ROI PRESIDENT'S LETTER

Edition 22 June 1, 2006

It is time for my quarterly update to you, our partners in business.
The President's Letter "Summer 2006" from ROI

Has anyone seen PAT? For those of you who are not familiar with "PAT" it is the "Project Attack Team", created by our customer service department in an effort to assure that no one has a workload that will jeopardize the commitment to our customer. This is how it works. Each account manager posts their daily activities. Those with available times will assist others with some of their assignments to relieve the workload. This is certainly oversimplified, but the real point is they are working as a team to assure that no customer is left behind. P.S. this was their idea and I am proud to say that I think it is going to work well.

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Manufacturing is under tremendous pressure to produce at lower cost. At an open house of a major supplier, an executive with Proctor & Gamble made reference to lower prices on five occasions. The message is loud and clear if we do not become a low cost producer the manufacturing jobs in America will go overseas to nations without minimum wages, few if any benefits, no environmental regulations, and health care far inferior to that which we are accustomed. Enter Lean Manufacturing. Over the past several decades we have seen TQM, ISO 9000, Six Sigma and various iterations of quality assurance and productivity improvement programs. Today I am pleased to announce that ROI has embraced the Lean Manufacturing program that combines elements of all past programs and concentrates on continuous process improvement with the involvement of all employees of the company. Every area from administration, sales, customer service, purchasing, shipping and receiving, and each manufacturing department will be critically reviewed by those working within the department. Substantive short term goals are developed and individuals/groups are held accountable for their implementation. Continuous improvement is our key to a secure future. We are looking for a young person with compatible skills to facilitate this program-referrals are greatly appreciated.

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ROI has been described as a 'wide web' pressure sensitive label printer or a medium to short run 'narrow' web roll film converter. In two previous customer surveys, a common response to the question of "how you would like to see ROI change" was "we wish you were a wide web printer." Times are changing! ROI has placed on order a 43" wide eight color CI press with one print unit downstream (either front or back side in register) and a gravure laminating station. This press is equipped with turret unwind and rewind to allow for continuous running. While our target has been the short to medium run roll film market, we will now be able to serve our customers better in the medium to lower end of the longer run market. This press will also allow entrance into the high quality roll paper market. Oh- did I mention it is a servo-driven press, thereby guaranteeing exact repeat lengths; film snap-back is minimized. Watch for news in the next issue since installation is scheduled for the winter of 2006.

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Proofreading - a lost art. Unfortunately in today's electronic world the traditional concept of proofreading and use of the universal proofreaders marks have all but disappeared. This is still a critical issue and one that is often misunderstood. When 'native' electronic files are presented to your supplier, he must convert those files to a data file compatible to the software of his operating system. One cannot assume when transferring one file to another all data will be correct unless you have prepared that file to the specifications of your vendor. An example of one such situation is where a file is submitted to a flexo printer in Quark (this is a page file for offset), and must be converted to Illustrator to prepare for flexo. Text will often 'reflow', and elements may be lost or covered by another layer - the end result is a copy other than what you submitted. Two critical points - 1) Always read or at least 'line slug' the proof you receive; 2) Encourage your graphic supplier to contact FlexGraphX, the prep operation supporting ROI, for instructions on how best to prepare a file for flexography.

Market Survey - the following excerpts were taken from a recent survey of 120 CPC's (Consumer Product Companies) by the Flexible Packaging Market Research Group:

* "Customers expect suppliers to increasingly offer innovative solutions tailored to their own requirements and product marketing plans."

* When asked to rank service, price, delivery time, and quality - price continued to remain the number one factor. The rankings were dependent upon the market segment and consequently those markets less sensitive to 'commodity' products often ranked pricing further down the list.

* Flexo quality is closing the gap with traditional gravure and offset print markets. Therefore, other inherent core advantages of flexo allow the printing process to experience steady growth as print runs lengths decrease, the number of SKU's increase, and faster turnaround is the norm.

* There exists continued pressure to 'get to the market' with promotional market strategies. More simply stated, "We need high quality with fast turnaround in order to address the sudden market changes."

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An exciting event took place this spring where key management personnel of ROI along with outside expertise joined in a 'Long Range Planning' session. Our first task was to take a critical look at 'who we are,' not 'who we think we are or who we want to be.' This exercise was no holds barred and intended to be a constructive critical look at operations, organizational structure, and markets served or not served that would create opportunities for ROI. The session lasted for two days and everyone departed 'drained' but energized and empowered to make changes that would allow us to become a stronger company in the future. We have an excellent reputation and a bright future if our concerted efforts target our customer needs.

It has been three years since our last customer survey. The feedback from these surveys was instrumental in changes that were made to strengthen ROI, both internally and externally and to satisfy and better serve our customers. We have recently sent out a survey which is administered by an independent firm. All responses are summarized and reported to the executive committee of ROI. Individual notes are appreciated and included in the summary data. Summary data will be provided to all who received the original survey and will be accompanied by a letter from me outlining the action to which we are committing in response to your issues, either positive or where improvement is necessary. I want to thank you in advance for taking the time to complete the survey.

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Our annual sales meeting took place this past March during which supplier presentations were targeting new product that would support efforts in the marketplace. In addition, there were technical presentations from outside personnel, as well as discussions of ROI¡¦s vision as seen by our founder (that's me). Several sessions under the guidance of Sid Chadwick were dedicated to market development and sales oriented activities. Sid, a sales marketing consultant, was outstanding and greatly appreciated by all. Thanks Sid!

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A company cannot survive as an 'isolationist', either from your competitors, the industry, or society. I have been a proponent of outside educational opportunities for our employees as well as management participation in activities that strengthen our company and support our industry. I am pleased to announce that George Towle, our CFO (and a partner) has been asked to serve a two year term as Chair of the PIFE (Printing Industries Financial Executives) group. In addition, George is serving as Chairman of the Government Affairs Committee of PGAMA (Printing & Graphics Arts of the Mid Atlantic - an affiliate of the Printing Industries of America). George, thank you for all your contributions to our industry!

Tim Roberts
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