intergrating new productsjune2003

T he soft economy of the last two years has kept the prog-

nosticators of the color laser printer market still speculat-

ing about total shipments for the year 2003. In 1998 there

were 87,000 color laser printers purchased. The press releases

from Gartner Dataquest estimate color laser placements for

2001 at 250,000 units. For the year 2002, market growth was 21

percent with placements of approximately 300,000 printers. The

estimated growth projection for color lasers printers to the year

2007 is shown in Figure 1.

The traditional laser printer market has a relatively short prod-

uct life cycle and suffers severe reductions in selling price. The prod-

uct life cycle for cartridge remanufacturers has usually taken a form

shown in Figure 2. The stages of life for cartridge product lag the

OEM cycle proportionally to the technology level of the printer.

The stages in the product life cycle are:

1) Development

2) Growth

3) Expansion

4) Maturity

5) Saturation

6) Decline

■ During the lengthy cartridge

research and development stage,

there are no cartridge sales at all.

However, manufacturing must sup-

port a development area and provide

the resources needed to ensure a

timely product launch.

■ In the growth stage, sales are

slow and marketing costs are high;

often manufacturing resources need

to be supplemented by frequent

training sessions and manufacturing

team building.

■ In the expansion stage, sales

should grow more rapidly, and man-

ufacturing teams are executing their

well-thought-out plans to accommo-

date growth.

■ In the maturity stage, sales

plateau as most customers who want

116 | June 2003 | www.rechargermagazine.com

T by Mark Hibbard | Celestial Engineering Technical

Integrating Color into Your Production Facility

Figure 1. Estimated color printer shipments (1997 to 2007).

Figure 2. Estimated market for the WX cartridge.

the product have quality sources for the product. Manufacturing

teams have predicted this plateau and the production schedules

adjust for sales volume and inventory reduction.

■ In the saturation stage, every customer who wants the car-

tridge product has several competitive sources for acquisition,

and there are few opportunities for increasing sales.

■ In the decline stage, cartridge sales fall and the product

eventually becomes obsolete. Manufacturing teams have transi-

tioned resources to new products and reduced raw materials and

finished goods to reduce financial risk.

Accessing the competitive and rapidly changing color laser car-

tridge market has been extremely difficult. Your company’s future

growth is directly related to your plan for understanding what role

color cartridges will play in your facility. The remanufactured

monochrome laser cartridge product development cycle has lagged

behind the OEM printer introduction by 12 to 20 months. The

example in Figure 2 is the product cycle for the WX, one of the

more difficult cartridges to bring to market. The multiple inte-

grated HP 4500 cartridges have exasperated the developers of HP

4500 products.

Just recently, remanufacturing industry suppliers have

launched technologically competitive consumables for the current

color laser cartridges. For remanufacturers, this is the clarion call

to ready your facility for color. The R&D cycle for color toner

cartridges has been severely hampered by the remanufacturing

industry’s dependence on a few major suppliers.

The supply corps has been working feverishly with its sup-

pliers developing the toner and photoconductor replace-

ments for color printers. Secondarily, suppliers have the

major issue of interface electronics — smart chips — to com-

pletely overcome.

To provide the customer with a fully functioning product, the

smart chip is the supply industry’s major hurdle. It has taken

almost three years to provide a complete solution for the HP

4500 color laser cartridge family.

Cartridge remanufacturing is a critically strategic business, not

merely a technical activity. Strategic decisions should support the

strategic objectives of your complete business.

Addition of color products to your business is achievable by

manufacture, wholesale sourcing or an integration of both. This

article is designed to discuss the process of supporting the deci-

sion to establish a color cartridge manufacturing presence within

your facility.

Strategic Plan for a Fictitious Company:Grand Manan Laser (GML)Grand Manan Laser is a well-established remanufacturer

with 25 employees. The facility currently produces approxi-

mately 9,000 cartridges a month. There are 10 members of

the f loor production team. The co-owner, who is the pro-

duction team manager (PC), manages the team. The PC has

a support team consisting of a quality-assurance technician,

maintenance technician, work-shift coordinator and materi-

als coordinator.

The co-owner of GML acts as sales and marketing man-

ager (SM). Her support team consists of two sales managers,

two sales team staff, an accounts payable/accounts receiv-

able person, inventory control person, an IT manager and

two f loating office staff members.

The owners of GML feel like they are operating in a lean

fashion at this time. The owners’ operating strategy for GML

has always been to bring new cartridge products to market as

soon as they can provide a product that has basic fitness for use.

Then they concentrate on elevating the product to match OEM

performance.

The owners are aware of the remanufactured cartridge life

cycles and have tried to stop in-house production before cartridge

products’ gross margins decline to less than 10 percent. If there is

a continued local demand, they have sourced cartridges from

larger wholesale companies or delivered the OEM cartridge at

cost.

Grand Manan Product Mix and RevenueGrand Manan Laser currently can manufacture 18 different

products. There are specialty and MICR products that it manu-

facturers on a quarterly basis. The monthly mix of core products

shown in Table 1 is an average for the year 2002.

The owners of GML understand where each cartridge

product is positioned within the life cycle and the range of

profitability.


Table 1. Average monthly mix of products for GML.

They have broken down the total costs for each product

family to best strategize which products may need price adjust-

ment, process adjustment or to be displaced. See Table 2.

Grand Manan Laser is a remanufacturer producing more

than 100,000 cartridges with revenues of $8.5 million. Our

fictitious company has a $1.2 million payroll, and the gross

profit in 2002 was $2.8 million. The choice to finance

expanding color cartridge products will be driven from the

current profit center. GML has sufficient capital and techni-

cal expertise to move forward with its color cartridge pro-

gram. See Table 3.

Color Cartridge Product SelectionThe laser color printing market is growing nicely. GML looked

at the total number of printed pages with at least 10 percent

color content and found it was expected to be approximately 104

billion pages out of an estimated total of approximately 462 bil-

lion total pages in 2004. The entire business imaging color mar-

ket is partitioned into six segments. See Table 4.

Projected to 2004, the electrophotographic laser print-

ers using dry toners will grow approximately 80 percent.

Total revenue from all families of laser printer consum-

ables will approach $15 billion, compared with inkjet’s $28

billion.

The simplicity and higher-rated page speed of the solid ink

Phaser/Legacy printers is gaining some market share thanks to

huge marketing dollars from Xerox. The Phaser printers com-

parably placed with the same memory, firmware and Postscript

drivers have a faster time to first page (TTFP) than the HP

4500 laser printer.

However, HP has always been able to compete on price.

GML will select the HP 4500 color laser printer family as its

first remanufactured color product. In addition, the installed

base of 4500s is approximately 520,000 units as of 2002. The

current installed base of all other color laser printers is

roughly 250,000. Another point in HP’s favor is that a hall-

mark of its laser printer series has been excellent serviceabil-

ity and reliability.

The HP 4500 was of low enough cost that GML has experi-

mented with the printer and cartridges. During the last year the

basic perceptions include:

■ The individual toner cartridges contain the reservoir, trans-

fer roller, charging blade and developer sleeve. The K (black) car-

tridge is only slightly different from its sister color cartridges

(small differences to the toner and charge mechanism).

■ The color toner system is new for Canon engines. It is

chemically prepared and has a fusing component within its

chemical matrix.

■ The OPC unit contains an OPC, PCR, cleaning blade,

sweeper strip and a waste system that uses a logic/memory chip

to detect waste reservoir status.

■ The transfer belt unit contains the charging belt and trans-

fer roller.


Table 3. GML expenses and revenue.

Table 4. Business imaging color market.

Table 2. Total costs to GML for each cartridge family.


■ The fuser subsystem is a heated roll/pressure roll that

requires no release material (such as silicon lube).

■ During cartridge breakdown, cleanliness will be critical.

Cross-toner contamination must be controlled.

■ For filling color cartridges, while production demand is

low, filling will be best done with bottles. Semi-automated filling

systems will require triplication or extremely aggressive cleanli-

ness procedures.

■ The K (black) cartridge can be remanufactured on the cur-

rent line with minimum of process/procedure modification.

■ The drum unit can be remanufactured on a current line

with a minimum of procedure development.

■ The remanufacturing process for the toner cartridges will

need to be statistically sound. There will be only audit testing.

■ Color cartridge remanufacturing will force immediate

excellence upon the production floor.

■ Grand Manan Laser will not remanufacture the fuser car-

tridge at this time.

Facility Assessment — Grand Manan LaserFacilities planning for any manufacturing concern is a process

that cuts across several specialized disciplines. It is unlikely that

your staff includes a civil, mechanical, electrical and industrial

engineer.

However, adding the process of color cartridge remanufac-

turing will include considerations that will require someone to

act in all of those capacities. To systematically approach the

problem, it is proper to access the objectives in an itemized fash-

ion. See Figure 3.

The GML color cartridge team consists of the sales and mar-

keting manager, production team captain, quality assurance man-

ager, IT manager and two production floor persons. The team

Figure 3. Proposed production layout for GML.


reviewed the current work plan, as well as product and people

flows. The time was taken to document material handling, inven-

tory and packaging processes. The team developed the list of cur-

rent tasks, including tasks and material movements that cause

problems.

The plan for color cartridge product solutions was developed

to help with current product flow as a benefit. See Table 5 on the

next page.

GML’s strategic plan determined how all tangible human

and equipment assets would best support the introduction of the

HP 4500 family of color laser printers. The survey of the exist-

ing process task list concluded that many of the existing proce-

dures would only need slight modification to allow remanufac-

ture of the OPC unit and the developer unit (when belts

becomes available).

The critical concerns centered on handling the color toner

waste in the evacuation area and the color toner delivery in the

filling area.

When developing your plan, consider the following two areas:

■ Develop a plan that describes primary and secondary

work activities that will occur within the critical procedures area

of evacuation and filling.

■ Examine your production schedule to determine when

color cartridges would best fit into the schedule. This is based

on product volume and availability of key floor personnel who

will be responsible for the startup.

Grand Manan Laser management proposed that one of the

evacuation booths and its associated breakdown area be moved

and reworked to be completely enclosed. The evacuation booth

was redesigned to increase the workface air velocity. This area

was also serviced by janitorial services that understood the

high cleanliness requirement. All of the metro carts used for

movement of the four toner hoppers for HP 4500 product were

marked for individuality and had covered totes used for clean

transport between workspaces. The overall cleanliness of the facil-

ity was raised and a laundry service was provided for the 11 floor

workers to use lab coats on a trial basis.

The color cartridge filling station was placed in a low-velocity

evacuation hood to prevent toner migration from the filling bot-

tles. The fixture allows five cartridges to be filed simultaneously.

A procedure was developed for emergency cleanup and recovery

in the event of a bad color toner spill. The procedure made an

audible alarm available to the workers in the filling area. This

would cease the movement of personnel until the spill was

addressed.

HP 4500 Color Product/Operations ManifestThe basic outline for the team’s consideration was organized

by activity. The objective was to consider the impact of pro-

ducing the six new part numbers that are consumables for the

HP 4500.

For each activity center within the facility the following list of

considerations were investigated.

• Manufacturing readiness.

• Capital equipment or modification and maintenance.

• Physical plant modifications.

• Inventory control and adjustments.

• Human resources.

Inbound LogisticsSome things GML considered for inbound logistics:

• Purchasing and inventory control.

• Production scheduling.

• Receiving and inspection.

• Warehouse management (position control).

Only one supplier responded with most of the components

for evaluation. The primary components were identified by a

product code for purchasing and inventory control. See Table 6.

Table 6. Comparison of parts and prices for HP 4500 cartridges.


Table 5. Task/process list for existing cartridges.


There were six new finished goods part numbers, and 38

purchase items added to the inventory control logistics soft-

ware. See Table 7.

The inventory management software will provide forecast

and price adjustment data as the product is moved from the

launch to the growth phases. The receiving and inventory area

for purchased components has enough space for a monthly

run of 350 black cartridges, 300 color cartridges and 200

OPC cartridges.

The incoming inspection for the HP 4500 purchased com-

ponents would initially be quite rigorous. An extra person

would be rotated into this area temporarily. The finished

goods area has enough space to produce 15 black cartridges,

10 color cartridges and five OPC cartridges a day. The prod-

ucts can be moved to an adjacent location for normal stock

rotation at the week’s end. The monthly HP 4500 product out-

put estimates would be as listed in Table 8. Sales and market-

ing projected the ramp to forecast for six months. Then they

will adjust the forecast according to product acceptance by the

customer.

Revenue for 2004 would be estimated to be over $1.1 million

and profitability from the entire HP 4500 product line would be

close to $415,000. Compared to the current business that Grand

Manan Laser is doing, the HP 4500 line would represent

approximately 12 percent of the revenue and 15 percent of the

profit for 2004.

Outbound LogisticsSome of things GML considered for outbound logistics include:

• Order acceptance.

• Picking.

• Inventory adjustments.

• Cycle count/inventory adjustments.

• Shipping confirmation.

The inventory management will easily accept the new prod-

uct launch forecast of an extra 1,000 units per month from fin-

ished goods into inventory. Inventory adjustments will be sched-

uled in three-week increments. Sales and warehouse staff will

verify product picking locations and use shipping confirmation

protocols from the inventory management software.

Table 8. HP 4500 monthly production (with 21 day cycle).

Table 7. Finished goods product codes.


Service and SupportWhile planning service and support, GML took into account:

• Technical training.

• Production process development.

• Testing.

• Documentation.

• Recruiting/hiring.

Technical training for the four key production team members

has been ongoing throughout the development process. Final

process descriptions and purchased component lists will be doc-

umented before the launch date. The testing area staff members

are especially concerned about the inspection audit protocol.

There will be three new HP 4500 printers ready for print testing.

The production ramp to the target volumes will happen over

10 production days. During those 10 days, the QA team will

audit 20 percent of the color cartridges on a daily basis. The

OPC and black cartridges will be audited at 10 percent per day.

The testing requirement is not severe — approximately 200

cartridges will be functionally tested and 20 cartridges will be life

tested during the first 25 days. All process changes and docu-

mentation updates will be rationalized weekly. One production

person and one salesperson were selected and hired by the end

of the second month of production. Sales support materials, as

well as test print samples, were completed by the end of the first

week of production.

Sales and MarketingFor the sales and marketing, GML looked at:

• Sales goals.

• Product management.

• Advertising.

• Customer identification and priority.

• Forecasting.

The sales goals have been clearly stated. The sales staff needs

to be patient and prepared for the first 40 days of the product

launch. To adjust the forecast will take agreement from the pro-

duction captain, QA, marketing and materials manager. The sales

and marketing manager will be working very closely with the

inventory management person to understand the demand for var-

ious products.

Motivation Behind Facility PlanningOne of the most effective methods for increasing plant pro-

ductivity and reducing cost is to reduce or eliminate all activ-

ities that are unnecessary or wasteful.

Good practice of facilities design will accomplish this goal

in terms of material handling, personnel and equipment use,

reduced inventories, and increased quality. Understanding

product f low and material movement will prevent issues with

employee health and safety.

High Performance ManufacturingThe Grand Manan Laser management team members have set

simple goals for themselves as they launch their color cartridge

products. These are:

■ Decrease unit and process cost are of prime importance.

■ Practice good manufacturing — The concept by which all

people work together to eliminate waste, including:

• Overproduction.

• Waiting.

• Transportation.

• Processing.

• Inventory.

• Motion.

• Rework.

• Poor people utilization.

■ Remember cheapest is not always best.

■ Remember that quality is essential and difficult to measure.

■ Set sights on the quality level desired by selecting good

people, well-thought-out equipment and establishing world-class

process methods that produce excellent products.

ConclusionThe Grand Manan Laser example shows that most of the plan-

ning and preparation activities to launch color products out of an

existing facility are the basic one million tasks that are accom-

plished for the current business. Grand Manan Laser made

adjustments in the evacuation, transport, cleaning and filling

processes to bring HP 4500 products to market. The success of

the color product launch at Grand Manan Laser was its people,

planning and involved management.

BibliographyHewlett Packard: www.hp.com/hps/

ISO and standards: www.iso.ch/iso/en/CatalogueDetailPage.Cat-

alogueDetail?CSNUMBER=22145

www.iso.org/iso/en/CatalogueDetailPage.CatalogueDetail?CS

NUMBER=22145&ICS1=37&ICS2=100&ICS3=10

Halftone and color science:

www.adobe.com/support/techguides/color/colortheory/variables.html

http://imagine.gsfc.nasa.gov/docs/science/know_l1/emspectrum.html

“Electro-Optics Handbook,” Waynant, R.W. and Ediger, M.N.,

Editors, Optical and Electro-Optical Engineering Series,

McGraw-Hill, 1994.

Fortner, Brand and Meyer, Theodore E., “Number by Colors,”

Springer-Verlag, 1997.

Halliday, Resnick, Walker, “Fundamentals of Physics

Extended,” 5th Ed, Wiley 1997.

For more information, or for details on the references cited in this

article, contact Mark Hibbard at [email protected].

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