Postal Partners

Merging with their organizations' mail operations has made these in-plants indispensable.

by Mike Llewellyn

IF YOU weren't watching, you wouldn't have caught it.

Four years ago Carl Johnson's supervisor, who was in charge of the mailing operation, was relocated. It was a small change—a barely noticeable shift in the architecture of Nevada's Washoe County government. But before Johnson knew it, the move had permanently altered the scope of his in-plant. He was given responsibility for the mail operation.

The first thing he did as supervisor of mail and reprographics was roll up his sleeves and figure out what kind of equipment he needed.

"We invested in extra equipment—mostly inserting and addressing," says Johnson. "It cost us $60,000 to get into this business."

But it was a price well worth paying. By offering mailing as part of the six-employee in-plant's list of services, not only have customers seen substantial savings, Johnson's in-plant can counsel clients on economical package design and can help them avoid getting on the U.S. Postal Service's bad side—by catching potential mail problems before an envelope is even printed.

This is a lesson in-plants all around the country have learned. Fully half of them list mailing as one of the services they provide, according to IPG survey data.

Walter Leonard, director of general services for Sonoma State University, in Rohnert Park, Calif., also had a mailing operation virtually dropped in his lap. He says his in-plant merged with mail during the last recession, back in 1991. Jobs were lost in the process, he remembers, but in the long run, the merge turned out to be good for the in-plant, which now employs five in printing and 10 in mailing, including four students.

The Sonoma State University shop runs two Ascom Hasler (now Hasler, Inc.) mailing machines side by side to maximize the efficiency of the operation.

"We were able to buy two whole systems for less than the cost of one Pitney Bowes system," he says, adding that his shop's location had a lot to do with the price (Hasler is nearby).

"Having two machines adds a lot of value," he says.

New Addressing Equipment

At Carl Johnson's operation, jobs are submitted to the shop's relatively new Pitney Bowes addressing and inserting equipment via SmartMailer software. The addresses are printed on a Xerox DocuTech 135, which Johnson says the shop had long before it began handling mail.

But both men knew the best equipment in the world can't run a mailing operation by itself. Each manager had to learn volumes of postal regulations. Johnson believes this was easily the most challenging part of the process. He attended three different postal forums hosted by the U.S. Postal Service soon after taking on the mail facility.

"There's just a ton of information to pick up at those sessions," he says.

Leonard also attended training courses offered by the postal service, and to top off that education he uses the Domestic Mail Manual (DMM).

Learning the dry material has been a huge help, says Leonard. Having a wealth of knowledge regarding postal regulations saves him, and his customers, a lot of headaches. For example, sending certain commercial packages through the mail without the proper documentation and fees paid, he warns, can result in stiff fines being levied against the sender.

"Knowing things like that has made my services easier to sell," he reveals.

Mailing expertise has allowed Leonard to pick up a few new and grateful customers, as well. The admissions department is just one.

"They were sending everything out first class," he says. "I contacted the vice president, and I said, 'I guarantee we will save you money on printing and postage.' "

As a result, Leonard's facility handles all of the admission department's mail.

A Get-rich-quick Scheme It's Not

Johnson says that if an immediate increase in profits is what you're after, investing in a mailing operation might not be the best way to go.

"I'm not sure we're even turning a profit," he says. "We don't charge back in the mail room, just in the print shop, for tabbing and folding."

To offset the cost of the mail operation, Johnson is looking for opportunities wherever he can find them.

"One thing we are doing is charging back what customers we can—any non-county entity, which we call 'enterprise funds,' " he says. "They're supposed to pay for all the expenses."

Sonoma State's Leonard also admits it's tough to turn a decent profit with a mailing operation, but it can be done (see sidebar).

"You can actually make money from postage," he says. "We haven't gotten into that yet as much as I want to. But there's a fair amount of money to be made if you're allowed to do it."

Leonard cites mail clearinghouses as an example of an operation that mails in bulk for a profit.

"You give your customers a good deal, but you get a better deal because everything is CASS-certified," he says, referring to the post office's Coding Accuracy Support System that ensures every address in a mailing has a physical counterpart in reality.

"So mailing is not very important right now as a profit generator, but the potential is there," he says.

Staying Positive

Johnson says that while merging with a mailing operation may not be directly helpful when it comes to the in-plant's bottom line, it is worthwhile in the long run.

"Merging with the mailing operation is very beneficial," he contends, adding that in time, this will translate into more business for the in-plant.

"It's a benefit for the in-plant because it makes us more closely tied to the organization," he explains. "They're concerned about the economy, and they know that closing the print shop would be a certain loss to the organization. We're hoping they can't do without us."

Leonard also finds the primary advantage of the merge to be that it has created a more complete shop, and a fixture on the university's campus. For starters, he says it's fortunate the school's mail system operated out of the same building as the print shop.

"The first benefit was that I could use the whole building, so we could do one-stop shopping for the school," he says.

Additionally, the merge brought the in-plant an influx of new customers.

"We promoted this new aspect of our business, saying anything reprographics does will be correct as far as the postal service is concerned," he says. The service introduced new customers to some of the in-plant's existing services, he adds.

Overall, he says, the good will that operating a low-cost mailing operation generates among customers assures their repeated visits for any number of jobs—both printing and mailing.