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June cover package: Management Plus

Jun 1, 2003 12:00 AM

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NAPL's (Paramus, NJ) Management Plus program has recognized graphic-arts companies' business excellence for more than 20 years. The two-part program requires entrants to first 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, optional part of the program involves submitting the results to the annual Management Plus competition. Entries are judged on how well they rate in the above areas compared to companies of similar size. Merit, Silver and Gold winners are selected based on their score. 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, 29 companies were recognized at NAPL's annual Top Management Conference (see for more information). We spoke with four of the 2002 winners to find out how ordinary companies are achieving extraordinary results.

Banner year for Branch-Smith

Branch-Smith (Ft. Worth, TX) is having a banner year. Having won the 2002 Malcolm Baldrige award in the small-business category, the company took home a Management Plus Gold award. David Branch, chairman and CEO, also has been named GATF/NAPL Sheetfed Executive of the Year (see p. 12). “I've gotten much more attention than I deserve,” says Branch. “We have a great team and we've all learned together.”

The motto for the $10 million, 70-employee company is “expert solutions for publishers.” It offers turnkey publishing services for short-run magazines, books/directories and catalogs. “We resemble a specialized web operation — we just happen to be sheetfed,” explains Branch. “We're in a niche made possible by our manufacturing efficiencies. Most general commercial printers can't [emulate] this strategy because their world is being everything to everybody. When it comes to price performance, they can't match what we're doing.”

According to Branch, ISO-documented process management helps the company achieve these manufacturing efficiencies. “Everything we do, we drive through ISO.”

The exec also advocates a patient and disciplined management approach. “It's doing all those things that are never urgent but always important,” says Branch. “We're not immune from market forces — we're getting buffeted around like everyone else — but we're also not drifting, wondering what to do.”

Branch-Smith won its first Management Plus Award in 1992. “We wanted to determine what the best-led companies were doing,” explains Branch.

The company's journey to winning the Baldrige award began in the early 1990s, when Branch-Smith participated in a 24-month, total-quality-management training program for small-business owners. “We muddled through, learning about managing suppliers, surveying employees and other things,” recalls Branch.

After completing the program, the company made process management a priority, and eventually attained ISO certification. In 1996, Branch-Smith submitted what Branch terms “a primitive application” for the Texas Quality award. Over the years, the management team continued to refine its approach, culminating in the 2002 Baldrige award.

Branch-Smith's technical strengths include its CTP and four-over-four-perfecting capabilities. According to Branch, however, the equipment is simply one component of a comprehensive operations strategy.

“We excel in information systems,” explains the exec. “Electronic job-ticket information and shop-floor data are used to chart individual, workgroup and company performance. The company worked with management-information-system (MIS) vendor Printers Software (Sarasota, FL) to customize its electronic job-ticket, data-collection and financial reports.

“We overlay the standard [MIS] printing world with our quality information database to track supplier nonconformance, customer complaints, opportunities for improvement and internal nonconformance,” says Branch. “Our strategic plan is linked to this system… it gives us a larger view of what's happening.”

Branch-Smith's Q1 results are up 17 percent over the previous year, “definitely flying in the face of the industry,” says Branch. “We're very competitive and still making money, but we need more volume to support the platform we've built,” says the exec. “But we're confident we can do it.”

Slow and steady wins the race

Founded in 1954, Merit award winner Litho Craft (Lynnwood, WA) is a $10.5 million general commercial printer specializing in four- and six-color work. The company first entered the competition seven years ago as a result of participating in a peer group. “All of the peer-group companies were NAPL members, and a couple of them were Management Plus winners,” recalls Gary Cone, Litho Craft's vice president of sales. “We've won three times in the past seven years.”

The peer group eventually fell apart as members sold their businesses to consolidators and other buyers. But Litho Craft is still going strong. Cone, who has been with the company 27 years, credits its staying power to prudent fiscal management. “We're pretty careful about what we buy,” he explains. “We don't try to grow too fast — we would rather grow steadily at five percent to 10 percent per year, than to see if we could grow 50 percent.” Cone adds that because Litho Craft purchases — rather than leases — its equipment and real estate, it has avoided a cash crunch during slow periods.

“Our biggest challenge is keeping prices competitive, while maintaining profits at the level we'd like,” relates the exec. “But there's no easy answer.”

While keeping a careful eye on the purse strings, Litho Craft's management team is committed to keeping up the technology. “We don't have a piece of equipment that's more than five years old,” says Cone.

Pressroom highlights include two Komori presses (halfsize and fullsize). The company also has an offline UV-coating operation, which runs as a trade service for other printers.

Litho Craft's approach to customer service has been influenced by Nordstrom (Seattle). Just as the department store is famous for its no-hassle return policy, Litho Craft offers the No-Fault proof. “We show customers their first [inkjet] proof and they can make as many changes as they want,” says Cone. “We don't charge them more [for changes they make] — we give them a price and stick with it.”

Litho Craft also looks after its vendors. “For 27 years we've held an annual breakfast in their honor,” relates the exec. “We include all of our primary vendors — paper, ink, prepress suppliers — and the ones people might overlook: our accountant, lawyer and mechanic. All have an integral part in keeping our business running smoothly every day.”

The printer also pays its vendors within 10 days “regardless of whether we've been paid,” says Cone. “We've built strong relationships.”

A new attitude

Another Merit winner, Herald Printing Co. (New Washington, OH) is a newcomer to the Management Plus competition. Founded as a newspaper in 1881, the $11 million sheetfed printer transitioned to commercial offset work in the 1960s. Today, it specializes in high-end color work for a range of customers, including sports teams (professional and college), tobacco, educational institutions, and lawn-care companies. In 2002, current owner and president David Stump and his wife Suzanne bought the company from Bob and Carolyn Bordner.

“The company experienced the same struggles everyone else has seen throughout the printing industry the last couple of years,” concedes Dave Stump. “It wasn't that our management or employees had done anything wrong. The economy was partially to blame, but we also lost work to new technology such as interactive CDs and the Internet. We had to find new ways to promote ourselves and find new markets and profit centers.”

Stump adds that the company's rapid growth posed its own problems. “In the 1990s we went from being a company with revenues of $3 million to $12 million.” The Herald Printing Co. found it had to adjust to the increase in business and attendant concerns.

Today, Herald Printing's management team has a new attitude after analyzing and working through the growing pains. “Our customers have made us change the way we react to their demands with their shorter turnaround times,” notes the exec.

Previously, most employees operated a single piece of press or bindery equipment with little team interaction. “But our workforce is stronger and more versatile now,” says Stump. “A truck driver may help pack off a collator; a press operator may help another press operator with a makeready.”

Stump says participating in the Management Plus awards has given the company a useful industry perspective. “It makes you look at a good printer and determine what makes them better. Those companies are making money and a lot of printers aren't. You don't need to get bigger, but you sure have to get better.”

Not your average in-plant printer

The Management Plus award's highest honor, the William K. Marrinan Hall of Fame award, recognizes exceptional management performance demonstrated over a period of many years. This year's winner, Allstate Insurance Co.'s Print Communication Center (APCC) (Wheeling, IL), has won seven consecutive Gold awards. As the Hall of Fame winner, APCC will bestow $1,000 scholarships to two Chicago schools: The American Academy of Art and Columbia College.

APCC reportedly saves its parent company an estimated $15 million annually. Said to be the second-largest in-plant printer in the U.S., it employs more than 360 people and currently occupies 430,000 sq. ft. The plant operates around the clock. It has a wide range of digital, sheetfed and web equipment, including 10 Xerox DocuTechs, two Xerox DocuColor 2060s and an Indigo; and a six-color Heidelberg CD74 with coater and four Komori Lithrones. The center's equipment has received a 95 percent capacity/efficiency rating.

“We buy nothing that we can't pay for in 24 months,” says Bob Tierney, APCC operations director. “We must have a two-year ROI. We have grown to this size by understanding what our [parent] company needs. Early on, we identify [future] work and invest prudently.”

We asked Tierney to tell us more about APCC.

Why did APCC enter the Management Plus competition?

We entered to help us assess our operation and to pursue our vision of becoming a world-class commercial printer.

How did employees react to the Hall of Fame win?

They were overjoyed. It made them feel like they were truly working at a commercial printer. We celebrated with a “Hall of Fame” week.

How do an in-plant's management challenges compare to a commercial printer's?

Everything we do must be perceived as a profit center. Our folks need to understand that we are only as good as the last job we printed, and that our existence and future is predicated on saving the company significant dollars while providing quality superior to the competition — commercial printers.

Of the nine Management Plus categories, where does APCC shine?

APCC's internal control systems are a strength. Our metrics are the envy of the in-plant industry.

Is there a category the company had previously targeted for improvement?

We've striven to improve our marketing/sales plan to extend our reach to the entire enterprise. We have right of first refusal on all company print and we intend to make our customers want to come to us.

Are you doing much variable work?

More every day — it currently accounts for about seven percent to eight percent of our volume — we are going to print 1 billion sheets this year. But 18 months ago, variable was only 1.5 percent of our volume.

Where will APCC be in the next three to five years?

We are going to grow and take a larger role in the corporation. Integration in our enterprise will provide new opportunities for our print and fulfillment operation, resulting in greater savings to the company.