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Facility expansion: What you should know before you break ground

Nov 1, 2002 12:00 AM


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Is your operation so pressed for space that your employees are tripping over one another, equipment, supplies and product? If so, you are probably already considering moving to a new location or expanding your current facility.

Although an expansion might seem like the easiest way to alleviate overcrowding, there's more to it than erecting a few walls and a ceiling. AMERICAN PRINTER spoke with two industry consultants who assist graphic-arts companies with expansion and relocation projects, as well as two printers that opted to enlarge their facilities and a trade binder that chose to relocate. (For a more in-depth focus on moving, see “Moving on up,” September 2001, p. 30.)

STEP 1: EVALUATE EXISTING OPERATIONS

According to A. John Geis, principal of A.J. Geis Associates (Chapel Hill, NC), a firm that specializes in plant layout, facility design and materials handling, the first thing a printer should do when considering a facility expansion or move is conduct a thorough evaluation of its existing operations.

Geis' approach includes determining a client's sales-to-area ratio: He divides annual sales by the total sq. footage of the facility or facilities, taking into account any off-site space. “Historically, sheetfed printers fit into a range of $200 to $350 of annual revenue per sq. ft.; web printers are in the range of $350 to $500 per sq. ft.,” he says. “If a printer is on the low end of that range, I question whether they really need to expand.”

Instead, Geis says, the company might benefit from a reorganization — clearing out old equipment and decreasing the amount of stored goods to provide more space in the plant.

If a printer's sales-to-area ratio is on the high side, however, “there is probably just no other alternative — they are totally overcrowded and already running three shifts,” Geis says.

Hal Ettinger, president of RBE Co. (Lawrence, KS), a plant-layout and design firm, agrees that printers should analyze their operations in detail, but he admits that such assessments are rarely made. “Printers won't [make a change] because they're tripping over their inefficiencies — they do it because they believe they need additional space,” he says. “Printers need to analyze existing operations to see if they can be more productive in their space, rather than throwing bricks and mortar at a problem.” Ettinger advises printers to benchmark existing conditions. An analysis of operations should include the following steps:

  • DETERMINE WHAT IS STORED IN YOUR FACILITY. Are there archived files, plates or finished goods that are never turned? Could your ink vendor(s) suggest how to store ink differently, or assist in reducing the number of “specials” stored at the plant? Could waste be managed differently, to reduce the amount of waste container that take up valuable production space?

  • TAKE A HARD LOOK AT ALL EQUIPMENT. Is the graveyard of press and bindery equipment growing because nobody's willing to get rid of it?

  • ANALYZE THE STREAM OF MATERIALS HANDLING, FROM RAW MATERIALS, TO PRESS, TO BINDERY. Could the current space be reorganized to facilitate an easier flow of materials?

PLAN, PLAN, PLAN

Once an expansion has been deemed the best solution, it's time to develop a blueprint for the project. This is perhaps the most important part of a move or expansion. “You have to be very thorough and comprehensive in your planning. If not, you risk spending more money and time,” Ettinger says.

Geis advises printers to do an area allocation analysis: Determine the current sq. footage of each department or area, and determine how the space will be broken down once the expansion is complete. He advises printers to provide 15 percent to 25 percent additional area for three- to four-year growth. From there, a new layout plan can be established.

“The layout design is the bones [of the project] that you put the skin on. The layout is critical to success,” Ettinger states.

Geis says that printers should spend as much time as possible planning the expansion, and that an architect or builder shouldn't be brought in until a final plan has been developed. He notes that the longer the project timeline, the more opportunity there is for the contractor to get competitive bids for the work.

“Make sure you know your financial capabilities to cover the cost of the expansion,” the consultant advises. “I've been in a couple of situations where we've completed a detailed layout plan but then the company can't get a loan from the bank. You have to have a business plan before you start working on an expansion plan.”

ACQUISITION PROPELS EXPANSION

Suttle Press (Waunakee, WI) began planning a 38,000-sq.-ft. facility expansion just before it merged with Straus Printing (Madison, WI) in July 2001. The primary objective of the expansion was to consolidate the two operations under one roof. Straus was headquartered in a 60-year-old, landlocked building that couldn't be expanded; Suttle Press still had land available for an addition.

John Berthelsen, president of the renamed Suttle-Straus, Inc., says the company assembled a team to tackle the expansion that included the contractor's designer and production manager, Suttle production and management staff, two Straus managers, as well as RBE's Ettinger and a CAD operator.

Berthelsen recalls how the team spent a day brainstorming ideas for the expansion — moving equipment, consumables and other production elements around on a diagram and piecing together a workflow. The group wanted to use as much of the existing layout as possible, so not every piece of machinery would have to be moved.

One of the company's first challenges was geographical: “Ideally, the building expansion would have been more of a square shape, but the land was rectangular,” Berthelsen explains. “We had to play with different configurations, but we wanted an efficient workflow that made sense.”

The expansion was conducted in two phases. The first phase was facility construction; the second phase included renovation of the facility's existing space in the plant and installation of Straus' machinery, a new eight-page web press and a new 40-inch, six-color sheetfed press.

Suttle-Strauss estimated that the entire project — expansion, renovation and moving — would take one year. Instead, the project was finished three months ahead of schedule — a rare occurrence for a manufacturing-facility overhaul. “We held up our end of the deal — we made decisions quickly, and we had a good relationship with our contractor,” Berthelsen explains. “And because we did things in phases and stages, that probably made it as easy as it could be.”

The exec admits, however, that it wasn't a painless transition: “It was tough to live in a construction zone for nine months. I know our employees were glad to see the last electricians and carpenters leave.”

GROWTH DEMANDS MORE SPACE

When Midstates Printing (Aberdeen, SD) built a new 30,000-sq.-ft. facility in 1994, its managers anticipated future expansion. “We knew we were going to be on a growth spree,” says owner Roger Feickert.

The Midstates plant was constructed on a 12-acre lot that can accommodate a facility up to 180,000 sq. ft. in size. The printer, which operates both sheetfed and web presses, installed three-inch gas lines to enable future heatset additions, and fiber-optic cables for high bandwidth.

The company installed a new halfsize heatset web press when it opened its doors in 1994, marking the beginning of a rapid growth period. “We grew quite a bit in cold and heatset work, and that's what allowed us — and forced us — to build in 1998,” says Feickert.

The printer added 30,000 sq. ft. in the 1998 expansion, driving the total facility size to 60,000 sq. ft. Midstates worked with the same builder that constructed the original plant and hired an architect to approve the expansion plans and ensure that everything was up to code. Neither the builder nor the architect had specific experience with printing plants, which Feickert believes wasn't necessary, because the facility features a no-frills, basic design. “It's basically a square-shaped plant that's very functional. We made sure that we didn't have any drainage problems, that we had high dock doors without pits and that it was built with energy efficiencies, but we did not spend more than we needed to.”

The expansion took six months from start to finish. Midstates installed a fullsize heatset press when the addition was completed; Feickert says what surprised him most about the expansion was how quickly all of the new space was occupied.

During the next few years, Midstates continued to grow exponentially; in 2001, it once again faced tight space limitations. Instead of immediately opting for another expansion, Feickert contacted Geis for some layout advice.

Geis recommended that the company relocate its corporate and administrative activity to a different building that Feickert owned. Now, customer-service, sales, administrative, human-resources, planning and graphics personnel are located in that separate building. Bundled T1 lines are wired into the Midstates plant, directly connecting prepress to a CTP system.

Midstates also followed Geis' suggestion to alter production setups — the printer repositioned some bindery equipment and installed a racking system capable of handling 700 pallets at once. The $15 million company is now operating efficiently and comfortably in its reorganized facility.

WHEN EXPANSION ISN'T A GOOD OPTION

In 1998, trade finisher Ace Graphic Services (Lenexa, KS) and DIEmasters Inc., its die-manufacturing subsidiary, occupied a 42,000-sq.-ft. plant. The company had begun to reach its space limits, and when the facility was flooded for the second time in five years, management decided to forego an expansion and move the entire operation.

“We needed more room, of course, and we were tired of cleaning up after floods,” recalls Bob Gallagher, president of Ace Graphic Services.

The company found a 30-year-old, 56,000-sq.-ft. warehouse in an industrial park adjacent to two highways and decided to convert the warehouse into a fully air-conditioned, humidity-controlled production facility.

Ace Graphic Services estimated that the conversion and move would take five months. Triad Construction Co. Inc. (Kansas City, MO) was hired to convert the facility; it began work in September of 1999.

The first step was to install an air-conditioning system, which, according to Gallagher, was very expensive. In the next phase, interior concrete-block walls were erected. A shipping and receiving module was constructed with fast doors to separate it from the rest of the facility, so the temperature in the production area could be maintained. Dock doors were added to accommodate a trash compactor and recycled-paper handling.

A service module was constructed to house the maintenance department, and a separate room was cordoned off to contain the company's air compressors and prevent the air and noise from becoming a distraction. The office space had to be altered to comply with the Americans with Disabilities Act (ADA), which also required an exterior wheelchair ramp to be constructed. Other external work included repaving the asphalt delivery area with concrete, and cutting holes in the facility's outer walls to provide ventilation inside.

Gallagher says the actual move didn't distrupt normal operations. “We didn't stop the machines until we were ready to move, and move quickly. We did the move in stages — we got equipment running before we focused on the next machine,” he explains.

The entire project was completed in February 2000, about 30 days behind schedule, which Gallagher believes was inevitable. “There's always something that takes longer than expected — in our case, it was having the floor cleaned and resealed. It needed to be done when no one else was in the building,” he observes.

Gallagher has one major piece of advice for printers about to embark on a moving or expansion project: “Plan, plan, plan, but be flexible.”

Before taking the big step

Before expanding a facility, managers should ask these questions:

  • Is there sufficient acreage available at your current facility for expansion?

  • Is sufficient acreage available for future expansion?

  • Is the area of the expansion in the right location for optimal workflow?

  • Will the facility's expansion increase its resale value?

Source: A. John Geis

The case for hiring a consultant

When trade bindery Ace Graphic Services (Lenexa, KS) began to develop a plant-floor layout for its new 56,000-sq.-ft. facility, president Bob Gallagher sought guidance from Hal Ettinger, president of RBE Co. (Lawrence, KS), a plant-layout and design firm.

Because Ace Graphic Services' clients are primarily printers, Gallagher has visited many printing plants and observed inefficient layouts. When it came time to design the floor plan for his own business, he wanted an expert's advice.

“I'm really sold on using someone who is experienced and an expert [in this area],” Gallagher says. “We toured the sites of some of Ettinger's other projects, and that helped us understand some of the issues we needed to address.”

Both Ettinger and A. John Geis, principal of A.J. Geis Associates (Chapel Hill, NC), say that few printers enlist the help of consultants prior to expanding or moving. “Printers often rely on architects or contractors, who usually don't know printing,” Geis notes. “I've known printers to be so pleased with the layout that the architects have come up with, but it's totally wrong, because it doesn't accommodate workflow for a printing operation.”

Roger Feickert, owner of Midstates Printing (Aberdeen, SD), turned to Geis for help with space allocation and layout when space became tight at the printer. “You can get really inefficient when you don't have a good plan for where equipment is going to go and don't know how much space a department requires,” Feickert says. “If you left a press installation up to press people, they'd want a lot more room around the press than they probably need. Geis helped us determine how much space to allow for that.”

Ettinger is a firm believer in assembling a team to tackle expansion projects. He encourages printers to include not only owners and department supervisors in the planning process, but production and warehouse personnel, because “they are in the trenches and face operating challenges every day.”