2009 Spring

Diecrafters, Inc.: Common Sense Leadership, Steady Growth

May 1, 2009

by: Bob Windler

Editor’s Note: Diecrafters, Inc. is located in Cicero, Illinois. The company identifies itself primarily as a finisher, providing diecutting, foil stamping and embossing, and specialty folding/gluing. Approximately 15 percent of its annual sales come from bindery services. A member of the Binding Industries Association (BIA) for more than twenty years, owner and president Bob Windler has served in a variety of positions for the association, including a term as president from 2005-2007.

The story lies in the company’s people, rather than the company itself. The seeds of success were planted by Jack Windler in 1956, and the vine has been tended by his son, Bob, since 1985. With a no-nonsense operating philosophy, an old fashioned work ethic, and a steady hand on the plow, Diecrafters continues to grow despite a shrinking economy.

With a true love of the industry and a knack for systematic business investing, the story of the Windlers is one where the lessons learned apply to far more than just the family. In this narration lies the history of an industry, a pragmatic business philosophy, and an optimistic outlook. Here, Bob Windler tells the tale.

When two men in business always agree, one of them is unnecessary.
– William Wrigley, Jr.

Diecrafters incorporated in 1947, although old records indicate the founder, Walt Hahn, started as far back as 1936. Hahn worked out of the proverbial “garage” while moonlighting from his day job at Barrett Bindery, one of the oldest known binderies with diecutting services in Chicagoland. My familys history with Diecrafters started in 1956 when, after nine tumultuous years, Walt decided to sell the business. My father, John “Jack” H. Windler, saw an ad in the Chicago Tribune about a diecutting company for sale for $7,000. My father had worked his way up in the folding carton business as a bookkeeper, accountant, and production manager.

Dad learned that Walt had never achieved a level of sustained profitability, but after studying the situation my Dad decided that he could make a go of it. He estimated that if he could “stop the bleeding,” draw a small salary, and break even his first year, then he would have a good chance of survival. To line up the necessary working capital, he took his savings and borrowed some money from his father, purchasing Diecrafters, Inc. in June 1956. This was quite a gamble for a 36-year-old father of three, with number four (me!) just around the corner. After his first six-month period, ending December 31, 1956, he was able to pay all expenses, plus draw his salary and generate an additional $10,000 profit. Dad never lost money in any year he owned the company.

Dad owned the controlling interest in the company from day one. In 1961, his brother Bob came to work at Diecrafters and purchased a minority interest. The two brothers made great partners. As the saying goes, “If two men in business always agree, one of them is unnecessary” – they argued often, had very different viewpoints, and always seemed to reach a decision whether they agreed or not. Bob was the “people person,” while Dad was all about the numbers. They were quite a team until Bob sold his shares back and retired in 1978.

When Dad bought Diecrafters, the company rented 2,000 square feet on the 4th floor of a five-story building in Chicago. I heard stories about how the tanks of developing fluid on the 5th floor “sloshed” back and forth from the bed motion when Diecrafters’ cylinder diecutting press was in operation. In 1961, Dad bought a 4,300-square-foot building next door to the original site. In 1963, he doubled the size to 8,600 square feet, and then added another 1,500 square feet in 1968, which was as much as the city would allow for the lot size.

In 1980, one of our competitors wanted out and it was too good of a fit to pass up. Dad bought out Belman Die Cutting & Finishing in October of 1980, which provided the company’s first automatic-feed presses, as well as high-speed folding and gluing capabilities. In 1989, Diecrafters acquired a 70,000-square-foot plant and consolidated operations in Cicero, Ill., which is our current location.

The problem with owners is they hang around after they’re useless.
– Jack Windler

I started working there as a kid in the summer of 1973, jumping down crates of waste paper and stripping waste off the diecut forms at the end of the presses. Around 1976, I started doing payroll and a few other accounting functions, and by 1979, I had become heavily involved in the management of the business. With the next generation in place, Dad began a five-year phase out into retirement beginning in 1980. His exit strategy put a vice president/general manager in charge and developed a lead pressman into the senior production manager.

In March of 1983, Vice President/General Manager Forbes Lange had a very serious heart attack that left him incapacitated. Forbes had been a close friend of my Dad’s for 40 years, so this not only had an impact on the business, but also was very hard personally. The heart attack happened on a Sunday, so the production manager and I came to work on Monday expecting my Dad to come back in and take charge. Finally at about 9:30 a.m, I called the house and asked Mom, “Where is Dad?” She replied, “Right here,” and handed him the phone. When I asked Dad who was going to take over and run things, he simply replied, “Sink or swim” – and then hung up! We began treading water frantically – and eventually we swam. Ten years later, I was talking to my dad and said, “I couldn’t believe you did that!” Dad acknowledged a little trepidation. Actually, what he said was, “I was scared to death” “I wasn’t sure if I’d ever get my retirement money, but I had faith.”

On January 2, 1985, Dad sold Diecrafters to me and I remain the sole shareholder today. I was still young and green then, but he surrounded me with talent and a management team with many good years ahead of them.

Once Dad retired, he wanted to stay out of the business. I used to go over to ask his opinion, but he would say, “I’m out!” He often said that the problem with owners is they hang around after they’re useless. He did love investing, so he acted as the fund manager for our profit sharing plan, which he started in 1966. A portion of the profits are distributed to the employees each year we make a profit, giving the employees a stake in our success. He outperformed the Dow and S&P consistently.

Just because I said it, doesnt make it right.
– Bob Windler

We’ve expanded over the years, and our reinvestment into equipment has been steady and measured, with a long-established plan for reinvestment of profits into both our equipment and our people. All the iron in the world is merely iron without the talent to maximize what it can do. The real difference in any business is its people and Diecrafters’ employees are the best! Our staff is structured with a core group of 40 employees who have been with us for some time – many since the 1960s, ’70s, and ’80s. We recruit and develop new talent through a cross of bringing in new blood and drawing top performers from our extensive part-time staff.

Our business is not a happy-go-lucky, fun-filled adventure every day. It’s certainly not without its challenges. But I think people enjoy their jobs more when they’re being pushed. And I expect my employees to push me, as well. Just because I said it, doesn’t make it right. “Yes men” don’t cut it in my organization. I don’t need that. And I hate to hear anyone say, “That’s the way we’ve always done it.” Recently, I was talking to one of my supervisors and asked him why we were doing something a certain way, and he got this extremely guilty look on his face. He knew I wasn’t going to like the answer! Finding ways to be more efficient is critical. What differentiates us is that what is good enough for everybody else isn’t good enough for us.

That doesn’t mean we can’t make mistakes. I would love to claim that we are perfect but, of course, we have had our share of problems. How we handle problems is what sets us apart. I have always felt that making mistakes is a natural part of growth and development, but making the same mistakes over and over again is the definition of failure. As long as we learn from our mistakes, and are making new and “better” mistakes, then we are progressing.

If you don’t get any value out of it, don’t pay me.
– Jim Niesen

One way to keep learning is to stay involved with the industry. In the late 1980s, we joined our local PIA affiliate, Printing Industry of IL/IN Association, and learned of the BIA through this affiliation. Jim Niesen was the head of BIA for many years, and he worked out of Chicago. He came in one day and wanted to know why we weren’t a member. He gave me the big sales pitch and wouldnt take no for an answer. He said he was enrolling me, and he said, “If you don’t get any value out of it, don’t pay me.” It was a great sales technique!

Jim made a point of engaging me every time an event came up, making sure I stayed involved. Very quickly, I found that networking with companies from across the nation was valuable – what my local competitors wouldnt tell me, a similar company from the other side of the United States would happily share and vice versa.

The BIA used to put on bind-a-thons once or twice a year. The BIA would pick a host, and the attendees would fly in, get a hotel, and then hop on a bus to do four or five plant tours per day. It was a two-day event that exposed us to eight or nine companies. The real value was talking to industry peers who had a different perspective. We would sit on those buses and we’d ask each other questions – what are you paying for insurance, what are your benefits – information you couldn’t get from a local group because of the worries of competition. Some of the binderies we toured also had finishing and other integrated services, some being done successfully and some, unsuccessfully. There was a true value in sitting down with industry leaders after those tours to discuss what worked and what didn’t work.

Well, I was hooked. Diecrafters has been involved in the BIA for twenty years. I’m a past chairman of BIA and I’ve held other positions, too. I think the hardest thing about any trade association is to recognize and quantify what your return on investment is, but I have learned that there’s a direct correlation between what you put in and what you get out. The time that I’ve spent going on bind-a-thons, the depth of information that I’ve shared with allies in the industry – that stuff is invaluable. It’s a key part of identifying the opportunities that will avail themselves as your business grows and as the industry grows. We are involved not only with the BIA, but also the FSEA (Foil & Specialty Effects Association) and the PIA. All of them give me a direct line, a way of tapping into the various views of the future. Today many views are quite pessimistic but there are little gold nuggets of ideas. Not having exposure to those people and those ideas would be like bowling with your eyes closed.

If everybody else is doing it, it’s probably wrong.
– Jack Windler

We certainly don’t approach things the way everybody else does. It’s both a strength and a weakness. My dad used to say, “If everybody else is doing it, it’s probably wrong.” He taught me to challenge the traditional view. He’d look at the same situation I was looking at, the same facts I was looking at, and he’d burst my bubble with an obvious point that I just didn’t see.

Obviously, with the market right now, the masses are looking at the industry from a survival standpoint. Binders and finishers are in a waiting game. They’re lowering prices as far as they can to get work in the door, but I think that’s a never-ending downward spiral.

Diecrafters is in a very unique position in that we have financed ourselves through the investing and saving of profits, so we don’t have outside debt to hold us back. The market has taken big hits, and the future is in question, but we’re not panicking. I think the reality is that big changes don’t just happen, they unfold. A business plan has to be a living, breathing document that evolves, and Diecrafters is in a good position to evolve as the market does.

Even now we’re moving ahead – we’re forging alliances. We’re exploring and focusing our energies on developing the business, which is what we have always done.

We’ve always added services to support our clients’ needs. Often, this coincides with an opportunity to reduce costs and increase turnaround times with new equipment purchases. Several years ago, I told my wife the market was changing and the climate was getting tough. I needed to make a decision – all in or all out. We went all in. We bought a number of additional Bobst machines, an Eagle foil stamping unit – over about three or four years, we did some pretty heavy expansion. We bought material handling equipment in order to reduce payroll costs and improve service. Slower diecutters were been replaced with faster machines, and the foil unit that I mentioned delivered cost reductions with faster makeready times and run rates, as well as providing more efficient foil utilization. We have expanded affixing capabilities and integrated many of our services to run in-line with other functions. None of those efficiencies would have been implemented if our clients didn’t have a need; if they didnt ask us to provide a service knowing that we would do it better than the other guy.

My kids have asked me if I hold on to the business because of my Dad’s association with it; if I’m emotionally tied to Diecrafters, rather than evaluating it from a purely business perspective. If I’m honest here, I’ve probably given it a little more slack than I should have. My decisions have definitely been influenced by my love for the industry. It’s been good to me for a number of years. I’ve been doing this longer than my Dad did. And I guess I’ll be at it for a while longer.

John “Jack” Windler, age 89, died peacefully on February 15, 2009.

Folding Gets Futuristic: Embracing Technology for Ultimate Efficiency

May 1, 2009

by: Trish Witkowski, Finishing Experts Group, Inc.

Just about every step in the print production process has been modernized – but the one real holdout is folding. Yes, programmable folding machinery has been around for several years, and there are automated folding systems that can do incredible things. However, until folding itself goes digital, automation alone will not be enough to truly maximize production efficiencies.

Now, I want to be clear – I’m reaching for the stars here. We’re talking about the Holy Grail of print production – end-to-end total process automation. In my opinion, it’s an attainable goal, but we have work to do to get there. Before we get started, if by some chance you aren’t convinced that we even need to “go there,” here are a few compelling reasons to aggressively pursue total process automation for folded materials.

Demand for “lights-out” automation is growing with the steady increase in digital short run printing, web-to-print, and print-on-demand business models. The technology exists to achieve this goal. However, implementing a fully automated end-to-end workflow is not a plug-and-play endeavor.
Shorter run lengths and faster turnaround times require frequent makereadies, so manual tasks waste a lot of time that we don’t have. Build in the likelihood of human error, and things can get backed up, costly, and off schedule very quickly.
There is a growing need to automate folding because skilled bindery operators are getting harder to find – folding as an “art” has become a thing of the past as a generation of trained bindery experts is slowly phasing out of the industry.
A downturn in the economy, the commoditization of print, international competition, and pricing pressures demand a more efficient and cost-effective process.
Fold placement is math, and because of this, standardizing the file set-up process for folded material is a real possibility. We cannot automate a process that has not been standardized, and therefore without a standardized file submission process for folded materials, we cannot even hope for total process automation.

Assessing the Scenario

Turning folding into the streamlined, standardized, computerized process it should be is a fairly ambitious task. Here’s the problem as it stands:

Currently, there is absolutely no control over the digital document creation process. A printer basically has to work with whatever file he gets from a client. And since file set-up for folding can be a fairly complex task, who knows what you’ll actually get from the client, and how long it will take the print provider to fix the file. Thats problem number one.
Problem number two is that once you have a press-ready file, and that file can be sent through to the MIS system as a PDF in a digital workflow, that file does not currently carry the information necessary to communicate with the system to tell it what the folding style is, the placement of the folds, etc. which leads to problem number three.
Even if the folding machinery is a whiz-bang programmable JDF-compliant monster, it will still require some degree of manual adjustment because the file does not hold JDF folding intent information. Without the JDF data, the MIS cannot send precise settings to the automated folding machine. The file stops at the bindery and waits for (fancy, motorized) machine set-up.

Looking at the problems laid out above, the path to fully automated folding can be boiled down to two major issues – the need to control the file submission process upstream at the design stage, and the need to embed JDF folding intent into the file to enable communication downstream to finishing.

Assessing Current Technologies

Let’s take a look at existing technologies as they relate to the two major issues we’ve identified:

JDF folding intent – There have been dramatic improvements in the folding section of the latest iteration of the JDF specification. Previously, there was a library of set folding styles, which really limited the scope of JDF for folding. Folding is varied and broad in its spectrum, so a more flexible solution is required to accommodate for this. The JDF 1.4 specification has expanded to not only offer the standard set of folding styles from the previous version, but also offers the ability to define your own folding settings. This is a huge step forward.

Control over the file submission process – By now, we’ve realized that there will never be a day when all designers understand how to manually set up a file correctly for a folded product. As a matter of fact, we won’t see a day when 20 percent of all designers do it right. It’s not their fault – file set-up for folding is a precise process that is not currently taught in any graphic arts program anywhere, and manual file set-up (by the designer or print production person) almost welcomes human error. With that said, the only viable solution is through widespread use of custom automated folding templates.

The template is critical, since it virtually eliminates human error, and offers a file that is set up precisely for the folded process – the designer can just start designing. However, the file also must accomplish another goal: it must carry JDF folding intent, and this data must be populated at document creation. There must be no manual data entry, and it must work in the background. Designers do not know, nor do they care to know, anything about JDF. If we can embed it in the file under the hood, the file can talk, and we can understand it.

A Call to Action

For folding to truly go digital, making way for “lights-out” automation, it will take an aggressive, industry-wide push to make it happen. Collaboration is key, the tools are sitting in our laps, and the time is right.

Trish Witkowski is the president of Finishing Experts Group, Inc. She is the creator of the FOLDRite™ software system, a 2004 GATF InterTech™ Technology Award winner that builds dynamic custom digital templates that are mathematically adjusted for the folding process. These templates also have been proven to populate and embed JDF folding intent, standardizing the file submission process for folded materials. Witkowski holds a bachelor of fine arts degree in graphic design and a master of science degree in graphic arts publishing from Rochester Institute of Technology’s School of Printing Management and Sciences (now the School of Print Media). Current publications include: A Field Guide to Folding, Folding for the Graphic Arts: A Teacher’s Handbook, and FOLD: The Professional’s Guide to Folding. For these publications, and for custom digital folding templates, videos, and more, visit her online folding community at www.foldfactory.com. For more information, email trish@foldfactory.com.

CASE STUDY: JDF Works! Print Shop Live, Graph Expo 2008

At Graph Expo this past October, FOLDRite participated in the first-ever end-to-end live JDF workflow collaboration at a show between multiple vendors. Other participants included Adobe, Avanti, Kodak, Xerox, Duplo, EFI, Canon, Heidelberg, and CIP4.

The product produced was a folded brochure, created with a FOLDRite template in Adobe InDesign. The challenge was figuring out how to embed custom XMP data tags into the Adobe InDesign template that was generated. These tags would indicate fold placement and would communicate this information downstream to the automated folding machine. The brochure layout was exported as a PDF, and the XMP data stayed with the file. JDF data also was built in from the other vendors by request, including trim, etc. There was a web portal to upload the PDF, and upon upload it exported a JDF file that could then be absorbed by the MIS system. After that, it was up to the MIS system to communicate the information to the workflow software, the digital color printer, and ultimately to send the folding intent and related information to the automated folding machine.

How did we do it? There was a lot of back-and-forth in building and testing the JDF file, since different systems process JDF differently, so a lot of adjustments were made to make the file palatable for all systems. Valid JDF files were passed back and forth, but just because the file is technically correct does not mean that it works on all machines. Further testing was provided with files to support this process and collaborate across the workflow requirements for communicating the job intent and job messaging.

The end result was a success. The collaboration demonstrated that it was possible to embed JDF data into a custom digital folding template and to pass the data through the entire workflow to ultimately control the set-up of an automated Duplo cutter/slitter/creaser machine for end-to-end automation.

Five Strategies for Guaranteeing Customer Loyalty

May 1, 2009

by Robert W. Lucas, Creative Presentation Resources

Customer retention has always been one of the most cost-effective ways to increase business revenue. According to the international consulting firm Bain & Company, you can increase profits by as much as 95 percent through increasing retention by as little as 5 percent. If organizations fail to focus their efforts on servicing current customers while spending excessive amounts on acquiring new ones, they are wasting their efforts and much of their revenue.

Most customers are looking for good value for their money, especially in hard economic times. They also are attuned to product and service pricing. Even so, many customers are likely to pay a bit more to organizations that demonstrate a true concern for customer needs and a willingness to go out of their way to provide quality service levels. Certainly, providing service that differentiates your organization from others requires effort, training, and staffing, but the return on investment is well worth it long term. You cannot expect to approach service with a “fix it and move on” mentality. Service is a process, not an event. It requires dedication of time, money, and resources and a commitment to provide whatever it takes to satisfy your customers.

Here are five strategies that you can use to enhance your organization’s customer retention:

1. Create brand recognition. The most successful companies and those that stay in business for decades or longer are the ones that spend time and effort planning and executing strategies to acquire and sustain brand recognition. This means creating a market presence where customers know who they are and what they provide. Think about organizations such as Sears, JC Penney’s, AARP, Firestone, Ford, AAA, Maytag and Macy’s. When you hear those names, you know what they do and what to expect from them.

To establish your brand recognition, you must first identify what it is that you want to be known for, to whom you will market it, how you will market it, and ways to offer quality products and services at a competitive price. Once you establish these criteria, you can set out to spread the word through advertising, product and service sampling, strategic partnerships, customer acquisition, and effective service.

2. Get regular feedback from your customers. You cannot address customer needs if you do not know what your customers want. A big mistake that many service providers make is that they look at articles and other sources that say “Customers want…” and go on to list what all customers want. While such resources can be a good indicator, unless you ask your customers what they expect and want regularly, you likely are spending time and money providing the wrong thing to your customers.

For example, in good economic times competitive pricing may not get people in your door or to your website. However, when money gets tight, cost may become more important to your customers. Additionally, depending on the type of products or services that you provide, customer needs may be different. For instance, for customers looking to buy construction equipment, safety might be an important concern. For someone buying women’s clothing, that is not likely a big issue. Take your customer’s service pulse regularly in order to keep up with their changing and specific needs. (For sample questions to ask customers, see this article in its entirety at www.thebindingedge.com.)

3. Make it easy for customers to provide feedback. Do not forget to ask for feedback following a sale or service encounter – that is a big mistake. If you do not ask, most customers will not tell you. Some studies show that if customers are disappointed, they will not tell you. They will simply go away and then tell others about their negative experience. This can lead to the loss of that disgruntled customer while missing the opportunity to serve those who heard their story. You need to hear the good, the bad, and the ugly related to how well customers perceive your service efforts.

Many organizations say that they welcome customer feedback, but they hide behind technology and make providing feedback difficult. Make it easy for people to give you feedback or voice concerns. On your website, have a link that says “Customer Feedback.” When customers click the tab, they should get a form to complete and see your organization name, address, phone number, and email address at the bottom, in case they want that information. On your automated phone system, offer an extension in your outgoing message that says, “To leave feedback for us, punch extension #___.” Ensure that someone checks these sources daily and responds in less than 24 hours. Contact the customers to let them know that you received their feedback and to thank them. (For more ways to collect customer feedback, see this article in its entirety at www.thebindingedge.com.)

4. Listen to your customers. It does no good to gather input from your customers if you ignore it. This will only lead to frustrated customers and lost business. If nothing else, thank your customers for taking the time to share their opinions with you.

No matter whether the feedback that you receive is positive or negative, you should receive it enthusiastically and give it immediate attention. Instead of looking at negative feedback or complaints as a bad thing, recognize that the customer took the time to share it with you and ask yourself the following questions:

Why would this customer feel this way?
What did we do/say that created this impression with the customer?
Is the customer’s reaction reasonable? Why or why not?
Have we heard similar things from other customers?
If necessary, what can we do to prevent similar reactions by other customers?
Gather all customer feedback and examine it periodically. Look to see if there are trends or patterns that you need to address – for example, if a number of customers have complained about long wait times on the telephone or that they failed to receive a product or service when promised.

5. Act on feedback immediately. Do not file away customer feedback for discussion later or to have a committee review it; act on it right away. If you fail to examine the cause of customers’ dissatisfaction or to acknowledge feedback received from them, they will likely stop giving it. If customers are complaining, they also will likely escalate the issue higher in the organization or take their business elsewhere.

If someone is unhappy with your organization because of a policy, procedure, or the way he or she was treated, you should deal with that issue immediately. Examine and change the process that created the problem or counsel or discipline any employee, as appropriate. Failure to act can lead to additional complaints by other customers.

The key in guaranteeing customer loyalty is to treat customers not as you would like to be treated but as they would like to be treated. Strive to provide exceptional service in every service encounter, and the name of your organization will potentially become a household word.

Robert Lucas is president of Creative Presentation Resources and managing partner of Global Performance Strategies. He has over three decades of experience in the customer service, human resources, training, and management fields. He has written hundreds of articles and contributed to 28 books, including Customer Service: Building Successful Skills for the Twenty-First Century. You can reach him at www.globalperformancestrategies.com or email him at blucas@globalperformancestrategies.com.

The ‘Green’ Direction: Binding and Loose Leaf Companies Weigh in on Sustainability

May 1, 2009

by: Renée Varella

Although the “green” phenomenon has not swept binderies or loose leaf manufacturers like it has other industries, several authorities in the field say it is just a matter of time. Reasons for both types of companies to address the sustainability issue range from “It’s the right thing to do for the environment” and “Customers are demanding green options” to “A commitment to sustainability will differentiate your business from the competition” and “It’s an excellent opportunity to find ways to reduce costs and increase productivity.”

“A focus on sustainability equals a focus on social responsibility, the environment, and the economics of operating our businesses,” noted Kris Bovay, general manager of Pacific Bindery in Vancouver, British Columbia, and board member of the Sustainable Green Printing (SGP) Partnership. “Our customers and our markets are, or soon will be, demanding sustainability commitments. For example, in the province of British Columbia, there is a Sustainability Purchasing Network (www.buysmartbc.com) of large corporate buyers who want to deal only or primarily with sustainable printers and binderies.” Bovay also is a board member and vice chair of the Binding Industries of America (BIA) board of directors.

Another industry colleague believes sustainability is all about consumers: “The motivating factor for going green is the fact that it’s a customer-driven phenomenon,” said Gary Jones, director of environmental, health, and safety affairs for Printing Industries of America (PIA) in Sewickley, Pa. “We’re in the midst of a fundamental change – and I don’t think it’s going to go away, although it is hard to predict exactly where it’s going. Business has always been about price, quality, and service, but now you have to add what youre doing to protect the environment.”

Jeff Hunter, president of Federal Looseleaf in Minneapolis, Minn., considers recycling and other green initiatives a customer-driven solution – and a good way for a business to be Lean. “I’ve had customers ask us whether we use electrical- or gas-powered pallet jacks,” he said. (For the record, the company uses human-powered pallet jacks.) “We don’t let any equipment ‘hum and run,’ and we turn off lights and reuse and recycle ring mechanisms, chip board, and vinyl. It just makes good business sense to salvage over-runs, recycle at the curb, and be energy-efficient.”

Richard Senior, president of Duraweld Limited in Scarborough, England, and BIA chairman, noted that the industry needs to embrace environmental stewardship for its own sake: “It is becoming increasingly important that companies become green not just to get orders or get on recommended supplier lists but because they actually care how they affect the planet,” he said. And while Senior said the current economic situation has shown a slippage of green initiatives in favor of the cheapest price, he’s confident that the sustainability movement is here to stay.

Knowing the Lingo

For starters, companies considering green initiatives must understand widely used environmental terms. Below are several definitions from the SGP Partnership, a certification organization that recognizes facilities that have met sustainable manufacturing and business practices. (For more on SGP – plus a study on the recyclability of foil-decorated paper – see the box on page 25.)

Carbon footprint: The total set of GHG (greenhouse gas) emissions caused directly and indirectly by an individual, organization, event, or product, commonly measured in metric equivalent units of carbon dioxide (CO2e). It is meant to be a useful metric for individuals and organizations as they conceptualize their personal (or organizational) impact on global warming.
Carbon neutral/Carbon neutrality: Refers to a net zero carbon release, brought about by balancing the amount of carbon released with the amount prevented, sequestered, or offset.
Carbon offset: The mitigation of greenhouse gas emissions by offsetting emissions generated in one location with emissions reductions or displacements in another where it is technically and/or economically more feasible to achieve those reductions. Carbon offsets are measured in metric equivalent units of carbon dioxide (CO2e). Carbon offsets can be purchased and traded through financial instruments representing greenhouse gas emission reductions.
Cradle-to-cradle: A system by which materials are maintained in closed loops from creation to final fate to maximize material value without damaging ecosystems. Cradle-to-cradle protocols minimize waste through recycling and reuse, rather than disposal.
Greenwashing: The unjustified appropriation of environmental virtue by a company, industry, government, politician, or even non-government organization to create a pro-environmental image or sell a product or a policy (definition attributed to Sourcewatch).
Sustainability: Meeting the needs of the present without compromising the ability of future generations to meet their own needs (definition attributed to World Commission on Environment and Development).

Industry Challenges – and Payoffs

If implementing sustainable practices in a formal, organized manner was easy, every binding or loose leaf business would already be on board. “The most important challenge a company faces is making everybody internally, from top to bottom, agree on the environmental policy and then carry it out in practice,” Senior said. “We’re trying to steer customers in a green direction but, believe it or not, our customer service staff still has a knee-jerk reaction to quote what the customer wants rather than suggest what might be better.” He noted that other challenges include how to cut energy consumption, reduce waste, and recycle – not just send items for recycling.

Bovay noted some additional challenges, including customers who don’t want to pay the price of more environmentally friendly products – particularly in these cost-conscious times – and developing cost and production efficiencies to make sustainability practices affordable. Other issues include developing systems and processes to assess reductions in material costs, utilities, and waste disposal costs as well as cost improvements and efficiencies in health and safety, operating, maintenance and replacement, and legal and insurance.

“Socially responsible binderies are at a cost disadvantage from those that keep labor costs down and pay the least they can,” Bovay added. “And you need to consider that binderies compete not only with other binderies but with their own customers – i.e., printers, most of whom have their own in-house bindery services and can spread that cost amongst more people and more processes.”

The good news is that companies implementing sustainability goals are seeing positive results. For example, Duraweld has invested in recycling, including recycling equipment, and in energy-saving machines, lights, etc. Plus, the company soon will attempt to recycle rainwater through its toilets. “As a result, we’ve reduced energy consumption, reduced what we send to the landfill by about 30 percent, and realized an income stream from our surplus segregated polypropylene, PVC, and card waste,” Senior said. “And, although it took us nearly a year, we were the first in Europe to create our own 100 percent recycled clear polypropylene from production waste.”

According to Hunter, Federal Looseleaf has had success producing 100 percent recycled binders – a polyplastic version and one with recycled wood products. “Our binders are close to closing the loop environmentally – a customer can recycle the binder case at the curb with his cereal boxes and the ring mechanism with his metal cans,” he said.

Pacific Bindery has invested in lowering its energy costs and has optimized its closed waste paper handling system. “In an average year, we recycle 1,300 tons of waste paper,” Bovay said. “We also have reduced our use of plastic containers, solvents, rags, strapping and wrapping, and recycle what we do use – sending less waste to landfills.” And although the economic downturn has hurt recycling revenue, Pacific Bindery’s environmental initiatives return approximately $70,000 to the bottom line in an average year.

What’s Right for You?

Industry leaders agree that not every bindery or loose leaf operation will go in the green direction. The key, they said, is to assess your customer base to determine how important an environmental focus is to the markets you serve. A good way to begin, Jones said, is to talk with your top customers and learn whether customers are making environmental commitments, and one good place to start is to review their websites. That said, Jones acknowledged that an environmental focus requires a business to undergo a “culture change” – where everyone in the workforce becomes involved in the process – and that some companies will determine, for a variety of reasons, that such change is not necessary.

If you decide to forgo green initiatives, Jones still recommends putting in place an effective energy management system, citing the price of fossil fuels and the push by various levels of government to reduce greenhouse gases. Efficiency ideas include buying Energy Star-compliant appliances and equipment when replacing old models; installing motion detectors in low-traffic areas; eliminating screen savers on computers; and installing more energy-efficient lighting. He also encourages companies to think of the energy-management and green plan as a continuous-improvement project. “Go through each department and think about how to reduce waste and cut costs,” he said. “Start with the easiest to implement you don’t have to spend a lot of money.”

Of course, keeping up with environmental issues and figuring out how to respond to them given your market is no easy task. But industry leaders note that taking the first few steps can make a big difference. “The companies that are enjoying the greatest success from a business-retention, business-generation, and cost-savings perspective are those that are making the transition to green,” Jones said. “They’re harnessing the power of their workforce to reduce operating costs, cut energy consumption and waste, and finding recycling opportunities.”

On the Forefront

If your company is ready to take on sustainability, Bovay has this advice: 1) Start the dialogue with your suppliers. “Begin to apply some pressure on them to look at developing more environmentally friendly alternatives that work,” she said. 2) Take one small step at a time. “You don’t need certification to do the right things. However, a certification process will help to guide you and hold you accountable.” 3) Reduce waste and work with environmentally safe (or safer) materials. “Develop socially responsible policies and practices, and focus on a differentiation strategy that includes a commitment to sustainability.”

“Most environmental care is common sense and starts by looking at yourself and how wasteful you are – and then going forward from there,” Senior added. “Do not be afraid to stick your neck out, and do not be afraid to challenge normal unethical practices.”

Industry Update: Sustainability Certification, Recyclability Study of Foil-Decorated Product
To promote green initiatives in the print and graphic communications industry, the Sustainable Green Printing (SGP) Partnership was founded as an independent certification organization in 2007. According to Gary Jones, director of environmental, health, and safety affairs for Printing Industries of America in Sewickley, Pa., printers can apply to become a “Sustainable Green Printer” – and now the SGP is working on creating certification criteria for binderies and finishers, including loose leaf companies.”When SGP circulated its draft document two years ago, I expressed interest in offering input on the ‘bindery version’ of the policy,” said Kris Bovay, general manager of Pacific Bindery in Vancouver, British Columbia, and SGP board member. Bovay and other members of an SGP technical advisory committee met for the first time in April to begin developing certification standards for binderies and finishers. “Understand that certification only offers a unique differentiation in the early days of the program – so don’t ‘do certification’ just for the marketing benefit; do it because it’s the right thing to do,” Bovay added. “The businesses that are best, and honest and ethical in their sustainability commitment and approach, are recognized as leaders.”

Another issue for binderies concerns the recyclability of foil-decorated projects from printing customers. Last fall the Foil & Specialty Effects Association (FSEA) commissioned a study by Pira International, an independent research firm in Surrey, England, to evaluate the repulpability of foil-decorated paper/board. The evaluation included foil-decorated product that represented 25 to 100 percent post consumer waste and that was utilized from both hot foil stamping and cold foil processes. The study concluded that neither hot nor cold foil-decorated products would yield the kinds of problems found in other decorating processes that might render them unsuitable for recycling. To obtain a copy of the 14-page study, call the FSEA at (785) 271-5816 or email jeff@fsea.com. For more on the SGP certification program, visit www.sgppartnership.org.

Investing in Energy-Saving Improvements

May 1, 2009

by Ryan Thompson, Murphy Company

As more corporations respond to an anemic world economy by putting capital improvement programs on a starvation diet, the age-old question asked in every cyclical downturn surfaces anew – “Is cutting capital improvements the right decision?”

In some industries, the answer is “yes,” but for many, it is not. There is a strong case to be made that 2009 is an optimal year for corporations to invest in energy-saving improvements.

The reasons? One is the certainty that the investment will cut a major operating expense – the cost of energy – immediately and long-term. And, cutting operating cost is one sure way to offset slowing sales. Second, the pay-back period for energy-saving initiatives is typically very short. In fact, many are cash-flow positive in the first month. Third, today’s business landscape is flush with federal-, state-, municipal- and utility-sponsored incentive programs that make it even better for your bottom line to invest in energy-saving improvements now.

Energy Use Is an Increasingly Significant Subject

Historically, utility costs (natural gas, water, and electric) have been viewed simply as a “cost” of doing business. Little significance was attached to them. That’s no longer the case. In today’s era of lean manufacturing, the drive to be competitive makes it imperative to find savings wherever possible. In the same vein, energy projects are now seen as a worthy pursuit of companies trying to attain ” practice” status. Finally, many customers (Wal-Mart among them) are requiring vendors to demonstrate their commitment to being responsible global citizens by becoming more “green.”

No Hiding From Higher Prices

While every industry suffered from the skyrocketing price of oil in 2008, the publishing and binding industries have been further affected by increasing internet use and diminished readerships, which have resulted in lagging sales. Initiating an energy project within your manufacturing facility has many significant returns on your investment. The ability to cut annual utility- and maintenance-related expenses by 10 to 30 percent also provides a solid foundation for future pricing flexibility and profit margin defense. The true beauty of investing in an energy-saving project is that once it is complete, the return-on-investment compounds automatically year after year.

Best Practices

Energy-saving opportunities are found in every faction of a production facility.

Lighting
Upgrading lighting systems is a popular energy investment right now. While the concept is admirable, there is more to it than simply installing new fixtures or bulbs. Does the lighting design supply enough foot candles to maintain quality and safety? Does the design meet the criteria required for incentive programs? How is the new system to be controlled – with motion sensors? bi-level switching? Will the new set-up negatively impact heating and cooling loads?

Compressor
Is your compressed air system properly maintained? Are there leaks? Has your compressor exceeded its life expectancy? Does your system have isolation valves to shut off zones when not in use? Would adding a staging compressor actually be a money-saving solution?

Motors
Are your motors designed to properly control power factor and avoid costly correction charges from your utility provider? Are you aware of your VFDs, VSDs, or capacitors?

HVAC
Since many publishers and binders operate HVAC equipment year-round to control humidity in production areas, big savings could result when the system is properly commissioned. Are you controlling humidity most efficiently? Are you over- or under-cooling? (Not only is over- and under-cooling costly, it can be detrimental to product quality.)

Questions to Ask an Energy Consultant

While some companies offer energy audits and energy upgrade services, their experience, capabilities, and scope of service vary greatly. Before you choose an energy consultant, find out:

1. Are they charging for a stand alone audit? Even though that sounds like a logical first step, audits can be costly and not always focused on opportunities that are feasible or make financial sense to the owner. Select a partner who will help you think through your financial and operational goals prior to purchasing an audit.

2. Do they have the expertise to analyze all systems within a facility, including mechanical, electrical, process, controls, and building envelope? A consultant that is only focused on one system may miss some of the best opportunities in your facility. It would be unfortunate to undertake a lighting project only to find out afterward that a controls project could have cost less money and resulted in greater savings.

3. Can they help to implement the savings strategies identified? Your partner should either be able to self-perform the project or be capable of serving as your construction manager. In the case of the former, his ability to do the work should be supported by an experienced and diverse group of in-house engineers and construction specialists. If you choose to use your partner as construction manager, he should provide you with single-source accountability as he specifies and procures bids from qualified service providers, selects the project team, and manages the project to a successful completion. These projects should unfold with minimal disruption to operations.

4. Is the consultant experienced in your industry? An expert who knows your specific industry can help reduce the time and cost of the audit by quickly identifying the most promising opportunities based on past experience. Make sure your partner is cognizant of the special requirements for your process and facility. Energy savings should never compromise safety or quality of the product.

5. Is your advisor affiliated with a specific manufacturer or product line? Will the equipment recommendations be unbiased? More and more companies are positioning themselves as “energy consultants” as a way of selling their product. An independent energy consultant will evaluate multiple products to determine the most cost- and energy-effective solution.

6. Is the consultant knowledgeable of and able to qualify your project for all applicable federal-, state-, and utility-sponsored incentive programs? These programs can be very complex and cumbersome, with stringent requirements. Your partner should have in-depth knowledge of the specific standards, calculations, and paperwork required for each of the various existing energy-efficiency incentive programs. A misinterpretation of the program could result in loss of incentives.

With “green” and “energy” the buzz words of the day, many consultants who claim to have specialized, comprehensive expertise, in reality, do not. Do your homework to ensure your trusted advisor brings value to your unique energy project.

Incentives Can Cover Costs of an Energy Improvement Program

As noted, federal-, state-, municipal-, and utility-sponsored incentive programs are abundant and can offset a portion of the cost of an energy improvement project. At the federal level, the rapid depreciation schedule in force in 2008 is expected to be renewed in 2009. Additionally, many projects qualify for a federal tax deduction of up to $1.80/SF for boosting the energy efficiency of an existing commercial facility or building a highly efficient new one. Many states and utilities offer separate incentive plans, ranging from low-interest loans to cash rebates that reward companies that invest in energy-wise equipment.

Founded in 1907, Murphy Company is an integrated mechanical contracting firm with an in-house staff of more than 40 engineers that serves a national clientele from offices in St. Louis, Mo., Southern Illinois, and Denver, Colo. Its Energy Solutions Division, staffed by Certified Energy Managers (CEM) and Leadership in Energy and Environmental Design Existing Building (LEED EB)-certified energy engineers, delivers turnkey solutions from design and engineering through installation and maintenance. As an Energy Star partner, Murphy Energy Solutions can help binding and publishing companies optimize energy savings and significantly reduce maintenance-related expenses. To find out more, contact Ryan Thompson at rthompson@murphy-stl.com or (314) 692-1555.