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OPI looks at mailroom and packaging, a sector that can deliver savings to companies
Mailroom and packaging. Not the most interesting topics, I hear you say. Well you’re wrong and let’s get one myth out of the way right away.
Paper mail is not dead. Ok, so the more observant of you may already suspect that from the amount of paper that is floating around the office and bulging out of recycling bins. But did you know that the volume of paper documents could actually be on the rise? Even direct mail is undergoing a renaissance with email marketing success declining as well. It has been some time since the prospects for mailroom and packaging solutions, increasingly viewed as a way to lower costs and help drive efficiencies, have looked so good.
That’s not to say it isn’t tough out there for manufacturers. Several of them have made redundancies in the past year and many recognisable names such as German company Curtis 1000, which remains in administration, are still struggling. However with recent data suggesting the market has stabilised and Bong and Hamelin’s rather sensibly conducted N45 million ($57 million) merger providing certainty in the sector, things may be turning the corner.
"It’s not surprising that mailroom has suffered some decline in recent years. The decline in the housing market has affected sales for moving items," says Patti Sack of ShurTech, the US manufacturer of brands such as Duck and Caremail. "Likewise, the mailer business has suffered due to the growth in online activities such as shopping, bill pay and email. In recent months, we have seen the market start to come back and are optimistic, especially in terms of working with our customers to drive the category."
In fact, according to datalink, the long term is looking particularly rosy. In the last 20 years, working from a screen has become the norm in offices. However, companies still receive and produce large volumes of documents by mail every day. The trend is the same around the world: a steep increase in paper received by companies.
In the UK, it is estimated that 73 percent of all documents received by companies are paper documents (62 percent from mail and 11 percent from faxes). Electronic documents still represent less than a quarter of the bulk of documents (16 percent as emails and 8 percent as web forms). On average, companies today receive 3 million items per year and the cost of processing incoming mail is estimated at £0.15 to £0.25 per item. Furthermore the use of email has not lead to a reduction in the volume of paper circulating inside companies.
Research carried out by Lexmark shows that, on average, a company prints more than 1,000 pages per employee per month, and according to IDC Consulting the use of emails has led to a 40 percent increase in the volume of paper documents. Mail volumes continue to grow, albeit slower than the early part of the last decade and are stimulated by mobile work forces. For example, medium-sized companies now process 100,000 pieces of mail a month and service over 200 departments
The corporate mailroom, a vital link in the corporate information system, is struggling to keep abreast of the workflow. As ever the solution really could lie with technology. At the enterprise level (companies of 500-plus employees), the past year has seen the big players in the sector such as Pitney Bowes offering solutions offering to take on that workflow.
Pitney Bowes’ Mailroom service is being promoted as a "key work-flow integration point for a variety of business processes. It improves service levels while reducing your overall investment". With companies looking to increase efficiencies and optimise business processes to improve service and cut costs, the mail centre has become a place where real costs can be taken out of a business.
Due to the difficult financial climate, Gareth Stoten General Manager for the UK & Ireland at Pitney Bowes, says his customers are increasingly being asked to provide more for less. As a result, they have to be able to get more out of the technology that they invest in and diversifying into new business areas where possible.
"Both suppliers and customers understand the need to be cost competitive – in simple terms, to reduce significantly the cost per mail piece," he says.
UK wholesaler VOW thinks that it’s not just large companies that can reduce costs by looking at their mailing expenses. And that means opportunities for dealers. "This is a large growth area for resellers – this is a £1.2 billion ($1.9 billion) market within the UK."
Finally, according to ShurTech’s Patti Sack, customers may be looking for value but, in the mailroom where time really can be money, they are not willing to sacrifice performance: "While our customers may be heavily focused on price, they are not willing to sacrifice quality. So, we’ve found both carry equal weight."