Case study: Kuehne+Nagel saves paper and cash with managed print services

Partnership with Lexmark also lets company drop printer inventory by 53 percent

May 14, 2012
Michael Power

Sea freight forwarder Kuehne+Nagel tracks millions of pieces of freight every day. To keep operations running smoothly, the company relies on sophisticated systems and printed documents to accompany shipments worldwide.

“We are a premium services company, so getting our invoices, waybills and reports out is critical,” said Scott Forest, Kuehne + Nagel’s senior director of procurement. “If invoices don’t go out, we don’t get paid.”

As Kuehne+Nagel grew, the scope of its output environment, including all of its printers, copiers, scanners and fax machines, remained largely unchecked. Attempts to track output costs and toner consumption were thwarted by equipment and consumables budgets that were spread throughout multiple departments.

The evidence that an opportunity existed to rein in costs and improve printing operations was visible. Unclaimed print jobs piled up on tabletops. Toner cartridges lined storage closets. Recycle bins were filled with paper. Aging devices were more costly to maintain and were prone to breakdowns. The IT staff had difficulty keeping up with device maintenance for so many equipment manufacturers and models. All of these signs led to diminishing user satisfaction and costs that continued to rise.

An inventory of printers in its US headquarters was revealing: 1,400 devices encompassing 66 different models from eight manufacturers—supporting a US workforce of 3,500. Many of these devices were single-function, desktop inkjets that were not connected to the network and couldn’t be shared among employees. These devices also lacked advanced features and required more expensive, lower capacity consumables.

“It was clear that we needed to regain control of our output infrastructure and cut our costs,” said Forest. For Kuehne+Nagel, regaining control meant, first, establishing a comprehensive output strategy. “A key goal was to implement managed print services so that we could outsource device management and maintenance to a partner,” said Forest.

Kuehne+Nagel embarked on a project to lower overall costs, drastically reduce its fleet size, standardize on one manufacturer, cut paper use and completely outsource management of its output fleet. After analyzing proposals from several providers, Kuehne+Nagel chose Lexmark.
“We had to pick the solution that was best for us and that would give us the best return on investment, the best cost reductions, the best consolidation of devices,” Forest said. “Lexmark came out on top. It wasn’t only the technology. It was the partnership, the flexibility and it was the cost factor. It was also the future solution and how it was presented.”

Lexmark consultants visited Kuehne+Nagel offices, making specific recommendations for models from a single product family to closely match printer capacity with departmental demands. Consultants interviewed employees about their usage and mapped building floor plans to determine a set of deployment principles for the capacity and placement of the new printers and multifunction printers (MFPs). By evaluating departments’ needs—like human resources, marketing and legal—the team could ensure that employees were gaining more capability, capacity and features with the new approach, while still meeting cost reduction objectives.

The new laser printers and MFPs encompass just a few models from a single Lexmark product family that all share the same toner cartridge type and feature the same touchscreen panel. All of the devices are set to default to duplex, thereby printing automatically on both sides. With a standardized and optimized Lexmark output environment, employees experience the same user interface on every device.

Lexmark monitors all the output devices on the Kuehne+Nagel network. The devices themselves report back their health so that issues can be dealt with. The Lexmark devices automatically trigger a Lexmark toner cartridge to be ordered as soon as toner reaches a certain threshold. The cartridge is shipped and arrives to the device location in time to be replaced. The devices also report error conditions automatically to the help desk.

Kuehne+Nagel now has information upon which to make business decisions. The company knows how many devices it operates, where they are, what they’re printing and whether each of those devices is overused or underused. Toner and other consumables are shipped, arrive and are replaced automatically, freeing employees from ordering, storage and replacement and freeing up closet space.

Kuehne+Nagel has also slashed its device headcount by 53 percent—from 1,400 to 660. Its user-per-device ratio climbed from 1.5 : 1 to 3.2 : 1. The approach has eliminated one million abandoned print jobs, saving the company 15 tons of paper annually and aiding its sustainability goals. Operating and consumables costs are down by more than $1 million annually as a result of the managed print services approach. With Lexmark now monitoring fleet operations and responding to service alerts, Kuehne+Nagel’s IT staff is able to focus on other strategic initiatives. Amidst these business results are satisfied employees who now have more advanced features such as scan to email, color printing, duplex, multi-up printing and other finishing features that they did not have previously.

Though this phase of its output strategy is complete and the benefits continue to accrue, Kuehne+Nagel is continuing to pursue opportunities to leverage its MFPs. “This is a solution that will carry us well into the future,” said Forest. “We are looking at improvements to our business processes so that we can scan more documents into our systems more rapidly to provide services more efficiently internally and for our clients.” According to Forest, Kuehne+Nagel is also looking to replicate this approach in other regions around the world.

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