MENU
August 1999
Spotlight
E-Com Excitement
Product Show Pics
Lawrence Peralez, Director
of Business Services
November 1998
Good Morning,
I've been asked to do a presentation on Business Services'
operations.
In thinking of how to approach this, I thought it might be best
to give a little history and background information first.
************
For those of you who are not familiar with Business Services, we are a division of Business Enterprises. Our departments include Central Stores, Mail Services, Material Management, ReproGraphic Services, and Shipping & Receiving. Central Stores also manages the campus copier program and Material Management oversees moving services. I am responsible for the overall management of these departments. Additionally, I am responsible for vehicle accident claims, bid preparation, vendor interface, and whatever project Joe comes up with.
When I started here ten years ago I thought I would come in, get things squared away, hopefully make some improvements that would make a difference, and then move on to something new and more challenging. Well, I'm still here, there are still plenty of challenges, and there has been a lot of them along the way.
In 1989, Business Services employed approximately 60 full-time staff and 30 student assistants. The majority of full-time staff were in General Fund positions. A few of the departments also received some General Fund allocations.
Central Stores was a stocked operation that carried over $600,000 in inventory -- a lot of the stock was obsolete. The print shop also carried $600,000 in paper inventories, some of which were also obsolete. As space was cramped, we stored the paper in hallways. The print shop also had other problems. It's capabilities were limited. It couldn't produce full color or jobs on glossy stocks and the standard turnaround time was "two weeks."
The equipment in the campus copier program was 10-12 years
old; average life expectancy for a copier is about five years.
At the time, Office Machine Maintenance supplied paper as part
of the per copy price. We noticed we were having to buy huge
amounts of paper. To find out where the paper was going, we kept
a log on a $100,000 paper purchase. We found that departments
used $65,000 worth of paper for other purposes -- printers, duplicators,
etc. That's the reason you now have to buy your copier paper!
The old infortext copy cost accounting system regularly lost
track of substantial amounts of copies made on the copiers. This
meant significant dollars were being lost!
Mail Services was making twice-a-day deliveries to the campus.
Mail Services was making 6-8 trips to the Post Office to pickup
mail so that we would have time to get it sorted and on the truck.
There was a large volume of mail being missorted and misdirected.
Postage chargebacks sent to the FAS were occasionally unaccounted
for due to lack of proper reconciliation procedures. One of the
first assignments I was given was to get involved in decentralizing
the University postage budget and make departments responsible
for their postage expenditures. As a result, my name is now forever
linked with the word "chargeback."
The Property Office had failed several audits. Physical inventories were not being performed as required by the State. Office relocations were performed by our employees; even the smallest move took at least a week to complete. Surplus property was stacked in hallways. Sale of surplus property was being done by sealed bid -- a long and tedious process that resulted in minimal income. Shipping & Receiving also made twice-a-day deliveries. We were stumbling over each other trying to process and deliver shipments we had received on the same day. New equipment and surplus property was being commingled due to lack of storage space in the Quonset hut. Our vehicles were in bad condition.
Business Services was scattered around the campus, some of us were in the old Montezuma Elementary School; the print shop was in the BAM basement; Central Stores was in the rear of the Physical Plant building. There were less than half a dozen computer in all of Business Services. We had no written service guide to distribute to the campus.
Then the State budget deficits forced us to cut back on mail and freight delivery services from twice to once a day. WordGraphics was closed down. Micrographics went away. In-house moving services were scaled back.
In the midst of all these problems we were asked to start giving up our General Fund positions and allocations as well as all but one of our management positions. The deficits caused us to reduce our full-time staff to under 30 and our student assistants to less than 10.
Well, I'm happy to say that, like the rest of you, we made it through the bad times of deficit reductions. In fact, we have become a stronger organization. Given the scope of our responsibilities, I believe that we are one of the best operations on campus.
Five years ago, Central Stores grossed about $450,000 annually. For each of the last four years, Central Stores' annual gross has been approximately 4.5 million dollars with an estimated saving of $450,000 passed on to departments. Last year, Central Stores processed over 10,000 requisitions.
Central Stores is now a 100% self support operation. Central Stores employs four full-time employees and one student.
In 1989, Central Stores established a local office supplies contract with Eastman, now Office Depot, and introduced Just-In-Time (JIT) ordering to the campus. In 1991, after compliance issues arose, we developed specifications for a JIT ordering program and asked the State Office of Procurement to prepare a bid. After a two-year struggle, we successfully lobbied the State Office of Procurement to bid and award a contract. It is interesting to note that six years later, the State implemented it's own JIT ordering program. Today, more than half of all CSU campuses have implemented or, are now pursuing, the establishment of JIT ordering programs.
Central Stores has gone from a stocked operation requiring a 7000 square foot warehouse (valued at 1.10/sq. ft.) to a JIT ordering program occupying office space only. Physical Plant took over the valuable warehouse space and put it to good use.
Central Stores' use of master agreements in it's JIT ordering programs have put the University on par with private sector usage levels according to a 1994 benchmarking study conducted by the CSU. The University is among the highest users of Master Agreement in the CSU system. Use of Master Agreements (BPO's) is a highly efficient way to make repetitive purchases of materials.
Prior to 1992, the campus copier program grossed about $400,000 annually. Since 1992, the copier program's annual gross has been over $600,000 with an estimated saving of $150,000 passed on to departments. The copier program reproduces over 13,000,000 copies each year.
In 1992, we invested $1,000,000 to buy new copiers to replace the obsolete equipment in the campus copier program. We also replaced the Infortext system with an Equitrac system. This year, we have outsourced the campus copier program. Our new vendor, Ikon Office Solutions, has recently installed 125 new copiers and has reinstated the Equitrac copy accounting system they purchased as part of our contract.
The majority of departments elected to continue participation in our program. The few who did not, purchased copiers from a vendor who did not offer the same level of services (on-site technicians, Equitrac copy cost accounting) as our program and, thus, was able to offer slightly better pricing on some equipment.
Our program offers a choice of models; competitive pricing; copiers can be upgraded or replaced if not working properly; on-campus technicians; and access to a centralized copy control system. The contract expires in three years subject to renewal. Paper is no longer included in the per copy price. However, Central Stores does buy paper in truckload quantities and sells it to departments at a competitive price.
Over the past several years, Central Stores has established contracts for office supplies, custodial and hardware products, lab chemical and supplies and computing equipment and peripherals. In 1993, we took the lead in establishing a system-wide contract with Apple Computers. In 1997, we took the lead to establish a system-wide contract with Sun Microsystems. This year a system-wide contract has been established with Office Depot.
To ensure that we can continue to provide the items departments want to buy, Central Stores is constantly adding new suppliers and products. Recently, we've added Air Touch Cellular, GTE Mobilnet and BKM of California (Steelcase furniture). We will soon offer Meeting Maker, a scheduling software package, for sale. Last year, Central Stores was delegated limited purchasing authority to issue purchase orders against state contracts for computers and peripherals. The maximum amount of each transaction is $500,000. We are able to provide products from IBM, Toshiba, HP, Dell and other computing equipment manufacturers. An announcement will be in the mail in a few days about this.
We are now able to provide our customers with Internet access to our vendors. From your desktop, you are able to place orders of less than $1,000 over the Internet, pay with your campus credit card, and have the order shipped without any involvement from Central Stores.
Central Stores has begun sending confirming copies of sales orders to departments. We will be implementing an electronic transfer of our accounting information to the FAS that will contain a reference number, probably an invoice or sales order number that will appear on your AMO. This will help make reconciling your accounts a lot easier.
In 1990, Central Stores began sponsoring an annual product show to help keep the campus informed about the latest innovations in office supplies and equipment. In 1996, we co-sponsored the College of Education's "Learning with Technology" show. The next annual Office Product Show, our tenth, will be held this August. Central Stores will continue to host this and other demonstration shows and roundtable discussions open to the entire campus.
This fall, Central Stores will announce the opening of a mini-showroom.
The showroom will feature systems furniture arrangements, seating,
cellular phones, ergonomic products, computers and a variety
of office supplies. We anticipate showcasing Office Depot's quarterly
promotion by offering exciting and creative incentives. The mini-showroom
will be housed in the IT building (the old ReproGraphics space).
Representatives from Office Depot and Central Stores will be
available in the showroom to answer questions and provide product
demonstrations. There will be an open house and you are all invited!
************
Today, Mail Services employs six full-time and two half-time employees. With this staff, we process over 17,000,000 pieces of mail each year. Last year, the department saved the University over $70,000 due to presorting and barcoding of outgoing mail.
About three years ago, Mail Services developed and introduced campus mail codes. The mail clerks no longer have to read illegible, handwritten addresses on intra-campus mail, they simply read numbers. This has helped considerably in reducing misdirected and missorted mail and to speed things up.
The campus mail codes were developed to be used as part of an expanded postal zip code. Use of an expanded zip code on incoming US mail will allow us to automate the sorting process. When funds are available, Mail Services will acquire high speed, automated mail sorting equipment. Employees will sit at a computer, and enter the mail code. The code will be sprayed onto the envelope as a barcode; read by an OCR scanner, and sorted to the appropriate route. This technology will significantly speed up the entire mail process and greatly minimize sorting errors.
There are virtually thousands of State and Foundation accounts that departments use to charge postage against. It's Mail Services' responsibility to recharge the correct account. That's why we ask ReproGraphics to print a barcoded account number on the back of envelopes. Mail Services uses a laser wand to read the bar-coded account number on each piece or bundle of mail. The information is then processed by our computerized mail management system and uploaded, via modem, to the FAS on a weekly basis. Mail Services processes approximately 1.5 million dollars in chargebacks each year. Over the past two years, there have been no reported chargeback errors or postage losses! Written postage security and accounting procedures has been developed and implemented to help prevent loss of assets.
In 1993, we worked with Personnel Services to change the Mail Clerk classification to Warehouse Worker. This was done so staff could be utilized to meet workload demands in either Shipping & Receiving or Mail Services. This is one of the reasons we are doing a better job on our deliveries.
************
Material Management is the custodian of the University property records. It is responsible for maintaining a database of over 11,000 equipment items valued at over $37,000,000. Material Management consists of two full-time employees.
Over the last 30 months, property records have been audited by at least three different agencies. No significant issues have been found. Physical inventories have been performed in accordance with State requirements. Last year, this department coordinated over 1,100 moving services requests performed by an outside contractor, Mon Van Services.
We went to an outside moving contractor to do our office relocations and surplus property pick ups because they have the ability to provide as many workers as necessary to do large scale moves quickly and efficiently. As an example, the relocation of departments to the Student Services Building, a 99,000 square foot complex, was completed in less than four days. A more recent example is the Library move. If done on an in-house basis, the moves would have taken several months to complete. Mon Van has done an excellent job.
Material Management now has its own facility for surplus property storage to ensure that no commingling with new equipment occurs.
Disposal of surplus property has been reorganized into three
steps --
Number 1: To ensure campus departments are provided the first
opportunity to select material for their own use.
Number 2: To assist local public schools and charities through
donations.
Number 3: Sale of remaining materials by public auction.
About five years ago, we began hiring a licensed auctioneer to sell our surplus property by "called" auction. In FY 97/98, our auctions generated $25,000 in net income on more than $65,000 in total sales. Income was used to buy like equipment for various departments.
About five years ago, Material Management began placing bar-coded State ID tags on each piece of equipment. In the near future, bar-coded labels will be placed on every door jamb of every building. When the project is completed, we will be able to perform physical inventories on an automated basis. To perform an inventory, we will download departmental information from the property database to a laser scanner, read the label on the door jamb, scan every piece of equipment in the room or building and then upload the information to the property database and produce required reports. To assist departments in managing their equipment, we now provide "read only" access to the property database. If you are interested in this, give me a call.
************
Prior to 1993, ReproGraphic Services generated annual revenues of approximately $550,000. In each of the last three years, ReproGraphics has generated revenues of $1,000,000 with estimated savings of $200,000 passed on to departments. Last year, ReproGraphics processed over 9,000 jobs. ReproGraphics is a 100% self-support operation. They now employ 16 full-time employees and one work study student. ReproGraphics overcame past deficiencies through the acquisition of new and used presses, paper cutters, and bindery equipment. When SDG&E closed down their print shop, we bought their 4-color press and folding equipment. When Great American Bank closed down, we bought their 36" electronic paper cutter. The equipment was in excellent condition and we saved over 75% compared to the cost of new equipment. We also purchased new computers and highly sophisticated electronic prepress equipment. ReproGraphics now buys its paper on a Just-In-Time basis and the value of on-hand inventory is less than $20,000.
We hired a new manager, Frank Gibson, to run the shop and a customer service representative, Jon Hyde, to go out and work with departments. New press operators and graphic artists with the skills to produce high quality full-color process work were also hired. Our existing graphic artists received training to update their skills and knowledge of the latest software used in the graphics industry.
Because of these changes, Reprographics can and does produce a wide variety of high quality jobs. We consistently meet customer time frames. Departments can now send their jobs to ReproGraphics over the campus network. We can provide written quotations generated by our electronic estimating software.
Reprographics received a first place award from International Publishers Management Association for the design and printing of the 1996 SDSU Calendar. It also received statewide recognition in an article printed in "Micro Publishing News." The article highlighted our advanced graphics and pre-press techniques.
A representative from ReproGraphics is available in the Industrial Technology building on a full-time basis now that Reprographics has moved to our new building. This employee will answer phones and take in, or have jobs available for customer pickup. In addition, Jon Hyde is available at the Industrial Technology building appointment to help customers plan and prepare their jobs. Should a customer require a press check on one of their jobs, we will pick them up, drive them to the new building, then return them to their office.
************
A Copy Center has been established to give the departments access
to the latest digital technological innovations in networked
copying equipment, and to have an on-campus facility to process
quick copy work currently sent all to other vendors. The Copy
Center is able to accept cash, as well as charge back to State
and Foundation accounts through the FAS. Revenues will be used
to help Reprographics offset operating expenses, acquire new
equipment, and hire additional staff to help improve services.
The quick copy center is expected to complement, not compete with ReproGraphics. The quick copy center specializes in small volume, quick copy digital laser work, offer full-color copying, highlight color services, walk-up copiers and related finishing services. A future extension of the Copy Center is to incorporate a "Post Office" offering postage, express mail, packing and shipping, and mass mailing services.
Shipping and Receiving now has five full-time employees and four work study students. Last year, it processed over 80,000 shipments and handled approximately 1,300 inquires from departments. We expect to exceed those numbers this year.
The department has new, larger vehicles designed to carry more weight which means more freight can be loaded per trip. This helps us by reducing the number of times a truck has to return to the dock to reload before continuing on a route. Drivers can stand fully upright in the freight area of the larger trucks. From a health and safety perspective, this will help reduce injuries caused by improper lifting of freight in cramped spaces.
We are presently working with vendors to design a powered conveyer system for Shipping & Receiving. It will have a flexible unit that extends out from the building to the back of a truck. Freight is then loaded directly onto the conveyer. As freight moves past computer stations along the conveyer, our staff will log onto a database, create a bar-code label that identifies the shipment and then affix the label to the carton. When the freight reaches the end of the conveyer line, it will be sorted by route. The following morning a delivery manifest will be created electronically; the driver will then load his truck and begin his deliveries. We will use bar-code reading equipment to track the shipment every step of the way. We will use the same system for tracking accountable mail. Departments will also be able to log to the system to check on the status of a shipment.
*************
Today, there are 38 full-time employees in all Business Services. The majority are funded through our self-support operations.
We hired a network administrator, Tim Ameredes, to manage our systems and also act as computer consultant for the department and the campus. We have invested thousands of dollars to help our staff improve or acquire new skills. Virtually every employee that uses a computer in his or her job has attended some type of training. The majority of our equipment is new. We believe these investments have paid off!
In 1995 Business Services was given the go ahead to build a new building provided we paid for its construction. With help from various Business Affairs' departments, the building is now a reality. Business Services' new building was completed in May 1997. The building has 30,000 square feet and is located in X-Lot. This will be the first time that our departments have been housed in one building. Each department's space in the new building has been designed not only to accommodate present operations but also to allow for future growth.
ReproGraphics now has enough space to stage ongoing jobs. As a result, we are able to take in larger printing jobs that were previously turned away. ReproGraphic's heavy equipment is located on the first floor. It's lighter prepress operation and graphic artists are on the second floor. Central Stores, Material Management, and Business Services are also located on the second floor.
Mail Services, currently cramped into a space of less than
1,200 square feet, has 3,000 square feet on the first floor.
There is ample space to accommodate the automated sorting equipment
I spoke about earlier. Incoming mail deliveries from the U.S.
Post Office come in from the front dock. The post office delivers
the first mail drop at 6:30 am. As we don't open until 7:00 am,
the Post Office
puts our mail in a small room that restricts access to the rest
of the building. Keys to the room are kept in a Post Office lock
box located on the building exterior. Our employees unlock the
room from the inside, bring the mail in, process it, and load
on trucks from the side docks.
Shipping & Receiving occupies warehouse space of about 6,500 square feet. There is ample space to receive and stage our freight deliveries and to accommodate the future conveyer system. The warehouse is totally separate from other operations. This will help keep our shipments secure from loss. We are sharing part of the new building with Aztec Shops. They will use their space as a staging area for their food services and bookstore operations. As a result of our relocations, the campus has seen a significant drop in truck traffic.
In 1991, Business Services developed and distributed our "Business Services Guide." We now have put our web page on-line. It features "hot links" to our vendors' web sites as well. For example, Mail Services' has a link to the Postal Services web site. A vast amount of information will be available at your fingertips!
About 1-1/2 years ago, Business Services started having monthly "get together" events to help promote cooperation within the department. The events, open to all staff on a rotating basis, typically last an hour or so. Last Friday, Purchasing and Accounting Services went with us to DZ Akins for breakfast. Previously, we had lunch at Oscars in Mission Valley and at the Corvette Diner. Future outings include the movies and the Grand Prix go-cart race track. You are welcome to join us. Send me an E-Mail if you're interested.
All of the changes I've talked about could not have happened without the hard work of good people. People like Tim Ameredes in Business Services; Frank Gibson and Jon Hyde in Reprographics; Caroline Tanner and Anna Ellrott in Central Stores; Kevin McCully and Doug Jarmusch in Mail Services; Ed Lucas in Material Management; Jesse Buggs in Shipping & Receiving; and the rest of our great staff! They are the people that deserve credit for putting forth the effort required to make Business Services the organization it is today.
Thank you.