Houston Chronicle SW Production Plant Transformation and Packaging Project

Centralized Packaging for Hearst Media South Texas Newspapers.

Houston Chronicle, Beaumont Enterprise, Laredo Morning Times and San Antonio

Express-News

• We will be a world class service organization that relies on efficient/optimized processes to insure flawless execution

• Our organization is positioned to deliver exceptional value for our audience/readers, advertisers, and is relied on to deliver the bargained for message

• Customer service and process efficiencies are leveraged to unlock incremental value by attracting new customers

Vision

2

Strategies

• Develop a professional management organization & culture

• Ingrain process discipline

• Implement accountability and measurement systems to insure performance

• Ensure effective utilization of assets/tools/staff to create value

• Install financial discipline at all levels in the organization

• GROW Business - Commercial Print Opportunities (Tune in Tomorrow)

Sunday, Direct Mail and SMC Plant - 163,137 Sf.

South West Production Plant Total SF. – 440,730 (118,320 unoccupied)

Harvey Wilson (East) - 78,845 Sf. Newsprint and Distribution with Rail Spur.

Main Business office 801 Texas Ave. - 498,340 Sf. Office Space 278,290 Production/Industrial 220,050 (phased out)

Facilities

Consolidate Kempwood to Southwest / Improve Performance

Background & Business Case

Project Scope: OVERVIEW

Strategy • Convert fixed to variable costs• Lower the overall cost baseInitiative• Close & sell 160,000 square foot offsite, separate

inserting facility• Relocate all inserting to main production facility• Reduce operating costs by $2+ million annually• Relocate all Texas inserting to Houston

San Antonio Laredo

Prior to Project:13 total inserters• Sunday facility: 3 NP 630 ‘s• Main plant: (1) Double out 2299, (5) 1272P• San Antonio: (1) 2299 double out, (1) 1472 and (1) SLS-1000 17 Head inserter

After project:3 total inserters• One 40-1 double out Magnapack• One 32-1 double out NP-632• One double out 2299

Equipment

Southwest 2nd Floor Packaging CenterOne New + One Machine Relocated and One existing 2299

(1) 40-hopper Magnapak + (1) 632 machine relocated. Existing 2299 location shown. All shown as double-out for flexibility in layout.

55’ – 0”

55’ – 0”

55’ – 0”

40’ – 0”

Double-out632 Inserter

40-hopper Magnapak

Existing Press / Operating Level

Pallet out-feed

ROP Stack / TieLines

Existing FourPallet Lift

Existing 2299

Existing (2) SinglePallet Lifts

Pallet staging

632 Inserter under Reconstruction and Reconditioning

NEW MAGNA PACK 40 Head

2nd Floor / First Floor Pallet StoragePallet Storage Racks

2nd Packaging Level 1st Warehouse Level

90’

212’

Wide-aisle Racks

RemainingNewsprint Storage

Pallet Gravity Staging Racks

12

20

12

16

12

20

12

16

12

12

12

12

Pallet / NewsprintStorage Below

Area for lift truckpicking pallets –move to inserter

1

2

1Pallet Gravity Staging Racks

Project Scope Insert Storage and Barcoding Management

Volume Processed

• 34 million (+) inserts per week.• 1,500 pallet storage in Racks• 76 to 80 unique Pressruns Weekly.• Avg. weekly tons 760 (+), up from 641 last year.• Almost 24 thousand M8PP per week.

Products Produced @ SW

• Houston Chronicle• all related Products• Houston LaVOZ Spanish Bi-WeeKly 400K (+)

• USA-Today• Beaumont Enterprise Daily and Commercial• San Antonio Express-News:

• Sun-Comics• Advances Thu-Fri-Sat and other related products requiring inserting

• Laredo Morning Times:• Sun-Comics• Advances Thu-Fri-Sat and other related products requiring inserting.

Distances covered to ship Insert packages

197 mi

314 mi

95 mi

154

mi

Additionally:Houston prints Beaumont Daily 7 daysSan Antonio print Laredo Daily 7 days

• (6) 12 unit Goss Metroliner Presses (12 Folders)

Pressroom Transformation