Edwards Brothers Malloy: Making Change Their Friend
In order to fully reap the benefits associated with change, it is important to believe that a deviation from the status quo is both good and necessary. For some, change may be thrust upon them; for others, it may represent an opportunity to exceed, or merely just survive.
And, for those printers that ply their craft in the book manufacturing industry, change has become a fact of life.
"Our company is 120 years old, but we've probably seen more changes in the last five years than we had in the previous 115," observes John Edwards, president and CEO of Edwards Brothers Malloy, a book and journal printing specialist based in Ann Arbor, MI.
Instead of allowing change to dictate its future course, Edwards Brothers Malloy has ushered in an era of evolution. In early 2012, then-separate entities Edwards Brothers and Malloy Inc. announced that they were merging their family-owned businesses, creating a mega book printer with $102.5 million in sales for fiscal year 2013.
In addition to reaping each other's equipment mix, Edwards Brothers Malloy has been highly aggressive in its most recent capex campaign, bringing aboard its first sheetfed offset press to be used for four-color text, a 40˝ Heidelberg Speedmaster. A Ricoh InfoPrint 5000 continuous-feed inkjet press (its first), a Kodak NexPress (its fourth), two Konica Minolta bizhubs (a C7000 and C8000), an HP wide-format digital printer and two Océ 6320 monochrome text printers from Canon Solutions America round out the unprecedented growth spurt.
In a sign of the growing trend toward short-run, digital book production—where Edwards Brothers Malloy is experiencing 20 percent annual growth—the company announced last summer that it was consolidating its Jackson Road and State Street manufacturing facilities in Ann Arbor, and relocating some of its gear to its Lillington, NC, plant, in a yearlong process that underscores the decline in long-run offset book printing.
The move toward digital printing is unmistakable. "Our perspective is that the future of our business is being able to help publishers manage their supply chain and, to do that, we need to be able to print anywhere from one to 100,000 copies—mainly one to 1,000—quickly and cost-effectively," notes Joe Upton, vice president of sales and marketing. "These equipment investments were made with that in mind. Whether its print-on-demand (POD) output or an inventory replenishment model, it's really targeted to working with publishers as a partner and managing their supply chain."
Edwards Brothers Malloy is a short- to medium-run book manufacturer that produces hard-bound, softcover and stitched product runs under 10,000. Prior to obtaining the Speedmaster, Edwards Brothers Malloy focused primarily on one- and two-color production. The firm can handle components, text and binding—all in-house.
Offset and Digital Powerhouse
With upwards of 800 employees working in eight facilities across the United States, Edwards Brothers Malloy serves the educational (higher ed and K-12), trade, self-publishing and professional (practicing doctor/lawyer/accountant) sectors. It handles about 20,000 offset orders per year, with runs ranging from 200 to 100,000, and more than 200,000 digital printing orders annually, from single copies to several hundred.
Of the many changes taking place at Edwards Brothers Malloy, one of the most notable is the recent acquisition of the Ricoh InfoPrint 5000, which just went live last November. It is being used to run one- to four-color text in run lengths up to 1,500 copies and page counts up to 1,200, depending on paper bulk. The new inkjet web press also answers the call for quality that rivals digital toner and short-run offset printing.
"There was an area of demand that we were not able to serve economically," Edwards observes. "This press enables us to jump into the inkjet market with a significant bump in capacity. Our goal is to run four-color digital work on the InfoPrint, but initially it will constitute half black-and-white output as four-color demand continues to grow."
Joe Upton points out that Edwards Brothers Malloy recently took over an in-house digital printing facility in New Jersey operated by one of its major publishing customers. The sizable volume of four-color work that accompanied the agreement made it easier for Edwards Borthers Malloy to justify its InfoPrint acquisition and fits into the company's ideal role of serving as an inventory manager for its client base. That's certainly reflected in further planned acquisitions, many of which are concentrated on IT and creating systems that drive cost out of the transaction process, while making life easier for the customer.
In all, Edwards Brothers Malloy has eight digital printing centers nationwide, with one in the United Kingdom. Of the nine, five are housed at customer locations. "We did significant upgrades at most of the centers in terms of equipment, normal wear-and-tear replacement, and picked up some additional capacity," notes Donna Coleman, director of marketing.
The book printer and manufacturer has helped many of its longtime offset customers transition smoothly into POD production. One of its larger clients posted 17,000 orders in 2012 with an average print run of just 2.2 copies. Edwards Brothers Malloy has reduced many of the human touch points that can complicate the process by linking POD customers with the printer via an electronic data interchange (EDI) connection. The EDI-driven orders contain all the specifications that are needed to process the short-run jobs, which are sent directly to the print engines without the need for human intervention.
"This saves us significant time (that comes with) having a human being enter the order, prep it and push it into the production system," Coleman notes. "It also saves on the back end, since invoicing is also done automatically, along with order receipt acknowledgements and shipment notifications."
Clearly, the biggest change to visit Edwards Brothers Malloy was the 2012 merger that brought the two Michigan heavyweights together. John Edwards and Bill Upton began talks in August of 2011, and soon realized the companies had complementary aspects and little redundancy, including in their customer lists. Edwards Brothers offered a significant digital footprint, and Malloy Inc. countered with a solid fulfillment operation. Both firms were traditional family-owned businesses with vision statements that were essentially the same. The typical Edwards Brothers print run was half as long as Malloy's, but with twice the page counts.
In the span of roughly six months, the marriage was finalized. It has been an eye-opening experience from both perspectives, simplified by the existence of more commonality than difference between the firms. But, as with any coming together of two cultures, the fear of the unknown can still be gripping.
"Employees see that our differences, within the grand scheme of things, are pretty minor," Bill Upton observes. "But, anytime you change one thing for one group of people, the impression they have is 'we're becoming like the other company,' when in reality we're becoming a different company. It's two family-held businesses, and our culture reflects that."
Components of a Successful Merger
As part of the coupling process, John Edwards said the companies researched business mergers, why they fail and what characteristics can generally be found in successful unions. They found that the most successful ones involve companies that are close in proximity, in the same line of work and where senior management remains in place. This deal met all of that criteria.
"One of the toughest things is that you don't shut off the lights at one company on Friday and move into the other on Monday," Edwards points out. "A machine moves, and a crew moves with it. A shift opens up and a crew moves over. It makes it a lot tougher because we're standing on both sides of the river."
A transition committee, headed by the firm's HR director and containing employees from every department, shift and building, meet on a weekly basis to discuss the difference in cultures and how to reconcile the differences in the daily activities. In addition to the committee, teams from prepress, press and bindery deal with area-specific issues to ensure a smooth transition, with employees from all shifts at both plants participating.
"When you get people in a room together and they start to see each other's perspective, it helps to break down walls," Edwards notes.
About five years ago, then-Edwards Brothers unveiled gps Global Print Solutions, a distributive print and distribution model that was ahead of its time. The idea was to form a solution—printing on "both sides of the pond"—that could enable publishers to cost-effectively manage their international printing needs by reducing time to market and diminishing the costs associated with shipping and maintaining inventory. Edwards had explored the possibility of partnering with a United Kingdom print provider 10 years earlier.
"We couldn't make the math work until about three years ago," he says. "Files are now more portable and we've figured out how to reduce the transaction cost. We've since added partners in Australia and Singapore. This is going to grow significantly. I see more titles coming to us from the UK than the other way around."
With book order volumes constantly shrinking, digital output offers the best path to growth for Edwards Brothers Malloy. Custom publishing—a buzz area in higher education, with text content catered toward a specific professor's curriculum—is one of the faster-growing areas. The K-12 segment, which has disappointed the book printing space the past few years, also offers optimism for an uptick in 2014.
Self-publishing continues to be a fertile ground, but one market where Edwards Brothers Malloy will not compete is photo books. The challenge? The Christmas season is when photo book demand is at its peak, but that is also the busy time when Edwards Brothers Malloy is addressing the needs of its education clients.
"One of the areas where we excel is flexibility," Bill Upton observes. "We run a wide gamut of products in offset plants and can match those quite well with our digital offerings. From an inventory management standpoint, that's very important to our customers. They don't have to dramatically change specs when a title moves out of the offset printing realm into the digital realm."
Building Strong Partnerships
Moving forward, the short-term goals for Edwards Brothers Malloy revolve around completing the Ann Arbor plant consolidation. With the integration of their respective IT systems now in the rear-view mirror, the company has even higher expectations for 2014.
In a world of change, the one constant factor for any business is to become an indispensable provider to its customer base. "You need to know what's going on in the marketplace and understand your customers, and offer value propositions that make them want to partner with you," Edwards remarks. "I say the same thing to our vendor suppliers: Help us run our business more efficiently and help us do a better job. That's how you stay relevant, and that is what we've focused on for the past couple of years." PI