1285 Hamilton Parkway, Itasca, IL, USA 60143
www.teamdls.com

A changing of the guard does not mean a change of fortune for Diversified Labeling Solutions (DLS). As the company ushers in new leadership, this versatile label converter will continue to drive exponential growth with an emphasis on people, technology and culture.

Established by Bob Hakman in 1985, the company’s footprint has expanded significantly in that time. Jim Kersten, who served as CEO for the last 12 years, helped execute Hakman’s vision by overseeing growth to five facilities – four production facilities and a distribution warehouse – conveniently located throughout the United States. Kersten retired at the end of 2022 and passed the reins to Bill Johnstone, who had been serving as COO.

Johnstone boasts more than 30 years of experience in the label and printing industries. Kersten identified Johnstone as the ideal candidate to take over the helm of DLS. With Johnstone’s arrival in June of 2021, Kersten embarked on a detail-oriented succession plan designed to ensure a seamless transition. The plan worked, as DLS continues to deliver for a wide assortment of customers in multiple industry segments.

“A lot of companies don’t even take the time to put a succession plan together, and they miss on that basic governance issue,” explains Johnstone. “What Jim did was very thoughtful, and the fact that he executed the plan in a very seamless way is truly a credit to the way he feels about the people at DLS. He wanted to make sure that the people here were taken care of as he goes into retirement. There’s a tremendous amount of credit that goes to him and the rest of the leadership team – because they all facilitated the transition.”

“Before bringing Bill on board, Jim stated that his goal was to find someone who was going to be a good fit for our culture,” adds James Cirigliano, VP of marketing. “When Bill arrived, we all immediately felt that he was the right person. We instantly felt comfortable with Bill, and that’s what made the transition even easier. In addition to his experience, he has a similar mindset to Jim. We knew this would be a continuation but with some changes and a new style – and that’s what the company needs.”

Kersten assumed the role of CEO in January of 2011. He subsequently guided DLS from $36 million in annual sales to more than $100 million in 2022. Today, the company boasts more than 260 employees across its production facilities in Itasca, IL (headquarters), Reno, NV, Duluth, GA, and Arlington, TX. DLS also has more than 317,000 square feet of production space, with room to grow in its current footprints.

Johnstone has a dedicated team to help him lead the company into what promises to be a bright future. In addition to Cirigliano, Johnstone is joined by Mike Kaufman, VP of manufacturing, Mike Richter, CFO, and John Moberg, VP of business development and estimating. Jamie Poss, HR director, Jason Jonelis, IT director, and Ron Perfetti, controller, round out the senior leadership team.

DLS also works closely with parent company TSC Auto ID Technology, which acquired the Itasca, IL-headquartered converter in 2019. Under the acquisition, DLS remained a separate entity, retaining its name and brand, as well as all of its employees and executive leadership. TSC gained the ability to offer competitive pricing on a wide range of labels and other media distributed through DLS’ national network. Meanwhile, DLS gained industry know-how and a valuable technology partner.

“TSC bought us because we’re a complementary business,” states Johnstone. “They are a technology company that manufactures and sells printers. We produce the supplies, or the consumables, so it’s kind of the razor-razorblade model. That was the initial investment thesis. They’re also very much in global growth mode, so they’re continuing to introduce new products. That’s encouraged us to expand our product portfolio.”

The partnership has influenced target markets for DLS while providing advantages for the company’s current customer base. These markets include, but are not limited to, RFID and linerless labeling. In fact, DLS recently installed a new Mark Andy press equipped with a Tamarack unit to produce RFID labels and tags.

“The partnership has allowed us to be aligned with our parent company while at the same time expanding our portfolio to our longtime, loyal customers,” remarks Johnstone.

DLS plays in numerous end-use markets, as well. The converter specializes in auto-ID and durable labels for the retail, logistics and warehousing sectors. The company has also identified the healthcare market as a viable growth path. While DLS currently offers solutions for the healthcare industry, this segment will emerge as a focus in the future.

Shrink sleeves and flexible packaging are on DLS’ radar, as well. While the company has numerous capabilities to deliver stunning prime labels, that is not the core focus of its customers. Ultimately, DLS will listen to the market.

“At our last strategic planning session, we talked about how we need to be mindful of where these potential growth levers are in the future and where we need to be looking,” says Johnstone. “We discussed making sure we’re doing all the right things in our core business to make sure we’re continuing to drive that business forward as well. We want to make sure we continue to be the best solution for our customers.

“We are market driven,” he adds. “We want to be where our customers need us to be, and that informs a lot of our decisions. A lot of the labels we produce are used by some of the biggest companies in the world.”

Culture, communication, connection

While the technology has improved and the initiatives have evolved, Johnstone has continued to place a premium on his employees – values that originated with Hakman and continued with Kersten. Johnstone proudly acknowledges that the company’s operations are designed with the health and happiness of the employees in mind.

In Johnstone’s view, every decision is made to benefit the employees and the customers. “This is what I’ve learned: take care of your customers, take care of your employees, and the investors will do just fine,” he explains.

DLS has long put this philosophy into practice, as evidenced by the company’s profit-sharing plan, annual bonuses, and “deck the halls” Christmas Parties that employees look forward to every year.

“Perhaps the most unique thing we do here is our annual Christmas Party,” comments Johnstone. “When I joined in June of 2021, it was getting into the holiday season and Jim emphasized the need for us to make our arrangements for the Christmas Party. I didn’t know people still did those anymore, since I hadn’t been to a company Christmas Party in 25 years. We go out to each plant to celebrate, culminating with a final party here in Itasca.

“Historically, Jim would open up the festivities by talking about the year and the successes we had, and he really thanked our people,” he adds. “We then let them know what the outlook is for the profit-sharing, which is a reward for our employees. We have a nice meal and then we hand out presents. It feels like your extended family getting together for the holidays.”

“It’s like being at home on Christmas,” notes Cirigliano. “Everyone gets one gift, and as they’re opening them, we’re all cheering for them and taking pictures.”

Additionally, DLS has created a work schedule that promotes a work-life balance. “We’ve attracted some employees from companies that operated in a 24/7 environment, where they worked three shifts around the clock,” Johnstone notes. “We don’t work Sundays – we haven’t worked a Sunday since I’ve been here. Saturdays are rare, except for some preventive maintenance. And we work two shifts, so there is no graveyard shift here. That’s one of the offerings that makes us an attractive place to work. I’m an operations guy at heart, and I know that running a press 24 hours a day is going to be a lot more efficient, but that degrades the culture. Every move we make is with an eye on the culture and not losing sight of what got us here.”

“This mantra all stemmed from Bob in the beginning,” adds Cirigliano. “He really instilled that family culture, and Jim was able to carry that on. That’s obviously Bill’s style, too. We operate like a family. As part of leadership, we don’t just sit in an office. We go out onto the floor and talk and interact with our people because they’re important, and that’s important to us. No matter what position you are, you’re valuable to us.”

The same emphasis on the employees has been extended to DLS’ customers. In addition to serving as a collaborative partner, DLS has developed in-house capabilities to make their customers’ lives easier. This can range from live educational webinars and open houses, to custom branded marketing materials, including videos, sales sheets, emails, and imagery. The company has also developed a new customer portal to provide all the tools distributors need to sell more labels.

“We’ve really tried to get creative in communicating with our customer base, which makes an impression on them,” says Cirigliano.

Perfect Partners

Partnerships have been a key part of DLS’ journey. That collaboration involves working with supplier partners and teaming with distributors to ensure the right solutions get to the end-customer. DLS’ emphasis on mutually beneficial partnerships served the company well as the industry grappled with numerous supply chain challenges.

“Having done this for a long time, I’ve realized that a lot of label converters have a bit of an adversarial relationship with their suppliers,” explains Johnstone. “When I got here, I learned quickly that DLS has taken a different approach with suppliers. We’ve always treated suppliers as partners, and what that means is we treat them fairly, pay them on time, and when we have issues with material we work through them, so it’s a very collaborative partnership.”

Mactac and Spinnaker have been key material suppliers for DLS. On the equipment side, there are several constants throughout DLS’ national network. The converter leans on Mark Andy for its flexographic printing needs. In 2021, it installed five new Mark Andy presses to help meet soaring demand. In its Itasca headquarters, the new presses included a Mark Andy 2200XL, a 4-color 17″ press and a Mark Andy 2200XL, 2-color 17″ press.

Both press lines have Martin Automatic roll splicers and ABG turrets for complete, inline production capabilities. According to Johnstone, Mark Andy, ABG, and Martin Automatic have a strong presence in the company’s manufacturing facilities.

“We look at all technologies and are open to all technologies, but we’ve just found that for our needs over these past couple of years, Mark Andy has had the best solution for us,” he comments. “We also have a lot of turrets, and our primary partner there is ABG. We’ve made significant investments in them, and then we have Martin Automatic splicers everywhere.”

The latest equipment purchases have centered on speed and automation, to enable employees to do more with less. “The investments we’ve made since TSC bought us have all  been, for the most part, new technology and new equipment,” says Johnstone. “Our 5-year capital plan today is identifying how we’re going to continue to update our fleet. Some of that is in our facility now and some of it is on order.”

DLS has also supplemented its booming flexo business with numerous digital presses. Most recently, the company installed an HP Indigo 6900 digital press. For UV inkjet printing, DLS partnered with INX International Ink Co. on two presses in Itasca and one in Texas, serving as a beta site, while adding a Colordyne Technologies unit.

“I think having digital is crucial from a strategic standpoint,” notes Johnstone. “If we’re going to be a good partner for our customers, we must have a solution there. But our bread and butter is and will continue to be flexo. We think they’re complementary, so we’ll continue to make sure we’re investing in digital because our customers have that need. It’s just about having the right mix to be able to serve our customers.”

In the future, DLS will continue to increase its sustainability offerings. The company has already prioritized lowering its carbon footprint, and it is working with suppliers to meet ongoing demand.

“I think we’re a very responsible environmental steward today,” states Johnstone. “But I’ve gotten a lot of feedback in the time I’ve been here from our leadership team, our employees, and our customers, and they would like to see us do more in that arena. This will become more of a priority going forward.

“We are in the process of hiring a new corporate manager of EHS,” adds Johnstone. “This person will handle all our safety-related programs and procedures, providing resources to the plants and all the appropriate reporting. They’ll be doing the same on the environmental side.” 

“We’re especially proud of our Power Pellet program, where we recycle label waste into fuel for power plants,” says Cirigliano. “But our commitment to the environment goes beyond that. Throughout the office we’re separating cans, papers, and everything that’s getting recycled. Everybody at our company is on board with that concept. We’re looking at reducing paper usage within the office, as well. We’re always looking at ways to reduce where we can, in production and in the office.”

DLS’ sustainable initiatives have proven to be cost neutral. “I think a lot of environmental solutions can not only be good for the environment, but they make you more efficient,” states Johnstone. “Our Power Pellet program is a great example, where it’s a good environmental story but the operations people designed the setup to make their people more efficient.”

Overall, DLS has a dynamic outlook of the years to come. “We feel like with our current geographic footprint, we have great coverage,” says Johnstone. “And we have a tremendous amount of room to grow with our existing manufacturing and people footprint. We also have room in our current facilities to expand and grow.”