Mad As Hell And Not Gonna Take It In Boston!

Our Client Conference on Production Management will be held June 5-8, 1996 in
Charleston, West Virginia. Some non-client participation is available.
Details following this message. . . . We ll see you in DETROIT this Saturday
morning, May 11th where we will be chat about printing and prices. Coming up:
ATLANTA, May 18th; CHICAGO, June 1st; and MIAMI, June 15th. Fax (304)
342-5187 or call (304) 342-5100 if you want to attend any of the sessions.
Session is FREE, but you must PRE-REGISTER. 


Letters: Mad As Hell And Not Gonna Take It In Boston!
Transmitted from Charleston, West Virginia

Get ready for the second shot heard round the world. Mona Long writes from
Boston that Xerox is being unfair and she s not going to take it anymore!
Here s excerpts from three of her rapid fire messages.


Subj:	Xerox XBS 
From:	MSQP1
To:	TomCrouser

Dear Tom, Something appeared in the Wall Street Journal yesterday that got my
attention. Xerox announced a new service of outsourcing.  The ad said that


you do not need to buy equipment or hire and train people we do it al.
 Services will be offered both on-site and through a world-wide network of
Document Technology Centres.

   Now as a customer of Xerox who has bought and
leased a lot of their equipment should I be lived about this, because I am.
 I called my Xerox Sales Rep about this and she knew nothing about this.  How
can that be?  Here is a woman who has worked for Xerox for 15 years
her husband works for Xerox as a supplies rep they have two small children
and just moved into a new house.  And now Xerox s ad says 

you do not have to
buy equipment or supplies

!.. She said she was going to make some phone calls
and get back to me.  . . . . I think anyone who has ever bought a piece of
equipment from Xerox for print-for-pay should be concerned about this.  There
full page ad was in the Wall Street Journal, Boston Globe and on the WWW.  I
can not compete with their marketing budget. I called the number in the ad.
 And the women could not answer my questions.  She said she would have to get
someone to call me back.  I thought I was asking her simple questions but she
was pretty clue-less.  Please respond when you have a chance.  I want to be
informed about what is going on here.  I want everyone in print-for-pay to be
aware what is going on.

Sincerely, Mona Long/MSQP1


Subj:	Xerox
Date:	96-05-03 12:07:07 EDT
From:	MSQP1
To:	TomCrouser

Dear Tom, Thank you for responding.  . . .. .. (Xerox) had a full page spread
in the Boston Globe and in the Denver Post yesterday (May 2, 1996).  They say
in the ads and in their ad on the WWW that you do not have to buy any
equipment or supplies or train any people.  They will come on-site or you can
send your documents to any one of their Document Technology centers. They say
in their ad on the WWW that the market segment they are going after are the
universities, manufacturing, pharmaceuticals, government, financial services,
healthcare, education and legal. Sounds like all the market segments I have
been wearing out my shoes calling on. I know in the past they had xerographic
centers and they got a lot of flack about it.. They had about 60 they cut it
back to 5. We called Stamford. They were very corporate and said that they
have always been in the business.  But they seem to have all of sudden come
back very aggressive and even more competitive. The guy in Stamford said they
do not have any walk-up centers. They do not need walk-up centers when
documents can be sent electronically, They also said in their WWW web ad 

we
have made it our mission to follow the document from creation to
destination.....

 

Services will be offered both on-site at customer
locations and through a worldwide network of Document Technology Centres.



Sincerely, Mona Long

P.S. In the end if Xerox dominates the document market does this benefit the
paying customer in the end or do they end up paying more for their documents
because Xerox drives out the competition and then they can charge what they
want?


Subj:	Xerox
Date:	96-05-03 12:31:03 EDT
From:	MSQP1
To:	TomCrouser

Dear Tom. . . .More thoughts.  I spoke with George Rounds of NAQP yesterday
and he told me he spoke with Mr. Jim Huggins, Industry Manager World Wide
Commercial Print Business Unit Xerox Corp. a week ago at the
Digital-On-Demand Show for 45 minutes and Mr. Huggins assured him that this
is exactly what Xerox would not be doing. A week later this is exactly what
they are doing.

Xerox flew Larry Bart from Boston to the Digital-On-Demand  on the Xerox
corporate jet along with some other business owners from the Boston. They
wined and dined them and not one mention of this new service was made at that
show.   Xerox knows had they said one word about this at the show their
print-for-pay customers would have rioted!

Sincerely, Mona Long 



Well, what have you heard and how has or will it affect you? Is Mona the only
one who is concerned about this? Let me hear from you.



Service or Servitude?

In the meantime, we had a discussion recently among some of our clients which
prompted the following note:

Your comments ... 

The Customer Service Rep, much like the person waiting
on you at McDonald s, does some production work such as make copies and take
brokered orders (fills Cokes and gets the fries). So, most of the time, the
CSR just handles the brokered item, orders it, checks it in, bills it and
handles questions from vendors.

 reverberated here at our shop in a way I
doubt you might have anticipated. Specifically, your reference to fast food
operations. It s an analogy I have been rather unsuccessfully promulgating
with my son for literally years.

The essence of the argument is, I guess: whether systems can/should be
developed and placed that deal with the commonality of jobs in order to take
them in, process them, do them and deliver them in efficient, productive and
profitable ways - as opposed to treating each as 

an art project

 - for which
a new wheel must be invented each time. Obviously, since I m on 100%
commission as the owner, you know which way I fall.

My guess is that I am not alone in this argument with employees (whether
family, or not) who skew towards an attitude of 

individuality of each job


as opposed to the 

commonality of each job

 Obviously - to me at least - this
ability to find ways to find commonality in each food order (from order
taking, to preparation to wrapping, to deliver, whether it s eggs, chicken,
burgers or double burgers) is the driving force behind fast fooders  ability
to lower costs and prices while reaping  higher market share and
profitability over 

traditional

 restaurants. It s more than equipment. It s
attitude and a systems approach. My guess is that you might find this analogy
an intriguing theme for one of your articles. And, yes, I d love to wave it
in my son s face - who rejected the analogy in this case. What s a poor
father to do?!?!

Poor Dad, So Sad


Well, Dad. . .er, . . .fire the son? Okay, just kidding. Actually, Theodore
Levitt (marketing guru, Harvard professor, author of that timeless Harvard
Business Review piece, 

Marketing Myopia

 which said if the railroads thought
of themselves as being in the transportation business versus the railroad
business, the face of transportation as we know it would have been charged),
authored (another) Harvard Business Review piece which was, I believe,
published in the 1970 s. It was entitled, 

The Industrialization of The
Service Sector

 in which (going from memory) he argued very successfully that
it was the systematic approach to service which was the key to service
success versus the concept of service as servitude. He cited McDonald s
French fry scoop which allowed a specific number of fries to be delivered to
their contained with one fell swoop (within +/- 2% or so). He cited
Transamerica Corporation and their 

industrialization

 of life insurance
policy processing. And there were many other excellent examples. Basic thing
I remember is that service is best approached systematically rather than by
heroics. And that s the philosophy of operations management.


Speaking of serving the customer, here s a message from a printer 

trying to
develop the many processes necessary for ensuring  our customers

 will remain
satisfied. Or is he?


Subj:	HELP!
From:	Post Pre Press
To:	tomcrouser@aol.com (Tom Crouser)

Hi Tom, My company has just moved from the prepress world into the print
world and we are trying to develop the many processes necessary for ensuring
 our customers that they will remain as satisfied with our new services as
they have been in the past.  Most of our customers have used us as a film
output provider as well as a high quality color house.  The process for
which I am seeking your valuable input is this: 

a)    What is the liability of my company (as a provider of film) verses the
liability of the customer when it comes to approving a proof and/or film
prior to print?

b)    Is there some verbiage you might suggest in creating a sign off form
that will protect me without making some kind of a statement to the customer
that makes it difficult for them to do business with me?

c)     Are there any industry standard forms or stickers that are used to
address this?

d)     Is this type of a procedure legally successful in shifting the
responsibility to the customer or is it simply a fear tactic to get the
customer to view the proof more carefully?

Thanks in advance for your input!  And thanks for the many resources you have
provided in the past weeks since I became a subscriber. 

Thanks. Post.


Actually, Post, I have to take exception. I don t read that you 

are trying
to develop the many processes necessary for ensuring our customers that they
will remain as satisfied with our new services as they have been in the
past.

 I read that you are trying to make sure you cover your rear so these
slovenly customers don t force you to pay for their dumb mistakes.

If we were trying to develop the many processes to ensure customer
satisfaction, then we would be talking about quality management techniques.
We re not. We re talking about legalities. That s okay, legalities does
little to add to customer satisfaction.

Now, more directly to your question. You couch you question as a legal
win/lose when, in reality, it is a lose/lose situation. We have had
discussions here on trade customs and my advice has been to take the trade
customs and make them a part of the terms and conditions of sale. That s the
verbiage you can use to help protect yourself. So, specifically, a non-lawyer
answer to your questions in order are:

a) You, the producer, are generally liable for your product or service to the
extent it does damage to someone else. That s how a $1,000 job can do $1
million worth of damages. The customer doesn t have any liability that I can
see in your question other than to pay for a job which they can t use in the
worst case.

b and c) Verbiage: Get the booklet titled 

New Graphic Communications Trade
Customs and Business Practices.

 These were developed under the auspices of
the Graphics Arts Technical Foundation; National Association of Printers and
Lithographers; and the Printing Industries of America. The 58 page booklet
represents a complete revision of the 18 customs issued in 1985. It adds five
new sections addressing such issues as telecommunications and electronically
prepared manuscripts and images. The customs, prepared under the guidance of
consultant and long time printing association executive Bill Treadaway, also
include possible alternatives for variations printers may want to consider.
You may obtain a copy from any of the trade associations listed above.

d) 

Is this type of a procedure legally successful in shifting the
responsibility to the customer or is it simply a fear tactic to get the
customer to view the proof more carefully?

 Legally successful? Sometimes,
but it sure kills a customer relationship. Generally, I view this verbiage to
be of help in protecting yourself against a claim which will put you out of
business. Otherwise, you must try to accommodate the customer and improve the
quality of production management so neither you nor the customer is in such
bad shape.

A few months ago, Nancy DeDiemar of NAQP fame forwarded me a couple of
messages from the Four Color list dealing with a similar subject: Typos and
Liability. Since members of the Four Color list also receive this report, I
won t repeat the scenario. However, generally I think that discussion
concluded as I have found, a lot depends upon who you are and who the
customer is. Printers need the legalities to keep from unfairly being put out
of business, but applying them egregiously will result in printers without
customers.

What s your experience? What s the biggest screw up you have ever had? Share
your horror stories with all of us. Send them to me and I will issue a
special Saturday Night Horror Show message just for your enjoyment. Or
commensuration. Now, let s hear from Stripped who has been done in by the
landlord. . . .


Subj:	Need Help Badly!
From:	Stripped In A Strip Mall
To:	TomCrouser

I opened a shop in June of 1992. When shopping for a location, we were sold
on one in the second Phase of a new shopping center. In this area was to be
 two large anchor stores. With a layout like this... how can you miss...
Plenty of traffic right?, Wrong. 43 months later there still are no anchors
and the layout of center funnels traffic to the other side. To make a long
story short. I ve lost a bundle.... Usually bringing in only $13 to $17 K a
month, I ve had a hard time meeting expenses, not mention the rent... At the
present the landlord is suing me for $15,000 in back rent, most of which is
funny money due to his creative accounting... Well, we have found another
location and have moved our shop two weeks ago. 

This is scheduled to be heard in a court before a jury. I am looking to
counter him for $500K + for Fraud, misrepresentation, loss of income,
suffering, damages to business reputation, personal reputation and what ever
else we can think of..... Basis of most of this, that I feel we could have
grossed an easy $10k more a month if this area was as active as originally
described. Maybe even more. 

What I need is a direction to a source of basic Quick Printers monthly gross
or Yearly gross figures based on national or local averages.... Hopefully,
This may be useful (or any other information) in stating our case. 

Appreciate any advice. Stripped


Dear Stripped. . . . It appears to me like you could use some of the studies
published by the National Association of Quick Printers, specifically the
last industry ratio report in support of your court case.

Now, your immediate problem, of course, is the lawsuit, et. al. The real
problem is that you violated Crouser s Conservative Site Selection Law Number
One. Set a shop up where there are lots of printers not where there is no
printers. It s a darn site easier taking business away from someone else than
it is to create it in the first place.

Good luck in court.


I also received a very interesting bit of correspondence from Jay Garnier, a
printing broker in the northeast. He has some comments generally for printers
who are trying to sell their businesses. . . .

Dear Tom:

I am a printing broker. . . .I . . .broker the purchase, sale and merger of
printing businesses. I am a regular Quick Printing reader, and several things
have happened this morning to compel me to write. . . .I would like to see
someone like you do a multi-part article on selling and/or merging a small
printing business.  

. . .You see the guy that is 60 and is still operating today as a survivor,
even though he has made no serious capital investment in 10 years, and he has
been trying to sell out for the last 5 years and no one will even pay him the
amount of his liabilities, and I see him as a dead body that just hasn t been
buried yet.

There is an endless stream of those shops here, with owners that are 30 as
well as 60.  These are not your top 100 shops, they are the bottom 60-75%.
 Almost universally they have the same misconceptions, the same unrealistic
expectations, and no real idea where to start or what is important, and no
idea how to provide for the rest of their life.  Universally, when we first
meet face to face they don t believe a word I say to them, they are sure that
I am out to rob them or steal their business. 

Universally, 3 years later they tell me I was absolutely right and are
 willing to accept what I told them 3 years earlier, but both they and the
business are 3 years more beaten up and run down than they were when we first
met, and what they are now ready to accept is no longer realistic, and what
is now realistic they are not ready to accept.  The owners simply don t know
where to begin, what is real, or what is important.

The people that are the likely buyers for these shops give up attempting to
buy an existing shop after a repeating the same frustrating dance a few
times, and wind up renting space and buying equipment, and competing for the
same pool of business. 

Some buy franchises and open new stores.  Many are already in the trade, and
displaced for some reason.  They usually wind up more competitive at doing
the work than the shop they would have bought, but since they have the fixed
overhead but lack the customer base, very often the immediate response is to
compete based upon pricing or levels of service that they cannot maintain in
the long run. The market is now served by two very weak players rather than
one strong player.  Both become a probable candidate for extinction.

My favorite discussion is an article out of a 20+ year old magazine that
everyone seems to have, which lists 8 rules of thumb for valuing a printing
business.  Every old printer saved this.  Every one calculates all 8 and
decides since his business is special he gets to pick the highest among the 8
values, which may exceed most of the others by 300-1,000%.  He forgets or
doesn t know that at that time, for tax reasons, almost every sales was 29.5%
down and the balance in installments at a low interest rate, and expects that
price in cash.  He always forgets that at that time environmental, safety,
and similar regulation was very different than today, he has now idea how far
from being in compliance he may be, and no idea of the costs involved.  He
has no idea of the extent that innovation and decreased equipment life cycles
has changed the business, possibly because he hasn t changed at all.
 Universally I waste an hour telling them why that tattered piece of paper is
not gospel any longer, if it ever was. You certainly would be doing me a
great favor by giving me something newer and helping me avoid that hour 4 or
5 times every week.

With the names changed to protect the guilty, I could give you page after
page of war stories that repeat over and over, different in minor details,
but similar in substance and effect.

Rarely have I met a printer that has any idea what someone walking into his
business sees.  They have seen the same things for so long they don t even
notice.

Someone would be doing these people a very real service by laying out for
them both the pattern and the appropriate responses.  
  
Thank you for all your efforts, and for your excellent writing. Jay.

Thank you, Jay. Looks to me like you have done an interesting job yourself. I
will take your suggestion under serious advisement as I am in the final
stages of completing our first book project on the financial side of running
a printing business (you ll hear more on this later in the summer). In the
meantime, if anyone in the northeast wants to sell their business, you can
contact Jay at Jatvrg@aol.com or find him at: Jay A. Garnier, 267 West Third
Street, P.O. Box 7, Moorestown,  New Jersey  08057.


Change Happens. . . .

More than one industry vendor uses the concept of change to sell products.
For instance, I recently ran across the following vendor quote, 

According to
some estimates, 50% of instant and small commercial printers today will be
out of business within the next four years. While that number can be debated,
there is no question our industry is being rocked by fundamental and dramatic
changes.

 Fundamental and dramatic, hummmm.

Would it interest you to know that at least 25% of our industry is going out
of business even in the best of times! From studies we have done, we find one
out of four printers losing business this year. This generally means some 10%
or so of all print shops actually 

go out of business

 by closing or selling
in any given good year. So what?

Change is all around us. Most small businesses fail within the first five
years. Ever heard that? What you might not have heard is that 50% of the
Fortune 500 won t be around in their present state in 20 years either. Nor
you may not have heard that the average life span of a successful business is
only some 15+ years.

My point is 50% of instant and small commercial printers today could be out
of business within four to five years, but that would signal no reason for
you to run out and buy something from someone. That s a state of nature which
has always been with us and probably always will.

A more challenging statement would be that 50% of instant and small
commercial printers today could be out of business within four to five years
to be replaced by . . . . .now you finish the sentence.

Joe Polanco, Printing Industry Association of Texas head honcho, adds another
perspective to last s issues  discussion of depreciation. Let  er go, Joe



Re:	Re: Depreciation - Crouser Report, May 1996 
From:	piatexas.joe@nt1.azone.net (Joe Polanco)
To:	TomCrouser@aol.com

Tom, interesting comments (regarding Depreciation).  I d like to add another
caution.  With today s
electronic equipment, we re running into a double edged sword.  MACRS forces
you into a five year depreciation schedule for computer equipment.  In
reality the equipment probably has NO value in eighteen to twenty-four
months. Now you really have problems.  You have to realize the loss prior to
achieving it s book 

life

 and then you get to start the whole vicious cycle
again.

I was in Washington DC this past week at the PIA Legislative Conference
(along with some of NAQP s reps led by Jeff Hayzlett), and this issue was one
of the top concerns for our industry.  More to come at a later date.

Thanks, Joe. And, finally this week, an endorsement. Earlier, we had a
discussion about post script files, etc. Larry Nebel sends in this piece of
mail regarding what they do.



From:	LarryHN
To:	TomCrouser

Although we do accept non postscript files in selected (not all) Mac and IBM
native mode files, I agree that the smartest and most successful method is to
accept only postscript files. If you have to buy John Giles Book - 

The
digital original

 for your customer (available from many sources including
Alco Print, 39176 Fremont Boulevard, Fremont, CA 94538-1316 for $42.95 plus
$6.50 shipping and handling (plus 8.25% sales tax for California residents).
It takes the guess work and the fear out of making Postscript files.

Larry Nebel

Thank you, Larry. John Giles can also be reached at  JohnG247@aol.com. Until
next time.

Happy Trails. Tom Crouser

Crouser Conference on Production Management
June 5-8, 1996
Charleston, West Virginia


Highlights: Following, you will find highlights of our upcoming client
conference on Production Management.  There are only a limited number of
spaces for company participants who are not currently clients of Crouser &
Associates. Cost for the conference is $1,200. (Subscribers to the Crouser
Estimating Guide, computer program or members of the National Association of
Quick Printers or a Printing Industries of America affiliated association:
$1,000). Contact Clark Workman at (304) 342-5100 or fax (304) 342-5187 or
email crouser@ibm.net for more information or request for registration.



Crouser Conference on Production Management. Purpose, Precepts and
Procedures. 

Production (Operations) Management: What is production management and where
does it fit into the small press shop? Using the classical tri-deputy model.
Morning Meeting. Schedule. Hang-ups I see in the field. Rules of engagement.
Tools of the professional production manager.

Right On Time! The object of operations management is to get the product to
the customer right and on time. Self Analysis. An organizational time
analysis. Common difficulties you experience supervising others regarding
time. What to do about it..

Quality Management Methods and the small press shop: Overview as well as its
applicability to our shops. 

Is It A Problem? How do you know when you have a problem in the first place.
Problem solving techniques in production management. Some statistical
analysis.

Standards: Estimating Standards; Production Standards, Engineering Standards.
Methods of Establishing Standards. Streaming Procedures - cycle time,
bottlenecks

People Skills: Leading People. We look at our own profiles and their impact
on our organizations. We then use these profiles to help us understand our
other members of our team. Other people related issues: supervision and the
laws: how to discipline, discipline steps, counseling. Quality of People We
Hire: Interviewing and testing. Setting Up Meaningful Training and Getting
The Time To Do It - What do they need to know how to do? How to determine. -
The four steps to training anyone anything. Training records.

Production Management Technical Issues: OSHA; EPA and Stuff; Hazardous
Material; Right to Know. Plant layout. Inventory control.

Plus Three Breakout Sessions where production managers will be discussing
their most common problems in a moderated session. Topics such as: Why can t
you apply the tri-deputy model to your shop? What is not being done now that
needs to be done to conform to the model? Care and Feeding Of Owners. And
everything else we haven t talked about that we need to talk about.