Think Global, Act Local
The more things change, the more Richard "Dick" Koplitz remains the same. He has worked for several high-profile companies, switched industries mid-career and experienced first-hand the effect of consolidation on the book publishing world. Yet, regardless of the setting, he goes about his business—
negotiating procurement contracts, that is—in an equally efficient and effective manner.
Colleagues and suppliers de-scribe him as tough, but fair. He's respected for his honesty, business acumen and straight-shooting style —as well as for always acting in his employer's best interests. Now, as senior vice president of global sourcing for Pearson Inc., Koplitz continues to demonstrate the art of the procurement deal.
The road to the Hall
Koplitz's road to the Production Executives' Hall of Fame has taken quite a few turns. After graduating with honors from the Bernard M. Baruch School of Business in New York, Koplitz began his professional career in the broadcast industry.
He worked for Visual Electronics, an equipment supplier, then joined the National Broadcasting Company (NBC). He ran NBC's purchasing program for seven years before moving on to a similar position at the American Broadcasting Company (ABC). At both television networks, he was instrumental in negotiating major contracts and managing their procurement departments.
By 1985, Koplitz had grown weary of this battle of the network stars and was hungry for new challenges. He was hired by publisher Simon & Schuster as vice president of purchasing. According to Koplitz, the transition from the broadcast industry to publishing was uncomplicated. "The skills are transferable," he says. "I just had to learn a new business. Fortunately, I had good teachers."
From his first year with Simon & Schuster, Koplitz achieved significant savings. He enhanced expenditure efficiency by organizing best-practice, team-driven cost reduction programs. Koplitz also formed a number of key industry alliances early on, and has fostered those relationships ever since.
"I've known Dick Koplitz for more than 15 years," recalls Daniel Bach, president of D.B. Hess Co., Woodstock, IL. "We initially began dealing with each other when he organized the corporate purchasing function for Prentice Hall [a division of Simon & Schuster]."
Bach lauds Koplitz for his finely tuned sense of fair play. "I have found that once a contract is reached, if an issue is raised, Dick will support both his operating companies and the vendor to ensure that the issue is resolved in a fair manner, and within the spirit of the agreement," he relates.
"Dick stands behind agreements 100 percent," agrees John D. DePaul, chairman of the Lehigh Press, Pennsauken, NJ. "He is one of the most ethical people I've ever met."
A hidden asset
In November of 1998, Pearson Inc. acquired Simon & Schuster's educational business units, including its purchasing department and key personnel such as Koplitz. At the time of the acquisition, Simon & Schuster was a $1.4 billion business.
The new ownership was quick to identify Koplitz as an invaluable asset. Since the acquisition, Koplitz has integrated the Simon & Schuster procurement functions into Pearson's and globalized supply chain efforts.
Now, from his office in Upper Saddle River, NJ, Koplitz is responsible for worldwide procurement of all commodities for Pearson, which includes business units that span television, a magazine and newspapers, as well as book publishing. Last year, Pearson reported total sales of $5.3 billion.
Koplitz's mission is to achieve significant cost reductions for the organization without sacrificing quality. Toward that goal, he put together internal supplier management teams both in the U.S. and internationally. Each team represents a particular Pearson company, business unit or function. Members of a team develop and implement savings strategies, and also collaborate with other teams to maximize savings across the board.
"I'm very proud to have been able to put together teams of stakeholders, and have them work together to reduce costs," Koplitz remarks.
Prioritizing book production
While book-production-related purchasing is no longer Koplitz's sole concern, it remains a priority. Print and related procurement accounts for approximately 60 percent of Pearson's overall outlays, according to Koplitz. "Since this area represents the largest percentage of our expenditures, it's especially important that we manage it effectively," he stresses.
The domestic supplier management team for production comprises 20 to 25 people. The U.S. team is complemented by a European paper and production team. "The global supplier management teams mirror what had been put in place here," Koplitz explains.
In addition to orchestrating supplier management teams and acting as a liaison among Pearson divisions, Koplitz acts as a primary negotiator with outside vendors. "I'm always looking at innovative ways to establish agreements with our supply base," he remarks.
"Not only does Richard go above and beyond [the call of duty] to ensure that he is keeping Pearson's interests at heart, but he also understands the importance of developing mutually beneficial partnerships with [Pearson's] suppliers," declares James Conway, president, chairman and CEO, Courier Corp., North Chelmsford, MA.
Dollars and sense
In 1999, Koplitz and his supplier management teams reduced company costs by $33 million. "And we're forecasting an improvement on that this year," Koplitz notes.
"Dick has captured tens of millions of dollars—perhaps a hundred million dollars—worth of savings for Pearson," asserts Phil Hoffman, president of Pearson Inc. "He has really taken us to the next level.
"Before, we were going for quick [savings] hits," Hoffman acknowledges. "Dick's resources and experience have allowed us to chase all [cost-reduction] opportunities in all corners."
What Koplitz has done for Pearson in terms of cost savings is simply a continuation of his efforts at Simon & Schuster prior to the acquisition. In his 15 years with the Simon & Schuster/Pearson organization, Koplitz estimates overall savings in excess of $250 million.
Hoffman recognizes Koplitz's accomplishments over the long haul, and the characteristics that have contributed to his success. "People recognize that Dick has a lot of experience in the field," he notes. "[I appreciate that] his primary objective is to save the shareholders money. He has no personal agenda, he's all about what's best for the company.
"[Internal] suppliers are open to working with Dick because he brings to them savings and opportunities," Hoffman adds. "[Outside] vendors respect him because he treats them fairly and he's honest. They know that, while his job is to deliver the best product for us at the lowest price, at the end of the day the deal will be mutually beneficial. That's why almost all our deals evolve into long-term partnerships."
Koplitz believes that he's getting as good as he's giving. "I've really enjoyed the last 15 years," he declares. "And I must admit that my experience with Pearson has been wonderful. I'm working for a company with a great management style and great people, like Phil Antoine [assistant vice president of global sourcing for Pearson]."
Antoine returns the compliment: "I've known Dick since November 1993 when I came to work for Simon & Schuster as manager of production consolidation, and I've worked closely with him ever since. He has very strong management skills and works well with other company executives.
"You know exactly where you stand with Dick, which is one of the things I admire most about him and that I try to emulate," Antoine continues. "[He's also] very open minded. We may not always agree, but, over the years, we've learned to agree to disagree. In any case, he always listens, and he's quick to praise. Due to that we've been able to get and retain good people."
On a professional or personal level, Koplitz undoubtedly is a people person. "He's a good man, an excellent father and a good husband," reveals Lehigh's DePaul. "He's a very bright man, loyal to the company, all the good things that an employee should be. I can't speak highly enough of him."