All in the Family

Jan 01, 2005 10:30 PM  By

OH, TO BE VIVITEK!

A start-up of Sun Chemical Corporation, the fast-growing printing supply business has seen its revenue grow from zero to millions in less than one year. And — get this — the Fort Lee, NJ-based company doesn’t have to employ its own sales force or invest in a single warehouse.

As a member of the Sun Chemical family, Vivitek enjoys strong support from the parent company’s existing infrastructure — accounting, human resources, legal, sales and marketing, distribution. Everything Vivitek needed to get up and running fast, efficiently, and cost-effectively was solidly in place when the start-up began operating in fall 2003.

Sun Chemical, with more than $3 billion in annual sales, is the world’s largest ink and pigment manufacturer. The corporation is trying to become a total solutions provider for the printing industry, and Vivitek was born of that strategy. With Vivitek, the recently acquired Rycoline, and other related businesses in its fold, Sun Chemical can offer commercial printers synergistic packages of products used in press rooms: inks, fountain solutions, blankets, safety glasses, measuring tools, and the like.

A HOUSE DIVIDED

Vivitek divides its business into four buckets: chemicals, dry goods, blankets, and equipment. The company purchases chemicals in bulk, brings them into a master distribution center maintained by Sun Chemical in Chicago, then repackages them into different container sizes for shipment to customers or to replenish satellite warehouses.

“We’ve chosen to keep the chemistries in Sun Chemical locations because Sun Chemical has expertise in handling that kind of product and because our warehouses are rated for flammable, combustible material,” explains Vivitek’s operations leader, Jim Putney. Vivitek serves as a sales agent for various equipment manufacturers, and their items are drop-shipped.

CLOSE TO CUSTOMERS

Sun Chemical has more than 70 warehouses across North America. Vivitek can potentially use all those locations, but it keeps inventory only in those six facilities that are closest to its customers: the master distribution center in Chicago, a warehouse in San Francisco, and four other locations around the Midwest.

Vivitek relies heavily on Sun Chemical’s shared services model, with one notable exception. Sun Chemical’s legacy systems couldn’t accommodate Vivitek’s needs for a Web site with an integrated Web store or its differing system of measurement. So, for its IT backbone, Vivitek started fresh with NetSuite, a hosted ERP solution that enabled the new company to get up and running inside of a week.

“Once we’ve got the process down of how to establish a distribution site, it’s easy to do another, because technology is not going to hold us back,” notes Bill Glass, Vivitek’s vice president of business development. “We don’t have to go out and train a lot of people, because the NetSuite system is easy to use. It’s hosted, so we don’t have to invest in servers or IT personnel. All we need to get into it is an Internet connection and a browser.”

DRIVING SALES TO THE WEB

Sun Chemical’s direct sales force currently places about 80% to 85% of Vivitek’s orders. The rest come in through the Web site. Vivitek is trying to drive more orders in through the site, which would allow salespeople more time to focus on selling. “We’re trying to get our direct sales force to move away from entering orders, because that’s non-value-added activity,” says Glass. “We don’t need a salesperson to take an order. Our customer service people can work with a customer’s procurement department to take the orders and process them.”

Orders placed through Vivitek’s Web site go directly into NetSuite. Sun Chemical facilities are not live on NetSuite, so phone and fax orders placed by salespeople funnel into a customer service center in Chicago where they are entered into NetSuite. Putney reviews and approves orders as they come in, chooses the ship-from location based on proximity to the customer and product availability, and then e-mails the order along with any special instructions to that warehouse.

“After an order is approved and I’ve set it up for fulfillment, a picking list is printed out of the NetSuite system,” says Putney. “Once the order is prepared for shipment, the [warehouse] generates a packing list. When the shipment is completed, they will fax back a copy of the picking list and shipping confirmation with tracking numbers on it, then I’ll enter that information into NetSuite to initiate invoicing. Our third-party warehouse is live on NetSuite and can do all of this for us right in the NetSuite system.”

So far, so good. “We’re roughly 97%, 98% accurate, as far as our picking,” Putney says.

Glass anticipates continued double-digit growth for Vivitek and the ability to handle that growth with ease. “The model that we’re using is very scalable,” he says.

Putney agrees, citing the system’s flexibility and speed. “Adding another Sun Chemical location is as easy as adding an inventory location into NetSuite and then putting material on the floor,” he says.

Dana Dubbs is a freelance writer based in Ensenada, CA. She can be reached at ddubbs@pacbell.net.

Chemical Reaction

Sun Chemical has built a fairly robust distribution and sales network across the country,” says Jim Putney, operations leader for Vivitek. His main concern, he says, was how to introduce a new product line into that network. Sun Chemical’s shared services model enables Vivitek to keep chemistries on designated racks within the parent company’s shared warehouses. Similarly, the folks who handle those materials are shared employees. “Our business tends to be very demanding in terms of short turnaround, particularly for some of the chemistry items,” says Putney. “Our master distribution facility for chemistry in Chicago and the third-party warehouse with all of our dry goods in Louisville, KY, are centrally located to our customer base. These Midwest locations put us within two days’ shipping of roughly 80% of the printing market in North America. We’re within three days’ shipping of about 90% of the market.”— DD

VIVITEK INC.

Headquarters: Fort Lee, NJ

Revenues: N/A

Total employees: 7

Phone: (201) 224-4600

Fax: (201) 224-0042

Web site: www.vivitekps.com

Master DC: Chicago

SKUs: 1,500

Volume: 160 orders per month

Third Parties

Dry goods such as cutting knives and masking tape are handled for Vivitek by Kuehne and Nagel, a third-party logistics provider in Louisville, KY. Blankets are cut to order by a separate vendor and drop-shipped. Vivitek’s operations leader Jim Putney explains,“We put those items into a third-party location because the issues with handling those products are nearly non-existent, and because third-party providers have greater expertise than Sun Chemical in terms of security and inventory management of those materials.”— DD

Suppliers

ERP solution: NetSuite Inc. San Mateo, CA

Labels: Certified Data Products, Hillsborough, NJ; iTech Automation, Mundelein, IL

Printer: iTech Automation, Mundelein, IL

Boxes: LabelMaster, Chicago, IL

Containers: TricorBraun, Charlotte, NC