Keeping Your In-Plant Relevant

Like their counterparts in the commercial sector, in-plant print shops are under assault by the tsunami of mobile connectivity and the Internet, as well as shorter runs and faster turnarounds.

In-plants, however, have the additional burden of their employers—universities, private sector corporations, government agencies, hospitals, etc.—re-thinking the necessity of their existence, a path promoted by outside consultants who offer the promise of savings.

In-plants are under scrutiny, which they have been for years, acknowledges Howard Fenton, senior consultant for NAPL. The difference now is that the scrutiny is, in some cases, more insidious, subtle, hidden.

“Years ago, I would get a phone call from an in-plant manger, asking for advice after a meeting with his boss, where he was told that they were considering whether or not they should keep the in-plant open or close its doors,” Fenton explained.

Today, managers are not even told they are scrutiny; they show up for work and are told that the in-plant is being closed, and are then asked to write the RFP to outsource the work.”

“You would think that some in-plants, like within a healthcare or financial organization, that have tremendous volumes and are producing five to 10 million pages a month—a large majority of which are transactional—you would think they are immune to being closed,” Fenton said. “But there’s no market niche within the in-plant sector that is not under scrutiny. Whether you are a transactional printer, pharmaceutical printer, or a university printer, there’s equal scrutiny across the board.”

There is a perception, by management at the administration level, that print is a commodity. They look at the in-plant and ask, “Why should we maintain the risk of cost justifying our investments, when we can simply buy the service?”

The person in charge often doesn’t want the responsibility of being in the print business, with the accompanying challenges and investment costs. Without input from the in-plant director, upper management doesn’t see the shop’s added value to the overall organization—for example, knowing the product, insuring the integrity of the data, or maintaining in-house control.

“In my presentations (at industry events) I tell in-plants that they have to be prepared, that they have to be proactive in demonstrating their case (to the powers that be),” Fenton said.

Once the decision is made to close the doors, you may not have the opportunity to present your case.

Mike Loyd, production marketing manager, Ricoh Americas Corporation, noted that there is a noticeable absence of in-plant managers or director at conferences geared toward higher education upper management personnel, a situation he has blogged about on Ricoh’s company’s website.  He argues that many of the vendors and sessions tend to focus on the outsourcing of support services, with no in-plant representatives to “counter the claims of better service, cheaper costs, and more professional services.”

In-plant printers need to look at how to increase their value to their organization, especially as the volume in traditional print declines. Like commercial printers, they need to bring in more value-add services, such as mailing & fulfillment, design, and variable-data capabilities.

To ensure their shop’s success, industry performance leaders, both within commercial and the in-plant arenas, listen to their customers, either through focus groups or one-on-one conversations.

“Talk to your customers, and get feedback from them on what services or products they require,” Fenton advised. “Find out how your customers’ needs are changing.”

The single product/ service growing most successfully is wide format, Fenton says. “But that doesn’t mean that everybody has that need. There are some in-plant printers that started offering large-format printing two years ago, and now have three or four machines.

If you aren’t sure if the demand justifies buying equipment, start by offering the service, and out-source the work until demand justifies buying equipment.

To insure the in-plant is operating at peak efficiency, a critical requirement in today’s business environment, Fenton advises in-plants to compare their performance to industry leaders—using metrics that genuinely help compare performance.

“What almost always results is an understanding of where they are doing well, and where they need to improve,” Fenton said. For example, if you are looking to improve your sales per employee, to improve the metric might require a piece of software that automates the process i.e. a web-to-print solution that allows the in-plant to do more with less people, increasing their productivity.

Even though in-plants don’t “sell” their services, the sales per employee metric is a good measure of the shop’s overall productivity.

For one in-plant at a Big Ten university in the Midwest, on the verge of being shut down because of customer complaints, NAPL’s Business Advisory Group consultants conducted an assessment of the operation.

NAPL’s eKG Competitive Edge Profile survey determined customer satisfaction and in-plant competitiveness compared to the in-plant’s customers’ best alternative print services providers. Wit the help of the survey, the root causes of customer complaints were identified as slow turnaround times and uncompetitive costs of core products such as business cards, letterhead, and envelopes. The advisory group’s three- year analysis of plant output showed a steady decline in print volumes, while internal manufacturing costs were increasing, primarily due to staffing. Time and motion studies showed that the use of a traditional order entry method and offset printing process were contributing to both the slow turnaround and higher manufacturing costs.

The group recommended that the in-plant make greater use of automation software, adjust staffing levels to match up with work volume, and install digital printing equipment to reduce makeready and startup waste.

Implementing the recommendations over a six-month period, the in-plant was able to deliver faster turnaround times, lower internal manufacturing costs, more competitive pricing, and to significantly improve customer satisfaction.

The bottom line—after being in danger of closing, the facility remains open.

University Printing Services at Stephen F. Austin State University, the In-plant Printing and Mailing Association's 2014 Print Center of the Year Award winner, is another example of an in-plant that saw the writing on the wall, and turned its operation around to make it relevant and successful.

Current director John Yerger was hired in 2013, and under his helm, the department revamped its service offerings, which also included expanding into digital printing. Part of the improvement process including analyzing expenses and profits, and then using that information to bid more competitively on larger projects. The printing services department also worked with its customers—other campus departments—to lower production costs, often suggesting different types of marketing programs.

Following the turnaround, printing services experienced a 29-percent increase in sales.