July 13, 2022

Operational Process Death by a Thousand Paper Cuts

Paper-dependency is killing operations in a technology world.

Have you ever stopped to think about the waste that comes from being too paper-driven in your day-to-day operations? The costs could be upwards of 20% of your company’s overall expenses.

How could it possibly add up to that much? Read on while I plead my case for a paperless tomorrow.

To make a point, I’m not even going to include the additional waste on things like paper bills, direct mail and other customer-facing paper-driven activities – so I’m excluding areas like sales and marketing, advertising, customer support and human resources.

I will focus on the internal operations of order fulfillment for this say-no-to-paper drive, so all the things a company needs to process an order, deliver the good or service and bill for it – I’m including administration, product/service delivery, health and safety and accounting.

Paper-driven processes create waste and prevent multitasking efficiencies. Plain and simple.

I could go on and on about the paper waste stats such as the average office worker uses 10,000 sheets of paper a year, 50% of the waste of businesses is composed of paper, each organization’s paper consumption grows an average of 22% per year (doubling costs every 3.3 years) and so on. But, instead, let’s get right into the problems with paper-driven processes.

Here is an insightful article to read if you’re interested in those stats and other great tips to reduce paper consumption in the office.

There are two main cost disadvantages to relying on paper-driven processes.

First, there are the obvious hard costs (office supplies): paper, toner, printer hardware, printer support and maintenance, filing cabinets, file folders, staplers, staples, paper clips, hole punches and binders. Oh, and don’t forget about secure paper-shredding costs. If you would like a ballpark yearly dollar figure on the hard-costs of paper expenses, add together the following numbers:

  • your printer hardware, maintenance and support costs per year
  • office supplies @ $350 to $1,000 per employee per year
    ($1,000 if you have a company of 4 or less staff)
    ($350 if you have a company of 200 or more staff)
  • secure paper-shredding costs per year
  • any additional costs related to the delivery or storage of paper documents

Second, there are the soft costs (inefficiencies and wasted human resources): waiting for the printer to print, retrieving printouts, hand-delivering printouts, filing, replacing paper and toner, standing around waiting for an ink signature from the boss, having a single printout that only one person can consume at a time, photocopying documents, scanning paper documents for the purpose of signature or storage and sending staff to purchase paper and other paper-related office supplies.

In my opinion, the latter is actually the greater cost and risk to your business profitability and longevity.

Let’s go over a hypothetical on how a reliance on paper can be very costly:

Let’s say you have a business of 10 office workers. It’s not unusual for the average employee to print up to 10 documents per day. Now, let’s say the average time spent on paper activity (enabling the computer to print, waiting or it to print, picking up the printout, stapling, paper-clipping and filing) is 9 minutes. This will make the math easier.

So, 1.5 hours (90 minutes) per day, 5 days per week, 50-ish weeks per year. Keep in mind that the average worker is only productive for up to 7-hours per day, on an 8-hour shift, after subtracting two 15-minute breaks and one 30-minute lunch. The reality of it is that the same worker also spends another 30 to 60 minutes per day, walking to/from meetings, getting coffee or water and using the washroom. So, really, productive time for an employee is probably closer to only 6.5 or 6 hours per day.

For our math calculation, we will stick with the “7 hours of productive time” per day per employee (even though we all know it’s less). If 1.5 hours per day out of a 7-hour day is spent pushing paper, 21.4% of that worker’s salary is going towards wasteful paper processing. It’s like burning money on paper. Or, burning paper money. Or, paper that’s burning your money – I’m sure there’s a creative pun that belongs somewhere in this paragraph…

Have a look at your company’s yearly payroll and calculate ~20%. It may be more for one company and less for another but this ~20% is what you’re spending in soft costs for your company’s reliance on paper.

Here are some tips for reducing your company’s reliance on paper:

Think about all the process-related areas where your teams may be over-utilizing and over-depending on paper. Then, look at the paper-driven activities and determine if it is possible to replace them with electronic activities instead.

Again, I’m only focusing in on administration, product/service delivery, health and safety and accounting. But, if you like, feel free to consider the paper-driven processes within your sales and marketing, advertising, customer support and human resources departments as well.

Paper-driven activity

Replace with electronic activity

  • delivering printouts
  • waiting for ink signatures
  • photocopying documents for multiple people
  • multiple printouts in meetings with multiple participants
  • scanning documents for the purpose of filing and storage
  • printer maintenance
  • filing paper
  • use email or fileshares
  • use electronic signatures
  • share electronic document to multiple people
  • use a portable monitor or tablet for the meeting participants
  • secure electronic file storage for scanned documents

Here’s a fun suggestion to help you put a stop to paper:

If your company is already using electronic solutions and continues to print and file paper anyway, try kicking off an initiative to put a halt to the duplicate paper processes. Reward your team members with credits for each time they do not duplicate their electronic efforts with paper. Run this initiative for one year and have your team members periodically trade those credits in for things like coffee gift cards, iTune gift cards, their pick of projects/initiatives to work on, time off and other fun items.

You might think giving time off is counter-productive at first, but if they are spending 20% of their working year on non-value-add activities, giving them one day off out of ~250 working days per year (less than 1%) is still netting your company a 19% improvement (potentially).

This activity may cost you a little at the beginning but the savings will stretch on year over year.

Let’s kick off the New Year with this resolution:

Commit to identifying each process that is still paper-driven and put a plan in place to optimize the process and phase out the dependence on paper.

Need some help assessing and planning this out? Process Primer Consulting can help! Contact us anytime to learn more.

Happy New Year!

We’re always available for questions and opinions. Feel free to leave a comment below.

Comprehend. Reimagine. Outperform.

Alwin Kwan
Your Friendly Neighbourhood Process Consultant

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