WestKey’s keys to growth in tough times
by Alan Zisman (c) 2010
published in Business in Vancouver November 2 - 8, 2010 issue #1097
A decade ago, the so-called dot-com meltdown hit tech companies
especially hard. Many disappeared; others laid off staff and closed.
Apple took another tack.
CEO Steve Jobs said, “A lot of companies have chosen to downsize, and
maybe that was the right thing for them. We chose a different path. …
We chose to invest our way through the downturn.”
Apple continued to develop its product line and laid the groundwork for
future products. The company remained profitable, and its sales grew at
a time when other computer vendors’ sales shrunk.
I don’t know if Alfie Karmal has been studying at the School of Steve,
but he seems to be following a similar train of thought. With a
background in IT services, Karmal was recruited to Burnaby-based
WestKey Graphics after Vancouver investment group Stern Partners
invested in the company in 2006. Ronald Stern was, according to Karmal,
specifically looking for someone from outside the printing industry to
head the company.
For most of the past 50 years, commercial printer WestKey had focused
on producing business forms using traditional offset printing – a
technology that works best with relatively large print runs. Despite
being one of the region’s largest business-forms printers, WestKey was
seeing shrinking markets even prior to the current recession.
Customers, however, were increasingly asking for what Karmal refers to
as “mass customization” – smaller runs with frequent updates and fast
turnover time, while keeping the quality of offset printing. Karmal
defines his job as “trying to predict where the market is going and
aligning WestKey to it. While WestKey has bet millions on the future,
if we hadn’t, we would have shrunk.”
Karmal suggests that new digital technologies have revolutionized
printing; hardware such as the Xerox 800 acquired by WestKey bridges
the gap between traditional offset printing and digital printing.
Offset printing provided high quality for large runs, but lacked
flexibility. Digital printing worked well for smaller runs, but
delivered lower print quality. These new digital technologies, Karmal
says, have kept WestKey competitive while allowing it to expand into
new markets such as label and four-colour envelope printing.
The new label division, requiring a $2.5 million investment in
hardware, started three years ago with no customers. Now the company’s
two presses, which are capable of up to eight-colour printing, bring in
$6 million annually.
However, according to Karmal, buying new hardware is easy: all it takes
is money. Changing habits is harder. As part of the transition to new
printing technologies, Karmal claims to have met with each of the
company’s 130 employees to help engage them in the process.
Employees identified reducing waste as an important part of becoming
more efficient. The new digital technologies’ smaller, more flexible
print runs result in less paper wasted. To track progress in meeting
waste-reduction targets, the company started to attach a dollar value
to waste and began publishing monthly reports on improvements.
Energizing WestKey’s business required more than new hardware and staff
involvement. Consolidating the supply chain for greater efficiency has
helped the company to evolve into what Karmal calls “a true one-top
shop – Western Canada’s only single-source printing supplier.”
Along with printing, WestKey offers customers 24/7 online procurement,
warehousing and delivery of print jobs and supplies.
In January, WestKey will be moving to a larger facility. Through
consolidation of three buildings into one with higher ceilings for more
efficient warehousing, Karmal expects the move to pay for itself, while
providing room for future growth.
Both Apple’s Steve Jobs and WestKey’s Alfie Karmal would agree that
growth is possible, even during tough economic times. It requires
staying focused on customer needs and not being afraid to spend money
to respond to those needs.