Fulfillment &
Warehousing
Distributorship: CBI Corp.
Service Expert: Cliff Bregstone, CFC,
president
Location: Addison, Ill.
Service: Fulfillment and warehousing
account for 50 percent of CBI's annual sales. Customers include firms requiring
large volumes of printed materials and wide distribution needs, as well as
organizations that need a variety of products, such as associations.
Other offerings: Commercial printing, print-on-demand items and traditional forms
Launching New Services
Distributors often try out new services on existing clients, who are more likely than prospects to show patience during a trial-and-error phase. Not Cliff Bregstone, CFC: Three years ago, a Fortune 1000 human resources consulting firm asked Bregstone, president of CBI Corp., for help with something the distributorship hadn't offered before: fulfillment. The end user needed training kits, including 1-inch-thick booklets and personalized letters, for 25 of its Fortune 500 clients.
Confident with its in-house quality-assurance program and previous success with other projects, CBI won the account. The distributorship assembled 250-300 kits per month in a 3,000-square-foot facility. "We had to learn from the ground up," Bregstone says. (Today, CBI processes approximately 1,000-3,000 orders per day for the client.)
Countdown to Customer Satisfaction
3...
A major international association purchased a Xerox DocuTech™ printer, then decided to outsource its printing work. "They went to Xerox and said, 'We want you to manage this DocuTech for us--we don't want it on site. We also have a warehouse that we're not happy with,'" says Cliff Bregstone, CFC, president of Addison, Ill., distributorship CBI Corp. Xerox called on CBI,
a longtime business partner, for help.
2...
CBI brought two DocuTechs into its facility that allow it to print the association's course kits on demand, combine the kits with binders and books, and ship the packages within 24 hours. The association uses an online system to update its materials. CBI also handles sales of the association's 200 books, accepting orders from toll-free calls, faxes and the internet. CBI verifies customers' credit card information, ships products to various destinations (including Amazon.com's warehouses) and provides accounting reports.
1...
CBI provides the association with reports including sales analyses and inbound 800-number call statistics. Bregstone estimates that CBI fulfills course packets for 3,000 events annually and processes 1,000 book orders monthly. In addition, CBI recently helped to convince one of its partner manufacturers to open a facility nearby, enabling the distributorship to provide fast commercial printing jobs for the association.
Blastoff!
The association was delighted. "As a matter of fact, I'm having lunch today with the executive director," Bregstone said during his interview with Print Solutions. "We've built a nice relationship. [CBI] plans to do a lot more in the association field based on our success here. We plan to make it one of our vertical markets."
Demand for CBI's fulfillment services
soared after the distributorship marketed its capabilities to other clients and
prospects. The company hired 20 employees, added 20,000 square feet to its
facility, and invested $250,000 in counting equipment, folders, inserters and
other mailing equipment. Because most of CBI's workforce spoke Spanish as a
first language while others primarily spoke English, the company wrote
procedures, helping to prevent miscommunications and errors.
In 1980, CBI instituted a
quality-assurance program based on ideas Bregstone read in the book Quality is
Free by Phil Crosby. Twenty years later, CBI honed the program by adopting
practices based on Six Sigma, a quality analysis and improvement program that
trains companies to deliver superior products and services with nearly perfect
consistency. CBI now tracks nearly every aspect of its operations, right down to
questions employees ask during production. In each instance, CBI analyzes why
the employee didn't already know the answer. The company examines the situation
from several angles: Was the employee's training inadequate? Were procedures
ineffective or unclear? Was it a unique situation?
CBI also keeps an eagle eye on its inventory. For example, when end users send CBI materials for distribution, CBI immediately verifies their amounts and places its own bar coded labels on the products. Clients also can check the status of their orders by using an online inventory system CBI developed.
CBI enjoys virtually zero turnover and absenteeism, Bregstone says. "We treat our associates on the assembly floor the same way we treat our associates here in the office," he says. Unlike some production environments, CBI's fulfillment center has air conditioning, heat and fluorescent lighting. "If we're going to ask [employees] to achieve Six Sigma work, we have to give them an environment that's conducive to that kind of level," Bregstone says.
CBI employees receive full benefits, vacation pay and participation in a profit-sharing plan. Bregstone says each floor worker will receive $2,000-$3,000 in profit sharing this year. The distributorship relies on a steady workforce, pulling in part-time workers only when it must complete large, one-time orders. "We do pay the highest wages in the industry, I'm sure," Bregstone says.
Houston, We Have a Problem
According to Bregstone, clients often bring their efficiency problems into their warehousing and fulfillment projects. "Typically, they don't really understand--even if they're doing it themselves--all the problems that they have internally," he says. "Once they've outsourced it, those problems come to light. What we try to do is document [clients' forms management] ahead of time to make sure we identify all the potential problems so we don't have them."
CBI offers "process mapping," meaning the company evaluates the end user's forms management procedures and creates a map to reflect the client's workflow needs. CBI offers the service separately, but Bregstone says customers who buy the service usually purchase paper-based solutions later. CBI prices its services on a case-by-case basis. "You charge basically the way the customer wants you to charge," Bregstone says. "One of the things that we pride ourselves on is our versatility."
The View From Here
Bregstone predicts that the demand for warehousing and fulfillment will rise. "More people are recognizing the need to outsource," he says. But he also predicts future challenges. Bregstone says electronic and print-on-demand forms will grow in popularity, replacing many paper-based forms. He also has observed that many documents require less warehousing space than in the past, because their parts per document have diminished. Distributors who want to offer high-quality warehousing and fulfillment should be skilled in quality measurement and inventory control, he says. Bregstone feels CBI has a secure niche. "We think there are very few who can handle the quality standards that we have," he says.
Launching New Services
Approximately seven years ago, magazine articles were touting the paperless environment. Clients were starting to request 4-color work. Faisal Ahmad, president of Dallas distributorship USfi, could see the writing on the wall. "I forecasted that if forms distributors did not diversify vertically, we would see some real insurmountable challenges coming up," he says. "At that time, it seemed to me that design was the most natural diversification to embark upon, simply because it's the most related to our industry."
At first, USfi outsourced the graphic design for its customers' projects. "We didn't know what we were doing," Ahmad says. "I could appreciate good design and 4-color from bad, but actually doing it is almost like you're reinventing yourself. No matter what, 4-color isn't forms." As USfi attempted to establish itself in the market, he noticed a trend. "We discovered whoever controls the design traditionally controls the print," Ahmad says.
The distributorship hired four graphic designers and a 4-color production manager. USfi also purchased several Macintosh computers, desktop color printers (strictly for creating proofs), scanners, digital cameras and software packages such as QuarkXPress™ and Adobe® Photoshop®. The company added approximately 5,000 square feet to its facility.
Design work wasn't the only service Ahmad adopted. After seeing successful e-commerce systems from Amazon.com and Land's End, and hearing about customers taking advantage of larger bandwidths and networks, Ahmad decided to offer web development. USfi hired four software engineers, invested in high-speed data transmission lines, and targeted small to medium-sized companies with outdated ordering systems and overwhelmed (or nonexistent) IT departments.
When USfi began offering web-based services, "something very magical happened," Ahmad says. "Our clients started looking at us very differently. They thought of us as a more sophisticated organization." USfi tailors prices to clients' finances and their projects' complexities and timelines.
Today, design services account for approximately 60 percent of USfi's sales. Web-based services account for 20 percent. "Essentially, we're an organization that has multiple points of entry into a client," Ahmad says. USfi seeks to penetrate each account within three years of first contact, providing all of the customer's design services, commercial printing, web applications, warehousing and fulfillment.
Houston, We Have a Problem
David Porter, senior account executive of USfi, convinces prospects that the distributorship provides better creative services than marketing agencies. "We provide agency quality and more end-to-end solutions than agencies," he says. "Most agencies provide the design and then they're done with it." When clients ask for design ideas, USfi provides several samples, then allows time for clients' staff members to agree and plan their next course of action.
Occasionally, USfi accepts digital files from clients. For example, a phone manufacturer often sends product images so that USfi can convert them into artwork for promotional literature. "Because of the expertise we have in house, it goes relatively smoothly," Porter says. "The software industry has taken such leaps and bounds forward that a lot of times we can just convert files to the formats we need."
The View From Here
"Everybody says they're value-added, and everybody says they're thinking out of the box," Porter says. "[Ahmad] truly wrote the book." As end users demand more creative, high-tech solutions, distributors constantly must reinvent themselves in order to keep customers, he says. According to Porter, the market for creative services is wide open. "The challenge isn't getting the business," he says. "It's delivering quality consistently."
Don't Leave Earth Without It
Distributorship CBI Corp., Addison, Ill., gained a
competitive edge in warehousing and fulfillment by implementing Six Sigma, a
quality analysis and improvement program developed in 1986 by Motorola Inc. A
"sigma" is a mathematical term defining how far a measured result deviates from
the average. Six Sigma means 3.7 defects per 1 million opportunities--nearly
perfect quality. Many firms offer Six Sigma training. For more information,
visit Motorola at http://mu.motorola.com.
