10 Ways Your In-plant 
Adds Value

When a nearby in-plant shut its doors, Brian Wadell got nervous that his own university might take the wrong lessons from that situation. So the director of Repro Graphics at the University of California-Davis sat down and detailed all the ways his in-plant benefits the university—as well as the unforeseen costs and problems that would result if his operation were shuttered. His proactive effort helped educate university officials about the value the in-plant was providing.

As a service to his fellow in-plant managers, Wadell agreed to let us publish his document, in hopes that other managers can use his examples to create preemptive justification reports of their own. Though some of the justification arguments here may be obvious to seasoned managers, they are likely not even on the radar of your upper management.

Preparing a report that spells these benefits out, ready for quick presentation to any doubters, is a winning strategy for any in-plant.

Though there may be many local commercial alternatives to our in-plant, each potential solution brings new issues. Using commercial vendors likely increases costs and departmental workloads, while simultaneously reducing the commitment to uphold university graphic standards and the secure handling of confidential documents.

Here are several factors to consider in evaluating the true cost of our printing department to UC Davis:

1. 
 Less Paperwork

Repro Graphics (RG) processes 1,500 individual jobs each month through automated upload; thus no departmental invoices are required and no checks need to be written. To process that same volume of business without an internal provider means individual invoices processed through the departments and checks cut through Accounting and Financial Services (A&FS). Both increase labor costs.

2.
 Copier Program Saves Money

Our Campus Copier Program (CCP) manages and maintains nearly 400 machines for the campus and health system through four service providers. CCP collects the monthly usage meter reads, submits them to the service provider and processes the invoices for payment. The indirect costs, if not done centrally, include:

• A department representative must read the meters, submit this data to the vendor, receive and reconcile the invoice and submit it for payment. This would increase the workload at the department and at A&FS, which would need to cut 400 additional checks each month.
• The click rate for maintenance goes up when there are 400 clients rather than one.
• Shared copiers need central management to maintain account separation, so more copiers would likely be needed.
• As departments need to upgrade or downgrade their equipment, vendor leases will be broken, incurring substantial penalties.
• Strategic sourcing agreements encourage the partners to oversell, so departments will be spending more than their anticipated machine use would justify.

3. 
 Efficient Print Procurement

Repro Graphics is a very efficient print buyer. When Purchasing issues print bid specs on behalf of campus departments, Repro Graphics often wins the bids even if we aren't doing the job in-house. Industry figures suggest that on average an experienced print buyer will negotiate pricing 7 percent lower than individuals buying print on their own.

Many commercial printers either provide us lower-cost bids because our involvement reduces their costs, so they pass enough savings on to us that we can add our approved markup and still be the low bidder. If we are doing the work in-house when the size and run length match our equipment, we are usually price competitive.

4. 
 Rent Costs Covered

Repro Graphics pays rent (approximately $210,000/year) and property taxes (approximately $6,000/year) on our space. If we were not contributing as we do, the university would still be obligated to pay the expense.

5. Assessment Payments Add Revenue

Repro Graphics pays the 3 percent assessment ($100,000/year), which would be lost if all printing were done off campus. In fact, the assessment amount would grow if all printing work was done by Repro Graphics rather than off campus.

6. 
 Free Alterations

As a university department, we have the same end goal as the departments we serve. As a result we feel an obligation to help departments represent themselves in print as professionally as possible. We tweak client-provided files for page setup, logo resolution and identity color integrity at no additional charge every day.

It could be argued that we should charge for such alterations but the total labor costs are built into our rate model so they are actually socialized and recovered in the job cost. This sometimes makes our prices slightly higher on a per-click basis but definitely lower without charges for file manipulations. This is extremely difficult to quantify, however, since it isn't tracked.

7. Convenience and Sustainability

Our on-campus location is not only a convenience for many academic departments, it also provides a cost and sustainability advantage over off-campus printers (i.e. less fuel used for delivery of jobs).

8. 
 Document Security

Many academic departments submit exam materials electronically or walk them in to retain security of the documents. We have career staff print them and secure them in a locked cabinet while they await pickup or delivery. By contrast, local printers employ part time student staff, which puts document security into question.

Likewise, we print annual W-2 forms and monthly Surepay and billing statements that need secure handling. We handle sensitive and secure documents for the chancellor's office as well. It's very difficult to quantify this value.

9. 
 Tax-free Printing

All jobs printed off campus have the increased cost of sales tax, which we do not charge. Nearly 100 percent of the time when clients tell us our prices are higher than our competition, they do not factor in the sales tax; they are just looking at the printing costs or the discount.

FedEx Office has developed a clever marketing technique of quoting an artificially high cost per copy and applying a "35 percent university discount" on the job total. Many clients focus in on the 35 percent discount and never notice they still paid more for the job than they would have with Repro Graphics. I have documented examples of this.

10. 
 Job Delivery

Clients never factor in the direct department cost of receiving the finished product. Repro Graphics delivers jobs valued over $30 for no additional charge. Jobs less than $30 will be delivered for a fee but may be picked up on campus for no charge.

Many clients do not consider the staff time associated with driving to the off-campus printer's facility to pick up finished work. If that hour of staff time, the sales tax and the additional A&FS costs are added to the total cost of the print job, the comparison would always favor Repro Graphics.