Tighter Operations in Tight Times

By: Mark Fitzgerald Sun-Times Media Group (STMG) knows all about getting smaller. With its financial strength sapped from within by the alleged looting of hundreds of millions during former Chairman Conrad Black's reign ? and from without by the harsh newspaper advertising climate ? the parent of the Chicago Sun-Times and dozens of other Chicago-area papers in the past two years has reduced its printing facilities from five to three, and its press lines from 13 to nine. It folded or consolidated community papers, and shed jobs in all departments.

""Whatever could be outsourced, we're outsourcing ? ad production, inbound classifieds call center, circulation call center, delivery has been outsourced,"" says Rick Surkamer, the longtime operations executive who is now STMG's chief operating officer.

But as battered as it is by the economy, the fact remains that STMG is still putting out a lot of product, and it cannot simply operate with less equipment ? it must optimize what it has. Perhaps no other newspaper group in America could justify making no more capital expenditures better than STMG, the publisher of a second-place metro daily that also owns suburban papers that are in ferocious fights with such strong family groups as Paddock Publications and Shaw Newspapers.

""We're still making capital investments,"" says Surkamer. Certainly, STMG is not spending freely. All projects must have ""hard-and-firm [return on investment],"" he notes. Yet it hasn't shied away from bigger investments that optimize the capacity and efficiency of its equipment.

For instance, as STMG was cutting down the web width of its flagship Sun-Times and other tabloids, it purchased nine Advantage CLS computer-to-plate imagers from Agfa for its three remaining plants. It also installed a plate-sortation system from Acutech, and took other measures to automate workflow. Lines of sticky-note applicators were also added.

STMG presses now run more like commercial operations, Surkamer explains. ""The days of taking a press down for two shifts for 30-day maintenance is gone,"" he says. Crews work quickly within windows that do not disrupt production. And not only is equipment not breaking down, he adds, ""productivity is up substantially.""

But Surkamer, who often takes a macro view of the newspaper industry, argues that operations will not be truly optimized until there is more standardization of newspaper products, something always resisted by the sales side. ""We produce an awful lot of products,"" he says. ""I think we've optimized ourselves into a corner.""

At The Eagle-Tribune in North Andover, Mass., Operations Director Jim Falzone has reached the same conclusion. When he arrived at the Community Newspaper Holdings Inc. (CNHI) paper, his first task was to centralize production with three sibling dailies, saving $200,000 annually in labor costs.

But what was needed to really optimize the presses and inserters was not so much new equipment or control systems, but a change in scheduling. ""We had weeklies spread out all through the week, and every one had a reason why they wanted to publish on a certain day,"" Falzone says. This year, though, the papers all shifted to Thursday publication, at Falzone's urging ? but not his command. He got editorial buy-in with a simple argument: ""I said, if we don't save money ? it's editorial jobs. They're definitely more open than ever to realizing the importance of the expense side of the equation.""

Some expense-cutting, though, demands a certain level of investment. Consider lighter-weight newsprint, which essentially became an industry standard as newsprint prices began to climb more than a year and-a-half ago. But the newsprint comes with its own problems. Levels of ink that are normal for standard newsprint not only risk show-through, but also the water levels can weaken the web, and ink left on rollers can wrinkle the web.

The Miami Herald this year added ProImage's OnColor ECO ink optimization software, and reported an ROI of less than three months. The bottom line: Overall ink cost fell as much as 25% during the Herald's test period.

""In these resources-stretched times, that's a really welcome savings,"" says Craig Woischwill, vice president/operations for Miami Herald Media Co. The system has worked as advertised in reducing set-off and web wrinkling, he adds: ""We're really pleased with it so far. It tends to be slightly cleaner in the final print.""