Lean Printing; the benefits of implementing an MIS/ERP solution in small to mid size print shops…

Printing has become a very complex and constantly changing industry. With the rapid advancement of digital technology, the rise in the use of the internet, globalization and the commoditization of the printed products the industry as a whole has seen compressed margins and a new level of competition.

Combined with a weak US economy and lagging consumer confidence this storm has wreaked havoc on US print shops.

Using the Business Register from the US Census Bureau the number of shops has declined from 36,024 in 2003 to 29,550 in 2008 that is a loss of 6,474 print shops in 5 years.(1) It has become a top priority of print shop leadership to find more creative ways to distinguish themselves among the crowd and to maintain profitability. Today, commercial printers have difficulty differentiating themselves from one another; this has come from the elimination of craft positions and increased reliance on automation to maintain profitability. One of the ways that companies can get the most out of their organization is through the implementation of a MIS/ERP solution to help keep inline with lean manufacturing principles.

Lean manufacturing is a combination of practices, polices and philosophies that allows an organization to shorten the time between order placement and product delivery by eliminating waste in equipment usage, labor resources, and materials to produce higher quality products and greater profit margins. (2) Even though Lean Manufacturing principles have been around for ages the printing industry has been slow to adapt them. (3) In fact, it is a common misconception that you must be a large organization to benefit from Lean.

NAICS 323 Printing - from the Business Register of the Census Bureau
Enterprise Size	2003	2004	2005	2006	2007	2008	2008 % of Total
1-4 employees	16,307	16,214	15,952	15,450	15,551	14,117	47.77%
5-9 Employees	7,661	7,464	7,214	7,067	7,069	6,109	20.67%
10-19 Employees	5,096	4,984	4,793	4,619	4,466	4,107	13.90%
20-49 Employees	3,974	3,774	3,599	3,495	3,434	3,110	10.52%	92.87%
50-99 Employees	1,669	1,636	1,589	1,551	1,531	1,052	3.56%
100+ Employees	1,317	1,249	1,238	1,251	1,230	1,055	3.57%
Total	36,024	35,321	34,385	33,433	33,281	29,550	100.00%

 In the US the Small Business Administration classifies a small business as a company with less than 100 employees. In the European Union a small business is any business with less than 50 employees. In 2008 almost 93% of all print shops in the United States had 49 or less employees. Yet when we look at these companies we find that less than 5% of small firms and less than 20% of large firms have an Enterprise Resource Planning (ERP) System. (4)

According to a 2004 Gartner, Inc. white paper entitled, "ERP Applications Help Achieve Lean Manufacturing," there are five areas in which an MIS/ERP solution can be leveraged to build a successful Lean Manufacturing operation:

1. 
   
   Product Data Management
2. 
   
   Forecasting
3. 
   
   Line Design
4. 
   
   Line Scheduling
5. 
   
   Flow Visualization

MIS/ERP solutions offer manufacturing organizations many benefits, it can help with value stream mapping of individual processes and help to increase the flow of information to the leadership to increase response time and limit buffering for problem correction. It can be helpful to human resources managers to monitor and asses the strengths and weaknesses in the organization's employees and give them and the production manager's feedback on employee's productivity and effectiveness.

MIS/ERP solutions can affect not only the pricing and estimating strategy but also can affect the days sales outstanding by making the billing/invoicing systems more efficient. Due to the high importance of cash in running a business, it is in a company's best interest to collect outstanding receivables as quickly as possible. By quickly turning sales into cash, a company has the chance to put the cash to use again. Printing is a capital intensive business and the proper use of all resources is critical.

Indentifying, assessing, and implementing a successful MIS/ERP solution can be a daunting task. Not only are the systems to be implemented important but equally important is the company doing the implementation. The analysts and sales staff must be familiar with the intimacies of print shop operations and it is even better for your salesperson to have worked for a number of years in the areas of the shop to be affected. If your salesperson has not "walked the walk" it is almost like giving someone a heart transplant after reading a book. To be successful leadership must consider the following three areas for assessment: 1) Technology 2) Human Resources 3) Systems after the assessment leadership must look for ways to implement the simplification of the identified processes and lastly place policies to safeguard performance with metrics for measurement.

Value mapping a process can help identify "cost added" activities and "value added" activities. A "cost added" activity is any activity that does not directly increase the value of the product. When looking to streamline a process the RIT Center for Excellence in Lean Enterprise has identified 7 different kinds of "cost added" activities.(5) 1) Transportation; movement of material in the plant 2) Inventory; anything of value waiting in process 3) Motion; excess movement of people 4) Waiting; idle operation of machines 5) Overproduction; producing more product at each step that is needed downstream 6)Over-Processing; performing extra processing steps that do not add value 7) Defects; materials spoiled in the process.

Until the advent of the proliferation of digital technologies the printing industry has fought against using many manufacturing techniques to save the impression that it is a "craft" done by "artisans" instead of looking at the productivity and effectiveness at its employees and processes. Until the digital age the printing industry was filled with highly skilled workers that could output the day's jobs using their "craft" to uniquely produce each job. This lag in adopting "lean manufacturing" has positioned the industry to be caught up in the "perfect storm." Michael Baker in his blog, "Lean Manufacturing Blog" (5) states,

"Lean manufacturing may be the last hope for the printing industry. Because of the promises, the forecast and expected savings companies can reap from implementing lean manufacturing principles: the printing industry is believed to be the most and primarily boosted and lifted up by the lean manufacturing approaches.

The printing industry has somehow turned into a damsel in distress. With the lean manufacturing, figuratively, its knight in shining armor."

Using Lean Manufacturing as our armor, technology then becomes our sword. Technology is one of the most valuable "keys" to unlock the door to reducing the costs of business and manufacturing processes. Having access to the proper information is critical for all areas of a printing organization from the receiving or taking of the order through every step in the process to the point that it is delivered to the customer and eventually billed and the payment received. It is estimated that there is a 60% chance that a job will get delayed somewhere in the production process. The delay ultimately will be caused by the lack of information. These delays cause jobs to have to be expedited to maintain delivery promises. This sacrifice of efficiency to maintain "service at all costs" puts an organization in jeopardy.

The effective implementation of a MIS/ERP system to allow for the critical exchange of information and the proper allocation of resources can be tantamount to the long term success of an organization. MIS/ERP systems have come a long way now integrating every area of the shop. From web submission to the ordering of inventory, efficient pre press workflow, maintaining job ticketing information and feedback to production managers of bottlenecks or potential shop problems, to the dissemination of business intelligence to the leadership and the eventual shipping and invoicing of the job to the client.

Due to the varied services and product offerings of today print shops, a solid MIS solution must be modular and offer flexibility in designing an end to end solution for your organization. It must not just automate the simple tasks in the production organization but must also provide real time feed back to production managers and shop leaders so they can monitor the key performance indicators that had been identified in the original analysis. One of the key factors in lean manufacturing is that the employees must be surrounded in a culture that promotes thought and the questioning of all processes. Leadership must have the business intelligence real time to minimize the buffers so that they can be quick to react to opportunities to impact and improve shop efficiencies.

As JDF/Cip4 technologies develop and come to the forefront you will want a MIS/ERP solution that can help you manage your equipment workflow and address challenges that come from improperly or inefficiently installed pieces of equipment. These inefficiencies can create "islands of automation" which can contribute to "cost added" activities which will undermine your lean efforts. Leveraging CIM principals can enhance the areas of 1) Improved quality 2) Increased productivity 3) Lowered costs 4) Shorter customer lead times 5)Reduced waste, labor and inventory 6) Greater flexibility and responsiveness - all are parts of a good lean strategy.

This use of lean manufacturing principles and techniques will further separate the leaders from the challengers as the competitive field narrows through attrition. Only the companies that embrace the emerging digital technologies and proven manufacturing processes and strive to continually improve those processes will survive.

Happy Sale'ing
Pirate Mike

1. Frank Romano and David Broudy, "An Investigation into Printing Industry Demographics—2009" RIT 2010
2. Chris Faust, Paper Film and Foil Converter, Apr 1, 2003 12:00 PM, "Think Lean"
3. Sandra Rothenberg PhD and Frank Cost, "Lean Manufacturing in small and mid-sized printers" RIT December 2004
4. Frank Cost and Bret Daly, "Digital Integration and the lean manufacturing processes of US printing firms" RIT October 2003
5. Frank Cost and Bret Daly, "Digital Integration and the lean manufacturing processes of US printing firms" RIT October 2003
6. Michael Baker, "Lean Manufacturing Printing Industry", Lean Manufacturing Blog, http://www.leanmanufacturingsecrets.com/

11 days till… David meets Goliath; a fight that may define the end of IKON OFFICE SOLUTIONS

In 11 days I will get tons of calls and emails from around the country on what new changes are being made inside of the Ricoh / IKON group. I have been listening to both sides of the house and have been hearing similar stories.


Unfortunately for those employees that still work there they do not sound good.


There have been rumors of huge layoffs and mass firings in store. It appears that these decisions are being looked at on an area by area basis. IKON has not been keeping up with the "Welch Way" of differentiation so there is bound to be more firings than layoffs. 

From what I'm being told there have already been some location closings/mergings in certain areas where it made sense. Some branch locations have scaled back or quit seeking new people all together. These have been kept very quiet as the worst has yet to come.

So what do we know so far of the story as it is unraveling? We know that there have been many "engagement issues" in which Ricoh sided with "Cain" We also know that the April 1st deadline (fiscal year) is coming upon us soon and Ricoh will not wait to "kill" IKON like they did with Lanier.

This is not a 5 year process!

The process is to merge the top level execs (already done and it appears that many of them came from IKON) and then to merge the back end processes (done) then to merge the sales forces and remove the chaff. (Starting to happen!)

What will we see?

Meetings with sales managers and local leadership on a market by market basis (Already Done) I am sure that they will dress it up as a "let's meet our neighbors" visit. I am sure that it will be very cordial. But what it really will be is a public display much like a title fight between heavyweight contenders! They will weigh in face each other and pose for a picture before the real Day of Atonement. I am sure they will make their merge decisions on an area by area basis.

There is a lot that is unknown, Ricoh has a lot of "purchased entities" in their back pocket and a lot of "intellectual property" that it has yet to release. One thing we know for sure is that they (Ricoh) has yet to make a unified group out of their acquired companies and has yet to create a soup to nuts product portfolio out of them. So anything can happen; so everything that we talk about here is just speculation.

In the end their can only be 1 Ricoh and 1 Ricoh Business Solutions and IKON which now is more of a RiKON than what people remember as IKON will soon be no more! Eventually Cain will kill Abel as he did more than 2000 years ago and the story will relive itself again.

I was miss-quoted the other day so I am making a re-post so that there is no misunderstanding.


If you look at my blog post which was posted at 9:05pm 01-13-2010 it clearly indicates that I am "on the market looking for a job." That blog can be found here: Pirate for hire! 


I am no longer in any way associated with IKON/Ricoh group.

If you are a shop owner or production manager and are seriously interested in the limitations that I ran into while placing this equipment I would be glad to answer your questions.

There are many successful C900 installations and soon to be C720 installations as well. But there are some limitations that need to be understood or your experience with this gear like all gear could become a nightmare.

There are many variables to consider when getting a production copier or digital press and I think I will dedicate an article specifically to that end.

This industry is where I make my living so I will keep some of my personal feelings to myself.


Pirate Mike

Pirate Mike; what is it about production that makes good men go bad…

Call to production; what is it that makes us sell our soul to be great…

So what is it about production copiers that lure dealers and manufacturers alike? Is it the large hardware revenue opportunities that lure organizations to seek out pirates to push their wares? I think not; everyone knows that the profits that come from the hardware revenues goes to keep the lights on and pay everyone. So what is it? What keeps VPs and Owners up all night dreaming of the one hit wonder?

When service directors say that we are running them into the ground? Well if .003 or .045 is so bad what do you keep approving it? How is everyone else doing it? Why is .0049 their "lead with" rate? Explain that to me. Is it that their service organizations have attained a level of automation and sophistication that tops the normal human organization that is still relying on human might and intellect?

If it is so desirable to do this business why is everyone so skittish? Why do organizations leave the production arena as quick as them came into it? It seems that the few that are known for selling production solutions love it and the rest can just not compete. For the few they seem to put the least value on their people. Why is that?

Why is it that when the future is obviously moving in the direction of full color messages and faster speeds, more capacity and higher volumes? With the sale of this "high speed" equipment comes with even more complex environments to place them in. More varied applications and software systems that the machines and high security systems that they must interface with.

With this ever evolving complexity comes also a sour market and soft economy. With the tough economic environment comes a greater margin compression from a better trained, experienced and motivated level of competition.

They say that the consolidation of large independent distributors and the eroding of the small dealership has put a lot of talent on the street yet my phone keeps ringing looking for a "Production Specialist" or a "Commercial Print Rep" or a "Print for Pay Rep". I love how you can tell someone what you are looking for and they ignore everything you said and say something like, "you know we would love to see you over such and such area calling on the print for pay market."

Why? They traditionally are the lowest margin deals that quite frequently do not pay their bills! This is not a slight on the industry. It is quite comical to watch the Dallas – Fort Worth marketplace. We are the 5^th largest print market in the country and at least 1 or 2 large shops go out of business every month. We started off with 840 commercial print and quick print shops in 2009 and in 2012 it is predicted that we will be down to 600.

So what does that mean? Are companies printing less pieces of paper? NO we are constantly growing the amount of digital sheets we produce. So what does that say about the print for pay market? Are these companies not being run efficiently? Is there poor leadership, inconsistent business practices? Have you ever tried to acquire credit for a print for pay organization? It is miserable; you almost always need 2 years of financials and on and on.

So with all of this uncertainty and financial instability why do copier dealerships and manufactures direct outlets die trying to place this "Big Iron" in these shops that will run their technicians into the ground, cuss out our receptionists and eventually not pay their bills?

What is so urgent about the call to production? What is it about the large multi case orders of toner that sit upon the dusty shelves of the environmentally volatile warehouse space that houses the 55 gallon drums of solvent and 25lb tins of ink? I have been selling the Big Iron for some time and have yet to understand the reasoning behind the mad dance that flows from the scent of an RFQ or the nearing of a lease end.

What is it about the mad addiction of polymerized toner running through our veins that makes us fight to the death over a $150,000.00 worth of equipment to end up selling it at cost and at .00 nothing just to get yelled at by our service director that signs the order and then to get fired from our area vice president for doing what we were told to do.


May the toner reduction mode be selected and every sheet be clicked twice,


Pirate Mike

Pirate for hire!

Pirate Mike no longer works for the one world leader! Expect more commentary from the rouge one!

IKON Delivers Ricoh Pro C900 Digital Color Printer For Grover Printing, A Consolidated Graphics Company

IKON Office Solutions, Inc., a Ricoh company, today announced that Grover Printing, a Consolidated Graphics company, has installed a RICOH Pro C900 digital color printer, giving them greater versatility and enhanced capabilities to better meet their customers’ wide range of printing needs.

Based in Houston, Grover Printing is a one-stop shop for all their customers’ printing needs. They also provide state-of-the-art online solutions and variable data printing, enabling customers to order customized marketing communication materials.

Grover Printing is a Consolidated Graphics (CGX) company – one of North America’s leading general commercial printing companies. With 70 printing companies strategically located across 27 states, in Canada, and in Prague, the Czech Republic, CGX offers an unmatched geographic footprint with extensive capabilities supported by an unparalleled level of convenience, efficiency and service.

“CGX has the largest and most technologically advanced printing capabilities in North America,” explains Ric Davis, Executive Vice President of Operations for CGX. “Our companies are very diverse and offer a full range of capabilities. CGX has the ability to respond to all printing-related needs no matter how large, small, specialized or complex.”

Grover Printing recently decided to make the move into digital printing, and felt the RICOH Pro C900 was a good fit for their needs, giving them more versatility, with faster speeds and excellent print quality. Davis stated, “My team investigated several different digital presses, and the RICOH Pro C900 stood out for several reasons. It produces great quality, giving Grover Printing the ability to offer more robust graphic design and customized collateral via variable data technology. The RICOH Pro C900 also features an attractive price point, from the initial purchase to the consumables.”

Engineered to meet the demanding needs of the production print environment, the RICOH Pro C900 represents an advancement in efficiency and productivity, combining consistent 1200 dpi output with 90 pages-per-minute speed. It utilizes Ricoh’s new image processing technology for unsurpassed quality and fast turnaround times, and can handle a wide range of media, including weight ranges up to 110 lb. cover. Its modular design enables a number of input and output configurations, and offers many production tools for advanced page programming requirements like tabs, inserts, covers and chapter breaks.

The RICOH Pro C900 is designed to have extremely low maintenance requirements, and is backed by IKON’s team of locally based service and support professionals, along with a team of color and production specialists. IKON has many years of experience in meeting and exceeding the demands of corporate print centers and commercial print businesses.

In addition, IKON customers can maximize their color solutions by engaging with IKON’s color and production specialists, and its Professional Services team, who can provide customers with a suite of services and application development, including variable data integration for marketing and personalized communications, advanced color management, forms design, data steam conversion and custom workflow solutions to help improve productivity, reduce turnaround time, and increase effectiveness.

It is IKON’s experience that led CGX to purchase their RICOH Pro C900 through IKON. “Our strong relationship with IKON was key in the decision to purchase the RICOH Pro C900,” says Davis. “We have worked with IKON for several years, and can trust them to come up with innovative ways to meet our needs.”

“The RICOH Pro C900 provides customers with exceptional color quality, extensive finishing options, and complete end-to-end workflow solutions,” says Spencer Adamson, Vice President, Production Solutions and Commercial Print, IKON Office Solutions. “In addition, through IKON’s experience in digital printing, we can help printers like Grover Printing expand their digital printing business and assist them in using technology and advanced solutions to develop and grow their business and offerings, leading to increased profitability. We are proud to partner with CGX and Grover Printing.”

About Consolidated Graphics
Consolidated Graphics, Inc. (CGX), headquartered in Houston, Texas, is one of North America’s leading general commercial printing companies. With 70 printing business strategically located across 27 states, Canada and in Prague, the Czech Republic, we offer an unmatched geographic footprint, unsurpassed capabilities, and unparalleled levels of convenience, efficiency and service. With locations in or near virtually every major U.S. market, CGX provides the service and responsiveness of a local printer enhanced by the economic, geographic and technological advantages of a large national organization.

Consolidated Graphics’ vast and technologically advanced sheetfed and web printing capabilities are complemented by the largest integrated digital footprint of any commercial printer in the U.S. By coupling North America’s most comprehensive printing capabilities with strategically located fulfillment centers and industry –leading technology, CGX delivers solutions that create a spectrum of value for customers. CGX offers the unique ability to respond to all printing-related needs no matter how large, small, specialized or complex. For more information, visit www.cgx.com.

Ed Avella is my counterpart in Houston and is quite a rock star down south. Ed and I were the 2 GAR's for Texas until North Texas gave up waiting for the program to work and moved me over to a specialist position. East Texas/Louisiana was patient enough to wait till he got the program ramped up.

Congratulations to Ed! Your doing a great job!

Happy Hunting,

Pirate Mike

Scary Times – Ricoh the one world leader succumbs to bad economy and is vulnerable like everyone else…

Now this is just hearsay, but I was just told that Ricoh is making employees take a week furlough without pay and has started lying off employees. This is a very similar situation that I am seeing across the boat I mean board with companies in our industry. From Konica Minolta's huge layoffs right after Xerox and Kodak cut roughly 20% of their global workforce. I'm sure it is not a shock to see HP step back and act cautious in new hires and expansion. Now with Canon in complete desperation to see them partner up with HP is almost funny. These types of partnerships are not uncommon in our industry, good bedfellows they make as they both struggle to assert their once top tier status. With Oce bleeding profusely to now even Ricoh showing their humanity we see salary's decreasing, employee benefits being cut or disappearing all together to sheer headcount reductions in almost every company.

IKON has even make changes and cutbacks in our company 401K matching program. The one thing I will say is that we are still expanding headcount and retooling our demo facilities and go to market strategy. We have not given up that we can be successful in such trying economic times. "Be Bullish In Production" our RVP says religiously. IKON is very bullish in times when even the greats are cowering. In fact we seem to have put on the war paint and run into the streets to meet our enemy head on. We continue the fight regardless of the naysayers.

I am getting nervous to see our "big brother" have such 'noise' coming from their employees. I knew many that went from Konica Minolta and others to over to RBS when they were the best looking for longevity; now what were long term stable employees they too are making the great pilgrimage to look for "gainful employment."

With everyone having such a knee jerk reaction it makes me wonder what is coming next. From everything I am seeing it appears that IKON is coming out on top and in a strong position to negotiate with the Ricoh first born. It would not surprise me to find that IKON becomes the "chosen one" and the pony picked to win this next horse race. I look forward to hearing the stories from my readers as I'm sure that many will find even uttering such a thing blasphemous.

If you have a Ricoh layoff story or more "inside information" I would love to hear. As for Pirate Mike I think we will see the true colors of Ricoh's intentions by April 1^st 2010! Maybe I'm wrong but hide and watch as Ricoh retools their organization to come out fighting strong in the next fiscal.

Also be looking for the new Ricoh Pro C901 ( or whatever they will call it ) This new machine of destruction will be a great advancement of the C900 of today with no fuser oil, basing its strengths on a newly formulated polymerized toner? that will bring digital quality to new heights. If I had to guess with the speed at which they are developing products I would guess mid spring or early summer. With all of the great advancements of the Aegis product you can be sure that Ricoh is looking to show the world that "Ricoh knows production." Or at least the new horse they ride IKON>

What Ricoh knows is how to buy the best technology and engineers and then follow that up with a great distribution model which they did too buy. The IKON acquisition will show that their multibillion dollar purchase was not in vain but truly put them on the map in a way that they never could have done before the acquisition.

Ricoh is slowly learning the power of the weapon that she bought. But being able to wield this new weapon of destruction is yet another story. IKON is not an easy horse to ride, and this ride is surely to get very edgy in the short term as things build and the economy continues to falter. This is an "E" Ticket for sure!

As we get into 2010 I'm sure there are more cuts, layoffs, and changes to come. All we can ask is in the end that we are paid to the champions of the day. I for one cannot complain too bad as I have had record months and a record year! I am sitting somewhere around 120% of my budget with almost 400% of my yearly units. The Ricoh Pro 550EX, 700EX and the infamous C900 have taken me to the Promised Land!

Even in bad times the pirate of Lewisville Lake is showing that it can be done with no food or water and just on new business acquisition alone!

Happy Hunting,

(Xerox, Konica Minolta, Danka, Ricoh, IKON, Oce, Imagistics, Lanier, Global) How good companies alienate great people – A story of bloodletting and corporate ignorance.

I have wondered how companies let such great talent walk out the door and end up at the competition to do nothing short of shut them down in a particular marketplace. I have watched so many people change hands over the last 4-5 years that it is truly amazing how fast the strength of a company can change. I have noticed that companies lose employees in 5 distinct ways.

1.Through lack of leadership.
2.Through lack of promotional opportunities, and poor positioning of their resources.
3.Through changing of the compensation plan or not insuring that the employees get paid as they should.
4.Through the changing of an established employees territory or constant switching of roles.
5.Through the lack of respect, recognition or pure disregard for the employees goals and dreams/desires.

I have survived now 2 distinctly different combining's, the merger between Konica and Minolta and the acquisition of IKON by Ricoh. Both were very different but had many of the same elements in them. I have witnessed several other acquisitions and mergers from the acquisitions of the Ricoh family companies like Lanier to the acquisition of Global by Xerox and Danka by Konica Minolta and Imagistics by Oce. One thing that they all have in common there was always a mass exodus of many great people during these troubling times. And in which affects the company's strength and positions the company for greater failures.

During Konica and Minolta's merger I witnessed many events that I wish would have ended up differently. One thing that Minolta and the later Konica Minolta were very good about is making sure that their employees got paid what was due to them and identifying what the employees dreams were and addressing their work to accomplish that dream/desire. Managers took special care to see that the sale reps got paid and that their livelihood was preserved at all costs. Although it seemed as if the sales people were spared the initial cuts, pay plans took dramatic cuts. Leadership was there to manage focus and readdress employee concerns. Konica and Minolta had their failures with processes and support structures. The companies were brought together without a good supply chain methodology. There were very few things that actually happened that made business any easier. In fact many of the processes that were solid become more flimsy as the companies came together. Research and new product lines were coming out quickly giving their people some great products to sell but there was no internal support structure to get them to where they wanted to be. The frustration had always been tolerated as salesmen knew that they were "paid the big bucks" to deal with it themselves. Now that the financial incentive had left the big hitters left also for a more fertile hunting ground.

There was very little emphasis that anyone was very important. In fact the exact opposite was quite true, we like you but we can replace you tomorrow with someone that wasn't here when we paid them properly was definitely the attitude. Promotional opportunities were available but limited to the local leadership's ability to keep you pinned down to what they needed you to do (sell if that was what you were good at). The branch I was at had probably 8-10 of the companies top 20 reps nationally and they all were gone within eighteen months of the formal merge. Territories didn't change for the Minolta employees but that isn't true of most of the Konica employees that ended up in menial jobs and eventually quit to find somewhere else to graze. Minolta had a strong culture of respect and that was only broken by raping the compensation plan to the point that one could see the writing on the wall (you are not getting paid the way you used to so just get over it). It was obvious that Konica Minolta didn't want a huge changeover but really did want to slowly change out all of their employees to new ones that would only remember Konica Minolta and not one or the other. The legacy employees were not good for morale and only brought strife and improper expectations. The original expectation was that if you don't make a six figure income we will fire you. The new expectation was be lucky to have a job and hope you make 65-80k.

IKON and Ricoh's situation was quite different. Ricoh tried to preserve the unique identity of IKONITES. They were very keen on putting value on their individuality and importance. Great steps were taken to try to keep key employees put until the changeover was complete. Leadership was lacking though as IKON had become weak and instable. How can the largest independent distributor of office products in the world get taken over? Who would let this happen? Hedge fund operators that were looking to plunder gold at any cost, that effectively were nothing but corporate pirates. These raiders and marauders slowly and methodically purchased stock and held it for ransom till they were able to manipulate the books till IKON looked like an attractive buy. Leadership had lost the desire to fight and had become fat, slow and lost the entrepreneurial spirit. IKON's growth pattern was like a dwarfed child with no way to grow into the fulfillment of the promise that it had once offered. As a result she became a victim of greatness. Her size and distribution model soon became the desire of others that didn't want to create their own but saw IKON as a cheap alternative since she had become so weak and unprofitable.

IKON was built on the conquering spirit and had become a fierce competitor to do battle with. Over time their success had created greed and sloth. (See the 7 deadly sins of a copier salesmen to fully understand this dynamic) IKON became vain and without potency. Something like 21 companies bid for IKON; Canon, HP, Samsung are some of the ones that I heard of. (If you know where I can find documentation on whom bid for IKON and how that went down please let me know) Now after the acquisition there is much restructuring being done to become the new Ricoh; the new one world leader.

One would have thought that promotional opportunities would have been wide spread as many of IKON's people did leave to places far off. But as the people left the leadership found it more attractive to place "new" talent in place that did not know of the IKON way. The compensation plan was very slowly adapted to a new way of thinking. This new "manufacturers" view of box placement and aftermarket preservation took a while to settle in and is still being implemented now as we speak. Territories have not changed that much as they really have tried to preserve IKON's identity and run it as a "wholly owned" subsidiary for the mean time. People were viewed as an asset and respect was placed on maintaining the integrity of the local branch and employees. But IKON really expects you to take care of yourself, they do not see the value in "getting you paid." If you cannot figure it out for yourself you are surely out of luck. They still believe in the "only the strong survive," and do expect that everyone that comes aboard has a sharp sword and is ready to use it. (Even if it means cutting a few throats in the initial onboarding) I almost find it funny sometimes as I have almost become accustomed to it.

Other employers love to hire IKON employees as they bring the "blood lust" to their people. We revitalize their troops in a way that we will never fully understand, but it is why we get so many phone calls. If you survive you are a "keeper." Leadership at IKON is much more methodical than Konica Minolta but the leadership at Konica Minolta was much more visionary. I can still remember seeing the President of Konica Minolta come to the local branch and taking time to meet and inspire the local people. IKON is the exact opposite they do not have time to be bothered. I have seen people I didn't know walk to the corner office and leave within an hour to only find out that it was the National VP of Sales or some other high powered title to watch them gather their things and leave as quickly as they came. They would rather do a "focus" group then actually meet the people and refocus the troops. This is the mistake that Konica Minolta did in the acquisition of Danka; they did not reach down and pull everyone up this time as they did in the merger.

But I have decided that "acquisitions" are much different that "mergers." In a merger everyone is more hey we are a team that is now stronger to take on bigger foes, in an acquisition you are more the conquered one and must be subservient. People look down but they do not reach down to pull you up. They look at their new purchase in a fish bowl and see how neat their new pet is. In a merger you look over at your new comrade in arms and hope he is carrying a big stick and extra ammunition as you go to slay goliath. Konica Minolta was a 'small' company that had 'big' dreams. Their dream was to become a tier 1 player in the game of office equipment and imaging/document services. Ricoh's dream is to be the 'one world leader.'

So in this I have seen many different approaches and cadences. I have seen good management and poor management, good leadership and poor leadership. I cannot tell you exactly what good leadership is but I know it when I see it. I can 'feel' it. It is the love – hate relationship that you have with overcoming your fears and taking new ground. It is the fear of taking the hill then rejoicing as the hill falls to your power. Good leaders empower their people to conquer and do not hold them back but send them out as berserkers. For those of you that do not understand the reference and its importance; "Berserkers (or Berserks) were Norse warriors who wore coats of wolf or bear skin and were commonly understood to have fought in an uncontrollable rage or trance of fury, hence the modern word berserk."

We now more than ever must come to grips with our fears, overcome our call reluctance and go forth with frenzy. We must take our market share by force and win friends and influence people with the sharp edge of the sword and the tactical advantage of a calculator and well worked spreadsheet. Some days I love the challenge and other days I wish I was dead. Today I was up for the challenge. I will probably reword this blog many times over so you can read it every day and it will change as the season and circumstances change. One thing that you will find out about Pirate Mike is that I am not stubborn in my knowledge. I fully bend and flow as my understanding changes. I hope to evolve my understanding of my circumstances and the events around me and hope to be a survivor and a thriver in this harsh economy and time in our industry.

So WHAT DO YOU THINK?

Pirate Mike

Here is to good hunting… May you kill everything that falls into your sights…

Credit in a wayward world; what you need to get a loan…

Yes my name is Michael and I work for IKON; I wanted to stop by and introduce myself. Can I get a fully completed credit application, your personal guarantee and social security card and a copy of your driver's license and maybe 1 or 2 years of your most currently audited financials?

Does this sound like you initial cold call in the frozen tundra of your business landscape? Well it will soon, or should. How do you expect to get any business done talking to decision makers of well intentioned companies that have plenty of needs but no cash or credit? Everyone I talk to tells the same story, ya I had to walk away from 3 deals this month as I couldn't get them approved. I have had deals take weeks when the company and principal had great credit with no negative information.

When the daily news looks like this: Xerox forecast down 80%, Kodak alying off 18% of their global workforce, Konica Minolta laying off 600, Cenveo shuts down plant, Vertis Communications consolidating, Consolidated Graphics Reports Loss on Quarter, RR Donnelley Q1 Net Down 92% On Changes, Southwest Color Graphics closes doors, United Graphic Equipment no longer, U.S. Postal Service posts $1.9 billion loss, Quad/Graphics to lay off another 140 employees, Domtar Reports Loss of $45 million, Kodak First-Quarter Sales Decline 29%, Additional Cuts. It is not hard to understand why no one with money wants to hand it out to our capital equipment investments.

In this day and age you had better have perfect credit, audited financials and a very strong personal guarantee (750+) if you really think someone is going to loan you anything especially if you sic code is something like 2752! Although commercial printers are not the only ones being picked on, it seems like no one is immune to the credit FREEZE. It is like the ice age after a nuclear holocaust. Everyone has put all their supplies together and are waiting it out. Each hoping that the other will go out and see if the radiation is gone, just to look at the window and see another drop from poisoning.

We are not out of the woods yet, in fact it looks like 12-18 months if we are lucky to see some light at the end of the tunnel, and that may even be too optimistic. Companies are slashing employees, cutting benefits/pay/travel, outsourcing everything, and looking for a sign that everything they are doing is working. The atmosphere at the office has become uber competitive, where anyone even the secretary could be plotting against you just to lengthen her job by a week.

I hope for all of our sakes that I am wrong. I hope that the headlines start to read, "Companies expanding, spending money and handing out pay raises to beat inflation and the cost of living!" But I fear that we are not there yet,,,

Any comments?

Pirate Mike..

Amidst the slaughter rises Xerox Technology

Xerox has been considered a leader in document imaging equipment and software for many years. In a press release on Xerox's website claims that they earned "600 new patents in the year of 2008." Xerox Chief Technology Officer and president of the Xerox Innovation Group, Sophie Vandebroek says companies must keep the innovation pipeline flowing even in a lean economic climate or they will face huge product gaps in future years. In her quote, "You cannot sacrifice tomorrow to save today. Our investment in innovation guarantees Xerox leadership in our core business and creates opportunity to grow in new markets," said Vandebroek. "It's also a source of pride for us. More than 2,300 employees, past and present, have been granted five or more patents – an extraordinary accomplishment." Xerox has been issued over 55,000 patents worldwide since it was founded. They mentioned that 18 scientists have earned the 100 patent mark. That is a tremendous feat. In our economic environment technology companies live and die by their research and development. Those that quit developing and forging on quickly go by the wayside.

I am always amazed at Xerox's tenacity and sheer bulletproof-ness. The old saying, "no one ever got fired for buying a Xerox," is one of those phrases that I have actually had someone say when they were not going to buy from me and didn't know why. It is a fallback statement your prospect uses when you didn't do a good enough job building your "Value Proposition."

As the economy tightens up and the financial markets "right size" themselves we will see true competitive natures come out. The only people that can survive such environments are true warriors. Many will be sacrificed over the next few years as the "great consolidation" occurs. With so much talent on the street jobs will go to the "lowest bidder." Companies are looking to "upgrade" their talent and cut costs while doing it. I have seen jobs offered at 30-40% of what they were just a few years ago.

As the number of competitors decreases the quality of our competitors gets more intense. It seems like I get closer to all of my enemies every day. Over the next year I am sure I will meet the rest of them face to face as I dig my feet deeper into the sand and prepare to get down and dirty with them.

All the while I am also meeting people that I admire and can learn from. As I get closer to the sources of information I am learning much more about the business that I could ever imagine. Innovation and the ability of a company to package that innovation and convince others of how it can benefit them is the key measure of their potential of success. Xerox is no stranger to a "good package." I have always been amazed at "team Xerox's" ability to sell iGen's. Almost everyone that I run into is grossly underutilized. And not only did they up sell the customer they got their asking price in many of the older examples. Canon, Ricoh, HP, and Konica Minolta are making them think twice about their pricing strategy and how they "brainwash" their new and current customers.

They must have a good training program, I have not had the benefit of such training other then the down the street training I received at Minolta. I am ready to put my thinking cap on and become a student of the business again. I am interested to what mother Xerox does in such trying times. After Xerox lowers their profit forecast by 80% and cuts 3000 jobs in 6 months worldwide in an attempt to get things under control. Even the company's executives are starting to "right size" along with the markets. Top level executives including Chief Executive Anne Mulcahy's have come down considerably, Anne's 2008 total pay fell to $10.9 million from $13.5 million a year ago.

So what does that mean for the global giant? Can Xerox live long enough to bring their new ideas to fruition? Or will the ideas die along with the inventors as they enter the market as over qualified Walmart greeters? As one of their competitors I have mixed emotions. Just as bad as I would like to be the one to slay goliath, it will be a sad day in history as well. Will the reorganization make Xerox leaner and meaner? Will they bring these new innovations to market instead of hide them in research journals and patent office's?

Only time will tell if they have what it takes to rise from the fire once again. As a warrior I love a good competitor. Just a few thoughts from your favorite copier pirate…

Pirate Mike