By Steve Katz | March 6, 2009

Teamwork and an eagerness to explore new markets are keys to the success of this growing Pennsylvania converter.

Xode's 25,000 square foot manufacturing facility
In mathematics, the letter x is often used to denote the "unknown" in algebraic equations. In literature, an "ode" is considered a fable or story. But this is not a story about topics covered in high school, but one about a thriving label company with an unusual name. Xode, located in Kutztown, PA, USA, was perhaps at one point "unknown," but since its inception 41 years ago, has not only become quite well known, both regionally and beyond, but is poised to continue to thrive into the future.

Situated along the meandering roads and peaceful countryside of Eastern Pennsylvania, Xode started doing business in 1967 when founder and CEO Jim Seitzinger began selling pressure sensitive tape and safety equipment from his home's garage for a variety of manufacturers. Over the next few years, Seitzinger's customer base grew, and in 1971, Joe Tkach, Xode's president, came on board. Fast forward two years to 1973 – a milestone year for the company – when they purchased their first press, a three-color Mark Andy 810, and began manufacturing labels in a 5,000 square foot facility on the very spot where Xode sits today.

But much has changed since the early days. The company gradually grew, and about 10 years after its first press acquisition came its second, a three color Mark Andy 820. That original 5,000 square foot space is now 25,000 square feet. Xode employs 23 people who contribute to its annual sales of $7.5 million. Management reports growth of 20 percent in its most recent fiscal year.

Notably, while Xode grew, it also became a true family business. Seitzinger's son Pete joined in 1985 and today serves as vice president. In 1989, it was Pete, along with Tkach, who persuaded Seitzinger to expand.

Jim Seitzinger talks about how the smooth expansion came about. "Pete and Joe saw the need to expand and convinced me to increase the size of the building. Being situated on a lot that was expandable made the job a lot easier. We constructed our current building in two sections. The first section was built next to our existing structure and when it was completed we transitioned everything from the old building to the new facility over a weekend, and never missed a minute of production. Once transitioned, the old building was torn down, with the exception of a few walls, and we completely cocooned the remains of the old structure into the second half of our new facility," he says.

Milestones and markets

Clearly, expanding to five times its original size is a major milestone, and a real indicator of growth.
Not only did the size of the building expand, but Xode's family ties grew as well. In 1991, another of Seitzinger's sons, John, came on board and now serves as the company's sales manager. Today, it's Joe Tkach, along with Jim, Pete and John Seitzinger that make up Xode's management team. The four work together seamlessly, collaborating on all of Xode's business decisions. Based on results, what they're doing certainly seems to be working. Xode's philosophy is one of teamwork, open mindedness, having a strong work ethic, and a personal commitment to customer service.

But nothing is more indicative of growth in the label business than a new press acquisition, and in 1993, Xode purchased a 13" Mark Andy 2200 with four color stations that has since become eight.
"The main focus surrounding our equipment purchases is to maintain two week delivery. That's one of our primary selling points for our customers, and it dictates our equipment acquisitions. We're generally quicker than two weeks, but that's our standard," Pete Seitzinger says, adding that the additions in color and UV stations were made to accommodate the growing business. "Whatever it takes to get the job done," he adds.

Xode's management team, from left to right: Pete Seitzinger, VP; Joe Tkach, president; Jim Seitzinger, CEO; and John Seitzinger, sales manager
Committed to the company's standards for turnaround time, coupled with continuously increasing business, another press purchase was made in 2005, Xode's second 2200 eight color Mark Andy. "Like Pete said, it's based on our customer's requirements, as far as keeping our lead times to no longer than two weeks, having the capability to print multiple colors, and other additions like delam/relam units, cold foil stamping, and supplementary production options," John Seitzinger says.
In addition to the four Mark Andy flexo presses, which have all seen their share of upgrades and attachments over the years, Xode has also invested in digital technology. In 2007, the company purchased a small digital press with a digital diecutter, and the team reports the acquisition has been a success. It's being used primarily for short runs. The pressroom is also home to two Web Techniques tabletop and two Arpeco rewinders.

Thanks in large part to its equipment updates and acquisitions, as well its commitment to meeting the demands of its expanding customer base, Xode's printing capabilities have evolved over the years as well. Current capabilities include thermal transfer blanks and ribbons, sheets, up to eight color printing, UV printing and coating, front and back printing, overlaminating, cold foil stamping, consecutive numbering and bar coding, and converting of instant redeemable coupons (IRCs).

The markets Xode serves are as diverse as its converting capabilities. They include both prime and non-prime labels, automotive, OEM, pharmaceutical, food and beverage, and industrial. In addition, the company has a few interesting niche markets working with co-packers and the federal government.
"I'd say our biggest growth markets are food and beverage, pharmaceuticals, co-packers, and industrial products, but we certainly do have our niches," Tkach explains. "For example, we have a customer that manufactures tanks for the government, and we'll convert for them descriptive-type warning labels that are placed on the interior of the tank."

John Seitzinger says that Xode's machinery facilitates some of its niche work. "We also do converting for government or military equipment industries, where we'll take a masking tape and diecut it, which will mask off an area in which they don't want paint, for example. It's a nice niche for us, and just one element of government work we do," he says, adding that Xode's Mark Andy presses are capable machines when it comes to this type of work. "Some of our other capabilities include diecutting and converting of unique substrates and products for specific manufacturing processes. For example, we can diecut Velcro pieces and intricate patterns from double coated tape."

The current economic downturn that has affected such a wide variety of companies in a multitude of industry's has made headlines in recent months. But Xode has managed to steer clear of the effects of the struggling economy, and it's not by coincidence. Having a diverse mix of customers has been a key asset and Xode only grows.

"Food and beverage and a mixture of large and small accounts play an important role in our day-to-day production. With the current downturn in the economy, our diverse combination of customers has provided stability in our manufacturing process," says Tkach.

Cross training

One well publicized aspect of the current economic crisis are the layoffs that have taken place throughout industry. Having been around for four decades, the company has witnessed economic troubles both locally and nationally. Yet Xode is proud of having been able to steer clear of the economic hardships that could adversely affect a workforce.

"Throughout our 41 years in business we have not had to lay off one person due to a downturn in business. We have a loyal and exceptional group of employees and it is our goal to keep them motivated and energetic about their job," Jim Seitzinger says.

Both Pete and John Seitzinger, as sons of a label company owner, grew up at Xode, and have pretty much held every job there is to be held in the label business at some time or another. They're ready and willing to step in wherever there may be a need, and this attitude has a carried over to how Xode is run.

"Cross training of our employees is a key to our success. If someone is out, we have another person to take his or her place so as to not jeopardize an order being completed or shipped," notes Pete Seitzinger, adding that the pressroom is managed by not one person, but by a pair of "team leaders." He says, "It's really a great system. The team leaders switch on and off, and if one should be out sick, the other can step in. It ensures that we don't miss a beat with our production."

Quality control is another area where the various roles in the workflow cross over. "Press operators are checked by other press operators," explains John Seitzinger. "They have sign-off sheets, and checklists that are used. The labels are then sent to the rewind where there's another series of sign- off sheets and checklists, and then somebody double-checks their work. Basically, the whole press department is quality control."

The company takes quality control seriously, and with everyone working together, it's ensured that nothing leaves the facility without meeting quality standards. "Let's say somebody in the shipping or accounting department sees a label that doesn't look right, he or she will put a red flag on it and we could correct any potential problems," says Pete Seitzinger. "As far as quality control goes, we don't have a problem with anyone questioning anything that doesn't look right, or looks out of place. Also, all of our products are date coded as it goes out. This way we know exactly when it was run, what day of the week, what line it came from – and everything about that particular job is documented in the team leader's office.

Sales and structure

Versatility of Xode's individual employees is certainly a great asset. But a closer look at the company's organizational structure perhaps reveals more reasons Xode continues to grow. The company places a strong emphasis on sales. In fact, more than one third of its 23 employees are direct sales reps. The sales team is driven, and management challenges them to think outside the box.

"We have nine direct sales people, and two inside reps, which is probably somewhat unique for a company our size," Tkach says, noting that the job they have is magnified in scope based on the company serving dual roles.

One of Xode's Mark Andy
2200 presses
Xode, which began as a distributor, still maintains that side of the business in addition to selling the labels it manufactures. Because of this, its salespeople are responsible for more than just selling Xode labels. In addition to its label business, Xode sells industrial products and tools for several companies, with an emphasis on 3M, but also including products from Tesa, Dynabrade, Weiler, Arc, Shurtape and others. One of the features of Xode's website is an "online store," that facilitates the purchasing of 3M and Dynabrade sanding machinery, as well as a broad range of tapes, adhesives, and packaging and labeling systems and supplies.

Tkach says that the nature of Xode's business underscores the importance of having a strong sales team. "Our business is broken up between our labels and the distribution side – and we need our sales reps to perform a dual role to sell Xode labels as well as the distribution of products. And a lot of the time the two businesses go hand in hand," he explains.

Every Friday, at the Xode headquarters, management and the entire sales force have a meeting. It's here where the discussion turns into a brainstorming session with a focus on expansion and growth. It also provides a forum for management to challenge the team, and to perhaps explore new avenues. Recently, in light of the current economic downturn, the Xode sales team was asked to turn it up a notch.

"One of the things that we do is challenge our reps," not only do we challenge them to work harder, and make more sales calls, but also to seek out new applications for our products," Pete Seitzinger says.

"We've realized, particularly in times like these, that we have to work even harder," adds Tkach. "With that in mind, we have asked our sales reps to make 20 percent more calls, in order to gain greater market share. Anyone manufacturing a product needs to label it in some fashion. It doesn't matter if it's product information or identification. We are ready to provide them with the labels necessary to accomplish the job. That's our message," Tkach says.

Xode is perpetually looking to expand. With much of the sales territory located in Eastern Pennsylvania, Southern New Jersey, Delaware and Maryland, the business is branching out all the time. "We now have some customers in Tennessee, Florida, Texas and the Midwest, and we're international, too. In fact, one of our newer customers is a guitar manufacturer based in Mexico. We're continuously expanding and growing – we're never standing still," John Seitzinger says.

With expansion being such a major theme for Xode, it's no surprise that one of Xode's new endeavors is to increase its presence on the web. Tkach says that the company is making a concerted effort to spike web traffic through search engine optimization. The Xode website is equipped label-wise for giving customers instant quotes as well as for purchasing some of the products it distributes.

Customer service is taken very seriously at Xode. When a customer calls the company to inquire about its label or other products, they're going to receive personal, custom service, and not a machine directory. This is a point of pride for Xode, as well its ability and enthusiasm in crafting a job. "Our in-house art department is available to our customers – to help improve upon current labels or even create an entire new concept or idea," Tkach says.

"When we get a customer we work hard to maintain them," says Jim Seitzinger. "Our exceptional customer service, top quality products, competitive pricing, and our quick turnaround time are keys to customer retention."

Always looking to expand its customer base, Xode sets up booths to display its labels and capabilities at a variety of trade shows as a way of finding new customers. For example, the team will be at the Philadelphia Candy, Gift and Gourmet Show in Atlantic City, NJ, in September.

For the future, the plans are big in scope. A new press purchase is a possibility; the company has been in talks with Mark Andy about buying a new machine. The team is also contemplating adding a new digital press to the Xode arsenal. They're always on the lookout to learn and improve upon their technology. Tkach and all three Seitzingers were in attendance at the 2008 Labelexpo in Chicago.

Expansion is also on the horizon. "We're going to continue to look into other markets and we're definitely looking to expand by acquisition," Tkach says, referring to the prospect of purchasing a label company. "With our current growth expectations, we're also looking at another site which would double our capacity."

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