A growing California converter takes digital – and flexo – in a new direction.
By Jack Kenny
Published March 8, 2012
2419 E. Winston Road
Anaheim CA 92806
Digital-only label converters aren’t all that rare any more. But it might be just a bit unusual to find a printer who added flexo capability well after establishing itself as a digital house. That’s the story of Labeltronix, a successful converter in Anaheim, CA, USA. The company found that multiple digital presses could manage growth only so far, so a high-end flexographic press was acquired for production of longer runs. Today, Labeltronix is a prominent manufacturer of labels for wines, nutraceuticals and premium foods, among many other markets.
Many label converters say that they do things differently from others, but that’s rarely the case. Labeltronix, however, has come up with distinctly different ideas about production, and has established programs for customers that offer beneficial pricing. The company operates two full shifts, and recently moved its business to a plant twice the size of its former headquarters.
Labeltronix was founded in 1993 by Dan Blair and Eric Shepard, who remain active partners today. John Trail, the third partner and president of the company, joined in 1995. They started out focusing on sales and service of bar code label printing systems, which remains a significant part of the business today. Soon after, the business evolved to include label sales. “We were having a good run and significant growth with the small labeling systems, but we were also a growing broker and reseller. We wanted more control,” says Trail. “Almost from the get-go we focused on labels, so we were starting to outgrow some of the local converters, in terms of their capabilities and our expectations.”
To get control over their destiny, the partners examined the options. “We looked at acquisitions, but decided to do it our own way, the hard way, from scratch,” Trail recalls. “One of the things that we did was to go out and take the time to interview a number of our largest customers to understand what their needs were and what they were looking for. That’s always been a part of what we are building, and we try to keep that mindset.”
The first step was the acquisition of an HP Indigo 4000 press and finishing equipment from AB Graphic International. That was in 2004.
“Digital is clearly the mindset that we have,” notes Trail. “I like to look at it and say that the Indigo is really no different from the Zebra printer, fundamentally. We get it. We get it as an organization, from Day One: printing from a computer on demand. When you put it in that perspective it wasn’t very intimidating to understand. We’re just taking a file from a computer, sending it right to press and it prints out. And every label can be different.”
The transformation over the past 10 years has been dramatic. “In the beginning we were a black-and-white-only company,” Trail says. “We didn’t know what color was in 2000. Four-color process was a learning experience around here.” But learn they did, and moved beyond the limitations of the broker business to direct connection with clients.
From its location in densely populated Southern California, Labeltronix mainly serves industries in the large state. “Our customer base is very diversified,” says Trail. “We serve the wine and food industries, the largest in the state; medical devices is another significant industry, as well as electronics and media. California is a pretty diversified environment. Nothing comes close to it as far as concentrations and scope of business and volume of opportunity. It’s a lot of small to medium sized businesses. Our diversity, I think, is better, but it’s not easier. It’s more work, more challenges. The wine industry is probably the closest we will ever come to anything that’s of clarity and focus and consistency in our base.”
When they turned on the HP Indigo press on the first day, Trail says, “We had no preconceived notions, no previous experience. We do a lot of things differently that might go against the industry, but we don’t know any differently. The more we can embrace this different way and make it work, then it’s a strength and an advantage.
“For us, everything was a learning curve. The HP experience was tremendous. People talk about the famous click charge: We laugh when we hear them complain about it. I wonder why the flexo people don’t look into it. It’s kind of like Apple in some ways: controlling the software, controlling the applications, controlling the user experience. It has negatives because of what Microsoft and others have to offer, but at the end of the day it seems to be emerging as the right way. It has been a benefit to us because it helped steer us in the direction of all the substrates and the inks and all the components versus flexo.”
At the end of 2006, Labeltronix acquired its second HP Indigo, a 4500. Soon after, the company bought a Nilpeter FA flexographic servo press with eight print stations, full UV and sleeve capability.
“Flexo was a need in front of us from our customers,” recalls Trail. “We’re in the game, and we have clients who want more from us that just didn’t justify running digital. So we looked for the most advanced flexo press that could parallel what we have learned and loved and known from the digital experience.” The partners made their final decision at Labelexpo in 2006, took delivery in 2007, and brought in an experienced operator.
“It was a process, like digital, but much more complicated,” according to Trail. “We had some knowledge base as we hit the ground, but we didn’t want too much because we wanted to find our way and run it the way we saw fit.”
Labeltronix utilizes multiple finishing systems that offer various combinations of processes, and include spot finishing with flexo varnishes, flatbed embossing and flatbed hot stamping.
The first finishing machine at Labeltronix had rotary hot stamping. By doing business with the wine industry – known for its exacting standards – the company learned that flatbed was needed to achieve the highest quality level of stamping and embossing. “We can get a much better emboss and much finer hot stamping, because the pressure in the flatbed process is much more controlled and consistent across the web versus the rotary.” Stamping pressure can be as high as 25,000 pounds per square inch. The foil systems feature a servo-driven intermittent feed with a foil-saving process that minimizes the high percentage of waste common in other systems.
As evidence that Labeltronix has established itself as a prominent manufacturer of labels, the team has received more than 30 national and international print quality awards over the past three years, in addition to its achievement of ISO 9001:2008 certification in 2010.
Several years ago, John Trail was driving home from work and thinking about customers, customer focus and the internal practices of Labeltronix. The name Lean Labeling came to him, and the company adopted the name for a successful customer program and registered it as a trademark.
At its website, the company explains it this way: “Gone are the days when the label printer is in control. With Lean Labeling, you’re in control. Order only the labels you need – when you need them. Your pricing can be fixed… Order only the labels you need when you need them. Your expenses are spread out over time by printing rationally, resulting in improved cash flow and reduced costs.
“…We can offer you flexibility for your business because our just-in-time, Lean manufacturing set-up takes advantage of both advanced technology and an efficient pressroom organized to avoid redundant steps in the production process. …Participation in the program helps you to shorten your time to market, reduce costs, gain great operational control, and make a critical first impression.”
According to Trail, “Our Lean Labeling is the go-to-market difference maker in who we are and how we do business. We knew we were doing things differently, and we were learning about Lean, and we understand the need to communicate to our clients and how does it benefit customers. So we called it Lean Labeling. We embrace the fundamental discipline and the concepts of Lean Manufacturing: Try to reduce our waste, have less sitting idle, be more sensitive to the customers’ needs, work only working on the job that needs to be worked on now, try to be organized and standardized. We have a process improvement team that we formed last year, eight or nine people, and I’m very excited about it. It’s the future of Labeltronix, it’s the core team from all the different disciplines – manufacturing, customer service, graphics, IT – and we spend a lot of time focused on our work flows and gaps and how to make process improvements.
Labeltronix is conscious of the environment and the inevitable contribution to the waste stream that all label converters must acknowledge. “This new building has a lot of energy efficiencies, with the lighting, power sources, the way it was built and insulated,” Trail says. “The way we run, the amount of waste we generate is well below average, even on the flexo press, because we can set up so quickly and finish with re-registration. We don’t have to run a lot of material to get to registration and set the die up. We have materials that are eco-friendly, and are trying to offer those to our clients.”
The previous home of Labeltronix was located in Orange about two miles from the new plant, was half the area and divided into two buildings, each with two stories. Equipment was in one, materials in the other.
The new space, nearly 50,000 square feet in area, was completely rebuilt inside before the company moved in.
“It was a major project, very successful, a tremendous amount of investment and money and time,” says Trail. “It was on our hit list for years, but we had to move this year, because we ran out of room for the equipment we were adding.” The company signed the lease in mid-August 2011, and moved in by the middle of November.
One of the real eye-openers at the plant is the new Application & Learning Center. It’s a large space, a gallery, just beyond the reception area, and features black open shelving throughout the room displaying samples of products containing labels made by Labeltronix. Large graphics adorn the walls, and comfortable black leather chairs in the center provide a central focus. The effect is dramatic.
“It’s really to focus on our customers,” Trail says. “At the end of the day we always go back to ‘How does this benefit the customer? Don’t forget about the customer. How do we talk to the customer?’ We don’t like to go out and say, ‘We have X amount of presses.’ They probably don’t care what kind of equipment we have. All they care about is their label. When they walk in here they really want to learn, and here we can talk to them exactly about their specific label, or about their industry, trying to create an environment that can evolve and develop that is focused on our customers and the applications of the labels that we make and how they are used. That’s what it’s about. It’s not about ‘We can make labels.’ It’s about ‘What are those labels used for?’ That center, that room, is all about a myriad of things. We plan to have seminars, both internal and external. Our goals are to be able to put events on here that draw clients in so they will learn something, whether it’s about color or advancements in digital printing.
“To educate people is our number one challenge – what is possible, what are the capabilities,” declares Trail. “Get in front of them and talk to them in language that is meaningful to them. As we stay on the forefront of technology, it will forever be that way.”