Beating the Shell Game With Inkjet
Ah, the equipment lease. It’s an in-plant shop’s best friend. As many operations prefer to re-evaluate their needs in accordance with their five-year business plans, the pending expiration of a lease provides a golden opportunity to reassess how customers’ needs are being met. Are we, as a shop, turning around jobs efficiently and effectively, with an eye toward cost containment?
The violent technological changes taking place in the printing arena dictate that shops can ill-afford to fall behind the curve with outdated gear. One prime example of a fortuitous lease expiration is the in-plant serving Physicians Mutual, based in Omaha, Neb. In 2014, Physicians Mutual saw leases for both its printing and inserting equipment nearing expiration. The timing, however, was more opportunity than challenge.
Founded in 1902, the parent company consists of Physicians Mutual Insurance Co. and Physicians Life Insurance Co. The former offers Medicare supplement, dental and supplemental health insurance while the latter provides life insurance coverage and annuities. The companies have more than $3.8 billion in combined assets.
A 50-cent tour of Physicians Mutual’s Mail Processing Center (MPC) is in order. The 41-employee shop — which operates 5:30 a.m. to 6 p.m. from its 90,000-sq.-ft. facility — services the printing and mailing needs of seven different departments at Physicians Mutual. It produces 30 million pieces annually — of which 22 million find their way into the mail stream — resulting in an operating budget of $4.3 million, done on a chargeback basis.
MPC offers myriad printed materials, from policies and checks to rate books, brochures, agency kits, posters and raffle tickets. The shop boasts a veritable full production mailing facility, from printing to inserting.
“We house all material here at this facility; we have all the different printing, finishing and inserting capabilities,” observes Rob French, print production supervisor. “We’ve added some Duplos to improve process, allowing us to utilize those resources. I’m all about automation. If I can utilize those resources somewhere else, I’ll do it if we can automate a process.”
From Toner to Inkjet
As far as printing goes, MPC had been largely a Xerox shop — relying heavily on its cadre of two 495 continuous-feed machines, a pair of highlight color DocuTech 180s and two DocuTech 135 MICR devices. Two Konica Minolta bizhub PRO 1200s rounded out the fleet.
In 2014, with the leases coming up, Plant Manager Aji George and his staff began a vetting process that incorporated the company’s marketing group, a poll of customer needs and consultant Howie Fenton. During a six-month review with Fenton, MPC evaluated the best solutions for its needs and narrowed the field down to three manufacturers. In the end, the MPC Project Team opted to go with a Ricoh InfoPrint 5000 production inkjet press, a roll-to-cutsheet device with dynamic in-line perfing and dual engines for duplex printing.
“We were originally box-to-box, printing on the Xerox 495 continuous machine with preprinted stock,” George notes. “Then we would apply variable data to that preprinted stock. It was very costly; any time you use toner-based impressions, it’s going to be a little higher price-wise. We had more than 1,200 preprinted shells on our shelves.”
Geography played a role in MPC’s decision-making process. George’s crew made several visits to local printers that had multiple units installed, and all of them raved about the InfoPrint 5000. When Physicians Mutual’s executive committee gave the green light, it led to the elimination of the 495s, the 180s and the 135s. The shop also obtained two Ricoh Pro C9110 digital presses and two Kodak HD150 MICR devices. One of the Konica Minolta 1200s was upgraded to a 2250 (the shop kept the other) and MPC also uses a Xanté envelope printer.
Another perk resulting from the InfoPrint 5000 was the ability to consolidate the preprinted forms into a smaller footprint; in all, 250 inventory locations were eliminated. The annual outlay for the shells approached $400,000, a cost absorbed by the Direct Marketing Group, but MPC has drastically reduced those costs. Employing continuous improvement has allowed for the reduction in staff through turnover, resulting in savings of nearly $100,000 in annual salary.
“At one time, we thought there was no way we could implement the IP5000 from a cost and volume perspective,” George notes. “We’re doing five million impressions a month compared to the 10 million duty cycle that system can handle. We have a lot of room to increase our capacity, so if we ever want to bring something back, we can do that and turn it around pretty quickly. Right now, the IP5000 allows us to be about three weeks ahead of schedule for our direct marketing work. And we’re very efficient on the transactional side.”
The InfoPrint 5000 offers the capability to print self-mailers on rolls of heavier stocks. MPC then takes the mailers offline for folding. Previously, the mailers were done on cut-sheet machines.
As a lion’s share of the work being churned out on the InfoPrint 5000 is the marketing and transactional mail on uncoated stock, MPC has the color quality set to good (better and premium are the others). It saves money for the customers, who sign off on the quality before going full run, and they find the color quality acceptable. George points out that the higher settings produce “outstanding” color, but “good” works for most.
Web-to-Print on the Way
The shop is in the process of implementing WebCRD Web-to-print software from Rochester Software Associates to automate functions such as ordering, fulfillment and job ticketing. The interface has been introduced to Physicians Mutual’s agents in division offices, with rollouts planned for the agency group and eventually the external customers.
MPC produces much of the transactional mail for its various divisions — policies, monthly bills, payment packets, correspondence letters, to name a few. Jobs that are farmed out include special diecutting and laminating, along with banner printing and spiral binding. These jobs generally don’t rise in volume levels to the point where MPC can justify acquiring the equipment to keep the work in-house. One example of a need being filled was the acquisition of a Duplo USA DC-746 slitter/cutter/creaser, which has been a boon from a scoring standpoint and also offers an integrated folding system.
The parent company also recognizes the value of its in-plant, which was underscored in a market analysis performed seven years ago. Seven quotes were sent to companies within the commercial sector; five of the companies queried came in above MPC’s operating budget, while the other two printers didn’t express an interest.
“Everyone understands we have to have an in-plant to be successful,” George adds. “There’s real value that we add to our organization.”
Future Inkjet Goals
Moving forward, George would like to see the operation add cut-sheet inkjet capabilities and in-line inkjet on the mailing end (MPC’s current footprint doesn’t allow for in-line inkjet). A newer wide-format printer is also on the wish list.
“We’d like to grow our internal and external business and reduce costs, and that starts with reducing waste,” George says. “We’re pretty good from a waste standpoint. The IP5000 has allowed us to cut back a lot on the cost, especially with staffing. The ultimate goal is to become a white paper factory.”
French would also like to see MPC realize more utilization of the new equipment and software.
“Ricoh’s ProcessDirector [production automation software] is capable of more than we are utilizing it for,” he says. “We’re working with Ricoh’s team to create a roadmap for some of the things we want ProcessDirector to do. We want to be file based, and it has the capability to do that. Those are the opportunities we’ll take advantage of going forward.”
Related story: Mail Keeps Omaha In-plant Strong