Print
Solutions May 2005
Feature Article
Going
Global
Laserwave
partners with Chinese and U.S.
manufacturers to satisfy clients'
needs, not just to find low prices.
Will its global approach be typical
in the future?
In
many ways, New Brunswick, N.J.-based
Laserwave Inc. is a typical distributorship.
When customers need brochures,
catalogs, tags and packaging,
the company combines its in-house
design and prepress capabilities
with the offerings of third-party
manufacturers and mail centers
to deliver solutions.
But
its global approach distinguishes
Laserwave from most of its industry
peers. At least half of the company's
work is manufactured by printers
in China. Regardless of where
you stand on the debate about
overseas competition, the reality
for Laserwave is clear: Becoming
skilled at international trade
has bolstered its position as
a print expert and helped it gain
jobs from high-profile clients.
Client
Focus
As
other industries struggle to survive
in a global market, the U.S. business
printing industry largely has
overlooked overseas competition.
The U.S. Office of Consumer Goods
reports that printing imports
reached $2.2 billion in 2002,
but the overall market for printing
and related support activities
that year was $96 billion, according
to the U.S. Economic Census. Some
segments, such as commercial printing,
even have enjoyed a trade surplus,
but the gap has been shrinking
rapidly. Aided by technology and
lower labor rates, other countries
have reduced the barriers to doing
business with them. End users
seeking to cut costs have noticed,
and it's at this juncture
that Albert Hakim, president of
Laserwave, fills a niche.
"We
don't approach it as, 'We're
going to print your job in China
no matter what," Hakim says.
"We approach it as, "What
does our client need? And then
if the client thinks they need
one thing, we can suggest to them
something they may not have heard
of before because it was cost-prohibitive
in the States."
For
instance, if one of Laserwave's
non-profit organization clients
wants to produce 500 copies of
a 2-color, 64-page saddle-stitched
journal, Hakim will offer to print
a 4-color, perfect-bound version
cost-effectively in China.
Laserwave
also benefits by serving clients
whose products already are manufactured
in China. "Being a U.S.
expert in this field gives me
an opportunity with companies
that are already producing in
China, to do their work for them
in China," he says. "A
lot of the work we do technically
is not offshore printing. It's
printing in China for use in China—to
package the items. It's
being used in China and then exported,
as opposed to a book that's
going to be shipped to the United
States, to be used in the United
States."
A
notable example is a hang tag
Laserwave supplied to Ecko Unlimited,
a lifestyle brand that encompasses
men's and women's
apparel, watches, eyewear, footwear
and accessories. Headquartered
in New York City, Ecko Unlimited's
products generated $400 million
in domestic retail sales in 2003
for parent company Mark Ecko Enterprises,
a $1 billion company. Ecko Unlimited's
products are sold through 5,000
retail stores domestically, and
they're available in 45
countries and online.
The
tag, a 4 x 2-inch, 12-page booklet,
required matte lamination, foil
stamping, spot UV, embossing,
die cutting, metal grommets and
specialty binding. Ecko Unlimited
asked potential suppliers, including
Laserwave and Chinese manufacturers,
to provide samples and quotes
on an order for 3 million units.
"Most of those tags are
needed in China anyway, so you're
not going to produce them in the
United States and then ship them
to China," Hakim says.
He
flew to China the next day. Three
days later, he returned to the
United States with the samples
and a quote. "Because I
was able to work so quickly and
provide them with finished-quality
samples, we won the job over other
factories who took three weeks
to sample and price the job,"
he says. Laserwave's relationships
with Chinese manufacturers were
essential to landing the job,
but its proximity to Ecko Unlimited's
national headquarters also helped
win the business.
Building
Bridges
Hakim
started Laserwave in 1989 as a
student at Rutgers University
in New Brunswick, N.J. He offered
typesetting, design and print-buying
services for local businesses.
After graduating, Hakim devoted
himself full-time to growing Laserwave.
In 1994, he was joined by his
brother, Dan Hakim. The company
now has 10 employees, including
three sales representatives.
"One
day, maybe eight or nine years
ago, we designed a hang tag for
a clothing company in New York
City, and they said, 'Albert,
do a really good job on this tag,
because we're going to send
it to China to print 1 million
pieces.' I gave them the
disk, they sent it to China, and
they printed 1 million pieces.
I decided I needed to be a part
of that," Hakim says.
As
any business-owner who enters
a new market, Hakim faced a learning
curve. "There are so many
things that can go wrong—color,
fonts, gloss finish, outdated
art files, bad bar codes, inconsistency
from run to run or factory to
factory," he says. "Those
are the things we deal with on
a daily basis to try and avoid."
The result of Hakim's experiences
is Laserwave's meticulous
logistics operation designed to
coordinate overseas print jobs.
The company's preflight
department works with hardware
and software calibrated to the
European CMYK standard used in
China, and the company often receives
actual press proofs via FedEx
from the manufacturers. Its operations
department carefully monitors
scheduling, shipping and financing.
Because of the 12-hour time difference,
Hakim works until midnight almost
daily so he can email and call
his contacts in China.
Hakim
also travels to China regularly
to meet with current and potential
manufacturing partners. The quality
and working conditions in Chinese
factories varies, so it's
essential to visit them. "They
generally range from immaculate
to disgusting, and I've
seen it all," he says. "The
factories we work with now are
tried and true, each the best
at what they do, each specializing
in a particular area of printing."
Competitive Advantages
Laserwave
doesn't work exclusively
with Chinese printers. It chooses
depending on the project, giving
Hakim a unique perspective on
the state of U.S. competitiveness.
"If you're a good
printer in the United States,
China's not going to take
your work away from you,"
he says. Say a book publisher
has a niche of books he wants
to produce. There also are books
he doesn't want to produce
because the quality, run length
and features are cost-prohibitive.
"The more standard a job
is, the more cost-effective it
is to do it in the United States,"
Hakim says. "The more unique
a job, where it involves a lot
of work to send it out, but a
very short run, it's a better
fit for China."
Aside
from lower labor rates, a reason
for this is the investment that
Chinese manufacturers have made
in packaging equipment, he says.
The volume of U.S. consumer products
manufactured in China is so great,
it's economical for individual
printers there to own a wide variety
of finishing equipment, including
die cutting, die making, film
laminating, spot UV, silk screening,
foil stamping, grommeting and
stringing machines. Whereas U.S.
manufacturers may outsource finishing
to another manufacturer that owns
the equipment—adding time
and cost to a project—a
single Chinese manufacturer typically
has the capability to do everything
in house.
Projects
with ultra-fast turnaround still
have a place in the United States,
but that, too, is changing. To
shorten lead times, but keep costs
in line, overseas distributors
ship part of the order by FedEx—maybe
1,000 units of a 10,000-unit order—and
ship the rest by boat. This way,
clients receive what they need
immediately but still realize
the cost savings from printing
overseas.
Laserwave
works with marketing departments,
agencies and distributors to capitalize
on its niche expertise. As the
global manufacturing environment
grows even more competitive, Hakim
sees the value of his services
only increasing: "Without
Laserwave's U.S. operation,
which is specifically geared to
facilitate the nuances of overseas
production, printing in China
wouldn't be possible. It
would be a mess."
Andrew Brown is assistant editor at Print
Solutions. Email him your comments at abrown@PSDA.org
.
THE FILE ON LASERWAVE
INC.
Name:
Laserwave Inc.
Location:
New Brunswick, N.J.
Founded:
1989
Principal:
Albert Hakim, president
Employees:
10
Business
in Brief: The distributorship
works with U.S. and Chinese manufacturing
partners to offer clients design,
photography, preflight, prepress,
manufacturing and fulfillment
services.
Experts:
Enter the Overseas Market
Cultural
and economic barriers that created
a proverbial "moat"
around U.S. print production have
diminished, says Vincent Naselli,
principal of Naselli and Associates,
Somerset, N.J. Prompted by U.S.
printers' concerns about
overseas competition, Naselli
and Dr. Joe Webb, president of
Strategies for Management Inc.,
Harrisville, R.I., researched
the issue. They recently published
their findings in the book, A
Critical Look at Offshore Printing.
"There's
been a great equalizer in software
and technology," Naselli
says. "The fact that you
can collaborate remotely, whether
it be through the approval process
or proofing process—that's
what's happening."
He points to countries such as
India, where the workforce is
highly skilled, educated and English-speaking,
as examples of how obstacles to
overseas printing have disappeared.
Webb
agrees: "The internet has
changed everything. You just can't
get around that we're more
tightly knit. People should have
seen this coming." According
to statistics from the Office
of Consumer Goods, the value of
U.S. manifold business form exports
decreased 14.5 percent to $9.8
million in 2004, as imports rose
10.5 percent to $14.5 million.
Commercial lithographic printing
fared slightly better: The value
of U.S. exports grew 12.5 percent
to $1.45 billion, while imports
grew 10.9 percent to $1.43 billion
in 2004. Still, even as exports
grow, the trade gap has narrowed
tremendously in the past few years.
"One
thing that's been very interesting
to me in this study is that people
automatically assumed that all
jobs that went offshore had certain
characteristics to them,"
Webb says. "The print buyers
we spoke with were surprised by
how many jobs could now be done
offshore, that they would never
have thought of sending offshore
before."
Webb
and Naselli suggest that U.S.
printers compete most effectively
on fast turnaround, low-volume
jobs that require collaboration
or complex coordination. In other
words, printers that offer value
and service to their customers
stand a better chance of succeeding
than those who compete on price.
"What end users care about
is the same thing they've
always cared about: hitting the
target price, that their quality
expectations are met and the timeframe
is met," Naselli says.
Both
experts urge U.S. printers to
take action now rather than react
when it's too late. They
suggest that printers consider
entering international markets
with their own products or partnering
with international companies to
take advantage of developing economies.
At the very least, they should
be aware of global changes in
the industry and reposition their
companies accordingly.
"U.S. printers
are not accustomed to thinking
in terms of worldwide markets,
because the market here has
just been so good," Webb says.
"But printers overseas have
to look overseas as a natural
part of their business." Naselli
agrees: "This hasn't been a
part of U.S. printers' culture.
They haven't had to look beyond
their borders, but we're at
that point now where I think
it's absolutely necessary, not
only to survive but to succeed."
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