Continuous Forms Refuse to Die
Fact: The major directs are loosing their stronghold in the marketplace.
Fact: Within the independent channel, many manufacturers of continuous forms have abandoned the product in lieu of more value-added products.
Fact: Laser cut-sheets simply can’t cut it in certain industrial environments.
The upshot? Some astute industry professionals are turning what others consider a dying product into a viable commodity.
For example, Quick Tab II, Tiffin, Ohio, does business with a software vendor that sells its products to auto glass companies, where the dust-and debris-ladened environment wreaks havoc on laser printers. Vice President Mike Daughenbaugh explained these businesses still use Okidata-type, continuous feed printers. The shops that tried to switch to laser printers got fed up with the time and expense of calling in service reps.
Despite environmental demands, the cost-saving benefits of continuous formats versus laser cut-sheet products still make continuous an attractive choice. “Toner costs for laser printers are quite expensive, depending on the amount of area that needs to be covered,” noted Daughenbaugh.
“A lot of the software that has been developed over the last five or six years has promoted the laser cut-sheet and ink cartridges,” agreed Kenneth Adams, president of Central States Business Forms, Dewey, Okla. “Folks are making a lot of money selling small quantities of ink, which can be more expensive than the paper itself. Whether laser cut-sheet or continuous, preprinted forms allow end-customers to save on ink and possibly handling costs, as well.”
Depending upon the type of paper being used, both contributors noted laser printers can also be rather temperamental and prone to misfeeds. Particularly with smooth-surface stocks, there is a tendency to grab extra sheets.
Supply and Demand
The demand for continuous still exists, but more manufacturers are moving away from the products, leaving distributors looking for new sources. “As a result, we’re gaining market share. For us, continuous is a cash cow-type of thing,” said Daughenbaugh.
“Quite a number of the direct selling entities are losing their sales people to distributorships that we do business with, so I would probably speculate that there is a higher erosion of continuous from the major directs than the independent sector,” observed Adams. He pointed out, historically, the major directs tended to concentrate on larger corporations, which have eliminated continuous products more readily than smaller companies. In particular, many major directs converted much of what constituted long-run work to electronic type media faster than short run work, which can to be more segmented or more differentiated.
At present, continuous form products account for approximately 10 percent of Quick Tab II’s orders. Daughenbaugh reported 75 percent of those orders are for checks; the remaining 25 percent are for statements, invoices and purchase orders. “The demand is primarily for short-runs, meaning 5,000 pieces or less,” he added. “We keep four pack-to-pack presses busy on short-run orders, and use Stevens web presses for the longer runs.”
Evidence of the strong trend toward short-runs can also be seen at Central States Business Forms, which produces continuous form products including invoices, statements, bills of lading and medical forms. Said Adams, “Rather than tying up money in ever-increasing storage costs, end-users are trying to figure out just-in-time inventories. They’re willing to pay more per form and have it delivered more often, rather than buy a one- or two-year supply and store it.”
Laser cut-sheets have certainly eroded much of Central States’ single-part continuous work, although a few orders still come in. Adams reported carbon and carbon interleaf multi-part forms make up the bulk of today’s continuous orders, although they might have been reduced from a four-part to a three- or two-part form.
While pricing for continuous is more competitive than ever, manufacturers are grappling with increasing raw material costs, including paper, ink, oil-based shrink wrap film, chip board and cardboard, as well as delivery and freight charges. “Today, everyone is trying to figure out how to use less or do things differently,” acknowledged Adams.
As prices increase, some distributors are discovering that business they had for years is suddenly being put out for bid by purchasing agents. “When that happens, more times than not, the margins tend to be cut a little bit, since someone else may not require the same margin as the distributor who has had the business for a while,” said Adams. “It is a process of trying to figure out if you are getting a fair price on a product. You have to go out and see if what your vendors are telling you is happening all across the board.”
Reconsidering specs and designs can create cost-saving opportunities. “We love to look at alternatives,” Adams continued. “Perhaps the whole process can be done less expensively as a pressure-seal application rather than a traditional business form. Even if you have to buy a different piece of hardware to do the folding and sealing, it might make sense from a total processing of the form. Or there may be some combination of medium that cuts out a step. Sometimes we have suggested a different weight or size of paper that reduced the cost of forms to our distributor customers, and that has been very beneficial.”
So, who is a good candidate for continuous forms? As with any application, Adams emphasized distributors need to investigate and analyze operations to discover where and how end-customers are using paper. “For instance, a company may have direct deposit, but employees still have to be notified that they received a paycheck,” he commented.
Said Daughenbaugh, “Distributors should look at where printers are being used. If it is a humidity-controlled office environment, where there is not a lot of dust or debris in the air, laser printers may be fine. But, if it is a hot, factory-type atmosphere, if there is a lot of paper dust or if printers are in locations where they are susceptible to being bumped or knocked into, there are going to be more issues for those using laser printers.”
For these reasons, and again, the fact that laser toners are fairly expensive compared to cartridges for dot matrix printers, continuous forms keep on keepin’ on.