NAPLBizBuzz

IDEAlliance's Culminating Day

LAS VEGAS, APRIL 9

The culminating day for Print Distribution ’08 began with R.R. Donnelley’s Mike Winn reminding participants that a mere twenty years ago our business consisted of clients throwing names and repro material over the fence to the printer, and printers doing their thing before throwing mail over the loading dock to the freight carriers and USPS. In an extended supply chain world, the prepress-premedia functions are increasingly collaborative, continuous and seamless between parties to the job. The clear direction for printer-mail service providers is to partner with the distribution sector in like manner, shortening cycle times, minimizing “touches” and – thanks to standards and electronic files-documentation sharing – eliminating errors and process variation.

The reality, of course is that when the partner (printer output is their input) is the USPS, we are talking about a many-headed, self- and legislated-regulated enterprise that exhibits best intentions and nevertheless represents a collaborative challenge.

On the matter of names and delivery addresses, MTAC representative Chris Lien of BCC Software (Böwe Bell + Howell) shared the view that when it comes to the lists mailers handle on behalf of clients, the goal of Complete, Correct and Current is easier said than done.

The address standardization, validation and update tools available are being augmented by a B2B SuiteLink product (assigning sub address elements to partial business addresses). The Delivery Point Validation (DPV) toolkit is being enhanced with a Vacant address check. All of the tools are intended to protect the mail owner and the USPS against waste: Undeliverable As Addressed (UAA).

Developments to watch:

1. Effective 5/12/2008 selected postal statements will have an (informational? enforceable?) checkbox certifying the mailing (no longer the individual names which may have been rented from multiple list owners) has a defined delivery address update methodology
2. Effective 11/23/2008 all First and Standard mail will have to certify the names have been Move Updated within 95 days of the acceptance into the USPS.
3. The USPS is taking informal soundings throughout the industry to gauge whether mailers are OK eliminating CASS certification as a predicate to mailing, while – note – maintaining the ability to sanction mailings (and mail preparers) that manifest a statistically unacceptable incidence of UAA.

On this latter point, the attendee consensus was that “we love our clients but eliminating a CASS certification requirement puts the mail services provider in a Liability situation.” The MTAC reps will be encouraged to keep CASS requirements in place, while at the same time educating our mail owner clients as to the value of doing their own list hygiene up front and (now) frequently. Make no mistake, the USPS is keeping score.

So we’re paying attention,

4. Effective 8/1/2009 there will be an all new CASS specification, whose detailed requirements will be provided the software companies in May of that year, right on top of the next Rate Adjustment

Final segment of the conference was intended to catalog the most pressing or vexing areas of industry engagement with the distribution priorities of today. They included:

• Final specification and rule making behind Intelligent Mail Barcode (IMB), the services which are attached to it, the Flat Sequencing System requirements that pertain. All were in agreement that an automation-efficiency standard with years of implications should not be jammed through an official Comment period ending May 2, so that the rules effective date will dovetail nicely with the Postal Forum on May 18. Both IDEAlliance and PostCom will go on record this week with a “take your time and get it right” recommendation.
• Problematic, non automatic application process for USPS programs, the newest of which (like the optional IMB) regional postal authorities are not fully briefed to advise postal clients on.
• Wooden pallets
• Other emerging requirements for mail preparation that may require industry-wide fact finding and action. This may result in a request for NAPL participation.
• The CASS certification “trial balloon” (see above) that should be taken seriously
• Related to that, a sense of unease that working within the letter of the December 2006 law, the USPS will be looking for a set of rulings, regulations or loopholes either to push activities off their books and onto the mail preparers’ “To Do” list or – via fiat – to promulgate a situation (see wooden pallets above) that may in the short term help them to achieve their mandated CPI Cap costs-rates adjustment commitments
• Do Not Mail legislation. More industry-wide activity and education needed.

Bob Whitton

Listening in IDEAlliance Print Distribution ‘08 Keynotes, Panel Discussions

LAS VEGAS, APRIL 8

Two USPS keynoters headlined the conference on Tuesday. Thomas G. Day, SVP for Intelligent Mail and Address Quality. Day clarified that internal measurable USPS standards will be in place across the board by the beginning of FY ’09, or October 1. He announced one more Federal Register round of comments on measurement, with comments complete in short order and final announcement by mid May. Mr. Day reiterated the elusive “carrot” for implementing Full Service Intelligent Mail Barcode (IMB) by the optional start date of October ’08: Address Correction Service (ACS) at no charge, likewise “Start the Clock” and quality feedback (the measurements again).

In the second keynote, USPS SVP of Operations William P. Galligan reminded the attendees that the IMB in tandem with Flat Sequencing System (FSS) machines deployment – 100 machines in phase I – is all about eliminating carrier casing of mail and organizing street-sidewalk delivery tours of ~ 7 hours a day. He’s also supporting internal Cap Ex proposals for any solution that eliminates other machine “touches” of mail, such as traditional OCR scanning of catalogs and magazines to undo the presorts that printers have already done and reroute the printed matter to the appropriate destination postal units. Galligan predicted the IMB implementation will lead to further sortation and pallet makeup, so as to tee up multiple zones and zip codes to the new FSS equipment. And he also foreshadowed the revision of the USPS Logistics network, but amplifying as outsourcing cross-country movement of BMC-to-BMC mail, which today can be suboptimal if only the USPS is the shipper of record. What happens when Service Standards bump up against Freight cost and efficiency.

In related panel discussions on the FSS equipment trials in Northern VA, the USPS project head Rosa Fulton and her colleague Sharon Daniel identified another anticipated engineering innovation, namely the ability for a machine to break open bundles and ingest automatically into the FSS. No more shrinkwrapped, compensated flats bundles, rather one or two straps (back to the past) instead. The address orientation and imaging discussion spilled over to breakout groups. Suffice to say the magazine renewal Attached Mail envelope and “Last Copy Expire” marketers are going to be strongly disappointed by the address placement requirements of the new efficiencies the letter carrier workplace. See the April 9 Federal Register for details. Mike Winn of R.R. Donnelley described the great progress that multiple printers and inkjet equipment manufacturers have made with the new IMB, while acknowledging that practical implementation across the entire print-mail platform in the US is necessarily dicey. Leeway and tolerances are still needed on inkjet and address panel specs, so that a large majority of the industry can replicate what R.R. Donnelley and other participating printers have so far been able to demonstrate.

All of the postal representatives agreed the likely earliest rate filing will be in February for an implementation date of May 29, 2009. This was judged by all the software vendors and publishers-catalogers-consultants-printers alike as insufficient, and various pitches were made for advance “signaling” the rate differentials between Full Service IMB, Basic IMB, Postnet (still optional for a year), noncompliance, etc., etc.   

Pritha Mehra of USPS defined new working specs for code 128 barcoding of trays, plastic sacks, pallets and other “aggregate” containers for mailers who participate in IMB. She promised in a matter of weeks new guidelines for eDocumentation and Scheduling, another requirement for participating in IMB Full Service. And she offered tantalizing “soft benefits” for marketers who choose to use the IMB as a turn-around document with business-meaningful coding for the address-specific unique IDs. Some of this was alluded to by a panel of users, especially Chuck Howard of Harte-Hanks. For all intents and purposes the Optional Endorsement Lines (OEL) used by catalogers and magazine publishers will remain alpha-numeric characters below the new 4-state barcode, as a safety net.

An excellent Transportation and Logistics panel gave further evidence and weight to the diesel/jet fuel price-driver shortage-TSA-Department of Transportation-EPA-fleet reduction-truck capacity outlook. Attendees were promised a truck freight tightening, when the economy and housing come back (in part because laid off construction workers have been driving!). The USPS promised to revisit the plastic vs. wood pallets discussion, as it has led to pushback both internally and in the user marketplace. And further fragmentation of the postal Network (promised this Spring) may – word of caution – put even more pressure on truckload efficiencies, stop-offs, and the like.

Bob Whitton

Second Day Report

Daniel G. Blair, administration-appointed chairman of the Postal Regulatory Commission detailed how his 55-person staff has moved mountains in reorganizing the former PRC following congressional mandates in the Postal Accountability and Enhancement Act of (late) 2006. In short order they made progress on an impressive set of goals and milestones which can be found in the all new www.prc.gov. He foreshadowed Spring ’08 changes by USPS in its Network of facilities (BMCs, SCFs and the like), a sensitive review of the subsidy or cost underpinning for periodicals (founding fathers, do you hear us?), and the introduction of new Flat Sequencing System (FSS) machines capable of doing catalog-magazine sortation for mail carriers at the rate of 250,000+ pieces per machine per day.

A panel which followed danced around the likelihood of rate incentives (and counterbalancing rate dis-incentives) which follow the introduction and combination of FSS, Intelligent Mail Barcode (IMB), FAST reservations and eDocumentation. There is a chicken and egg relationship between the adoption of new best practices and the perceived value to do so. This is probably not a Field of Dreams package – in other words, unless rates are set to a perceived advantage, only the philanthropic and beta testers will come. So far no indication of the kind of guidance mailers will get, or the lead time they’ll have prior to a Fall ’08 implementation.

The morning panel on Retail distribution included a mini tutorial on trucking fuel rate surcharges (which do you want – low base rate and high surcharges or higher base rate and low surcharges?). Driver shortages in Canada and the US, coupled with the cost of border delays (post 9/11) between the two largest trading partners. Transportation Safety Administration expansion of surveillance beyond airline passengers to broader freight screening. And a set of magazine newsstand trends that make the aphorism (“Is Flat the New Up?”) particularly appropriate.

Bob Costello, VP and Chief Economist for the American Trucking Association gave a lucid discussion of freight supply and demand in relation to the overall economy. In his and others’ view the congressional rebate stimulus will have a desired effect in the second half of ’08 but further fleet reductions, another round of EPA emissions standards for engines, the reverse relationship of diesel to gasoline prices, fuel costs – abetted by underlying weakness of the dollar and speculation in commodities – will contribute long term to a freight rebound and the consequent effect on the transportation of printed matter.

Ben Cooper, NAPL and DMA’s point man on mail-related legislative affairs described the coalition building which will keep pressure on to defeat state initiatives on Do Not Mail. Though we can’t declare victory on DNM, right around the corner is a national harmonization of sales tax practices including beating down a tax on postage, and also a set of late ’08 early ’09 activities related to Global Warming and in part directed at US paper manufacture and recycling.

Concurrent Breakout Sessions probed retail distribution and sale trends in depth, drilled down on the new postal ratemaking process, and pondered anew how the USPS and industry can articulate measurable and accountable Service Standards, by mail subclass, origin entered or re-entry, with enough completeness and granularity to allow rapid diagnosis, feedback and improvement.

-- Bob Whitton, R&E Council of NAPL

Biggest News From IDEAlliance Print Distribution ‘08

Las Vegas

USPS is getting out of plastic pallets for bulk printed matter. Printers are restless as this cost-cutting “improvement” is actually a step backward to the need for forklifts at all USPS facilities, the frailty and ultimate cost of wood, its extra weight (~ 40 pounds) which increases everybody’s carbon footprint with over the road freight. Strenuous pushback is needed

Mail Piece Design. Good tips on USPS testing of new tabbing, item thickness, emerging return address, address quality and legibility, location (for Intelligent Mail Barcode, IMB, catalogs and publications may have to change.

Ominously, one direct mail client vows to invest a dollar in electronic delivery for every dollar they now invest in postal compliance and qualification. In the interest of mitigating now-annual costs, the rules and regulations get more arcane and implementation more technically challenging.

Take IMB for example. Inkjet scan standards for pallet-container flags have to change again for Postal employees to be able to scan successfully from their forklift equipment. Addressed IMC on pieces still being ironed out by a joint equipment manufacturer-industry-USPS task force so that catalogs and pubs especially can meet the IMC address specifications consistently. IMB takes effect May 2009 across several classes of mail. Postnet fades out a year later. The companion requirements for address hygiene and customer mail unique IDs take hold around the same time or sooner, like Move Update frequency for customer lists (November this year).

The major printers and 3PLs are revising their drop ship strategies every year, with every rate adjustment. The rate filings come fast enough that the industry is hard pressed to do the software revisions and equipment investments fast enough to get their arms around the ROIs and at the same time minimize their customers’ postal costs by the effective dates. Worrisome complexity department: USPS is doing some fancy footwork with local, little-documented annexes for delivery of classes and types of mail, creating a multiplicity of physical addresses for what logically can be known as “Atlanta SCF.”

Emergence of paperless documentation and payment: Outlined for us at last year’s Santa Barbara Top Management Conference, the beat goes on. With adoption of expanded Mail.dat data standards for postal mail, the Form 8125 and most of the traditional first, Standard, Periodical and Parcel mail payment forms will vanish, referenced only by a line on the truckers Bill of Lading plus all of the new advance ship notices that seamless acceptance mailers will deploy. The rates (incentives) will come to favor significantly mailers and service providers who adopt. Of course an industry of assisters like Pitney Bowes, the list houses and third party logistics providers will be there to help the medium sized printer.

My sense: Mail.dat will shortly be replaced with Mail.xml standards for interoperability between customers, mailers and USPS. The legacy systems will be put to a merciful death. 

-- Bob Whitton, R&E Council of NAPL

TMC: Stop Time

It's keynote time. All things come to an end, and TMC 08 ends with Marshall Goldsmith, a keynoter back by popular demand. He's addressing industry leaders on, guess what, leadership. One of his key coaching techniques to teach leaders not what to do -- but what to stop. He picked it up from Peter Drucker.

One thought was on the quality of ideas versus commitment to making them succeed. Smart CEOs try to keep making things better, but sometimes by improving a person's idea by 5% can decrease his or her personal commitment to implementing the idea by double digits. Why? Because they don't look at it as their idea any more!

Print leaders come to TMC to share ideas, find some new things to do, and to Goldsmith's point, also stop some things. It's time to think and decide what works and what doesn't. What works for you?  And if it's several things, don't worry. Goldsmith recommends improving just one thing at a time. It's more than enough and usually makes a huge enough difference.

-- Rhona Bronson

TMC: Best Practices

Practice makes perfect. It can get you to Carnegie Hall and it can get you print customers. TMC is starting to wrap up with an overview by three printers on best practices, which by definition, don't happen overnight, but with alot of dedication and-- well, practice.

Rick Schildgen, CL Graphics (Crystal Lake, IL), uses consistent marketing to stay front of mind with customers.  As a result they tend to think the company's larger than it is, which doesn't hurt. One of his key tools is an annual "wow" package as well as monthly update written by him to clients.  In his updatek, he even writes about going to conferences like TMC, because customers like to know that he's staying up-to-date.

Bill Woods, Jr., EPI Companies (Kennesawk, GA), says his role as CEO is really to be chief cheerleader. He says it's his favorite role. Employees get caught up in fighting fires, but as the face of the company, he feels it's his job to show perspective and let them know that regardless of all the daily challenges, overall they are doing well.  He calls it "Damn It Control."

Bill Gilmer, Wordsprint (Wytheville, VA), talked about his company's incentive plan. Wordsprint is smaller, entrepreneurial site and he concentrates alot on sales. He doesn't look at labor as a variable expense. Like the tides, he's the gravitational pull for the numbers.  If he's out selling, guess what?  All sales efforts rise.

Other cool ideas:

1. Schildgen has a key supplier program and takes his suppliers to lunch, not the other way around.
2. Gilmer went out every afternoon in '06 to see customers. He says you get what you focus on and he focused on sales and  it grew by more than 20%.
3. Schildgen believes in giving back.  He looks to give 1% of sales to community service, some through in-kind services. He specializes in nonprofit markets and having a good heart helps endear him to them.

-- Rhona Bronson

TMC: Green Sales

You can spend an hour with Larissa Crum at TMC, or days with her at Management Institute in August.  One hour will convince you to spend the time with her in DC this summer.  But, here's the one hour gist, or at least a 2 minute piece of it.

There's no difference between sales management and going green. Why?  Sales responsibility is no different than any other type of responsible management.  The key issues are sustainability, chemistry, and knowing the landscape. Sales Stewardship so to speak.

1. Chemistry:  Your clients have got to like you. The chemistry has to be good.
2. Landscaping:  You can't be on a client's team if you don't understand their landscape (or playing field). Don't sell them shade plants (even if they have a shady spot) for their sunny patio particularly if they're planning a big garden party this weekend. In print terms: The client doesn't need a digital sales person, a fulfillment rep, and a database guru. They need one point person (the contractor) who can then bring in the specific team experts as needed.
3. Coaching:  A sales team like a sports team has star players. You can treat your players equitably or fairly. Larissa recommends fair over equitable. After all, would you pay the same for Eli Manning (NY Giants) as John Beck (Miami Dolphins)? If you wouldn't for a quarterback in football, why would you for a sales rep in printing?

Sales, by definition, is supposed to bring in revenue and profits, so if that isn't a green initiative, what is?

-- Rhona Bronson

TMC: W2P Biz Models

There's an ongoing controversy about the success of W2Print technology to gross sales or increased profitability.  Some claim that it increases sales and profitability. Others say no. The issue is really the biz model.  Some are simply procurement models which allows people another tool to order. But that doesn't necessarily result in either plus sales or profits.

Biz models that contain solutions to overcome pain points are the best way to increase sales and profits.

-- Howie Fenton

TMC: Marketing Games

CMOs, chief marketing officers,  average very short career spans.  So, if printers think they have problems marketing, imagine the life of a marketing person!  One has to wonder if CMOs can't seem to get it right or find career stability, how can printing sales reps?

According to Peter Winters of The Winters Group, that's exactly what's supposed to happen.  In his session "Big Ticket Selling to the CMO" he advises printers to become marketing partners and discover where a client fits on the Big Marketing gameboard before trying to sell him or her anything.

The takeaway is that in today's world clients such a bank executives, publishers, and others are facing their own challenges and don't know where to turn. Winters suggests that you make the sales call and put yourself in the chain but not by providing solutions -- at least not at first.  Rather than boast about your great applications (read VDP,PURL or whatever you've got that's hot), first find out the marketing problem the client's facing.  Only then do you even have a chance at being part of the solution, preferably longer-term.

P.S. I've been the Marketing head of a publishing operation. In 10 years (apparently a long, and hardy marketing career), a few printers did try to call on me.  Mostly, I'd refer them to Purchasing or our Ad Agency because I wasn't buying printing.  I was buying media reach.  Our agency was buying the brochures. Well, I guess that was Winters point afterall.  Don't sell what the CMO isn't buying.

You can't be in the game if you don't know what game the CMO is playing, or what's considered a home run for the CMO with his or her superiors.  For too many CMOs the game's over fast and printers never even get a chance to be considered part of the team.

-- Rhona Bronson

TMC: VDP

In an earlier seminar, Thomas Carroll of RR Donnelley noted that he thinks the printing industry has doctors beat in terms of acronyms. VDP is one of them.

InfoTrends' Barb Pellow led a panel that included:

Steve Ebanks – Partner, Xerographic Digital Printing, Orlando, FL

Tom Mercier – President/CEO, Bloomington Offset Process Inc., Bloomington, IL

Walter Payne – President, Image/Mark Business Services, Gastonia, NC

There are as many questions as answers, but InfoTrends is reporting that companies with digital platforms are averaging healthy annual revenue growth. Some key points that came out of it:

1. Judgment is required – by client and campaign – as to whether discretely charge for all services or use some activities (particularly the first out-of-the-box effort) as loss leaders. None of the three, specifically, yet charge for data archiving.
2. Sales involves calling on marketing or brand management. Often marketing departments are not fully aware or informed of 1-to-1 or on demand print collateral capabilities.
3. It's now a requirement for printers aka marketing service providers to cultivate and research the customer vertical industry requirements to the point of attending association meetings where the marketers and professionals gather.
4. Problem solving usually extends to fulfillment and mailing. Mailing implies inhouse Postal expertise. Client databases are rough and require hygiene, cleaning up, especially at first. Client education can include regular attendance at sales meetings, internal training aids and tools to make adoption (particularly by retailers or field sales people) easy and susceptible of enthusiastic reception.

Bob Whitton -- Research & Engineering Council of NAPL

TMC: At Will or At Risk

Afternoon breakout sessions were packed full, which is quite a testament to the pull of a TMC topic after two days and after-lunch.  I sat in one on employment law, and the conversation was lively, to the point, and helpful.

Here's one tidbit:  At -will employment only works for anyone not in a protected category of any sort. Since many employees are either over 40, belong to a minority, or have even a "perceived" rather than real disability, At -will may not be viable at all.

If you need employment advice, NAPL has contracted with Fox Rothschild (Philadelphia, PA) for free labor and employee relations phone consultation for members only.  It's not unlimited, but it can point you in the right direction. For more info, call Melanie Martin-Iuso at NAPL 1-800-642-6275, ext 6318.

-- Rhona Bronson