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Why Industry Suppliers Need an Association of Their Own

(October 2004) posted on Tue Dec 14, 2004

Questions and answers with NASMA's Chairman of the Board, Graham Cooper


By Tom Frecska

Last March, NASMA became an official trade organization after more than a year of planning and coordination by leading manufacturers in the North American screen-printing industry. Graham Cooper, president of Autotype Americas, Schaumburg, IL, and chairman of the board for NASMA, recently spoke with Screen Printing magazine about the factors leading to the association's formation and the goals toward which the organization is gearing its activities. The following comments are highlights from that discussion.

SP:

What is NASMA?

Cooper:

NASMA is an association of manufacturers within what we term the specialty-printing industry. It is an association that has been formed to provide manufacturers with a forum to legally and ethically cover issues of interest to them--a forum which did not, until this time, exist. Our goal is to serve and represent the unique interests of manufacturers of equipment and consumables for screen printing, digital, pad printing, and other imaging processes. Clearly, as manufacturers, we recognize that the ultimate success of our businesses is based on our ability to serve customers effectively. We believed, as a group, that there was merit in forming an organization that could focus on issues that either could not be dealt with on an ad hoc or unstructured basis, or could not readily be addressed within the existing structure of the Specialty Graphic Imaging Association (SGIA).

SP:

How did formation of the organization come about?

Cooper:

The initiative actually came from Europe. It began with representatives from the European Specialty Printing Manufacturers' Association (ESMA) inviting a number of North American-based manufacturers to come together and have an exploratory meeting to talk about what ESMA is up to and what they've achieved. ESMA was interested in the benefits that might be achieved in terms of expanding its membership into North America. This was not about a bunch of strangers coming together--a bunch of Europeans sitting down with a bunch of Americans and saying, "Okay, here's a good idea: Why don't we form an association that you can be involved with?" It involved American-based companies, as well as companies that are active members of ESMA and leaders in the North American industry.

The initiative by ESMA began about 18 months ago. It led to an exploratory meeting where a substantial number--by which I mean probably close to 20 potentially interested parties in the US--got together to discuss and hear more about what ESMA does and to discuss the benefits and the possibilities of forming a similar association in North America. In that meeting, there was a consensus of opinion that this was a worthwhile initiative.

Those present at that exploratory meeting was strongly of the view that if an association were to have any value to the North American industry and its manufacturers, it needed to be very much a North American focused and organized entity from the practical, the market presence, and the market-reach points of view, as well as from the legal and regulatory point of view. So that was the spark, or the genesis, of NASMA. From there, the group of manufacturers who had come together and discussed the scope and opportunity for this organization formed a small steering committee, which, over the course of 2003, was engaged in the process of looking at how to structure the organization legally and financially.

NASMA is clearly a voluntary association in the sense that this is intentionally an organization that will function for its members by its members' activities. Harold Johnston [formerly of Nazdar] is the executive director and is the only paid employee of the association. His roles are largely administrative; the would-be members were quite clear from the beginning that this would be an organization in which the members' interests drove the organization.

So that was really the process we went through in 2003. A few members served in the role of a steering committee. The project's culmination was the formation of NASMA early in 2004, which included legal incorporation, the formation of a board of directors, and the formal signing up of member companies. In March, we had the first meeting of the board of directors. There, we started to chart the course that the organization would follow, where it would focus its activities, and how it would go about doing these things.

So ESMA was the catalyst. However, the new organization has been formed with a quite different, or independent, set of goals and objectives to those of ESMA.

SP:

Why do NASMA members feel that an independent trade organization is needed for manufacturers serving the specialty-printing industry?

Cooper:

The idea of an independent organization has, I think, been discussed from time to time over the years. But I'm not aware of any prior occasion on which effort was made to organize a manufacturers' association. Many of us have had personal experience with manufacturers' associations in other industries. So it was clear that it might ultimately serve this industry's interests to provide a forum where manufacturers can get together and talk about issues in a legal and ethical format.

So there was an opinion throughout the potential membership that a forum was needed in which issues of specific interest to manufacturers could be addressed. We did not feel such a forum existed.

Most of us are members of SGIA, and I think almost all of us would say, as members, we get--and we believe that printers get--very good returns on their membership investment. Manufacturers see SGIA in many ways as a value-creating or value-providing organization. Nevertheless, one area in which we did not see that to be the case was in providing an opportunity for manufacturers to sit down and talk about things of specific interest to them. The sense that there would be opportunities or benefits to be gained by a separate organization was pretty universal, I'd say.

SP:

What are the primary goals of NASMA?

Cooper:

Our vision is that NASMA should represent and serve the unique interests of manufacturers of equipment and consumables for the specialty-printing industry. That's our simple, overall goal. We think that as an organization, our activities should ultimately focus on benefiting the specialty printer. This is driven by the harsh reality of commercial interests. We've certainly not formed this organization to impact or impede each other's competitiveness as players in the market; we want to look for opportunities to do things or develop information that may be of interest to the manufacturers and ultimately will redound to the benefit of the printer.

The areas in which we would see an association as having value are in in-formation collection and dissemination to its members. The obvious aim is to equip members to be better advised, to improve their forecasting and planning, and to improve their understanding of customer needs, market changes, and so forth. Information is a key area.

Other areas in the future that we may look to engage in could be things like technology assessments--again information gathering--changes in technology, trends, etc. Possibly, we may also represent manufacturers in advocacy terms at the national or policy-making level.

I'm intentionally staying away from a catalog of specific things because, by nature, the organization will tend to move from one to another focus over time. The focus will depend on a number of factors, some of which are related to who happens to make up the membership at that time, others of which may be related to external variables.

SP:

How will the group ensure that its functions aren't redundant with those of SGIA?

Cooper:

Redundancy is bound to be the enemy of NASMA, because it is quite clear that unless the membership perceives a value and benefits in membership in NASMA, certainly the members will not sustain the organization. Therefore, to the extent that NASMA members are almost universally members of the SGIA, redundancy would be clearly and rather easily visible to them. That, I would say, is the most pragmatic or practical brake or constraint on NASMA becoming duplicative or redundant.

Because the members are members of both associations, it also is clear that we, as members of SGIA, have good visibility of what SGIA is doing. So, again, there's not guessing in the dark: "Oh, I wonder if they're working on that?" or "Would this be of interest to them and are we treading on work that's already being done?" I don't want to say "treading on toes" because this is not about sensitivities, it's just about practicality.

The question comes down to fine tuning the activities of NASMA in such a way that they are not seeking to duplicate or cross over, except in a positive and additive sense, with what other organizations, such as SGIA, do. Take the issue of health and safety and compliance. SGIA does a pretty darn good job for the association members. But it may be that there are particular health and safety or compliance issues that are more relevant--or only relevant--to the manufacturing community because [manufacturers] happen to be at a different stage of the process compared to the print producer. Therefore, one could imagine an entirely complementary health and safety focus within the manufacturers' association that looks either at the same issues from a different perspective, or more likely, at different issues altogether.

SP:

To what degree is NASMA being modeled on ESMA?

Cooper:

The structure of NASMA as a members' association where the members are the active participants is very similar to ESMA. The focus of activity and initiatives undertaken by NASMA are reached on essentially the same basis as in ESMA, which is through the board of directors deciding on things that require follow-up and on activity by the members.

Like most similar manufacturers' associations, the success of what the association does depends entirely on the proactivity of the members. This means that from time to time, the association may be more strongly focused on one particular area than on another, often depending on who the individual prime movers are. If somebody has a strong interest in whatever particular topic of interest--let's say health and safety-- and this person gives of their own time to promote that interest, then you may well see that that association will be very active in the area of health and safety. Again, the rise or fall in the importance given to topics depends on the push from the membership. So NASMA is a very similar to ESMA in terms of how it lives and breathes.

That being said, ESMA is a quite independent organization, formed obviously under European law. We are formed under US law, incorporated in the state of Missouri. But we have an open and friendly working relationship with ESMA, which is to be expected given the international reach of many of the members. And we have a structure that permits both organizations to be represented at board meetings and assembly meetings of the other organization, in a voice but no vote kind of mode. Specifically, an ESMA chairman or NASMA chairman would be able to attend the board meeting of the other organization, hear what's going on, and express ideas, but without the ability to vote. We're not members of each other's organizations, but we have a structure that allows us to be in close contact.

SP:

I understand that one important project NASMA plans to undertake is a series of "Market Metrics" studies. Can you describe what these studies will entail and how members expect to benefit from them?

Cooper:

The area of market metrics is regarded by many of the members as one of the most interesting potential benefits to be gained from membership in this association. It is common among trade associations to have data shared by member companies in an appropriate form that enables the member companies to understand, with greater numerical accuracy, the size of the market, the size of market sectors, trends, and so forth. While there obviously are a lot of industry surveys done through other organizations, our intention is to work toward an environment in which member companies submit data and receive the aggregated industry data from all the members to give them a greater degree of measurability against the industry, and various components of the industry, than currently exists.

If you look to any one of our individual companies, our own perspectives on market size, market trends, and market shares are very subjective. There is an absence of a metric that enables us to say that we believe the industry is this big and that we are this big. Market metrics gives us some sort of measurement. Right now, it's very difficult to determine market size with a degree of accuracy that is instructive to decision making.

Market metrics is one of the first initiatives that NASMA is working on. It will ultimately take the form of regularly updated information brought in from member companies and aggregated into a market report that each of them will get on a regular cycle. Because this project is still in the early stages of development and a large amount of work must be done to put this together, I would not want to say that this report will be delivered to members every 90 days guaranteed, come rain or shine. The first phase will be a limited project in its reach. It will be an attempt to create a baseline of where the industry stands. Over time, the data will gradually be developed and refined.

SP:

How will the studies be conducted and the data managed to prevent any single member from gaining a competitive advantage over other members serving the same markets?

Cooper:

This process is in development. The overriding requirement is that the data have to be relevant to member companies. A lot of work has been done by a subgroup of members who are working to form meaningful categories of industry breakdown and to form meaningful categories of product or product type so that the members would all have data that are expressed on a consistent basis. The reality is that if you go from company A to company B, their definitions of market and sector might vary, one to the next. So there's been some ground work done to get those sorts of definitions and industry classification clarified.

The requirements of this project are that it is to be conducted in a very proper environment and that it is not to be done in such a way as to compromise the privacy or confidentiality of a particular manufacturer's data. Clearly, this is going to be a short-lived process if, through the dissemination of industry information, some competitor can determine what another competitor's sales are or another competitor's profits are, or anything of that sort. We presently are at the stage of developing and structuring the reporting and data-management attributes relative to the market metrics activity. I can't tell you how we're going to do it, because at the moment, we are still looking at a number of options.

SP:

What role will NASMA serve in regards to the regulatory and health and safety issues faced by its member companies?

Cooper:

We're still in the early stages in terms of the formation of projects, but health and safety is definitely an area of interest. The process of defining specific objectives involves gathering ideas, gathering concerns, gathering requirements, sifting, filtering, and then determining whether there exists a core group of interests or needs that can be usefully addressed by the association. This process is not just peculiar to health and safety; it would be the modus operandi for any decision to ask the members to actively engage in a project. I would simply say that health and safety needs, requirements, and opportunities are an area undergoing very active assessment at the moment and will be further developed and discussed at the association's first general assembly meeting in October.

SP:

Will the association sponsor or conduct any events for producers of specialty graphics?

Cooper:

The answer is that this is not foreseen. It's not precluded by any hard and fast rules that state we won't do that. However, the organization has not been formed with that kind of specific defined objective. So if we tear the covers off this and say, "Are we about to start putting together a show to compete with the SGIA?" the answer is patently obvious--no. That's not part of what we're about. It takes quite an administrative infrastructure to undertake something like that. This is an organization where the cost of membership literally needs to be only that which it costs to actually administer it effectively. After that extent, there is really no commercial drive here that says, "Well, we need a revenue producing property," or anything like that.

SP:

What other functions and projects does the organization plan to tackle?

Cooper:

There's nothing I can point to specifically at this point. Obviously, an organization of this sort needs to attract members who not only want to associate with it but become actively engaged with it. When it is a virtual organization, as it was, and when it is a fledgling organization, as it is now, with lots of ideas and possibilities, but nothing very tangible to show, it is somewhat difficult to sell the benefits to certain potential members. The absence of a well-detailed, bullet-pointed catalog of projects does not imply that the association is of no value, but instead is indicative that the association is in the formative and direction-setting stages.

Clearly, our goal is to be able to demonstrate to manufacturers the benefits of membership in the association. To demonstrate those benefits, we have two choices: we either discuss the virtual organization and get people to sign up to an idea, which is basically what happened with the original core group of members, or we begin to have tangible things to show. In that respect, we believe that market metrics will be a tangible product that, eventually, will be available to members and be a reason that some people decide this is a good organization to join.

SP:

The companies that spearheaded NASMA and most of its early members are predominantly associated with the screen-printing industry. Why did NASMA choose to identify itself as a "specialty graphics" association and also court manufacturer members from outside screen printing?

Cooper:

Selling a virtual organization to the screen component of the membership was somewhat easier than selling it to other groups. That's based on comfort factors, if you like. The companies represented at the first get together for NASMA were predominantly involved in the screen-printing industry, just the way that ESMA is in Europe.

As manufacturers to the screen-printing industry and as manufacturers to the specialty-printing industries, most of us recognize that the industry definition has to be broader than screen printing because screen printing was never an industry; it was a process used in all sorts of industries. To the extent that so many of our existing members also are actively engaged in the digital world, and to the extent that the traditional screen-printing turf is also a major hunting ground for digital suppliers these days, we believe it's appropriate that NASMA should ultimately be seeking to create an association that represents all of them. Our goal is not just promoting screen-printing technology, but rather, focusing on the interests of our customers, the success of whom will ultimately drive our own success. We're very keen to get the digital guys into the fold, and not just those who also have screen-printing arms to their business.

As you've seen, the roster is starting to grow. Our expectation is that by the end of calendar 2004, we'll be at or around 30 members. I think as we begin to add more tangible signs of value for the membership, we will see an increased interest from other manufacturers in the specialty-printing and screen-printing fields. With membership rising, we're on our way to having a solid core of membership. It is dominated by screen printing, but we've got some substrate and digital equipment companies as well. Diversity will expand, and this diversity of membership will greatly enhance the development of the market metrics program and other initiatives.

SP:

Are there any final comments that you'd like to make about NASMA?

Cooper:

The success of a voluntary association of manufacturers depends on the manufacturers wanting it to be a success, seeing benefit in it, and engaging in it. I saw NASMA as a value-creating thing that was good for my business. Ultimately, it will be good for my business because, if we operate this association effectively, it will be good for the specialty-printing industry at large. I am very encouraged so far. We have a group of companies here that are motivated, want to be actively engaged, and see this is as a great opportunity. While there are practical challenges and concerns, they don't detract from the very optimistic sense among members that this can be a very useful organization for manufacturers in North America.

Editor's note: To learn more about NASMA, its current member companies, qualifications for membership, and details about projects it is conducting or planning to conduct, visit the association's Website at www.nasmaonline.org.


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