Back in 1998, Honsen approached Customer A to introduce our products to them. We were so surprised to discover that they had a storeroom of about 600 sq ft, just for their stickers. According to them, at any one point in time, they had approximately 1,200 different types of stickers and so needed a store to keep them.
Then, they were using rubber stamps to stamp an average of about 4 to 5 lines of information per sticker. They required 2 staff each day (about 16 to 20 man hours) just to arrange and imprint the necessary information on the stickers for the following day’s production. The feedback we gathered from the manager regarding their labels and printing process was:
- Poor readability – This was mainly due to the inconsistency of the strength used in stamping
- High reject rate – Rejection stemmed mainly from poor stamping, last minute changes of lot numbers, and so on
- Production downtime – Due to the high reject rate, production schedules were often interrupted since the stickers needed to be re-stamped again
- Delivery downtime – This was caused by insufficient stickers being stamped because of mistakes in manual calculations, errors in stamping on the correct labels, plus high rejection rates, which led to delays in shipments
- High inventory and cost – Due to the large number of label SKUs they handled, they did not have the bargaining power to ask for better pricing on their stickers. They ordered about 1,000 to 2,000 stickers per type and had to keep high stocks of each type
- High labour cost - About 16 to 20 man-hours were required each day to prepare the stickers required for the following day
Upon understanding and gathering this information, we helped Customer A solve their problem by introducing a new printing method to them. We began by suggesting they use a Thermal Transfer Printer. Eventually, this was the outcome:
- Good readability – Regardless of the quantity they printed, labels were always readable. There were no smudges, no uneven prints and so on. Since letters were computer-printed, the text was also consistent and easy to browse through
- Low reject rate – After using a thermal transfer printer, they managed to reduce their rate of rejection to almost 0%
- No production downtime – A low reject rate also helped to reduce production downtime to almost 0% since no reprinting was needed. Even if there were reprints to be done, re-printing was much easier than before and time taken for reprints was also shorter
- No delivery downtime – Since the quantity required for each type of sticker was computer generated, the quantity printed was always correct
- Low inventory and cost – Honsen studied the various SKUs of the customer and after some brainstorming, we helped Customer A to streamline their SKUs to only 20 types. By doing so, we helped them gain better bargaining power with their suppliers by increasing their purchase volume. As such, their cost price and inventory for the labels became much lower
- Reduced labour cost – In addition, Customer A now only required about 4-5 manhours per day to prepare the required labels for the following day
When we first proposed our plan and the cost reductions it would bring to management, they were so excited that they wanted us to start implementation immediately. However, in the 1990s, our most challenging task was to train a group of operators to learn how to operate a computer, as there were not so many computer users back then. We scouted around and eventually installed the simplest software available and provided on-site training for the company’s operators.
The greatest satisfaction from working with Customer A was derived from being able to help them in streamlining their process and daily operations, such that both management and staff were exceedingly happy.
Soon, we also approached another customer and introduced Thermal Transfer Printing to them.
Initially, this customer was using a very small, traditional printing machine to print information on their packing cards. Since it was a very old machine, print speed was very slow and maintenance costs were high. Besides this, the customer needed at least 2 days to prepare the required label quantity for 1 day’s production. To our surprise, they had about 8 workers just to supply printed labels to the various departments.
After some study and understanding of the basic needs and requirements of the customer, we managed to source for a different material for their cards and introduce a more efficient printing method. By implementing some changes to the design of their packing cards, we were able to print the cards in rolls (which is more efficient than sheet printing) and cut them into pieces for their packing. By doing so, we helped to reduce their printing preparation time from 2 days to less than a day. Within the span of 6 months, they had transferred 2 of their operators to other departments, and invested in an additional 3 printers. Within a year, their packing card printing department was managed by only 2 staff and 1 supervisor operating 4 thermal transfer printers, thereby effectively reducing their fixed cost to a mere fraction of what it had been before.