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Cary Sherburne: Hi, I’m Cary Sherburne, Senior Editor at WhatTheyThink. And I’m here with Chuck Stempler who is President and Owner of Alphagraphics in Seattle, welcome.

Chuck Stempler: Thank you, Cary.

Cary Sherburne: I guess Alphagraphics standard was kind of Printsmith in that running the business is coming from the heritage that you did. But you’ve got a pretty complex operation and you’ve recently upgraded to Pace. Maybe you can talk about why. It’s not a trivial process. Why did you make that investment?

Chuck Stempler: We actually worked very closely with Alphagraphics over about 18 months, and looked at probably a dozen different software solutions trying to find a path that would work for my business and possibly work for others in the Alphagraphics network. Our strong preference was to stay within the EFI family, because they have such a deep relationship with Alphagraphics over almost the entire life of the franchise. We were able to put a deal together to buy Pace. And staying within the EFI structure enabled me to be supportive of the Alphagraphics relationship. And it was the superior answer to our particular segment. Our challenges were, at the time it was about a 10 million dollar business. Currently we’re pushing towards 12. We have six locations, five in the Seattle area. So we have - Printsmith doesn't support support, multiple locations on one. That’s what they call a master, so that was a very large problem. We have a large hub manufacturing location with these distributed lightweight production or sales office structures. So building an infrastructure that will allow us to work efficiently with that was really critical to us. Secondly, we’re a very data-centric company. We really wanted to be able to understand daily production, daily orders, and measure and manage to cost per order, standard versus actual. Learn, improve, retrain, replace if we have to. And at the same time, also manage the sales team for margin by account and by sales rep. Not necessarily only one order, looking at it over a monthly and quarterly period. Those are functions that are just outside any realm of possibility in a Printsmith model. I’m happy to tell you that it was an enormously painful experience, but the good things in life often are. We spent 10 months building the estimating structure route, six months integrating it, training our sales team, our assistants, and our CSRs. We ran them parallel for a brief period of time, but within the first 12 months of our move over from Printsmith to pace, we moved five margin points to the bottom line.

Cary Sherburne: Whoa, that’s huge.

Chuck Stempler: In a 10 million dollar business, you can imagine that’s a many times X cost of buying this type of an operating system. But it does not happy just by buying the system. This is a living, breathing entity that we have to take care of and work on every day. And it brings us so much benefit, that it is worth that effort.

Cary Sherburne: That’s terrific. You bring up a good point. A lot of companies, I think, put an MIS in and they just think they’re done, and they’re not.

Chuck Stempler: The guy that runs our MIS system sits in my office. I can throw my pencil at him.

Cary Sherburne: And you probably do.

Chuck Stempler: He knows it’s coming. It’s just that critical to the success of our company.

Cary Sherburne: That’s terrific.

Chuck Stempler: It gave us the ability to be hyper-efficient. To raise the quality, raise the productivity, not be insensitive or inhumane about it. Some of what we do is limited to the speed of the device, but a lot of it is about the gaps between device. What happened to the order between when it left this department and when it got to that department?

Cary Sherburne: Right.

Chuck Stempler: We work in a model where we’re a very, very large, quick printer. And we think quick printers are supposed to be quick, so turnaround literally in hours, and we’ll do in a day what many of our competitors would take two, three, four, or five days to do.

Cary Sherburne: Wow that’s great.

Chuck Stempler: And all this information is making all the difference.

Cary Sherburne: That’s terrific. I’m glad to hear all these success stories, because there are some sad stories out there. But your story sounds very happy.

Chuck Stempler: Well a lesson I would offer is that the decision maker, the owner, the key executive has to be committed and focused on this type of an investment. This is not something that you buy and then hand off to someone who has no authority, and expect a miraculous result to come out of it. You drag some of your company kicking and screaming off of whatever system they’re used to, into something like this, and there is a lot of pain. And I apologize profusely for it, but the game and the information provides and enables us to be so much more competitive and offer greater value to our clients, it’s a necessary transition.

Cary Sherburne: Yeah, it’s a great piece of advice. Thank you.

 

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