A key method for adding value and successfully competing against low-cost and high-volume competitors lies in personalization and small order processing. However, the challenges of building a manufacturing process capable of individualized order processing are daunting. For manufacturing and shipping small quantities, initial implementations typically require extraordinary amounts of time and labor in order processing and non-scalable processes.

George E. Daddis Jr. PhD, CEO/president at Bristol ID Technologies and an International Card Manufacturers Association (ICMA) board member, shares general approaches to solving these problems, with a highlight on digital order automation and digital manufacturing job management.

Opportunities in Individualized Small Order Processing

Many businesses work best and most efficiently by bringing in low-SKU-count/high-volume business. There are successful businesses domestically and overseas working with this business model. A key question for many manufacturers is, “How will I effectively compete with these high-volume business models?” especially against those firms (such as many overseas competitors) that compete almost solely on price creating a “race to the bottom” in the market.

Due to shipping costs, tariffs and lead times, these overseas businesses will be somewhat disadvantaged. These same factors make it difficult for these high-volume business models to engage in small order or highly customized card offerings. This leaves an opening in the market for businesses that can efficiently run large numbers of small orders and respond quickly and with quality to requests for customization, unique programming and personalization.

Further, personalization often implies somewhat sensitive data, which customers prefer to keep in domestic facilities that are highly transparent. This provides another competitive edge for domestic businesses providing these services.

Lastly, a small order/personalized business can exploit today’s changing market needs and quickly evolving technological trends. High-volume manufacturing often finds it difficult to adapt processes and equipment that is highly optimized and specialized to new product builds and unique customer requirements. Businesses capable of small orders and high customization are often (but not exclusively) most able to innovate, adapt to changing technologies and accept new product build challenges from customers.

Challenges in Manufacturing Process for Individualized Orders

Scalability is the main challenge of building a manufacturing process capable of individualized order processing or processes able to produce unique and advanced technology products, due to the following factors:

• The ability to scale a small custom card shop that can efficiently execute short manufacturing runs to a business driving tens of millions of revenue dollars and beyond requires significant investments and planning. This is essential for both the sales side of the business, as well as the operations side.
• On the sales side, there needs to be an understanding of how to profitably reach large numbers of small customers or to attract large customers with a high volume of small orders.
• Once this marketing and sales challenge is conquered, the next critical challenge lies in building a back-office and job control processes capable of handling hundreds to thousands of purchase orders (POs) each day. For a high-volume business, winning a large F500 customer is hard work. Nevertheless, once the PO comes in, the administration is manageable and well-funded by the revenues brought in by the order.

For a scaled small-order business, the administrative burden of processing individual manufacturing orders, invoicing, shipping, receivables collections, and the myriad other steps involved in building and fulfilling the PO is a significant challenge with high order volume. It is important to note that these steps are required whether the orders are large or small, and that small orders have fewer dollars associated with them to cover these overheads. The challenge then becomes one of building the right automated processes.

In operations, the problems are well known including:

• Offset presses are low cost per sheet, but high in setup cost.
• Costs of pre-press, shipping and other operations are nearly fixed relative to job size. Anyone who says large customers require more hand holding than small customers has never accepted gift card artwork drawn on the back of a diner placemat from a customer whose life is invested in their downtown retail shop.
• Most importantly, manufacturing in nearly all sectors runs most efficiently on long runs and small SKU counts.
• A flex-manufacturing line that’s modular in the right ways to handle multiple card builds and options is difficult to design. Capacity planning also is correspondingly difficult for flexible manufacturing.

Solutions for Individualized Small Order Processing

The key to efficiently handling high volumes of small orders is to design a manufacturing flow where small orders are grouped into gang runs or streams that can be run as one job.

This is an obvious answer, but often very hard to implement in practice. Further, the entire process—from order taking to fulfillment/shipping—must be designed to require labor costs that are proportional to the number of gang runs executed, not the number of orders in the gang run. Specifically, every step in the value chain must be engineered to be automated when handling individual orders, both digitally or physically or through clever processes.

The primary tool for this lies in digital automation, with the aim of eliminating manual handling or human intervention, whenever working at the individual order level. Orders must be accepted digitally from customers, checked in software and streams/gangs composed all in the virtual realm. Pre-press people can then work with the job at the gang level, checking composed gangs and scheduling the entire gang run rather than individual orders.

The concept of a “digital twin” for orders, a representation in software of every order flowing through the system that can be easily tied to the physical order on the floor, enables much of the necessary automation. Using a “digital twin” in your job management system for each order is especially important during the process of separating the gang back out into orders. This “de-interleaving” orders from a grouped gang run usually occurs at the personalization/programming step or as early as die cutting.

To relate the “digital twin” in software to the order in the physical world, manufacturing often uses RFID or barcodes. This allows identifying individual work-in-progress orders within a gang and allows for automating their unique processing (i.e., personalization, unique packaging, invoicing, shipping, etc.). Techniques such as these enable the critical elimination of manual handling and human intervention at the order level, which is key to scalability, efficient cost of goods sold and minimizing errors on large numbers of small jobs.

To sum up, building such customizable manufacturing lines is achievable. But it must be intentional and carefully planned. Investment in software engineering resources is necessary for creating critical automation in addition to strong modular manufacturing line design.

If you’re interested in learning more, attend the presentation Digital Order Automation/Small Order Processing at the ICMA EXPO on May 15 at 3:45 p.m. Find the full agenda at ICMA.com.

More Insights on Card Trends

For more than 30 years, ICMA has represented the interests of the card manufacturing industry—which includes manufacturers, personalizers, issuers and suppliers—as its leading global association.

Throughout the year, ICMA members have the opportunity to share insights and knowledge by giving presentations during ICMA webcasts and events. The association’s main event is its annual Card Manufacturing & Personalization EXPO. The 2024 EXPO will take place from May 13-16 in Orlando, Florida.

ICMA offers regular educational opportunities, including ACE-Manufacturing, ACE-Personalization and ACE-Advanced Technologies training and exams at the ICMA EXPO. ICMA also offers ACE-Commercial training, which provides sales, marketing, customer service and other key personnel at ICMA member companies with the opportunity to learn the fundamentals of card manufacturing. Learn more about the benefits of ICMA membership.