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Date
Client
address
city, state, zip
Dear _____,
Thank you for the opportunity to provide you with information. We are approaching our twenty fifth year of service to Client Company and I believe that filling the ABC Print Services position last July marked a new level of partnership between our companies. Enclosed you will find a proposal for a custom Document Management program for the Client Company's Data Center.
In the last few months we have uncovered a tremendous cost saving and service improvement opportunity. Both can be easily achieved by opening a reprographics center at the Data Center.
Cost saving opportunity:
Hard-copy cost for desktop laser printer output is at least twice the cost of printing to the newest high-speed digital printer/copiers.
Client Company is faced with large capital expenditure to replace obsolete copiers.
Our Proposal:
Distributor Company will equip and staff a digital print/reprographic center inside the Data Center.
Benefits to Client Company:
- Hard copy savings of 3.5 cents per 8.5 x 11, single sided digital copier print (versus 7 to 9.5 cent estimated cost range for comparable desktop laser print).
- Over $125,000 worth of equipment, including a Xerox 265 digital printer/copier and a Canon 700 color copier, as well as a staff of five trained employees at no additional cost to Client Company.
- The cost of printed output to the reprographic center will be easy to track and charge to users.
- Secure mode print and Saturday availability to serve Accounting Department needs.
- Full feature collating and sorting will greatly improve volume report assembly.
- Windows environment copy machine will appear as another printer on the print menu.
- Online Internet ordering of retail store's printed business products.
- Better utilization of employees to identify cost-savings opportunities.
- Faster rush service.
The attached proposal details our proposition and the advantages to Client Company. We have attempted to address the main issues involved, however we welcome your feedback.
Thank you for the opportunity to provide this information. We pledge our utmost efforts to you. If you have any questions please call me at 555-5555, or e-mail at me@mycompany.com.
Sincerely,
Me
Vice President/Chief Operating Officer
The Opportunity
Cost of digital printer/copier versus laser printing. Photocopying is universally acknowledged to be less expensive than laser printing. The cost of printing to laser printers is directly related to the cost of toner coverage whereas the cost of analog photocopies is related to the number of impressions per month. Much of this difference came about due to the advent of quick printing shops whose profit requirements drove demand for high-speed output and tiered cost structures based on volume. Competition to place digital printer/copiers in the 60 to 65 pages per minute range has driven their costs to be comparable to that of analog photocopying. The main deviation is higher per click charges for maintenance and supplies due to the absolute lack of independent service organizations to provide for these new digital machines.
Buyer's Laboratory Inc. (Volume 20, Number 1, January 1998) reports that by Hewlett Packard's own reckoning the cost to print letter size, single sided to the average HP laser printer is 9.5 cents. Other estimates place the number at between 7 and 10 cents per print. For comparison purposes we estimate laser printer charges at Client Company of 7 cents per copy due to the practice of purchasing less expensive remanufactured toner cartridges. By comparison the cost of single sided photocopies is generally quoted between 2.5 to 4 cents per copy. Distributor Company will charge 3.5 cents for a single sided letter sized copy, our price to Client Company since 1995.
According to John Curtis, Hewlett Packard FirstView product manager, "the magnitude of the average company's hard-copy costs is largely unknown." Hewlett Packard considered the total cost of laser printer ownership to be "the last unaudited expense" in corporate America. (Buyer's Laboratory Inc. Volume 20, Number 1, January 1998) This statement holds true for Client Company also in that there is no tracking or budgeting of cost to output from the various laser printers distributed throughout the organization. In reality hard copy costs of laser output are de-centrally managed over many departments and associates. Furthermore no simple method exists to quantify hard-copy usage and costs associated with desktop laser printers.
One of the most powerful benefits of our reprographic center will be that Client Company will know explicitly the cost for printing to the digital printer/copier. These costs can be accumulated and billed daily, weekly or monthly.
Service Needs Uncovered
Digital Printer/Copier Requirements:
Allows desktop access to less expensive printer/copier technology versus laser printing. Accounting department access to secure prints and photocopy for sensitive materials. Higher quality black & white periodicals, (Newsletter names) Rush service improvements.MRO Print Services position:
Requires a large amount of order entry. Requires full-time coverage for customer services and order taking. Receiving and delivery duties required. Questionable need for sales function in this position.Account Executive position:
Increased activity in identifying cost saving opportunities. Increased capacity for researching solutions. Responsible for marketing Print Services. Coordinate form design and typesetting of printed business products. Art production. Potential for monthly flyer art production in-house. Online form requirements (*.PDF and Lotus Suite compatible forms).Our Proposal
The Distributor Company print shop will move to the Data Center. Our offset presses and bindery will reside in the old _____ construction office, an unfinished cinderblock structure "in the back". Our reprographic center and the Print Services associate will be conveniently located in an unfinished area next to the Accounting Department for access by end-user associates/departments.Central to this proposal is the addition of a Xerox DC265ST digital printer/copier to our reprographic center. This $32,000.00 sixty-five page per minute printer/copier provides the high quality 600dpi output of a laser printer with speed and costs comparable to traditional photocopiers. This printer will reside on the Client Company network and will appear as a printer selection on all Windows desktops. When an end-user needs to output a job to the copier they will simply print to the Xerox 265. The job will queue and output in the reprographic center for pick-up or delivery by the mail cart.
Advantages
Reduce printing costs through the use of a digital printer/copier.
Capture desktop laser printed jobs and self-serve photocopy jobs in quantities of two or more. Hard copy savings of 3.5 cents per 8.5 x 11, single sided digital copier print (versus 7 to 9.5 cents estimated cost range for desktop laser print output.)Track and budget for cost of desktop print
The "Total Cost of Ownership" of desktop laser printers is not currently audited in most corporations in America including your company. This is a difficult expense to track due to sheer number of people and departments involved. Also most laser printers do not accumulate usage information. Usage of our reprographic center will be easily tracked and accounted for through our billing cycle.Access to reprographic center equipment.
Over $125,000 worth of equipment, including a Xerox 265 digital printer/copier and a Canon 700 color copier, as well as a staff of five trained employees at no additional cost to you.Improved coverage of the MRO print services position.
The reprographic center will utilize three full time employees all of whom will be available to assist customers. Coverage will be from 7:00 a.m. to 5:00 p.m.Improve productivity and rush service.
Faster deliveries and fewer hours spent gathering jobs to be run at our shop. At least twenty hours a week could be saved through the elimination of courier service between the end-user associate and our print shop. Savings in productivity and cost of job production will be felt by the associates through lower prices, improved service, and additional equipment.Specifically address the needs of the Accounting Department.
The Xerox 265 provides a secure mode that holds specific jobs until released by authorized personnel. Saturday hours are available to further meet Accounting needs.Account Executive assigned to enhance service.
Will coordinate and manage cost reduction activities. Will market Print Services to provide high quality solutions to end-users.Online Internet ordering service.
Online Internet ordering of retail store's printed business products. Will reduce procurement costs and provide control of authorized form products.
Our Xerographic Charges
Distributor Company has charged 3.5 cents per single sided letter sized copy since 1995 and will continue to do so regardless of which machine is utilized.Within six months Xerox will offer job-tracking software to automatically assign ownership of jobs to the various departments. In the interim job ownership can be tracked at the time the job is printed or at job receipt. This data can be accumulated to identify repeating jobs that may be purchased more efficiently through other means.
While we will charge 3.5 cents for a single sided letter sized copy the actual breakdown of cost for these machines varies based on the monthly maintenance charges, the varying overage charges, and the monthly impression volumes on each machine. The following spreadsheets show the breakdown of our charges by machine. (include spreadsheets)
Spreadsheet Headings
No. Impressions/month
Depreciation per click
Base Maint per click
Average per click
Tlt monthly maint per click
Tlt machine costs per click
Paper costs per click
Labor costs per click
Overhead per click
Tlt cost/click
We average 250,000 impressions per month on our current copiers. The majority of these jobs come to us as hardcopy originals output from a laser printer. We can transfer up to 150,000 impressions to the digitally connected Xerox 265. The balance of the jobs will be split between the two analog machines. The average of the 150 M columns cost of the Xerox 265 and the 5680 is .0356. We believe the growth potential and our ability to utilize the less expensive machines will help us to average out to a profitable 3.5 cents per copy. However, if we cannot realize a consistent 300,000 impressions per month within the first six months we will increase our charge to .04 cents per letter sized single sided copy. Baird, Kurtz and Dobson's fraud examiner will oversee the determination of average copies per month. It would be a mistake to charge customers based on the true cost of the output because we would lose the convenience incentive for end-users to utilize the digital printer/copier versus their desktop laser printers.
Account Executive position will be responsible for coordination and facilitation of our Document Management Services:
- Oversee the handling of print services requests
Work with end-users to provide document solutions
Utilize print services employee and the Distributor Company staff to assist in clerical functions
- Identify and target opportunities to save money for Client Company Hard Cost Savings
Take bids on printing
Develop combination orders
Utilize more efficient construction of printed pieces
Utilize the most efficient means of production (Laser, Xerox, Digital, Analog)
Migrate printed pieces to online electronic media
Utilize high speed copier instead of laser printers for higher volume reproduction
Delivery handled by Distributor Company not Central Services
Standardization of store forms identifying pick & pack opportunities
Soft Cost Savings
Identify repeat orders
Identify pick & pack opportunities for store forms
Faster more efficient typesetting
Simplify work processes
Improve procurement efficiencies
Charge only an order processing fee for jobs awarded to lowest bidders other than Distributor Company
- Develop and write-up achievement goals and show progress at quarterly reviews.
Accumulate proof of cost savings provided through Document Management Service
Prepare computerized forms management reports
- Archive and manage all art production for forms and quick print.
EDC composition dept
Free-lance artists and typesetters
- Work with Manager as needed
Equipment Lists and Capabilities
The Reprographics Center
The reprographic center will require:
- A minimum of 300 square feet of space, 400 square feet preferred.
- One 220-volt outlet and ten 110-volt outlets.
- A telephone.
- An additional phone line for online connection to our mainframe.
- Connection to the Client Company e-mail system, Lotus Notes and Lotus Suite.
- Moving the Print Services IBM compatible PC to the reprographic center.
Reprographic Center Equipment List (provided by Distributor Company)
Description Electrical Requirement Xerox DC265ST (65 pages per minute)
Xerox 5680 (80 page per minute)
Canon 700S color copier
Paper jogger
IBM compatible PC for order entry
IBM compatible PC for Xerox DC265ST
Apple Macintosh Power PC
HP 6P Laser Printer
Glue paddy wagon
Paper swatch samples110-volt, 20 amps
220-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
Distributor Company will provide counters, tables, desks and chairs.
The Print Shop
The print shop will require:
- A minimum of 850 square feet of space, 1,000 square feet preferred.
- Three 220-volt outlets and twenty 110-volt outlets.
- A telephone.
Print Shop Equipment List (provided by Distributor Company)
Description Electrical Requirement Challenge paper cutter
Challenge paper drill
Baum 714 folder
X/rite 706 shrink wrapper
Hand held drier
3M 1190 Onyx plate maker
Amergraph plate burner
Socbox 4000 numbering machine
Maxim 10 collator
Booklet maker
AB Dick 9985 2 color press
Multigraphics 1450 2 color press
AB Dick 360 1 color press
Xerox 1090
Apple MacIntosh 7100 power pc
Dataproducts Typhoon 8 11 x 17 high resolution laser printer110-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps (dedicated)
110-volt, 20 amps
110-volt, 20 amps
220-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
220-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
220-volt, 20 amps
110-volt, 20 amps
110-volt, 20 amps
Capabilities
Distributor for forms manufacturing plants
Distributor Company has been a distributor of business forms for the past 30 years. The manufacturers for whom we distribute utilize large rotary/web presses which transform huge rolls of paper into multi-part computer forms, laser compatible cut-sheet forms, envelopes, labels and other printed business products. These multi-million dollar presses provide the absolute best economies of scale when printing quantities of 2,500 or more. For thirty years we have been helping our clients save money on printing by utilizing these highly efficient presses.Print shop experience
We have operated our own print shop for ten years, providing quick print services to our clients. Five years ago we added high speed photocopying and full service bindery to our shop. We also have typesetting equipment and computerized pre-press capabilities. We are a full service quick printer offering high quality output fast.Composition Department and Internet Access
Distributor Company serves nationwide markets. To better serve remote customers we have developed our Internet e-mail and e-commerce capability. These services allow customers to send electronic files to us for higher quality output and faster delivery. Also exact repeat orders are handle more efficiently in exchange for lower prices.Commitment to education
Distributor Company is committed to educating ourselves and our customers as to developments in our industry. To that end we are actively involved with the Document Management Industries Association, The Society for Service Professionals in Printing, and Print Image International.Technological breakthroughs
One of the most exciting technological developments is the advent of digital print engines such as the Xerox Docutech and the Indigo E-press. We have partnered with companies that offer on-demand printing of books and manuals using these digital presses. This technology allows you to order much smaller runs than in the past for substantial savings in cost and reduction of obsolescence. We offer Desktop Publishing training to help you utilize the revolutionary changes taking place in the printing industry.Document Management
Distributor Company has become a single source provider of printing and information management in response to the requests of our clients. As an experienced forms distributor who also owns and operates a quick print shop, we can place a job where it fits best for cost, quality and delivery. Distributor Company is uniquely able to provide document management services to Client Company.
Contacts at Distributor Company
Sales and Customer Service
____ _____
Account Executive
____@________.com_____ _____
Customer Service Representative
____@________.com
Corporate Officers and Management
____ _____
Director of Operations
____@________.com
_______ ________
Printing Operations Manager President
____@________.com_____ _____
Vice President/
Chief Operating Officer
____@________.com
Available at:
(555) 555-5555 - (555) 555-5555 - Fax (555) 555-5555
Internet E-Mail (see above)@___.com
Vice President's Home Number (555) 555-5555Hours of Operation
7:00 a.m. - 5:00 p.m. Monday through Friday. Extra hours are authorized as needed.Physical and Mailing Addresses