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Qualex: Not Business as Usual



On-Site — The Minilab Scene

Qualex: Not Business As Usual

By Jerry Lansky
December 2001

I frequently get invited to attend a press function with a covey of brethren. A few hors d'oeuvres, a drink, maybe even a complete meal on a good day. Followed, of course, by the host's agenda. A frequent ritual for us trade journal folks, especially at the PMA convention where the ceremony is repeated many times daily. Tough for us calorie counters.
Seldom do I get treated as a 'customer.' I mean getting invited to the headquarters office and enjoying the red carpet starting with a great dinner, presentations by top execs from each discipline, a tour through operations, discussions with managers, Q&A - and the obligatory sandwich lunch at the conference table. Where did this happen? At Qualex, Inc. offices in Durham, N.C.
To be truthful, I was not invited at all. I asked if I could come which made the special treatment even more special. After all, I'm not a potential customer of anything from Qualex, but they acted as if I were on a visit to their headquarters last summer. To me, Qualex had always been an inner-sanctum and, even though they controlled a huge portion of the on-site processing sector and an even larger chunk of the wholesale lab industry, I never felt as though I understood much about the operation.
I now had that chance. I met with all the right guys: De Lelly, President; Bob Williams, VP of OSP operations (OSP: used to be On Site Processing; now, On Site Pictures); Rich Baiardi, VP Qualex central lab operations; John Tatreau, director of OSP marketing/program management; Pete Orsini, director of OSP business development/digital products; and other important folks. George Briggs, another Qualex president, was called away at the last minute.
I trust I will not be criticized for openly acknowledging that I was very impressed with what I learned about Qualex on this visit: the systems that are in place, the attitudes of the people running them and the way they do it give one that feeling. Then, again, would they have been able to build up the central lab and OSP empires that they control without doing a lot right?
That doesn't suggest that Qualex has no detractors; even some of their own wholesale customers openly complain about the quality of their overnight work; their biggest OSP customer has opened the door to the competition.
All is not peaches and cream here in grit-land. The nature of business conditions in general, and at Kodak in particular, being what it is, Qualex is faced with new challenges:
• They are presently undergoing a corporate restructuring which will have the wholesale lab side splitting with the OSP group with one reporting to Rochester, the other to Atlanta. (see sidebar story);
• Walgreen has broken 30 stores out of the Qualex OSP system and will equip these stores with Fuji Frontier digital labs;
• The success of on-site is absorbing rolls into the stores and away from Qualex central labs. Four central labs have been closed within the past year; two more will be closing in the next two months;
• The monogamous relationship between Qualex and Gretag has come to an end as OSP is looking to the future with competing brands.
And these are just the matters of Qualex concern that are apparent to me as an outsider. No doubt their own list is a lot longer.
During my short visit to Durham I was exposed to a vast amount of information - a lot more than my editor would give me space to report on. Let me go through the different areas and report the highlights of each:

Central Lab Operations
Rich Baiardi acknowledged that the on-site labs were growing in roll volume in relation to the number of rolls that were being sent back to the Qualex central lab. He indicated that overnight volume increases when a store puts in one-hour equipment. Traditionally, about 60% of rolls went to overnight with 40% handled on-site. However, this number is shifting to 50-50, he said. As for Qualex volumes, Rich guesses that the roll count may have peaked last year.

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