J.S. McCarthy — Driving Out Costs, Waste
OF ALL the avenues a general commercial printer can take for increasing its profit margin, raising prices to customers is the one option that isn't likely to produce the desired results.
Indeed, it takes a hearty printer to compete in the general commercial realm--one more apt to accept smaller margins, offer a full array of services, become the low-cost provider and be able to find ways to drive costs out of the system. Oh, and don't forget quality. The implication is that quality is sometimes winked at in low-cost scenarios. . .your competition wants you to believe that.
All of the aforementioned outlets are pursued in lieu of asking clients to bear a greater burden in the fiscal portion of their print campaigns. It may not sound like the sexiest way of doing business, but there are companies in this space that have been able to rise to the challenge in less-than- favorable conditions. J.S. McCarthy, or JSM, is one of those printers; a conglomeration of merged entities honed into a taut, well-oiled machine that is only getting stronger with time.
Rick Tardiff, president of JSM, leaves no stone unturned in his quest to find an advantage over the competition. From adding more efficient equipment that handles twice the work of their predecessors, to green initiatives such as wind power, and embarking on lean manufacturing training that will allow the company to do more with less, Tardiff knows how to seize the opportunity.
"We're JDF-compatible, from the press to cutting, folding and stitching," notes Tardiff. "All of our equipment purchases moving forward will be made with automation in mind; we see that as the future. We can cut our makeready times and out-produce someone who has conventional equipment. We're looking to be the low-cost producer in the industry. The bottom line: The low-cost producer is going to win in the end."
To say JSM is a provider of 40? product does not do justice to its dizzying array of capabilities: variable data digital printing, wide-format output, package printing, diecutting, foil stamping, embossing, mailing, fulfillment and specialty applications. Its clientele primarily represent the greeting card, secondary education, museum, B2B and retail sectors.
"The breadth of services we offer under one roof is a major strength for us," notes Jon Tardiff, JSM vice president and Rick's son. "There's not much work that we farm out."
The pride of Augusta, ME, JSM took on its current form at the beginning of the millennium. Letter Systems--fresh off its acquisition of Knowlton & McLeary--bought JSM, which had merged with Gannet Graphics previously. Prepress house Graphic Color joined the fold shortly after. JSM's name was kept since it boasted the strongest brand identity.
JSM, which posted $22 million in sales for the latest fiscal year, has enjoyed a carnival-like atmosphere of activity since the series of mergers and acquisitions. In the past few years alone, the company has installed two eight-color, 40? Komori Lithrone S40 sheetfed presses, including one with perfecting capabilities. Rick Tardiff auditioned all of the usual suspects in the 40? press market, and opted for Komori because of its high automation.
"In doing our analysis, we determined that half of our day consisted of makereadies, the other half production," Rick Tardiff notes. "With the Komori, we've actually reduced our makeready time by 50 percent, and the amount of paper we use for a makeready by 50 percent, as well. That equates to 750,000 sheets of paper a year on one press that is running virtually 24/7.
Doing More with Less
"We were able to replace six presses with three newer models. A majority of work we have now is being cranked out by the two new Komori presses, with the third one pitching in as needed," he continues. "So, we've basically cut our pressroom in half. And we're outperforming what we had when running six presses."
Other outlays in the company's seven-year, $14 million capex initiative have brought aboard an MBO Perfection folder with Navigator control, a Heidelberg ST450 stitcher, a Kodak Magnus platesetter, along with assorted foil stamping and diecutting gear. Advanced Equipment Sales pieced together a scrap retrieval and baling system for JSM, and the company recently completed a 36,000-square-foot addition to its facility. In the last year, J.S. McCarthy has also been making PANTONE and spot colors in-house, and has saved on ink costs, by using an Mx6 ink formulation dispenser from GFI Innovations.
JSM is a regional printer by definition, but accomplishes some very impressive global reaches (including California and. . .Qatar!) due to its technological prowess. Technical assistance is one of JSM's specialties, with in-house staff that travels to support the software and hardware customers use on the prepress side of the workflow (such as Adobe In- Design, Photoshop and PDF). More than 500 clients also use JSM's online remote proofing product.
Technology continues to help expand the company's geographic footprint, according to Conrad Ayotte, CFO at JSM. "When you talk technology, it's really the centerpiece for us because of our location," he explains. "Half of our volume comes from more than three hours away, so we need to answer the challenge of distance. We embrace technology because we see it as the single best means to drive down costs...maximize its potential."
JSM has no issue with being a leading-edge company when it comes to technology. It is currently working in tandem with EFI and Kodak on a beta version of Prograph, a print MIS solution. The printer has also achieved GRACoL 7 (G7) certification and is one of only 12 sheetfed printers in New England to garner G7 Master Printer status, according to qualifier IDEAlliance.
Printing to the G7 standard can bring peace of mind for a print buyer, adds Roger Schutte, director of technology at JSM. "It just builds a lot of confidence in a print buyer's mind that, if they're outputting proofs in their office, they are to the G7 standard. This really tightens the circle in terms of what had arguably been a very loose system.
"We're doing on-screen proofing for our press checks, and we've even gone to a totally proof-less workflow with our largest customer," he says. "The client has a proofer in their office; they supply us PDFs, we process the files, and they proof our impositions. Then we go to press, run to the densities and match color on the monitor. It's something we're expanding rapidly to other customers."
Environmental responsibility has been a major concern for JSM, reflected in a number of its greening initiatives. The company has been 100 percent wind-powered for roughly the past 12 months. It recycles 120 tons of paper per month. Plus, JSM is licensed to recycle the one product of hazardous waste it uses in the production process: the solvent/water combination that comes from one of its presses. By recycling this, the printer hopes to achieve "small waste generator" status from the state in the near future.
"With our Komori presses, we've eliminated alcohol from the system," Rick Tardiff notes. "We've gone completely digital and taken all of the developer and fixer out of the system. We treat our plate processor waste here on-site to the point where it can be discharged into the regional sewer facility. Also, we replaced every light in the building to energy-efficient lighting. We've replaced compressors with more energy-efficient ones. All of our wooden pallets and plastic and metal barrels are recycled and reused. The list goes on.
"We look at what the major uses of material are and attack each one, one at a time, to reduce our footprint," he adds. "We keep working our way down the line, to the point where we will eliminate as much hazardous waste as we can and reduce the amount of waste we're putting into landfills by recycling."
Make no mistake about it. While JSM will continue to fulfill the needs of customers, it will undoubtably continue to accomplish more with less. The company has 70 fewer employees than it did eight years ago, while sales have grown dramatically over the same period.
"In a nutshell, we aim to satisfy the customer," Rick Tardiff concludes. "We keep our ear to the ground to find out what our clients are seeking. For example, when a customer wanted to run a virtual greeting card company through our Website, our IT people developed a customized software.
"It's hard to say what customers will want a year from now. But you can be sure, we'll figure out a way to keep them satisfied." PI