Printer-Friendly Version     More by Rita Tiefert Automatic Forms Ltd. reinvents itself by taking on new technologies and launching another company. Automatic at a Glance Automatic Forms and its sister company SpectraDynamix are headquartered in Montreal in a 16,000 square-foot facility. Automatic also maintains a 5,000-square-foot sales office in Toronto and a small satellite office in Ottawa. The company rents warehouse facilities in Montreal, Toronto and Vancouver for forms management and distribution services. Its customer base is largely centered in North America. The management team includes the following people: Travers W. Emms, CFC, honorary chairman. Karl Graham, CFC, president. Pierre Durocher, CGA, controller. Chris Stride, CFC, director of manufacturing and logistics. Elizabeth Prime, CFC, sales manager of Quebec branch. Pearl Nip, sales manager of Ontario branch. Catherine Xu, graphics and production manager. Karl Graham's cabin cruiser is named Paperless-evidence of his humorous take on the future of business forms. It's also a symbol of success for Automatic Forms Ltd., the Montreal-based distributorship where Graham serves as president. In an industry awash in technological changes, the company has managed to do much more than simply stay afloat. Adjusting to change hasn't been automatic at Automatic. It has taken smart employment practices, targeted investments and careful strategizing. Setting Out to Sea When Automatic was founded in 1958, the distributor concept in Canada was in its infancy. The company created specification and order standards from scratch and sought out vendors. One of its top manufacturers was located 350 miles away. Long-distance phone calls were too expensive, so the company sent most RFQs by mail. "As you can imagine, this added considerably to lead times," Graham says. As with many start-up companies, Automatic's management team ate, slept and breathed the business. Though Graham didn't join the company until 1978, after responding to a newspaper ad, he has come to know the story of Automatic's beginning well. "Our two principals at that time, Alistair Mckinlay and Travers Emms, would spend their days prospecting and selling, their evenings writing specifications and invoices, and their nights-often until 5 a.m.-drawing forms in pencil on forms layout charts," he says. In 1966, the company became the 70th member of DMIA (at that time, the National Business Forms Association). "This was a real eye-opener as the company discovered that our American cousins had been developing the distributor concept-and sharing ideas as to how best to make it work-for some time," Graham says. "We did not have to reinvent each and every wheel." Like many distributorships, Automatic decided to focus on value-added services to distinguish itself from direct-sellers. The late John Pidoux, a career-long sales representative at Automatic, and Emms, honorary chairman and the firm's former president, were the 49th and 50th people to complete DMIA's industry training program and earn certification as CFCs. All Hands on Deck Today, Graham encourages all Automatic employees to earn CDC designations. But training doesn't end there. Employees participate in regular role-playing sessions. "We have created sales-call scenarios which are acted out by volunteers, videotaped and critiqued to promote an ongoing improvement in our skill set," Graham says. Employees also attend weekly training meetings where they discuss the best solutions for customers prior to giving price quotes. "We take advantage of the collective knowledge and experience of all attendants at these training sessions," Graham says. During one training session a few years ago, a sales representative wishfully said that Automatic would benefit from a computerized system designed to track account activity in real time. The idea piqued Graham's interest. "I started scratching my head and thinking, 'We can do that,'" he says. "But the technology wasn't available then." He filed the idea in the back of his mind. From 1970 to 1990, Automatic grew rapidly. In 1975, the company launched a sales coordination services department to handle internal support and free up time for outside sales representatives. In the 1980s, the company opened a branch in Ontario. By 1990, the Ontario market accounted for 50 percent of the company's sales. "The 1990s began a roller coaster ride of technology impacting our traditional markets," Graham says. The company's sales of complex, multipart forms dwindled as non-impact printing technologies, such as laser and ink jet printers, entered the industry. Forms became simpler to design and produce, making product differentiation a challenge. Electronic fund transfer became available. "It became crystal clear...that the things we did to succeed for the last 40 years were not going to be enough to allow us to succeed for the next 10-let alone 40-years," Graham says. Adjusting the Course To survive, Automatic reassessed its business approach in 1996. Throughout the year, the company identified and recorded the following assets: employees who were motivated and well-trained, approximately 1,000 loyal customers, a reputation as a good corporate citizen and a creative, well-equipped graphics department. "Second only to its people, the major asset of any distributorship is its customer contact base and [trusting] relationships," Graham says. Automatic also identified its goals-to streamline and maximize return from existing sales and to establish a new group of product offerings with long-term growth potential. To reach those goals, the company undertook a massive overhaul of in-house operations. Automatic set up a virtual private network that, at first, was slow and unreliable. Some employees expressed skepticism. "Would you buy a toaster that broke down three times a day? That's the way desktop operating systems were," Graham says. Eventually, though, technology improved and the company upgraded to DSL lines, enabling employees to exchange encrypted data at high speeds. Graham finally could revisit the idea of tracking the company's accounts in real time. Automatic hired programmers to develop customized software that tracks all sales contacts and projects as they happen, notifies and assigns tasks across the network to appropriate departments, and allows for project review. For example, a sales rep can enter specifications on a "smart" electronic form that prompts for certain information. The information appears as a "task" on the computer of an estimator in the support department. The system also suggests manufacturers for the job. The estimator can use the system to select specific information and generate RFQs. At the same time, the task appears in the graphics department (and the accounting department, if a credit authorization is required). Color proofing equipment and scanners are fully mapped across the network. An employee in Toronto can place a full-color image or layout page on his computer, and another employee in Montreal can access the file and manipulate or edit it using graphics software such as QuarkXpress™, Adobe® InDesign™ or Adobe Photoshop®. The images can be sent directly to film as PDFs. Then, Automatic saves the information, which is categorized by customer and job number, as an Adobe Acrobat® file. The files are housed on a central server with hundreds of gigabytes of storage space and can be accessed from any company computer. Automatic also encourages its customers to install Acrobat Reader(tm), which Adobe provides for free. "The time and cost savings from this are quite dramatic," Graham says. New technologies made business faster and enabled Automatic to centralize its support, graphics and administrative services. "When people work together in the same location, they're able to develop synergy and trade ideas and work together," Graham says. "There's a cost advantage as well because of the elimination of replication." Automatic also limited travel expenses by implementing video conferencing. Adding to the Fleet After streamlining, Automatic set its sights on market expansion. "We decided that the ideal complement to our capabilities and structure would be a new company which would provide marketing and graphic solutions to our existing and future customer base," Graham says. Automatic wanted to branch out into graphic design, digital printing, 4-color process offset printing, image storage and retrieval, print-on-demand, and other services. Rather than overhaul its product line and identity, Automatic launched a manufacturing company. "By creating SpectraDynamix as a separate company, we wanted to avoid cannibalizing Automatic," Graham says. "We wanted to view SpectraDynamix with a clear sense of its performance as a stand-alone company....It's very important to us that our suppliers see us as a distributorship and not someone who gives them overflow work. It's also important that our customers see us as a distributorship because we can bring them better service." Automatic bought short run digital and offset equipment for spot and process color applications, increased its graphics department to serve both companies, and added Web-based image storage so that clients can access their projects online. In addition, the company implemented direct-to-plate technology for offset jobs and direct-to-film for business forms, which it outsources. SpectraDynamix employees were added to Automatic's private network so the two companies could share account information using electronic calendars. "I could view a sales representative's comments made at 9 a.m. from a particular sales call," Graham says. While Automatic has approximately 1,000 active customers, SpectraDynamix has 300. Half of those are customers who have never done business with Automatic, says Graham, who sees crossover potential. "We are delighted and somewhat flabbergasted by how well-received SpectraDynamix and its products have been by our customer base," Graham says. Given SpectraDynamix's growth rate, Graham predicts its sales will exceed Automatic's by the beginning of 2003. He doesn't rule out the possibility of consolidating the two companies. With the industry changes he has seen in the past 22 years, Graham says he has learned to never say never. When the Ship Comes In When asked what advice he would give to other distributors hoping to overhaul their firms, Graham laughs. "Have half a million bucks available," he says. "Have nights and weekends available for the next three years....It's an expensive process." But seriously, he says, "Recognize that the costs are going to be largely hidden costs." If he could start over again, Graham says he would have diversified Automatic's product line sooner. Even so, Graham has no regrets about Automatic's decision to embrace new technology. "It's a decision which has given us an infinitely better chance at growing faster and becoming more profitable and having a longer future," he says. "No doubt about it." He attributes much of Automatic's success to well-trained employees who accepted the new technologies with ease. "After a time, people become like ducks to water," Graham says, "And they don't even remember how they used to do it." Rita Tiefert is an assistant editor at FORM Magazine. Email her your comments at rtiefert@dmia.org.

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