Pilot Italia

By Jack Kenny | January 14, 2011

An Italian converter embraces Lean Manufacturing to increase margins in an uncertain economy.

Andrea Vimercati
Some label converters go their own ways. They watch what is taking place in the markets and among the competition and make the choice to take the road less traveled. Many converters, of course, insist that what they do is different from others, but sometimes you can actually find a business that really is doing so.

In the not too distant past, Pilot Italia made the decision not to join the flexo community. Letterpress and screen printing had always had strong roots among Europe's label printers, and Pilot was among them. Indeed, the company still maintains a complement of letterpress machines and a strong screen printing capability throughout its plant. But when flexography began its move into label shops around the European continent, Pilot Italia said no. The company didn't turn completely away from flexo, but rather focused intently on narrow web offset technology, and has not looked back once.

Today, the 42-year-old company, based in Usmate Velate, Italy, has established itself as one of the largest label converters in the country, and has a strong presence throughout the continent. Its sales director, Andrea Vimercati, has been serving as president of FINAT, the European label association, for the past 18 months, and has done his best to elevate the visibility of the group around the globe. That's in addition to helping run a €20 million family business.

Pilot Italia was founded in 1968 as the Italian branch of Pilot, which was based in France. In the 1950s, Pilot was producing materials, self-adhesive labels and label applicators. Eventually the company went bankrupt and had to sell the branches.

In 1984, Giancarlo Vimercati, the father of Andrea, made a management buyout of Pilot Italia, and heads the company today as its managing director. According to the son, much has changed since those days.
"During the 1980s we were producing simple labels, such as those used for price and weight," says Andrea Vimercati. "Eventually we started to understand that we needed to escape the competition for these very simple labels, and to go to more complicated and more technological products."

One of the Nilpeter MO-3 10-color offset combination presses at Pilot Italia
After receiving his doctorate degree at age 24, Andrea joined Pilot Italia. That was 14 years ago. "Since then we have been buying machines," he says. "We were the first company with ISO certification in Italy, and the first label company to buy an offset press. Our Nilpeter offset, which we acquired in 1997, was the seventh in the entire label market. Before that we were printing with letterpress and screen.

"But we saw big opportunities in combination printing. There were no better machines than Nilpeter offset to put together silkscreen, offset and flexo. We got our second one in 2003, and in 2007 we purchased a Drent press, which is an offset flexo press." The company has five Gallus presses – two letterpresses and three screen/letterpress machines – plus a Codimag waterless offset press.

Pilot Italia works with some large customers. The company was for some time the only label printer for Johnson & Johnson in Italy. Andrea and a marketing manager are employees of the company, but the bulk of the sales is performed by representatives.

"We have agents who work only for us and only sell labels," Andrea says. "That means that they have big customers. But these five people are very loyal to the company, and to my father especially. We deliver the most significant quantities of labels in Italy."

The company intentionally serves a variety of markets. "We have always focused on having a good balance between cosmetic, pharmaceutical, food, and wine," he adds. "And we have developed some patents in pharmaceutical markets. We have always tried to work with two aims: The first is to have a balanced turnover, and the second is to work with big companies and/or multinationals. In the past we have worked with Johnson & Johnson, then Unilever, L'Oreal, Pfizer, Novartis. We always try to have 20 percent of our customers, which make up 90 percent of our turnover, as the big companies. And our main goal is to always deliver new ideas, innovations to them."

Italy has about 500 label printers, Andrea says, "which is crazy. In the 1990s a lot of strong print technicians left their companies to start up their own businesses. They bought presses and competed at lower prices. That is why we are working with a lot of big companies, because the big company has efficacy in its vision, and a need for innovation. If I tell you that I need one lira more than the others, I will also assure you that you will never have downtime because of my labels. This is a concept that one company in five can really understand."

The Lean advantage
As the recession was beginning to show its ugly face, the people at Pilot Italia were embarking on a new journey. Implementation of Lean Manufacturing can be a lumpy process at first, but when participants begin to see the beneficial results, the complexion of a company – along with its operations and profitability – can change.

The Drent VSOP press has offset, screen and flexo capability.
Pilot has 100 employees. The company used to operate three shifts, "but with kaizen activities we have reached the finish line of having only two shifts," says Andrea. "Through kaizen activities we have moved from 40 percent of production against 60 percent of the time spent on setup, to 60-40, just the reverse. Just changing the layout and talking to the people and analyzing with them how they can perform in different ways has made a major difference. For example, we had a lot of tables in front of the machines, now you see only trolleys. It was the right time to put this in place at the beginning of 2009, when we had only some early signals of the economic crisis."

This year, Pilot Italia will move its operations, which Andrea refers to as "two and a half plants," to one facility in a town about 20 kilometers from its current site. The new plant is 7,500 square meters, half again as large as the space it occupies today. "This gives us the opportunity to improve our layout," he says.

Absent from Pilot is anything resembling a digital label press. The subject is on the table at the company, but so far the management doesn't see a need.

"I always see a lot of digital presses when I go abroad," Andrea declares. "Do I have to buy digital because there's a lot of life there? But then I have the wrong customers? What we have always seen in the Italian market is that probably five or 10 companies need one digital to fill it. You need a special niche.

"We are looking at digital presses, and the digital inkjet presses," he adds. "But still we don't see anything that can substitute for silkscreen now, for example. Inkjet might do that in the next few years, but it doesn't make sense for us today."

Leadership and perspective
As the current head of FINAT, Andrea Vimercati has had opportunities and he has taken them. He and colleagues around the world, including those from TLMI in North America, are pushing for more joint involvement by label associations worldwide.

He has also had the distinction of serving as a leader during a rough economic period. "This is a market that still is not used to no growth. Now, after the crisis, people have had to realize that they have to look at production and sales and cost. We have always been growing, every year. New customers come in, and few customers go. Now the world has changed. You have to look more closely at your costs, and face customers who are not paying. We now have to deal with things that in the general economy are normal, things like reducing your workforce. This is really new for our market.

"We have always been product oriented: I have to deliver the best product in the world on time to a customer, and that's it. Sometimes it doesn't matter if I have to pay extraordinary wages to my people; if I have to do things in an inefficient way I will do them, because my end is to produce and deliver to my customer.

"That kind of thinking is in the past. The economic crisis has changed the vision of a lot of entrepreneurs. Now we are talking about Lean Manufacturing, making joint ventures, mergers� We see a lot of bankruptcy, not only among our competitors but also among suppliers. You think that's normal in other markets, but we have never seen a moment like this in our sector.

"It's not comfortable. But it's a very strong stimulus to think something new and different. What I have seen is that this industry is growing, like when you are a boy and you're growing, you get a temperature and after three days you have grown. It's the same for us: A lot of us are suffering, but the ones who will stay standing during this period will be the strongest. In Italy it is not finished. We had a big stop in mid-September, October, and mid-November. I think it's a problem of customer warehousing. I think they have run a lot of labels during the first three quarters, and in the last quarter they stop. But we expect to have a good first quarter this year.

"The sun will come up again," says Andrea Vimercati, "and at that time we will see a boost in the market."

Related Labels & Packaging:

Related Equipment:

Related Technology:

Related Markets: