- October 01, 2000, Edward Boyle, Contributing Editor
Doing what it says "no one else can do" is the stock in trade of Los Angeles Label Co. Helping the cause are Webtron presses and some well-trained employees.
When discussing the growth of their companies, executives from across the converting spectrum -- labels, flexible packaging, folding cartons, corrugated containers and more -- invariably will credit "their employees" as the key to their success. Of course, maintaining the latest in state-of-the-art equipment is usually a close second. Well, those converters might learn a thing or two from the way Los Angeles Label Co., a small southern California converter, manages to get the most from both its equipment and employees.
Take, for example, the way the Commerce, CA, company went about choosing the press that ultimately was responsible for launching the company's critical expansion into the prime-label market in the mid-1990s.
The 67-year-old, third-generation, family-run company had built much of its business and reputation serving the industrial label market. But president Nick Valestrino ultimately saw prime labels as an obvious and more lucrative extension of the company's core capabilities. Naturally, the first order of business was upgrading to a press capable of delivering the highest quality product. But which one?
A Different Approach
The traditional approach to selecting a new press typically involves attending trade shows, meeting with sales representatives, possibly comparing notes with other label converters, and ultimately visiting the suppliers' manufacturing facility to see the press up close.
L.A. Label did things just a bit differently. It began the process by sending a 200-question survey to each of the more than two dozen label press manufacturers capable of meeting its needs. The suppliers were made aware that filling out the form "was just the first step" in L.A.'s selection process. Ten companies replied.
Next, L.A. Label audited the production processes of each label manufacturer: How well was the company run? What was the complexity and efficiency of its equipment? Finally, the operation flew pressmen as well as plates and other supplies to each of the "finalists" and conducted a test run.
"It's was obviously a big decision," Valestrino says of buying L.A. Label's first prime-label press, "so we had very rigid testing guidelines. We made a big investment in time and effort to make sure we chose the right press."
The choice? A 10-in., six-color Webtron flexo press. Ironically, the company was already using a number of Webtron presses to convert its traditional base of industrial labels, and Valestrino admits there was some surprise in discovering that it was also the best choice for producing prime labels.
"We didn't go through all that trouble just so we could stay with Webtron," says Nick Valestrino. "We really weren't expecting that, but we wanted the best, and in the end there was an advantage to staying with a press [manufacturer] we were familiar with."
In the past seven years, L.A. Label has added three more Webtron presses (two are eight-color models and one is a seven-color model, all 10 in. wide) and expanded its role as a prime-label supplier.
With its emphasis on quality the company also relies on some of the biggest and most respected names in the business for its raw materials and accessories, Valestrino notes, including Fasson rollstock, Akzo Nobel inks, DuPont photopolymer plates, and Rotoflex rewinders.
Earning Its Good Reputation Today
L.A. Label converts virtually every type of label, including coupon, thermal transfer, embossed, hot stamped, and more. And, as its expertise has grown, so has its reputation. Two years ago the company won the prestigious "Best of Show" prize in the annual awards competition of the Flexographic Technical Association (FTA). In the first few months of this year alone, L.A. Label was recognized by the Tag & Label Manufacturers Institute (TLMI) with a "Best Managed Company" award and received two Gold awards and one Silver award in the FTA's most recent label competition. Valestrino traces those accolades back to its renewed focus on quality.
"Obviously, a big leap came when we changed our focus to produce what we feel are the best quality products in the marketplace," says Valestrino. "We always focused on quality; you have to do that to be competitive. But when we changed our focus, we didn't just shoot to get into the prime-label market; we aimed to be the best in the prime-label market. And once we did that, things just started to roll. We do things that other people can't, and that makes all the difference."
With an eye toward the future, L.A. Label was also one of an original group of 17 converters that formed the Digital Label Alliance several years ago to explore the potential of digital press technology specifically for the label industry. More than three years later, L.A. Label earlier this year became the first converter to take delivery of the digital "label" press developed through the label alliance and built, ironically enough, by Chromas, Webtron's parent company. (Details of the digital press are still confidential.)
"If you can have a digital press that functionally operates as a conventional press but economically meets the needs of the short-run, prime-label market, you have a technology that is going to revolutionize our industry, especially if our consumables are low," notes Valestrino. "That's what is so exciting to us. After five years of development, we can say, `The technology does exist, and it works for the label printer.'"
Training Makes Employees Ideal
L.A. Label's determination to find equipment most ideally suited to its needs is matched only by the company's emphasis on attracting and retaining good employees. Yet, virtually every business from McDonald's to McDonnell-Douglas is facing the same harsh reality: Unemployment has reached 30-year lows, and competition for skilled employees in the age of "dot coms" is at an all-time high.
Just how does a small label company not only survive but thrive in such a market?
Acknowledging that "having the right people for the job is always a challenge," L.A. Label began emphasizing employee training and empowerment long before it came into fashion. For example, all of the pressroom-level employees spend approximately 10% of their time in ongoing training to enhance technical and process improvement skills.
So, while some converters focus primarily on getting product out the door, L.A. Label's emphasis on improving "employee quality" goes a long way toward ensuring that what leaves the shipping dock doesn't come back.
Valestrino suggests that while the time employees spend in training might seem to arrest productivity on a short-term, day-to-day basis, the ultimate benefits are reaped when customer rejects are reduced drastically and permanently.
"There is a transition," says Valestrino, "but as waste and customer rejects drop to next to nothing, it becomes obvious that focusing on training is the right way to go about it. It is a huge commitment and, in turn, a huge expense, but it allows us to do things that other people can't, and that's the bottom line."
Diverse Line Is a Challenge
At the same time the company is working to improve "employee quality," it maintains a full-time chemist to work on developing the unique inks and adhesives that go into making a top quality prime label.
"We really keep our ink suppliers on their toes," says Valestrino. "When they make a statement about how their ink will perform, they need to back it up with a chemical formula, and that makes all the difference. We ask questions. `What's your Delta variance? What's your ratio of silicone in the ink?' We do a really good job of ink management, and that's all part of getting the job done right the first time."
That is particularly important for L.A. Label, which has virtually no direct sales to end-users. Instead, the bulk of its business involves supplying print brokers, ad agencies, even other label converters with higher quality products that the customer itself cannot deliver to the ultimate label user. That might mean producing flexo labels for an offset-only converter, or 300-line quality work for converters with lesser quality capabilities.
Consequently, the ultimate end-users of the company's labels cross all market niches, from hardware to hot dogs to hand cream. But while some converters might shy away from serving such a diverse product mix, L.A. Label prefers it.
"It's actually a nice position to be in, because industry downturns, recessions, little glitches here and there in certain industries don't tend to affect us all that much because we're so diversified," notes Valestrino. "We don't sell labels; labels are what we produce, but what we actually `sell' is our service and quality capabilities. That's really our niche."
While many of L.A. Label's customers traditionally have been based in the western US, it finds more and more of its business coming from other regions as other converters, agencies, and brokers discover the benefits of working with a label converter that, well, doesn't sell labels.
"The one thing we do very poorly is advertise," Valestrino says with a laugh. "We don't really put much emphasis on marketing ourselves. Really, all our growth is through word of mouth. `Yeah, I've heard of your company. I called around and everyone said go to L.A. Label if no one else can do it,' and they wind up here. We focus on making outstanding products, and our partners do the rest."
Chromas Technology/Webtron, Ft. Lauderdale, FL; 954/971-1380
Akzo Nobel Inks, Plymouth, MN; 612/559-5911; akzonobel.com
DuPont Cyrel Products, Wilmington, DE; 302/999-5740; dupont.com
Rotoflex Intl., Mississauga, Ont., Canada; 905/670-8700; rotoflex.com