29 June 2014 Printing/Print Companies

How Healeys survived the recession

The Ipswich printer has undergone a complete transformation. Now it is ready for any change that comes, argues Philip Dodd.

Philip Dodd has been in a meeting a bank manager. It is not the manager of his bank he explains, but a manager from a rival bank looking to win Healey Print’s business. Two years ago a meeting with a bank manager might have been something to dread, now Dodd can be polite, yet the sales pitch can be brushed off. Healeys is not changing its banking arrangements, even if in the last 18 months pretty much everything else about the Ipswich printer has been reengineered as he puts it.

Two years ago the company was suffering, like many mid sized commercial printers. While it had a reputation for fine colour printing, especially for art gallery catalogues, the reality remains that most work is not of this nature, but general work for a host of customers where price pressure and changing habits have applied the squeeze. Healeys had to make job cuts to survive.

“We didn’t have enough sales for the number of staff that we had,” says managing director Dodd. “We had to do what I had always wanted to avoid and made 20% redundancies.”

That came with the realisation that business post recession was not going to return to pre-crisis days and that the whole way that customers interact with the print supplier and buy print is changing “and we have to react to that. Change is coming” he says. That is unarguable. It is what companies do about it, whether they shy from it or embrace it, that can make the difference between success and failure. Had Dodd simply cut the headcount and carried on much as before, a further round of redundancies would have been almost inevitable at some point. He didn’t and sales this year are 10% up, reaching £1.6 million for the first half of the year with a profit of £120,000 on that.

“We have taken £350,000 of costs out of the business and in a couple of months we will be starting on a waste reduction and press optimisation process to work on reducing make readies which will bring further savings,” Dodd says. “We were in the middle of recession so we almost had an excuse for our predicament. We were at the point where the thought of getting rid of people and then not fighting to increases sales was something that we didn’t want to give consideration to.

“I don’t think there’s ever been a redundancy process where anybody says ‘I did that at the right time’. Instead everyone will say ‘I wish I had done that earlier’. Opting for pay cuts is an instant fix, but does not solve the problem. Our redundancy programme was considered as part of a full business plan and now we have greater time to think about what we can do as a business rather than constantly fire fighting. The business is a lot calmer as a result and we have increased sales.

“For example, we have appointed leading hands through the pressroom and bindery. This is an operational role, almost the first step towards management for these people and they will lead the new waste management programmes. This will also relieve the pressure on our production manager and ease his 14 hour days.”

The understanding that Healeys needed to do something had been growing for some time. The company had built a reputation for the quality of its art catalogues, but there by no means reflected the reality of the business which operates like most commercial printers with a mix of work. It had seen Heidelberg demonstrate the XL75 at Ipex 2010 and had taken in the presentation talking about the production black holes that result from waiting for paper to arrive at the press, from waiting for plates and so on which combine to stop the press turning.

The five-colour press was ordered at Drupa and installed 15 months ago. While not its first B2 machine, the XL wiped away most of the remaining B3 machines (Healeys retains a two-colour SM52 and a Quickmaster), leaving the focus of the business on the one litho press and its digital capacity. It had been one of the first to buy a Ricoh C651 at its launch, swiftly upgrading this with a C901 and adding a Kodak Nexpress to this last year. The latest machine hasn’t replaced the Ricoh printer even though the number of clicks that the Nexpress generates makes it one of the busiest in the country. Instead the Ricoh sits alongside it, with the more productive machine producing the body sections of a book and the Ricoh the cover for example.

It has also bought a Mimaki wide format printer and invested in a Vpress web to print set up. But while the technology means that the company is as up to date as any, the technology alone is not enough. Like many businesses Healeys had at best a vague concept of the direction it was headed or should be heading, but no formal structure or framework for getting there. And there was no real business plan in place.

That has changed. Dodd worked with Richard Gray from Print Future to pull together a detailed business plan. Now not only does Dodd have sales targets to hand, he knows what will be needed to achieve those figures and knows what the figures will look like at every point. “We are planning for growth to £4.5 million over the next three and a half years, starting by producing £3.3 million this year. We have looked at what resources will be needed and what the bank balance will look like,” he says.

The round of job cuts has left the business with the right people, and what Dodd says is a very good balance. As it starts to grow, and that is also part of the plan, the company will take care to employ people that fit the new culture. The first has already been taken on. There will also be investment with the bindery earmarked to benefit along with a new platesetter to keep up the flow of plates to press. “And we’ll need a second folder and handling around a guillotine and then we’ll probably need more press power, perhaps returning to a four colour B3 machine.” Part of the target is to keep the higher value work in house, putting out the hand work and simple jobs that cannot command a respectable rate for the same people resource.

The difference is that now the decision about which supplier to work with will fall to those using it. By involving staff in the process, assessing which machine will best fit the company’s needs and how it should perform, those involved will have a greater interest in ensuring that it performs to the mark. It’s not entirely a free choice as the management will work to narrow the field to two or three types before the testing begins. This also has the advantage of engaging the supplier in the process to gain their commitment to making the equipment run as it should.

The purchase of an Optimus Dash as the new MIS exemplified the approach. The software company produced a detailed plan, explaining every step of the way and every impact that it would have on the business. Optimus responded with a detailed dossier on what healer’s might expect from its MIS. Nicola Bisset, managing director of Optimus, concurs. “They gave us a very clear brief on what they wanted to achieve and their future vision of a easy to use and efficient system which would reap rewards from short term automation to long term business goals that can now be achieved with the help of dash and the integration provided to Vpress web to print,” she says.

That plan is now under examination as the implementation is underway. “One of the reasons to change the MIS is that we needed to have real time information. There is no point installing a new MIS if everybody that uses it uses it in the same way as the old one. You have to take it and embrace the potential and possibilities it opens,” Dodd explains.

One of the aspects that Dash will deliver is connecting the web to print to the print room. Currently digital accounts for 15% of sales and he wants digital to account for one third of sales. Volumes have doubled in the last six months, he adds and for further growth automation of file handling and job submission is vital.

While there are customers using web to print to order stationery, there is more potential for different types of work and customer. He talks about an design agency that Healeys supplies. It uses the web to print portals at four different printers, each with different foibles and faults. None is perfect. Healeys will learn from this to “bring all the good things that customer has experienced together in one site”.

And not all Healeys’ customers will want to use web to print. It has to be right for the right customer. However, all customers will notice a difference with the implementation of Optimus Dash. The standard quotation letter sent out to a customer has not changed in decades he says. That is a waste as the company could be using the communication to promote other aspects of its business, “perhaps a highlighted box with a specific offer for a discount on an order for wide format printing” he suggests. This is what used to be called transpromo, using a transactional document to deliver a marketing message, and was something that banks and insurance companies were expected to use. It was not something that printers deployed in their own businesses. Dodd will change that, communication with customers becoming one of the key changes towards greater collaboration with them. That means uncovering more about their needs and their challenges and going deeper than the day to day interaction of delivery schedules and inching orders to understand how they have fared during recession.

There has always been a commitment to quality. Dodd refuses to hide behind phraseology like “commercially acceptable” when rules do not meet across a spread for example or tints vary in colour. “When we had a customer call to say a job was a little below our normal standard, without being asked we put on an extra shift to reprint and get the job to him. That is very central to what we do,” he explains.

There is a Fastbind hardcover book maker that Healeys bought from Ashgate Automation in order to produce photo books and which is being used to produce sample books to show what the Nexpress can do with spot varnish effects, tactile finishes and personalisation. These were put into a handcrafted box, also made using the Fastbind equipment, with a personalised notebook and hand delivered to customers. “We began with 450 and quickly found that we needed to produce more,” he says, not least because Kodak asked for some of the comparison books for its own marketing purposes. There was also a Purl campaign where customers could enter details to receive their own personalised notebook. Healeys would be able to follow up with a phone call.

“It is not longer about digital or litho printing, it’s simply print. The quality that exists now and some of the finishes that we can produce are different to litho,” he says. “When we got the Fastbind I said that even if we only use it to produce our own promotional material for the next three years, the investment will be worth it.”

Kodak's request for additional copies for its own marketing purposes is part of a move to work more closely with the printer. For Dodd the idea of collaboration with suppliers will benefit the business more than switching between manufacturers and treating each relationship with suspicion

The first investment to undergo this approach will be a replacement saddlestitcher for its Hohner line. Once removed the company will have gained more space in the finishing area and can look at what tasks are to be performed in house and which should be outsourced. Dodd is keen that Healeys retains the work with the greatest added value, the more complex finishing rather than benchwork which can only be charged at minimal rates.

The ideas have not just come from Print Future and suppliers like Heidelberg, IFS, Ricoh and Kodak. Dodd is a voracious consumer of ideas. He has a business book on order from the US about the benefits of collaboration and engagement, and he is out collecting ideas from other printers.

And one of the best days last year he says was Forward Thinking Printing. “This should get the support from the industry that it absolutely deserves. When you have an industry that loses the ability to invest in itself, then you have an industry that has problems.

“The people that participate in Forward Thinking Printing are those that are passionate and focused and are those that take time to invest in themselves and their businesses. They are open and approachable and share what they are doing as we are. If anybody wants to come here and see how we have reengineered the business over the last 18 months, they are very welcome.”

He has been to visit others they took part in Forward Thinking Printing last year, ESP Colour, Precision Printing and Hunts for example, and there is always openness because each is secure in its customers “And they do take a more positive outlook,” he adds.

The third leg of the engagement strategy is with the staff, perhaps the hardest to win over. The first step is a complete openness with the company’s performance. “It is long and hard but it’s pointless doing a business plan if people don’t know what it is. We presented to the staff and now every month we talk about it. We are giving them the sales figures and profitability numbers and discuss any issues raised,” he says.

One that quickly came up was about any bonus should departments exceed their figures for that month. After sleeping on it, the relevant period his extended to three months and staff can build a bonus pot. “My task is building the team and making it work very well together. It’s very easy in my position to get into fire fighting,” he says.

Underpinning the structure that has been put into place is the need to prepare for the company to grow beyond the £3 million where it is possible for one or two people to manage a print business. This is also why so many companies fail to make the transition to the next stage of growth. He explains: “Many keep working as if they are the £1 million to £3 million company and we have to break out of that. A turnover of £3 million is the point that a small company cannot get beyond until they become a small big company and we were in that position for many years.

“The way that we work changed with the industrial revolution to a top down command structure system, but I don’t believe that you can continue to operate companies like that as the tech giants like Google are proving. The challenge is how you get the engagement with your staff, how you get everybody to generate the ideas and to share the benefits.”

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Philip Dodd

Philip Dodd

Philip Dodd realised that the post-recession landscape for print would be very different from pre-Lehman Brothers collapse. Consequently the company mad the cuts and changed its model in order to be ready for whatever comes next.

The company has a strong eco-ethos, ordering the first carbon balanced Heidelberg Speedmaster to reach the UK during the last Drupa.

Dodd was one of the key panellists at the Print Business Forward Thinking Printing event in 2014, stating that

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Conclusions from Forward Thinking Printing

About carbon neutral Heidelbergs

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Kodak Nexpress

Kodak Nexpress

Digital printing has been vital to the future for Healeys. It had experience of an early Indigo, moved to Xerox and then the first Ricoh C651 in Europe.

That was replaced by a C901 and in 2013 was joined by a Kodak Nexpress, which was expected to replace the Ricoh machine. However the Ricoh remains while the Nexpress is used for variable data and enhanced print delivery.

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About the Kodak Nexpress

About the Ricoh C901

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MIS and web to print

MIS and web to print

The company has replaced an old style MIS with the Optimus Dash in order to handle raising estimates and job tickets for shorter run and digital print that was taking too long previously.

It also runs a Vpress web to print system, both for those customers that want to do business online and as an internal communications system. It integrates with the Optimus MIS to deliver job data directly to the press room with minimal intervention from the office.

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About Optimus Dash

About Vpress web to print

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