Distribute then Print

Presentation Distribute then Title Print Consolidated Name of Speaker Graphics’ Digital Print Centers Steve Brown, Kevin Davis, Jim Finger, John Scheffler

April 21-22, 2010 ď‚Ť San Antonio, TX

agenda

• • • • • •

CGX Global Digital Footprint Overview The Value of Outsourcing Data Security Print Transformation – tapping into Digital’s potential Case studies Q&A

who is Consolidated Graphics?

Consolidated Graphics provides the service and responsiveness of a local printing company combined with the economic, geographic and technological advantages of a large global printer.

digital super centers

digital capabilities • Over 220 digital presses in 64 companies • Expanding international production • Integrated Digital Highway

22 iGen

2 Oce 5 Xeikon 29 NexPress

57 Indigo

color management • All sites GraCl7 Master Certified • Managing color on each press, each platform, at every site, to meet aggressive color goals • Maintenance of color fidelity is best in class • With our management skills, we achieve a Delta E of less than 3.0 across our entire digital fleet!

• We are confidence that no one else in the world is managing color and quality at the level CGX is doing today.

digital PCS Digital Production Control System • Automates order process across all production facilities • Site selection made by product type, geography and other pertinent factors • Drives template management system for multi-up layout • Bar code driven templates to monitor individual orders • Real time reporting to maintain control of all operations • Orders submitted with color profiles included • Designed to manage tens of thousands of orders, across all facilities, seamlessly and to very aggressive production schedules.

• Global monitoring system to address issues before failure occurs or to quickly respond to unexpected situations.

global capability • • • •

Printing: 30,000,000+ 4-color digital pages per day Binding: 200,000+ bound books per day Mailing: Millions of pieces per day Fulfillment: 200,000+ orders per day

• This capacity is unmatched in our industry today.

• We are committed to future expansion.

strategic outsourcing value

Fuel

Reduce

Mitigate

Growth

Costs

Risks

• Faster Time to Market • Flexible infrastructure • Virtual capacity • Global expansion •Business Intelligence • Information Lifecycle Management

• TCO • Volume = Savings • Lower Support Costs • Leverage CGX buying Power • Enhanced Operational efficiency

• Multiple operations • Disaster recovery • Experience • Knowledge of HP Infrastructure • Improve Security • Better controls

total cost of ownership Visible Costs

Per unit printed material price

Hidden Costs

Printed Material $0.14

Procurement

Managing multiple vendors adds 5-15% 16% is wasted due to obsolescence Single purchase order generates $75-$175 in internal costs Storing inventory adds 19% Fulfillment adds 87%

$0.02

Total Hidden Costs

$0.20

$0.02

Waste/Obsolescence

$0.01 $0.03 $0.12

2

Material Management

Storage Distribution

strategic outsourcing System Integration

Sourcing

Production

Distribution

Invoicing Reporting

• Custom API

• Capacity planning

• Facilities

• Global resources

• Centralized billing

• Integrated network

• Forecasting

• Equipment allocation

• Distribute & print

• Content mgmt software

• Contingency planning

• Training

• Automated ship selection

• Production reporting

• Digital PCS

• Material standardization

• Project management

• Online resources

• JIT/VMI Supply Chain

• Color management •Quality (ISO)

• Freight options • Postage savings

• Key performance metrics • Savings analysis

strategic outsourcing

Marketing

Historical

Today ď § Future

Customer Corporate HQ

Customer Corporate HQ

Purchasing

Marketing

Purchasing

Local Departments / Divisions

Local Departments / Divisions

Local/Regional Printers

CGX Print and Document Services

Customer - Printer relationship

CGX Operation

CGX Operation

CGX Operation

CGX Operation

strategic outsourcing – reengineer your thinking • • • • • • • • • •

Job strategy & planning Continuous improvement methodology On site project management Scalable solutions Process engineering within CGX network Local representation for HP OEM’s Dedicated support services group Administrative/reporting services Subject matter experts Program implementation

strategic outsourcing Customer

Distributed Manufacturing • Single Point of Contact • CGX Presidents “own solution” • Solution “Franchised” • Processes replicated • Training replicated • Equipment replicated

Sales Team Producing Facility 1 Implementation Team Leader

TSSG

CGX PM

Facility President

Producing Facility 2

Facility Presiden t

Implementation Team Leader

statement on auditing standards #70 (Data Security)

important ?’s

SAS-70 users • Current and Prospective Clients • Client Security Organizations • Independent Accountants and Auditors • Sales and Marketing Departments • Corporate Accounting • Institutional Clients

SAS-70 type 1 & type 2 differences Type 1 • • • • •

Reports on controls placed in operation (as of a point in time) Looks at the design of controlsnot operating effectiveness Considered for information purposes only Not considered a significant use for purposes of reliance by user auditors/organizations Most often performed only in the first year a client has a SAS 70

Type 2 •

• • • • •

Reports on controls placed in operation and tests of operating effectiveness (for a period of time, 6 months) Differentiating factor: Includes Tests of Operating Effectiveness More comprehensive Requires more internal and external effort Identifies instances of noncompliance More emphasis on evidential matter

print transformation • The future is Digital!

• By 2020, 40% of industry sales will be Digital compared to 10% of industry sales in 2010.

• CGX leverages technology, footprint and equipment mix to assist customers in leveraging digital capabilities.

• 100% of our National Accounts have leveraged our digital resources to meet strategic objectives and achieve higher levels of performance.

print transformation Current Distribution Model

Improve Distribution

Reduce Obsolescence

Improve Cost Savings

Warehouse Needs

Process Change

POD Needs

Today

Future

opportunity is in the process

On average, for every $14 spent on printing, $20 goes to ancillary services.

-Infotrends.com

print transformation The Challenge: • Marketing materials were not the first priority at the Tyco fulfillment facility.

• Delivery times were too long • No accurate product counts • Obsolescence was uncontrolled • Most important to them, they had no true measure of costs and usage.

print transformation The Result: • Print and fulfillment services awarded to CGX • Increased time to market utilizing CGXSolutions StoreFront • Improved inventory control • Over 50% of products migrated from offset to digital • CGX-led Print Transformation to meet ADT goals • Six Sigma team recognized 64% reduction in expenses & 48% reduction in process steps • Total cost savings of $2.1 million in the first year alone.

• Reduced fulfillment time from 30+ days to 1-7 days • Reduced literature creating time from 104 days to 20 days.

• StoreFront hosts 1600 products and provides user access to 5500 active users.

print transformation Shell Overprint Program •Digital technology reduced turn time •Eliminated storage costs •Removed need for inventory management •Mitigated risk of obsolescence •Reduced risk of cash flow tied up in static materials •Customer saved $55,000 in first year

print transformation The Challenge: • • • • •

Replace clumsy two-color pocket folder & hand collated inserts Integrate with existing ordering system Develop a scalable solution Reduce costs Produce up to 300,000 units per year

print transformation The Result: • Decreased Call Center Volume • Closed Down an Entire Warehouse • 1.2 million pieces of paper trashed when move made to POD • Decrease in Postage Costs • No affect to the IT budget • Positive Response from Brokers & Customers • Product updates take less than an hour with no waste.

• Fully automated digital workflow is fast and error free.

• Print Transformation goals achieved for customer

print transformation

The Challenge: • Eliminate inventory • Eliminate product obsolescence • Reduce transportation costs • Reduce new product release lead-times • Production to occur on-site with other manufacturing processes

print transformation The Results • • • • • • • •

Installed onsite digital production facility within Esselte operations Saved Esselte $500k in year 1 Reduced inventory from 6 months on-hand to 1 day Virtually eliminated transportation costs Expanded Digital Production centers inside Esselte facilities in Union, MO and Reynosa MexicoSaved Esselte 500k in year 1 Reduced inventory from over 6 months to 1 day Virtually eliminated transportation cost Digital Production centers inside Esselte facilities in Union, MO and Reynosa Mexico

print transformation Nimblefish Program • Produced over 120MM direct mail pieces • Largest digital direct mail campaign in North America • Single source production contact • Choreographed production utilizing the 4 CGX digital supercenters

Presentation Distribute then Title Print Consolidated Name of Speaker Graphics’ Digital Print Centers Steve Brown, Kevin Davis, Jim Finger, John Scheffler

April 21-22, 2010 ď‚Ť San Antonio, TX