Succeeding in the Small Order Financial Card Niche

By Bill Knotts, VP, Spartanics

As financial cards continue to become more of a price-based commodity sale, many ICMA members with long time financial card niches have diversified into new product lines such as loyalty cards, gift cards, and RFID cards. Another avenue to consider as a way to restore healthy margins is the aggressive pursuit of relatively profitable quick turnaround small orders of high value financial cards. The first step is to gear your sales and marketing effort to actively seek such work. Of equal, if not greater importance, is looking at ways to incrementally speed your job turnaround times while ensuring quality so customers seeking such services from your company are not disappointed. Moreover, in addition to minimizing production bottlenecks you need to eliminate sources of downtime.

The first consideration is how to revamp your sales and marketing departments so that your sales staff seeks the higher margin small orders. In many cases this takes quite a bit of coaching and an adjusted sales commission plan to undo the habits of years when bigger orders automatically equated with better financial results. Sales staff needs to understand that sometimes those 4-5 million card orders are nothing more than trading dollars, with little or no profit, and those more profitable small orders of 1/2 million cards or so are far more preferred.

Once your sales staff is appropriately schooled in the company’s need for small orders, it’s time to take a long hard look at your manufacturing operation to see if it meets the descriptive of “lean manufacturing” in the small order niche. Predictably, adjustments will need to be made in the number of employees and/or how your staff is deployed.

Concomitant with population adjustments, you need to re-evaluate the appropriateness of the equipment in your plant for quick turnaround and high quality demands of small order work. With small orders, there just isn’t time to go back and reload to reprint a job when quality is unacceptable. Your plant needs to be reorganized so that small orders go from start to finish with a high yield the first time.

Over the long term, you may find it beneficial to re-engineer your plant and transition to equipment that better facilitates quick turnaround, high quality small order work. Some tooling decisions for quick turnarounds with high quality are quite obvious. For example, automated feed speeds used by card manufacturers vary significantly, with the fastest feed technology providing a 50% speed improvement over the earlier types of feeds still found in card manufacturing facilities that haven’t upgraded feed technology in the past few years. Throughput considerations typically drive the adoption of smart self-learning systems that are able to fully inspect up to 36,000 cards/hour and do it efficiently by using only one inspection pass through the inspection machine. Thus, many basic tooling decisions can dramatically affect job turnaround time.

That’s not the end of the story, however, because as we all know, the far more important aspect to consider is how reliably your equipment will function day in and day out in real world plant conditions. When you are making purchasing decisions, an important aspect to consider is how the equipment manufacturer will respond to your plant in the worst case scenario of outright equipment failure, or whether routine maintenance will create machine downtime. Whenever possible, look for suppliers that can provide loaner modules for equipment or in other ways assure that your downtime is minimal, if not eliminated altogether.

To sum up—if you are finding that your business is getting beaten down in price too often with longer runs, you might take another look at the small order niche. You need to consider that it is not just how many cards your plant makes each year, but rather the overall profitability of your business that makes a difference. From a strategic standpoint, card manufacturers that gear for small order work, and especially those that equip themselves with the efficient throughput equipment options, are able to downsize their payroll considerably. Ask yourself—are you in business so you can say that you make 200 million cards/year or are you in business to make a profit?