Expressing Your In-plant’s Value
To survive, in-plants must calculate their financial contribution and articulate it to management.December 2010 By Jerry Sampson
I read Bob Neubauer's editorial in the September issue of IPG, titled "Beware the Backstab." He emphasized in-plants must be proactive in communicating with their parent organizations. An in-plant manager must take the initiative when defining the in-plant's purpose and contribution to upper management. It is still a numbers game, and the in-plant manager is responsible for calculating the in-plant's financial contribution and articulating that contribution to upper management.
To state it another way, look at your in-plant as an independent business. What would the in-plant's value be as an independent business on the open market? Many of you have self-directed 401Ks and IRAs through which you invest in the stock of certain companies. As an investor, what are the criteria you look at in determining which company you invest in? Think of these criteria in terms of your in-plant. For example:
• Profitability: this is the in-plant's financial contribution.
• Market Share: the percentage of business the in-plant produces, versus what is being sent out.
• Competitive Advantage or Niche: do you perform specialized services that are not commodities? Do you provide customized applications and programs for customers?
• Reputation or Brand: does the in-plant enjoy preferred status in the organization? Is it viewed as holding a unique or special position?
• Marketing Proficiency: does the in-plant communicate in a consistent, precise manner?
• Linkage to Core Business: does the in-plant contribute to the corporate mission as opposed to just printing and copying?
When this analysis is completed, you can then place a valuation or rating to the in-plant just as professional analysts will place on a company.
Where Do You Stand?
From management's perspective, is your in-plant a:
Buy: the future looks good. The in-plant is making a very strong contribution, with specialized products and an excellent marketing program. The in-plant is growing. It invests in new equipment and technology (like a strong Web-to-print solution) to increase productivity. It is not a commodity. The in-plant has the total support of senior management.
Hold: not sure which direction the in-plant is going. It is doing many things well but the contribution is not well defined. Management may be inclined to solicit proposals from FMs. Volume may be decreasing at a greater rate than the parent organization. Hold off on investing more in the in-plant until further valuation is completed.
Jerry Sampson is a 15-year veteran of the U.S. in-plant printing industry. He is the National Business Development manager for the xpedx Business Imaging Group and is responsible for xpedx's in-plant consulting unit. Contact Jerry at: email@example.com