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
s 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.
s 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.
s In the expansion stage, sales
should grow more rapidly, and man-
ufacturing teams are executing their
well-thought-out plans to accommo-
date growth.
s 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.
s 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.
s 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 floor 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 floating 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 Revenue
Grand 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 Selection
The 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:
s 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).
s The color toner system is new for Canon engines. It is
chemically prepared and has a fusing component within its
chemical matrix.
s 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.
s 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.

s The fuser subsystem is a heated roll/pressure roll that
requires no release material (such as silicon lube).
s During cartridge breakdown, cleanliness will be critical.
Cross-toner contamination must be controlled.
s 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.
s The K (black) cartridge can be remanufactured on the cur-
rent line with minimum of process/procedure modification.
s The drum unit can be remanufactured on a current line
with a minimum of procedure development.
s The remanufacturing process for the toner cartridges will
need to be statistically sound. There will be only audit testing.
s Color cartridge remanufacturing will force immediate
excellence upon the production floor.
s Grand Manan Laser will not remanufacture the fuser car-
tridge at this time.
Facility Assessment — Grand Manan Laser
Facilities 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:
s Develop a plan that describes primary and secondary
work activities that will occur within the critical procedures area
of evacuation and filling.
s 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 Manifest
The 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 Logistics
Some 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 Logistics
Some 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 Support
While 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 Marketing
For 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 Planning
One 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 flow and material movement will prevent issues with
employee health and safety.
High Performance Manufacturing
The Grand Manan Laser management team members have set
simple goals for themselves as they launch their color cartridge
products. These are:
s Decrease unit and process cost are of prime importance.
s 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.
s Remember cheapest is not always best.
s Remember that quality is essential and difficult to measure.
s 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.
Conclusion
The 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.
Bibliography
Hewlett 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 celestialengineering@ptc-me.net.
R

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