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Automation arrives for coupon printer

Cox Target Media is reinventing itself to more than double production with half the number of employees.

By PAUL SWIDER
Published July 29, 2006


ST. PETERSBURG - It looks like just a big box from the highway, but inside a printing revolution is under way.

Jim Sampey has to remind himself that he is not launching the space shuttle with the $200-million he is spending on building, training and equipping Cox Target Media's new facility off Interstate 275 in St. Petersburg - he's just printing coupons.

"This is such a dramatic business change for us," said Sampey, executive vice president for operations at Cox Target Media, which has spent the last four years engineering a whole new production process for the printing and distribution of those little blue Valpak coupon envelopes. "It will be a cultural change."

Considering the company prints 20-billion coupons a year and plans to more than double that with the new facility, a complete reinvention was in order.

"Our production process has been in place for 36 years," Sampey said of the company Cox acquired in 1991. "We've just thrown people at it."

The company now has about 900 employees working on production and mailing from its Largo facility and another in North Carolina. An individual coupon hops from one end to the other and back round again, being physically handled as much as a dozen times before hitting the postal system.

In the new automated plant, from the time paper feeds into the printing press until the postal carrier takes the blue envelope, no human hand will touch a coupon.

"We were getting to the point where, the more we sold, the less efficient we were getting to be," said Bill Disbrow, the company's president and chief executive officer.

With only a partially mechanized process, Valpak had employees of assorted skill levels doing mostly manual labor. Starting at about $8 an hour, the jobs were simple, straightforward, mechanical. Shifting to a highly automated system not only meant higher efficiency, it also meant the need for a skilled work force working smarter rather than harder. The new facility will more than double production, using half the number of employees.

The project is ambitious, but Disbrow said the demand in the industry is such that he expects the investment to pay for itself in six or seven years. As mundane as a coupon may seem, he said, people like them and use them. Cox has 60,000 advertiser clients.

For two years, Cox has been telling its employees of the change to come. The plant in North Carolina would close. All employees could compete for positions at the new facility, but the company would usher them through education and evaluation so the competition would be fair. All the jobs would be new to everyone, so no one had an edge.

The next step, which the company is just beginning, is more technical training. While some will lose jobs, salaries in the new plant start 50 percent higher and advancement is based on skill not experience, Sampey said.

"There are going to be fewer jobs but a lot more opportunities," said John Campbell, a 57-year-old mechanic with 20 years at Valpak. "I haven't heard any feedback that people are unhappy. People are open-minded. They are waiting to see what will be available."

The change has to do with business practices, too. Cox markets the ability to target to populations of 10,000 households, a so-called Neighborhood Trade Area. In the old process, Cox would mail by NTA but print in larger batches. Now, a customer can aim a different offer to every neighborhood.

The company's existing system takes four days to create a customer's product, start to finish. The new system takes four hours.

"The scope of this project is absolutely amazing," said Werner Naegeli of Muller Martini, the Italian firm whose machines interface between press and collators. "This is the most advanced material handling concept ever realized. It will be a guideline for the future of the industry."

Paul Swider can be reached at 892-2271 or pswider@sptimes.com or by participating in itsyourtimes.com.