Diversify or die is a blunt but appropriate business philosophy for Bob Mormile Jr. As president of The VT Group, Yeadon, Pa., he operates his flexographic plate-making operation knowing that he must avail himself of new technology. If he doesn't continue to offer services that his competitors can't match, he won't be able to provide jobs for his many veteran employees — jobs that at some point in his career he has done himself.
All of these displays were printed directly on corrugated with plates supplied by VT Graphics.
Throughout grammar and high school summers, he worked at VT Graphics with his dad, Robert T., who started VT Graphics in 1966 with three partners. By working at his dad's company (and box plants), Mormile learned the intricacies of making printing plates and how they run on various flexo printing presses.
When he graduated from Widener University, Chester, Pa., in 1983, VT Graphics offered Mormile a full-time job as a production manager.
"It was a perfect position for me because I had done every job in the shop [during school summers]," he says. "I knew the technology. My dad and his partners gave me the chance to take risks." Mormile bought out the partners about 10 years ago.
Combating Rising Raw Material Costs
Over the past four years, he has taken a number of business risks that were driven by his need to differentiate his company from competitors. He knows that it can be very dangerous to run a 42-year-old company as if it were 1975, or even 1995.
For years, VT Graphics has been making plates for candy maker The Hershey Co., which does $5 billion in annual sales. A team of designers, marketers, and project engineers manages its corrugated point-of-purchase display business. VT Graphics sells its plates directly to Hershey-approved corrugated box plants, which then print and diecut the displays. Of course, it also makes plates for other box makers throughout the U.S., Canada and Mexico.
If you do business with consumer packaged goods companies like Hershey's, you must maintain color consistency.
"That's the big challenge," Mormile says. "Colors are critical. There's the Reese's® orange and the Kit Kat® red. They have to be consistent [no matter who makes the displays]. It's very difficult. We control color management well by understanding the variables that affect color. This lets us produce proofs that match what the printing presses will print."
Using Esko's DeskPack 3-dX software, Rick Rutkowski, creative director, can view a prototype display's panels from every conceivable angle. This avoids costly design mistakes down the road.
One of Hershey's biggest customers is retailing giant Wal-Mart. Keeping Wal-Mart happy nowadays means coming up with new packaging year after year. Or, put another way, Wal-Mart drives today's graphics.
This is where VT Graphics' diversification comes into play. In 2004 it started Digital Impact, which makes short-run displays and a lot of promotional items using a Hewlett-Packard Corjet large-format printer, which allows them to print directly onto corrugated board. It also operates two Kongsberg DCM digital diecutters, and a Weeke CNC router for permanent displays.
Playing with Panels is Now Easy
"I looked at this [Corjet] press for three or four years," Mormile states. "By 2003 I could see using it for short-run [one to 1,500 pieces] production and package prototypes. It was a fit for our business, but I wondered if the industry would see it as a fit. We knew we could make this work, but we had no line of customers."
Mormile took a calculated risk and saw it pay off. Buying the press gave VT Graphics that critical quick option that new customers need these days. A couple of years ago, Pat Anderson, president of Lyropa Tool Corp., Eddystone, Pa., had new Twist-Lok™ drill bits that he wanted to introduce at an upcoming trade show in San Diego. But he had no packaging. On a Saturday he searched the Internet, found Digital Impact, sent an email, and visited Digital Impact on Monday. In less than 10 days he had packaging for the drill bits that in turn helped him have a very successful show.
Marc Salera, assistant art director, compares a VT Graphics Trucolor dot proof to an actual print job.
Meet My Needs
Nowadays, quick reaction time to a potential new customer's packaging request is mandatory. If you don't respond immediately, customers can hang up the phone and search the Internet for someone who can meet their needs. And even once you get the order, you have to deliver it quickly or that will be your first and last one.
"Fifteen years ago, it used to be one week for proofs and one week for plates," Sales Manager Carlton Boon says. "Today, we do from concept to delivery in as little as three days. With box maker consolidation, scheduling becomes critical."
But VT Graphics realizes that scheduling is only one piece of the customer satisfaction puzzle. In the old days, proofs would consist of art boards with color keys, says Mormile. In today's digital world, you're dealing with Encad proofs for print position (including traps and bleeds) and digital proofs for color match.
Using Esko Artwork's Kaleidoscope™ color management software, the company has developed the Trucolor™ dot proofing system, which entails VT Graphics employees visiting client box plants and fingerprinting their presses. Thus, Trucolor proofs are made at line screens that match specific presses currently running at VT Graphics customer box plants. In just a few sheets, the job will match the proof if everyone manages the variables, Mormile states. This significantly cuts down on waste and press downtime.
VT Graphics' ability to produce quality plates quickly goes a long way in maintaining its long-term relationship with Hershey's, which has a constant need for new displays.
Bottleneck Potential Grows
One growing trend that VT Graphics must now handle is ongoing box plant consolidation. Not only is the competition between converters intense (especially in the Northeast), but there are fewer of them. And then there's the evolution of box superplants, which translates into the business of two or three integrated box plants now flowing into one.
All of this creates order bottleneck problems that center on delivery challenges. VT Graphics employees work to prevent these problems by anticipating them. They also educate their new clients on what to expect as an order is processed.
Mormile knows that if he doesn't keep up with evolving customer needs and wants, his company's margins will suffer. Growing current (and winning new) business comes down to providing plates in the clutch. VT Graphics employees have worked at the company for 12 years (on average), with many having put in more than two decades.
When the pressure is on to complete an order, Mormile knows what they need to get the job done; he has worked on the floor and run the box plant presses that will be using VT Graphics plates. So he makes certain his people have the tools they need.
To avoid ever having to say, "We can't help you with that," two years ago Mormile expanded VT Graphics' services by starting Ocean Design Group, a design company that can help a client develop a new corporate identity or a new package for short-run production.
Marc Salera, assistant art director (left), and Dani Cahill, art director, compare a customer's current package to one of VT Graphics' Trucolor dot proofs of the same package.
"Customer demands help make us better plate-makers," he states, adding that VT Graphics often finds itself not only providing products, but also consulting with box plants to help them get the most out of their presses. It's all about developing ties that bind.
These efforts are making a financial difference. The past year has seen Digital Impact grow 40 percent (with sales in excess of $1 million) and Ocean Design Group grow 25 percent. VT Graphics' growth during the same period hit 12 percent.
Today VT Group finds itself competing directly with many companies, including Chinese, to design packaging for new products. If it doesn't offer what others can't, it will be passed over simply because it wasn't the lowest bidder.
"At the end of the day, what makes us stand out is diversification and the personal aspect," Mormile stresses. "Here, when you call us, you're talking to a person. I have no voice mail. Then there's the passion that our 60 people bring. It's not just me, but lots of cogs that make the wheel turn."