Testimonials
“I am very happy with the layout that you put together for us. We are filling up the western side of the building's office space with a design company, a music company and a large format output device. We are going to be rebranding as the COT Media Group later this month. We now need to refine a few Standard Operating procedures to maximize the work flow. Things however are dramatically improved with the new layout. I will keep you posted and please feel free to have anyone contact me for a reference.”
Nigel Worme
Managing Director
COT Caribbean Graphics
Articles
High Volume Printer
Plant Planning
By Hal Ettinger & Marc Enggas
Merger Mania:
The takeover target's plants must be assessed.
This issue we inaugarate a new column, covering considerations in plant expansion and equipment installations. Traditionally, printing was a labor intensive industry, and plant modifications were less expensive. But changes in state and federal regulations, technological advancements, increased labor and materials costs and other factors have made the industry more capital intensive. The operating theory of this series is that plants and equipment run more efficiently and produce more volume per hour when properly installed, based on comprehensive design plans. Further, plant expansion is done more efficiently when all systems--electrical, environmental, plumbing, HVAC, etc are planned in a uniform manner.
For better or worse, mergers and acquisitions are transforming the once locally oriented, privately held printing business. One way to improve the probability of success in these deals is to project the consequences of retrofitting existing facilities versus expansion, or versus new construction; or balance of all three.
Shrewd players like Graphic Industries, R.R. Donnelley, Sorg (itself a subject of takeover) and Graphic Media have entered ready made markets, gained advanced technology and increased sales through mergers and acquisitions, Graphic Industries during the past five years have acquired more than 15 medium to large sized printers, primarily in the Southeast, and they are now buying properties in the Midwest.
These companies are real pros in the merger game. But in many instances, printers make the merger move without careful analysis of the physical plant they will inherit. This becomes especially critical if plans to upgrade an acquired property include retrofitting an old plant. In fact, a building's structural integrity, shape and potential for expansion are critical factors in assessing business for merger activity--unless the plan is simply to build new from the ground up.
"When someone buys a company and brings in some of their own equipment, everything tends to be piecemeal," says Steve Heller of the Printing Industries of Illinois/Indiana. "And there's nothing like a printing plant to see piecemeal work."
Since each additional alteration builds upon each preceding one, it is best to think about an existing plant's limitations before buying it. An architectural/engineering firm can give an idea of how planned modifications will affect existing facilities. "You can't put in all this extra hardware without thinking about the fact that you'll have to put in extra conduit for the wires," says Heller. "And the extra conduit for the wires may require you to drop the ceiling, and that's going to affect your air conditioning, etc., etc."
Industry standards of technology continue to advance, especially as the dynamics of the merger marketplace bring more investment capital into the industry. This capital fuels research and development in production; in marketing; and further advances merger/acquisition activities.
Expansion activity should be tailored to account for several factors. Among these: to allow work to continue uninterrupted; to maintain or improve materials handling efficiency; and to facilitate future additions of new or improved technology in all departments. Here are some recommended points of consideration in planning an expansion or reviewing a potential acquisition of a print manufacturing facility.
Assessment - Before future plans can be drawn up, a clear understanding of the "as is" condition is essential. It is most important in this phase to be as objective as possible so that the functional, informational and dynamic aspect are viewed as whole operation, not as separate entities.
Strategic planning - Expand planning horizons, anticipating market changes and competitors' moves. Incorporate the company's business plan with technical system issues, so that both can be accommodated in the final system design. The resulting master plan will prioritize the needs of the company.
Next issue this column will cover structural consideration in avoiding floor failures in the plant.
