Trade Binderies : The Laws of JustificationFebruary 2010 By Erik Cagle
JACK RICKARD is a firm believer in the concept of printers farming out their binding/finishing work to trade houses that specialize in such jobs, as opposed to print shops installing massive amounts of binding and finishing gear. And, since Rickard is the owner of Rickard Bindery, a 110-year-old trade firm in Chicago that specializes in folding and saddlestitching, we need to take his advice with a grain of salt.
But is Rickard biased toward specialty shops only because it's in the best interest of his business for printers to outsource their binding and finishing work? Actually, Rickard is a huge fan of outsourcing, and he practices what he preaches within his own business.
"The 'bring it inside' mentality doesn't work financially, for one," he says. "You're better off farming out work that is not part of your core business. All printers should have bindery capabilities, to an extent.
"I tell printers to figure out what their slowest day of the year is in the bindery, and size the bindery so that it will take care of 80 percent of that slowest day," Rickard adds. "Farm everything else out. That accomplishes two things. One, you'll have a department that runs at 100 percent, which is a great way to run a graphic arts business. Two, you'll have a bunch of happy campers among the trade shops that you're doing business with, and you'll have the versatility to go anywhere."
OK to Outsource
Three examples during Rickard's tenure have reinforced his faith in the outsourcing mantra:
• At one time, Rickard Bindery employed a delivery truck driver. When the driver passed away, Rickard re-evaluated the merit of maintaining delivery services in-house. His expenses were $70,000 a year. "I asked myself, 'why in the hell am I in the truck driving business, especially since I don't know anything about keeping a truck?' " As a result, Rickard hired a third-party trucking firm, and his outlay shrunk to just $15,000.
• When the firm's bookkeeper retired, Rickard questioned the need for a full-time staff person since there weren't enough transactions to really justify the post. Now Rickard's accountant sends over a lower-level assistant to tend to the books once every other week, and he's now paying just a quarter of the former bookkeeper's $50,000 salary.
• About 25 years ago, Rickard ventured into the mailing business. It quickly became apparent that he needed to exit that business and leave it to those firms that specialize in mailing. "I stuck my toe into mailing, found out what it was all about, and got out in a hurry," he recalls. "Unlike most bad graphic arts decisions, which take years to rectify, I was gone in less than six months."
One misconception in some circles is that trade binderies have outlived their usefulness, that the current progression is toward full-service print shops assembling their own comprehensive binding and finishing operations. But, for the trade binderies we surveyed, that is simply not the case. Almost all binderies, to a person, see the logic in printers maintaining some level of binding and finishing gear. Even so, unless your volume can justify it, why take on equipment—particularly in a down economy—unless it's going to get adequate utilization?
It's that philosophy that has kept some trade binderies in high cotton for generations, and they're not exactly going the way of the eight-track tape.
After a stake in her family business was sold, Patty Traynor thought highly enough of the subcontracting viability of trade binderies to open up a new shop last November. Finish On Demand, of Lancaster, PA, is still getting its sea legs, but Traynor is backed by years of experience (this third-generation owner is on the board of the Binding Industries Association), a veteran roster with employees boasting 25 or more years of experience and a passion for the trade binding game.
Traynor has carved out a niche, providing short-run perfect binding to address the twin problems of high cost and waste. She can economically churn out 100- to 500-count book runs, a sweet spot for digital printing. Add in mechanical binding, folding and flexible scheduling, and it equals a new lease on the trade binding life for Traynor.
"My pricing is much lower for small quantities than what local printers are used to paying," she notes. "They've been printing these small-to-medium runs and sending them to the large perfect binders, where they create a lot of extra waste and pay an arm and a leg for the makereadies. So, my company's value proposition is kind of a combination of speed and pricing."
Traynor is working the marketing end hard to get her firm established on the East Coast. She's confident in her ability to do just that, and had no qualms about launching a new business in the midst of the country's second-biggest economic slump ever. After all, it's times like these that make it easier to get good deals on equipment and building rentals, and anyone who thinks it's still hard to find qualified labor obviously hasn't posted a "help wanted" ad recently.
"Oh, it was easy to find employees," she says with a laugh. "There's a risk anytime you start a business, good economy or not. I'm very sure of myself, I know what I'm doing and I'm getting a good reaction from the printers I've been talking to. Quotes and jobs have been coming in."
Variety Is Key
While many trade binderies have humble beginnings, they aren't necessarily prone to a generation or two of eking out meager profits with the same menu of services. Baltimore-born Bindagraphics debuted as a simple book bindery in 1974 but, according to COO Matt Anson, has come to represent the antithesis of a one-trick pony.
The company has made monumental strides, particularly in the past 10 years. Bindagraphics opened a satellite bindery operation in High Point, NC, in 1999. In 2005, the company purchased Colad, a Buffalo, NY-based presentation and promotional packaging establishment. Two years later, Bindagraphics snapped up trade finisher Art Laminating & Finishing in Atlanta. And last year, it expanded its packaging division, Pack Appeal, by obtaining high-speed rigid packaging lines, multiple CAD tables, in-house die making and a full-service design team.
Still, it hasn't all been a walk in park for Bindagraphics, Anson admits. Printers and binderies have felt tremendous pricing pressures, and it has impacted job planning.
"The goal of the perfectly planned job, from prepress through final shipment, has been supplanted with the goals of landing enough work to keep remaining employees busy, and pressuring suppliers to help carry the deep discounts necessary to win jobs in the first place," he says. "It's become a zero sum game—maneuvering to outplay, outwit and outlast your competitors."
In this regard, Bindagraphics is fully armed to address any needs with its one-stop-shop convenience, in-house design expertise and die making capabilities. Plus, in the words of Anson, "If the job is big and hairy, we are the place to go."
Anson believes a key to the future of trade binderies is to answer both long- and short-run needs alike, and to continuously upgrade equipment and overall capabilities in order to convince printers to stick with their core competency—and thus stay out of the bindery, so to speak.
"In the end, trade binderies are completely dependent on the commercial printing market and, as that shrinks, so will we," Anson concludes. "It is our job to help printers sell more printing by being able to produce complicated—hairy—jobs fast." PI