Dec. 29 2006 11:17 AM

Intelligent Mail Finishing: No Room for Integrity Errors

A successful intelligent mail finishing system must be fast and easy to use, but more importantly, it must guarantee document integrity. Why? Because the costs incurred when a business delays, damages, misassembles or misplaces integral documents are often significant especially those not discovered prior to delivery. These costs might include higher customer service costs, lost revenue from dissatisfied customers, acquisition costs for replacement customers and legal costs associated with lawsuits resulting from failure to comply with regulations governing critical document processing.


Why Integrity Trumps Speed

Undoubtedly, the characteristic most customers fixate on when choosing equipment is speed, and while it is a critical factor in intelligent finishing, it is less important than integrity. Many companies assume that the fastest equipment will yield optimal productivity, but often this is not the case because documents must be processed not just quickly but accurately. Having said this, when reviewing system speed, it is important to distinguish between machine cycle time and throughput. The former measures the equipment's theoretical ability to move paper through the system, (e.g., 10,000 pieces of paper per hour). The latter measures the number of complete and accurate packages the system can actually assemble, taking into account the size of the documents, materials used and operator proficiency. When compared to cycle rate, throughput is a superior measure, as it factors in the machine's physical capacities as well as its stoppage rate. By making a careful evaluation of throughput, customers will have a much clearer picture of a machine's true production speed.


The Impact of Errors

When acquiring an intelligent finishing system, companies are also often very surprised to learn that, in fact, inserting equipment does not typically run constantly. Inserters must be reloaded, changed over, adjusted, and imperfections of materials going into machines commonly cause stoppages as well. Most inserters are actually "up" and working 60% to 90% of the time. As this is the case, it is important to make the system as fast and efficient as possible without sacrificing document integrity. Certainly, the inserter industry has met this challenge. Machines offered now include models that can cycle at rates approaching 30,000 pages per hour and approach accuracy levels of 99.99%; but what does 99.99% really mean? What is the financial impact of a machine that produces an error, say, one out of 10,000 times? Surprisingly, it can be quite large.


Integrity errors typically come in two forms: those that are discovered before entering the delivery process and those that are not. The former type of errors poses remarkably complex issues for those who must fix them and incur time, manpower and opportunity costs that can make them quite expensive.


Chart 1 shows the relationship between a system's accuracy and its total cost. As the accuracy of the system improves (as can be seen by the blue plotted line), its overall cost, or cost per completed piece (shown by the red plotted line) · declines. The implication is that with typical systems now available there is an inverse relationship between these two factors. Take for example a human system's accuracy and its cost (plots A and B). Compare this to a typical inserters accuracy and cost (plots C and D)and finally, the most accurate inserter's accuracy and cost (plots E and F).


Errors of this nature lead to interrupted throughput, representing tremendous opportunity cost, but also affecting the bottom line in terms of labor and material. The average cost per piece for errors of this nature is estimated at around $50 and can reach $100 depending on the application run and the efficiency of the organization in correcting errors. Multiplied by even a small number of errors, this can represent a major expense. Consider this: for every $100,000 a company spends on a piece of inserting equipment, only 2,000 errors may be made by the equipment before the cost of errors becomes greater than the cost of the machine. At an error rate of one per 10,000 and running at roughly 10,000 per hour, the machine, on average, might be producing one piece of bad mail per hour. Extrapolating this to an operation running its system for eight hours per day, error cost will exceed machine cost in less than one year, assuming all errors that can be corrected are fixed. Overlooked errors can be even more expensive.


Integrity errors that commonly escape in-house detection include double stuffs, improperly matched documents and improperly inserted documents that are sent to the wrong customer. Here, not only are the costs to reproduce and resend the document higher than if they had been discovered in-house, but they also reflect poorly on the company's image. In the case of sensitive information, like health or financial documents, this could lead to lost business or punitive action. In some cases, such as the mishandling of certain insurance information, errors can lead to legal action by the intended recipient. In any case, it should be the goal of any organization processing this type of information to do so with 100% integrity. While the estimated cost of correcting an integrity error is approximately $50, errors that escape in-house detection can be far more costly. They involve higher quantifiable costs but also lead to non-quantifiable costs as well. Customer service, reprinting and resending costs can be easily defined; lost business and bad-will cannot.


Read-Before-Feed: The Key to Perfection

When it comes to document integrity, at what point does perfection start? No errors in a million pieces; no errors in a billion pieces? Gunther systems have an estimated machine error rate of one per billion. What is the secret that enables Gunther to reliably attain accuracy 1,000 times greater than other machine alternatives? The answer is technology; specifically, its patented read-before-feed and "indexing" conveyor technology.


Gunther systems employ read-before-feed and indexing conveyor technology to give customers 100% document integrity. This technology works differently than traditional intelligent mail finishing systems and guarantees the intended document is complete and in the correct envelope. Read-before-feed technology doesn't attempt to read a moving document. Instead, it verifies documents in a stationary position, which eliminates the possibility of mis-read or commingled documents and either routes them through the machine or diverts them as errors.


The Gunther conveyor is designed to repeatedly start and stop (index), which provides the necessary time to accurately complete an array of complex processing events (reading, feeding, collating, binding, enveloping, printing, posting, etc.) without error. Additionally, a multitude of sensors and microprocessors monitors the package as it "indexes" down the conveyor. Data collected is then recorded by the system's operating software, allowing the operator to determine the status of a given document at any time.


Traditional equipment, on the other hand, reads documents while they are moving and attempts to verify integrity based on algorithms or input/output order comparison. While this approach generally allows the machine to process more paper in a given period, it is inherently fallible in terms of document integrity. Characteristically, these machines can only guarantee 99.7% document integrity. Furthermore, a moving conveyor does not allow for sufficient recovery from mis-reads, mis-feeds and other system errors.


Speed and ease-of-use are critical factors when selecting an intelligent mail finishing solution, but integrity should be the primary consideration as it has the greatest potential to affect the overall value of the finishing system. For enterprises deciding which mechanical alternatives to select, intelligent systems using read-before-feed technology guaranteeing 100% document integrity pose the best value as they virtually eliminate the costs associated with errors. Delivering superior integrity while remaining competitive in terms of speed and price, these systems are currently the best alternative for companies looking to maximize their return on investment.


D. Scott Foster has utilized his acumen to analyze, among other things, the financial impact of accuracy and productivity on mail processing operations since joining Gunther. For more information, please visit Gunther on the Web at