2011: Taking Care of the Pennies (Part 10)
MULTI-ART PRINTING PLATES
Executive on Demand Position:
Chief Operating Office, General Manager, Vice President Logistics, Director – Procurement
Project Outline:
One of the advantages for sourcing production related material from Asia is the ability to purchase in very small Minimum Ordering quantities (MOQs). For aerosol cans the general rule of thumb is purchasing printed cans at an MOQ of 10,000 units, regardless of can size. However there is a requirement to secure a printing requirement of 30,000 units annually. The 30,000 MOQ requirement is a printing need to produce the printed plates in a cost efficient run size and be able to provide the small procurement cost at or just above the container price. The Asian manufacturer will usually hold the plates in “Flat” form for the unused cans until the next order at no extra cost, as long as the duration is less than 12 months.
Request for cans having demand for 10,000 units by fillers is not unusual, however this can sometimes be a year’s requirement. The aerosol can filler does not mind maintaining this inventory to take advantage of the lower cost but does not want to be financial responsible for unused “Flat” inventory in Asia. A strategy to circumvent the 30,000 can equivalent for printing and maintain the 10,000 can MOQ for finished cans needed to be developed.
Project Outcome:
Working with the Asian aerosol can manufacturer a solution was created that was satisfactory to everyone. It is important to recognize that the aerosol can MOQ is set by the number of cans that can be put on a container. For 20 ounce cans a 20 ft container will transport 30,000 units. Should cans be ordered in larger quantities then the MOQ for a 40 ft container is 60,000 units and a 40 ft high cube is 72,000 cans. Therefore production planning is closely related to the size of a container. When empty aerosol cans ordered in quantities of 10,000 units with the remaining 20,000 plates put into storage for future orders, a prurchaser can put three different printed products of the 20 ounce size on a 20 ft container, 6 different cans on a 40 ft container and 72,000 on a 40 ft high cube. Purchasing using this strategy requires the buyer to be aware of the “Flat” inventory and must use it up within the twelve month holding requirement. The reason for a limited time for maintaining th “Flat” inventory is to ensure that the can plates do not rust while they are on hold. In addition the buyer does not want to have to make payments for “Flat” product that he does not want to order within the minimum time requirement.
The solution implemented that satisfied both the buyer and the manufacturer of the cans is to produce printing plates that can accommodate more than one set of artwork. It is general practice to produce printed plates in flats that accommodates 20 finished cans in the 20 oz can size before being cut to finished size. Understanding the printing requirement I was able to inquire about the ability to print different cans at the same time on the same master printing flats. The response back was that this was very feasible as long as the request for colour printing remained within the same colour families used. That is as long as everyone one of the can labels used the same base colours, then the multiple labels can be produced in any finished quantity size. This does not mean that the can labels being produced need to be the exact same colour it means that different shades of the multiple colours can be produced. Different shades of a color can be created by managing the transparency of the screening for each label.
The end result was that pre-printed cans could be ordered and produced using an MOQ of 10,000 at the same price as the container MOQ, “Flats” were no longer required to be put into inventory for future orders, financial responsibility for unused inventory was removed and the financial potential for bad inventory loss due to an extended period for storage were no longer a deterrent to enabling a global procurement strategy.