Living in the midst of the data-intensive, computer-driven Information Age, we tend to take for granted the innovations wrought by the inventors of the last century. Not the major inventions like the light bulb and the telephone, but seemingly simple ideas that were revolutionary notions at the time. Among these is the Bandless File, so called because it used metal clips instead of easily broken rubber bands to organize and secure files at the turn of the 20th century.
The Bandless File was the invention of Charles Smead, who started Smead Mfg. Co. with a staff of six in a small room above the local newspaper office in Hastings, Minn. Unfortunately, Smead died shortly thereafter, and in 1916 one of his employees, P.A. Hoffman, purchased the company and successfully led the growth of Smead along with his son, Harold. Smead Mfg. Co. has been privately owned by the Hoffman family ever since, with the unusual twist that since the mid-1950s it has been a woman-owned company.
Following the unexpected death of Harold Hoffman in 1955, his widow, Ebba C. Hoffman, was faced with a difficult decision: step in and run the debt-ridden business, or sell the company and find another way to support herself as well as her two young children. Many urged her to sell the company, but fortunately, she heeded her own common-sense intuition and didn’t sell. Instead, she built the business into an industry leader that she passed onto her daughter, Sharon Hoffman Avent, in 1998. Avent continues to lead the business into a new century drastically different from when her family first started the business.
Still headquartered in Hastings, today some 2,400 employees support nine North American production facilities and distribution centers totaling 1.5 million square feet located in California, Georgia, Minnesota, Ohio, South Carolina, Texas, Utah and Mexico. As evidenced through a series of European acquisitions over the last 10 years, the company is pursuing a “balanced” growth strategy, combining acquisitions with organic growth. President and CEO Sharon Avent explains, “The European acquisitions have given us the perfect opportunity to incorporate into our strategic plans only those assets that will significantly contribute to our continued growth, namely through complementary product lines, additional distribution channels and geographic coverage, and increased manufacturing capabilities within the European market.” Through these acquisitions, Smead now enjoys a worldwide presence through an additional 1,000 European employees and six manufacturing facilities in The Netherlands, Estonia, France and Finland.
In addition to expanding its geographic boundaries, Smead has dramatically increased its product offerings from a single item, the Bandless File, to more than 5,000 stock items. Today, Smead provides a wide range of products for all organizational needs, including folders, wallets, pockets and portfolios. The company also produces special-made and made-to-order products for many customers. Add to that Smead’s full lines of self-adhesive label products, office shelving and mobile office furniture, and it’s easy to see that Smead really does have a solution for all organizational challenges.
Just as Smead has continued to evolve and grow every decade, the industry it serves also has undergone major changes over the past 20 years.
Emergence of “Big Box” Retailers
The emergence of the “big box” retailers, superstores and wholesale clubs has drastically changed the face of the office products industry. “Everyone used to buy their office supplies through their local stationer,” says Avent. “With the emergence of the big box retailer, the independent owners had trouble competing, so the industry under went a huge period of consolidation.” The end result has been the formation of several prominent “buying groups” of independent stationers. By joining forces and buying in larger quantities, buying groups can pass along significant cost savings to their members and help them remain competitive with the larger retailers. “Even though our sales continue to increase year after year, the shift has been to fewer orders with larger quantities per order.”
Another change brought about by the birth of the superstore is an increased focus on consumer trends. “The biggest trend in our business today is growth of the SOHO segment – the Small Office Home Office – which includes the 66 million people now working from home,” Avent explains. “This market segment doesn’t want the ‘same old, same old’ and is looking for greater flexibility in creating their own filing systems. They want products that are functional yet reflect their own personal style.” To capture the attention of this segment, Smead has introduced new products using fashion colors, textured materials and even fabric coverings.
The renewed focus on the consumer brought about another major change at Smead: the redesign of its distinctive trademark plaid packaging. “We were known by our plaid box – one glance and you knew it was a Smead product,” Avent remembers. “Now, the consumer is more interested in how our product will fulfill their organizational need, so we completely updated our packaging.” The end result is a clean, bright package that gives shoppers an organized and simple way to quickly find the products they need.
The retail focus has brought about internal changes at Smead as well. “Working through retail product development and packaging changes highlighted the need for adjustment internally,” notes Avent. “We started to look at not only how our products fit into a retail channel, but our internal processes for bringing those products to market.” In the end, Avent decided that the company needed to shift its strategy to a category management business model.
Approximately halfway through the anticipated two-year transition, the company is embracing category management as its “go-to-market” approach. Avent anticipates that category management will bring about better consumer understanding through research, shortened product development cycles, supply chain efficiencies and improved product availability, while maintaining high customer satisfaction and product quality. “When all is said and done, the end result will be to deliver better value to the consumer,” says Avent.
While the emergence of the retail channel has brought about significant change, probably the biggest shift in customers’ needs has been the integration of technology into virtually every office setting.
The “Paperless Office”
Years of experience organizing paper documents made the transition into electronic record management a natural one. Operating in a technology-driven era in which the adjectives “paper” and “electronic” are required to differentiate types of documentation has led Smead to develop Smead Software Solutions, in which a group of employees focuses on developing and selling a series of Windows-based software products to organize electronic documents. And while we frequently hear about the “paperless office,” Avent points out that there’s still a growing need to effectively organize paper documents. “The fact is that for all the technological advances, more and more paper is still being generated. And those documents need to be effectively organized.”
Smead Software Solutions has been created for one purpose: to manage all forms of information, both paper and electronic, in one easy-to-use application. The technologies address the management of different types of documents or information, ranging from hard copy paper files to imaged documents to files created on PCs or batch data from large host databases.
The products are also designed to meet the document management requirements of any size business. Whether it’s color-coded filing systems for paper files or developmental solutions enabling an entire enterprise to integrate and manage all forms of information, Smead Software Solutions makes management of multiple document types easy and intuitive.
“Misfiled reports, paper piles, and general clutter all add up to lost productivity,” Avent notes. “To a certain extent, we’re resistant to cyclical economic ups and downs. There’s a little more cost-consciousness with a need to reduce waste that’s certainly not unusual in any business nowadays. But companies and individuals are going to produce paper regardless of the economy and regardless of the sophistication of their IT systems. They need a way to get it effectively organized. Smead provides the tools to do that. It’s because we’ve been in business as long as we have, and because we approach the needs of our customers beyond just selling file folders, that we’re frequently viewed as the supplier of choice to help keep them organized.”
Like many other manufacturers in the United States, Smead Manufacturing Co. has faced its share of challenges over the past decade. But through it all, Smead has adapted, even grown, into an international presence looking forward to entering its second century in business. And although there have been many changes since 1906, it is still Smead’s principle to provide only the highest quality products that best serve its customers’ needs.