By Milt Vine
Back in July, I wrote about the increase of mergers and acquisitions throughout corporate America and in the printing industry in particular. In the last year or so, Quebecor Printing (USA), Graphic Industries, Heidelberg, Mail-Well, Inc. and Consolidated Graphics have all made major acquisitions. And theyšre not alone. We've even made a small acquisition of our own here at Seattle Bindery, consolidating Blake Letterpress into the family, and we're thrilled with the expanded capabilities that came with it. After all, that was the main point of my column: that an acquisition often provides for a greater range of services at one shop, upping both speed and efficiency.
But I also brought up the ugly specter of the reverse possibility because I doubted that gains in profitability and customer satisfaction would prove to be the norm for every expanding company, at least after a certain point. It seemed reasonable to me that size might eventually become more important than service. A company might be taken over by a sort of never-ending expansion of machinery, then employees, then machinery, then employees, and neither the company nor its customers would end up the better for it. So imagine my interest when I opened my August edition of Printing Journal (always a good read) and saw the David Lindsay article about the shutdown of Roger's Binding and Mailing in San Bernardino, California. Roger's was 'widely recognized as the second largest binder in the country,' Lindsay writes, but closed after thirty years, partly because of a continual need to keep twenty folders, three perfect binder lines and seven saddle stitchers all running continuously in a market noted for overcapacity.
Bindery Size. After reading this regrettable tale, I immediately sat back and wondered how big was too big and if the same tools could be used to measure 'too big' status at any postpress house. Well, former BIA executive director Jim Niesen, as quoted in Lindsayšs article, gave me one measuring stick. Niesen believes that all binderies seeking to become the biggest and the best should look at the closing of Roger's and remember the bottom line. 'We have found that once [a bindery is] up around 80-100 employees, youšve got to be pretty special to be profitable,' he says.
The reasoning behind Niesen's statement, I suspect, is simple economics. For if a company, like Roger's, is sizable enough to offer a variety of services at lower than market prices, and thereby gain customers, the equipment and the number of employees necessary to keep such a juggernaut jugging along demands a huge amount of daily income. In that situation, a company must do almost anything and cut almost any price to keep every machine busy at all times. And the basic cost of doing business, the real 'bottom line,' is sometimes overlooked.
Customer Service. But economics arenšt the only measurement possible. After all, so much of what we do matters only if wešre keeping our customers happy, and that makes them a true judge of how we're doing no matter what size we are and no matter how large wešd like to become.
So, even though Seattle Bindery is nowhere near eighty employees, and the CPA in me can never forget the cost of doing business (even when doing so might make for a more restful night's sleep), Lindsay's article caused me to question further. As I've mentioned, wešre thrilled with our recent consolidation here in the plant, but I needed to look at changes in our company through our customers' eyes as well. Could a customer think wešre now too large?
The quickest method of answering that question is to ask, of course. And this I've done. But beyond that, I decided to re-examine customer desires that have been brought up in various focus groups and customer roundtables wešve held. Consistently, it seems that customers want us to be flexible problem solvers and they want a direct line to someone with answers to their particular questions.
The Test. And, as luck would have it, at the time I read Lindsay's article we were in the midst of a job that proved the perfect test. Our mission: to produce a quarter of a million spiral bound books. Our time to do so: not much.
We received the call for the job at 5:30 on a Monday. By Thursday, we had the paper in place, and production began the first thing the following week. We ran two shifts five days a week, with fifteen temps added to each of those shifts; we worked on four consecutive weekends, including three Sundays; we brought in additional equipment; we added power, lighting, compressed air, phone and computer capabilities to our storage area; and we finished on time with a quality product, exactly as the customer expected. What we learned was that additional size hadn't made us any less flexible, and that the customer rep, on site for much of the job, still enjoyed direct access to anyone at any time. At the wrap party, the customer bought ice cream for our entire staff, and that's when we knew we'd proven ourselves. We were bigger, but not 'too big,' and wešd learned that comforting bit of news from the best source possible.
Milt Vine is president of Seattle Bindery, a postpress house specializing in custom
tabs and presentation folders; folding and stitching; foil stamping, embossing and
diecutting; plastic spiral, Wire-OŽ and perfect binding. You can reach Milt at
206/682-2558.
Š 1998, Seattle Bindery. Reprinted from Printing Journal, November 1998.