Changing Times for the Paper Segment
When I was growing up, paper was a powerful lever that could be used to turn an unexciting “last look” into a profitable winner. It was a tool belt unto itself. But, as Bob Dylan belted out in 1964, the times, they are a changing.
Paper procurement USED to be a strategic function. For printers, it was an opportunity to leverage scale of spend to better serve our customers and in so doing, to beat the competition and convert opportunities into profitable business. I cannot remember a single occasion when I had to turn down an order because I couldn’t get the right paper. I can, however, remember hundreds of occasions when I won projects because another printer couldn’t find paper.
Now, I don’t even get the chance to furnish the paper half the time. Another portion of the time, an end-user directs me where to go and how to do my job. I’m not sure this is quite the revolution Dylan envisioned.
I’ve had plenty of discussions with various mills on this evolution in channel. Most mills still have their longstanding preferences on channel, but given the tough competitive dynamics of our marketplace, game theory dictates that they must sell to merchants, printers, paper brokers, and end-users. I don’t see another way around it, and in the main, neither do they.
For us printers, this creates absurd situations. For example, I recently received an e-mail from a national accounts group mandating that I procure all of my paper from a certain contact in a far-off office. What’s laughable is the frequency with which the price lists lack the products that the end-user actually uses. I sometimes wonder if they did any work at all putting that price list together.
The sales rep followed up with a call to inform me of the new construct dictated by the end-user. He gave me a fifteen minute lecture on how things would work in their new, “centralized and efficient” workflow. Then, he asked if I was familiar with his company. To his surprise, I knew his company very well and let him know that I have been spending eight figures with them for some years. What I didn’t tell him is that I have been buying paper from them for this very end-user for the last seven years. So much for the benefits of efficient centralization!
I feel terrible for my local rep who had admirably serviced the business for years, only to lose it to someone representing the same mill from his same company out of another office.
It made me wonder what might happen if a couple of large mills established clear policies on distribution channels to clean up some of these inefficiencies? Pretty quickly I remember who I’m talking about and I conclude that this is no more likely than a swift solution to climate change, Middle East peace, and unfortunately, postal reform.
And now with Unisource and xpedx marching towards the altar, we’re in for more change. Paper has been through a decade of job cuts and re-organizations, but I guess we’re in for another big round. Indicative of the changes in perception, most printers I know didn’t even blink an eye when they heard about these two giants coalescing.
That’s a big sign that Dylan had it right. Historically, any tiny change with potential consequences for the printer’s buying power has set aflame strong emotions and shockwaves throughout the industry.
Are we just accustomed to these changes, or are we simply recognizing that there’s not much we can do about it? Or maybe it’s just not as important to our business as it used to be.