Panelists at America East Say ‘Numbers Don’t Lie’ in Operations

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By: Jim Rosenberg

As has oft been noted, you can’t fix what you don’t measure.

The title of a Tuesday-morning session at the annual America East Newspaper Operations and Technology Conference in Hershey, Pa., seemed to say it all: “The Numbers Don’t Lie.” Representing enterprisewide, operations-only, and job-specific approaches, three panelists made sure that listeners got the rest of the message: people may lie and interpretations can stray.

Observer Publishing Co. Operations Analyst Brian Penak provided a simple example of something in between: When a manager announces that the last month’s circulation surpassed the previous month’s, the figure is misleading if same-month circulations I previous years were higher.

To ensure that it was making sense of its business numbers, Thomas Northrop, the publisher of the Washington (Pa.) Observer-Reporter, created the analyst’s position and brought in Penak from outside the industry. Not usually a decision maker, Penak describes himself as “a little bit purchasing agent, a little bit accountant” and a little of something in several other areas, from newshole to newsprint use, waste, and pricing. His work ranges from one-time projects to ongoing, updated analyses and reports — such as fleet tracking by service, mileage, abuse, fraud, and fuel pricing. Data from such analyses leads to informed vehicle purchasing and selection of fuel vendors, for example.

Penak also gives newshole and ad linage quarterly reviews, ensuring that paid circulation stays in line with page counts. Using a spreadsheet, he charted page-count-per-inches of advertising, making it easy to approximately the 50% target.

To keep costs in line, Penak offers five recommendations: obtain the Inland Newspapers cost/revenue study, check paid invoices weekly, track bank and credit card processing fees, review copier, fax and maintenance agreements, require managers to get at least two bids on agreements and major purchases.

One thing that goes untracked — but which Penak thinks is worth looking into — is employee hours per page. Chairing the session, Observer-Reporter Operations Director Al Serafini remembered the measure being recorded when he was at Scripps Howard years ago, but believes it has since “fallen through the cracks.”

It isn’t being measured at Dow Jones, either, according to Mary Cory,

At the opposite extreme from the Observer-Reporter is the challenge Dow Jones & Co. faces — printing one product with a common look on 19 presses in 17 plants around the country. For that, Cory was named business opportunities and analysis manager after spending most of her 17 years on the company’s financial side.

To meet the challenge, she said, good data — “concise and uniform” — is needed first. “To much data can have an adverse impact.” Data used, she concluded, must be from reliable and consistent sources, and interpreted by both financial and operations staffers.

And the most advantageous approach was “to standardize our materials,” putting the same consumable in all locations. With standardization, one group can identify problems and solutions that are applicable across all production sites.

Good data are essential to arriving at a standard consumable. But what are good data? A continuous improvement group analyzed 48.8-gram and 45-gram newsprint in terms of opacity and strike-through. Judged solely by the optical data, the two looked very close, but a comparison of the printed results proved otherwise.

Along with that standardization came leveraging supplier relationships and sole-source purchasing. Corey cited an example aimed at boosting ad volume: Two plants have undertaken testing with Flint Group on new “rub-and-smell” perfume- and chocolate-scented inks. The hidden costs (notably time and waste) of materials testing are eliminated, she added.

Supporting Down Jones’ efforts are its single system (from Harland Simon) for collecting data from all presses (e.g., times, waste, materials consumption). As a result of accounting for everything in the same way, she said, the system also helps in Sarbanes-Oxley compliance.

Factors in Dow Jones’ production scoring system are quality, at 50% (with newspapers graded for specific defects), delivery and freshness at 30%, and newsprint waste at 20%. Cory acknowledged that the system forces managers to make choices when some factors work against one another — run-start efficiency versus waste, for example.

Last year, the company developed “flash reports” for weekly reviews of important expense drivers such as newsprint and delivery costs. Since then, Cory said it was discovered that with newsprint, for example, “we can come up to almost a million dollars in variance for a given month.”

Cory’s job also includes forecasts for: newsprint, based on information from advertising and circulation groups: other consumable use, in comparison with Dow Jones’ established consumables cost per page; plant and equipment utilities costs; and transportation (mostly for fuel).

Working with the company’s insurer, the continuous-improvement effort that looked at standard and lighter-weight newsprint also compiles accident data for safety training purposes.

One more area studied for acceptability was the recent move to printing part of the week’s Hawaiian distribution of The Wall Street Journal in Hawaii, which meant, said Cory, “we’ve had to reduce the image of the page slightly.”

Penak and Cory may not track employee hours per page, but Clifford Tompkins can quite accurately track employees.

The assistant circulation director at Capital Gazette Newspapers, in Annapolis, Md., noticed that mileage “was getting out of control” among distribution managers and others in circulation (and he assumes the same probably happens in ad sales). “They were padding their pay checks with mileage figures,” he says.

Looking on the Web, Tompkins said he discovered the Land Sea Air company, which offers an electronic travel tracker that “will check GPS data for approximately two weeks” before recharging. Installed in newspaper vehicles, the wallet-size device tracks location, mileage and speed.

Tompkins secured a $300 unit, with software and connectors, to test, and found that “it not only works as advertised, but better.” Though not offering real-time access, the animated record shows a tiny car moving on a map, with a clock and speedometer running in the upper right corner.

“It’s pretty big-brotherish,” Tompkins admits. “Interestingly enough,” he adds, “it was pretty well received.”

In addition to those transporting subscription copies, the device is used with single-copy drivers. “Some of them were abusing mileage figures like you wouldn’t belive,” Tompkins remarked.

Tompkins suggests reassuring employees that device’s purpose “is not to pin down their activities.” If a person can start late or finish early and still show results, Tompkins says it’s fine with him. Tracking is performed on all drivers at the outset, and only occasionally thereafter, he added.

Users can zoom in for local detail on the map, and a daily report is generated. To that, said Tompkins, “I sit down and compare their mileage report that they turn in at the end of the month.”

The result, according to Tompkins, has been a 35% reduction in transportation costs, despite a period of rising gasoline prices.

The device can save more than money. It shows the maximum speed for a given trip, and Tompkins found one speeding employee who had carriers in the vehicle.

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