Supply Chain View from the Field

In today’s cost-cutting environment, many procurement and category management teams are sharpening their pencils and looking at ways to reduce indirect spend in areas such as printing, document management, and paper.  In addition, the push to become more sustainable is also driving people to think about printing less, and saving trees.  These two distinct elements are causing supply management teams to explore what is happening in the printing space.

As background, recall that when inkjet printing entered the market, everyone could now cheaply print documents.  If you found a couple of typos in your document, you didn’t bring out the white-out, you just made the corrections and printed out the entire document.  The old one?  Into the trash (or perhaps the blue bin…)

In today’s environment, the need for cost-cutting is driving managers to consider print costs, within the large scope of the expanding IT platform control issue.

There are two distinct trails on this.  One is the environmental initiatives and sustainability initiatives.  Then there is the cost management / IT/infrastructure piece and what that is producing.   Managers I recently interviewed note that there is definitely a shift in enterprise IT initiatives away from individual inkjet printers.  Not only because of the economy driving challenges – but a shift towards centralized laser printers.  Laser printing is seeing increased placement in many office settings.  A lot of small to medium businesses  are moving to, say, an HP Office Jet product rather than a low end laser.  The growth is not necessarily in the top high-end range multi-color printers, but rather the mid-range multifunction color machine where there is growth on the order of 20% per annum.

Cost of ownership is part of the business case here being used.  Lasers like the OfficeJet have good cost per page and good cost of ownership but this may also depend on how much people are printing.  A low end laser has lots of color but it is hard to say if it does have a lower cost.  Ink does have a lower cost per page in general, but it won’t always be the case in every situation.  If you are printing full color marketing collateral, you will get a better cost per page in a laser than an ink for that type.  However, end users probably do not do that level of purchase decision.  For example, a home user with a black and white laser who wants to get into color may think that color laser is expensive, and will upgrade from a mono laser to color ink product, even though they won’t use a lot of color.

Large companies I’ve spoken with are pushing the  “electronification of paper” (not a real word…)  This is a program to reduce the amount of paper used.  That happens through encouraging associates not to print.  With centralized print, companies can track metrics such as paper usage and toner usage and put out a report for each employee on how much they have printed.  Having this data shown to people in many cases will cause them to re-think whether they need to really print out everything!

Another interesting variable at play is the reduction in number of FTE’s who work in an office, combined with the growth of remote working programs.  As people are working from home and have to order their own toner or decide not to buy a printer from the company they work for and print at their own expense, they are moving away from print cartridges.  When people can work two days from home, they have to carry all their work with them – and as such are incentivized not to carry paper!  In the words of one associate, “I never print anything anymore!  I need to have it all on my computer and can work from home.”

Which leads us to ask the question – are we moving towards a paperless office, as prophesized by management gurus in the past?  The short answer, in the words of a senior print sales account manager, is “not one iota!”  Even re-manufactured toner cartridges are not seeing a huge growth, because in many cases the print quality is not as good, and the life of these cartridges are not as long for the money paid.  With the exception of state and local governments that are cutting budgets and driving sustainability to reduce print, most companies are seeing continued growth in print spending.    IT departments are controlling what printers people can use and moving towards centralized print, but the current generation (myself included) refuses to do away with their need for tactile manipulation, and continue to print away!  Perhaps the next generation will print less, but in the end, I still love the feel of a crisp sheet of paper in my hand to scribble on in blue ink!