An Interview with Jim Dunn, President of Heidelberg USA Part 1

By Cary Sherburne, Senior WTT Editor

January 24, 2005 -- James Dunn was appointed president of Heidelberg USA in July of 2004, following the departure of Niels Winther after 30 years of employment with Heidelberg. Dunn brought with him extensive market and company knowledge, having held numerous positions throughout the Heidelberg community spanning more than three decades of service and leadership around the globe, including President of the Heidelberg Americas shared services division and Chief Financial Officer of Heidelberg Web Systems (now owned by Goss).

As 2005 begins to unfold, Dunn spoke with WhatTheyThink Senior Editor, Cary Sherburne, in this two-part interview, sharing his thoughts about what to expect from Heidelberg, and the market in general, in 2005 and beyond.

WTT: Mr. Dunn, thank you for taking the time to speak with us today. Can you talk a little about the high points over the last six months since you assumed this new role?

JD: The first thing I wanted to do upon assuming this new role was to visit with our own people; we have 1,000 people in 10 regions. Many of them I have known for decades, some are new. I wanted to talk to them in small groups, look into their eyes and hear their words about their hopes, fears, concerns, and what are we doing well and not so well.

As a business, we have gone through the same difficulties as the printing industry because it is the only market we serve. I wanted to understand where they felt we were and where they are as individuals. That’s where I focused during the first months, and it was very encouraging. We have a lot of long-time and new people that have great dedication and a great skill level. And now we are making sure they are focused and supported.

WTT: What are you seeing from the customer perspective?

JD: I also visited many customers while I was making the rounds. Many of them have adjusted to market conditions and are growing, profitable and successful—and in some cases even better off than they were before the recession, which was quite a surprise. On the other side, some are struggling or becoming members of the list of companies that are closing their doors.

WTT: Are there specific differences you see between those who are successful and those who are less so?

JD: I see two groups: there are those that have focused on specific market segments, and are able to support the business needs of that market segment. I visited a printer a couple weeks ago—all he deals with is the medical field. Interestingly, he has CSRs (Customer Service Representatives) that have medical backgrounds. They were nurses or people that were in the offices of medical practices, so they could speak the language. He has aligned himself with the medical business and is growing at an incredible rate.

On the other hand, if you are going to be a generalist, then process efficiency is going to be the winner for you. While you do need to make ongoing investments, a substantial qualification is understanding how to leverage those investments, using them to the max. Anyone can spend money, but it is how you utilize the investment you have made that determines your ultimate success.

The success stories stick out like sore thumbs in two categories—market focused or general commercial print that is really good on process.

WTT: Kodak completed the acquisition of Heidelberg’s share of the digital joint ventures in May, with Heidelberg retaining an incentive to ensure that the business continues to grow. Can you talk a bit about your ongoing involvement in the digital business, if any?

JD: It is going well. What is really encouraging is that when I visit a customer that has a Digimaster or NexPress and ask how it is going, without exception, the answer is positive and the customer is stating that the NexPress organization has been first rate.

When we announced we would step out of the digital business, there was some worry on the part of our customers as to whether they would be properly supported going forward, and we were able to reassure them that they would be—and it is actually happening. We are proud to be working with the NexPress team.

WTT: Similarly, the Goss acquisition of the web press business was concluded in August of last year. Is there any ongoing involvement between the two companies other than the agreement for Heidelberg South Africa to distribute the Goss product line?

JD: As you know, I was at Heidelberg Web press, then called Heidelberg Harris, from 1990 to 1992. Those were interesting and challenging times. Today we sit with a 15% ownership in Goss. And in several markets, including Germany, Switzerland, Australia, Eastern Europe, Mexico, Brazil and South Africa, we do sales and service for Goss products. So we continue a good, strong relationship with them. In the U.S. market, many of us have worked with the prior Heidelberg web people for many years, and are long time co-workers, and in many cases good friends.

WTT: As we move into 2005, what’s in the wings for Heidelberg? Are you expecting any major changes during the year?

JD: We expect to see continued improvement and growth of print in the U.S. market, and therefore, our need to support our customers with efficient solutions. The focus is on efficiency as never before, as opposed to more iron on the floor. We put all of our CIM/JDF initiatives under the Prinect platform, and we are concentrating on supporting that area.

You will see some fairly big initiatives in marketing, including January and February open houses in our technology centers in Los Angeles, New Jersey and Chicago, and the opening of our Print Media Demonstration Center, which we’re calling PMDC, in Kennesaw GA. We have been working on the PMDC for a year, and the opening will be a big event. It will be the most complete customer care center in the industry, anywhere in the world, including Heidelberg in Germany. We are putting the finishing touches on now.

Of course, we have Print ’05 coming up, where we will show for first time in the U.S. the Speedmaster XL105 press. That will be the highlight of the show for us. I wasn’t able to attend drupa, so the first time I actually saw it was running in a print shop in the summer. It almost defies your eyes—you see the sheets flying into the delivery and you don’t hear any noise or feel a vibration. It is amazing.

WTT: What Heidelberg U.S. achievements are you most proud of in 2004?

JD: Visiting our staff and our customers, I think we have achieved the ability to understand the adjustments our customers have had to make over the last three years, and we have begun the process of realigning our organization to better meet their requirements.

WTT: What are some of the things you are doing to meet those changing requirements?

JD: A good example is spare parts. This is a back office function, but critical to our business and that of our customers. For better or for worse, machines do fail, and the most simple spare part could be the difference between a machine running or not running, between delivering a print job on time or not. To address this critical need, we moved our distribution of spare parts from Kennesaw GA to Indianapolis. That allows us to pick up an additional two-hour ship window—we can now get a part on a plane as late as 11:30 PM Central time. We can sometimes even process third shift orders from the East Coast. While we already had Six Sigma performance on spare part shipments, that wasn’t good enough because the environment changed and we had to change with it. You can imagine that moving thousands of spare parts from Kennesaw, Ga., to Indianapolis was not without its challenges, but the results have been excellent.

Watch for Part Two of this interview tomorrow to find out what Heidelberg has on tap for 2005.

This Interview was conducted by Cary Sherburne. She can be reached via email at cary@sherburneassociates.com, online at www.sherburneassociates.com and by telephone at 603-430-5463.