Logistics Moves Print

Shipping and distribution of finished goods are increasingly critical concerns for print firms of all sizes and specialities. Falling under the broader discipline of logistics—which includes moving raw materials into and through the plant to fulfillment to end-used delivery—distribution operations of mammoth scale have been built by printing giants such as RR Donnelley, Quebecor World, Valassis and Vertis. These units use software systems, barcoding and radio-frequency ID technologies to track materials movement, delivery and shipment status in real time.

Timing print offerings to marketing pushes—the launch of a Harry Potter title, or newspaper inserts for retail advertisers into newspapers—makes the need for careful orchestration. Dealing with the vagaries of print production operations—compressed schedules, spikes in fuel costs and increasing postage rates—has elevated logistics to a core production function. For many firms, logistics savvy offers a competitive advantage.

Logistics took on new significance in May, says Dave Johannes, director of mailing operations for direct mail printer IWCO Direct, Chanhassen, MN, when the U.S. Postal Service dramatically increased work-sharing discounts for mailers. “The marketplace is looking for postal and logistics solutions that drive postage to its lowest possible cost, while decreasing cycle time,” he adds. Johannes says logistics is a critical part of “everything we do” and starts with the job planning process. If logistics is not part of the overall production plan, it is impossible to deliver the cost savings and cycle time the marketplace requires, he says.

“The importance of logistics has grown as clients want later release dates for their printed inserts,” notes Jerry Pollack, national transportation and logistics VP at Vertis.

WorkflowOne estimates that its logistics skills allowed it to capture $100 million in new business. “Logistics is a growing area and more and more clients want us to manage it for them,” says VP marketing John Nicely. The company recently scored a multi-year contract with Tractor Supply Co. to provide 650 retail stores with forms, catalogs and other essentials (some 660 products) required to support its operations. Products are ordered online with turnaround times of as little as 24 hours.

Another logistics strategy pursued by WorkflowOne is certifying PDF files so that print output is identical no matter where it is produced. “Producing client's print closer its final destination squeezes cost out of the equation,” says Nicely.

Third-party shippers (FedEx, UPS, DHL, Yellow, Ryder) also have expanded their logistics services, using their own expertise to drive consultancy services, and offering even smaller printers support.

Innovations in distribution could be credited as a key enabler that has allowed online, on-demand printing firms to thrive.

“Logistics is the tail that wags the dog,” says Charlie Corr, VP coporate strategy, Mimeo.com. “You tell us when and where you need your print and we will work backwards to accomplish that.”

Mimeo.com's business model, Web-based ordering of on-demand documents, is built around product distribution. The company ships thousands of packages and prints over two million pages daily. Its main production facility is strategically located in Memphis to be close to shipper FedEx; the plant was the former home to FedEx's inplant printing unit.

For print buyer Lulu.com, the online self-publishing dynamo with over one million registered users, printing partners must have broad experience with transportation carriers, tracking methods and a high degree of shipping automation. The company distributes to over 100 countries.

“The logistics component for business requires a high degree of planning and automation,” says Andrew Pate, VP business development at LuLu. “Business rules in our computer system determine where to print jobs and how to distribute based on optimizing a customer's experience.”

Printers address distribution needs either internally, using their own or rental trucks and negotiate contracts with trucking and freight forwarders, or externally by hiring third-party logistics specialists to move print, or a combination of both. Materials are either delivered to client-designated locations or to the U.S. Postal stream.

Printing heavyweight Donnelley distributes 8 billion lbs. of print and mail pieces through its delivery network annually. USPS recognized Donnelley with its Partnership for Progress Award at this year's National Postal Forum. The printer won the honor for its OneSite postal tracking and reporting system, which allows mailers to track their mailing campaigns as finished mail pieces leave the production facility, travel through its logistics network and are processed by the USPS.

Donnelley says it is the largest shipper of mail into USPS, claiming to send around 50% of standard mail into the postal stream. After selling a packaging logistics unit of its own in 2004, the company expanded its logistics muscle when it acquired Banta in the beginning of this year.

Quebecor World Logistics ships over 9 billion pieces of mail and 4.2 billion lbs. of print per year. Freight moves through seven regional consolidation centers (Chicago; Memphis; Atlanta; Edison, NJ; Los Angeles; San Francisco; and Portland, OR), where QWL consolidates volume from all Quebecor World and third-party customers. The 314,000-sq.ft., state-of-the-art Bolingbrook (Chicago) facility pioneered the co-mailing of short- to medium-run magazines when it opened in 2005.

Quad/Graphics supports a transportation services unit that moves tens of thousands of tons of print to hundreds of destinations weekly via its own trucks and third-party carriers. The company sold its Parcel Direct unit, a national parcel consolidator, to FedEx in 2004 for $120 million cash; FedEx renamed the service SmartPost.

EPA awarded Quad/Graphics its Environmental Excellence Award for reducing air pollutant and greenhouse gas emissions in its freight transportation activities. The company installed diesel-powered auxiliary power units on its trucking fleet to heat and cool cabs so drivers don't keep trucks running while parked. The units use one-eighth of the fuel consumed when a truck is idling. Quad also installed technology that automatically shuts off a truck engine left idling for more than three minutes and activates the auxiliary power unit. Assigning two drivers per truck also reduced idling time.

Direct mail and insert printer Vertis' logistics unit provides transportation and warehousing services for more than 750 retailers and newspapers nationwide. Vertis Logistics operates its own internal trucking fleet and has over 800 truckload, LTL (less-than-truckload), and air freight partner carriers under contract throughout the country. The company reports it has nationwide purchasing power of $100 million for transportation and logistics services. “Logistics staff attend all production meetings so they know the status off all jobs and presses,” says Pollack.

Logistic specialists in each Vertis production facility continually juggle insert release dates, carrier ability and production status to ensure product gets to market on time. Logistic staff at each plant report to a national logistics team, use the same technology and adhere to standard operating procedure. Performance is measured daily and the goal is 100% on-time delivery.

ONLINE: www.dhl-usa.com, fedex.com, ryder.com, upslogisticstech.com, yrcw.com, stratis.com and jeco.com