Cost saving partners: by using cooperatives and networks, newspapers reap benefits.
Last year, PAGE Cooperative celebrated 30 years of business. Founded in 1984,10 family-owned newspaper companies came together to form what is now the largest purchasing entity in the industry. The company is headquartered in King of Prussia, Pa.
According to the company's website (pagecooperative.com), membership includes 255 newspaper corporations with 600 daily newspapers and more than 1,600 publications. The combined circulation of the daily newspapers alone is almost at 10 million. Newest members include The Ogden Newspapers Inc., Adams Publishing Group, Southern Community Newspapers Inc., and Korean Marketing.
Chief executive officer John Snyder said to become a PAGE member, newspapers must be independently owned and invest a $15,000 equity membership fee. This deposit is the same no matter the newspaper's size or how many publications a media company owns. If a member ever decides to leave the cooperative, the fee is returned.
Members pool together their individual purchases to create a purchasing volume. PAGE offers its members discounts and rebates from more than 200 suppliers. Members have purchased more than $200 million dollars annually. Suppliers and partners range from credit reports to press equipment, including ink, press plates, and press rollers. The more volume there is, the more discounts, Snyder said.
"How it works," he explained, "is that our members order directly from the supplier, and then the bill comes to us."
To become a supplier, a committee fields requests and schedules a presentation. These meetings take place once or twice a year, Snyder said. When looking at the proposal, the committee examines what services are being offered and if it offers benefits to the cooperative.
"Our focus is on print," Snyder said. "This year, we saw paper purchases go up 10 percent. That counters with what's going on the industry."
Since joining PAGE in 1985, Snyder said many loyal members and suppliers have been with the cooperative every step of the way, but as press rooms close and newspapers are sold, their business has gone elsewhere. Even though that's a sign of the industry, Snyder still believes there's room for print.
"We're a survivor," he said. "We're the only buying group that's member-owned and not-for-profit. Over the years, we've paid out millions of dollars back to our members."
One of those members is Gregg Jones, president and CEO of Jones Media, Inc. in Greeneville, Tenn. Jones is the past PAGE board president and currently serves as board chair. He has been a PAGE member for 25 years and has sat on the board for the last 10.
"I understand newspaper people are picky. They're stubborn," he said. "They know what they like and they know who they want to buy from. With PAGE, you can continue to buy from the same supplier and pay less."
The smaller papers being serviced by PAGE aren't immune to the economic woes found at the larger metros, but having PAGE at their side has helped with costs.
"PAGE is able to negotiate for us with suppliers," Jones said. "PAGE is able to facilitate with the best suppliers and offer us the best prices."
In the past five to 10 years, he has seen PAGE become more responsive and transparent (with sharing prices). For a company that's been around for 30 years, he continues to see growth with the company.
"I suggest papers take another look at PAGE," he said. "It offers suppliers incentives to lower their prices with this huge group of buyers, and papers know they're being offered prices that will never get beat."
The Print Packaging Network
Launched in 2010, The Print Packing Network (otherwise known as The Network) was founded by former Muller Martini Mailroom Systems vice president of sales and marketing Keith Hockenbery. After leaving the company in 2009, he was still being contacted by his newspaper and vendor clients on leads, so he decided to create The Network.
The Network offers a variety of different services. The majority of the work focuses on equipment relocation. According to its website (thenetwork.net), the company has relocated inserting systems utilizing former field service technicians from GMA/Muller, Heidelberg/Goss and Quipp. The Network services GMA/Muller and Heidelberg/Goss inserters; GMA/Muller and Ferag conveyors; Muller and Ferag storage and retrieval; Quipp stackers; and all models of Bindery equipment. In addition, The Network offers operator training, handles equipment sales, provides engineering and consulting, rebuilds feeders, and provides on-site and telephone technical support.
Hockenbery is also an authorized sales representative for the BURT System family of packaging and distribution software solutions. The Network recruits experienced technical and professional personnel and contracts them on a per-job basis. Many of these associates are semi-retired and help keep costs low. Hockenbery, who serves as The Network's president, has nine primary associates working with him.
Recently, The Network worked on a project with the Milwaukee Journal Sentinel that required a short turnaround. According to Hockenbery, there was a capacity issue, and there weren't enough hoppers to accommodate all the different inserts. The newspaper contacted Hockenbery last September, and when The Network was granted the contract, they quickly came in and converted two SLS2000 inserters to 28 hoppers each, up from 18 and 20 hoppers respectively. They also added an unwinder/title-up jacket feeder to a third machine. All the work was completed on time and on budget.
"This was a tight deadline with a big impact," Hockenbery said. "There was a lot of physical change. Now they have a machine that never stops. There's no down time with 20 people sitting there waiting to change the pallet (previously, the machines were shut down to change zones and accommodate the different inserts)...it makes it more efficient."
Pete Kowalewski, Journal Sentinel packaging operations manager, said the machines had to be converted by October 1 in order to hit the paper's busy season. The Network was able to meet that goal. Kowalewski said since then, efficiency has increased by 10 percent, and he has seen a return on investment with the money that was set aside to raise capacity. Since the project was so successful, Kowalewski said the Journal Sentinel already has plans to install Muller Martini 365 conveyors on two inserters this month.
When the Toledo Blade moved its printing to Detroit, The Network was brought in to remove inserting equipment and install and provide training on a new BURT system.
"When we came in, there wasn't a preprint planning system in place," Hockenbery said. "Now with the BURT system, they can send their data to Detroit pretty seamlessly." Working on a "super tight deadline" in late September, Hockenbery and his associates were able to take out the equipment in 15 days.
Blade controller Steve Dolley said four employees were trained on how to use the new BURT system in January, and the system is expected to go live this month.
"This was our first time working with Keith, and he was able to offer us a creative financial solution," he said.
Whether it's relocating machines or buying equipment, Hockenbery said he sees one common denominator in his travels--a lack of training. According to him, about 50 percent of packaging departments are under producing significantly.
"The people running these departments don't understand what the machines are capable of," he said. "So we come in on the training side and address their productivity. It's fixed within a few weeks."
Caption: A GMA SLS3000 that The Network installed in Pontiac, Mich. The machine was expanded from 24 to 30 hoppers as part of the relocation from Mount Clemens, Mich, for 21st Century Media Michigan.
Caption: John Snyder, PAGE Cooperative CEO
Caption: Machine parts being placed on skids for shipment.
Caption: Keith Hockenbery, The Network president
Please note: Illustration(s) are not available due to copyright restrictions.
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|Comment:||Cost saving partners: by using cooperatives and networks, newspapers reap benefits.(production)|
|Publication:||Editor & Publisher|
|Date:||Feb 1, 2015|
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