Industry Growth… But Will You Benefit?

Bob Schimek
Posted by Bob Schimek Senior Director of Postal Affairs Thursday, February 16, 2017 - 01:32
Industry Growth… But Will You Benefit?

Recently, Idealliance published its 14th edition of State of the Industry Report by chief economist Andrew D. Paparozzi. One of the themes of the findings is “Urgency and Discipline” as keys to success for companies that are excelling because “the issue in our industry is not a lack of opportunity. The issue is deciding what is and isn’t an opportunity given each company’s specific resources, capabilities, and circumstances.” Paparozzi also emphasizes learning from our mistakes and that companies succeeding are not taking growth for granted, so it’s not too late to evaluate where you stand and what you might change.

The commercial printing and mailing industry has undergone profound rapid change, experiencing slow growth due to the digital revolution and the economy. Idealliance data shows that while sales of digital printing increased, sales of lithographic printing declined three times the increase in digital. As for the economy, GDP grew an average of only 2.2% per year since the Great Recession, as compared to an average of 3.4% per year during the quarter century prior to the Great Recession. “The difference between the economy growing 2.2% per year rather than 3.4% per year over six years is approximately $1.1 trillion of final goods and services that don’t get produced, promoted, etc.”

Idealliance’s read on the next 18 months is that they will look very much like the past 18 months for both our industry and the economy. The State of the Industry report offers extensive data that is a must read, but that is not our focus today. Let’s focus on what you can do in this environment to ensure you are among the organizations experiencing success and growth.

Although there are external forces to deal with, you do have the power to drive positive results. Paparozzi’s summary of the research findings as it pertains to those organizations seeing growth offers encouragement:

“Nearly 63.0% of State of the Industry participants report that their sales increased during the first half of 2016.”

“When asked why profitability is up, far more credited actions they’ve taken, such as increasing revenue and holding the line on costs (60.5%), increasing production efficiencies (41.9%), and capturing higher-margin work (37.2%), than credited improved business conditions (20.9%), the failure of competitors (7.0%), or decreased price competition (4.7%)”

“The words State of the Industry participants use most often to describe the keys to profitable growth: efficiency (58.0%), on-demand (44.9%), and integration (37.7%).”

At Quadient, we have domain knowledge and technology that enables a superior ability to deliver value and have witnessed the success it brings to our customers. Those growing have recognized that production efficiencies and delivering value is critical to sustainability and profitability. A recent article outlines our approach to helping customers improve their ability to provide value.

Innovating for Radical Efficiency Gain
A step change in performance improvement through technology and processes that may have been tried and tested in other industries and applications

By stepping back, leveraging industry expertise and thought leadership, and asking the difficult question – “Why do we do things the way we do them?” – our customers have experienced increased efficiencies and cost savings while decreasing risk of error. By innovating data processing using Quadient Ignite, the efficiency gains have enabled customers to drive more effective utilization of existing resources. The benefits around increased efficiencies include the ability to quickly on-board new customers and jobs; add more customers and jobs without adding resources; sell more complex jobs at higher margins; onboard and train new employees easily; and reuse job workflows and share work across teams.

The results? Examples from our customers include:

  • Reduced the number of software tools from six down to one
  • Added 300% more work without additional staff
  • Tripled capacity on number of jobs processed per day
  • Doubled capacity with same staff
  • Reduced 16 hours of manual work to just 15 minutes

What are successful customers doing with the cost savings? Those savings have been used to invest in new revenue-generating services or improve the bottom line by reducing or eliminating the chance for error and the subsequent rework with built-in quality checks. In addition, customers have been able to right-size the level and type of resourcing allocated to the projects. For example, not only are they reducing resource needs for a given project, but they are eliminating the cost of expensive outsourcing by bringing work back in-house without added cost, and reducing the need for high-cost coding skills. In this area, our customers cited the following results:

  • Reduced system support staff from 2.5 FTEs to 1 FTE
  • Eliminated need for one person to manage and monitor job processing
  • Overtime and weekend work was immediately eliminated

Moreover, by experiencing time savings, customers have been able to increase job processing velocity, eliminate time to initiate a job with “hands-off” automation, and deliver on shorter customer timeframes. Examples of the processing improvements they have measured:

  • A job that took four hours now takes only 90 seconds, including new de-duplication process that found an additional six groups of duplicates that had never been identified
  • Processing of 2 million address validation and NCOA records now takes only 1:17 minutes
  • A four-hour job now takes 20 minutes
  • A seven-day job now takes 45 minutes
  • Daily 75-minute job is down to five minutes

You, too, now have to ability to handle top line growth in data processing without scaling costs. One of our customers stated that “50% more jobs are now being processed, including far more complex and higher margin jobs than we ever could have handled”. And this is not going unnoticed; several other customers have commented that this particular company is suddenly showing up in competitive situations and moving quickly – they wanted in on what Quadient is providing. Which path will you choose? Ignite your growth to deliver superior value or get left behind?