Hallmark was founded more than a century ago in 1910 by a teenage entrepreneur Joyce C.

Hall with a couple of shoeboxes of postcards under his arm and the American dream in his heart. Todays Hallmark is a $4.4 billion business with greeting cards and other products sold in 38,000 retail stores across the U.S. and in 100 countries worldwide. Its brand also reaches people online at Hallmark.com and on television through Hallmark Hall of Fame movies and cables Hallmark Channels.

The 83 year old Kansas City company reengineered almost every aspect of its operations with the objective of dramatically reducing the time that elapses from noting a new market need to filling it with a card on the retailers shelf.

 Hallmark

Cards, Inc. looked to reengineering as a preventive competitive strike rather than as a response to a bad situation.

The

one who did reengineering was Robert L. Stark, president, Hallmark Cards, Inc.

Their

reengineering effort started in February 1989. In the summer of 1991 Hallmark developed a new line of cards in an entirely different way.

Product cycle time was approximately 3 years. 2/3 of the time was spent in developing the plan and concept for the card. Growing trends of more and more niche markets.

The company was making about 50,000 revisions to designs each year, and Hallmark had no accurate way of finding out what was selling well and what was not.
Numerous hand-offs of work during card development. The concept spent 90% of the time within the creative staff sitting in someone's in/out slot. Retailers demands of fast and tailored products and marketing programs. The no. of stock-keeping units expanded far faster than the sales rate. Run time came down from 20-24 hours to 8 hours but make-ready time(time to get the press ready, the dies aligned, and so on) still remained 8 hours, with all kinds of implications for costs and capitals. New forecasting tools for sales in new segments were required. Sales data arrived too late, to refill the hot sellers, pull the slow ones, and plan for new lines.

In February 1989, an off-site meeting of 40 senior executives was held. Donald J. Hall, the chairman of the company and son of the founder, articulated the companys beliefs and guiding values to communicate them to the employees. In April 1990, the company formulated its business priorities. The key objectives were articulated: To reduce new product development time to 1 year. To produce products buyers and retailers would love. . To reduce costs with improvements in quality. A reengineering team was set up, staffed by some of the companys best and brightest employees.

100 employees were appointed to 9 teams, each of which addressed a specific "leverage point" -- the critical parts of the business that needed to be changed. These teams came up with 100 recommendations and presented them to 5 person operating committee, 12 of which were chosen for a pilot project.

The pilot program: Capture sales data at the point-of-sale using barcodes. Communicate actual sales data throughout the company. . Assign 5 groups to set up decision-support systems to interpret trends in stores. Form cross-department groups to develop new cards. Eliminate entirely old style review processes.

Once it became clear the pilot program was generating impressive results, the reengineering initiatives were put into action company wide.

Before

After

Getting new line of products from concept to market took 2 to 3 years. Inefficiency due to queue time. Costly revision to design. Sales data arrived months late. Had no accurate way of finding out what is hit and what is flop. To many hand-offs.(about 25) Artists and editors work was reviewed periodically.

Now less than 1 year is taken for new product development. Products hit the stores 8 months ahead of schedule. Computerized point-of-sale information systems that used barcodes. Decision support systems to interpret trends in stores. Cross department groups were made to reduce hand-offs, cut down queue time and increase creativity. The team reviewed its own work.

 Employees

were concerned that Hallmark was abandoning their legacy. Difficulty understanding the relationship between continuous improvement and business reengineering. Employees thinking its a productivity improvement program. Acceptance. Technology.

 The

ability to track the effectiveness of a store layout or advertising campaign more precisely and quickly will reshape the way they merchandise and market. Due to new review process the development process got much faster and creativity increased. It enabled Hallmark employees to react swiftly and successfully to continuous, unpredictable change.

 Three

things that we learning from Hallmark reengineering are:

Communication. Getting senior management and their best people committed to the effort. Clear goals.