Changing the In-plant Perspective
In-plants that view themselves as being in their parent organization’s business will develop strategies to help the organization thrive and meet its goals.December 2010 By Greg Cholmondeley
In-plant production facilities face a host of challenges to survive: there is the threat of facilities management or outright closure; senior management may perceive the in-plant as not being strategically relevant; and then there are the nearly impossible profitability targets that trap in-plants between the rock of being profitable and the hard place of not overcharging internal clients.
All too often, the result is a no-win management review situation. There are ways to avoid all of these challenges—but implementing them requires fresh thinking and some alternative in-plant management approaches.
Well-run in-plants save companies, schools and agencies money while producing critical materials. Yet even some of the best have given way to facilities management or outright closure. Interestingly enough, reviews of recent in-plant closings show that some were closed because they were bleeding money, others closed even though they had significant money in reserves, and others closed with little regard to future costs or inconvenience to their internal clients.
In all cases, it is apparent that the value and contributions to their parent organizations brought by these in-plant production operations were just not understood or appreciated by their management. Perceptions like these have to change for any in-plant to be successful and to grow.
Changing the landscape
There are two value perceptions that are critical for in-plants to address with their management in order to be successful:
• True financial value.
• True strategic value.
Affecting your management’s perception of both of these values starts with changing your own perception of your in-plant and your business strategy.
For years, industry pundits have encouraged in-plant managers to consider themselves printers. In-plants that view themselves as printers will develop print-centric strategies to justify their existence. They will strive to make their expenses and revenues balance to zero—which is a very difficult balancing act. They will view insourcing as a strategic value rather than as a funding aid. They will be setting their priorities on print production rather than on the priorities of their parent organization.
On the surface, this seems to make sense, since in-plants provide the same services as commercial and quick printers, utilize the same equipment, software and workflows, and compete head-to-head with each other for jobs. However, I disagree.
The difference is that while in-plants provide the same service as their commercial counterparts—they are not in the same industry. A hospital in-plant is in the health care industry. A school copy center is in the education industry. Your in-plant is really in the industry of your parent organization. This distinction may sound like simple wordsmithing, but it is a critically important difference in management thinking.
Greg Cholmondeley, In-plant Market Strategist at Ricoh Americas Corp., has been active in the industry for more than 25 years and has presented at numerous in-plant conferences. Seminars on this article’s topic are being held throughout North America. Contact your Ricoh representative (or RicohProductionPrinting@ricoh-usa.com) for information about scheduling in your area. You can reach Greg Cholmondeley at: Greg.Cholmondeley@ricoh-usa.com