From the Editor: The Fear That Never Dies
Outsourcing is one of those issues that seems like it’s always going to be with us in the in-plant industry. No sooner do I report on an in-plant that scored a victory over a facilities management takeover attempt, when I hear about another in-plant being shuttered due to a backroom outsourcing deal with a commercial printer. Whenever I start to feel confident that today’s in-plants are adept at proving their value, I hear about an outsourcing firm ramping up its efforts.
I’d like to tell you that the threat of outsourcing is diminishing, and that may be the case, but the smart advice is to never drop your guard, no matter how confident you may feel at the moment. I can point out, as I did in our new research report (Trends and Services in the In-plant Industry), that the number of in-plants approached by outsourcing firms has decreased over the past four years. And I can note the rising optimism in-plants have about their future growth, and that nearly 70% feel they are highly valued by their upper management — yet I don’t want any of you to feel that the outsourcing danger has passed either. You have to keep marketing your value, even when it seems the powers that be love your in-plant.
In this issue we are focusing on a topic that I’ve long wanted to cover: in-plants that were once outsourced but whose parent organizations discovered the hard way that the outside providers weren’t performing as expected. So they brought their in-plants back, and those shops are now thriving. Though this happens from time to time, it’s been difficult for me to get anyone to talk about it; companies don’t want to acknowledge that they once made a bad decision, so they’re unwilling to share the hard lessons they learned from their outsourcing error.
This time, however, I found three in-plants that were happy to discuss their success stories, and how pulling the plug on their outsourcing vendors allowed the in-plants to return and provide better service at a lower cost. We also talked with a former in-plant manager who testified about the decreased service levels his company has encountered since it outsourced printing.
Don’t just read these stories and feel triumphant, though; make sure to share them with your boss and others who may someday get a call from an outsourcing vendor. Let them know what will happen if your in-plant goes away.
I recently caught wind of an incident at an in-plant that specializes in personalized direct marketing pieces. A print broker had gotten a contract with the parent company to handle a different segment of the company’s printing and eventually made a move to grab the in-plant’s business as well.
So the purchasing department conducted a review of the in-plant to see just how much money the broker could save. Because the manager knew his numbers and had his data in spreadsheets, that study revealed that the in-plant’s costs were 40% lower than what the broker would have charged. It would have cost the company an additional $1.73 million a year to outsource.
As a result of this study, the in-plant’s equipment was upgraded and its volume increased. It’s a great turn of events, all because of the company’s smart decision to conduct a review instead of simply trusting the broker’s claims.
As we all know, though, not every organization is as wise as this one and gathers actual data before making decisions. So it’s fine to smile at in-plant victory stories like these, but make sure you’re also collecting data and preparing for the day when something like this happens to you.
Related story: The Value of an Outside Opinion
Bob has served as editor of In-plant Graphics since October of 1994. Prior to that he served for three years as managing editor of Printing Impressions, a commercial printing publication. Mr. Neubauer is very active in the U.S. in-plant industry. He attends all the major in-plant conferences and has visited more than 130 in-plant operations around the world. He has given presentations to numerous in-plant groups in the U.S., Canada and Australia, including the Association of College and University Printers and the In-plant Printing and Mailing Association. He also coordinates the annual In-Print contest, cosponsored by IPMA and In-plant Graphics.