Territorial Imperative

Pictured from left: Jeff Prunzik, president, and Dan Prunzik, vice-president, of The Paper Exchange (photo by  Marc Soracco)

Like most independently owned secure destruction and record storage companies, The Paper Exchange (TPE), Pittsburgh, seeks to distinguish itself from competitors. But brothers Jeff and Dan Prunzik, co-owners of TPE and president and vice-president, respectively, bring a unique passion to their Pittsburgh-centric business. By serving customers locally and regionally while preparing like world-class players with professional accreditation and operational investments, "TPE wants to deliver the best of both worlds home," Dan says.

The history of The Paper Exchange is grounded in paper recycling and closed-loop logistics. Jeff worked in the Pittsburgh division of a Cleveland-based paper recycler. "I got close to customers and learned intimately the route of pickups," he says. Jeff also advanced the office recycling programs for his employer's customer base, extracting the scrap paper that, by 1994, was growing in resale value.

By early 1996, however, when paper markets suffered a massive collapse, Jeff's employer went out of business. He soon realized there was an opportunity to capitalize on the solid relationships that he had developed and the business he had built in Pittsburgh. Jeff and his brother, Dan, decided to "purchase a truck and get incorporated." The two brothers established The Paper Exchange in 1996.

Their business grew as other recycling companies in the area closed, creating crucial entry points. TPE was positioned to meet hauling needs, implement service contracts and offer the specialized expertise required to set up paper recycling programs for customers. "We gained essential volumes of cardboard, newsprint, office mix and printers mix," Jeff says, "and being able to handle the logistics piece was everything."
 

FORGING A TRAIL
The distinctive character of TPE as a company began to evolve during this period, according to Jeff and Dan. "We recognized that 'relationships' would drive our business growth, from long-term contracts with key customers to the quality of employees that we could attract and retain," Dan says. "As we began to diversify our services, these relationships provided direction."

The passage of critical data protection laws and regulations in the late 1990s and early 2000s raised the consciousness of business professionals across the spectrum and led The Paper Exchange to enter the secure destruction business soon after its founding. "We bought a shredder and established a shredding division," Jeff says. "We actually used recycling to incubate the new secure destruction business—it was a great way to transition," he reflects.

Initially, TPE developed markets within the greater suburban Pittsburgh area. "Being locally owned has definitely been an advantage for us," Jeff says. "Pittsburgh people working side-by-side with local companies is a powerful message in this area," he continues. But, Dan also concedes, "You've got to earn credibility and demonstrate to customers that you can satisfy their data security concerns and assure regulatory compliance."

In 2003, The Paper Exchange increased capacity with a new shredding facility, located on the north side of Pittsburgh. Jeff and Dan upgraded the shredder and began to invest in additional vehicles to service accounts. Customer reach was expanded to areas within a two-hour radius of the company's shredding facility. The scope of operations for TPE now includes western Pennsylvania, eastern Ohio and West Virginia.

With the growth of the secure destruction division, TPE made a strategic decision to "focus on shredding and get beyond the ups and downs of the recycling business," Jeff says. The brothers sold the recycling division in 2006. "This move supported the growth of our shredding division," Jeff adds.

The TPE shredding division business plan was based on "end-to-end customized solutions to fit the requirements of each client, supported by expert customer service," Dan says. Although the company offers on-site document shredding and has two shred trucks in the field, The Paper Exchange promotes off-site, plant-based shredding as "the most effective solution offering the highest level of security and confidentiality in the most timely, convenient and reliable service package."

To take the company to the next level in terms of professionalism, The Paper Exchange joined the National Association for Information Destruction (NAID), the Phoenix-based trade association for the information destruction industry. In 2003 TPE was awarded, and has continuously maintained, NAID AAA Certification. "Our clients have to comply with stringent data protection requirements, and NAID certification helps to assure them that TPE is the best partner to handle their secure destruction challenges and avoid risk," Dan says.
 

HARNESSING TECHNOLOGY
The company's off-site shredding capabilities "were stretched" as TPE pursued aggressive growth in niche markets, such as pharmacies, physician's practices, law firms, financial services, casinos and two major sports teams in the area. Product destruction also became an attractive value-added service.

"Our success with executing these strategies began to challenge shred capacity and processing capabilities at TPE," Jeff says. "To meet customer demands and support sales, we needed more versatility. Those are great problems to have, but we had to get it right by committing to a process for system design and operations planning."

The team began its search in 2010 by, as Dan says, "test-driving different shredder/grinders. We wanted a system that could handle the variety of materials that our customers need to shred," he continues. "And the system required versatility, with the durability and volume capacity to handle our projected future growth."

TPE selected a single-shaft Mega-Destroyer HF-7870-150XR shredder/grinder, manufactured by Cresswood Shredding Machinery, Cortland, Ill. "We were looking to reclaim floor space in our facility, and Cresswood engineered a custom 'shred and bale' system for us, complete with conveyors, that produces NAID-compliant output in one pass," Dan says. "It also meets our volume requirements within a compact footprint."
 

MANAGING BEYOND CHALLENGES
Dust collection and proactive fire safety were critical factors for TPE in the final design and engineering of the shredding system. "For us, safety is an integral part of our operations, from the front to the back end," Jeff says. "With dust, we all have something at stake, and out of concern for our employees, and our plant, we have to achieve a comfort level and manage those risks."

Imperial Systems, Jackson Center, Pa., worked with TPE and Cresswood to provide a dust-collection and spark-detection solution for the shredding system.

However, in the effort to reduce tramp metal contamination in material bound for secure shredding, TPE credits "good management practices" with limiting events. "Our Plant Manager Jim Moody has held meetings with drivers and reached out to specific customers when a pattern of contamination emerges," Dan says. "You've got to take what inevitably happens and manage it."

Training to manage operating parameters and the creation of maintenance protocols for new equipment also was a key deliverable required of TPE's system suppliers, which Dan says its suppliers provided.

The brothers also cite labor and processing efficiency issues as driving shredding system design for their company's application. Results have been positive, according to Jeff. "Our energy costs per ton have been significantly reduced, and we are now able to accomplish in one shift what took us a shift-and-a-half previously. Time required to complete the shred cycle is typically the same day," Jeff says, "and well under the 72 hours permitted by NAID."

He also credits the addition of a vault truck to the TPE secure service fleet with enhancing the company's material handling efficiency.
 

INVITE THEM IN!
Since the successful installation and startup of the new shredding system in September of 2010, The Paper Exchange has encouraged more customer tours of the off-site facility. "You build trust with openness, and we work to be scrupulous with our housekeeping—The plant is tidy and neat, and we are careful to sweep tires and feet of any lingering debris before they leave the premises," Dan says. "It's all part of maintaining a secure environment."

Plant Manager Moody, who is also the resident shred system "guru," says of tours, "Most people don't actually get to see the shredding process going on in a shred truck, so being at the plant with this intimidating machine, you can tell by the look on people's faces that they are in awe—we enjoy giving them their money's worth!"
 

CHOICE BEYOND REGULATION
Completing full-service outreach to the Pittsburgh community, The Paper Exchange offers residential services to individuals, either on-site with a provided secure storage container, or as a drop-off service at the shredding plant, scheduled by phone with a TPE team member. TPE averages five to seven residential drop-offs customers per week. "People have really become aware of identity theft in the last few years, and what would have been a tough sell seven to eight years ago is self-evident these days," Dan says. "We're providing the public with what we call 'choice beyond regulation.'"

TPE also conducts shredding events with organizations such as the Better Business Bureau and with property managers for business parks. "We are really a security company that has a solid recycling background, and that gives us a huge advantage when sustainability and stewardship are priorities," Jeff says. "In the recycling world, everyone is a customer. We don't want to lose that face-to-face connection with our community, no matter how sophisticated our business services become."
 

SIMPLIFY TO PROSPER
"Maintaining good relationships with mills and your broker and simplifying your downstream markets for baled materials are essential ingredients to growing your secure destruction business," Jeff advises. Based on Jeff's experience and 17 years in the paper recycling arena, TPE has found that "working directly with companies such as [Waste Management] Recycle America to broker paper makes a lot of sense for our company," he adds.

Jeff points to a number of factors that have led to this judgment. "As a small business, having a contract that you can believe in and payment terms that are very attractive brings a degree of predictability, and that is a valuable asset."

Maintaining quality of baled product and avoiding rejections are "primary goals for TPE," Jeff says. "It helps that TPE operates a secure, closed-loop system where we are rigorously monitoring contamination and pooling paper," he adds.
 

LEAP INTO STORAGE
In late 2010, The Paper Exchange opened a 16,000-square-foot state-of-the-art secure records storage facility on 2.3 acres in the Lawrenceville neighborhood of Pittsburgh. By February of 2011, TPE was receiving boxes from 10 to 15 customers. This segment of the business continues to experience positive growth, primarily by leveraging the company's existing shredding customer base.

"Storage really complements what we offer in our secure destruction portfolio," Dan says. "We were nudged into this service extension by companies calling and asking if we provide storage. They were not happy with their current suppliers and wanted another option."

Following the pattern established when TPE's recycling business was used to jumpstart the secure destruction division, shredding is now fostering the growth of the company's records storage business. "This road to diversification builds on the confidence that we've established with our secure shredding clientele," Dan says. "These businesses fit together seamlessly from a 'total solutions' perspective."
 

MAPPING THE FUTURE
The Paper Exchange has a wealth of growth plans in the pipeline but intends to avoid growing pains with the new records storage business by "pacing ourselves," Dan says. "We are comfortable with operating within a two-hour radius of our facility, or roughly 120 miles at this point."

However, by participating in shredding networks, TPE has gained the scope to service customers with locations across North America. "We are not constrained by quality, and our size isn't a liability when we can partner well with others," Jeff says.

TPE also is taking the lead to elevate professionalism "from the leadership team to all frontline personnel," Dan says. Jeff and Dan have taken the online courses and expect to receive the Certified Secure Destruction Specialist (CSDS) accreditation from NAID shortly. Their intention is to have a select group of TPE customer service staff CSDS certified, as well.

A secure destruction and storage company that closes the loop with recycling services fits the profile of a green and sustainable service provider. "We're moving forward to engage new service opportunities in the greater Pittsburgh market, but we will bring all of our resources and our relationships into these new endeavors," Jeff says.

With that attitude, the Paper Exchange is thinking globally but acting locally. It helps when you know the territory.

The author is a writer based in Bloomington, Ind., and can be contacted at aperiome@juno.com.