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8/4/2019 Outsourcing Your Printing Operations
1/31
O
UTSOURCING
YOUR
PRINTING
OPERATIONS
R
ISKS
, R
EWARDS
AND
R
AMIFICATIONS
N
EW
E
NGLAND
N
EWSPAPER
O
PERATIONS
A
SSOCIATION
N
EW
E
NGLAND
N
EWSPAPER
& P
RESS
A
SSOCIATION
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N.O.A.New England NewspaperOperations AssociationAN
E
N
P&NEW ENGLAND NEWSPAPER & PRESS ASSOCIATION
Terry Williams
President/ PublisherTelegraph Publishing Company, Nashua, NH
Featured Speaker
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O
UTSOURCING
P
RINTING
AND
I
NSERTINGTelegraph Publishing Co.
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Change is inevitable - except from a vending
machine.
Robert C. Gallagher
http://www.brainyquote.com/quotes/quotes/r/robertcga104504.htmlhttp://www.brainyquote.com/quotes/quotes/r/robertcga104504.html8/4/2019 Outsourcing Your Printing Operations
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UNIQUE CIRCUMSTANCESITEMSTO
CONSIDER
Each newspaper has a set of conditions, opportunitiesand needs that make each unusual
Take careful assessment of what those are and envision
how they might change and not necessarily for the
better. For many, outsourcing is not a viable option and
would be a mistake.
Dont assume that you are the best option or that only
you can do the job well
Printing is a cherished legacy and something to hold
onto, but dont let it become a noose
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OUR UNIQUE CIRCUMSTANCEEQUIPMENT
CHALLENGES
1984 MAN Roland double-wide press
Little automation
Good newspaper press but inflexible for commercialwork
High maintenance costs
High cost to operate with high fixed costs
We wanted to reduce the web width from 50 inchesacross to 44 - $250,000
If we were to do this, it would be a decision driven byprinting, not inserting
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OUR UNIQUE CIRCUMSTANCES
COLLECTIVE BARGAINING AGREEMENT
Expired at end of 2010
Expensive contract relative to other newspaperoperations
Restrictive manning clauses Contract lacked flexibility; so did the union
Health insurance, workers compensation increases
Concessions could be achieved but would they beenough?
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OUR UNIQUE CIRCUMSTANCES - LIMITED
COMMERCIAL PRINTING
Few customers
Limited future with this press for additional
commercial opportunities
Limited non-overtime shifts on which to placeadditional commercial work
Union inflexibility regarding certain jobs
Starting up a crew for our single-wide press wascost-prohibitive
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HAUNTING QUESTIONS
If you were starting a paper today, would you put in
press and inserter lines?
Are you in the printing business? If so, for how
long?
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WAS THE TELEGRAPHINTHE PRINTING
BUSINESS?
No
We produce and deliver news and other information, and
we support that through various sales channels
Circulation sales tells us that paid daily print productsare less and less useful to our constituents
Print readership continues its unabated conversion to
free and digital forms
Our traditional and loyal reader, as much as we lovethem, is aging and disappearing
Print is not competitive for the younger reader
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POTENTIAL NEGATIVES We didnt want to outsource
Significant reduction in staff
Feared losing control of quality
Feared losing responsiveness and communication lines
Earlier deadlines Transportation issues (more susceptible to weather)
Employee morale
Reader reaction
Other unanticipated logistical issues
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POTENTIAL BENEFITS Significant savings
Allow us to focus on core businesscontent and sales
Move future capital investment to growth areas of ourbusiness, particularly online, mobile and other digitalmedia opportunities
Reduce capital investment
Properly size our physical plant, eventually85,000square feet when we need about 20,000
Develop variable production cost centers allowing forcirculation declines
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THE PROCESSWHAT DID WE WANTTO
ACHIEVE?
We had systematic, production and financial goals in mindthat would have to be met
A plan was needed to sell off equipment
Narrower web width to save on newsprint
No meaningful impact on content from earlier deadlines
Smooth delivery
High production quality
Accurate inserting
Strong lines of communication and customer service
Backup printing arrangements
We wanted to migrate our commercial customers and retainthose relationships
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THE PROCESS Our production vice president worked with me evaluating
and, eventually, planning the move We contacted newspapers in our immediate region who we
thought could handle our operation and narrowed it to three,then two
We met with the press union several months before theexpiration of the contract to let the bargaining unit know wewere considering outsourcing
When negotiations started we communicated with them whatconcessions would have to approximate in order to keep the
printing in house We developed financial and production scenarios for each
printer and a no-go option
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THE PROCESS We involved key managers from each department who would be
affected and would have to lead the change I was communicating with my board of directors about this as a
possibility; we needed to make a decision by November tocoincide with our final budget approval and contract negotiations
Announced to staff on November 30 our decision to outsource andto go to Seacoast Media Group for that service
Covered the story on Page 1
Reached buyout agreement with press union on December 30
Printed last copy of The Telegraph at our plant on Friday,December 31 and covered this as a news story
Printed first copy of The Telegraph at SMG on Sunday, January 2
Forty full- and part-time employees lost their jobs
Our production vice president worked through the transition toSMG but he, too, decided to leave
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LESSONS LEARNEDIMPACTON
EMPLOYEES
Painful, difficult decision for managers andparticularly tough on employees Some acceptance and some appreciation for deciding on
this new path
Some anger Fallout lingers well beyond the transition
Crisis in confidence on the part of some employees
Community reaction was strong, toosomething
not to underestimate
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LESSONS LEARNEDLOGISTICSAND
PERFORMANCE
Communication is criticalthere cannot be enoughsharing of information and objectives
You need strong HR
Adaptation to another companys culture and productionways and means is critical
Patience is tested but necessary
Production is inherently complicated and has evolvedfor each of our companiesdont expect to escape re-evolution
Involved a lot of people in the transition and the follow-up
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LESSONS LEARNEDOR MISSED
Dont do it in the winter if it can be avoided
Readers, like employees, remember how things used
to be
Some members of the community will think you aregoing out of business
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FINAL ASSESSMENTAND POTENTIAL
OUTCOMES
We achieved our economic goals
Good results from our printer
Crystallized the mission for our operation, that we
need to produce a newspaper, we just dont need toprint it
Employees are resilient; the will find a way
Forces you to do a process analysis of your
production operationeven if you decide to keepprinting and inserting in-house
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N.O.A.New England NewspaperOperations AssociationANENP&NEW ENGLAND NEWSPAPER & PRESS ASSOCIATION
Gary FarrugiaPublisher & President
The Day Publishing Company, New London, CT
Featured Speaker
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Operating Agreement
NOA/NENPA ConferenceJune 9, 2011
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Business Trends
2002-2008: Expansion 100 Commercial Print Customers, 3 shifts, 7-days
Multi-million dollar business and nice margins
29 periodical titles; pursued daily customers
Considered building new plant solo or joint venture
2008-2011: Contraction
Purchased our largest weekly print customer outright Loss of customers to bigger, more modern
competitors
Loss of customers to nonpayment or ceasedoperations
Customers who stayed requested smaller orders 22
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Choice: Print or Be Printed
Sea Change in Newspaper PublishingBusiness Attempts to be the aggregating printer unsuccessful
22-year-old press too old and small to compete Capital investment maintenance, repair, replacement
From Industrial Age to Information Age Identity Crisis: 130 years of newspaper manufacturing
Now, an information company with multiple platforms A defining moment to restate our core business
Conclusion: Manufacturing not a strategic component
23
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Action Plan
24
Assumption
The legacynewspaper businesswill not recoverrevenues lost to therecession and industryrestructuring. Costsmust be permanentlyadjusted to reflect newrevenue levels.
Expand
Digital Content
Digital Ad Revenues Consumer
Revenues
Reduce
Print ProductionCosts
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Strategic Alliance
Create a strategic affiliation with another
publisher to leverage assets and initiatemutually-beneficial efficiencies.
http://cts.vresp.com/c/?TheDayPublishingComp/b9ce4a05a4/69b2d36323/3d583dece18/4/2019 Outsourcing Your Printing Operations
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Timeline
January, 2010 Overture from Providence
February, 2010 Strategic Affiliation Approach
April, 2010 Providence TMC to Day Proposed
May, 2010 Day Printing to ProvidenceRaised
June, 2010 Logistics and Pricing Negotiated
October, 2010 TMC Verbal Agreement Reached
December, 2010 Printing Verbal Agreement
January, 2011 New London TMC ProjectLaunches
March 28, 2011 Providence Print Project26
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Weekly Newspapers
27
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Partnership Responsibilities
Printing The Day
30-minute move-up 1-hour press run
Complete papers to NL
Daily Inserts Tuesday-Saturday
Sunday package
Live run in Providence
Advance run in NL
Sunday inserts run in NL
Weekly Projo Circular
Package and label 150-250,000 weekly
Multiple zones
Product Mailing
List Management
Individual labeling Mailed from NL
28
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Partnership
Partnering with The Providence Journal
provided investment capital needed tounderwrite our digital growth initiatives.
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Efficiencies
By sharing resources and dividing duties, The
Providence Journal and The Day each were ableto reduce costs, add revenues, and maintain
quality in manufacturing/distribution.
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Lessons Learned
Keep the Process Strategic in Nature Keep discussions outside the budgeting calendar Only seek mutually-beneficial solutions
Position yourself to be both the vendor and customer Dont book the savings until after you have signeddeal
Ongoing Issues and Opportunities Still refining the logistics
Technology transmission issues and refinements Monitoring and tweaking at-home delivery times Discussing other avenues of collaboration
31
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