In its independent assessments of the best practices of leading output service operations, we currently observes a strong trend towards consolidation of print and mail operations historically, separate back office functions.
Print and mail operations are the natural combination of two critical back office operations for most Fortune 1000 organizations. But the natural convergence of these two functions is undermined by their divided history and organizational separation in many companies. Print centers originated as a spin off of the data center, which traditionally was responsible for printed reports and correspondence within the organization. Contrarily, mail operations, also known as "finishing" or "insertion" facilities, rarely shared the status or the glamour of data centers and typically were relegated to second-class status and resources.
As hardcopy customer correspondence has regained strategic importance after the underwhelming results of recent electronic delivery channel projects, a renewed focus has been placed on enhancing the efficiency and effectiveness of critical print communication methods. Contrarily, e-Business initiatives that encouraged coordination of print communications with electronic delivery options, within sophisticated customer relationship management strategies, only added more rationale for combining printing and mailing operations and rationale for doing so at the forefront of corporate communication initiatives. For these and other reasons, advancing preparation, support and execution of traditional communications through tried-and-true hardcopy customer communication channels has returned to prominence within Fortune 500 organizations after years of inattention.
Combination Strategies
Simply enough, physical combination of print and mail operations can enable advancement of the efficiency and effectiveness to their processes. The physical co-location of facilities enables integration of entire print and mail capabilities, enabling significant cost savings and potentially higher service levels.
We recently observed one internal organization that maintained several back office facilities embarked on an ambitious initiative to consolidate printing and mailing into a single, centralized, state-of-the-art facility. While costly to construct, the facility produced immediate benefits by centralizing several distributed, redundant functions into a single location; this enabled process management and tracking improvements.
Naturally, the alternative to full physical combination of operations is the logical combination of functions, typically through organizational measures. This practice tends to create environments that limit improvements, which if present are typically visible merely through reporting and management reporting gains, but it produces less significant efficiency or process improvements.
Recently, we also has examined the needs of an output service bureau that maintained its print operations only a few miles from its finishing and insertion facility The company observed that the few miles could have been a few thousand miles, as invariably jobs and job parts were routinely lost or damaged in transit. Although the operation was organizationally consolidated, separate physical locations created a hurdle, combined with poor internal workflow and quality processes, that could not be overcome.
Planning
In a clean-sheet approach, unencumbered by existing facilities, we saw that it was best to attempt to place both print and mail functions in the same physical location. While this is not always possible, the organization believed potential benefits can be numerous, including improved cross discipline communication, reduced testing efforts due to retest and faulty workflows, improved employee relationships, more controlled process management and improved customer perceptions.
At another organization, we recently observed that an internal east coast print services organization was reacting to production situations rather than planning for issue-free · processing. Faced with multiple sites and heterogeneous environments, its management decided to consolidate all output functions into a single location but retain the technical distinctiveness of both original and acquired organizations, in anticipation of splitting off the newly acquired business shortly.
Ideally, the initial planning scenario begins by developing a production process flow diagram. The diagram provides an understanding of how the current work is actually performed, regardless of existing physical or geographical constraints. The process diagram provides the basis for the organization to streamline the anticipated process and removes as many existing hurdles as possible.
Combination Benefits
Along with the obvious benefits to consolidating print and mail functions under a single facility.
Collectively, the above benefits should be viewed as significant drivers for creating a single seamless operation at one site.
Integrated print and mail solutions can enhance capabilities to accept and manage jobs and documents through all aspects of production, finishing and mailing. And consolidated outgoing mail from various sources can be combined to maximize efficiency and obtain postal discounts associated with addressing and sorting requirements. Also, combining print and mail functions potentially allows software components to address expansion and cleansing along with CASS certification to help reduce mail returned for bad addresses.
Having both functions co-located and rapidly able to resolve process or material issues can be invaluable. Because mailing, including insertion, mechanical presorting and hand processing, are incredibly reliant on the preceding print process and material quality, having both functions together can expedite issue resolution and facilitate product delivery.
Merging Pitfalls
While there are notable benefits to the consolidation, there can also be undesired consequences. During initial expectation setting, it is important to balance the proposed challenges from the projected benefits and clearly understand the overall desired end state. Although the hazards are limited, not clearly addressing them prior to proceeding with a consolidation plan would be imprudent. Risks include:
A Spike in overall operating costs While reducing operational costs may be a goal, it will not be realized initially. One-time costs and process re-engineering tasks will boost direct costs creating short-term stresses.
Increased visibility of operation budgets Scrutiny can follow as functions consolidate.
Management challenges Varied skill and wage ranges can become more pressing sources of friction.
Short-term growth in problem complexity Bringing print and mail functions together can increase immediate complexity, in support of reducing future complexity.
Bottom Line
While there are many obstacles related to combining print and mailing functions, the overall benefits outweigh the challenges. Short-term difficulties created by the upheaval of business support processes should be overwhelmingly compensated for by the resulting efficiency and effectiveness of new streamlined capabilities. Although print and mail functions did not originally grow together, they have become significantly intertwined to the degree that neither stands alone sufficiently.
Kemal Carr is with Madison Advisors, an advisory and research firm specializing in the output industry. To find out more, visit www.madison-advisors.com.
