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Mail-Well Commercial Segment Reports Progress In All Phases Of Ongoing Restructuring Plan

Press release from the issuing company

ENGLEWOOD, CO, January 23, 2004 — Senior executives of Mail-Well Inc., one of North America’s leading producers of visual communications, report progress on all fronts as they carry out a comprehensive plan to reorganize the structure and refocus the strategy of the $1.8 billion company. The plan compacts the company from three business segments to two, remaps its geographic organization, unifies its sales offerings, and streamlines its management. Executives say that the result is a leaner, nimbler Mail-Well that is easier for customers to do business with and quicker to leverage opportunities for cross-company selling. They add that the company is extensively retooling its systems and procedures to take maximum advantage of the efficiencies made possible by its new structure. The plan, first announced to Mail-Well customers and stakeholders last October, consolidates the company’s commercial printing and envelope businesses into a single group for direct sales to national and local accounts. This unit – called the Commercial segment of Mail-Well – consists of 36 printing plants and 29 envelope plants that account for about $1.4 billion of total company revenues, according to Keith Larson, the division’s Executive Vice President-Sales & Marketing. Twenty-one companies make up the Resale segment, which consists mostly of plants from Mail-Well’s former office products segment. These companies currently sell about $400 million worth of products to third-party dealers such as print distributors, forms suppliers, and office-product retail chains. The Commercial segment, once dispersed across seven territories, has been compressed into five regions: West, Mountain, Central, South, and North. Each region has an Executive Vice President to which all Mail-Well operations within its boundaries report. Gordon Griffiths, President of the Commercial segment, said that the reorganization harmonizes Mail-Well’s structure with its principal strategic goals: to operate as one company; to provide customers with one point of entry into Mail-Well; and to go to market with the company’s complete range of products and services represented in the value proposition. Before the reorganization, Griffiths said, “our structure didn’t support our strategy.” Describing the new structure as “a mindset as much as anything else,” he said that he and his management team were committed to “changing the culture of Mail-Well” in keeping with the objectives of the plan. Griffiths’ senior managers agreed that the timing and the circumstances were right for an historic reorganization of Mail-Well, a 10,000-employee company that operates in 30 states and provinces and claims to be the world’s largest manufacturer of envelopes and of printed office products sold through distributors. James Cozart, Vice President-Sales, Marketing & Technology, said that the restructuring is “the natural evolution of what a roll-up company should do.” He explained that Mail-Well, having “codified” internally after growing by acquisition, “has spun it around 180º and is now focusing on the customer.” Bob Brundage, Senior Vice President-Sales & Marketing, noted that the plan was a logical extension of an ongoing initiative called SOAR – the initials of the strategy that exhorts Mail-Well employees to achieve “Superior operations; Operate as one company; Align with market demand; and Replicate success.” SOAR and other motivational programs like it have been helping to transform Mail-Well’s culture for the last two years, according to Gary Forget, Vice President. He noted the special importance of simplifying the interface between Mail-Well and its estimated 80,000 customers in North America as vendors everywhere face pressure to be more efficient. “Our customers are demanding, ‘We want one way of doing business with you,’” Forget said. “The restructuring is a response to that demand.” Larson said that for large customers doing business with more than one of Mail-Well’s 86 companies, the new structure will combine “all of the benefits of a national contract – volume discounts, brand control, and consistent quality and color – with the advantages of service at the local level.” Mail-Well can now improve the experience by assigning coordinators to manage customers’ jobs across all Mail-Well facilities in which the work is done, according to Larson. “It’s a great model,” he said. Local service will remain the keynote of Mail-Well’s relationships with customers of all sizes, Larson emphasized. Noting that Mail-Well printers typically are $20 million sheetfed shops serving metropolitan areas, he called their proximity to customers “the core of our value proposition.” He added that Mail-Well’s smaller-scale presence in many areas distinguishes it from competitors relying on very large installations in a handful of regions. “Eighty percent of our customers are within 200 miles of our plants,” Larson said. This means, he said, that Mail-Well can be “right there next to the customer” to offer the convenience and flexibility of a local provider for quick-turn, short-run work. Larson and others stressed that simplifying customer transactions will be a top priority in everything that Mail-Well does from now on. Brundage said that the formation of the Commercial segment would help customers to “shrink the sheer number of suppliers they deal with” because “under one umbrella, they’re getting access to 65 manufacturing plants.” Cozart agreed that the new structure would prevent the “confusion” of overlapping sales calls and eliminate the customer’s need to deal with more than one sales representative. “It’s pretty simple for a customer to enter our system now,” Larson said. According to Larson, Mail-Well’s sales force has been redeployed not only to assure customers of more efficient transactions, but also to acquaint them with the complete range of Mail-Well products and services in every sales call. He explained that the 650-strong sales group includes a 50-member “direct sales management team” set up to help the field sales force make the most of cross-selling opportunities. The management team includes industry specialists in banking, telecommunications, and other vertical markets served by Mail-Well; product specialists in print, envelopes, and other categories; and a cadre of technical experts in customer relationship management (CRM) systems, e-commerce, and similar solutions. These support personnel are on call to help the field sales force pinpoint customer requirements and deliver the right mix of products and services to meet them, Larson said. Brundage noted that cross-selling already was the goal of Mail-Well’s “Total Customer Solutions” strategy and that the company’s new structure would multiply its opportunities to better serve customers in this way. “We know that if a customer buys print, the odds are very good that they’re buying envelopes; and if they’re buying envelopes, we know that something’s going into them,” he said. Total Customer Solutions also includes a large-customer support organization called the 360º Enterprise Solutions Group, an 11-member section dedicated to optimizing service for accounts doing or capable of doing at least $5 million to $10 million worth of business with Mail-Well. Thanks to these programs, said Larson, “we’ve combined all of the sales force into one team for direction, support, and consistency. We now have 650 sales representatives working as one team.” To underscore the restructuring, Mail-Well also is updating its management systems, institutionalizing its best practices, and expanding its digital production capabilities. The company recently hired its first chief information officer, Matt Mitchell, whose primary task will be to develop a common platform for data utilization throughout Mail-Well. One goal of this effort will be to consolidate the databases of every Mail-Well company in a system that can offer all-in-one invoicing to customers dealing with more than one Mail-Well facility. According to Larson, a $10 million internal study called VISTA (Vision Information Standards and Technology in Action) is helping Mail-Well to identify its most effective standard procedures for adoption throughout the company. Among the 175 standards spotlighted by VISTA, Larson said, are a uniform chart of accounts now being used by all Mail-Well companies; and common systems for budgeted hourly cost accounting, estimating, and shop-floor data collection, currently being phased in. On the production side, Larson said, Mail-Well has added 20 digital presses to its conventional complement of 111 sheetfed and 34 web offset presses. He said that the digital equipment includes “four brand new HP Indigos” and that more of these color variable-data presses could be added as Mail-Well’s digital print capacity grows. Another project, the “Mail-Well Color Control Program,” will implement a standardized color management workflow in all Mail-Well locations. The net result, according to Larson, is that Mail-Well has realigned “86 companies that were doing their own thing” into a unified and cooperative whole. “Mail-Well was definitely ready for it,” he said. “It was the right moment in our history.” “There’s no reason to exist if we don’t act as one company in the marketplace,” Griffiths declared. “We’re like the pioneers in early America – there’s no turning back,” he said. But he voiced confidence in the outcome: “This is a good idea with good people behind it.”