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Reducing pressure sensitive label waste


We plan on implementing a system which will minimize the waste per order and increase revenue on each order according to the quantity and the depth of the label. We have discussed in detail with the management of Kieran Label Co. [KLC] what areas of production can be improved in order to minimize waste. In addition to touring the manufacturing facility we were able to witness various hands on demonstrations and a variety of processes in order to help us gain further knowledge of the tasks on hand. This process of meeting with management led to several discoveries of operational processes at KLC which could use improving. We have focused our attention on the overrun for the labels at the time of production.

Noticing the effect wasted material has on the profit margin, either overrun or shortage, we have devised a simple yet effective formula driven charting system to help estimate the amount of overrun necessary for each customer order. The process of creating this charting system consisted of gathering information from management, in particular the shop floor manager, who was instrumental in the placement and organization of the chart itself.

The current policy is to overrun 10 percent of the placed order plus an additional 2 percent to account for any unusable labels and to account for errors committed by the rewinding machine operators. We paid close attention to the rewinding machines. These machines are a valuable resource and need to be operated by a trained professional skilled and strategic. These machines save the company thousands of dollars per year by reducing the amount of production time and increase accuracy for every order rewound. It is at this part of the process where the operator must pay close attention to the numerous tasks on hand, our system requires these operators to be trained because they are implementing one additional task.

The rewinding machine operator receives the job ticket with the master rolls from the press operator, who, along with the equipment, is located at the other side shop floor. The job ticket will include the customer specifications for the order along with the requested amount to be on each roll. This is the basis for our methodology and how we calculated our formula. Due to the close relationship between the number of rolls and the waste, the company is losing money on a per order basis when they implementing the current policy which is to produce 2 percent over requested. This current policy has proven to be sufficient, however, not cost effective. With the current training provided the rewinding machine operators are able to stay well within the 2 percent of allowable overrun. Our goal is to use a chart which will customize each orders overage amount, instead of using an arbitrary 2 percent allotment for overage.
Our research has shown that the month of May is an average month for order receipts and to remain consistent in proving our results we have continued to use averages as a basis of calculation. In an industry which uses global standards and policies, we are confident in using averages for our statistics. We have created a confidence interval for a random sample of orders in the month of May. Our findings are consistent with our initial assumption that if Kieran Label Co. implements our new charting system they can save between [$$$$$$-$$$$$$] with 99.7 percent confidence. See appendix for specific data related to this information.

The sample was generated by randomly selecting orders using simply the quantity and the depth of label in an average month. By using Excel to create standard deviation and the sample mean we were able to plug them into the aforementioned formula and say with 99.7 percent confidence [ z-value at 3] that the company on average will spend [$$$$$] compared with [$$$$$$] using their old policies and procedures.


Kieran Label Co. has decided to implement our new procedure and has begun testing it on several smaller jobs, in doing so they have noticed that with smaller jobs the old policy of 2 percent overage was the same as the new procedure proposed. Due mainly to the fact that smaller jobs are harder for the rewind machine operators to be more exact in application of their process. As mentioned before, the smaller job sizes are lighter and are more likely to be rewound with more overages on each roll than if it were a larger order size.
We recommend that Kieran Label Co. implements our new procedure; however, it is most cost effective to stay within the range listed in our confidence interval. This way they will be 99.7 percent confident that they will be reducing the amount of waste per order required by management.


We conducted a random sample of fifty orders received in May. Our data analysis has the following statistics:

Random Sample of Orders [May 04]

Mean 263,100
Standard Error 110,173
Median 48,450
Mode 20,000
Standard Deviation 779,039
Sample Variance 606,902,303,367
Kurtosis 29
Skew ness 5
Range 4,999,000
Minimum 1,000
Maximum 5,000,000
Sum 13,155,000
Count 50
Confidence Level(99.7%) 344,108

Confidence interval Equation
Y ± z × s/vn =
Y = the sample mean [263100]
Z = 3 [ z-value is determined by the confidence interval, 99.7% on the table]
S = sample standard deviation [779039]
n = sample size [50]

263100 ± 3 × 779039/v50
Model WT-25LC
The WT-25LC features a highly refined photoelectric counting system. This makes it ideally suited to the pharmaceutical roll label printing and packaging industries where label count reconciliation is required. For simple operations, the counting system can be set to operate in the length counting mode.


1. Bill Walker, president of Kieran Label Company
2. Heizer, Jay; Render, Barry. Principals of Operations Management. Fifth Edition. Pearson Prentice Hall. 2004
3. Lou, Sheldon. Statistics 123. Pearson Custom Publishing. 2003
4. Web Techniques.

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