"End users view our products as commodities," says Barry Washam, vice president of The Venture Corporation, a 9-year-old distributorship in Carrollton, Texas. "They're getting calls every day from people who can do exactly what we do."
Venture aims to differentiate itself by providing personalized service, extensive product knowledge and 100-percent customer satisfaction. "You don't want everything you do to be purely driven by price," says Gary Dunlap, the distributorship's president. "By adding value, you make it a lot more difficult for a customer to go to someone else."
Five years ago, Venture began providing a manufacturing firm's accounting department with forms and print management services. Recognizing the potential for other business within the company, the distributorship approached its other departments. After three years, Venture provided almost all of the firm's printing, including business forms, commercial printing and promotional products.
The Venture Corporation, a distributorship in Carrollton, Texas, created a customized label program for a manufacturing firm that uses 50,000 to 500,000 thermal transfer shipping labels each month.
One exception was the 50,000 to 500,000 thermal transfer shipping labels the manufacturing firm used each month. A direct selling manufacturer preprinted 90 different types of 1 to 4-color labels in eight different sizes with the end user's brand names and logos. The end user printed the thermal transfer labels with bar codes, SKU numbers and part numbers, then hand-affixed them to boxes shipped nationwide. "I kept asking them to let me do their labels," Washam says. "They'd tell me, 'We've been doing business with [our label provider] for 10 years. We don't want to change unless there's a good reason.'"
After evaluating the manufacturing firm's label problems, Venture impressed the end user by proposing a customized label program.
One of the manufacturing firm's initial problems was that it constantly ran out of labels. The end user maintained a computerized label inventory, but the firm's 360 warehouse pickers often failed to update the system as labels were used. "The system would show they had 50,000 labels when they didn't have any," Washam says.
Now, Washam visits the end user's facility each week to inventory its labels. Minimum quantities for each label size are set at one month and maximum quantities are set at three months. Venture replenishes low inventories the same day by ordering releases from the label manufacturer's warehouse. Out-of-stock labels are produced and shipped in two days.
Other problems were cost and obsolescence. Since the end user's business peaked from March to August, it ordered large quantities of labels to last through that period and to obtain discounts. "If they bought labels in July and used only 1/4 of them [by the end of August,] they'd carry the other 3/4 of labels the rest of the year," Washam says. "They'd be sitting on $180,000 worth of labels that they'd already paid for but wouldn't use for 6 months." In addition, labels often required changes from one order to the next. The manufacturing firm sometimes threw away $50,000 worth of labels because they were obsolete, Washam says.
Venture created a label consignment program for the manufacturing firm, billing the company as labels are used rather than as they're delivered. For example, if the manufacturing firm stores 25,000 labels in its warehouse, but uses only 10,000 labels, it pays for only 10,000 labels. Venture also provides contract pricing, ensuring the manufacturing firm always pays the same price for labels no matter the order quantity.
In January 2001, Venture secured a 2-year label contract with the manufacturing firm. That year, the program saved the end user $220,000, Washam says. Venture is now the manufacturing firm's exclusive printing provider.
—Kara S. Carpenter
