We're not driven by quarterly earnings, although that's important," says Daniel E. Hickey. "We do look toward the long-term growth of our industry and our customers' needs. That's what makes us special."

Hickey, executive vice president of sales, marketing and new product development for Smyth Companies, Inc., is talking about what separates the St. Paul, Minn.-based package printer and labelmaker from the competition. "At least three of our owners [himself included] are active members, and this is our daily bread. We've seen a number of public companies that have come and gone in the packaging industry. We're not a conglomerate; we're dedicated to this business."

That statement stands out, particularly this year as Smyth Cos. celebrates 125 years of continuous operation. Founded as a book printer in 1877 by Henry Martin Smyth, the company has evolved to become a $90+ million national converter with 550 employees. Its plants include four Minnesota locations, a Bedford, Va., facility, and a contract-labeling operation in Golden, Colo. Smyth now ranks as one of the top 75 printers in the country and the No. 4-ranked primary-label maker.

Smyth's capabilities run the gamut from complete package and label graphic design and prepress services to printing and finishing. It serves the country's largest retail consumer-goods makers (as well as a growing private-label market) with primary labels, on-pack and in-pack promotions, coupons, game pieces and point-of-purchase displays. True to its foundations, the main printing process remains sheetfed offset, although web-fed flexo is also a significant part of the mix.

Five Komori Lithrone 44 sheetfed offset presses are the heart of Smyth's St. Paul headquarters' pressroom, toured by Converting on a recent visit. Three 6-color plus tower coater systems were purchased in the late 1980s. The wider 44-in. format better fits Smyth's primary-label printing needs. Two 8-color presses were installed in the late 1990s; one of which was the first U.S. application of an RP Model with a reverse-side print station. All presses are outfit with Sentinel ink-management systems from Accel Graphic Systems using INX Intl. cartridges.

The history of Smyth Cos. is one of constant innovation (See sidebar). That attitude lives in a range of business ventures the converter uses to grow and respond to changing market dynamics. Among the developments are a revitalized combined-label program, a high-tech solution to the problem of mixed-label shipments and a startup sister company—the Interactive Packaging Group.

"We know that the roll-fed side of our business is in the growth mode," Hickey says. "Sheetfed, we're just very good at it. We're exploring new technologies, but we're dedicated to growing those areas that we do best right now."

That includes serving the expanding private-label field. A major drive in this area was the 1988 acquisition of Piedmont Label, which has since become Smyth's Virginia facility. Smyth had always been a player in that market, but never a large one. The strategic buy thus gave the converter a regional presence with an established firm doing 60 percent of its business with private-label packagers.

The Shared Materials And Run Time program—or SMART—is one of Smyth's latest business ventures that exemplifies the importance of private labels to the company. SMART serves customers that typically order less than 100,000 labels at a time by printing them together with other customers' labels on the same sheet. The process can cut costs when the labels share color, ink density and substrate characteristics. The expense for labor and materials for the entire run is shared among the combined brands—sometimes as many as 17 different labels—printed on the sheet.

"The combination label has been in the customer's mind as kind of 'lower end,'" says Bill Orme, Smyth marketing manager. "What we're offering is all the amenities that go to national brands." Via SMART that includes a total digital workflow for label production, finishing and distribution. "Everything was designed to be economical but automated and high quality."

While combination labels aren't a new concept, "it's a repackaging, a new marketing effort to give our program its own face and differentiate from the competition," Hickey adds. "What's really different is the e-commerce portion of it."

Through Smyth's Web-enabled, online system, customers can place orders, track the status of an order, maintain and even authorize releases from inventory. The multi-year, $2 million e-commerce project came to fruition recently. "When a buyer goes on their customized extranet site, they're looking at the same information that our customer service people use," Hickey says. "The digital workflow is critical as well, and that's new, all the way from design and prepress through CTP. That's really unique."

The hardest part of having the e-commerce capability now, say Smyth managers, is not knowing completely what its customers are capable of doing. Are they Web-enabled enough to take full advantage of the benefits? "In a lot of ways, we're far ahead of them," Hickey says.

"Some people just like doing business the old way," Orme adds. "As a supplier, you have to do business every way that a customer might want it done. If we can steer more of our customers toward a totally digital workflow, it benefits us both in terms of cost containment, time management, etc. However, we have to realize that many of our customers like the more personal aspects of working through traditional avenues."

Mixed shipments are the bane of label printers everywhere. At Smyth, roughly 60 different varieties of labels are printed everyday at its St. Paul headquarters plant alone. Add to that the confusion that might result from 15 different labels being printed on the same shared SMART sheet. Obviously, checking shipping cases to ensure that label bundles aren't mixed is a top priority.

Enter the converter's new $1 million Vision system, which went into operation in February 2001 after about three years in development. The proprietary union of scanning software and machine-vision technology (affectionately referred to as the "Hubble" camera) "sees" if each case contains only one type of label. Beyond reading simply differences in bar codes, it is sophisticated enough to catch the subtlest variations between labels. Cases that don't pass muster are rejected to a repackaging area.

"The system has helped us lead the industry," says Tony Zagaros, director of post-press operations. "We're giving people the tools they need to do a better job."

An added benefit of the inspection arrangement: a four-color representation of the label in the case, along with plant destination information, is printed and applied. Codes on the shipper label help sort cases, automatically directing them to the right pallet.

Mislabeled products ending up in customers' warehouses (or worse yet, on retail shelves) represent a huge liability issue. The potential for harm from food allergies via a mislabeled product is only one example.

"When we sat down and justified the capital expense [of the new Vision system], it wasn't justified on cost savings for us by any means, or productivity or efficiency," Hickey explains. "The savings are definitely in reducing our liability, and therefore increasing the service and quality provided for the customer."

Thinking through a problem and having the means to solve it—that's the idea behind Interactive Packaging Group, Smyth's third major venture. The concept for IPG came about from Smyth's broad capabilities, promotional labeling emphasis and its equipment division's patented technologies that provide high-speed on-pack and in-pack promotion application.

IPG offers packagers a single source for any label type and label-application method, as well as contract-labeling services from its 100,000-sq-ft Colorado plant. Some of its proprietary projects include 30 million pre-labeled lids for refrigerated-dough canisters, integrating p-s labelers to apply peel-off back label game pieces at 300/min, and units inside vertical form/fill-sealers labeling 100 million cereal bags a year.

IPG was also set up as a "virtual label company," meant to pool the knowledge resources of both competitors and Smyth Cos. to develop packaging solutions. "You're talking about a business that doesn't have a lot of iron," Hickey says. "It's more in the technology and intellectual-property business."

Creativity in adapting to changes is Smyth's hallmark, according to chief executive officer David Baumgardner. The shift from large presses and long print runs to nimble operations capable of meeting JIT demands of smaller runs is only one example." We're providing customers with lower total costs," he says, "versus lower unit costs. In the past, there's been too much emphasis on lower unit costs—half a cent less per label."

IPG is evolving, Baumgardner says, as an example of a new way of doing business by letting Smyth concentrate on its core competencies. "We can then outsource to do business in areas we don't want to invest heavily in since overcapacity can be a problem."

Hickey sums up: "In daily business, somebody's going to come to you with something you can do without question. At other times, they say, 'It'd be nice if we could do this.' That's when you have to get creative."

The creativity shown by Smyth Cos.—now and over the past 125 years—should keep it in excellent shape to handle the challenges of the next 125 years.