A Tailored and Targeted Tomorrow

Welcome to the packaging and distribution center of the future, where computers know the location and contents of every product

by Steve Ostrofsky

The date was November 26, 2007. As she entered her office, the packaging and distribution manager for the Futuretown Info-Leader was thinking about prepping that night's run and getting ready for the big post-Thanksgiving Sunday package. As she scanned the shop floor, she realized that this was her 10th anniversary in what she used to call the mailroom.

Sitting down at her terminal, she fired up the production simulation system. She confirmed that the zone-production flow plan was working within the scheduled time and that the insert-pallet staging plan was being implemented. Her thoughts drifted back 10 years--the computer systems that generated and optimized the plans she was reviewing were just in their infancy. Even though zoning was not as complex back then, sometimes she didn't understand how they ever got the job done without the current technology.

After double-checking that advertising and circulation had input their package descriptions and zoning requirements, she took a few moments to verify that the latest database of subscriber profiles and requirements had been updated overnight. Last week's failure to do so had caused a rash of complaints from readers who hadn't received the sports sections they ordered for the start of the pro-football playoffs. A stack of error-accountability reports had landed on her desk with a resounding thud. She also verified the update cycle on the demographic database--she didn't want those fall fur-coat-sale inserts going to households that couldn't afford them. She grinned to herself--while targeting the Info-Leader had helped it compete against the onslaught of direct mail and custom content on the World Wide Web, it had also put real pressure on distribution accuracy. Advertisers were demanding accountability, and she wasn't going to get nailed again for delivering the wrong content.

Glancing out of her office window, she saw that her staff was already moving pallets of pre-packaged insert "logs" into the loading positions specified by the system. Another difference from 1997--the tremendous growth in the volume of zoned inserts, and the pressure to get them out on time, had made relying on "gut instinct" impractical. Her packaging system almost always did a fine job of optimizing the production schedule for both time in the plant and flow to the field, and she seldom had to override it.

Thinking about the insert logs, she made a mental note--although the quality of the insert printer's pre-packaging was usually very good, there had recently been some problems. Of course, the situation was not nearly as bad as the crumpled corners and broken pallets she had to endure 10 years ago, but anything that altered the complex field-delivery sequence was a problem. She'd call the printer, and remind them of ANSI's pallet-loading standards.

She turned her attention to the Sunday package. It was going to be pretty big, and she hoped they wouldn't have to slow down the inserters. She'd better check. She punched in a code, called up the Sunday manifest, and immediately felt relieved. Only three of the 256 microzones looked large enough to significantly affect speed, and she knew that the system's auto-optimization program had successfully handled worse situations in the past.

However, the following Sunday would really be a problem. Although advertising hadn't completed its order entry, the numbers on the screen indicated that the package would be over the size limit in many zones. A pre-run would be necessary. Grabbing a cup of coffee, she reflected again on mailroom progress. Even though her equipment could handle a range of package sizes from small to very large, it still couldn't process those ultra-large packages at full speed. The traditional procedures that she had learned as a young mailer in 1997 were still useful.

Walking onto the floor, she thought about some of the young people she had recently hired. While technical school had certainly given them the basic computer skills that the job required, they hadn't expected to lift and move things on occasion. Now there was a change! The old mailroom of heavy lifting and light thinking was long gone--some of the people she worked with had been able to pick up the technical skills to understand and run the new equipment, but many had not. The job simply required a different type of person today.

The manager turned to her floor supervisor, and began to discuss operational issues. Maintenance had become a concern, especially on the critical labeling equipment and custom-bundle stackers. The equipment was fundamentally reliable, but it required attention. She knew that some of her staff still had that "90s" mailroom mentality--to them a bundle was always the same size, and it didn't really matter if a few papers didn't have labels.

Well, not in 2007! If she couldn't produce custom-size bundles on the fly, the carriers would have to make up their route loads themselves, and that would take too much time. If they couldn't automatically label the papers, the Info-Leader wouldn't be able to assure tailored product delivery. She shuddered at the possible reaction from advertisers and subscribers.

The recent purchase of new stackers that automatically load papers from the press conveyor into special containers had been a resounding success. It had freed up the palletizing robots to focus on stacking the extremely sophisticated bundle load patterns necessary for the Info-Leader's complex delivery schedule, and had saved her drivers and distribution-center managers a lot of time. Unbundling single copies and sending them out in containers to her new single-copy DCs had also saved time, and had considerably reduced materials expenses. All of these represented a major change from a decade ago, and the old-timers were still shaking their heads.

Packaging & Distribution in the Year 2007

The scenario at the Info-Leader may be fiction, but it's based on solid projections. Many of the predicted systems are in place or under development today, shaped by market forces that will grow stronger over the next decade. The key words that will describe operations in 2007 are integration, accountability, customization and efficiency.

Integration. Through a network of interconnected computers, packaging departments will be integrated with many other parts of the newspaper. Inputs from advertising, marketing, editorial, circulation and the pressroom will be posted instantly, generating information and controlling the parameters that drive production runs. The need for this level of enterprise-wide computer integration is becoming widely accepted. As NAA's Post-press Manager Harshad Matalia puts it, "People are beginning to look at the overall process and are turning to chip boards instead of clipboards."

Within the packaging department, there will be almost total interconnection and integration of equipment and systems. Computerized run planning will optimize the setup and use of equipment, scheduling of zones and layout of material. In many cases, the machinery itself will be integrated, with single machines taking the place of separate stacking, wrapping, labeling and tying machines.

Accountability. Computer-based monitoring and control will enable the system to "know" the status of every package throughout its construction and delivery. At the end of a production run, the system will automatically produce accountability and tracking reports to show packaging managers how well their equipment performed and advertisers how well their goals were met.

According to Rick Surkamer, director of manufacturing and distribution for the Chicago Tribune, advertisers accustomed to targeting their message through direct mail will demand nearly error-free production, and newspapers will have to meet those demands if they want to continue to get the business. "One thing that will definitely happen is that quality will be way beyond current levels," he predicts. "The tolerance for error is going down much faster than we perceive."

Howard Eichler, NAA's vice president of newspaper operations, also believes that future operations will require a much greater emphasis on quality. To improve insertion speed and efficiency, he says, a set of industry-wide insert specifications will be in place, covering shape, size and quality. In many cases, printers will deliver their inserts to newspapers in large pre-packaged logs, ready for use by the inserters.

Customization. Address-specific delivery will require that a particular set of bundles be delivered to a particular carrier. If palletizing systems and equipment (in many cases robotic) are used, they will have to load products in specific sequences, and "know" where they are located. Papers will leave the packaging departments in several forms. The traditional wrapped-and-tied bundle will still exist, but alternative arrangements, such as completely bundled carrier loads in household order, carrier-specific carts and transport of loose papers in containers will also be widespread.

Most newspaper executives believe that the package itself will consist of a newspaper tailored to the requirements of a specific subscriber, containing targeted advertising and possibly containing product samples that have been automatically inserted or packaged. There will be a larger number of smaller zones, which will be defined by parameters like customer choices, advertiser requirements, demographic profiles of neighborhoods and households, and census data.

Where appropriate, these custom packages will be individually labeled by subscriber, and sequentially stacked and bundled for specific carriers in order of actual addresses. In situations where customization is not required, the entire wrapping and tying operations may be largely eliminated by transporting untied bundles in containers.

Chuck Blevins, principal of the Blevins Harding Group of Boulder, Colo., feels that the accuracy required by tailored newspapering will lead the mailroom and transportation departments to become a single, integrated unit. "The linkage between packaging and distribution will become much closer," he says. "The job of the carriers will have to become much easier than it is today."

Efficiency. Fewer people will be employed in the packaging department, and they will need a broader variety of skills--especially computer skills. According to April Gauldin, circulation-operations manager at the Denver Post, "The major metros will not design packages by hand. Zoning to carrier and household levels will require computers, and all mailroom people will have to be computer literate."

Individual tasks will be consolidated into integrated processes, and material handling be more automated. The result will be fewer "machine minders" and heavy lifters. At many sites, even supervisors will not be needed, as the work will be performed by self-directed teams.

What's Driving the Change?

The forces driving the Info-Leader are generally well-known. Advertisers and, to a lesser extent, readers are demanding a product more specifically focused on their requirements.

The goal of market segmentation is to create a specific message that is tailored and delivered to the customer most likely to respond. Over the past several decades direct mail has increasingly been able to help advertisers achieve this goal. Since newspapers have traditionally seen their role as reaching the broadest possible audience, the growth of direct mail has often been at their expense.

A more recent trend has been a desire on the part of readers to receive a newspaper tailored to their particular interests. A considerable body of research has shown that time pressures have greatly eroded the percentage of readers who read a newspaper cover to cover, and Barry Evans, vice president of projects for Ferag Inc., believes this trend will continue. "Distribution will be key," he says. "There'll need to be a one-to-one relationship between product and reader."

This tailoring of news is now being reinforced by the wide variety of choice and selectability on the Internet, and papers have started to respond. Advertising Sales Manager Bill Burks reports that The Roanoke (Va.) Times has already pulled its stock tables from the daily edition and is selling them at the reader's request in a customized tab. Such programs can offer significant savings in newsprint.

Newspapers have responded to the targeting demands of advertisers through zoning. Initially, zones were relatively large. However, advertiser demand for finer zones has accelerated as direct mail has enabled them to target more accurately. Many newspapers have already established ad-insert zones to the level of ZIP codes and microzones to the level of individual carrier routes.

The pressure for this ever-finer segmentation has fallen squarely on packaging departments. However, current equipment is neither fast nor accurate enough to handle microzoning without human intervention, and manually resetting inserters to handle multiple zones within a given production window can be expensive. In addition to the labor cost, frequent manual resetting can cause inaccuracies--and neither advertisers nor publishers want their current waste levels to increase as more zones are added. Likewise, neither wants to bear the cost of the increased hand labor necessary to ensure reasonable accuracy.

Clearly, packaging technology must be significantly upgraded if the challenges of the future are to be met.

The State of the Art

Much of the technology envisioned at the Info-Leader is either entering the marketplace right now or is under active development. Although a lot of the work is being done by large newspapers in complex markets, several midsize properties are also at the cutting edge.

When fully operational, one of the most advanced operations will be the New York Times' College Point plant. Dave Thrum, vice president of production, says, "The biggest trend in post-press will be increased integration. Current machines are simple and brainless. We'll need more control within machines for both small and large zones and the ability to learn from machines what is going on. How a machine is it running and how to communicate this to people in the mailroom are both important, so that we can have profiles of what runs well according to physical characteristics, and redress guidelines for advertisers. We already have almost all of this at College Point."

This emphasis on accountability and verification is also top-of-mind at the Tacoma News-Tribune, where GMA has installed a fully integrated system to enforce verification and accountability. Each individual package is inkjet labeled with a list of inserts it should contain. At the end of a production run, the system produces insert-accuracy reports for each zone.

At the Los Angeles Times, the process of unbundling has already begun. Using a system from Machine Design Service Inc. of Denver, the Times has started to deliver stacks of unstrapped papers to its distribution centers, shipped from the plant in custom-designed containers that protect the integrity of the product. Machine Design's Marketing Director Greg Greenan believes this approach will become widespread at newspapers with decentralized inserting operations in their distribution centers. The container process saves the time and expense of strapping in the plant and unstrapping in the DC, and reduces the potential for downtime due to tying-machine breakdown. "Many people are very interested after they actually see it," he says. "The potential has surprised even Machine Design."

The frenzy of carriers putting together their loads on crowded loading docks has been successfully addressed at the News & Record in Greensboro, N.C. As part of its overall plan for packaging reorganization, the News & Record has started to prepackage full individual loads in carts dedicated to specific carriers. The carts are shipped to drop points in specially designed trucks. Production Director David Reno has already seen significant time savings, and believes that in his market, this approach will permit even greater control as they move to more-tailored delivery.

Both GMA and Heidelberg Finishing Systems have started to offer integrated packaging solutions and say they can scale their systems for newspapers of various sizes. Says GMA President and CEO Randy Seidel, "We envision a preparation center, a production center and a distribution center. The overall concept would require the marrying of these three areas in the most efficient way. This would provide much more integrated control systems which would provide the accountability needed in order to manage a newspaper of the future."

Vendors are also developing other advanced technologies. In addition to the container systems they have at the L.A. Times, Machine Design Service has field tested palletizing robots with considerably greater flexibility than current systems. GMA has constructed and is evaluating a next-generation machine that combines the functions of stacking, wrapping and strapping bundles. Quipp and other vendors are already in the market with programmable stacking machines that can process different bundle sizes. The software side of the business is also receiving attention. Burt Technologies of Evergreen, Colo., is at the forefront of efforts to provide production-planning systems both through other vendors and directly to newspapers. Their president, Rich Burt, reports that they are upgrading code to run on the newer, faster equipment required for tailored products.

What Needs To Be Done?

Although much development work is taking place, a number of key issues still need to be addressed:

• Sensors. Fundamental to all targeted and tailored packaging is the simple ability to track inserts and packages. Jack Cannaboy, manager of packaging at the Baltimore Sun, says, "We have to improve traditional technologies--especially counting technologies and sensors."

  The integrated systems of the future will essentially have to "know" the contents of every gripper and the location and status of every package. Misses or misreads due to sensor failure will cause major problems for systems running at high speeds.

• Labeling. The technology for rapid, custom labeling has existed in the direct mail and packaging industries for some time. Implementation at newspapers, however, has been spotty. Finding a method of producing a label under operating conditions that is also readable under delivery conditions will be critical for tailored delivery.

• Automatic Package Repair. Accurate microzoning at high speeds will require hoppers that can deliver a wide range of inserts at significantly greater levels of accuracy. The machines will also need better capabilities for automatic repair of errors such as missed inserts. Some advertisers will require 90 percent fewer errors than even today's best equipment can deliver.

• Large-Package Capability. Newspaper executives are looking for ways to handle very large packages at higher speeds. With many markets projected to become even more focused on the Sunday edition, the ability to use highly integrated equipment to deliver tailored, targeted products will become critical.

• Technology for Small Markets. Much of the current development that will produce the packaging center of the future is taking place in major-market newspapers. However, the forces driving the process are also operating in many smaller markets, where newspapers may not be able to afford completely new packaging centers. While vendors claim to be developing scalable systems, it remains to be seen how successful they will be. An even greater challenge will involve retrofitting current mechanical equipment to take advantage of integrated, computer-driven processes.

• Insert Specifications. Although most newspapers have specifications for insert size, page count and delivery quality, enforcement of these specifications is questionable. The continuing growth of inserts as an advertising medium, coupled with microzoning and extremely high accuracy and accountability requirements will put tremendous pressure on even the most advanced packaging departments. No amount of technology will be able to correct for awkward sizes and shapes, extreme slickness or badly damaged products. The newspaper industry, both papers and vendors, will have to address this issue in partnership with major insert advertisers on a national basis.

The shape of the future is notoriously hard to discern. Many promising developments have crashed against operational and marketplace realities or have been rendered obsolete by new approaches. While the packaging department at the Info-Leader represents projections by some of our industry's most thoughtful executives, it's almost sure to be somewhat off base. Over the next decade however, one thing is certain--the industry must continue to improve its processes and take the necessary risks to meet a demanding future.

Steve Ostrofsky is president of Publishing Productivity Systems, Bremerton, Wash. E-mail: stevevelo@aol.com; phone (360) 308-0121.

Sources

Chuck Blevins, Blevins Harding Group, 2060 Broadway, Suite 1, Boulder, Colo. 80306. E-mail, bhg2west@aol.com; phone, (303) 443-2535; fax, (303) 443-2289.

Bill Burks, The Roanoke Times, 201 W. Campbell Ave., Roanoke, Va. 24011. E-mail, billbr@roanoke.com; phone, (540) 981-3361; fax, (540) 981-3204.

Rich Burt, Burt Technologies Inc., 57 Fir Lane, Evergreen, Colo. 80439. E-mail, richburt@worldnet.att.net; phone, (303) 670-7731; fax, (303) 670-0978.

Jack Cannaboy, The Baltimore Sun, 300 E. Cromwell St., Baltimore, Md. 21230. Phone, (410) 385-7017; fax, (410) 385-7771.

Howard Eichler, NAA, 1921 Gallows Road, Suite 600, Vienna, VA 22182-3900. E-mail, eichh@naa.org; phone, (703) 902-1845; fax, (703) 902-1843.

Barry Evans, Ferag Inc., 190 Rittenhouse Circle, Bristol, Pa. 19007. Phone, (215) 788-0892; fax, (215) 788-7021.

April Gauldin, The Denver Post, 1560 Broadway, Denver, Colo. 80202. E-mail, agauldin@denverpost.com; phone, (303) 820-1718; fax, (303) 820-1543.

Doug Gibson, Heidelberg Finishing Systems, 4900 Webster St., Dayton, Ohio 45414. Phone, (937) 278-2651; fax, (937) 274-5719.

Greg Greenan, Machine Design Service Inc., 3535 Larimer St., Denver, Colo. 80205. Phone, (303) 294-0275, ext. 112; fax, (303) 294-0634.

Harshad Matalia, NAA, 1921 Gallows Road, Suite 600, Vienna, VA 22182-3900. E-mail, matah@naa.org; phone, (703) 902-1852; fax, (703) 902-1842.

Lisa Parks, The Kansas City Star, 1729 Grand Ave., Kansas City, Mo. 64108. Phone, (816) 234-4657; fax, (816) 234-4604.

David Reno, The News & Record, 200 E. Market St., Greensboro, N.C. 27410. E-mail, renod@infi.net; phone, (910) 373-7202; fax, (910) 373-5958.

Randy Seidel, GMA, 2980 Avenue B, Bethlehem, Pa. 18017. Phone, (610) 694-9494; fax, (610) 694-0776.

Rick Surkamer, The Chicago Tribune Co., 777 W. Chicago Ave., Chicago, Ill. 60610-2489. E-mail, rsurkamer@tribune.com; phone, (312) 527-2484.

Dave Thurm, The New York Times, 229 W. 43 Street, New York, N.Y. 10036. E-mail, thurm@nytimes.com; phone, (212) 556-1714; fax, (212) 556-5901.

TechNews Volume 3, Number 2: March/April 1997

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