Are You Operating At Only 85%?

By Ed Crowley, Thought Leader, Virtulytix

Being a successful office products provider is getting tougher. Historically, if you did a reasonably good job of providing customer service, managed to maintain a steady stable of good sales people, and managed your expenses reasonably well - you could make really good money owning an office products dealership. Let's face it, all that printing and copying that was happening in offices provided you with a steady, annuity-based revenue stream. Life was good.

Then things started to change. Customers began printing and copying less. Yes, they still do print and copy, and they will for the foreseeable future, but volumes are going down. Customers don't want to switch out products as quickly, as they print less, the desire to get that latest, greatest piece of hardware diminishes. So, you have an installed base that is turning more slowly, making it necessary for you to have more account penetration just to keep the same revenue due to declining page volumes. To make matters worse, everyone else is feeling the pinch, so they are cutting prices to try and grab your customers.

Let's face it - business is tougher than it used to be. So, the question becomes, can you afford to leave money on the table? What have you done to optimize your operations? Have you implemented automated toner fulfilment? Or do you rely on manual systems that require more labor on your part, have greater potential for customer dissatisfaction, and result in customers throwing away toner because they pay the same on their CPC or MPS 'per page' usage contract regardless of how much toner is left in the cartridge when it says "toner low".

In today’s business, operational efficiency is everything. Sure - you can hire more sales people to chase after a bigger share of a shrinking pie. You can buy up the dealer in the next city who is also facing the same pressures, but does this make your business any more viable for the long term? I would argue the answer is no. The reality is, if you are going to not just survive, but thrive in the future - it's all about making your business efficient. Getting the most value with the least resource investment is the key to success. 

Let's go back to the supplies example. Based on the use of SuppliesIQ across customers in the US, Mexico, and UK, we know that on average your current system wastes up to 15 to 20% of the toner or ink in the supplies you use for your CPC or MPS contracts. That means you are only getting "at best" 85% of your rated supplies capacity, and in most cases 80%[SH1]  or less of your rated supplies capacity. And yes, if you are using your fleet management tools 'supplies optimization function' that number pretty much stays the same (or even gets worse due to early cartridge shipment errors). Would you be happy driving a car that only gave you 85% of the claimed MPG rating? That's what you’re doing with the fleets you manage!

Using the Virtulyix SuppliesIQ predictive analytics tool, you can reduce this waste by up to 90% (we average 85%!). You can get benefits by just using SuppliesIQ with your existing process, even if it is manual. However, the real benefit goes when you shift to an automated Just In Time (JiT) supplies replenishment system. This is where really big savings come into play. Plus, it actually is a better customer experience.

If you go to an automated JiT system, you can make your customer experience better by reducing the amount of waste (being environmentally friendly), saving space (no more need to store toner at the customers site), making office equipment management easier (they don't have to worry about supplies levels, they just show up when they are needed), and offering competitive prices (since you are operating more efficiently - you can compete, and still make money). And with a good system, you will need less labor in your shop, which means you improve your margins and make more money. SuppliesIQ and automated supplies replenishment give your customer a true Just In Time supplies delivery service that lets your business operate at 100%!

So, I come back to my original question. Can you afford to operate at 85%? Learn how much wasted supplies are costing you by visiting our free savings calculator. Or sign up for a demo to learn how your competitors are making more money and improving their customer experience.