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NER Data
Products
NER Data Products was a pioneer in
the Laser Toner industry long before laser printing was
synonymous with the desktop environment. As a ribbon
manufacturer founded in 1971, NER’s initial product offering
consisted primarily of wide data processing ribbons for
printing within the data center. Over the years NER grew to be
one of the largest ribbon manufactures in the world. Today,
NER has two distinct divisions; 1) Imaging Supplies; which
include the manufacturing of compatible toner, ribbons, inkjet
and thermal transfer and 2) Technology Solutions which
consists of media storage furniture, barcode tracking systems,
network furniture, command consoles and remote management
tools for the network environment. They are privately owned
by management and key members of the sales team and
have a workforce of over 450 people. Manufacturing and
distribution facilities include Denver, Colorado, Glassboro,
New Jersey and Toronto, Canada.
In the early 1980’s IBM introduced the
3800, one of the first production data center laser printers.
Seeing the need to expand into non-impact technology, NER
built a laser toner manufacturing facility located at its
corporate offices in Glassboro, NJ. High-speed laser printing
has always been a unique and challenging environment.
Typically a mission critical application used by fortune 500
companies for statement processing and direct mail
applications. All the issues that are present in the desktop
environment are magnified at print speeds up to 350 pages per
minute on complex printers that cost 500,000. “If you think
it is difficult to fuse toner at 50 pages per minute try
developing a formulation that duplexes and fuses at 300 pages
per minute,” noted Jim Coffey Executive Vice President of NER.
“The demands and technical skill set developed in the
high-speed laser toner environment for over twenty years has
uniquely positioned us to be a leader in the all-in-one
desktop compatible toner market.”
In fact according to Jim, during those
times the OEM was a lot less aggressive in targeting the
consumables revenue stream and more focused on increasing
their installed base of printers. “At one time, NER and
Nashua probably accounted for over 60% of the laser toner
supplied for the IBM 3800. OEM’s like IBM, Oce and Xerox
quickly realized that the greater margin potential was in
selling the razor blades. This soon resulted in barriers to
entry into the consumables business that has transcended
high-speed printing into the desktop environment. We have seen
the technology and capital barriers in the high-speed
enterprise for years. Today we are seeing the same barriers
in desktop and network printing. We believe that these new
challenges could completely change the landscape of the
compatible toner industry over the next several years” Coffey
indicated.
NER has leveraged their years of toner
expertise and production to become a leader in the compatible
toner business. “Our management team alone has a combined
tenure in the toner business of over 200 years” according to
Greg Stover Vice President of Sales.
Although the future holds no
guarantees, many including NER see a shakeout in the industry
as the rapid technology changes squeeze out many of the
smaller players. “We have spent the last several years
positioning ourselves for the inevitable consolidation within
the industry” said Coffey. NER has partnered with the leading
component suppliers like Static Control to stay ahead of the
technology curve. The cost of innovation is getting higher
and many remanufacturers may find the increasing difficulties
of chip technology, chemically produced toners and the
onslaught of new engines simply too difficult and expensive to
compete. Hewlett Packard has introduced seven new engines in
the last nine months and every new engine from HP and Lexmark
are now chip enabled.
The market is changing faster than ever
before and NER is focused on being a part of those changes.
“We believe the keys to long term success are continuous
improvement, including increased manufacturing efficiency,
product quality, speed to market of new products, unique
marketing programs and single sourcing of imaging supplies and
Technology Solutions for our partners, said Coffey. “Our goal
over the next 12 to 18 months is to double our compatible
toner business and grow our Technology Solutions Group by
50%.” In order to achieve those goals NER has been busy
adding value for their customers. They have immersed
themselves in a continuous improvement program called IMPACT
(Improving Material flow Production And Customer Service
Together). IMPACT was implemented a little over a year and a
half ago. It utilizes lean manufacturing techniques to
improve inventory turns and build quality at the source with
first pass capability. The premise of the ongoing program is
to ultimately meet the customer’s requirements for technology,
quality, cost and delivery.
In addition, NER entered into the
printer parts business in late 2001 through a wholly startup
named Image1. Headquartered in Plano, Texas and led by Brad
Hansing, an industry veteran, Image1 manufactures and
distributes maintenance kits, fuser assemblies, and other
printer parts. Hansing explained “utilization of NER and
Image1 facilities gives Image1 the best distribution
capabilities in the industry.”
NER believes the market opportunity is
in compatible versus remanufactured. General industry belief
is that HP has 70% of the market with 30% residing in
after-market products. With Lexmark products, the market is
85% with the OEM and the balance being after-market. Steve
Oatway, President of NER says, “A lot of people are competing
for that 30% or 15% of the pie. Our focus is to help our
dealers convert their end-users from the OEM to a compatible
brand with a product of equal quality and performance at a
lower cost per page. We have developed a comprehensive
marketing plan called our Platinum Program designed to help
our resellers accomplish that.” The Platinum program
provides premium content tools available to selected NER
resellers for converting OEM business. On-line compatibility
guides, installation instructions and troubleshooting tips
along with a private label program and customized collateral
support material are available. In addition, an online ROI
tool provides the financial cost justification for converting
OEM toner. The ROI tool has easy to use pull down menus that
quickly allow the user to enter the sku’s, usage and pricing.
It then calculates the savings to the consumer and the margin
implication for the reseller. The results are graphed and
added to a formal proposal for the customer, all within a
matter of seconds.
NER sees a bright future for
organizations like theirs that are able to innovate and lead
with new products and technologies. They have recently broken
ground in their Glassboro, NJ facility to consolidate and
expand their compatible toner manufacturing capacity. Oatway
noted, our philosophy is simple, “Listen to your customers,
recruit the best people, provide exceptional service, don’t
lose sight of quality and be innovative.” For more
information about NER Data Products, click on their web site
at www.nerdata.com.
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