Insert Management Methods
Tame the Tornado!
A whirlwind of part-run inserts has left some mailrooms in chaos. To regain control, focus on customer needs--and fulfill them
by Steve Ostrofsky
Agatha Christie could write this story. A serious and complex dilemma, becoming more and more urgent as time goes on; powerful protagonists with interests that both collide and coincide; clues that appear simple on the surface, only to get more mysterious upon deeper examination. Only this is not a whodunit set on some dark and stormy night, but the case of the advertising inserts.
The elements are straightforward. The motive: lucrative preprint ad dollars. The means: increasingly complex packaging and zoning. The protagonists: newspaper advertising and packaging departments, preprint advertisers and packaging-equipment vendors.
There's nothing particularly mysterious about the basic situation. Run-of-paper advertising, previously the unchallenged hero of our newspaper-revenue plot, has declined in importance. Preprints, formerly a minor character, have grown into a major revenue source, as newspaper sales reps compete with their direct-mail counterparts.
But wait, there's a twist: Preprints have become a complex and sometimes uncertain factor, with part-run distribution soaring and full run slowly declining. And while preprint advertisers like some of what newspapers are doing, they are also demanding more zoning, greater flexibility and better reliability.
Furthermore, in their desire to obtain more preprint dollars, newspapers may actually be pilfering money from other elements of their business, through ever-increasing capital expenditures, labor costs and delivery times. Ad departments anxious to satisfy their preprint customers are pressing for finer and finer zones, straining relationships with packaging and distribution. Vendors, caught between their desire to sell current equipment and the massive cost of developing new technology, are looking for guidance from the industry.
Enter another twist: some oft-held assumptions about the preprint industry--that advertisers want household--specific delivery, for instance-may be overstated. At the same time, newspapers aren't doing very well in some comparatively simple areas, like coarser, ZIP-code level distribution and packaging accuracy. Two wide-ranging surveys conducted by NAA in the past year provide a snapshot of how the preprint market is evolving, and ways that newspapers have scrambled to adapt to these changes.
Pump Up the Volume
Overall preprint volume has been growing moderately for years, according to surveys conducted annually by NAA. In 1992, U.S. newspapers delivered a total of 78.5 billion inserts. Preprint delivery volume continued to rise every year until 1996, when 87.4 billion preprints were carried, an increase of 11.3 percent over the five-year period (see Preprint Volume graph below).
While a quick glance at these figures implies that the industry is doing well, closer inspection reveals some ominous trends--especially for production and packaging departments. Over the five years surveyed, full-run preprint volume rose only modestly for the first two years and actually declined slightly over the last three. Part-run preprint volume, however, has hit the industry like a tornado. From a base of 29.9 billion pieces in 1992, it has gathered force by more than 42 percent, reaching a total of 42.5 billion in 1996.
Replacing full run with part run is obviously meaningful to the mix of advertising revenue. But the impact on other segments of a newspaper's business, particularly packaging departments, is much more complex.
The drop in full-run and surge in part-run preprints has been seen quite strongly at Florida Today in Melbourne, Fla. Production Director Pete Zanmiller relates that managing the greater number and type of inserts has been a real challenge. Most critically, he's found that frequently stopping insert machines for zone changes can inflict major damage to his schedules.
Careful management of zone changes and "doing it right the first time" are keys to dealing with the surge of part-run products and ZIP-code zones, according to Alan Flaherty, principal of ComPlan Inc., a Cincinnati-based consulting firm. He points out that smaller and smaller zones have forced the traditional continuous-process cycle in packaging departments to become more like a short-run job-shop operation.
Taking an extra minute or two between runs is no big deal if you only change over once or twice during a production cycle, it but can be a real problem in a ZIP-zoned operation. In distributing to three zones, for example, two unnecessary minutes per changeover result in the last products getting out four minutes later than in a single-zone distribution. In a 15-zone distribution, an extra two minutes per change results in the last product getting out 28 minutes late.
Flaherty says mailrooms need to focus on reducing changeover time between zones. A key step, he believes, is training staff to think about work-in-progress, rather than wait for the end of each zone production cycle to start preparing for a changeover. He notes that in a typical zone production run, the feeding of jackets into pockets may be complete well before the final packages cycle through the inserting, repairing and stacking processes where the final count is taken. Using this gap to prepare for the next run (positioning jackets and preprints, setting up machine controls, etc.) can significantly shorten changeover times.
Flaherty also stresses quality control--the less time spent repairing misses and doubles, the quicker the change. Newspapers should also look at simple things like reducing the distance between insert machines and stackers. It may not seem like much, but minimizing the distance can save valuable seconds while waiting for a zone cycle to clear.
Picking Priorities
Preprint volume is only part of this mystery. The plot thickens as we consider preprint product and service attributes.
NAA, and its Packaging and Distribution Committee, recently designed a survey to prioritize 23 attributes of preprint operations that affect customer satisfaction. Not meant to be a statistically accurate survey but merely to "take the pulse of the industry," it was mailed to about 50 members of the NAA Marketing Committee and the NAA Display Federation Board. Thirty-five surveys were returned.
The marketing people were asked to score each attribute on a scale of one to five by how important they are to advertising customers, and by how well they are performed by newspapers. The scores in both categories were averaged and ranked, and the difference between the ranks was used to set overall priorities for the industry (see Industry Preprint Priorities chart).
Not surprisingly, the top four industry priorities (ZIP-code targeting, packaging accuracy, proactive notification, and distribution accuracy) were also the four most important attributes to preprint advertisers.
ZIP-Code Targeting
According to NAA's 1996 Circulation Survey, 82.4 percent of newspapers are distributing preprints at or below ZIP-code level. Why, then, did ZIP-code targeting show up as the industry's number-one preprint priority?
Harshad Matalia, NAA's post-press manager, believes newspapers should offer ZIP-code zoning to all insert advertisers to maintain the competitive edge. "For advertisers, ZIP-code targeting is very cost-effective and a primary demand," he says.
However, the 82.4 percent figure implies that 17.6 percent of newspapers cannot or do not zone to the ZIP-code level. After years of NAA and advertiser proselytizing on the issue, why is that number still so high?
"There are both operational problems and revenue problems," Matalia asserts. "In rural areas, where there are only a few hundred people per ZIP code, it is not economical for newspapers to offer ZIP zoning. Some newspaper-routing systems that cross ZIP codes need to be upgraded. There are still some contract problems with carriers and distributors. Finally, some newspapers don't want to offer ZIP zones because of low-percentage penetration, and they fear the smaller zones might lead to a loss of revenue."
At the Fayetteville (N.C.) Observer-Times, Production Manager Ronnie Crimminger has been zoning a total-market-coverage product at the ZIP-code level for about three years. Crimminger says that "it's going really well," and reports good advertiser acceptance.
At Florida Today, Zanmiller says Heidelberg's Prima software for the paper's two Heidelberg inserters has helped manage the complexity of ZIP-code zoning. Before installing Prima's advertising, production and planning modules in the second quarter of 1997, scheduling the sequence of zone production and the physical arrangement of preprints in the packaging department was a cumbersome and sometimes error-prone process. Since installing the software, the process of zone planning has become "much more efficient," according to Zanmiller.
But the benefits extend beyond improved planning. More zones mean a greater variety of packages, which means more time lost while changing over equipment between zone runs. Anything that can reduce changeover time is a major benefit to production flow, and Zanmiller believes this is the area where the software has really helped. It has met the acid test of compressing the time between zone changeovers, reducing them to approximately one minute per change. "It has been a big success," he says.
Packaging Accuracy
Ensuring the correct number of inserts and their placement in each newspaper package seems like a relatively simple process.
It isn't.
Insert hoppers are not 100 percent accurate. Sometimes they miss picking up an insert from the stack, and sometimes they pick up more than one. Sometimes operator error is involved--the hoppers are not set up or fed properly.
The problem is often compounded by the physical characteristics of the inserts. Some are slick and easy to miss. Others are printed with tacky ink and stick together, causing multiples. Some have unusual dimensions or large page counts and are difficult for the hoppers to handle. Others arrive from the printer damaged or in insufficient numbers to complete the run.
Finally, different versions of an insert often look identical--the variation can be as subtle as a price difference. The similarity among different insert versions can trick operators into sending the wrong versions to some zones.
Despite the difficulties, there are solutions.
Proper equipment maintenance, for example, can reduce the problem to a more acceptable level. At The Sacramento Bee, maintenance supervisors Bob Montgomery and Scott Sandison designed a rack that uses counterbalanced weights to markedly speed up the process of extracting, lifting and turning massive hopper parts for maintenance and rebuilding. The careful rack design allows a worker to rotate a 500-pound hopper shaft-and-cam setup with one finger.
The effect of aggressive maintenance has been dramatic. Says Sandison, "Without a doubt, the program has improved quality through reduced misses and better detection of doubles." Before Sacramento started the program about three years ago, gearbox problems during production runs were a weekly occurrence. Now, Sandison reports, he hasn't had a gearbox breakdown during a run for over two years.
In addition to facilitating the planning process, preprint-management software can improve accuracy by directly driving insert machinery. Dennis Creamer, distribution manger at the News & Record in Greensboro, N.C., wrote an entire insert-management software package in Lotus 123. Like the products from the big boys, his IM (Insert Manager) package uses data from advertising and circulation systems to help set up zones and plan runs, reducing setup time from almost two hours to less than 10 minutes. And because the software also controls the equipment, starting and stopping individual hoppers and entire zone runs automatically, the News & Record has "much more confidence in the accuracy of the runs."
Improved accuracy doesn't always require upgraded equipment or new software. Since 1995, the Worcester (Mass.) Telegram & Gazette has achieved very high levels of preprint accuracy by stressing quality.
When advertisers started pressing for ZIP-code zoning, everyone at the paper wanted to do it, but the publisher insisted on consistent accuracy without significant additional cost. The solution? Under the team leadership of mailroom manager Wayne Shepard, they instituted a quality-assurance program that starts with concise, software-driven production orders. When preprints arrive at the dock, the receiving department immediately checks quality and quantity, and communicates any discrepancies to advertising. During the production run, QA staffers check bundle counts and packages, looking for shortages, doubles, damage, etc., giving immediate feedback to the machine operators--they even have the authority to shut down production to insure accurate inserting.
Results have been outstanding. Between the start of the program and the end of 1997, there have been no complaints from advertisers for improper preprint distribution--a record few newspapers can match.
Proactive Notification
Clearly, preprint advertisers want to know about problems before they hit the street. Creamer has combined the improved accuracy of his software-driven equipment with a strong emphasis on dialogue with his ad department. "We call advertising every night to let them know where there are shortages. We just don't get many complaints from advertisers," he says.
Kim McCleary-La France, director of advertising customer service and administration for the Los Angeles Times, confirms that her advertisers demand proactive notification. To address this issue, the Times is working with the management and staff of Times Community Newspapers, a subsidiary that does their inserting.
Several approaches are under way. Currently, report generation is unwieldy, because disks have to be physically passed between front end, production and circulation systems. The Times is now involved in a major project to integrate these systems.
Another issue is more subtle. When originally formed, McCleary-La France says, TCN was very focused on cost. Recognizing that errors and inefficiency also have a critical role in profitability, Times management is now working to change its culture, re-emphasizing customer service.
Today, every Times sales person gets a post-production report every Monday, detailing his or her account's production history for the week. While this is beneficial, and Times staffers are making progress on reporting, McCleary-La France feels that they "still tend to hear about problems from their customers and still need to do more work."
Distribution Accuracy
The single most important concern for preprint advertisers is accuracy of distribution--getting the correct number of inserts to the right area on the right date.
Although the problem is complex, it doesn't always require a high-tech solution. Wayne Bean, vice president of operations at Tucson Newspapers, developed an uncommon method of providing quality control and verification. Internally, staffers verify the weight and labeling of preprint skids as they come into the plant. In addition, a quality-control person pulls bundles at random to verify the insert packages against manifests for accuracy, doubles, misses, etc.
Externally, the papers have recruited people from every ZIP code in the city to check the quality of their delivered product. Bean reports that they've contacted fire departments, nursing homes and employee relatives who, for a free subscription, check the paper against a weekly calendar/preprint list. At the end of the week, the checkers drop off or fax back the list.
Wrap Up
The future of preprints is clear--advertisers will continue to use them, and they'll continue to stretch the capabilities of newspapers by demanding partial runs and finer zones. Although publishers tend to look at the higher costs, there are some cost-effective solutions out there.
Insert-management software, both purchased and home-grown, has proved to be an important tool for holding down zone changeover times and their associated expense. At the same time, the software can help plan runs and produce reports that form proactive relationships with advertisers.
While technology can help, it must be used in partnership with changed attitudes towards customer service, proactivity and quality control. In many markets, newspapers that have focused their efforts on improved management techniques, attention to detail and sound organizational practices have reaped the benefits while holding down the costs of part-run increases.
In other words, this mystery can have a happy ending.
Steve Ostrofsky is president of Publishing Productivity Systems LLC, Gig Harbor, Wash. E-mail, stevelo@ptinet.net; phone, (253) 853-4540.
Sources
Wayne Bean, Tucson Newspapers, 4850 South Park Ave., Tucson, Ariz. 85714. E-mail, wbean@azstarnet.com; phone, (520) 573-4450; fax, (520) 573-4688.
Dennis Creamer, Greensboro News & Record, 200 E. Market St., Greensboro, N.C. 27420. E-mail, dcreamer@news-record.com; phone, (336) 373-7188; fax, (336) 373-5958.
Ronnie Crimminger, Fayetteville Observer-Times, 458 Whitfield St., Fayetteville, N.C. 28306. E-mail, ronniec@fayettevillenc.com; phone, (910) 323-4848; fax, (910) 609-0605.
Alan Flaherty, ComPlan Inc., 3451 Fawnone Dr., Cincinnati, Ohio 45241. E-mail, alanflaherty@internetmci.com; phone, (513) 769-1440; fax, (513) 769-1446.
Gary Hughes, El Paso Times, 300 North Campbell St., El Paso, Texas 79901. E-mail, ghughes@elpaso.gannett.com; phone, (915) 546-6100; fax, (915) 546-6456.
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.
Kim McCleary-La France, Los Angeles Times, Times-Mirror Square, Los Angeles, Calif. 90053. E-mail, kim.mccleary-lafrance@latimes.com; phone, (213) 237-3005; fax, (213) 237-0703.
Scott Sandison, The Sacramento Bee, 2100 Q St., Sacramento, Calif. 95816. E-mail, ssandison@sacbee.com; phone, (916) 321-1775; fax, (916) 321-3275.
Wayne Shepard, Worcester Telegram & Gazette, 20 Franklin St., Worcester, Mass. 01615, (508) 793-7962; fax, (508) 793-7919.
Pete Zanmiller, Florida Today, 1 Gannett Plaza, Melbourne, Fla. 32940. E-mail, pzanmill@brevard.gannett.com; phone, (407) 242-3500; fax, (407) 752-5067.