Living and working in Southern California has an inherent set of benefits (like being able to surf before and after work!). But, there are also some drawbacks – we battle massive brush fires every year and the occasional earthquake. The Northridge earthquake in 1994 was devastating to local business – the shop where I worked suffered major damage (being 4 miles from the epicenter) and was shut down for 10 days as our presses were repaired (our 6-Color “bounced” 5 feet off of its pad and “twisted”). Since then – disaster preparedness has always been an important aspect of business and personal life. As such, I always as the question “What if?”. Shockingly, many printers and designers have no firm or real plan in place to deal with the inevitable. I am fortunate to work with a company that has a documented disaster preparedness plan:

Infrastructure to Deliver Business Continuity Disaster Planning

For disaster planning Consolidated Graphics leverages the fault tolerant redundancies that are part of our primary data carrier’s collocation facility. Our equipment is installed in a hardened facility with photo ID card key access only. The entire facility is protected by an FM 200 fire suppression system. There are dual A/C handlers that trade off operating so one is a known functioning backup to the other. There are two separate power feeds from the local electric provider. An adjacent battery room provides backup AC power to our equipment and A/C units with a dedicated diesel generator behind that. Diesel fuel contracts are in place to ensure a constant supply. Network connectivity is direct to our data carrier’s IP backbone and Frame Relay networks. There are two separate physical network feeds coming in at opposite ends of the building. Our equipment is covered by a minimum service contract of 24×7 4hr response. In addition to that, we have shelf spares for a few key components. Finally, tape backup media is stored off site so that systems can be rebuilt and installed at another collocation facility or node on our WAN in the event of a total loss.

With regards to the data security procedures in place to prevent unauthorized access, maintain data accuracy and ensure the correct use of information we have appropriate physical, electronic and managerial procedures to safeguard and secure the information we collect online. Consolidated Graphics utilizes a state-of-the-art firewall for access control. Our sites use SSL encryption to secure data during transfer. While Consolidated Graphics has identity authentication standards, we can customize identity authentication based on the customer’s requirement. Our hardware is located in a secure data center with photo ID card key access only.

In the event of “Act of God” occurrences or catastrophic events, copies of all software and system specifications are stored offsite. In short order, entire systems and installations could be rebuilt and available, either from the same location or a different location depending on the extent of the incident. Incremental backups are performed nightly. Full backups are performed each weekend. Backup tapes are retained for a rolling 30-day period and are securely housed outside a 5-mile radius of the facility.

And, unfortunately- we have had the occasion to test the system:

In early February of 2008, a tornado struck Mercury Printing, a Consolidated Graphics company, in Memphis, Tennessee. Fortunately, no one was injured. However, the building was badly damaged and a large amount of materials held on-site in fulfillment was damaged or destroyed. Although the area did not have power restored for several days, Mercury was able to bring in generators within 24-hours to provide power to critical areas in the building. Accounting and pre-press were up and running within 24-hours which allowed files to be sent to roughly ten Consolidated Graphics operating companies in strategic locations around the country. This sister company outsourcing, coupled with the immediate relocation of shipping and receiving to a nearby warehouse, allowed Mercury to provide seamless service to clients in the face of a potentially devastating event. Although part of the building collapsed, Mercury’s client base saw no interruption in service.

So, I would always ask your vendor “What If…?”

Questions? Drop me a note.

A Good friend, long term client, and mentor of mine hit it out of the park with this recent article, published in the San Fernando Valley Business Journal. Many people will think that what Scott and I sell are competitive to one another – I strongly disagree. Marketing is an applied science – printing and design is still an art form. Scott is a scientist at getting his clients new business, and he understands the value of partnering with a “printer” that can help him deliver that message. Enjoy:

Marketing Managers Need to Show Creative Side

Over the last few years, when discussing marketing and advertising with clients and prospects, I have been meeting with more company presidents, owners and C-level executives than I had in previous years. Missing from many of the meetings have been the marketing managers. The trend kind of snuck up on me and has become more pronounced since the beginning of the current economic downturn.

I finally figured out why – and it’s not good for the future of marketing managers. Far too many of them have turned into purchasing agents, completely ignoring strategy and turning creative into a commodity. It started years ago with printing. Most companies have shifted printing responsibilities to purchasing agents, individuals trained simply to compare costs and without the experience or training to evaluate quality. To them, all printers are the same and whoever can hit the deadline at the lowest price gets the job. They wouldn’t have a clue if called upon to evaluate paper samples, print quality, die-cuts or other nuances that can make an average print job a great one. Continued…

Questions?

Drop me a note.

I have had the chance to participate in a recent “vendor” review with a long term client as they have been put in the uncomfortable situation of having multiple print vendors close their doors.

In an effort to continue the transparency aspect of this blog – my client felt that I was “uniquely” qualified to help them, as I was at the helm of one of the shops that closed and was employed by yet another as a sales manager. They reached out to me to help them establish some “criteria” by which to judge current and future print relationships (and yes, my current employer remains on their active vendor list after undergoing the vetting process).

Over a series of posts, I am going to share some of the ideas and suggestions that they implemented.

Fiscal Stability (part 1):

Ask for recent financial’s.

Not fiscal year end, but quarterly reports. If they are fiscally stable, they should have no problem sharing these with you. Some vendors will react negatively to your request, and they have every right to. You are asking to see their profit and loss. I advised my client, that if the vendor was wiling to do so, they too must be willing to share with them their most recent quarter/yearly print spend.   You must also be willing to sign a confidentiality agreement or a NDA. Almost every print vendor you look at will be showing a loss – but you need to dive in deeper – are the losses growing?  Are they cutting costs? Do their numbers fit within industry guidelines (there are some real simple metrics to look for in regards to billing per employee etc available from the Printing Industries of America or PIA). You want to make sure that they have the current fiscal stability to weather this financial storm while still being able to afford you strategic cost savings (a great reason to show them your print spend – how can they benchmark any savings if they don’t have a starting point? A real starting point).

A CPA or a CFO can look at these numbers in a second and give you a pretty accurate guess as to the stability of the company in question. If my client were to have looked at my financials, they would have seen a debt to equity ratio that was out of whack, and lack of cash reserves, and COG (or, “Factory Expenses”) that was in excess of 83% (based upon industry standards I should have been at <75%) and COS (Cost of Sales) in excess of 12% (Again, based off of industry standards, I should have been <9%).

Resources:
“Rules of the Road”: The PIA Ratios

Bottom-line, if you are looking for a long term, mutually beneficial relationship – you need to be willing to ask some hard questions, share some information and be willing to spend time talking with your vendors about the economy and your cost savings goals. They are relying on your continued relationship as much as you are relying on theirs.

I look forward to your thoughts and feedback.

steve@puttingdotsonpaper.com

Solutions Case Study

From time to time, I will be posting case-studies made available to me as a solutions provider for CGX. I will be deleting the “client” name, in an effort to avoid trying to sound like I am name dropping. The “vendor” name will of course be left in.

The Challenge: The extensive product & service offering of “CLIENT” requires a significant sales force with over 200 sales and service offices in the U.S. alone. With such an immense sales force, “CLIENT” faced a situation in which important sales and marketing literature was not being fulfilled in a manner that was consistent, on time, and without defect. Haydee Manzanero, a six sigma black belt who spearheaded this project, identified 117 process steps and over 50 hand‐offs in the old purchasing program. There was up to a 2 month lead time through 8 authorization steps to get a new marketing piece into the literature database for the sales force to order.

Their findings showed the following as areas for process improvement:

• Streamline their speed to market
• Increase competitive pricing across all “CLIENT” divisions
• Build confidence in the efforts of marketing
• Keep branding & offers consistent
• And ultimately decrease literature expenses

The Solution: Consolidated Graphics (CGX) was chosen as this strategic supplier and was tasked with helping to streamline “CLIENT”’s marketing literature process. By incorporating CGXSolutions’ Storefront application, “CLIENT” was able to merge all activities into one system that previously required three systems. The real time inventory and tracking information feature increased speed to market, decreasing out of stock incidents and obsolescence. This also assists in developing future programs that complement the sales fields’ self generating efforts in both Residential and Commercial segments. Prior to the partnership with Consolidated Graphics, the inventory information was sent out once a month and tracking shipments was difficult if available at all, representing a dramatic improvement over the old program.

The Results: Utilizing CGX Solutions’ technology generated immediate results in speed to market and inventory management resulting in cost savings for “CLIENT”. At the 2007 Operational Excellence review Haydee’s Six Sigma team identified a 64% reduction in expenses and a 48% reduction in process steps. Total cost savings were measured to total $2.8 million for the first year alone.

The integration of the CGX & “CLIENT” teams throughout the implementation process was comprehensive. In fact, the project was in the top 3 finalists for the “Teamwork & Culture” category in “CLIENT”’s Operational Excellence yearly review. As CGX and “CLIENT” continue to grow the relationship increases in complexity and has translated into many collaborative projects outside of literature inventory. CGX has been able to showcase an increasing array of technology advances in regards to commercial print and utilization of the vast printing network. “CLIENT” has increased their speed and variety to market while decreasing costs of these same functions. The relationship has added tremendous value in the form of onsite assistance with process improvement, the convenience and efficiency of online print procurement, and much more.

Think that a solution like this might help your company, or have any specific questions about the solution? Feel free to contact me!

steve@puttingdotsonpaper.com