The Challenge

No industry has experienced more evolutionary change in the last few years than that of photography. Over a five-year period, the photo production process went from 90% optical to almost completely digital, and it was no easy task for photo labs to adapt.

H&H Color Lab of Raytown, MO, saw the change coming and recognized that not only was the world “going digital,” but also that the pace of photo processing would increase significantly and that customers would need to be far better serviced. Critically, all of this had to be done while keeping a lid on costs and competing with every local processing shop around. Many shops didn’t survive, but H&H Color Lab knew this would be a turning point in its 35-year history.

“Back in 1999, I wasn’t happy with how we as a company were performing,” admits H&H President Wayne Haub. “If we were going to grow and meet the demands of a new process and a changing marketplace, we had to make some dramatic moves; this meant improving the integrity of our orders, producing shorter turn times, cutting unnecessary costs, and generally improving service to our customers. At the same time, going digital meant a significant investment in new equipment and employee and customer training.” Wayne became a dedicated student of process improvement, and through his commitment to the concept of Lean methods and its relationship with Productivity Inc., his company has undergone a dynamic dramatic rebirth in the way it does business.

Haub jump-started the Lean process by adopting Lean and Six Sigma methods to his operation. Conducting a series of Kaizen events, he began encouraging employee involvement and created pockets of excellence that helped cut photo processing time and improve productivity. For example, four separate internal workgroups called squadrons were created. Each squadron was assigned specific customers with the goal of dedicating themselves to these customer accounts. As result, H&H team members became more familiar with their clients, making them better able to anticipate customer needs.

Additionally, communication within each squadron improved, resulting in quicker resolution of problems, processing errors being reduced, and turn-times being improved. “Product quality is noticeably better,” says Haub. “We have improved lead-time to photographers significantly; are more responsive to customer needs; and have been able to hold pricing down. I can’t speak highly enough about what Lean thinking has meant to our operations and bottom line.”

The Commitment

After experiencing the success of his Lean Six Sigma workgroup structure, and convinced more than ever of the viability of Lean methods, Haub took the next step: taking several staff members to a Productivity Inc. Executive Forum in Houston. He was looking for a more in-depth approach to implementing Lean throughout his entire operation.

From that event, Productivity Inc. associates visited H&H and together took a hard look at where significant improvements were most needed. Productivity Inc. associates visited with members of various departments – product development; IT; maintenance; sales; production, and customer service. Working closely with H&H staff, this “executive team” identified the stronger, more successful aspects of H&H operations, looked at how the business could leverage these successes, and then developed a 3-5 year Lean business plan based on the concept of “policy deployment.” The key to its success would come from the ability of senior H&H staff to take a hard look at the business and determine what kind of operation it wanted to be and how best to get there. From this came an “X” Matrix of goals, objectives and specific projects that H&H would undertake over a series of 12-month time periods.

This in-depth review revealed that manufacturing lead times (order arrival to shipment) were still too long and the backlog was growing; rework dollars from processing defects were too high; maintenance costs needed tracking; shipping costs had to be reduced; and that operational costs for the various processes needed to be tracked and measured.

Out With the Old, In With the New

Before Lean, H&H had been using exclusively a process-based system in the lab, whereby similar equipment and production processes were concentrated in one area. After processing, orders would be sent to another work area for the next process. Under this system, it was commonplace for a customer’s film to move through seven separate and specialized departments, traveling from one end of the lab to another - and back again.

Working with Productivity Inc., H&H implemented Lean methods to improve workflow. They created mini-production cells each comprising 90% of the steps needed to process orders and get them out the door. Fifteen of those cells were established where equipment and processes were rearranged to create higher efficiencies, each with the capability to process a customer’s order to near completion, from order confirmation, inspection and color repair to printing, cutting, coating, finishing and mounting.

This new flow process has dramatically reduced factory time and given H&H the ability to catch and quickly rectify any print defects. The quantifiable results are impressive. When the company’s Lean journey began, over half its orders - 52% - were being shipped late to customers. As it entered 2007, that number was down to below 7%. And remakes, or repairs of prints, were cut in half during that same time period.

Just the Beginning

Haub continues to work closely with Productivity Inc. to help bring about successful change to other aspects of his business. For example, given the transition to online operations and digital processing, IT has become a critical area for improving performance. To that end, Haub invested in the education and training of his employees, while Productivity helped establish standard IT processes and communicate the new procedures to the workforce.

Additionally, a sequence of events is being developed to ensure the most effective way to bring new products to market, including how to identify vendors, time-to-market procedures, and the mapping out of a product development process. Customer service is also playing a role in the Lean improvements. Administrative processes are becoming streamlined and standardized and the silo mentality that existed between production and customer service is quickly falling. And rather than reacting to maintenance problems and having to absorb costly downtime, H&H adopted a planned approach to taking care of equipment under a Total Productive Maintenance (TPM) program.

“With our commitment and the help of Productivity Inc., Lean methods have caught fire and motivated our people into ‘Lean thinkers’”, says Haub. Employees began looking for and identifying other opportunities to create efficiencies and improve work assignments. They helped create a better method for viewing prints to ensure color quality; improved visual quality control during the sheet cutting process; and helped reduce maintenance downtime on coating machines from 90 minutes on each piece to 20 minutes. And the long-range Lean plan developed by Haub and Productivity Inc. includes the ability to measure successes, along with the flexibility for course correction every 3 to 6 months.

H&H Color Lab made the transition, and adopting Lean thinking has played a major role in propelling the company into the top five in industry sales in the United States. “The transition from optical to digital imaging and the corresponding need to significantly improve services could easily have been our swan song,” continues Haub. “Instead, all of us at H&H think Lean in everything we do, and the successful results speak for themselves.” ◊