Near enough is not good enough… and there are lifetimes of difference between benchmark Six Sigma and the ‘average’ Three Sigma.
Especially if you are a hospital patient, when you would be close to three million times as likely to have the wrong operation.
The difference between dispensing the wrong drug 5400 times a year instead of once in a quarter century; dropping a 40,500 newborn babies in a year instead of three in a century; losing 54,000 mail items an hour, or 35 a year… and so on.
It’s a comparison Sanat Hazra likes to make when explaining the importance of process improvement at the Times of India, where he is technical director.
In business terms, the cost of failure for ‘average’ companies on the Three Sigma process improvement ranking is 25-40 per cent of sales, compared to less than one per cent for benchmark Six Sigma companies. Each level is a ten per cent net income improvement.
And Times of India has a lot to lose or gain. The Bennett, Coleman & Co subsidiary – publisher of the largest-circulation English-language newspaper in the world – consumes massive quantities of everything in printing 4.78 million copies of its flagship daily plus millions of copies of other newspapers.
They use 360,000 tonnes of newsprint – 80 per cent of it imported – to print 77 billion pages, imaged with 7500 tonnes of ink via 4.4 million printing plates. Using 54 million units of energy and 260 megalitres of water.
Potential cost savings are huge, as are the statistics of green initiative opportunities.
And it is the role of Hazra – who grew up in Rochester, New York, and worked for facsimile developer Crosfield Data Systems, the New York Times and briefly NY News, before moving to India four years ago – to maximise them.
“Production is not just quality… there’s more to it than that,” he says of the company’s strategic approach to excellence.
Consumable costs are a huge challenge, especially in a market where advertising – “so very sensitive to the global economy” – accounts for almost 90 per cent of revenue. (Although it accounts for a third of the print advertising market, the TOI’s cover price is the equivalent of only about four cents).
In addition to newsprint and other press consumables, distribution and utility costs are high, the latter increasing by 20-40 per cent in recent years. And as newspaper circulations keep increasing, an unstable exchange rate “plays havoc” with the high capital expenditure needed for new plant and upgrades.
The company prints the Times of India, dailies the Economic Times (640,000 copies), Mirror (one million), TIMS (1.65 million), Ei Samay & Onno Samay (560,000) and Maharastra Times (820,000) plus supplements and magazines at 12 of its own printing plants – mostly manroland equipped – and 24 contract sites, most of which have Manugraph CityLine and HiLine single-width presses.
The mission statement might be mostly routine – produce the best quality, on time, on or ahead of budget, without accident – but the emphasis here and in the vision statement on “nurturing individual growth, creating an entrepreneurial culture of innovation and empowerment to achieve sustainable technology leadership in print and beyond” is not. It is addressed through initiatives including a ‘community of practices’ – groups of five who share learning on topics such as the presses, mailroom and CTP systems – and the Times education centre. This provides training for operations excellence, building functional capability, nurturing talent, multi-skilling and developing staff, as well as creating learning architecture. Recruiting talent is difficult, so retaining good staff is especially important.
Review mechanisms for continuous improvement group include regular reviews – weekly with teamleaders, fortnightly by advisors, and monthly by the steering committee. This group monitors the progress of initiatives, commits resources, adds new teams and arranges rewards and recognition.
Sanat Hazra quotes his old university professor, Vijay Govindrajan that the strategy approach involves balancing projects which manage the present, “selectively change” the past, and create the future. There is, he says, an inherent conflict between making money and investing for the future: “Selectively forget the past, and then you can change the future,” he was told.
A first phase, in 2008-10 created ‘economies of scale’, while a couple of years later, the emphasis moved to ‘economy of talent’.
Important goals for today’s business include:
• a focus on cost, quality and delivery to enhance business value;
• product and process innovation to create high value at low cost; and
• brand loyalty, “engendering customer delight”.
On innovation, Hazra is a pragmatist: “It doesn’t matter what industry you are in, someone somewhere is trying to develop a product, process and/or business model that will entirely dislodge our business,” he says.
“In the newspaper industry it has already happened. Someone has already redefined what it takes to be successful in our business.”
He says growth will only come through innovation and “disruptive improvements. In the US,” he says, “the big drawback was that companies did not invest, and now cannot compete.”
Strengths become weaknesses, he says, citing Kodak’s situation and a big NYT plant he had to close. But newspapers – the only medium which touch all five senses – enjoy a unique advantage: Interactivity, and opportunities to make customers proud and enhance their experience.
Reverse innovation – a breakthrough product with 50 per cent performance at 15 per cent of the cost – could achieve a new pricepoint. At Times of India, Hazra says, a half-jacket advertising option became viable when staff redesigned the gluer so they could be made inhouse at a tenth of the cost.
“Cost leadership gives us an advantage,” he says. “Anyone can do it at high cost.”
Standardised quality/output to ISO 12647-3 on all presses was accompanied by a push for minimum wastage and reduced manning… impacting cost and price. A planning production dashboard collates and presents data from a variety of sources.
“Automation on quality has delivered fewer quality-related claims, guaranteed similar advertisements, and ensured the same output on all press lines,” he says.
The company has automated plate loading on one of its manroland presses and is looking at automatic density control. Hazra was inspired by a visit to Printers Partner in Belgium, where he saw three people running 11 folders and 33 towers.
“Chase every small thing you can chase,” he says.
With a $6 million annual spend, newsprint yield is “quite big money for us”, so minimising waste brings significant returns. Lower newsprint grammage reduces cost in a number of areas, and the company is testing 40 gsm stocks.
Ink optimisation – using Binuscan technology – saves almost $2 million, with “brilliant quality” a further benefit of the work involved. In one project, cyan and yellow ink use was reduced by 24 per cent, magenta by 17 per cent, against a 19 per cent increase in lower-cost black ink.
Power consumption initiatives have include optimising usage, replacing 500 light fittings with LED and T5 luminaires, and installing heat recovery in the M-600 press hall. Savings for the year to date are 94.4 lacs ($165,000) about 85 per cent of which came from a power factor improvement.
The question of whether to install new equipment or retrofit is also closely defined: “With automation, we have told manroland there must be saleable copies when we start the press,” he says.
Strategic approaches include reducing or eliminating manual intervention on press, unifying control systems and defining the causes of remaining process instabilities. A future project will be production monitoring via iPad… and he urges, “think and act green and you will save money, and think how it is helping the customer”.
It’s paying off: The reduction in water consumption is enough for 6.32 Indian villages; savings in energy sufficient to light 1923 homes.
Strategy, he says, is not what one will do in 2020. “It’s what one will do in 2013 to stay relevant in 2020”. With the Times of India’s massive and growing production requirement, that’s a huge incentive.
Peter Coleman
• Based on a presentation to Australia’s Single Width Users Group.
