Opi app september 162 a

twenty five year anniversary

Office Products International

twenty five year anniversary

Big Interview

Connecting the

business products world

ISSUE NO.2 62

Wayne Beacham, CEO, SP Richards p16

September 2016

SEPTEMBER 2016

Getting Off Carpet and

Seeing thee Light with Genuine Joe

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WWW.OPI.NET

Jan/san opportunities p30 Depot reveals strategic plan p11

p23 GSA hope for US dealers? p47 Tech trends in cleaning

Contents September 2016

www.opi.net

News

Events

6 Round-up

40 ABC 2016

Technology and new product categories were two of the core themes at this year’s ABC event in Washington, DC

Manutan acquires in the UK; BOSS launches data standard

9 News Analysis

Essendant takes action after disappointing Q2; Depot reveals strategic plan

42 NAOPA 2016

The seventh NAOPA rewarded standout products and outstanding personalities

Features

47 ISSA/INTERCLEAN

16 Quietly confident

Bill Balek explores the emerging technologies in cleaning, all to be seen at this year’s ISSA show in Chicago

Wayne Beacham gives his take on the current state of SP Richards as well as the industry at large

51 Climb of Life

The 2016 Climb of Life cancer fundraising gets underway

23 US federal contracts Is the potential reopening of the US Schedule 75 a positive development for dealers?

16

53 Big Buyer

Details on Italy’s premier office products event

27 The smart washroom

The Internet of Things is enabling new ways of working. And the washroom is the first port of call for FM outsourcing firm Mitie

30

Regulars

27

5 Comment

30 Another door opens...

54 The generation game

Opportunities in jan/san abound, and even within the category there are plenty of options to explore

Daniel Kelly

56 5 minutes with...

36 Always on the hunt...

Tim Webster

Breaking away from the traditional has proved a real success for US dealer R&R Office Solutions

58 Final word John Barrett twenty five year anniversary

twenty five year anniversary

Big Interview

Connecting the ISSUE NO.2 62

business products world

Wayne Beacham, CEO, SP Richards p16

September 2016

SEPTEMBER 2016

23

Office Products International

Getting Off Carpet and

Seeing thee Light with Genuine Joe

WWW.OPI.NET

“By undermining full and open competition, closing the schedules to new offers mitigates the government’s access to the fruits of market forces: innovation and downward pressure on prices. In addition to contradicting the spirit, if not the letter, of the law, it is antithetical to the schedules programme’s raison d’être…” For the full story, turn to page 23

®

Jan/san opportunities p30 Depot reveals strategic plan p11

p23 GSA hope for US dealers? p47 Tech trends in cleaning

w w w.opi.net | OPI Magazine

3

Editorial Editor-at-large Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net

Editor Heike Dieckmann

Comment

+44 (0)20 7841 2950 heike.dieckmann@opi.net

Deputy Editor Michelle Sturman

Are you converging?

+44 (0)20 7841 2942 michelle.sturman@opi.net

Sales and Marketing VP – Continental Europe, Middle East and Africa Ewan Dickson +44 (0)20 7841 2954 ewan.dickson@opi.net

VP – North America and UK Chris Turness +44 (0)20 7841 2953 chris.turness@opi.net

Director of Growth Services Jeremy Hughes +44 (0)7807 810617 jeremy.hughes@opi.net

Digital Marketing Manager Aurora Enghis +44 (0)20 7841 2959 aurora.enghis@opi.net

Events Events Manager Lisa Haywood +44 (0)20 7841 2941 events@opi.net

Production and Finance Studio Joel Mitchell +44 (0)20 7841 2943 joel.mitchell@opi.net

Operations & Production Eda Sismanoglu +44 (0)20 7841 2950 eda@opi.net

Finance Kelly Hilleard +44 (0)20 7841 2956 kelly.hilleard@opi.net

Publishers CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net

Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net

OPI is printed in the UK by

The carrier sheet is printed on Satimat Silk paper, which is produced on pulp manufactured wood obtained from recognised responsible forests and at an FSC® certified mill.

It is polywrapped in recycleable plastic that will biodegrade within six months.

It’s not a surprise to me that our annual Jan/san Special issue has become one of, if not the most popular of our monthly magazines.

Whether you’re talking about general premises, restroom or breakroom cleaning and hygiene products, the opportunities for traditional office supplies resellers to grow in the jan/san category remain huge. And I know I may sound like a stuck record when I say this, but it’s still not too late for newcomers to join the party.

Take Office Depot, for example. It has finally woken up to the true potential of The opportunities this segment (see News for traditional office Analysis, page 11) and looks supplies resellers to set for a big push in North grow in the jan/san America as it tries to take category remain huge facilities and jan/san sales up to the $1 billion mark.

This convergence of the office products and jan/san sectors will no doubt be one of the themes covered at this year’s ISSA/INTERCLEAN North America show in Chicago at the end of October. As an appetiser to this important event, make sure you check out this month’s Final Word with ISSA Executive Director John Barrett (page 58) and our show preview (pages 47 and 49).

Will you be converging on (and in) Chicago?

Have a great month.

Andy Braithwaite Editor-at-large

CBP0009242909111341

No part of this magazine may be reproduced, copied, stored in an electronic retrieval system or transmitted save with written permission or in accordance with provision of the copyright designs and patents act of 1988. Stringent efforts have been made by Office Products International to ensure accuracy.

However, due principally to the fact that data cannot always be verified, it is possible that some errors or omissions may occur.

Office Products International cannot accept responsibility for such errors or omissions. Office Products International accepts no responsibility for comments made by contributing authors or interviewees that may offend.

Office Products International Ltd (OPI), 2nd Floor, 112 Clerkenwell Road, London, EC1M 5SA, UK Tel: +44 (0)20 7841 2950

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5

News n Round-up

News from opi.net Traditional OP

Stora Enso reviewing Paper division European paper, packaging and wood company Stora Enso has said it is reviewing options for the future of its Paper division.

CFO Seppo Parvi explained that the company is reviewing “how to create the best conditions for the Paper division to compete under increasing cost pressures and declining market demand”.

Expanding on this, CEO Karl-Henrik Sundström added that it was “an internal project” aimed at seeing “what we can do within our ownership structure”. This will include looking at things such as whether the Paper division will require its own IT infrastructure and HR department.

While it is not a strategic review as such, Sundström said that he would be willing to discuss possible divestments if the right offers came along.

Stora Enso has been shedding its paper assets in recent years as it transforms into a ‘renewable materials’ company. Ten years ago, the paper business accounted for 70% of the company’s sales – this is now down to 33%.

IT & EOS

Vendors could do ‘a lot more’ to stop counterfeit cartridges European channel players believe print manufacturers could do “a lot more” to stop counterfeit toner cartridges flooding the market, primarily through clearer labelling, according to the latest ChannelWatch report from Context.

When asked who they thought could do the most to stop the growing problem of illegal printer consumables in the region, a clear majority (55%) claimed print vendors could do more, although some claimed the channel (37%) and government (35%) could do the same.

Clear labelling (73%) for legal remanufactured and compatibles products was considered by channel members to be the best solution to the counterfeit problem. However, half of respondents also thought that better awareness campaigns from vendors would help.

Over half (58%) of resellers told Context it would be easy for them to spot counterfeits, but just 15% said they thought it would be simple for their customers.

Some major print vendors are taking the initiative. HP Inc seized more than 12 million items and enforced over 1,800 actions across EMEA between 2011 and 2015, while Kyocera seized €10 million ($11 million) worth of counterfeit goods in FY 2015. But during just April and May this year, Kyocera reported the capture of goods worth over €5 million – an indication of the growing scale of the problem.

Some vendors have also responded with secure holographic seals, serial numbers and other innovative features to help distinguish genuine from counterfeit products.

Manutan makes UK acquisition European business supplies reseller Manutan has acquired Essex Electrical Wholesalers, a UK specialist distributor of electrical trade supplies.

Based in Braintree, east of London, Essex Electrical has annual sales of around £4 million ($5.2 million) and an operating margin of approximately 5%.

The purchase price was not disclosed, but Manutan said the transaction was wholly financed by its own equity. The reseller has seen good growth in the UK following its 2013 acquisition of Ironmongery Direct. Manutan also operates the Key and Rapid Racking brands in the UK market.

Mergers & Acquisitions 6

OPI Magazine | September 2016

Events

ISSA/INTERCLEAN in Turkey postponed The ISSA/INTERCLEAN Istanbul 2016 event scheduled for September has been put back until October 2017.

ISSA and RAI Amsterdam, along with local partners UBM and TESHIAD, said that after careful deliberation they have made the decision to postpone the event, citing rising concerns from exhibitors and visitors regarding travel in and out of Turkey as the chief motive.

ISSA/INTERCLEAN Istanbul will now take place from 18-20 October 2017.

BOSS introduces standard data format UK office products trade association BOSS has worked with major industry stakeholders to agree on a standard format for the supply of data by vendors.

The brief was to see if an agreement could be found on a standard data format which would satisfy the requirements of the vast majority of vendors and resellers, and reduce unnecessary duplication and cost.

As a result, the BOSS Standard Product UniForm was created and is now ready to be used by EVO, SPOT and dealer groups, as well as manufacturers and resellers, to both request and receive new product data.

It has already been adopted for use and some of the specialist data providers like FusionPlus Data have already incorporated it into their automated extracts.

Associations

Amazon Business customers double in six months Amazon has said the number of companies using its Amazon Business platform has grown to 400,000.

This is double the figure reported at the end of 2015 and 100,000 more than in March, meaning Amazon Business is adding 100,000 customers per quarter.

The online giant confirmed that Amazon Business sales were more than $1 billion in its first year, but that number has already been out in the market for a few months.

According to the e-tailer, more than half of Amazon Business orders are fulfilled by third-party resellers and these now number in excess of 30,000.

Large Resellers w w w.opi.net | OPI Magazine

7

Worse-than-expected Q2 results prompt swift actions from CEO Bob Aiken

EssEndant

CEO Bob Aiken spent several days touching base with the wholesaler’s investors following disappointing second quarter results and a lower outlook that have sent its shares tumbling by more than 40% on the NASDAQ exchange since 21 July.

Aiken told OPI that the calls “went well” and that he had assured investors the management and board of Essendant still believed in the long-term strategy to be able to grow shareholder value.

See opi.net for a closer look at the quarterly results themselves, but one of the key issues was a year-on-year

in announcing a series of strategic measures around three main areas: 1. Focusing resources on customer channels that have the best long-term profitable growth prospects. These include e-tailers, vertical markets such as enterprise accounts, and large jan/san distributors (segments that grew respectively by 10.8%, 18.6% and 4.6% in the second quarter).

2. Improving gross margin dollars by “more effective” pricing and merchandising. This entails more closely aligning with key suppliers.

3. Reducing Essendant’s cost structure, mainly through further simplification of the organisational structure and a reduction of the distribution footprint.

Impact on relationships The first two of these points will certainly impact the relationships that Essendant has with both its suppliers and resellers. “A majority of the profits in the value chain today are captured by manufacturers, not wholesalers or resellers,” Aiken told OPI. “So the question becomes: How do we align with resellers in a way to help key manufacturers grow and capture part of that value?”

An example of the kind of alignment Aiken is referring to is the recent strategic partnership with TriMega which, among other things, will see

“A majority of the profits in the value chain today are captured by manufacturers, not wholesalers or resellers” gross profit decline of more than $15 million. Aiken said this was caused by two main drivers: a shift in sales towards larger – and therefore lower margin – customers, and a higher mix of lower-margin products such as imaging supplies and paper after categories including traditional office products, jan/san and, to some extent, furniture underperformed.

With these margin pressure trends set to continue, Aiken wasted no time

the wholesaler play a key role in the dealer group’s marketing production.

On the manufacturer side, Essendant is reducing inventory purchases by $100 million by the end of this year. It’s something that Aiken said won’t affect all suppliers equally. “We’ll look at where our strongest partnerships are. Where there are less strong partnerships, the impact will be felt more greatly,” he commented.

Market forces such as the growth of the online channel and the decline in traditional office supplies are continuing to hurt Essendant, so it is not a surprise that Aiken has announced what is effectively the acceleration of an existing strategy.

The wholesaler’s investors will be nervy too, with the current share price at its lowest point since mid-2009.

This has reduced Essendant’s market capitalisation to less than $720 million and there have been rumours that this could make the company an attractive takeover target.

Dochelli and Phillips to lead divisions after reorganisation One early result of the further reduction in complexity at Essendant has been to reorganise the company around its two main customer channels: business and facility essentials, and industrial essentials.

Harry Dochelli will serve as President of Business & Facility Essentials. Industry veteran Dochelli has been with Essendant for four years and most recently led the sales and care teams.

Heading the Industrial Essentials division is Ric Phillips, most recently President of the ORS Nasco industrial products unit.

He will continue in this role and also add oversight of the MEDCO automotive and CPO online businesses.

Both executives will report directly to CEO Bob Aiken.

Essendant also announced that COO Tim Connolly will be leaving the company as of 2 September, and that it will not be seeking a replacement for him.

Other senior personnel changes include the appointment of Keith Dougherty as SVP of Merchandising, Inventory & Pricing, and the promotion of Michael Hauck to the role of VP of Marketing & Digital. Hauck has taken over from Mark Evans who has now left Essendant.

Harry Dochelli

Ric Phillips

w w w.opi.net | OPI Magazine

9

news n Analysis

Essendant responds to market dynamics

News ■ Analysis

Depot reveals strategic plan Four main pillars involve cost cutting, shareholder returns and changes in the retail and contract divisions

WHEN

Office Depot released its second quarter results at the beginning of August, it also provided details of a new, three-year strategic plan.

Back in May, Depot had said it hired consulting firm Bain to help finalise a comprehensive review of the company following the failed merger attempt with Staples.

The result is a three-year strategic plan “to grow profitability and provide shareholder value” that comprises four key elements: accelerating opportunities in the contract channel; optimising and reinventing the North American Retail model; implementing multi-year cost reductions across the company; and returning capital to shareholders (see ‘The plan... at a glance’).

As Jefferies Managing Director and analyst Dan Binder summed up in his

Depot has already had some success.

As such, it is more of an extension of an existing strategy rather than something revolutionary.

What it means is that we can probably expect some disruption in the marketplace as Depot targets jan/ san-related acquisitions and goes aggressively after this business – as, indeed, it will be doing generally in the Contract division after adding more ‘hunters’ to its selling model while it looks to recoup the market share losses of the past 18 months. Staples has also previously said it is looking to acquire dealers to grow its small and medium-sized business client base.

Meanwhile, Office Depot CEO Roland Smith described the new retail format as a “bold new customer

“Management’s conclusions on what to do next were not too surprising and do little to really reinvent this company” note to clients: “Following a strategic review, management’s conclusions on what to do next were not too surprising and do little to really reinvent this company.”

Looking at the contract and retail aspects of the plan, what perhaps is surprising is that it has taken Depot so long to focus on the facilities and jan/san opportunity – Staples and progressive independents have been doing so for several years already. Education is another fairly predictable choice in a sector where

proposition”. Given that store downsizing and improving the customer shopping experience (away from the big box ‘stack ‘em high, sell ‘em cheap’ model) have been around for years, it is hard to see what is so new about it.

It’s not that these changes Depot’s management team is proposing do not make sense from a business point of view. They do. It’s just that there is a ‘me too’ feeling to the whole strategy rather than anything really bold or transformative. .

The plan... at a glance Below are the four key areas of Office Depot’s new strategic plan: 1. Contract channel Depot said it has identified a number of adjacent growth categories, including education and facilities supplies.

Jan/san, in particular, is seen as a $1 billion opportunity – Depot says it will triple the number of SKUs, add more private label products and look to make jan/san-related acquisitions to quickly add scale in this category.

2. North American Retail Following the closure of 400 stores since 2014, Depot says it will close approximately 300 more stores over the next three years, with 25 closures to take place this year.

It is also expanding the pilot programme of its ‘store of the future’ initiative to a total of 24 stores by the end of this year. This format features a smaller 15,000 sq ft (1,500 sq ft) footprint and is designed to provide customers with an enhanced shopping experience including a curated assortment of products and expanded services.

3. Cost savings The company has launched a new cost savings programme intended to deliver a further $250 million in annual savings by the end of 2018. Areas include the implementation of a more effective customer coverage model, a reduction in indirect procurement costs, lower overall general and administrative costs as well as the benefits from the expanded US retail store optimisation programme.

4. Shareholder returns The Depot board has approved the initiation of a quarterly cash dividend of $0.025 per share and a share repurchase programme of up to $100 million.

w w w.opi.net | OPI Magazine

11

News ■ And finally...

Comment In this issue, OPI asked members of the industry what particular challenges those involved in the jan/san sector are facing, and what impact technology is having on products and facilities services. (To read more on the sector, read the Category Analysis on page 30) The Internet of Things could be an issue and challenge for the future. It brings real value and functionality to customers.

Mélanie Martins, Digital Marketing Manager, CEP Office Solutions The jan/san category is one of the fastest growing categories for the office products sector.

We have also seen from our office products supply partners that demand for personal protection equipment is increasing. This is leading to more customers wanting to consolidate orders and purchase from just one single supplier.

Streamlining orders for office supplies where everything comes under one purchase order is a growing trend which is proving beneficial to companies of all sizes.

Joel Corsan, E-commerce & OPS Channel Marketing Manager, EMEA, Kimberly-Clark Professional Larger customers often look at price and service with a professional offer to cover all of their washroom needs. Smaller customers, on the other hand, may simply have a kitchen and a single small washroom area, and are therefore looking for ease of delivery in small quantities as space is at a premium.

Pascal Mitchell, Group Marketing Executive, Lyreco We are seeing some great developments in internet-based cleaning service monitoring equipment for washrooms, but this currently tends to be sold by facility management services companies and cleaning services providers (for more on this topic, see pages 27 and 47).

Debbie Nice, Director, Facilities Supplies, VOW A considerable challenge we’re facing is that there are more and more places available to acquire product from. Whether it’s e-commerce, club stores or new players from other channels trying to break their way in, it’s important that we stay up to date with the newest innovation, trends and marketing to keep our dealers competitive in the market.

John Molidor, Facility & Safety Merchandising Manager, SP Richards

14

OPI Magazine | September 2016

TWEET CHAT follow us on Twitter @OPInews, @andy_opi

@GetGarveys Useful! Especially when you work at an office desk all day! #officehack #markers #cleaning @delseyofficial Look who we found in the office today! #pokemongo #france #officelife @PokemonFR #Delsey @FastenalCompany On #NationalLazyDay our employees never take a break!

A last minute delivery was taken care of! @EuroCleanJour Toilet paper shortages and no cleaners are among Rio police grievances @StateMuseumPA Ever wonder how we clean William Penn? #curatorsatwork

10%+

Expected growth (CAGR) of the global smart bathroom market between 2016-2020

opi.net poll results What has been the biggest factor in successfully growing the jan/san category?

8%

$6 billion

Projected worth of the global disinfectants market by 2020

$51 billion Estimated worth of the US cleaning industry in 2015

4.3%

Expected growth of the jan/san industry in the US between 2014-2020

29%

34% 29%

Customers looking for single source solutions Sourcing the right products at the right price Hiring product experts Greater product knowledge

SNAP SHOT European online business supplies group EO Group got into the spirit of Rio by hosting its own office Olympics. The event kicked off with Pele the parrot lighting the flame followed by the whole team getting involved in chair racing in the street, archery in the boardroom, and fencing and long jump in the office.

Big Interview | Wayne Beacham

Quietly confident

The past 18 months have been full of question marks and speculation. Now the Staples/Office Depot merger is firmly buried and with another successful ABC event under his belt, SP Richards CEO Wayne Beacham gives his take on the current state of the wholesaler as well as the industry at large 16

OPI Magazine | September 2016

SP Richards | Big Interview OPI: So what’s your assessment of our industry as a whole?

WB: The market continues to be soft but it’s not without its opportunities. Core OP, along with paper and ink, continue to shrink – especially in areas serving the oil, gas and energy sectors – and there has been no real inflationary impact for a number of years.

While we continue to see consolidation within the independent dealer community (IDC) we believe those that fully embrace all of the technologies and the practical, addressable adjacent categories being made available to them, still have plenty of opportunity for growth.

by Heike Dieckmann heike.dieckmann@opi.net

THE

core message coming out of SP Richards’ (SPR) recent Advantage Business Conference (ABC) in Washington DC was clear: the future is bright for those willing to evolve, change and – sometimes – take a gamble (see also our ABC review on page 40).

OPI took the opportunity to catch up with CEO Wayne Beacham to delve a little deeper and find out more about the underlying challenges – not to mention opportunities – that exist, not just for the dealer community, but also for the wholesaler itself and the industry at large.

OPI: Let’s start with your recent Q2 results: national account customers were up in the mid-single digits, but this was offset by a similar mid-single-digit decline to independent resellers. That’s not too encouraging as regards to the independent sector, is it?

Wayne Beacham: You are correct regarding the sales comparison. First, our national account customer base has grown nicely and we are pleased with that performance.

In reference to our independent dealer results it really is a tale of two cities. Much has been said about two of the larger independent dealers – HiTouch/MYOP and The Supply Room – converting to our competitor. We enjoyed strong partnerships for many years with both firms – and still do – and we all hate to lose business but nobody can bat one thousand. We feel very positive about our ability to capture new business in this space.

And actually, when factoring out the aforementioned losses, our dealer business is growing a bit better than the national account customers. We do keep score and we’re in good shape. 2015 was a record sales year for SPR and we fully expect 2016 to be another one.

OPI: And you have no doubt seen your primary competitor’s recent results too...

WB: Obviously we follow all the publicly-traded players within our space. To comment on any individual results would not be my style. However, I will say that we feel positive about our position in the marketplace and we work hard to make decisions that can stand the test of time and position ourselves, employees, customers, suppliers and shareholders well for the future. We’d like to think our past results bear this out.

OPI: How about your business to the big boxes and other channels?

WB: We have seen significant growth in alternate channels and also with the big boxes. They, just like SPR and progressive resellers, recognise the opportunities in facilities, breakroom and safety (FBS), educational and other product categories, not to mention the long tail.

Every company has constraints with warehouse space, working capital or both. We see the big boxes and stocking dealers taking stronger stocking positions in these new categories, creating growth opportunities in more traditional products for the wholesalers.

“We all hate to lose business but nobody can bat one thousand.

We feel very positive about our ability to capture new business in this space”

OPI: Now that the Staples/Office Depot merger is finally dead and buried, what have been the casualties/winners of this prolonged saga?

WB: It is too premature to determine whether or not there have been winners and losers as a result of the decision made.

However, we believe that everyone is relieved that we have some finality around this topic. All parties now have the opportunity to look beyond any potential consequences of this merger and can once again focus on the business at hand.

OPI: Have dealers grasped the ‘disruption opportunity’ over the past year or so?

WB: This question should probably be posed to the dealer community. That said, over the years, there have been any number of events that could be classified as significant disruption opportunities and there will be some progressive, resourceful independent dealers that are focused and well-positioned to take advantage, if in fact there is – or was – some disruption.

OPI: What about SPR in particular – I assume the Depot contract is still yours? w w w.opi.net | OPI Magazine

17

SP Richards | Big Interview WB: We enjoy a strong partnership with Office Depot and have an important and growing relationship with Staples as well.

SP Richards has a very bright future as a result of a strong balance sheet and a strong management team. We are also very fortunate to have a supportive parent in Genuine Parts Company (GPC) that provides the CapEx and funding for the six acquisitions we have made over the past 30 months as we ourselves continue to evolve.

OPI: What’s at the heart of this evolution?

WB: For a start, the FBS category I mentioned before represents a $30 billion+ opportunity.

That’s change!

The industry as we know it will continue to change at a pace that far exceeds what we have seen historically. But what will that change look like? For SPR and our partners, that change – or opportunity even – can be seen in our recently acquired partners which include Impact, Malt, JAL, Garland C Norris (GCN), Safety Zone and two premium brands manufactured by Rochester Midland.

OPI: How satisfied are you with the product portfolio that all these acquisitions combined offer you now?

WB: Well, the fact that we have added Malt, Safety Zone and the two premium brands from Rochester Midland over the past nine months speaks volumes as to how pleased we are and where we are going with the GCN and Impact acquisitions.

We have made great progress rationalising what products SPR can support in our OP distribution centres, allowing the IDC to sell more products to existing and new customers. These acquisitions support our long-term strategy to diversify our portfolio of products. They fit in perfectly with the aim to bring products to the market that consumers want, without having to sell them direct.

OPI: Do you have plans to make further acquisitions in the short/ medium term?

WB: That is certainly our goal, but these things always take time, effort and resources.

However, our acquisition funnel continues to look promising and given the success of our recent acquisitions we

“We have given zero consideration to selling direct and we do not want to compete with our reseller channels”

remain optimistic that the necessary capital required from GPC to further expand our product portfolio will be available.

What I would also say is that in a world where wholesalers and buying groups are tasked with the challenge of bringing more products to the OP dealer channel, there remains one very critical component that we cannot underestimate – it’s having the distribution to support the offering.

To offer a broad array of products through either print or digital means is important, but having the supply chain and logistics to support the offering is critical for this approach to be successful. We confidently state that we do both better than anyone.

OPI: You mention selling direct. There’s been talk of wholesalers perhaps having to shift away from a pure wholesaler model and creating or acquiring direct reselling operations. What’s your view?

WB: We have given zero consideration to selling direct and we do not want to compete with our reseller channels. As a matter of fact, as we examine possible acquisition targets, unlike others that have been acquisitive, one of our criteria is that they be pure wholesale.

So yes, selling direct isn’t just talk, it’s a reality for some of our competitors. But that is not our direction at SP Richards.

Our ongoing strategy is to bring the right products at the right price points to market through wholesale distribution. And we believe our recent acquisitions reinforce that direction.

OPI: Talking about acquisitions, are you working on a common technology platform for the firms you bought? What will the level of integration be?

WB: As we do our IT due diligence when making acquisitions we look for every opportunity to leverage these resources. To date, many of the backroom functions have been transitioned to common platforms.

Due to the uniqueness of these companies we have acquired to date the customer-facing platforms remain the same. As you know, IT security is top of mind for consumers and corporations, and a great deal of work and investment has gone into this effort to ensure the needed data protection for our customers and ourselves.

Whether we attempt to bring the acquired companies under one platform at some stage is yet to be determined. w w w.opi.net | OPI Magazine

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Big Interview | Wayne beacham OPI: On the subject of technology, you talked at your recent ABC event about dealers needing to embrace technology and taking a more long-term, rather than short-term, ROI view. Can you elaborate?

WB: There’s no question that all of us have to not only embrace technology, but we have to recognise the need for a commitment of resources – time, money and human capital.

We feel we are doing our part at SPR, as are some dealers.

Our hope is that more dealers will take advantage of the technology tools that are currently available from SPR and the independent software providers.

OPI: Let’s go back to specific product categories. You have already mentioned the FBS opportunity. What are the best performers for you?

WB: Let’s first answer this question by focusing on these categories without our latest acquisitions. Clearly, FBS is our fastest-growing category. We have well-documented numbers that suggest our growth in this category far outpaces that of our competitors as the category has doubled as a percentage of our overall business over the past seven years. And this continues to be a focus for SPR on many fronts.

Organically, we remain bullish on the future growth of this segment.

When you throw in the acquisitions, that growth explodes. And what that brings to SPR and our partners is tremendous opportunity. How we define that opportunity and how we communicate it has been revealed at our ABC event and will continue to be explored in subsequent meetings with our customers around the country.

Our second-fastest growing category is furniture. The strategies and business plans built around this segment have been impressive. We have consistently outperformed the industry and we do not expect that to change any time soon.

Our Lorell brand leads the way with a very strong compounded annual growth rate over the past few years, and the Diamond Dealer Program has been a smashing success.

OPI: Please tell me about your Guided Acquisition Program (GAP) and its progress so far?

20

OPI Magazine | September 2016

“Our hope is that more dealers will take advantage of the technology tools that are currently available”

WB: Our Guided Acquisition Program is now 30 months old and we have assisted over 70 dealers in the selling or acquisition of a business. We have also helped dealers in establishing a formal succession plan.

We are highly motivated to keep the IDC business within that same community. In addition, we also want to help dealers receive a fair price for their years of sweat equity. We have an aging demographic, but still a very bright future. Our industry has some very talented young executives in the business and that is hugely encouraging.

The use of independent third parties, especially in the way of business valuations, has gone a long way to accelerating the process of buying or selling a company and narrowing the delta that has historically existed in the perceived value of a business between buyer and seller. This is a key differentiator in helping buyers and sellers reach a fair valuation.

GAP focuses on how dealers can effectively create value over the long term through both organic and acquisition efforts. Our expectation is that through these efforts, independents can grow at a return on invested capital that is higher than the cost of capital.

OPI: On a rather different subject: are you – and if so, how – supporting the IS/TriMega EPIC Business Essentials initiative?

WB: EPIC’s charter is to help the dealer community win regional, co-op and national contracts. If dealers work with or through EPIC to accomplish these goals, SPR will be fully supportive of the effort.

This does not clash with any of our own initiatives. Our job is to support the IDC in their endeavour to win new business. Therefore, we support EPIC in their effort to win new business on behalf of the IDC. OPI: To sum up, what will the future for independent dealers look like?

WB: We remain bullish about the future for many independent dealers.

Like I said, those dealers that evolve by preparing for and embracing new product categories, invest in technology and utilise analytics and other business tools will grow.

Those that do not, will not.

SP Richards | Big Interview

The big picture In addition to a look at SPR with Wayne beacham, here OPI talks to two of the top level executives at its parent, Genuine Parts Company (GPC) – CEO Paul Donahue and his predecessor and current Chairman Tom Gallagher OPI: Given the increasing blurring as well as expansion of product channels for resellers, what synergies do you see between SP Richards and other companies under the GPC umbrella?

Tom Gallagher: Back-office synergies are significant. A couple of examples would be our ability to leverage our global spend in key areas such as freight rates and sourcing.

Freight rates for both ocean and ground are negotiated on behalf of all GPC companies which results in better overall rates.

We also continue to leverage our Global Sourcing Offices in Asia across all four of our businesses. This initiative, which began with just four people ten years ago in a small office in Shenzhen, has evolved to include an additional office in Shanghai and over 50 GPC associates today. This team provides sourcing capabilities, vendor oversight, logistics and, of course, quality control for all GPC subsidiaries.

We also see numerous opportunities as they relate to direct spend. Key product categories such as safety supplies, jan/san and industrial supplies cut across many of our business units. Our product teams are collaborating internally to ensure we are leveraging our total spend by category and are partnering with common vendors.

OPI: By the same token, are there any parts of GPC that are not a great fit anymore?

Paul Donahue: Portfolio evaluation is an ongoing process within GPC, both at corporate as well as individual business unit level.

As far as the four segments of GPC are concerned – automotive, industrial, office products and electrical – we are pleased to be in each of these segments and we continue to invest in them. All four are evolving and adapting to changing marketplaces, but they are each leaders in their respective industries and all are part of the long-term strategy for the portfolio composition of GPC. OPI: You had your final Q2 conference call recently Tom. How would you say GPC overall and SPR in particular are positioned in the market right now?

TG: GPC is fortunate to have strong market presence in each of our businesses. We hold

the number one or two position in each of the segments that we operate in, with good operating margins and financial profiles for each business. Yet, despite being number one or two, in no case do we have more than 10% of the total market share. So there is plenty of growth opportunity.

The key will be to ensure that we have the right growth strategy for each of the businesses, combined with a crisp and consistent execution of these strategies.

Specific to SPR, we feel that they have done a good job in transitioning and guiding their business through what has been the most dynamic and perhaps tumultuous period that the OP industry has ever experienced.

If we go back to the year 2000, SPR did about $1.3 billion in sales, almost exclusively in core office products, technology and furniture.

Today they are a $2 billion company, still selling OP, technology products and furniture.

But in order to help their reseller partners capture new business and get a higher share of wallet with their customer base, SPR has expanded heavily into new product categories. And they have backed this up with sales training and marketing pieces to help resellers participate in these faster-growing new segments, while at the same time continuing their support for the more traditional categories.

PD: I’m certain that SPR will continue to evolve in the years ahead. Importantly, despite any industry changes that may lie ahead – and Wayne has already emphasised this – the SPR team will continue to operate as a pure distributor, selling only to reselling customers, and they will continue to be committed to the independent dealer community.

These have been and will continue to be their guiding operating principles.

Tom Gallagher

“Despite being number one or two, in no case do we have more than 10% of the total market share. So there’s plenty of growth opportunity”

Paul Donahue

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Schedule 75 | Hot Topic

A new lease of life for

Schedule 75?

A lot of independent dealers in the US were disgruntled when the federal purchasing vehicle known as Schedule 75 was closed to new applications in 2010. Now it looks as if the schedule is set to be revived... its highest-ever level, reaching $725 million in the financial year to the end of September 2011, while the scramble to obtain last-minute Schedule 75 awards saw their number grow to almost 630.

However, it’s been downhill since then as contracts expired and the GSA pushed FSSI; in the 12 months to the end of September 2015, sales through Schedule 75 had fallen to $519 million and indications are for further high double-digit declines in the current financial year. The number of active contract holders is now set to fall to below 300.

by Andy Braithwaite andy.braithwaite@opi.net

THE

ability of small businesses to sell office supplies to the US federal government has been the subject of some controversy for several years now. Historically, in order to sell to federal agencies, resellers needed to possess what is known as a Multiple Award Schedule (MAS); for office supplies and related services that is a schedule called MAS 75, often simply referred to as Schedule 75.

By September 2010, there were almost 600 Schedule 75 contractors responsible for sales of over $700 million. Then that month, the General Services Administration (GSA) – the US government department responsible for administering the MAS programme – announced that it would freeze the award of new Schedule 75 contracts as it looked to channel federal spending through its Federal Strategic Sourcing Initiative (FSSI) project (see News in Depth, OPI November 2010, page 9).

Ironically, in the following 12 months, spend through Schedule 75 achieved

“There is no greater barrier to entry for commercial firms than the closure of schedules to new offers”

Future role to play Nevertheless, there is still a belief that the MAS programme has an important part to play in the future of federal procurement.

As Roger Waldron, President of the Coalition for Government Procurement (CGP), notes: “With regard to GSA’s MAS programme, there is no greater barrier to entry for commercial firms than the closure of schedules to new offers. By undermining full and open competition, closing the schedules to new offers mitigates the government’s access to the fruits of market forces: innovation and downward pressure on prices. In addition to contradicting the spirit, if not the letter, of the law, it is antithetical to the schedules programme’s raison d’être.”

After a ‘false alarm’ in 2013 when the GSA said it was intending to reopen Schedule 75 but nothing came of it, the agency made an announcement earlier this year stating that it was considering options to reopen the schedule to new offers.

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Hot Topic | Schedule 75 It is a development that Waldron applauds, saying that reopening the schedule is “a major step” to reducing the commercial barrier, adding: “It also fosters continuity in the federal market as firms facing the end of their 20-year schedule contracts will have an opportunity to submit offers for a new contract. Reopening Schedule 75 also recognises the reality that it is the leading contract vehicle for office supplies.”

A revamped Schedule 75?

Paul Miller, Director of Legislative and Regulatory Affairs at the National Office Products Alliance (NOPA), says the GSA’s proposal to reopen Schedule 75 is “positive news”. In a letter to the GSA following its announcement, he wrote: “For over five years now, NOPA has been encouraging GSA to reopen Schedule 75 in an effort to allow for a healthy increase in competition, as well as to allow experienced contractors whose schedules are nearing maturity to continue partnering with the federal government.

A fresh start to Schedule 75 would greatly benefit the government and small business.”

At dealer group TriMega, EVP Grady Taylor admits that he has mixed thoughts about the possibility of Schedule 75 being reopened to new applications. The group, via its Point Nationwide arm and through a ‘piggyback’ arrangement with two of its dealers, has been able to provide its members with access to the latest incarnation of the FSSI office supplies contract (known as ‘OS3’). The fact that Staples does not have an FSSI OS3 contract has also been beneficial to independents, he notes.

However, Taylor does recognise that some independents have been negatively impacted by the GSA’s policies and that having more dealers being able to participate in selling to the federal government would be a positive development from a service aspect.

Paul Miller: Sees positive signs from the GSA

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OPI Magazine | September 2016

Waldron believes that the GSA “can and should open Schedule 75 as soon as possible”.

He argues: “There is nothing that prevents them from opening it to new offers immediately.”

Miller does not share that view: “There are still wide-scale inconsistencies in how the GSA identifies products, manages large item files and conducts competitive pricing analysis that need to be resolved before a new iteration of Schedule 75 is implemented,” he wrote to the GSA on behalf of NOPA members.

Since that letter, Miller says he has been encouraged with the level of dialogue with the GSA. There has been progress on a number of key issues, in particular with cleaning up pricing and with the introduction of an updated tool (the Formatted Product Tool, or FPT) for the uploading of products and pricing into the GSA system. “As critical as I have been of the GSA over the years, the cleaning up of the pricing is the best I’ve seen it,” notes Miller. “They are asking for our input and actually using it, so I’m optimistic [this will continue].”

“A fresh start to Schedule 75 would greatly benefit the government and small business” The new FPT will hopefully take out, or at least reduce, a pain point widely experienced by dealers over the years. “We’ve been talking to vendors and it has taken up to six months just to load their new catalogues,” says Miller.

“We had one dealer that lost a $15,000 order because they [the GSA] didn’t upload the new catalogue correctly – for Schedule 75, that was a significant order.”

Still, despite this renewed optimism and the sense that Schedule 75 will reopen, it is unlikely that this will happen anytime soon.

Roger Waldron: Wants to see Schedule 75 reopened immediately

erstaffed

Mike Tucker: The GSA is und

Schedule 75 | Hot Topic In March, the GSA revealed that it was looking at three possible options for Schedule 75: keeping it unchanged, transforming it, or introducing a ‘hybrid’ version containing elements of the first two options. The likelihood is for the hybrid version to be retained, but a decision is not expected before the end of the year, and then it could take another 12 months for the revised schedule to be developed and released.

There are also doubts about the GSA’s ability to handle what will likely be a surge in new Schedule 75 applications. Even now, as Kris Colt, President of Schedule 75 holder Mono Machines, points out, it can take the GSA 6-8 weeks or even longer to process contract modifications and he wonders whether staff there are “overwhelmed”.

GSA staffing constraints Indeed, states Mike Tucker, President of dealer George W Allen and a veteran of doing business with the US federal government, “the GSA is understaffed”. He adds: “It will take them a long time to process everything, and even if a budget has been approved to add more staff, these people will presumably be new and need training up.”

Miller agrees, adding that the GSA’s lack of ability to manage the changes required is probably what is stopping the agency from reopening Schedule 75 sooner. “They

“It’s too little, too late. I don’t think that it will create much excitement” should never have closed it back in 2010,” he bemoans. “They had the opportunity then to clean up the schedule quite considerably; now the pool [of contractors] is just going to get smaller and smaller.”

Despite participating in a NOPA taskforce that is liaising with the GSA, ultimately Tucker is underwhelmed by the talk of reopening Schedule 75. “I think it’s too little, too late,” he says. “I don’t think that it will create much excitement; what dealer would want to jump in with all the work that is involved?”

Miller has a more positive outlook, despite the continuing uncertainties surround the timetable and structure of a reopened Schedule 75. A meeting with the GSA has already been set up for October and he is hoping the agency will continue to be receptive to NOPA’s ideas and suggestions.“There doesn’t have to be this uncertainty,” he argues. “We are pushing for more input and the creation of specific industry councils; if the GSA took that idea on board, they could achieve really solid programmes.”

Federal Strategic Sourcing Initiative falling short “OS3 and Schedule 75 are here to stay,” declared a General Services Administration (GSA) representative during an office supplies Industry Day that took place at the end of May in New York.

OS3, of course, refers to the third stage of the GSA’s Federal Strategic Sourcing Initiative (FSSI) contract that was seen as an alternative for Schedule 75 after the latter was closed to new applicants in 2010.

However, the GSA’s failure to promote OS3 among federal government departments may be one reason why Schedule 75 is likely to be rekindled.

Transactional data reporting […] has already set alarm bells ringing about the level of data dealers will be required to provide “OS3 has been anaemic,” states Mike Tucker, President of US dealer George W Allen, who laments the GSA’s failure to issue letters of commitment to federal agencies requesting they purchase from OS3 suppliers, as had been the case in the previous OS2 contract.

While Paul Miller, Director of Legislative and Regulatory Affairs at the National Office Products Alliance (NOPA), believes this may in part be due to staff turnover at GSA, he also points to what he calls GSA’s “shiny, new penny”, category management.

Category management is a new attempt by the US federal government to streamline processes and cut costs by organising purchasing along product lines rather than by government agency or department. “FSSI was supposed to be the be-all and end-all, just as contract bundling was in the past,” explains Miller. “And then 2-3 years down the road, they find this new, shiny penny that’s supposed to be better.”

It’s early days yet in terms of how category management will impact the office supplies sector, but one change that could soon be felt is new reporting requirements that are being tested as part of the wider category management project. Called ‘transactional data reporting’ (TDR), this is a requirement for federal contractors to report data on individual orders and purchases made on GSA schedules. It has already set alarm bells ringing about the level of data dealers will be required to provide and what GSA will do with this data.

The news of TDR – which is currently being piloted – prompted Roger Waldron, President of the Coalition for Government Procurement, to write a letter on behalf of his members with more than 60 questions for the GSA. NOPA’s Miller argues that the GSA has the data already, it just doesn’t have the resources or expertise to extrapolate and analyse it. But he is also concerned about the level of data needed. “With transactional data, they will take all dealer pricing and turn that over to the whole of the GSA,” he notes. “The GSA says that some of that information will still be proprietary, but the question is what happens if it gets out – there are a lot of people handling that data.”

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Smart Technology | Feature

The facilities management (FM) sector is generally conservative and slow to adapt to change. But the Internet of Things (IoT) is enabling – as well as enforcing – new ways of doing things. And for UK-based FM outsourcing firm Mitie, it all starts in the washroom

ONE

of the most prevalent issues facing facilities managers today is the ability to accurately understand how a building is being used due to the amount of manual processes and the lack of available data. Without sound data analysis, decisions made have historically been based on judgement rather than fact.

FM providers, on the other hand, need to address how they attract talent by better engaging and empowering their employees. They also have to manage the rising cost of labour for their clients. The answer to all these challenges is technology.

Increasingly, companies are getting savvier in overcoming the usability barrier presented by smart devices and that means technology is becoming the norm in the workplace. IoT and the ability of devices to transmit and collect data through interrelated connectivity is the way forward.

Having seen the trend of consumer devices and apps transition into the workplace, it’s now a given that this will lead to smart buildings and digitised processes.

Smart working UK FM outsourcing firm Mitie has come up with a solution that is built on a technology-led strategy which empowers the workforce, with the overall aim of generating accurate data to inform decisions. It’s an approach unprecedented in the FM sector – the development of an innovative suite of software applications that embraces cloud-based and IoT supported by smart devices.

Bob Forysth, Managing Director of Total Security Management and Clean Environments at Mitie, says: “Previously all data was collected manually, if at all, inputted into spreadsheets to produce charts, then analysed. The laborious nature

of doing this meant that the data was sporadic, questionable and not fit for making decisions on.

Facilities managers were also unable to provide details on efficiency or identify trends.”

He adds: “Phase one of our solution saw the introduction of smart devices with bespoke apps designed to enable accurate data collection – and lots of it. This automatically generated reports to enable our team to recognise areas of improvement.

“Currently, our solution recognises IoT whereby our devices are connected to sensors, drawing in data from several sources to produce the reports we need to streamline our offering. What we will see in the near future is our solution being adapted to supplement the human interaction and assist with automated decision-making whereby a computer through artificial intelligence will automatically make adjustments.” w w w.opi.net | OPI Magazine

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Smart Technology | Feature match that smart approach to keep up with the ever-changing employee landscape. The increasing cost of labour over the next five years and – in the UK space in particular – the uncertainty of Brexit on the labour market will change how people are working in the FM sector. They will come to expect technology to enhance their roles in the future and early adopters of the IoT concept will reap the benefits.

Demand-based cleaning The key components of Mitie’s strategy are to change the way facilities services are delivered by asking the following questions: • How can we deliver more with the same or less?

• How can we improve quality but reduce waste and inefficiency?

• How do we continue to increase client satisfaction, while continuing to deliver value?

Wouldn’t it be great, the company says, if only those waste and recycling bins that are full, or better still just becoming full, were visited? If only the rooms that needed cleaning were cleaned, based on data showing which ones had been used, when and for how long how many people had visited an office, meeting room or a particular

It’s all in the app hour every hour, for example, means that Mitie can streamline the entire process and apply resources directly to where they can best be used.

The first-stage solution, enabled by smartwatches and sensors, is demand-based cleaning, with a focus on washrooms initially. The sensors on a washroom entrance count every visit in real time and this information is fed back to a large IoT database in the cloud where analytics provide insight for operational managers to make decisions based on actual usage.

From the pilot schemes and the data recorded it has become clear that washroom usage is influenced by time of day and day of the week. There is also a significant difference in usage

The first-stage solution, enabled by smartwatches and sensors, is demand-based cleaning, with a focus on washrooms initially washroom? If only all soap, hand cream and toilet paper dispensers were monitored, and empty or nearly empty dispensers were part of the replenishment schedule?

To enable this scenario to become a reality, Mitie has worked with its partners to develop a number of revolutionary technology solutions.

Through these, the company is able to help its clients understand their buildings, providing them with meaningful and useful data, such as peak usage times and footfall in certain areas.

Knowing when to clean and where to clean and removing the scheduled cleans that were carried out on the

between male and female facilities.

Using a business rules engine, a threshold value is set for each individual washroom to ensure that it is cleaned optimally, thereby delivering a unique and personalised service. As more data builds up, longer-term trends can be identified, allowing for an increase or decrease of resources during peak times of the month or year. This increased understanding of the buildings being cleaned facilitates further improvements in where resources are deployed during the working day.

There’s no doubt that buildings are going to operate smarter in the future and FM providers will need to

Used in conjunction with Samsung smartwatches, the wearable tasking app provides Mitie with the ability to monitor its site-based teams to drive optimum efficiency via wearable technology. The app is ideal for use in service-critical areas such as toilets, meeting rooms, training rooms or restaurants, where footfall is variable and service can be flexed based on actual usage to ensure that optimum results are achieved, but areas are not cleaned unnecessarily. It can also be coded to stay in one area linking to geo-fencing technology, essential in high security or sensitive locations.

Connected to a host of sensors and counters, the app allows Mitie to track, monitor and redeploy either whole teams or individuals, based on data collected or in response to an incident or surge. In the event of a spillage or an emergency, for instance, frontline operatives can be located, messaged directly and redeployed to the required location quickly.

Not only does this allow selection of the closest operative, it will also measure the efficiency of delivery in terms of length of time taken to complete the task. This data is then analysed to identify performance trends and can inform process updates where needed.

The app also has a number of built-in human qualities, such as a pedometer which enables Mitie to advise colleagues on the best route to use, as well as a heart rate monitor that assesses the team’s or an individual’s physical condition during work.

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Category Analysis | Jan/san

Another door opens...

The jan/san category continues to provide fantastic opportunities for OP businesses looking to diversify away from traditional areas. And there are plenty of doors ready to open for those savvy players with the right attitude

by David Holes

THE

jan/san sector is huge.

According to data from The NPD Group, in the US it accounted for $5.8 billion in sales in the first half of 2016 alone. And the good news for companies involved in this industry is that it’s on the increase – with sales value up 3.6% year on year.

Views from those in the business supplies sector that have made jan/ san part of their remit reflect these broad-brush figures. Mike Foster, Director of Merchandising at US dealer group Independent Stationers, says that jan/san sales among its dealer members have grown by over 30% in the past two years: “The total size of the pie is not growing by this amount, of course” he comments, “but dealers are capturing market share and taking it away from traditional jan/san distributors. It’s

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this share shift in the market that’s fuelling demand in our sector.”

Jan/san is a very diverse category, with several related sectors also presenting bolt-on possibilities, as Tom Hoffman, Director of Purchasing at fellow dealer group TriMega, explains: “For those dealers prepared to commit the resources, time and training to the jan/san category, it continues to offer sales growth in the double digits.The breakroom is also a strong category where there’s definite overlap in towels and cleaning products, and dealers should see the opportunity of operating in both.

Safety and wellness are other related areas with huge potential.”

Across the Atlantic, Mélanie Martins, Digital Marketing Manager from CEP Office Solutions in France, reports equally buoyant figures: “We’ve experienced 22% sales growth in jan/ san over the past year. It’s a category that provides great prospects for renewed growth considering that our core business focused on desktop accessories is in decline.”

Sub-sector success Within the broad jan/san sector there are several key sub-categories that are performing particularly well. At global reseller Lyreco, for example, it’s washroom supplies that is one of the strongest drivers, as Group Marketing Executive Pascal Mitchell describes: “Toilet paper, hand tissues and soap are all office essentials that represent the biggest part of our business. To support this, we have a clear group strategy that works closely with our key suppliers at both international and local level, so we are able to offer the widest range of solutions for our customers in their washroom environment.

“In addition, our sales people have to be trained in how to offer the correct washroom solution – the right dispensers, consumables, how to install them, etc – and although it may superficially seem easy, it really does need some expertise and knowledge.

One recent cleaning development, for example, is the appearance of new, highly-concentrated cleaning liquids

Jan/san | Category Analysis which work out cheaper for customers and also reduce transport costs.”

In the UK, Debbie Nice, Director of Facilities Supplies at wholesaler VOW, says jan/san is its fastest growing category: “In particular,” she says, “we’ve seen an increase in our range of cleaning chemicals for use in healthcare environments, with more resellers picking up business from doctors, vets and nursing homes. In 2016, there’s also been an expansion of our disposable wipes range as the focus on health and hygiene grows.”

TriMega’s Hoffman, meanwhile, highlights another niche: “One of the biggest areas for dealers to sell into is gloves; whether disposable or work gloves, latex or nitrile, gloves sales make up 60% of safety sales today. With the increase in wellness awareness and employee health and safety, glove sales should be at the top of everyone’s list. You’ll be amazed at the opportunities.”

Chemical compliance

Tom Hoffman

expected average growth rates of 5% over the next year, the association also notes increasing commentary from companies regarding automation and a push towards the use of robotics, even in traditional areas such as floor cleaning. While none of the companies that OPI spoke to yet see this as an immediate opportunity (or indeed

As of 1 June 2016, the Globally Harmonized System of Classification and Labelling of Chemicals (GHS) requirement became mandatory in the US. Workplaces that handle hazardous chemicals must now ensure that they update their chemical labelling systems and hazard communication programmes as required.

This has had a direct effect on those companies that use and store jan/san cleaning chemicals and is driving demand for products that can help with safety data sheet authoring and provide GHS-compliant chemical-labelling solutions.

One company benefitting from this is Avery. Its Marketing Director of Industrial Labelling Solutions, Jenifer Do, explains: “We’ve experienced double-digit sales growth in our line of UltraDuty labels

“For those dealers prepared to commit the resources, time and training to the jan/san category, it continues to offer sales growth in the double digits” At UK manufacturer HK Wentworth, Group Marketing Manager Julia Vorley draws attention to other key product areas on the march: “There’s a real drive towards products that clean mobile technology, including universal screen cleaning solutions, particularly for touchscreen devices. Consumers want one cleaner that’s safe for all types of screens and provides a smear-free finish. Hand cleaning gel products are also popular – companies tend to keep large containers in the office environment for multi-person use, but individuals also like smaller sizes they can carry and use for cleaning on the move.”

New developments A recent report by worldwide cleaning industry association ISSA documents feedback received from 4,000 North American companies involved in the jan/san and cleaning industries.

Apart from highlighting

threat), it’s interesting to note that technology is making inroads into this sector as well (see page 47 for more on these cleaning technologies).

John Molidor, Merchandising Manager for Facility and Safety at US wholesaler SP Richards, also taps into this theme: “Statistics show that a third of people who have a negative bathroom experience in a business will just leave and never return. And it’s evidence like this that’s driving new innovation,

designed to help organisations properly label chemical containers and comply with the new regulations. Besides the labelling of primary chemical containers, many chemicals are being transferred to smaller secondary containers like spray bottles, and those containers also need to be labelled appropriately.

“Developments in cloud-based software are further impacting chemical labelling within the jan/san sector. We now offer free online GHS and safety-labelling software and templates that make it easier to create and print labels on demand using standard inkjet and laser printers.”

However, many organisations are still not fully aware or compliant with the GHS even though it’s now in effect. The Occupational Safety & Health Administration website – www.osha.gov/dsg/hazcom – is a useful resource for learning about the new regulations and for locating consultation and training programmes.

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Category Analysis | Jan/san

Jeff Bobroff

such as Georgia-Pacific’s Active Air technology that targets odour at the source, or Kimberly-Clark’s Smart Washroom that tells janitorial staff exactly when dispensers are running low or malfunctioning. As the Internet of Things continues to expand, we’ll be seeing a lot of new technology in this area, and that gets me excited about jan/san.”

This push by manufacturers towards ‘smart washroom’ technology is also something that Jeff Bobroff, VP of Merchandising for Business and Facility Essentials at Essendant, highlights: “Essentially, it works a bit like a managed

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print service. The equipment, such as a towel dispenser, communicates directly with the building service contractors regarding the usage of consumables and tells them when product needs to be replaced. Data can also be collected to determine the service level requirements of each washroom, which also creates labour efficiencies.”

Away from the higher-tech wizardry, Hoffman also sees simpler developments in commercial cleaning that present an excellent selling

The jan/san category is clearly diverse, and its sheer complexity can present a barrier to entry for those companies that are not yet involved.

Breaking in Bobroff has some advice for those yet to take the plunge: “There’s an evolution of sophistication that dealers often follow as they grow in this category. They start with simple, light cleaning products for the office environment such as disinfecting wipes, hand sanitisers and kitchen roll towels. Many then progress to

“There’s an evolution of sophistication that dealers often follow as they grow in this category” possibility for dealers: “New products such as Pak-It offer pre-portioned chemical packet cleaners that are simply dropped into 32-ounce spray bottles with water for use. These higher-margin commercial chemical options can offer substantial savings for the end user and provide them with a wide range of cleaning products from window cleaners to degreasers and floor care.”

moving into the washroom space with dispensed paper solutions and hand soap. Finally, as they grow more sophisticated, some then expand their customer base beyond the office environment to include those that have historically been in the bailiwick of specialist jan/san distributors, such as stadiums, hotels and convention centres.

“The biggest challenge for OP dealers is gaining the category knowledge needed to enable this evolution. Training and business development programmes

Category Analysis | Jan/san can help them gain traction, although many are now hiring jan/san specialists to supplement their own sales staff.”

VOW’s Nice concurs with that notion: “Training, confidence and the wider product range continue to be the main challenges experienced by resellers. A clear understanding of cost in use is imperative for selling the more premium solutions, especially for the washroom. We’re continuing to offer training events and the expertise of suppliers to help our resellers gain momentum in the category.”

Much of the traditional growth in the jan/san area has been with products sold into the front office, but it’s now the backrooms and manufacturing and warehouse spaces that many see as the area with the greatest potential.

As Hoffman points out: “Dealers need to make that step behind the dreaded warehouse door and look more towards commercial products in such area as chemicals, industrial wipes, safety and many of those ‘category B’ products, including mops, brooms, buckets, etc. But they

will need training and support from vendors and their wholesale partners to help them sell into this space.”

There’s no doubting the significant growth potential of this sector for OP dealers. Many have found that as long as they acquire the necessary product expertise, their service proposition and close customer relationships allow them to be successful in winning new jan/san business.

What about jan/san from a sustainability point of view – what are the issues? Look out for our Green Thinking supplement later this year.

Jan/san case study: Hummel’s Office Plus Hummel’s Office Plus opened its retail business in Herkimer, New York, in 1940. Originally known as Excello Office Supply, the small shop sold typewriter paper, ribbons and other supplies. Today Hummel’s has an 80,000 sq ft (8,000 sq m) distribution centre and is the largest independent OP dealer in upstate New York. And it’s big in jan/san.

OPI spoke to its COO Harrison Hummel about the possibilities and challenges that this particular sector has presented for the company.

OPI: How long have you been involved in the jan/san category and how has it performed for you recently?

Harrison Hummel: We’ve been in the sector for 15 years, but have been making a more concerted push in the past 6-7 years. Last year, we saw a 10% increase in this category and we’re tracking close to that pace this year too. It continues to be a focus for our future growth.

OPI: Which particular sub-categories within jan/san are the standout performers?

HH: Our towel and tissue business is particularly strong, but lately we’ve also been seeing much more activity in protective gloves than ever before.

OPI: What are the major challenges to operating in this sector and how have you overcome these?

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HH: Competitive pricing was an initial obstacle. To begin with, manufacturers tried to keep the OP and jan/san channels on separate price plans. Independent Stationers and SP Richards (SPR) have helped us greatly in this regard and R3/ Bunzl has also been a great partner in enabling us to gain access to a wider variety of products.

One of our biggest hurdles currently is providing e-content for all the products we sell. We need strong cross reference tools, top level e-content with video and sales copy, as well as better unit of measure (U/M) nomenclature from our wholesale partners. It’s not uncommon for there to be four separate part numbers for the same item loaded into our system because SPR and Essendant have their own U/M strategies.

As market leaders they need to create a unified strategy if they want sales, otherwise dealers won’t know what to sell, how to price it and just won’t stock it. Customers will be confused and go elsewhere. Dealers currently spend countless hours manipulating their inventory data to try and work around these issues – time they could spend selling instead.

OPI: How has operating in this sector impacted on the company?

Has it required extra staff training or have you had to hire specialists in the field, for example?

HH: We have brought Tork/SCA, Diversey, Rubbermaid Commercial

Harrison Hummel

and countless other vendors in to train our staff – you can’t do too much training in this sector. And as you say, we’re also aggressively looking to hire specialists in this field, as we feel that they can be growth catalysts with the infrastructure we have in place.

Hummel’s is always looking to have conversations with other businesses about possible acquisitions, but only if the fit is right for both organisations.

Our current outlook is to take a hard look at our stocking strategy and find opportunities to bring more jan/san SKUs into our warehouse.

This will require additional space, both in our warehouse and within our fleet of trucks.

Consequently, we’ve completed another warehouse expansion and increased the size of our newest trucks to handle the additional size and scope of these deliveries.

Dealer Spotlight | R&R Office Solutions

Always

on the hunt...

Breaking away from the traditional can be difficult, but as R&R Office Solutions proves, doing so can pave the way for new opportunities and progression

by Michelle Sturman michelle.sturman@opi.net

IT’S

tough in this day and age to be all things to all people, especially with e-tail giants such as Amazon nipping at the heels of all and sundry. One reseller that is trying its hardest to serve its customers by becoming a one-stop shop is Virginia, US-based R&R Office Solutions.

The company’s sales motto is ‘Always be hunting’, and while that served it well over the past 24 years, it’s never been quite as appropriate as it is right now.

R&R SVP Mason Kramer explains that, over the years, the business has grown into a full-service dealer and there isn’t a product that it wouldn’t source for its customers.

“We want our customers to know that, no matter what, we can and will get what they need – everything from a golf cart to an Xbox if necessary.”

This go-get attitude is evidenced by its growth rate over the past four years, which has been on average between 13-20% annually. In terms of product assortment, R&R has been focused on breakroom, facility supplies, furniture, school supplies, custom print and promotional products – all categories it considers to be thriving.

Being able to purchase all the aforementioned categories from a single source is playing in R&R’s favour, and the dealer credits its first-call wholesaler SP Richards (SPR) for access to vast product

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OPI Magazine | September 2016

categories. “Using SPR’s categories in conjunction with competitive pricing has really supported us in strengthening our relationships [with customers], as well as grow sales and profit,” says Kramer.

Onwards and upwards Like many forward-thinking dealers, R&R is experiencing success by branching out from traditional OP categories and also by offering value-added services and solutions.

The company has engaged customers with managed print services contracts, for example, and seen huge growth in the schools supplies category, mostly due to back-to-school campaigns in collaboration with SPR. According to R&R, furniture is another division that has taken off, chiefly because of the full-service offering available to customers, which includes complete design layout, onsite walkthroughs, sample products and professional furniture installation. “We believe that the only way to make it in the industry now is to push forward every day with new and innovative solutions,” says Kramer.

One of its most successful forays has been in the facilities, breakroom and safety (FBS) categories which, according to Kramer, are growing over 25% annually.

“We want our customers to know that, no matter what, we can and will get what they need…”

R&R Office Solutions | Dealer Spotlight R&R has a dedicated business development management team in place in the FBS category, along with a sales force searching for new opportunities within the sector.

Kramer explains that his plan is to continue to constantly build and develop the FBS team to ensure the company becomes a leader in the category.

He also credits SPR with helping it grow the FBS segment through product training, onsite demonstrations and prospect calls. In turn, R&R is now planning on developing FBS programmes for its own customers.

Mason Kramer

“We believe that the only way to make it in the industry now is to push forward every day with new and innovative solutions” On the subject of customers, R&R targets $1,000-and-above monthly accounts nationwide and stays focused on certain vertical markets, ensuring that its solution specialists become experts in those areas.

Currently, the company has customers in 36 US states and continues to add to this on an annual basis. For 2016, it plans to add another four states and the target is for a total of 48 by the end of 2017.

Servicing clients nationwide poses its own problems, of course. While R&R covers Virginia and North Carolina – about 40% of its total deliveries – with its own fleet of nine vans, it uses UPS to cover the rest of the country. Kramer points out that the business has been looking to move away from using UPS where it can due to a decrease in the quality of service, and is actively focused on creating better courier networks.

Naturally, ensuring that its delivery service is outstanding is imperative and includes offering a free next-day option. However, while Kramer doesn’t believe customer demand for same-day delivery is a reality yet, it is a service that the company is keen to start investigating.

Meanwhile, Kramer is full of praise for the company’s customer service team in particular, acknowledging the work employees have done: “I know the relationships they have built have helped us keep customers at a national level where we have no physical presence, something which is very hard to achieve.”

As a company, R&R has tried to create an environment designed to attract motivated

R&R Office Solutions fact box Founded: 1992 Owners: Shawn and Inger Stahr HQ: Richmond, Virginia Geographical coverage: 36 US states Employees: 30+ First-call wholesaler: SP Richards

and talented individuals, especially millennials. Elaborating further, Kramer explains that the millennial generation wants an “ideas-driven entrepreneurial environment that gives them the ability to shine while maintaining a cool and tech-infused atmosphere”.

To this end, R&R offers free breakfast for all employees every day, retro beer fridges for ‘Beer Fridays’, indoor games rooms and candy machines. “We also try to create a visually stimulating environment with green/black/red walls with huge sharks, and TVs throughout the office,” he adds.

Future-focused In addition, staff are encouraged to use text messaging, video conferencing and other social media platforms, such as Snapchat, Facebook and LinkedIn to stay connected to their customer base. All this contributes to its status as a progressive dealership with an eye firmly on the future. It sees the current state of the industry as an opportunity and R&R is actively looking to acquire companies within the office products channel, as well as outside the industry.

“We live up to our sales motto of ‘Always be Hunting’, and are looking for dealers anywhere in the US that are interested in selling or partnering, particularly in the e-tailer space,” Kramer concludes. w w w.opi.net | OPI Magazine

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Event Review | ABC 2016

Fail to evolve, fail to grow Embrace technology and new product categories, and engage with your peers (millennials included!) – that was the key message from this year’s ABC in Washington DC

“IF

we do not evolve, we will fail to grow and if we don’t grow, we won’t be able to reach our full potential!” That statement from SP Richards’ (SPR) EVP of Operations Jim O’Brien at this year’s ABC opening General Session in Washington DC on 21 July was the message to the assembled dealer and vendor community.

While that message from the outset seems somewhat pessimistic, O’Brien proceeded to prove quite the opposite when he charted the history over the past 30 years of the dealer community. “The quantity of dealers has diminished substantially, but the quality of these dealers is light years away from what it once was,” he said.

“The quality of [dealers] is light years away from what it once was” The reason for this, he added, is that those dealers embraced the change that’s necessary and turned it to their advantage.

Before handing over to CEO Wayne Beacham, O’Brien urged dealers to invest in technology, tools and data; fully explore the facility, breakroom and safety (FBS) categories; expand into the K-12 education market; have an exit strategy; and engage in strategic discussions with their peers.

Beacham, in his candid address to a packed audience, picked up on several of O’Brien’s points and also urged dealers to take on the challenge of technology and emphasised the need to expand existing and embrace new product categories. (Turn to our Big Interview on page 16 for more on SPR and Beacham’s views on the current state of the industry).

In the first of several keynotes of the event, Lisa Bodell told delegates to “kill your company, create more space for innovation in it and don’t think about what you’re doing now but about what you’ll be doing in 10 years’ time”. This was followed by the announcement of the first North American Office Products Awards (read on for more on the NAOPA winners). Delegates then had the opportunity to see first-hand at the Business Solutions

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OPI Magazine | September 2016

Expo what the possibilities are with regards to products in traditional as well as the much talked-about newer adjacent categories.

And on the second day of the ABC it was time to use that product knowledge and learn more about selling these items – it was seminar day. Current trends, selling and margin opportunities were topics covered in a number of sessions, particularly so in SPR’s new FBS and Furniture seminar tracks.

Bridging the generational gap Another popular topic covered at the ABC revolved around millennials. One specific session took place on the last morning of the event (23 July), and was delivered by Jeff Havens who brought the house down with his hilarious take on the generational divide.

After some rather more serious dealer case study sessions and the annual Town Hall Meeting with SPR senior executives, delegates were left to explore the sights of Washington before the evening’s Gala Dinner and entertainment which concluded not only with the final NAOPA presentations, but also featured another funny man – comedian and impressionist Frank Caliendo. An uplifting finish to another hugely successful ABC!

Next year’s Advantage Business Conference will be held at the Marriott World Center in Orlando, Florida from 12-16 July 2017.

Event Review | NAOPA 2016

The best... of the best The seventh North American Office Products Awards rewarded standout – and sometimes surprising – products and honoured outstanding personalities in our industry Best Product – Core Office Products Avery Easy Align Self-Laminating Labels

This is not the first time Safco has won a NAOPA – OPI readers may remember the Zenergy Ball Chair that won in 2013. Well, Safco has done it again.

Increasingly, office workers are looking for active product solutions for their workspaces and the Twixt chair offers just that. This ergonomic product allows users to adjust the angle of the chair so that they can perch, lean or sit, thereby providing an active seating experience. The chair also features a simple touch mechanism that adjust its height.

Judges referred to the Twixt as a “truly unique seating solution” and praised Safco for creating both function and design that inspire fluid movement and user options not seen in other active seating solutions.

Jill Kemma, Safco’s Director of Product Design and Development (pictured second from left), commented: “We’re very excited that the industry has been so responsive to this product and that dealers are increasingly embracing the concept of an active seating experience which is really trending at the moment.”

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OPI Magazine | September 2016

This category was a difficult one to judge.

There were so many fantastic product entries that the NAOPA judges had a hard time reducing it down to a shortlist, let alone picking a winner.

But sometimes it’s the simple solution to a reoccurring problem in offices and other business facilities which impresses the most and that is exactly what Avery addresses with its Easy Align Self-Laminating Labels. These labels are easy to produce, durable and create perfectly laminated labels without bubbles or wrinkles – without the need for a laminator or any special equipment.

The judges felt that this neat product will be a great seller for dealers. And while these labels are part of the Core Office Products category, Michelle Smith, Marketing Account Manager for Avery (pictured middle) – on receiving the award – also highlighted the importance of the industrial, safety and jan/san categories where they are being sold into particularly successfully. She added: “We’re always working very hard to be innovative and it’s a real honor to be recognised by the industry, especially given the tough competition.”

Best Product – Furniture Safco Products Twixt Ergonomic Chairs

NAOPA 2016 | Event Review Best Product – Technology

Best Product – Cleaning & Breakroom

Kensington SD3600 Universal USB 3.0 Docking Station

Sealed Air, Diversey Care Consumer Brands SmartDose

In this category, the judges recognise that there is a great demand for solutions that address the increasing mobility of workers. But who wants to spend hours setting up their desk every time they move location?

The Kensington docking station offers a solution that simply works. It enables users to quickly connect and disconnect laptops with their entire desktop setup – including dual HD monitors, a mouse, a keyboard and other peripherals – with a single USB cable. It can also be mounted to the back of a VESA-compatible monitor, leaving zero footprint on the desktop which helps reduce clutter and is important where space is limited.

This latter zero footprint feature, said Kensington’s Director of Sales Kathrin Esposito (pictured second from left), is one of the core differentiating factors of the docking station.

The NAOPA judges, meanwhile, felt that this product fills an important gap in the market and predict that it would become a big seller for dealers.

Product Innovation of the Year Fellowes AeraMax Pro AM III

Again, it’s the simple idea that often turns out to be the most effective and that is certainly the case for this product in the cleaning and breakroom category.

The judges thought Sealed Air, Diversey Care’s SmartDose was a great product that offers an effective solution to a common problem. It enables users to work more effectively with cleaning products, ensuring accurate dosing, safe usage and cost control while also addressing the often-quoted challenge of minimal space.

It’s an all-round great product that provides a solution to several hurdles in this category.

As Janet Kean, Sales Manager of Office Channel Consumer Brands at Sealed Air, Diversey Care (pictured middle), said: “It’s a great honour to be acknowledged for the technology of the SmartDose products. A lot of focus right now is on dispensing machines, but they are not the right fit for all customers. Smaller spaces with high-volume demands, for example, are where the SmartDose really excels.”

Absence at work because of sickness costs the US economy alone half a trillion dollars every year and much of that is caused by unhygienic workplaces. While a lot of the emphasis has been placed on surface cleaning, little has been done to tackle the problem of illness caused by airborne contaminants.

Fellowes has addressed this issue with the launch of the AeraMax Pro AM III. It’s an air purifier designed to clean the air in common areas such as schools, offices, waiting rooms and restrooms. The patented EnviroSmart technology detects the environment and automatically adjusts performance with changing air conditions.

The judges thought this was a powerful product which offers a new selling opportunity in a growing category for office products dealers.

It’s also a category that is still relatively new for Fellowes, as President Mike Parker (pictured left) points out. “Winning this award is a tribute to Fellowes as an organisation. We’re celebrating 100 years next year and have come a long way from the Bankers Box. We are embracing this new growth category for resellers which really complements what they’re doing in the cleaning segment.” w w w.opi.net | OPI Magazine

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Event Review | NAOPA 2016 People’s Choice MMF Industries PayVue Illuminated Cash Drawer

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OPI Magazine | September 2016

The final vendor award of the North American Office Products Awards was the popular and coveted People’s Choice award, voted for by OPI’s North American readers and delegates of SP Richards’ ABC event.

The winner – by a considerable margin – was the all-new PayVue Illuminated Cash Drawer by MMF Industries, officially launched at the ABC Expo. Using an energy-saving LED light source to clearly light the cash drawer for improved bill and coin identification and placement during transactions in low-light settings, this product clearly captured the imagination of many who voted.

Designed for restaurant, bar and nightclub use, PayVue improves transaction accuracy and speed, customer service, loss prevention management and low-light ambiance.

Ivelisse Gomez, New Product Development Manager at MMF and the brainchild behind the PayVue (pictured middle), said of this brand new product: “The idea behind the PayVue was to find a solution for using cash drawers in low-light environments.

What we did was to add an innovative new feature to a product that has been around for a while by simply adding a LED light.”

She added: “It’s a real honour to be recognised by both SP Richards and OPI and indeed the whole industry. It’s also particularly rewarding that the People’s Choice product is actually a product that is made in the US.”

NAOPA 2016 | Event Review Young Executive of the Year Rosemary Czopek

Professional of the Year Bob Shulman

Industry Achievement of the Year Kathy Hoyle

Young Executive of the Year is a brand new award, designed to recognise outstanding emerging talent in the North American business supplies industry. And it was given not only to a young person by TriMega EVP of Marketing Michael Morris – Rosemary Czopek is a mere 33 years of age – but also to the owner of a very young company with the millennial customer at its heart.

Gorilla Stationers was created by President Czopek four years ago in Huntington Beach, California, and over that time – and with two acquisitions just over the past year – has grown into a pillar of her community and a regional business force with her staff of 18.

Czopek has always been involved in fostering young talent herself, at Gorilla and through her work with the University of California, Dartmouth and the Goldman Sachs small business programme. She has hosted students from all over the world at Gorilla, allowing them to gain hands-on experience in social media, SEO and web development.

Congratulations to this leading light of the future.

The second award, Professional of the Year, aims to recognise the brightest established talent in the industry, a person with the potential to influence the future of the channel and the sector.

Introduced by CEO of Suburban Stationers Jeremy Bourret, this award went to Bob Shulman, President of the north-east dealer (pictured right). Not only has Shulman helped the company to triple in size over the past ten years in terms of sales and profitability, he is also a board member of NOPA and a founding member of TriMega’s NEXT committee.

Bourret highlighted Shulman’s professionalism and ability to build excellent teams on all fronts as well as his unerring conviction of always putting the customer first – never more important than in a very competitive landscape.

Involved in and hugely connected with every aspect of the industry in addition to a host of local boards and charitable causes, Shulman is clearly highly regarded by his peers, and none more so than his business partner Bourret.

The third and final award of the evening was Industry Achievement, presented to a person who has made an outstanding contribution to the advancement of the office products industry over the course of his/her career.

In a moving and emotional speech, Melissa Morris of North Carolina dealer Hoyle Office Solutions introduced her mother, company President/CEO Kathy Hoyle (pictured right), as the recipient of this year’s award, following in the footsteps of illustrious industry figures including Jim Hebert, Bud Mundt and Chip Hummel.

Established 71 years ago by James ‘Red’ Hoyle and always run as a family business, daughter Kathy took the business to a whole new level, according to Morris, always stepping out of her comfort zone and finding new ways to bettering the business in a progressive way.

As a woman-owned company and as part of her role as co-founder of Office Products Women in Leadership, Hoyle’s been instrumental in raising awareness of the importance of creating and nurturing more female leaders in the industry. w w w.opi.net | OPI Magazine

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ISSA/INTERCLEAN North America 2016 | Event Preview

The jan/san revolution

Bill Balek

ISSA Director of Legislative and Environmental Services Bill Balek looks at the emerging technologies that are changing the cleaning industry

WhEN

picturing the janitorial industry, what comes to mind? Pushing a broom through dimly-lit hallways? Emptying dustbins in a sea of cubicles? Scouring floors with a mop and bucket in tow?

That’s the jan/san industry of the past. High-tech innovations, such as self-cleaning surfaces, robotics and the Internet of Things (IoT), are revolutionising the industry and propelling it into the future.

Self-cleaning surfaces In the past, cleaning professionals routinely sanitised highly-trafficked surfaces of their buildings, sometimes multiple times each day. Every few hours they circled back to combat the bacteria growing in their absence.

Today, a growing number of surface products exist that clean themselves.

With traditional cleaning products, there is a risk that microbes could develop a resistance against a particular product. This means surfaces may not be receiving proper cleaning and sanitation.

Photocatalytic nanotechnology in self-cleaning surfaces eliminates this issue, as bacteria and other microbes cannot survive against the oxidation and hydroxyl radicals.

These high-tech surfaces contribute to increased success and efficiency in the cleaning process. They can improve a firm’s bottom line due to cost savings in time and product use.

Robotics The growing use of robotics is also changing the jan/san industry.

Smart technology is increasinlgy

“Smart technology is being integrated into many cleaning functions, from floor and restroom care to remote product activation” This helps to eliminate the need for constant touch-ups by janitorial personnel and creates a more efficient cleaning routine.

These products contain a photocatalytic surface, which is a type of UV light disinfection system.

It uses light as a power source that then generates two separate cleaning actions. In the first instance, an oxidation reaction breaks down fungi, bacteria, viruses and other organic contaminants. Secondly, hydroxyl radicals destroy pathogens.

being integrated into many cleaning functions, from floor and restroom care to remote product activation.

One of the greatest innovations in this area has been the introduction of automatic floor cleaners. These machines operate independently and function based on sensor patterns, allowing them to identify the optimal cleaning paths to complete the job.

Many are made with rechargeable lithium-ion battery systems, which offer a longer lifetime than other batteries. In addition, the installation

of vision and sonar tools eliminates the possibility of bumping into people or objects during cleaning.

The introduction of these types of robotics is rapidly improving efficiency in the cleaning industry.

The advantages of robotic technology include: • Increased productivity: robots select the most optimal cleaning paths to get the job done quickly.

• Energy savings: robots are able to operate at night without the necessity for light, ultimately reducing the amount of electricity used in a facility.

• Reduction in labour-intensive duties: automatic cleaners handle more intense cleaning and typically exhausting tasks, which alleviates pressure and stress on employees.

• Environmental benefits: with robotics, the use of water and cleaning solutions can be lessened significantly, producing less wastewater.

Innovations in the robotics field are revolutionising jan/san. Through advancements such as automatic cleaners, the industry as a whole is quickly becoming more financially and environmentally sustainable.

Internet of Things One of the most groundbreaking industry advancements is the Internet of Things (IoT). Spurred by the increased use of robotics, this form of machine-to-machine communication has the ability to connect machines, w w w.opi.net | OPI Magazine

47

ISSA/INTERCLEAN North America 2016 | Event Preview sensors and other devices in order to gain information on different aspects of equipment operations.

By establishing wireless connections between various pieces of equipment, companies have access to data that allows them to identify and analyse trends and utilise resources more efficiently. Machines create and send performance reports that summarise a list of the locations that were cleaned, any issues during the cleaning and overall status reports.

Tracking capabilities on some equipment also help determine how often certain areas within a facility, such as bathrooms, are being used.

By identifying traffic patterns, both machines and employees can use this information to adjust cleaning schedules. The usage pattern can ultimately reduce operational costs by allowing for the adjustment of cleaning routines and staffing during times of low usage.

In addition to usage patterns, equipment maintenance can be monitored via IoT tracking capabilities. An alert is issued when maintenance is needed which provides a more proactive approach to servicing equipment and reduces the need for constant checks by employees (for more on the use of

IoT in the cleaning industry, see ‘The smart washroom’, page 27).

Transforming the industry These innovations are only a few of the many technologies transforming the jan/san industry and the way cleaning professionals work. They increase efficiency, sustainability and overall knowledge of the most effective operational techniques.

ISSA/INTERCLEAN North America Where: McCormick Place, Chicago, USA When: 25-28 October 2016 Info: www.issa.com/show

Unleashing potential The annual ISSA/INTERCLEAN exhibition and convention is nearly upon us. The theme for 2016 is ‘Untamed Potential’, especially relevant given this year’s revamped education programme

thE

one-stop expo and convention for the cleaning sector, ISSA/INTERCLEAN North America, is back again this October. The show takes place in Chicago, Illinois, and will feature approximately 700 exhibitors from over 25 countries, a greatly expanded education programme, and host around 16,000 cleaning sector professionals, including decision-makers from the office products industry.

Exhibitors will cover the full gamut of the facility solutions segment. And, as always, the latest cutting-edge products and services will be on display from small company start-ups all the way through to the well-known global manufacturer giants.

Last year’s event attracted visitors from more than 70 countries outside the US, and the exhibition halls were full of business owners, management executives, senior sales personnel, as well as operations managers, facility directors, maintenance and environmental services personnel.

This year’s show is expected to draw a similarly diverse crowd.

A number of other industry organisations co-locate their annual conventions with ISSA/INTERCLEAN. These include the Association of Residential Cleaning Services International (ARCSI), the Building Service Contractors Association International (BSCAI), the Cleaning Equipment Trade Association (CETA), and the IEHA (International Executive Housekeepers Association).

Diving into education ISSA/INTERCLEAN events have always had a keen focus on education and this year features a revamped programme. In addition to a high-profile keynote speaker line-up, including former Navy SEAL Rob O’Neill and Apple co-founder and philanthropist Steve Wozniak, the 2016 schedule includes over 60 seminars and workshops, all focused on the latest trends and hottest topics.

The new, more intimate experience introduced for this year includes: • Deeper dives: in-depth seminars on the latest on-trend topics • Flash sessions: quick sessions filled with information on leadership, management and hiring tips

• Ask the experts: panel discussions based on audience issues • Workshops: hands-on opportunities to learn skills – including certification – through half and full-day programmes. The workshops can prepare attendees to become an ISSA Certifications Expert, Accredited Certification Trainer, or a supervisor.

ISSA Innovation Award Showcase The ISSA Innovation Award programme recognises the jan/san industry’s most innovative products and services.

Voting is open until 21 October for five product categories – Cleaning Agents, Dispensers, Equipment, Services & Technology, and Supplies.

During ISSA/INTERCLEAN North America, all exhibiting entries will be on display at the Innovation Showcase and attendees will be able to vote by mobile app for the Visitors Choice Award.

All winners will be revealed at the awards ceremony which will take place on 28 October, the last day of the event.

Also, and new for this year, a panel of judges will announce an overall ISSA Innovation of the Year Award.

w w w.opi.net | OPI Magazine

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Climb of Life 2016 | Event Preview

Reach new peaks OPI and the UK business supplies sector once again come together to fight the never-ending battle against cancer. And we need your help...

ANOTHER

year on members of the UK OP community and cancer will stand up to wind and weather, statistics still make for frightening often both in ferociously wintery reading. One in two people – more conditions, to raise money for the ICR. than ever before – will be diagnosed COL – created 29 years ago and with cancer at some point in their organised by industry stalwart and lives. Currently, half of those people Chairman of the BOSS Benevolent will survive.

Fund Graeme Chapman MBE – has The Institute of Cancer Research been supporting the ICR and its (ICR) aims to increase this survival vital research for the past ten years. rate to three in four cases by 2034.

During that time, many friends and In order to do this, it is continuously family members of those who have working to help prevent the disease, taken part – COL climbers themselves diagnose it earlier, develop even – have fallen victim to this new treatments, and dreaded illness. They have optimise current taken comfort from the fact treatments to make that one day, with their them even more fundraising help, the effective. All of this suffering of so many will Donations can be made requires funds. hopefully end. at www.opi.net/ This year, in COL2016 Climb of Life recognition of this This is where the longstanding support, the business supplies sector OP congregation will be taking and specifically the Climb of on ten of the toughest peaks in Life (COL) comes in. On 4 November the Lake District under the COL theme this year, COL will return once again of ‘10 YEARS 10 HI-PEAKS 4 ICR’. to the Lake District in the north of For the past two years, COL raised England where about 100 dedicated more than £100,000 ($129,000)

Please sponsor OPI

for the ICR (£101,260 in 2015 to be precise), bringing the total over the past decade to £650,000. And the only way is up, says Chapman, urging participants to pull out all the stops to surpass this phenomenal total.

And this is exactly what we’re going to do, says Steve Hilleard, who heads up the OPI team, the biggest fundraiser last year with £21,000 (followed by EVO Group): “This is the seventh year OPI is taking part in COL and the need to raise funds for cancer research is as pressing as it’s ever been. Please dig deep and support this fantastic cause. And hopefully one day there won’t be a need to climb mountains in the wind and snow and we won’t have to mourn friends and relatives that have lost their battle against cancer.”

Research information Among the trekkers in November will be Professor Keith Jones, a leading scientist from the ICR who will also brief participants on the organisation’s latest developments at the beautiful Swan Hotel in Grasmere, which will once again act as base camp for the event. Professor Jones – one of a number of ICR staff taking part in COL – is Leader of the Medicinal Chemistry Team 3 within the Cancer Research UK Cancer Therapeutics Unit. This team is involved in all stages of drug discovery from hit generation through to candidate selection.

Chapman’s support for this cause remains unwavering. He says: “If you had told me 29 years ago that I would still be organising this event now, I’d have thought you were crazy. But the incredible enthusiasm and commitment from the 100-strong team keeps me going and organisations like the ICR need all the help and support we can muster in order to fight this awful disease.”

w w w.opi.net | OPI Magazine

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big buyer | Event Preview

Made in Italy

The 21st big buyer trade show will be open for business from 23-25 November in bologna, Italy

OncE

again, Italy’s biggest office supplies and stationery show will take place in the magnificent and historic city of Bologna in the north of the country.

The timing of the show means buyers are treated to a preview of new products for 2017. It’s also ideal for planning orders related to school, stationery and office products for the upcoming year.

In attendance will be the industry’s key Italian players including wholesalers, manufacturers, resellers and retailers. As usual, there will be a large, dedicated space to ‘Made in Italy’ where all the major Italian manufacturers will be showcased.

However, alongside the Italian exhibitors and visitors are a growing number of international participants. Making up this year’s contingent are exhibitors from across Europe, including Poland, UK, Germany, Spain, Portugal and France, along with those from as far afield as the US, Japan and China. Among the more than 200 exhibitors at this year’s Big Buyer event are many familiar global OP brands such as ACCO, tesa, International Paper, Clover, Avery and Durable.

Ongoing developments The trade fair will build on last year’s successful arts and crafts, creativity and hobbies sector and include creative workshops that visitors can attend. Simonetta Pfeiffer, Sales Director of show organiser Edinova, says: “This year’s edition will be further enhanced by giving Big Buyer attendees the opportunity during the show to meet many leading companies in the arts and crafts sector, which is growing and has many similar features to the stationery and office products world.”

Big Buyer has significantly expanded the scope of its offering, and continuing its tradition of catering to delegates that want to keep up to date with the latest trade and consumer trends, this year’s event features a new Trends Area.

The inaugural theme is ‘Future Festivities’ which gives visitors the ability to browse and order for the 2017 major selling holidays and events, such as Valentine’s Day, Easter, First Communion, etc.

Edinova President Mariella Nasi Pfeiffer explains that while the firm favourites in the office products sector will be represented, including adjacent categories such as jan/san and safety, it is essential that Big Buyer provides an overview of all product groups. “The business supplies sector is undergoing a transformation phase that cannot be ignored and Big Buyer is opening the way to new opportunities in terms of business-oriented development and integration,” she adds.

Education and training As with previous years, Edinova is currently working in conjunction with AIFU (the Italian association of office suppliers) and Federcartolai (the Italian association of stationers) to put together a comprehensive education and training seminar programme and a distinguished speaker line-up.

All sessions will address the important and current issues in our industry, and offer solutions and ideas for attendees to take away with them and apply to their businesses.

Big Buyer 2016 will once again take place at the modern BolognaFiere trade fair centre in Bologna, Italy. The city and venue are easily accessible from all parts of Italy and Europe via rail and motorway routes.

Guglielmo Marconi Airport is only a short distance away by car or taxi.

w w w.opi.net | OPI Magazine

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Your OPI

The generation game Daniel Kelly, General Manager at Stuart & Dunn Office Choice in Australia, on the importance of technology

A

changing of the guard is at hand and spurring positive change is engrained in how millennials perceive the world – nothing is sacred, everything can be improved.

And because driving change isn’t formulaic, predictable or one-size-fits-all, the millennial inclination towards innovation and imagination through collaboration and transparency will lead to a wide range of solutions for problems that have long been a part of traditional professional culture.

These attributes make millennials well-suited to entrepreneurship, especially in an increasingly tech-focused business environment.

Millennials were born into a world where information is sourced, sent, and received at the click of a button.

They are programmed to respond quickly, expect immediacy and are able to source information on anything, anytime, anywhere.

Emphasis on family time over work time is reinforced by a general trend towards more flexible work schedules and a larger list of benefits. Thus, as millennials fill up those management desks and executive positions, the industry will continue to see focus shift more towards building relationships over making a living, and quality of work and experience over rigid work schedules.

Millennial customers But let’s talk about the most important millennials – our customers. How do millennials want to interact with your business?

“Their world is [...] totally connected and relies on technology such as instant chat, video conferencing and the cloud”

Virtual experience Millennials have spent years taking virtual classes and communicating socially online and thus gravitate towards technology and tools that focus on connectivity and a seamless user experience. As a result, they tend to stay away from restrictive business systems and software.

Their world is one that is totally connected and relies on technology such as instant chat, video conferencing and the cloud. They expect experiences to be seamless and thrive in a work culture that provides freedom to experiment and challenge traditional approaches to problems.

As this generation moves into more senior and managerial roles, more companies will have no choice but to foster freethinking, unique work styles and an increase in collaboration and leadership regardless of skill level and experience.

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OPI Magazine | September 2016

We already know they expect technology to simply just work.

They’ve grown up with digital devices that bundle communication, entertainment, shopping, mapping and education all in one. Millennials are a sociable generation.

They don’t just consume services and products – they review, blog, update Wikipedia entries and post YouTube, Vine and Instagram videos.

Often these posts concern their consumption activities, interests and aspirations but also include good, or bad, service experiences.

As a highly values-driven generation, more millennials than not integrate their beliefs into their choice of companies to support, their purchases and their day-to-day interactions. They make an effort to buy products from firms that support the causes they are concerned about.

They’re more likely to care whether or not their food is organic, for example. When you consider how money-strapped many millennials remain, their willingness to put a premium on such issues is striking.

When shopping, they prefer an experiential environment, where shopping is more than a transaction and the pleasure of being in the store isn’t limited to the goods that they take home. When millennials dine out, for instance, they’re often in search of something exotic, memorable or new to explore during their dining experience. This has helped transform cuisine searches into an adventure.

How will you send your customers on an OP adventure?

Millennial customers are an enormous commercial force to be reckoned with, imposing both influential power and tremendous spending power as well. And this purchasing power encompasses both their own personal expenditure and the purse strings that they are beginning to control at companies as they move into positions with significant spending power.

Are you a young executive and have a view for our Generation Game section?

Email us at editorial@opi.net

Daniel Kelly

CALL FOR ENTRIES Entries are now being accepted for the 16th annual European Office Products Awards

EOPA PRODUCT AWARDS COMPANY AWARDS • Dealer Group ofAWARDS the Year INDIVIDUAL

• Vendor of the Year • Reseller of the Year: Revenues under €100 million NEW Revenues over €100 million NEW • Wholesaler of the Year • Marketing Initiative • Product Video NEW

PRODUCT AWARDS PRODUCT AWARDS • Product Development of the Year NEW • Business Product of the Year NEW • Product Design NEW • Innovation of the Year

COMPANY AWARDS COMPANY AWARDS

INDIVIDUAL AWARDS INDIVIDUAL AWARDS • Young Executive NEW • Professional of the Year • Industry Achievement

For more information and to enter online, please visit www.opi.net/EOPA2017 or email awards@opi.net

Deadline for entries: 27 October 2016

Your OPI

5 minutes with...

Tim Webster, Head of European Business Development, Vistaprint Corporate Solutions Describe what you do in fewer than 20 words.

Provide office supplies dealers with a robust print solution so these dealers can offer print to their customers.

Your first full-time job.

Working for a small printer in Nottingham, UK. It sparked my enthusiasm for print and I have never wanted to be in any other industry.

Your rite favou e offic ct. produ is e r e Th ing someth bout a a ly love ck n’ new Bla ebook. t Red no

Your best piece of advice to a colleague.

Roll with the punches, enjoy the highs, learn from the lows.

What do you like best about the OP industry?

The service that dealers deliver to their customers always impresses me. There are some truly exceptional small dealers out there.

And least?

Those companies that don’t accept they have to change.

They will not be around in a few years and will be the ones moaning.

The industry figure you most admire and why.

Archie Waterston, my Managing Director at OfficeTeam. A great leader and a fair boss – he has become a good friend.

“Roll with the punches, enjoy the highs, learn from the lows”

What sports teams do you support?

I don’t really follow any sports teams, but enjoy watching cricket, rugby and England continue to fail at football (soccer to the US readers)!

Do you have a tattoo?

No – and I never will.

Your favourite movie.

I must have seen The Italian Job over 20 times and still enjoy it.

What is mankind’s greatest invention?

It has to be the internet.

It’s hard to imagine life without it now.

If you had one day to live what would you do?

Breakfast room service in the hotel at County Hall London; morning walking around tourist London; picnic at the top of a mountain in Glen Clova in Scotland; afternoon swim on Lady Elliot Island in Australia with turtles, rays and reef sharks. All followed with a glass of wine and a pizza in Cortona, Italy.

Your ideal evening.

A night in at home – the rock and roll days are long gone.

Things that make you angry.

Lateness.

The best book you’ve read in the past 12 months.

Replay by Ken Grimwood – very thought-provoking.

Your favourite holiday destination.

I love Scotland.

Any interesting hobbies?

My wife and I have been keeping bees for seven years now and have eight hives. We sell honey to local farmshops in our area.

Your OPI

Final word Your industry, your opinions

John Barrett, Executive Director, ISSA

Defining success: converge jan/san and OP? “IT’S

not what you do; it’s how you do it that defines success” – that’s what the headhunter told me when he first suggested I abandon my nine-year career at Xerox for the ‘glamour’ of the contract cleaning industry.

Fresh out of an MBA programme at the University of Chicago, I was looking for that first great general management opportunity. While I considered a number of positions, there was something intriguing about this role in cleaning. Sure, I would get to be the boss. But what made it so appealing was the notion that this was one of the largest addressable industries on the planet, growing faster than inflation, and it wasn’t going away – ever.

Though I was fortunate to find myself involved with companies that bring advanced services to the forefront, and support the development of wildly successful technologies, I never envisioned that – after nearly 30 years – I would have the privilege of serving as Executive Director of ISSA, the leading trade association for the global cleaning industry.

everything – and I mean everything – will be connected.

The implications for businesses are profound and, in some sense, our industry may be a very good case study.

OP and jan/san convergence For a start, there will be convergence and the merging of the office products and jan/san sectors is a perfect example. Traditional office products dealers are now more and more driven to offer jan/san products, owing to a changing competitive landscape and client demand.

ISSA is at the forefront of this union and is promoting jan/san within the office products sector in a big way. ISSA’s membership, for example, increasingly includes significant numbers of OP dealers with a wealth of benefits to these members, including tools such as the consumable costs calculator and the new ISSA Clean Standard.

ISSA.com and CMMOnline.com provide valuable sources of information for the industry while ISSA/INTERCLEAN conventions around the world explore education, technology and innovation in the sector (see also our ISSA/ INTERCLEAN North America preview, page 49).

The convergence of jan/san and OP is only a glimpse of the changes ahead. So how does a trade association such as ISSA keep up with these trends? We innovate.

We have, for instance, created a formal corporate development programme headed by former Executive Director John Garfinkel that brings together like-minded organisations under the ISSA umbrella. This is a global effort that is designed not only to change the way the way cleaning is viewed by the world, but also to position our members to compete effectively in the global economy.

So is it time for you to consider the glamour of the commercial cleaning industry in this move toward a global economy? It could change the way you define success.

“ISSA is at the forefront of this convergence and is promoting jan/san within the OP sector in a big way”

Banding together for a healthier world To understand ISSA, you have to understand its mission: to change the way the world views cleaning. This world is an increasingly germy and dangerous place, and if an organisation like ISSA can’t call together all those constituents who can positively affect human health and wellness, then who can?

What’s more, our industry has already amassed and implemented an astounding amount of technology. ISSA’s own Bill Balek spells out some of the most advanced of these technologies that are currently put to work in our industry (see page 47). The level of continuing innovation is equally staggering.

And, of course, we are now able to attract a whole new wave of participation by millennials and are looking ahead to leverage those technologies for this generation of young people who were born into the digital age.

I recently attended a symposium and was amazed to learn that this is the first generation that will not need a driver’s licence, thanks to driveless vehicles and the shared economy. Autonomous vehicles are currently delivering the mail in Europe while public transportation is slated to deliver people movers that operate at an inconceivable 700 miles per hour (1,125 km/h), and

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OPI Magazine | September 2016

Want the Final Word? Email editorial@opi.net

IN THE NEXT ISSUE • Big Interview with Aidan McDonough, CEO, Integra Business Solutions • Top 100: Who's made the cut in 2016?

• Mailroom/packaging and stamping category update

Office Products International ISSUE NO.2 62

SEPTEMBER 2016

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