Congratulations, you completed your latest mailing/shipping project on time and on budget. This is no small feat in today's environment of increasing cost and shorter lead times. Now, ask yourself the question, did my participation help my customer sell more product? Did my activities add value beyond the tactical task at hand? Did my results surpass any my competitors could have delivered? If the answer to these questions is no, then why should the customer come back? Price? Loyalty? If the answer is yes, did you receive a price premium for your efforts? Can the added value you delivered to your customer be identified?
We hear almost daily about companies that have failed to add sustainable value that their customers were willing to pay for. What is more tragic a company that fails to add value and goes under due to customer apathy or one that brings tremendous value but fails to capture that value in the form of price and fails because of no profit? The customer perception of supplier value can either be real or perceived. Real value is derived from quantifying or qualifying the results. Perceived value is typically derived from years of marketing and strong brand identification that positions your products and/or services as superior.
How does any of this relate to your position? Most of us are connected to a selling organization either directly or indirectly. We recognize our livelihood is dependent upon generating an increasing amount of profitable sales. Salespeople will grudgingly concede that most sales are born out of the collective efforts and capabilities of the organization. Our capabilities and past efforts ultimately will determine a customer's willingness to do business with us. The key question then becomes, "How can I arm my sales organization with more tools to convince their customers that we are clearly the best supplier to help them sell more of their product?"
Selling to the mailing industry can be a complicated task. Technology, mailing material and logistics were once sold as distinct products. Technology and material substrates were not always interchangeable. This usually meant that the mailing operation had to invest in redundant technologies based on material requirements or limit its product offering. Unfortunately, tunnel vision was winning the battle against market need. Suppliers were waging the war of material superiority when the customer was asking for flexibility. Fortunately, the message is now being received, and suppliers are now introducing expanded product offerings with several substrate alternatives and technologies that will operate across multiple types of materials. This change now arms the mail operations manager with a whole host of options to please the customer, from individually customized corrugated containers to automated packing systems that "form" the packing material around the product. These new options are designed to save money versus current technologies and processes. And because they have the ability for individual customization, the marketing opportunities are endless.
The Challenge
The last decade has seen dramatic changes in the traditional distribution chain. The increase in direct to consumer shipments has generated new demands on mailing centers to manage not only the front end of fulfillment but also facilitate customer communication, help build brand equity and loyalty and enable the easy return and resolution of returned merchandise. The development/enhancement of customer loyalty programs through the personalization of products and services continues to grow at rapid rates. These events have transformed many mailing centers that were developed to manage events of scale to now managing events of broad scope.
Automation of mailing lines has historically been used in an environment of predictability. In an environment of unpredictable demand, product mix and customer requirements, parts of the process were automated, but the vast majority of the task was left to human labor to manage the specific job requirements. Process flexibility became the operational driver in order to maintain responsiveness to the next customer requirement. The problem for the operations manager was process flexibility rarely allowed for an optimized operational model that allowed them to do it faster, do it better and do it for less.
The interest in automation also came with other associated pitfalls. As products change, the packing material, packing requirements and size requirements for the packaging also changed. Automated equipment typically came with operating parameters that limited the raw material it could process and the physical size of product it could run. The decision was, "Do I invest and automate some of my requirements, or do I standardize my service offering around my operational capability?" Neither were very attractive options. Customers were also asking for an expanded wish list. They desired to have improved graphics with their packaging; they wanted it personalized to the recipient security and tamper resistance issues were being raised, and they wanted the packaging to help expedite the process of returned merchandise.
The bottom line was the "need" list was expanding much more rapidly than the capabilities to keep pace. A solution was needed that could accommodate multiple types and sizes of products, would enable on-demand printing, was easy to use through existing logistics channels and was economical to use. Not too much to ask for.
What if you could (No longer only in your dreams)
Cold Fusion Packaging
Cold Fusion Packaging is a unique process for in-line or off-line use, with options for automatic product insertion. This material allows you to "custom" form packaging around your product. Rolls of specially treated "paper" are joined to form a moisture, tear and puncture resistant envelope around your product. Because this product has the same qualities as paper, you can die cut, fold and glue from your existing equipment just as you would a regular folding carton, with no process changes required. The paper converts at high speeds and accepts high-end graphics. The packaging can be used for returning merchandise if needed.
An Example
The Postal Service was evaluating a program for developing Priority Mail video boxes. The Postal Service would provide all material to a third party who would handle the fulfillment. All parties were looking at ways to reduce cost. Areas of review were: the cost of unpacking the video boxes, the cost of building and stacking the video boxes, the cost of product fulfillment and the stacking of the video boxes onto skids after fulfillment. Material options being considered were folding cartons, brown corrugated and a cold fusion product. The cold fusion was ultimately selected. Estimated cost savings to the fulfillment center were in excess of $100,000. Cost reductions were identified in these areas: increased production per labor hour versus other materials, the new material is waterproof and tear proof thereby reducing returns and scrap, the cold fusion material yields more finished units, which resulted in inventory savings, there was reduced labor on returns and there was reduced transportation cost to the local post office for packed units.
The Postal Service estimated an additional $100,000 in savings on its end. Its savings would derive from: material savings from corrugated or folding carton containers to cold fusion material, a 2/3 reduction in freight cost, a reduction in handling costs and a reduction in weight and cube space costs.
Digital Printing
Digital printing has been used in the mailing industry for a number of years. Many digital technologies are available today. Print heads can, at times, be retrofitted into existing equipment. Offline options include Web and sheet fed systems. Digital systems have dramatically improved in both print quality and speed.
Digital technology offers your customer unlimited freedom in personalizing individual messages. Variable data options, enhanced graphics capability, adding postal permit numbers and enhanced barcode capability are a few of the features. Because it's digital technology, no plates or films are required. Artwork development and press setup are now measured in minutes versus days.
Capturing the Dream
We'd better steer clear of the personal dreams, but the business dream of generating more, and higher profit sales is right at your fingertips. These new technologies allow a new message to your customer. Support your sales reps with more tools, build rabid customer loyalty by offering new options to help your customer sell more products and build a position in the headlines that asks the question "How did they do that?" rather than, "Why did they do that?"
Jeff Wettersten is the manager of New Business Development for Inland Paperboard and Packaging. Inland has recently launched a full service Web site, www.packagegenie.com. Jeff can be contacted at 317-879-4435 or jwetter@iccnet.com. Tom Santelli is the national sales and marketing manager for Tru-Tech, a division of Inland Paperboard and Packaging. Tom can be contacted at 317-879-4346 or tsantel@iccnet.com.
