To Build Strategic Relevance, Look Outside Your Organization
Many in-plants are looking beyond the walls of their enterprises—insourcing work to bring new revenue and outsourcing services to bring new value.December 2012 By Gina Testa
Perhaps the starkest reality in-plants face today is that many of their customers rank digital media as their top communications channel, not print. In that context, it's easy to see why in-plant print revenues have trended slightly down and in-plant establishments have declined by about 2 percent annually in recent years, according to InfoTrends.
The silver lining is that the shorter runs generally produced on digital printers—an in-plant strength—are in demand, often to supplement digital campaigns. Digital color volumes, in particular, are projected to continue growing for the near term.
Nonetheless print's new supporting role in the media mix puts a strain on in-plants seeking to bolster their strategic relevance. In response, many in-plants are looking beyond the four walls of their enterprise to insource work that brings new volume and revenue—and to outsource services that bring new value.
In doing so, they walk a fine line. Their mission is to serve their own enterprise, not external customers. Their mandate is to optimize internal resources, not to incur new expenses. Nonetheless, many in-plants are successfully performing this balancing act to stay relevant in the digital era.
Making Up for Declining Volume
About half of in-plants insource work, says Steve Adoniou, director of Consulting, Forecasting and Research at InfoTrends. "In-plants probably are not going to grow dramatically," he says, "but they need a certain critical mass to have volume to justify reinvesting in the operation."
At the Rochester Institute of Technology's (RIT) HUB Print & Postal Services, insourcing is doing just that: making up for some of the business erosion the in-plant has experienced for the last three or four years. While long-run offset jobs are declining, Director John Meyer has found growth in short-run digital color printing and in insourcing, which has grown from about 5 percent of the work six years ago to about 15 percent today.
Meyer credits streamlined digital color printing processes with enabling this growth. "With digital color, we're not working with all the variables that come into play with offset," he says. "Digital jobs basically run the same way, so we can service a customer who has one job as easily as one with 30 jobs."
The work delivers two key benefits: filling in the volume during the slow months of December, June and July, and generating revenue that helps fund equipment investments.
Gina Testa is vice president, Worldwide Graphic Communications Industry, at Xerox Corp. You can contact her at: email@example.com.