The Manufacturer Magazine : Promoting best practice in Manufacturing

Custom Direct LLC, Checks and balance

Manufacturing in Action, Source : The Manufacturer US
Published : May 2007

Direct marketer Custom Direct LLC is transitioning into a world-class organization using lean manufacturing and Baldrige criteria. Linda Seid Frembes finds out more

The Internet has become the cornerstone of life, from email to online shopping and even online banking. For check printing company Custom Direct LLC in Joppa, MD, the annual decline of check use by 3 to 5 percent meant looking beyond the horizon to new business opportunities. “We want less than half of our business to be checks over the next three to five years. We’ll accomplish this by adding product lines and services such as a Giggleprint.com, which is launching in June,” says Dale Dabbs, COO and executive vice president.

Dabbs joined the company two and a half years ago and brought lean manufacturing principles with him. Dabbs has been in the check printing industry since graduating from college and got his first job working for Clarke Checks. He started as a manufacturing trainee and worked his way up to plant manager at the age of 26. Clarke merged with another check company, where Dabbs met John Browning, Custom Direct’s CEO, who was vice president of operations at the time. Dabbs eventually became vice president of operations for the newly merged entity Clarke American. “We started a program in 1987 working toward the Baldrige criteria for performance excellence,” he notes.

Dabbs and Browning served as board members on the Check Payment Systems Association, so they stayed in communication. “Eventually John offered me a job, and I moved to Maryland,” says Dabbs. “The company values—respect, integrity, continuous improvement, customer centered, profitable growth, and teamwork—were a strong sell for me.”

Dabbs adds, “We’re a small player in this industry, so there is still opportunity in the market for us despite the decline in check usage. Our database of 24 million customers, of which 8 million are active, is a powerful tool for our direct marketing focus. We’re in the process of implementing key processes to grow the business in this direction.”

The company has a belief in its vision of achieving world-class status. “We want to be a world-class direct marketing company rather than just a check printing company like we are now,” says Dabbs. “Lean manufacturing, a balanced scorecard process, and achieving Baldrige criteria are under the umbrella of our journey to world class. Quality is showing 30 to 40 percent improvement, but we want zero defects. These are achievable targets.”

Luckily, Browning founded a hard-working organization that is used to taking on multiple challenges. “We do all our own web design, advertising, purchasing, and product design. Since we’re direct to consumer, we can offer value in cheaper prices and more design choices,” says Dabbs. “Of course, we work closely with technology partners like Cognos and Core Metrics to get the best results.”

The Lean Committee, or TLC, drives the lean manufacturing program at Custom Direct. The group is headed by Rich Joines, director of manufacturing, and his assistant, Sherry Jordan. According to Dabbs, Joines has really championed the lean journey and has worked with the Maryland Technology Extension Service (MTES), an organization that works with Maryland-based companies on implementing lean programs. “Every department has a representative on the committee. We went through 5S for all departments and even got some pushback from the more creative people, like marketing design,” says Dabbs. “But once people realized that lean manufacturing is about thousands of small improvements, they were on board with the changes.”

The company looks at lean manufacturing as a systematic approach to identifying waste and then eliminating it. Dabbs noticed that most people went straight for the elimination without contemplating the approach to identify the waste. The effort received Browning’s support, whose message was “change or be changed.” “As a result, naysayers have had to move on,” says Dabbs.

To support the Baldrige piece of the journey to world class, the company’s quality director, Tanya Cook, spearheads the effort. Cook was recently accepted as Baldridge assessor and has previously worked with the Maryland Performance Excellence Awards (the state version of Baldrige). Cook’s first state assessment won the Maryland Performance Excellence award.

“We are heavily into flow by nature of the business. Our company has a culture of continuous improvement,” says Dabbs. “Both our Joppa and our Little Rock, AR, plants ship out 40,000 boxes of checks every day.” The company also employs a four-person financial analytical group, which recently reviewed the company’s remakes—customer orders that are incorrect and need to be reprinted. As a result of the review, remakes are down 30 percent.

Custom Direct also recently completed the first employee satisfaction survey in four years. Conducted by the Jackson Group of North Carolina, it scored in the top 20 percentile among all 550 associates in manufacturing and contact centers at both locations.

Keeping the employees healthy and safe is another priority for the company. According to Dabbs, the company’s OSHA rate is under two. In addition, the company announced this year that there will be no health insurance premium increase for its employees who sign up to participate in the “Fit for Life” program. Program activities include completing a mandatory online health assessment, biometric exams, and then a physical exam with a physician. To support the program, Custom Direct built workout rooms that are available to employees anytime the plant is open. If an employee achieves three of five fitness goals, he or she receives a $250 cash award.

As the company transitions to a world-class direct marketer, cost areas like paper and shipping worry Dabbs a bit. However, he credits lean manufacturing and other efforts to contain costs and eliminate waste. “It’s a double-edged sword. Internet banking is pushing check degradation, but the Internet is also a great way for people to learn about us. Internet orders represent 40 percent of incoming orders, with phone and paper orders another 30 percent each,” says Dabbs

The company is prudent with capital investments, but Dabbs adds, “There’s an amazing level of technology in our plants. We don’t invest in technology for the sake of technology.”

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