Strategic Investment is NCL's Key to Success

Let the record show that NCL Graphic Specialties transformed the challenging market conditions of the past several years into a series of well-planned business opportunities. Headquartered in Waukesha, Wis., and with a sister plant located in Menomonee Falls, Wis., the company's habit of capital investment, coupled with its diverse capabilities, strong product offerings, and tradition of innovation, have positioned it uniquely well to grow and thrive as the recovery takes hold.

Established in 1947 and dedicated to label production since 1963, the privately owned label specialist produces more than 14 billion labels and assorted packaging components annually for some of the largest consumer product companies and promotional entities in the country.

Offset-printed, cut-and-stack paper labels for the food, pet, frozen pizza, and beverage industries account for roughly half (7 billion) of NCL's annual volume. The other half is focused on in-pack, on-pack, and near-pack promotions, pressure-sensitive primary labels, as well as games, sweepstakes, overwrap coupons, and specialized marketing materials. In addition, the company's recently fledged roll-fed flexible packaging business (short-to-medium run) aims to take advantage of the fast-growing market for frozen foods and microwaveable products. NCL also provides promotional game security, game administration, warehousing, and shipping.

Not this, but that

The company has no digital output capacity and no plans to acquire it, said President and CEO Steve Klopp: "It doesn't fit our product lines and our customers aren't demanding it," he says.

What NCL does offer customers are a number of unique advantages, beginning with the harmonious marriage of roll-fed web offset, sheetfed offset, and flexo capacity in one company. NCL's 143,000-square-foot Waukesha facility houses an array of sheetfed and heatset web presses, together with bindery, miniature folding, overwrap, and custom printing services. In Menomonee Falls, a $3 million, 63,000-square-foot production facility—built at the height of the recession in 2010 and opened in in August 2011—houses NCL's flexo operation, anchored by a fleet of 12-color flexographic presses ranging from 10˝ to 17˝ wide. The Menomonee site also boasts an additional 64,000 square feet of space for future expansion.

NCL's ample physical plant is just one reflection of its tradition of capital investment based on customer demand and a close analysis of market trends.

For example, Klopp noted, "We were primarily in cut-and-stack labels and in-pack coupons until 2000, when we added primary flexographic packaging capability, believing there would be more growth in polybag and frozen food packaging. We also perceived a movement from in-pack to on-pack promotions in 2000."

Yes, we can

One important way NCL scans the horizon for new ideas is to encourage a free-flowing collaboration between its customers and its creative team, Klopp said. "We constantly have customers coming to us with complex or unusual printing and finishing demands."

In one instance, Paramount Farms International came to NCL with a concept. The company wanted to place stickers on individual snack packs of Wonderful® Pistachios for a Halloween tie-in promotion with the theater release of Disney's Frankenweenie® movie. NCL was able to meet the client's needs by combining flexographic printing, laminating, diecutting, and finishing technologies. Twenty-one million individual pressure-sensitive stickers, eight versions of movie characters with glow-in-the-dark enhancements, and seeded unique codes were manufactured at NCL's Flexographic Division. Individual stickers were then finished on rolls for automatic application onto individual 0.25 oz. snack packs of pistachios. Twenty-five snack packs were packaged into a colorful master pack for retail display.

Capital investment: A habit

Even the sour economy of recent years could not derail NCL's forward motion. According to Klopp, in addition to building a new plant, the company made additional capital purchases and grew 15 percent during the recession.

On the offset side, the company's 2011-2012 investments include a Heidelberg Speedmaster XL 105-8-color LX printing press with closed-loop color control, economical CutStar long-grain in-line sheeting unit, and aqueous coater. While the company bought primarily used equipment prior to this purchase, the Speedmaster XL 105's 41˝ sheet size and high productivity made it an easy decision to invest in new technology. The new press, which has been up and running since May 2012, joins an existing lineup of four Harris heatset web offset presses. (A second, identically equipped XL 105 will be delivered by the end of the next fiscal year.)

"The new addition gives NCL the capacity to handle a significant additional volume of cut-and-stack paper labels and provide our customers with cost savings and flexibility in both short- and long- run formats," Klopp said, adding that the new press has already attracted new customers to NCL's client base.

Technology opens new markets

In July 2011, corresponding with the expansion of its product lines to include primary flexographic packaging—specifically, single-ply frozen food packaging—the company also installed a 12-color, wide-web Mark Andy LP3000 press in its Flexographic Division in Menomonee Falls, bringing the total of flexo presses in that location to five. This, too, has broadened NCL's product offerings to existing clients and opened the door to new markets and new clients.

According to Richard K. Mueller, NCL's chairman and founder, the company funds most of its own equipment, resorting to financing only for larger purchases. "All of our equipment purchases are based on opportunities to offer cost reductions to our clients, shortening lead times, and maintaining or increasing the quality and consistency of the product. New technology in color management, such as Heidelberg's Prinect Image Control, has also enabled NCL to improve waste reduction, increase run speeds, and provide enhanced overall color consistency, bringing NCL to the forefront of color management on press."

Continuous improvement

In its sheetfed and web offset pressrooms, as well as its binding and finishing operation, NCL places considerable emphasis on state-of-the-art automation and proactive process improvement to expedite production, reduce costs, and provide the company with a formidable competitive advantage. The addition of technologies like Prinect Image Control, for example, "falls right in line with our overall desire to continuously improve our quality and productivity through automation and the use of current technologies," Klopp said.

To cite another example, the company's bindery makes use of three POLAR 115 XT label systems with Autocut, which efficiently handle waste removal during cutting and alignment of the cutting material before each cut, in addition to aligning and unloading cut label stacks automatically. Each cutting system has network capabilities and can receive cutting programs automatically from prepress.

As noted above, CutStar in-line sheeters at the front of the XL feeders combine the cost benefits of web offset with the flexibility of sheetfed offset by allowing NCL to use inexpensive reel stock rather than more costly sheeted stock.

In the 1980s, Klopp explained, NCL pioneered the use of offset, roll-fed heatset web technologies for cut-and-stack paper labels. "While the industry was using sheetfed presses, NCL was perfecting the science of stabilizing paper on high-speed heatset webs, offering its clients quicker turn times and competitive cost advantages over our traditional sheetfed competitors. Our addition of the CutStar inline sheeter has allowed NCL to transfer the in-line roll-fed technology it developed for its heatset webs to the sheetfed printing process."

That said, "CutStar is critical in reducing waste and maximizing production in a sheetfed environment," Klopp concluded. "Our clients have experienced shorter lead times, aggressive pricing, and consistently high-quality products as a result of the installation."

NCL has put in place a number of rigorous quality controls to ensure the integrity of it products. In 2002, for example, the company introduced the Advanta-Pak packaging system, a proprietary method of packaging cut-and-stack labels to avoid mixed label bundles. In addition to automatic tray marking, automatic tray sorting, and automatic skid palletizing, the company also uses a variety of additional vision systems for identification and quality checks. Finally, in order to protect the integrity of its customers' promotional programs, NCL employs an in-house security expert and a variety of theft-deterrent measures.

As a corporation, NCL addresses sustainability in various ways, Klopp said, citing reductions in raw material usage, emission controls, and recycling. "In the long run," he adds, "sustainability is simply another facet of our commitment to continuous improvement."

Roll with it, build on It

Despite its enviable track record, NCL faces challenges familiar to any print provider working in a difficult economic environment; e.g., clients taking longer to pay, and the high cost of investment in new and upgraded equipment, to name just two. What clearly distinguishes the company, however, is a combination of vision and performance that enables it to mount a flexible response to changing market conditions.

"We are very diversified within the label business, with a highly skilled workforce; a solid, satisfied client base; strong product lines; a range of capabilities, and a management group that supports a habit of capital investment and continuous improvement," Klopp said.

Resilience is key, says Mueller. "We have always created different profit centers within the business. As a result, we can pivot among them, depending on market conditions and customer demand. It's this strategy, above all, that has enabled us to survive and thrive." pP