American Printer's mission is to be the most reliable and authoritative source of information on integrating tomorrow's technology with today's management.
Aug 1, 2004 12:00 AM
Business excellence in the graphics-arts industry is what the NAPL's (Paramus, NJ) Management Plus program is about. The two-part program, in existence for more than 20 years, requires entrants first to complete a comprehensive self-evaluation form, which requests details on the company's financial performance, internal control systems, marketing/sales plan, vendor relations, business planning, human resources, environmental concerns, quality control and community/industry affairs.
The second part of the program, which is optional, involves submitting the results to the annual Management Plus competition. Entries are rated on how well they score in the above areas compared to companies of similar size. Judges select Merit, Silver and Gold winners. The William K. Marrinan Hall of Fame award is bestowed on companies that have won several Management Plus awards over successive years. Earlier this year, 27 companies were recognized at NAPL's annual Top Management Conference (see www.napl.org for more information). The program is sponsored by AMERICAN PRINTER, Compass Capital Partners and MAN Roland.
AMERICAN PRINTER spoke with this year's Hall of Fame winner as well as three Gold Award winners to find out a little bit about the “plus” part of their managing.
Deborah Donberg is managing editor of AMERICAN PRINTER. Contact her at firstname.lastname@example.org
War may be hell, but when Wayne Scheible, president and CEO of Flower City Printing Inc. (FCP), calls himself a “guerrilla fighter,” he sounds at peace with the description. That's probably because it's key to a philosophy that has served him and his company well for 34 years.
“We don't stay still,” Scheible explains. “We keep moving all the time. You have to do that to stay alive today. We change our paradigms a lot, and we try and go with what's out there and what's new and exciting. We started out doing silk screen printing, then got into commercial printing. In 1985 we got into packaging and labels.” Scheible likes to say his area of specialization is “people that need printing. We're printers.” Printers that this year took home the William K. Marrinan Management Plus Hall of Fame Award.
Scheible started FCP in 1970 with four others (three remain, two have passed away). The company operates three plants, two in Rochester, NY, and one in Winston-Salem, NC. With approximately 250 employees and 250,000 sq. ft., FCP produces printing for the label, packaging, display, carton and commercial color markets, bringing in sales of more than $25 million.
Always an innovator, FCP has won numerous awards over the years, was the first privately owned printer in the US to be ISO-9000 certified, and often serves as a beta site for new equipment and materials. “We even do some alpha testing where we help develop the product,” Scheible reports.
The company runs large-format presses, ranging in size from 40 inches to 64 inches. Most presses have six color plus coating capabilities, and one 64-inch press can run eight-color jobs. Recent equipment includes high-speed inkjet printers for work larger than 64 inches. Applications for these flatbed digital presses include short-run POP.
When talking about the dramatic changes in technology since FCP was founded, Scheible recalls his early days with a laugh. “We bought one of the first digital adding machines for $1,400 and one of the first car phones for $4,200.” Nevertheless, while today's young entrepreneurs have a high-tech world at their fingertips, Scheible knows it's still not easy getting started. “Today, those things are all taken for granted, but there are new challenges. If you level it all off, it's pretty much the same.”
One problem often cited today is hiring good people. True to form, Scheibel has positive things to say on the subject. While not happy that many high schools have been forced to eliminate their printing programs due to cutbacks and not enough young people are choosing printing as a career, he says FCP still manages to find good people. “If you have a reputation as a good, honest place to work, your workforce seems to come along.”
Globalization? Many in the U.S. industry quake with fear at the word. For Flower City's guerrilla fighter, though, it's just another opportunity. “China is our biggest competitor. We used to do a lot of puzzles, for example, but that's all in China now. Okay, but that opens up other things. We have to do business a little bit differently. Maybe we have to offer just-in-time inventory to customers.”
A bad economy? “It hasn't been bad for us,” notes Scheible. “When the economy starts slipping, we go out and double our efforts. We're still buying equipment. Actually, we just chose not to participate in the last downturn!”
Scheible participates in the Management Plus Awards program primarily as a benchmark for his company. “To be honest, I think anybody that doesn't participate is missing something. It can be very hard as a businessperson to judge how you're doing. You may think you're doing great, and then you find out someone else is doing a lot better. This gives you a way to measure all that.”
When asked what advice he would give someone starting a business today, Wayne Scheible does not hesitate: “Be flexible.” Just another way of saying, keep moving and the battle will be won.
Located on the Canadian prairie in the province of Manitoba, Friesens Corp. does about 97 percent of its business in other places. “This is one of the positive results of globalization, according to CEO David Friesen. “It has given us great opportunities to do business elsewhere in Canada, in the U.S. and even the UK. On the other hand, today we have more competition from places in Asia than we ever did in the past. It is one big world, and customers can source products at home, close to home or far away from home.”
Friesens is a book printer with more than $25 million in sales and four plants totaling approximately 265,000 sq. ft. The plants, all in the town of Altona, employ about 500 people. One plant specializes in trade and educational books, another does school yearbooks, a third focuses on quick print and packaging and the fourth serves primarily as a warehouse.
The company does mostly four-color work. Major presses are large-format, sheetfed offset, but for quick print, advance copies of books, and other short-run work, Friesens does a small amount of digital printing.
“We are long-time members of NAPL,” Friesen says of his company, winner of a Gold Award in the Management Plus competition. “I'm a past director of NAPL board, and I think it was probably in the early 1980s that we first entered the award competition, primarily to benchmark ourselves against others. We want to know how we're doing, we want to get a sense of what others are doing. That's the primary motivation for entering the competition.”
David Friesen believes three main things set his company apart from competitors: “We have a modern plant and the most up-to-date equipment in North America. We have always done all of our prepress in-house, so we have developed an expertise in that area, including color. And we are well into things like color management and dealing with our customers over distance to manage their businesses.”
Founded in 1907 by David Friesen's grandfather, the company originally was known as D.W. Friesen & Sons Ltd. “When I came in [about 35 years ago],” says David, “we were at the beginning of offset and the end of letterpress. The front end of the business was the largest and most complex part of it. Today, that's migrating to the customer, so the biggest part of our business now is in the printing, binding, fulfillment, etc.”
A well-trained workforce is so important to Friesen that his company has gone further than most in this area. “We've developed a number of initiatives on our own, including our own training and our graphics-arts colleges. We hire people at entry-level in most cases and then train them. Some years we worked together with GATF and one of the local community colleges and developed a certificate course. We trained and hired an instructor, and each year we run students through that to train people in the areas in which we need them.”
And once they are trained, Friesens' employees participate actively in quality control (QC). “We are ISO certified,” Friesen explains, “but we have always tried to build quality into the product rather than using inspections. We develop programs internally, beginning at the front end of the business and going through to the back where people are responsible for what they produce. Each department is responsible for accepting something from another department and passing it along to the next with the appropriate quality controls.”
Friesen sees continued change ahead. “Prepress will continue to change, and more and more will flow into the hands of our customers. We also see a move toward shorter runs and quicker turnaround times as our publishers don't want to warehouse the amount of books they have in the past. Everyone wants things for less today, so we have to buy equipment that allows us to become more efficient and automate the processes we have in-house so we can produce more work with fewer people.”
The printing industry remains a thriving one, Friesen says. “Law books, encyclopedias, those types of things have migrated online, but textbooks continue to be stable. We print the Canadian edition of Harry Potter, and people certainly are reading that.”
Not only are people reading it, but many try to read it before it's published. The security challenges associated with that job, Friesen explains, necessitated having all members of the staff sign confidentiality agreements, installing a new security system on the physical plant, giving local police advance notice, and taking all information off the hard drive and saving it in a vault to prevent hackers from getting into the system. “With the last title,” Friesen says, “people from newspapers outside of our province came here to try and get into the local dump and find something that would give them an advance look!”
When asked what else he wants people to know about his company, Friesen says proudly, “We have been employee-owned for about 30 years. While we don't officially have ESOPs in Canada, all of our employees are shareholders. We run the company like a small public company, but only our staff can own shares in it. This is a big reason for the success of our company and one of the reasons we win these Gold Awards.”
When a company has a one-word motto, and that word is “Excellence,” you're looking at an operation that knows what it wants. And, in the case of Action Printing (Fond du Lac, WI), what it doesn't want.
“We don't like to take second place to anyone,” says Action president Robert Carew. “It's our culture. If we're going to do something, we're going to do it better than anyone else out there. That's why the Management Plus program is so good, and we've been fortunate enough to have won the gold award three out of the past five years [including this year] and silvers the other two years. The thing I really like about [this awards] program is that it…encompasses your entire business, from human resources, business planning, environmental, community affairs, sales and marketing, internal control, customer feedback, QC, vendor relations, financial performance. It's all there. To me it's the best report card in the industry. And one of the better roadmaps to profitability.”
Owned by Gannett Co. since August 2002, Action Printing boasts $10-$25 million in sales, about 100 employees in the printing division and approximately 100,000 sq. ft. total. The company produces catalogs, directories, manuals and publications with three web and three sheetfed presses.
“We're very competitive,” Carew notes, adding that one of the company's main competitive advantages is providing a one-stop shop for customers. “We do everything for the customer, starting from electronic prepress through print, bind, mail and fulfillment. Our customers definitely are more comfortable with one plant handling the entire operation. Two big issues in this are the confidentiality of their materials and faster turn times.”
Carew says his company has come through recent tough economic times very well. “We haven't had large growth, but we've maintained our profitability. The key is making sure expenses are staying in line with the revenue. We have a new press on order now which is expected to arrive toward the end of 2004, a 12-unit DGM [Dauphin Graphic Machines] 440 with two folders.”
Starting in 1970 as a publications business, Action added the printing division in 1973. Since it competes mostly in the short-run arena, the company so far has not found foreign competition a significant factor at this time. “It boils down to turn time,” Carew explains. “Our average job delivers in seven to ten days, including the proofing cycle, for a perfect-bound book. It's not plausible for that to be done overseas due to shipping charges and cycle time. You'll see globalization have a greater impact on materials that aren't as time-sensitive and can be planned further in advance.”
While not ISO-certified, Action Printing is very big on documentation, according to Carew. “We track everything. A lot of printers get ISO certified because they're dealing with companies that are ISO certified, and they're told they need to be if they want to be a vendor. We have not found that, because we have very strong control over all of our processes. We use a continuous improvement philosophy for QC. We're doing everything an ISO-9000 company would do, but we're not certified. We use ‘real-world’ measurements.”
Carew points out the importance of the “human element” in his business, which leads to the question of his workforce. “We've not had a problem getting good people, because we have extremely low turnover. We're a big believer in strong benefits, and when we hire someone, it's like a marriage: It might not be perfect every day, but you have to be willing to stay with it and make it work. Employment is a two-way street.”
He adds, “We're lucky in Wisconsin. There are a lot of printers here, so we have a lot of schools, and we get some pretty good candidates. But it's really the hands-on training we do here that's important. We have apprenticeship programs in the press and bindery departments. Our managers have written their own criteria and their own tests. That's how people move up in those departments.”
Action Printing runs with what Carew calls a “very strong and very diversified management team.” “Our opinions have similar weight. We have an ‘operating committee’ which includes a production executive, a director of sales and marketing, HR, finance, publications division, VP and president of the company. We really take a team approach. We get everybody's input. We don't always agree, and that's good. It provides for good discussion of the issues and thorough thinking through, but when we come out we like to be holding hands.”
Carew points to overcapacity as one of the ways the industry has changed for the worse over the years. “There's more capacity in the industry than there ever has been. So more competition and extreme price pressure.” Which is probably why his advice to someone trying to get started in the printing business today is, “You have to pick the technology you can afford, and you need to research your markets thoroughly before you dive in. It's a very competitive environment in every sector of printing.”
And that's coming from someone who knows what he wants and how to compete.
Private colleges, politicians and auctioneers. They may seem to have nothing in common, but to Bill Gilmer, owner and president of Wordsprint (Wytheville, VA), they are related as closely as profit and bottom line, since they make up the three main categories served by this rural Virginia printer.
With traditional offset and digital presses, both full color and monochrome, Wordsprint prints customized letters and brochures for colleges, updates for local politicians and brochures, advertisements, catalogs, etc., for auctioneers across the state.
“We also do other work — banks are big for us,” says Gilmer. “We design, print and mail, mostly targeted short runs in full color, 5,000 to 20,000.”
Gilmer started the business in 1986 as a one-man Macintosh desktop publishing operation called Wordsmith. Eventually he took on a partner, merged with another company, changed the name and continued to grow.
Because his company specializes in short runs, Gilmer has not lost many customers to offshore printers. He notes, however, “Globalization affects us indirectly, because our customers are being assaulted by it, and they are having to trim their budgets and get much sharper with the pencil when it comes to their vendors.”
Like most printers, Wordsprint has found the past few years challenging, to say the least. Gilmer explains, “We actually started noticing the soft economy in 1999. That year, 2000 and 2001 were the tough years for us. In 2002 we started taking advantage of the lower interest rates and the changes in the depreciation laws, and we upgraded several key areas. At the end of 2002, we went direct-to-plate with a platesetter. A year later, we completely upgraded our bindery equipment with a new Standard Horizon StitchLiner, which is a combination flat-sheet collator, stitcher and three-knife trimmer. And we're getting ready to purchase a five-color press. We had some lean years. Don't get me wrong, we never went in the red, but our profit margins got as skinny as they've ever gotten. But we're back up now.”
In fact, Gilmer says, the auction business is pretty much recession-proof, and it usually improves as the economy gets softer, which of course is good for his business.
“And,” he adds, “our biggest customers are two local private colleges. When the economy got soft, and then after September 11, more and more students started choosing community colleges. They didn't know if dad would have a job, they didn't want to go that far from home, they didn't want to fly. Many community colleges have responded by printing more. Instead of sending out 40,000 prospect letters, they're sending out 80,000 or 90,000. And that's more work for us.”
It's not unusual for companies to talk about the importance of customer service today, but Gilmer actually believes it is more important than equipment or process.
“Technology is almost a given now. Everyone has it. The area of competition has moved to information management. It's no longer who has the fastest or the cheapest or the best quality. If you're not good and fast and cheap, you're not even in the ballpark. Once you have all that, you compete on customer service and responsiveness. Our customers are comparing us not to other printers but to the service they get at the local Sheraton or the service they get when they call Direct TV. Our biggest push now is collective intelligence. And that really boils down to information management.”
So information management is what Wordsprint is about today, and in the future. “We are now collecting customer contact data in real time. If a customer calls, our operators are beginning to type in the conversation as it's happening. If they call back in 10 minutes and get someone else, their information is on the screen; they don't have to start all over. And we're trying to spread that out. We're moving toward electronic job tickets, so when a bindery operator goes to work on a job, he doesn't look at a job ticket that was printed several days ago. He walks to the computer screen, punches in a number and has the latest information.”
Helping to make all of this happen is Pace Solutions, a management information system (MIS) company in Jacksonville, FL. Gilmer says Pace had to do some custom programming for his company. “Most MIS do not include customer relationship management, so we've put some of those features in. Our sales reps use Pace when they make calls. Everyone is connected.”
Internships and a local high school with a printing program have helped Wordsprint recruit good workers, and once there, they tend to stay. “We have great people,” says Gilmer. “We've been known to hire people even if we don't have a position at that moment, just because they were too good to let pass by.”
In the past two years, the company has lost two people due to normal attrition. Rather than replace them, Wordsprint runs what Gilmer calls “two people leaner,” and things are going just fine, mainly due to cross-training.
“We recently created a SWAT team. Two of our operators are no longer bindery operators or direct-mail operators or press operators or whatever they used to be. They now are called the SWAT team, and they can run the press or direct-mail equipment or the folders. We have even trained them in customer service. They go wherever the hot spots are every day. The ideal would be if everybody in the company could do everything. We're pushing toward that.”
All Wordsprint employees are on an incentive pay plan. They all have a base wage, but the rest of their income — a substantial portion, Gilmer says — comes from incentives based on personal, department and company-wide performance. “It all ties in with distributed decision-making,” Gilmer says. “We are an extremely flat organization. We don't really have supervisors walking the floor. Our workers are the ones making the decisions. There are four of us who are part-owners, but daily operation is driven by the operators. They have planning meetings and make decisions on the floor because, through information management, they have the big picture.”
Gilmer calls the NAPL Management Plus competition “almost a business plan. If you did everything well that it measures, you'd be a very successful company.”
With 16 employees and about 20,000 sq. ft., not everything works for Wordsprint (a Gold Award winner with earnings of $1-$5 million). “For example, you score points for having a safety committee. We had one for a few years but found [at our size] we didn't need a committee, so now we have a designated employee who is a coordinator. But having that as part of the competition forced us to think about it.”