The Top Five Continue to Thrive
A proactive approach to marketplace changes proves profitable for suppliers
There are no big surprises at the top of the BFL&S Top 100 Supplier listing this year. Except for a bit of order shuffling, the five companies tßhat have dominated the rankings for the past few years—Ennis, Quality Park, TST/Impreso, Western States Envelopes & Labels and Champion Industries—continue to do so. And, it is traditional products, including envelopes, forms, tags/labels, commercial printing and direct mail, that account for the bulk of the sales that these powerhouses are posting.
Principle officers for the companies, however, stressed that it is product line diversification, acquisitions, ongoing initiatives to streamline operations and outstanding customer service that are driving growth and profitability.
Here, representatives for three of the top companies talk about factors contributing to their ongoing success and strategies for maintaining an upward track.
Ennis is Bigger and Better
Ennis, headquartered in Midlothian, Texas and lead by Chairman, President and CEO Keith Walters, has moved up from second place to capture the top spot from Quality Park this year. With a current run rate of more than $582 million in sales—an increase of more than $254 million over last year's figures—Ennis continues its strategy of growth through related manufactured products and acquired growing product lines. The company also reported an additional 3,531 employees.
"The acquisitions of Crabar/GBF, Alstyle Apparel and Royal Business Forms were easily the most significant events in what was the most active acquisition year in the history of the company," said Walters.
Not surprising, sales are up in the company's Forms Solutions Group. "Crabar/GBF and Royal Business Forms added estimated annual revenues of approximately $70 million, as well as additional production capabilities and geographical coverage," noted Walters. "The merger with Alstyle Apparel and Activewear establishes a new growth platform and brings an estimated annual revenue in excess of $200 million."
Ennis reported that apparel accounted for 41.6 percent of its business, while forms accounted for 46 percent.
A Process of Assimilation
Since the completion of the acquisitions in November 2004, the focus of management has been directed toward the integration of these companies into the existing Ennis operating structure, and reorganizing the management team to best deal with the greater complexities and issues resulting from acquisitions. "Ennis remains committed to managing its overhead in a prudent manner, and to adding and promoting people who can balance the multiple tasks required in today's business climate," said Walters.
There have also been a series of transitional location moves as part of a plan to reduce fixed overhead for greater efficiencies. Alstyle Apparel is much larger than any other organization ever acquired by Ennis, and a significant amount of work still needs to be done to finish the integration, although the process is moving forward at a satisfactory rate. "This acquisition has added a cyclical nature to the business, which did not previously exist for us. Sales of activewear are heaviest in the first and second fiscal quarters," observed Walters.
While much of the year was focused on acquisitions, the existing operating units continued to perform solidly. Ennis has 40 production and distribution facilities located throughout 15 of the United States, Mexico and Canada, strategically located to serve its national network of distributors. Ennis, together with its subsidiaries, operates in four business segments: the Forms Solutions Group, Promotional Solutions Group, Financial Solutions Group and Apparel Solutions Group.
Ennis was recently presented with the PLP (Preferred Limited Partner) Innovator of the Year Award by Proforma for its assistance with a multi-million dollar contract. The company's ability to work closely with and meet the needs of the Proforma owner helped to make the transaction possible. In addition to the PLP Innovator of the Year Award, Proforma also recognized Ennis as a PLP Top 10 Vendor.
Creative Product Diversification Propels TST/Impreso
TST/Impreso, Coppell, Texas, reported a reduction in sales of more than $8 million, but the company still managed to hold on to the No. 4 spot again this year. The company also reported five fewer locations and 73 fewer employees, no doubt resulting from the reconfiguration of operating facilities for greater cost efficiency.
"In the stock tab-paper converting segment of our business, we have experienced some significant customer losses with the increasingly competitive atmosphere of this mature and declining portion of our sales," said Marshall Sorokwasz, company president and CEO. "Subsequent to fiscal year end 2004, purchases by our largest customer decreased significantly. That reduction in purchases is expected to be equivalent to approximately $20 million in annual sales."
After the company's annual board meeting, which was held in January 2004, TST/Impreso announ-
ced that it was entering the bottled spring water business, which has experienced phenomenal growth in the past few years. The company agreed to lease the water production and a building that houses the spring from Alexa Springs, and then submitted orders to manufacturers for the water processing equipment.
"Looking forward to fiscal year 2005, I am very excited about the start of production at our water bottling facility in the Ouachita Mountains near Mt. Ida, Ark.," commented Sorokwasz. "This is especially significant as we begin the diversification of our product offerings out of hard-copy imaging supplies."
He also pointed out that the introduction of bottled water into TST/Impreso's paper business makes for an ideal companion sale, since the distribution model for the water products is very similar to that of hard-copy imaging products.
"Many customers who are currently purchasing from us also buy bottled water. The weight and dimensions of a pallet of bottled water and paper, and therefore the costs, are comparable," observed Sorokwasz. "Since we are already delivering our customers the paper products that they require, we can simply piggyback a second sale of water on the same truck. We plan to effectively compete in the wholesale market by offering a quality product at a competitive price point," he concluded.
TST/Impreso was founded in 1976 and has since operated in the hard-copy supply market, which encompasses those products that are used with a hard-copy output or imaging device. These products include continuous computer paper, ink-jet media, desktop ink-jet papers, thermal fax paper and copy paper. TST/Impreso manufactures and distributes its variety of products under its own Impreso label, generic labels and private labels, and the company operates out of 60 locations throughout the United States and Quebec.
Western States Envelope & Label Powers Up
Since 1908, Western States Envelope & Label, Butler, Wis., has put its stamp on the industry as a leader in envelope manufacturing, producing everything from the tiniest double-O coin envelope to huge file envelopes for film negatives for the resale market. "We're configured to manufacture any type of envelope construction that is imaginable," said Mark Lemberger, company president and CEO. "Every type of business enterprise uses our products, but health-care, financial, insurance and direct mail are currently our strongest markets."
Large-format, 9x12˝ machine-insertable products containing windows are also extremely popular. End-users are realizing the benefits of adding more color and sophisticated graphics to their envelopes, which, Lemberger observed, are essentially delivery wrappers.
"Many companies also want to demonstrate that they are good, environmentally friendly corporate citizens, so we have developed our Globe 100 line which features products made entirely from 100 percent post-consumer recycled material," said Lemberger. "There is also our two-way EcoEnvelope line. The outer delivery envelope serves as the return vehicle as well, thereby further reducing paper consumption. We have also made significant investments and have changed our equipment mix to be able to offer these types of products, and we have more BOE and SLE folding machines than anyone else in the industry."
With converting equipment costing millions of dollars, Western States Envelope & Label wants to keep its presses running to see a return on investment. The company operates around-the-clock shifts seven days a week at one facility, and five days a week at its other four locations. The label division was created in 1994, and because the company has been known as an envelope manufacturer for more than 90 years, it constantly reminds existing customers to also think of Western States & Envelope for all of their label needs.
Still, the label business is up 25 percent, fueled in part by unique equipment capabilities. "We can manufacture virtually any type of pressure-sensitive label in both long and short runs," said Lemberger. "And, as a beta test site for the Mark Andy DT, we currently have the only UV, digital, ink-jet and laser die-cutting label press in the world. It has the ability to produce extraordinary, high-quality, short-run, custom, pressure-sensitive labels. We can take a digital file, load it directly into the press and start producing products right away—no plates or die manufacturing are required."
In addition to equipment, Western States Envelope & Label also invests heavily in its people, dedicating significant amounts of time and energy to training the customer service and sales staff. "Having a good understanding of the manufacturing process puts them in a unique position to provide additional value at the point where jobs are being estimated and designed," said Lemberger. "We are also two years into a lean manufacturing initiative. It's an all-encompassing mind-set to improve our processes, including customer service, and to compress the sales-to-order process to reduce the time it takes to receive an order and turn it into a job that is being produced on the shop floor."
Value-stream mapping is one way that helps the company break down each step to see which ones add value and allows it to eliminate the ones that do not. Despite advances, customers are always looking for more. "It's our greatest challenge," said Lemberger. "Our mission is to do more while we lower our costs. With recent increases in health-care, fuel and insurance costs, this is a difficult task. But, this is how we take care of our customers and continue to grow as a company."
By Maggie DeWitt