A Texas In-plant Roundup
In-plant managers from all over the South got together in Austin, Texas, last month to discuss outsourcing, benchmarking and "Game Theory."October 2013 By Bob Neubauer
The Outsourcing Threat
After that session, the outsourcing theme picked up in earnest. Jack Williams, manager of the University of Tennessee's Graphic Arts Services operation, told the story of how his 44-employee in-plant, after just passing an internal review with flying colors, was suddenly on the chopping block. His school's board of trustees issued a directive to begin soliciting proposals from outside vendors for the possible outsourcing of his in-plant as part of a campus-wide analysis of all service operations.
Williams managed to get on the committee evaluating proposals, which allowed him to keep his staff informed and also to question vendors' claims. After viewing print samples from the outside bidders, it was clear the in-plant's quality was much higher. The committee received numerous messages of support for the in-plant from its many proponents. In the end, only two vendors offered bids. The in-plant's costs were lower, so it was retained.
Williams advised in-plants to find out all of their costs, even the ones they may not pay, like utilities or rent. These costs will certainly be examined if your shop is considered for outsourcing, he said, so have them ready.
Later in the conference, Beto, of UT Austin, described his own experiences when a fleet services provider pitched a high-level administrator on taking over his mail delivery operation (without any mail experience). Though he knew he had the data and experience to show that the in-plant could provide this service better, his challenge was not to get too passionate when making his points in this meeting.
"When you become emotional…those people around you automatically dismiss you from the conversation," he noted. By refuting the fleet company's claims, and demonstrating its lack of knowledge of postal statutes, he was able to convince his administrator to let the in-plant continue to provide this service.
Eliminating Non-essential Services
In his presentation, Danielczyk, of Business eXcellence Consulting, brought up the topic of massive online open courses (MOOCs), which he said were causing major disruption to the traditional higher-ed model. Schools are eliminating programs they see as non-essential and replacing them with MOOCs offered by other schools. In such a cost-cutting environment, he surmised, in-plants are being looked at very closely to determine whether they are a core part of the institution's strategic plan.
To find out, he said, some universities are employing a strategy similar to a Jenga game, in which pieces are removed from a structure to see if it will still stand without them. Universities are removing programs, and if there is no major impact or protest, then it stays out. Danielczyk said managers must interweave themselves so well that removing their in-plants will cause big problems. Have so many advocates among your customers that there will be loud protests if the university tries to remove you.
After showing a humorous video depicting a day in the life of a magazine editor, IPG Editor Bob Neubauer gave a presentation on best practices. First he listed some common reasons in-plants are targeted for outsourcing, and then followed that with examples of in-plants that have managed to prove their worth and save their operations. Stressing that in-plants need to ask customers what services they need and then offer them, he gave a number of examples of value-added services in-plants have added, such as garment printing, scanning, data management, shredding and others.
Technology and Benchmarking
Outsourcing wasn't all that managers talked about at SUPDMC. They also learned about new technologies that can improve their efficiency from NAPL Senior Consultant Howie Fenton. He talked about how Print MIS can eliminate a lot of work for managers, speeding up tasks like estimating, scheduling and billing, and reviewed the efficiency benefits of Web-to-print and workflow software. But his discussion of the latest production inkjet technologies is what really got the conversation going.
Fenton revealed that the cost of inkjet presses is decreasing, opening up this technology to in-plants. In the third quarter of next year, he predicted, managers should expect to see significantly lower-cost inkjet presses. Attendees were skeptical about the print quality of these devices, and Fenton affirmed that they did not produce offset quality, nor even quality matching high-level toner devices. But for many customers, he said, the cost savings overcome expectations of top quality. Fenton noted that by 2015, color inkjet will account for 43 percent of all printing, according to InfoTrends.
In a second presentation, Fenton noted that benchmarking—measuring and comparing your performance with others—demonstrates your commitment to management by numbers and continuous process improvement, and it can prove your in-plant's competitiveness and value.
He advocated taking a proactive approach when organizations threaten the in-plant by asking management, "Why do you want to be in the printing business? It's not your core competency." Fenton said you should counter that by saying, "This is our core competency, and we have benchmarked our performance and can prove it."
He went on to list a number of possible things in-plants can benchmark: sales growth, sales per employee, on-time delivery, competitive pricing, equipment utilization rates, etc. The most important analysis you can do, Fenton said, is a make vs. buy analysis, in which you list all work done in-house in a one-year period, calculate your total cost of operation and then compare this with the cost to buy that work outside.
In one interesting, two-part session, Chris Reich, CEO of TeachU, discussed how "Game Theory" can be used to manipulate the way others think by giving them choices that appear to be in their best interest. In any negotiation, he said, the goal is not to "win," but to maximize the outcome for both sides. So always consider what the payoff is for the other person, he said. It may be something that stokes their ego, gives them a sense of power or supports their belief system.
Reich played a game with attendees to illustrate that people have an innate sense of fairness; if a deal doesn't seem fair to them, they will say no, even if the consequences hurt them. So making sure the other party in a discussion gets something they want is the best way to get what you want.
The last session of the conference before the tour of UT Print & Copy Services and a visit to the Lyndon B. Johnson Presidential Library on campus, was a roundtable discussion featuring Kelly Hogg, of the University of Virginia; Jimmy Robinson, from the University of West Alabama; and Drew Burgering, of Valdosta State University. They led an engaging discussion, describing their operations and offering ideas for value-added services like producing yard signs for campus events, bulk mailing, envelope printing and magnets. IPG
Next year, SUPDMC will take place in Orange Beach, Ala., from October 19-23. Find out more at