Your business is growing, and revenue is flooding in. Everything seems to be in order. But then you start to notice that production seems to be slowing down, revenue is starting to decrease yet work keeps on piling up. If this sounds like your facility, a plant expansion might be just what you need.

Warning signs

According to Hal Ettinger's article, "Three steps toward a successful expansion," there are several warning signs that signal a need for an expansion or relocation. Ettinger is the president of RBE Co. (Lawrence, KS), which specializes in project management, plant layout and engineering design for the printing industry.

The first sign is overcrowding, where people don't have room to move around without getting in each other's way. "When customers see this kind of overcrowding, it looks like mayhem," Ettinger says. "From the customer-relations standpoint, this is a signal to do something about your space requirements."

Another flashing red light is the loss in revenue because people are spending their production time working around conditions that don't allow them to be efficient and effective.

And if your business is growing, expansion may be necessary if the present structural and engineering systems will not be able to handle additional loads. "In other words, you can no longer install machinery because your electrical system can't handle it," Ettinger says. "Or, you can't hire additional personnel because the present plan lacks employee facilities."

Expanding vs. relocating

After determining that your plant can no longer sustain your growing business, you need to determine whether it's better to add to your current facility or you need to move. "You need to ask yourself whether your current work space can be home for the next five or 10 years. Ask whether it can grow with your organization," Ettinger writes in his "Planning for plant expansion" article. "You must choose the one that will benefit you the most in the long run."

If you decide to stay in your current space, you can either redesign your existing layout or you can add onto your existing structure. "Every square foot should be justified to maximize its potential," Ettinger says.

But before you start knocking down walls, there are several steps Ettinger suggests to make the expansion smooth and less costly. First, analyze your plant's current conditions and figure out where the problem areas are. Second, determine your plant's expansion options, such as the available structural and engineering systems, and assess space for current and future needs. Third, develop a layout and consider the "buildability" of the layout. Meaning, is it a design that the architect or engineer can turn into a three-dimensional facility?

Once those steps are complete, you should develop a plan and appoint a committee to oversee the expansion process. You should define the company's goals and needs in terms of space, budget, overall size and business development. You should also have a general checklist to make sure everything involved in the expansion is accounted for.

For more information about RBE Co. or to read more of Ettinger's articles, visit the company's Website at www.rbeco.com

—Jorina Fontelera

Whether your converting operation has grown to the point of plant expansion, or you're seeking new geographic markets to not only serve but to set up shop, knowing which locales are most "friendly" to business is an important aspect. Fortunately, the Washington, DC-based Small Business & Entrepreneurship Council (SBEC) conducts an annual survey to help with your decision.

"In an increasingly mobile and competitive national economy, government-imposed costs of doing business can make a huge difference between whether a state grows economically or falls behind," says SBEC chief economist Raymond J. Keating.

The SBEC's 2004 index links together 23 major government-related costs that impact small business and entrepreneurs across a broad spectrum of industries and types of businesses. These include a plethora of taxes such as personal, capital gains, corporate, property, sales, unemployment, health insurance, gas and death taxes; electricity and workers comp costs; crime rates; number of bureaucrats; and state minimum wages, among others. The measures are combined into one final index number. The lower the number, the lighter the government burden and the better the environment for business.

The accompanying table (at right) shows how the top and bottom five states ranked last year. The specific index number varies from South Dakota's 24.55 to the District of Columbia's 73.55.

The list probably comes as no surprise to most converters, and of course, every state has its pros and cons. South Dakota may top the list, but a hotbed for package printing it's not. California may rank #50, but it's also the largest state economy in the nation. And all those customers could more than make up for the government-related downsides.

Clearly, there's a lot of factors to be weighed when deciding if and where to open a new converting operation. Many states and counties across the US have extensive marketing programs touting their particular locale's many benefits. Tax breaks are the primary teaser to get companies to either launch a greenfield plant or to renovate a Rust Belt site. Be sure to investigate every possible "gimme."

More info: 202/785-0238, www.sbec.org

—Mark Spaulding

You've built your business case for that new plant expansion or capital-equipment investment. You've documented the budget down to the nearest dime, and the project is a "go." Now comes the hard part: Finding the right people to make it all a success.

For guidelines on hiring, Converting turned to careerbuilder.com, the Chicago-based online job search and posting service. Here are some suggestions from its "Small Business Safeguards" pamphlet on how to avoid some pitfalls in the process.

The job description

Think of a job description as a "snapshot." It needs to communicate responsibilities, tasks, key qualifications, and basic credentials or skills. But such a description is also usually regarded as a legal document, says careerbuilder.com. Any references to race, color, religion, age, sex, national origin or physical or mental disability are illegal. Discrimination can also creep in with educational or experience requirements. To avoid age discrimination, experience shouldn't include an upper limit.

The interview

Conducting a job interview naturally means asking a lot of questions, but there are restrictions, warns careerbuilder.com. Some topics are legally taboo and might end up handing you a discrimination lawsuit. And don't think that asking questions without intending to use the answer to discriminate will help your defense. It's best to just avoid certain inquiries altogether. A few of the "Big Negatives" follow:

How old are you? A rather obvious no-no, as state and federal laws protect job applicants over age 40.

Are you married? Best reserved for after a job offer has been made.

Are you a citizen? This one's tricky. Instead, try asking, "Can you verify your legal right to work in the US?"

Are you disabled or have any medical problems? The 1992 Americans with Disabilities Act expressly prohibits job discrimination based on disabilities of any kind, advises careerbuilder.com. It's better to ask if the candidate is able to work "with or without accommodation."

Now you're ready to post the position. Fortunately, there's a wealth of vehicles available today to get the word out. Cyberspace comes in handy. Most converting-industry association Websites feature a "Job Postings" or "Career Center" section that let members post, and members/non-members search for, available openings. Among the most active are AIMCAL (www.aimcal.org), FTA (www.flexography.org) and TAPPI (www.tappi.org).

Trade publications highlight Help Wanted ads in their classified advertising. Converting typically lists nearly 100 such ads a year.

More info: Esther Hanscom at 646/746-7423, fax: 646/746-7392, e-mail: ehanscom@reedbusiness.com

—Mark Spaulding

What is Six Sigma? Think of it as a map towards process perfection, where each defect eliminated is like one step toward the destination.

Parts per million

Here's a simplified explanation of Six Sigma according to I Six Sigma, a leading publisher and content provider for the Six Sigma community. Six Sigma is a data-driven approach and methodology for eliminating defects in any process. The statistical representation of Six Sigma quantitatively shows how a process, operational or managerial, is performing. To achieve Six Sigma, a process or product must not produce more than 3.4 defects per million opportunities. A defect is anything outside the customer's specifications, and opportunity is the total quantity of chances for a defect.

Achieving no more than 3.4 defects per million can be accomplished through the use of Six Sigma DMAIC (define, measure, analyze, improve, control) for processes falling below specification and DMADV (define, measure, analyze, design, verify) to develop new processes or products at Six Sigma quality levels. Both processes are executed by Six Sigma "Green Belts" and "Black Belts," and are overseen by "Master Black Belts."

According to Scottsdale, AZ-based Six Sigma Academy, a provider of productivity and business transformation training and execution services, Black Belts save companies approximately $230,000 per project, at four to six projects a year. General Electric (Fairfield, CT), which now trains other companies in Six Sigma methodolgy—such as converter CoFlex Packaging in Chambly, Quebec, Canada—has estimated benefits of about $10 billion during the first five years of its Six Sigma implementation.

According to Jim Wheeler, former president of WESEECO LLC and technical advisor to AIMCAL, the use of Six Sigma practices and tools enables improved process understanding and control, which provides the opportunity to eliminate unnecessary steps. "Converters with high first-pass yield will have lower costs than their competitors," Wheeler says. "Furthermore, product delivery will be more reliable."

Implementation

There are many Six Sigma consultants all over the world to help your company develop and implement quality operations. One thing to keep in mind when thinking about implementing Six Sigma is that Six Sigma can only succeed if it is driven from the top of the corporation. "Six Sigma is a 'way of doing business,' not just a process," Wheeler says. "It's a corporate culture, not just a program. Everyone in the company and (people) involved with its business must practice the principles for Six Sigma to succeed."

The training required for everyone in the company is about two days, four days for managers and supervisors, and five to six months for Black Belts who will lead the company's Six Sigma programs. Converters can either have a consultant come in to look at the company and recommend a training program or contract an agency to run the training program. Wheeler suggests getting a consultant to reduce cost.

More info: www.isixsigma.com, www.6-sigma.com and www.ge.com/sixsigma

—Jorina Fontelera

Now that you have some tools to help you figure out whether to expand or relocate and how to manage your new hires efficiently, here are a couple of tips to help you stay on par with government standards.

The US Environmental Protection Agency created the Design for the Environment (DfE) Program to help the printing industry integrate health and environmental considerations into business decisions. "The DfE approach is intended to compare performance, risks and costs associated with alternatives to traditional industrial systems, materials and methods," the EPA says. "A primary goal of DfE is to encourage pollution prevention rather than relying on end-of-pipe controls to reduce risks to human health and the environment."

One of four partnerships, the DfE Flexographic Printing Partnership focuses on the three flexo ink systems: solvent- and water-based inks and ultraviolet-cured inks. Based on the DfE's research, the EPA compiled the following pollution prevention tips.

The first step is to construct a process flow diagram that identifies each stage of production. Waste streams can be prioritized based on hazard or risk, and the source of those waste streams can be targeted. Some obvious and not so obvious suggestions: Use computers for proofs to eliminate the use of darkroom chemicals, cover all volatile materials to minimize volatile organic compound emissions and rework press return ink. The EPA also suggests printing with four-color process to minimize the amount of mixed colored inks used.

More info: www.epa.gov/dfe. There, you can also find out about the DfE Gravure Printing, Screen Printing and Lithographic Printing Partnerships.

Volunteer to improve safety

Along with eco standards, you must also be knowledgeable in the various printing standards the Occupational Safety & Health Administration requires converters to adhere to.

To help converters avoid costly citations, OSHA provides a consultation service to find out about potential hazards, improve safety and health management, and qualify for a one-year exemption from routine OSHA inspections. In addition, no citations are issued. This free and confidential service is designed for small- to medium-sized companies. During the consultation, OSHA will walk through your plant and help you recognize hazards. They will suggest options for solving safety or health problems, provide a written report of the findings and assist in developing or maintaining an effective health and safety program.

More info: www.osha.gov

—Jorina Fontelera