Seattle Bindery — Trade Binderies in a Bind?

BY CHARLOTTE MILLS SELIGMAN

Milt Vine, president and CEO of Seattle Bindery, is often asked why he chose to acquire a trade bindery, particularly given his background as a CPA with one of the Big Five accounting firms. When he purchased a tabbing operation in 1991, and then a letterpress shop a few years later, folks pretty much fell silent on the subject, thinking Vine had some secret formula for success.

"Well, I don't," contends Vine. "I've just been around long enough to know that all the trends analysis in the world can't predict success. I also know that while some printing companies may, in fact, be bringing binderies in-house in the hopes of gaining greater customer share by providing a greater range of services, many others will continue to outsource. Both strategies have their advocates and detractors."

Vine's growth strategy for Seattle Bindery is a combination of both the outsource and all-under-one-roof philosophy. Citing Microsoft Corp. as an example of outsourcing in the extreme, Vine recalls that the company initially performed all R&D and production tasks in-house. Over time, Microsoft has migrated to a buy-out mentality, focusing only on R&D, now its core competency, and leaving implementation up to its acquired partners.

Vine believes Microsoft's arguments for outsourcing also apply to printing companies. Buying out bindery and other services:

• Allows printers to concentrate on core competencies;
• Frees up dollars for critical investments in front-end technologies;
• Avoids bindery equipment expense and attendant headaches of finding skilled operators; and
• Allows for greater scheduling flexibility and faster turnarounds, since specialized binderies have more equipment and, therefore, are better able to provide services.

"On the other side," says Vine, "as a business owner, I have to look at Seattle Bindery's options for growth: sell more services to our existing customers or expand our market share in bindery services. I've chosen to pursue both strategies."

The opportunity to acquire the tabbing operation appeared a few years after Vine purchased Seattle Bindery. According to Vine, the margins for this work are good, since the majority are custom jobs. It fit nicely into the company's other bindery offerings, and the deal included operators trained to run the equipment. Vine decided to drop the unprofitable mailing component of the bindery purchase and put those dollars toward the tabbing business.

Vine's more recent letterpress acquisition in 1997 was perhaps less tailor-made, but still made sense for Seattle Bindery. It would provide the company with a suite of complementary postpress services and, after Vine reviewed customer lists of both organizations, it was apparent there was already a high degree of crossover. This fact alone convinced Vine to add the letterpress services of diecutting, foil stamping, embossing (presentation folders) and numbering.

However, Vine overestimated his ability to run two separate businesses in separate locations.

Knowing that he was scheduled to relocate his entire operation to South Seattle in the spring of 1999 (see sidebar), he had hoped to avoid the disruption of moving the Bellevue-based letterpress operation into his Central Seattle plant...but it was not to be. Vine acknowledges that, in retrospect, the move probably was a blessing in disguise, since it helped him understand the inter-relationship between the bindery and other services, which was a great aid in planning the layout in his new facility.

"As much as I wish it were true, there are no foolproof routes to growth," concludes Vine. "I'm constantly reminded of the wisdom of the old saying: 'The more you learn, the less you know.' All we can do is take our best shot based on equal degrees of experience and intuition."

About the Author
Charlotte Mills Seligman is president of Traversant Marketing Communications. Formerly Marchand Marketing, the firm specializes in the printing and allied graphic arts industries, bringing nearly two decades of experience to its work for clients. For more information, call (415) 357-2929 or visit Traversant on-line at www.traversant.com.

The Sound of (State-of-the-Art) Silence

Seattle Bindery, a full-service postpress trade shop, moved into its brand new 30,000-square-foot facility in April. Located in South Seattle, the new single-story plant has a custom-designed floor plan and state-of-the-art information and production systems.

According to President and CEO Milt Vine, the advantages are many.

"The new open work area allows production managers to look up and see the entire floor," he says. "Want to know where a job is? Just look."

In terms of scheduling, Vine says the new space plan has already made transfer between departments quicker and customer service more accessible. Another plus, he explains, is in shipping and receiving, where two grade-level doors and four dock-high doors efficiently accommodate any size truck.

The biggest surprise, though, has been the noise—or rather, the lack of it.

"We all know how noisy postpress equipment can be," explains Vine. "In fact, I even bought a phone booth to put on the floor, so people could make calls without screaming. It's no longer necessary."

Initially a tabbing operation, Seattle Bindery expanded its operations to include letterpress services, such as diecutting, foil stamping, embossing and numbering. The letterpress capabilities were added to provide the company a full suite of complementary postpress services.