N E W S PA P E R S U P P LY C H A I N S

P O S T P R E S S P A C K A G I N G &
L O G I S T I C S

A discussion of how “End‐to‐End Supply Chain Management” 
principles apply to the newspaper industry. 

P3L, LLC
Post Press
Packaging &
Logistics

7707 Nature Trail

Lakeland, FL 33809

863-604-6123
news@p3logistics.com
www.p3logistics.com
© 2006 P3L, LLC
 N E W S PA P E R S U P P LY C H A I N S —
AGENDA

• SUPPLY CHAINS—THE UNIVERSAL DEFINITION

• NEWSPAPER CHALLENGES

• NEWSPAPER SUPPLY CHAIN

• FINDING THE VALUE—NEWSPAPER SUPPLY CHAINS

• NEWSPRINT & INK

• ADVERTISING & NEWS

• PRESS OPERATIONS

• PACKAGING OPERATIONS

• DISTRIBUTION OPERATIONS

• MANAGEMENT INFORMATION

• TYING IT TOGETHER— SUPPLY CHAIN INTEGRATION

© 2006 P3L, LLC 2

 S U P P LY C H A I N M A N A G E M E N T —
GENERAL DEFINITION

Supply chain management is the oversight of materials, infor-

mation, and finances as they move in a process from supplier to
manufacturer to wholesaler to retailer to consumer. Supply
chain management involves coordinating and integrating these
flows both within and among companies. It is said that the ulti-
mate goal of any effective supply chain management system is
to reduce inventory while maintaining necessary product avail-
ability.

Supply chain management flows can be divided into three main flows:

• The product flow

• The information flow
• The finances flow

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 S U P P LY C H A I N M A N A G E M E N T —
N E W S PA P E R C H A L L E N G E S

Newspapers are a difficult fit for traditional supply chain

models and suppliers.

• Newspapers speak a foreign language, with each property

adopting its own dialect.

• Complex inbound strategy for raw materials is replaced by

commodity buying of newsprint and ink.

• The intangible and unpredictable flow of news and information defines

production parameters.

• Product size, shape, and configuration vary from day-to-day and week-to-
week.

• Time available from production to useful consumer delivery is shorter than

any other industry.

• All critical distribution is performed at night, in predominantly short shifts.

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 N E W S PA P E R S U P P LY C H A I N S —
F I N D I N G T H E VA L U E

Newspapers require unique definition of their product, informa-

tion, and financial flows to be adapted to supply chain and other
quantifiable management programs.

The primary supply chain flow for newspapers is the outbound

product flow and its associated information flow.

Newspapers have successfully separated subscriber and adver-

tiser cash flow timing from product delivery. As such, all financial flows
within the newspaper supply chain are either discretionary (how much news-
print and ink inventory is carried), or direct costs resulting from the supply
chain in place.

The primary components affecting the total supply chain cost for a news-
paper are:

• Inbound Information: advertising, news, editorial, pagination

• Press Operations: platemaking through pressing

• Packaging Operations: handling, insertion, storage, package design & flow

• Distribution Operations: transport mode, timing, locations, and handling

BASI C NEWSPA PER SUPPLY CHAIN

Advertising &
News
Press Packaging Distribution
Operations Operations Operations
Newsprint &
Ink

INFORMATION

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 N E W S PA P E R S U P P LY C H A I N S —
F I N D I N G T H E VA L U E

Each link in the newspaper supply chain requires scrutiny, both

in how it performs its task, and how its results affect the per-
formance and cost of the entire chain.

Before evaluating the total potential for improvement within a

newspaper supply chain, each component’s potential must be
defined.

• What is the gain in changing the process?

• How easy is the process to change?

• What controls the start time for the process?

• What controls the duration of the process?

• What controls the end of the process?

• How does this process interact with other pieces of the chain?

BASI C NEWSPA PER SUPPLY CHAIN

Advertising &
News
Press Packaging Distribution
Operations Operations Operations
Newsprint &
Ink

INFORMATION

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 F I N D I N G T H E VA L U E —
NEWSPRINT & INK

The traditional inbound raw material supply chain opportunity

for a newspaper is limited. While value and potentially a cash
infusion can be gained from a hard look at necessary inventory
Newsprint & in-house, most newspapers prefer a “better safe than sorry”
Ink
approach to raw material inventory management.

Inbound transportation of newsprint and ink is largely governed

by broad purchasing contracts and commodity pricing. These channels are
best left flexible to leverage base product pricing, as this pricing gain exceeds
any potential for savings from an optimized inbound supply chain.

POTENTIAL METER—NEWSPRINT & INK

Financial Gain—potential reduction in inventory carrying costs

Ease of Change—offline from sensitive activity

Positive impact on other links—no impact on other links

Start Time Control—process timing controlled by newspaper

Process Time Control—delivery process unchanged

End Time Control—process timing controlled by newspaper

POTENTIAL SUMMARY—NEWSPRINT & INK

Overall Potential Rating—Unless newsprint and ink storage and

handling is cumbersome, or the property is willing to reduce on-hand
Minimal inventory of raw newsprint, refining this link will bring only limited
value to most newspapers.

Ratings Key:

Poor Minimal Fair Good Excellent

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 F I N D I N G T H E VA L U E —
ADVERTISING & NEWS

Unlike virtually any other manufacturing supply chain model,

the inbound raw material that controls the start time of critical
manufacturing processes is intangible. News happens without
Advertising & regard for newspaper deadlines.
News

News deadlines are set to provide the latest possible news to the
subscriber, while advertising deadlines are set to allow the wid-
est possible purchasing window for advertisers. Both deadlines must allow
necessary time for the remaining links in the supply chain to process any pack-
ages fronted by these start times, and backed by consumer delivery deadlines.

Since service in this model is an absolute requirement, all necessary assets and
resources are defined by the time available to complete the tasks essential to
good service.

Most supply chain models are tuned to balance service and cost. This model
doesn’t work for newspapers, since service must be a given. For example:

The typical supply chain model,

forced to represent service as
fixed, will balance time and cost. SERVICE

COST TIME
The newspaper supply chain
model must dramatically add
cost to compensate for the
small amount of time avail-
SERVICE
able while balancing service.
COST TIME

This leaves two options to maintain service balance while reducing cost:
skinnying the ‘cost’ elephant, or feeding the little girl ‘time’.

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 F I N D I N G T H E VA L U E —
ADVERTISING & NEWS (CONT.)

For the purposes of this discussion, we have ignored the com-

plexities involved in the editorial and pagination processes.
While these areas lend themselves to great potential gains, the
Advertising & following is assumed about these processes:
News

• Pre-press formatting has received a great deal of attention, both in terms

of process and technology over the past 10 years.

• Gains to these processes are largely driven by technology and asset purchases that enable
greater efficiency.

• Transforming information to ‘ready for press plate’ news takes a fixed amount of time
from the start point, the news or advertising deadline.

This leaves the advertising and news deadlines, the start points, as the primary
focus for supply chain efficiency gains.

POTENTIAL METER—ADVERTISING & NEWS

Financial Gain—huge potential supply chain impact from even small

additions of time to the process

Ease of Change—requires understanding of downstream impact, but

small changes can usually be implemented easily

Positive impact on other links—the addition of time to the downstream

supply chain can yield huge economic gains

Start Time Control—process timing controlled by newspaper

Process Time Control—editorial and pagination processes and time

remain unchanged

End Time Control—direct function of start time and fixed process time

Ratings Key:

Poor Minimal Fair Good Excellent

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 F I N D I N G T H E VA L U E —
ADVERTISING & NEWS (CONT.)

POTENTIAL SUMMARY—ADVERTISING & NEWS

Overall Potential Rating—while moving

Advertising & news deadlines to earlier has not been a
News Good
popular historical strategy among newspa-
per executives, changing news delivery formats and technology
may warrant a true understanding of the cost—to the entire sup-
ply chain—of late news, or even advertising.

Assessing this type of potential

is easiest by looking backward
from bulk and carrier distribu-
tion. How much can be saved
if press, packaging, and distri- SERVICE
bution operations were given an
extra hour? Fifteen minutes? COST TIME

In order to preserve both late

news and early delivery
deadlines, traditional effi- SERVICE
ciency gains have come by
“skinnying the elephant” — COST TIME
reducing costs.

Looking forward, ‘gain to pain’

ratios may be better by “feeding
the girl” — adding time to the SERVICE
process, allowing cost to be re-
duced further, while keeping ser- COST TIME
vice levels intact.

Ratings Key:

Poor Minimal Fair Good Excellent

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 F I N D I N G T H E VA L U E —
P R E S S O P E R AT I O N S

In general, the critical time for press operations is the fixed run
time. Papers per hour output is limited by the speed of a press
and the number of presses. The number and type of press is
Press difficult and costly to alter.
Operations

Remaining opportunities inside press operations involve elimi-

nating any barriers to maximum sustainable speed. The value of
each stop and start, each edition change, or once weekly collect run, should be
assessed versus its total cost to the supply chain.

POTENTIAL METER—PRESS OPERATIONS

Financial Gain—potential reduction in packaging and distribution costs

Ease of Change—depends on the proposed change—eliminating an

edition is easier than eliminating a collect run

Positive impact on other links—must be modeled, but small time addi-

tions can yield large results

Start Time Control—controlled by news & advertising

Process Time Control—can be reduced by increasing average speed

End Time Control—can be reduced by increasing average speed

POTENTIAL SUMMARY—PRESS OPERATIONS

Overall Potential Rating—Odd production days and unnecessary edi-

tion breaks can add time and cost to the supply chain. However,
Fair unless all current final production runs deliver directly to stackers
rather than to the mailroom for additional processing, value can best be de-
rived from other areas of the newspaper supply chain.

Ratings Key:

Poor Minimal Fair Good Excellent

© 2006 P3L, LLC 11

 F I N D I N G T H E VA L U E —
PA C K A G I N G O P E R AT I O N S

Packaging and Mailroom process, flow, and timing are the key-
stone to huge potential cost gains to the total supply chain, espe-
cially for newspapers unable to increase value at other links in
Packaging the chain.
Operations

Speed and accuracy during the final production process are the
typical focus for packaging and mailroom management. A
broader view of the interactions between packaging and the downstream sup-
ply chain can add dramatic value to the entire system.

Strategy, equipment, advertisers, history, page count, draw, building configura-

tion, available resources . . . All factor into how and when a mailroom oper-
ates. The most important value packaging operations bring to the supply chain
is balance.

The mailroom must balance the

restrictions of the fixed processes
before it with the fixed time win-
dow behind it. Each newspaper’s SERVICE
situation and solution are neces-
sarily unique; however, the key COST TIME
considerations remain constant.

KEY CONSIDERATIONS—PACKAGING OPERATIONS

Bottlenecking

Is the packaging operation slowing down the supply chain?

The fastest piece of production equipment for a newspaper is the press. If this
rate of production is slowed by any downstream mailroom processing, the
value of this activity versus its alternatives must be measured and balanced in
terms of cost, speed, and accuracy.

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 F I N D I N G T H E VA L U E —
PA C K A G I N G O P E R AT I O N S (CONT.)

To illustrate the potential value of removing post-press bottle-

necking, the following example assumes the following:
Packaging • A press start of midnight, 50,000 draw at a production rate of 50,000
Operations papers per hour (pph)

• Immediate post-press insertion at the aggressive sustained rate of 20,000

papers per hour.

• A per carrier draw of 250, field hand inserted at the rate of one paper every 5 seconds.

• No change in distribution location, meaning transport time from plant to distribution loca-
tion remains unchanged and not a factor.

Factor Press Inserter (max)

Output Rate (pph) 50,000 20,000
Example Press Start 12:00 AM 12:00 AM
Product Ready for bulk dispatch 1:00 AM 2:30 AM
Bulk Delivery time (time from plant to distribution FIXED FIXED
location will not change, thus zero is used in this example)

Carriers served (250 draw per carrier) 200 200

Hand insertion rate (1 copy every 5 seconds per carrier) 720 pph/carrier unnecessary

Net Hand Insertion Rate (all carriers, pph) 144,000 unnecessary

Product Ready for Carrier Dispatch 1:21 AM 2:30 AM
Field Time Savings 1:09 0:00
Savings from Mailroom ? none
Carrier Insertion Cost ? none

Net Cost/Savings: ?

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 F I N D I N G T H E VA L U E —
PA C K A G I N G O P E R AT I O N S (CONT.)

KEY CONSIDERATIONS—PACKAGING OPERATIONS (cont.)

Workflow
Packaging
Operations
The packaging link in the supply chain controls the workflow
not only for itself, but for each downstream element in the sup-
ply chain. It is especially key to ensure that packaging improve-
ments translate through distribution. Faster in one area of the supply chain
does not necessarily add time, reduce cost, or build balance.

Package design, count, timing, and

SERVICE
handling must act to balance work-
flow for packaging and distribution
COST TIME
to achieve the lowest possible cost.

Mailroom headcount and shifts, packaging equipment type and quantity, han-
dling methods, storage needs, distribution operations management needs, vehi-
cle type and number, driver type, count, and shifting, carrier count and route
length—all of these factors must balance for maximum gain.

Each newspaper will have different needs and priorities, requiring a custom-
ized model and considerations; however, the focal point for this balance is the
largest cost in the system, the human resource availability and prevailing
wages in the local marketplace.

• Will more daylight shifts improve my pool of resources? My wage base?

• Are new DOT restrictions on part-time driving hours placing the operation at legal risk?

• Are hourly rates at a premium due to short shifts?

• Can fewer, better scheduled employees perform the same tasks for less cost more accu-
rately and efficiently?

• Can full-time wages, turnover rates, training needs, worker’s comp claim rates, and pro-
ductivity offset the cost of benefits?

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 F I N D I N G T H E VA L U E —
PA C K A G I N G O P E R AT I O N S (CONT.)

Analysis of the ideal packaging operations for any newspaper

involves balancing packaging and distribution operations for
maximum gain to the system.
Packaging
Operations
While time critical operations can yield the most noticeable
impact, workflow for both packaging and distribution can also
be improved by proper integration of pre-packaged product into
the entire supply chain workflow.

POTENTIAL METER—PACKAGING OPERATIONS

Financial Gain—potential reduction in packaging and distribution costs

Ease of Change—depends on the proposed change—most successful

changes remove some time-sensitive processing burden

Positive impact on other links—must be modeled, but small time addi-

tions can yield large results

Start Time Control—predominantly controlled by news, advertising, and

storage capability

Process Time Control—can be reduced by increasing average speed

End Time Control—can be reduced by increasing average speed

POTENTIAL SUMMARY—PACKAGING OPERATIONS

Overall Potential Rating—Packaging operations are the keystone to an

efficient newspaper supply chain. Balancing circulation and human
Good resource strategy with the processes and equipment necessary to meet
the defined goals for today’s marketplace can yield substantial gains in effi-
ciency, accuracy, and cost.

Ratings Key:

Poor Minimal Fair Good Excellent

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 F I N D I N G T H E VA L U E —
D I S T R I B U T I O N O P E R AT I O N S

Distribution operations for most newspapers are reactive. They

receive product by time “x” and must complete operations by
time “y.” All delays in earlier supply chain links must be com-
Distribution pensated for by distribution, or the consumer suffers.
Operations

These parameters can dramatically be altered by changes up-

stream in the supply chain, but solutions inside the distribution
link can still bring broad value to the overall cost of the newspaper supply
chain.

In order to assess the potential for improvement within a newspaper’s distribu-

tion operations, the activity must be divided into two parts: Bulk Distribution
and Carrier Distribution. In some cases, these areas must also be subdivided
by home delivery and single copy. Newspaper treatment of each subset of dis-
tribution will dictate the applicability of value considerations.

KEY CONSIDERATIONS—DISTRIBUTION

Compliance & Risk

• Recent changes to D.O.T. hours of service regulations have exposed many

newspapers to the risk of non-compliance from part-time drivers.

• In order to simplify driver hiring, many newspapers use trucks rated below
26,000 pounds gross vehicle weight. At the very most, these trucks can
haul 10,000 pounds worth of product. (For newspapers, this means five (5) pal-
lets, ten (10) carts, or about 350 bundles.)

• Tail-Loading. . . the practice of placing smaller straight truck loads onto

the tail of the bed to speed unloading. This practice, combined with light
springs and single rear axles, leads to the dangerous situation of headlights
projecting too high on outbound loads, and too low on return.

• The combination of an illegal driver, an overweight truck, and an accident

can be extremely costly.

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 F I N D I N G T H E VA L U E —
D I S T R I B U T I O N O P E R AT I O N S (CONT.)

KEY CONSIDERATIONS—DISTRIBUTION

Distribution Utilization
Operations
Since most of the parameters of bulk distribution are dictated
by the links before and after this piece of the supply chain, the
resulting equipment and driver utilization must be explored as
an opportunity for gain. The following graph illustrates a typical utilization
graph for a mid-sized newspaper fleet. The graph reads left to right over a
time period of one-week, showing trucks in use as black bars.

SUN MON TUE WED THU FRI SAT

4 8 12 16 20 0 4 8 12 16 20 0 4 8 12 16 20 0 4 8 12 16 20 0 4 8 12 16 20 0 4 8 12 16 20 0 4 8 12 16 20

Truck #01
Truck #02
Truck #03
Truck #04
Truck #05
Truck #06
Daylight

Daylight

Daylight

Daylight

Daylight

Daylight

Daylight
Truck #07
Truck #08
Truck #09
Truck #10
Truck #11
Truck #12
Truck #13
Truck #14
Truck #15

Daylight hours are shown in yellow, revealing that 11 of this 15 truck fleet are
available for further utilization during prime commercial hours. Additionally,
this graph illustrates the potential for small time gains to allow a fleet reduc-
tion. This graph focuses on bulk distribution. Is this the tip of the iceberg?
The key to leveraging this potential is information.

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 F I N D I N G T H E VA L U E —
D I S T R I B U T I O N O P E R AT I O N S (CONT.)

KEY CONSIDERATIONS—DISTRIBUTION

Distribution Information
Operations
Information is the thread that binds the entire newspaper sup-
ply chain. Newspapers have histori-
cally been leaders in information ex-
change process and technology inside the walls of the
production facility. Unfortunately, this technology
and process usually leaves distribution with a printout.

Because each newspaper has different strategies,

needs, and priorities, information is the key to improvement within the distri-
bution link of the supply chain. Until recently, only two measurements were
common or necessary within newspaper distribution: 1) Did the job get done?,
and 2) Did they meet budget? Further integration of the information flow was
simply too costly to be warranted. The increasing
complexity at every step
of distribution made fol-
lowing the data difficult,
From plant to
if not technologically DC to Carrier to
impossible. Reader

Times have changed.

Jumping directly to GPS

based dynamic carrier routing with
real-time product delivery confirmation
is not a realistic or advisable next step for most
newspapers. The future of this type of need; however, is undeniable.

The best place to start is bulk distribution, where first-rate data, combined with
measurements to form management information, can yield fast results. Start-
ing at this point makes the information set manageable. This first step also al-
lows experience with what type of information will be most valuable when
considering an expansion of measurement inside the distribution link.

© 2006 P3L, LLC 18

 F I N D I N G T H E VA L U E —
D I S T R I B U T I O N O P E R AT I O N S (CONT.)

POTENTIAL METER—DISTRIBUTION OPERATIONS

Financial Gain—scope defines potential, but one

Distirbution average newspaper truck can save over $2,000 an-
Operations
nually with a 1 mpg fuel efficiency improvement

Ease of Change—outside forces can affect change

here, but most initiatives will improve workflow
and conditions, easing transition

Positive impact on other links—Adding quality distribution information

into newspaper’s management toolbox can unlock potential in every
other link in the supply chain

Start Time Control—controlled by news, advertising, and packaging

Process Time Control—the tools, equipment and processes used by dis-

tribution can have dramatic impact on the total process time

End Time Control—while any end time gains can be traded up and
down the supply chain, improvements in process time will yield imme-
diate results here

POTENTIAL SUMMARY—DISTRIBUTION OPERATIONS

Overall Potential Rating—Risk and utilization are major factors in

finding value within a newspaper distribution operation. Information
Good
is key to unlocking the potential of these factors. Improving utiliza-
tion will improve risk. Whether the opportunities revealed by better informa-
tion are internal or external to newspaper operations, better used trucks mean
better used drivers. Better used drivers mean less turnover and less risk, more
efficiency and more potential.

Ratings Key:

Poor Minimal Fair Good Excellent

© 2006 P3L, LLC 19

 TYING IT TOGETHER—
S U P P LY C H A I N I N T E G R AT I O N

While individual value can be gained from examining each link in the newspa-
per supply chain, the real value is in the big picture.

BASI C NEWSPA PER SUPPLY CHAIN

Advertising &
News
Press Packaging Distribution
Operations Operations Operations
Newsprint &
Ink

INFORMATION

Balancing time and workflow across

the supply chain will yield the largest
results. SERVICE

The key to unlocking this COST TIME

potential is the availability
of information. While efficient, system wide information capture
will take time and a step-by-step approach, gains will be realized each step of
the way.

A dynamic cost and process flow model of the newspaper supply chain will be
essential in keeping pace with changing needs and demands within the news-
paper industry.

© 2006 P3L, LLC 20