Outsourcing Out! In-plants Back In
When you are promised something that seems too good to be true, it probably is. This old adage should be remembered when outsourcing firms come calling with grand plans to shutter an organization’s in-plant and then “save money” by printing their work elsewhere. The vendor’s promises may sound financially appealing on the surface, but once you dig into the numbers, the reality isn’t always a pretty picture. Some businesses have seen the light, and have reopened their in-plants after being disappointed with the outsourcing process.
One former in-plant manager, who agreed to speak with In-plant Graphics off-the-record about his experience with an outsourcing company, provides a dose of reality. The source remains employed by the parent company for which he once ran an in-plant, and is involved in the print procurement process. His in-plant, which employed about 60 people, closed in 2010.
“One of our [company’s] large customers was also a print provider,” the source recalls. “They floated the idea of taking over the printing operation as part of continuing to be our customer. This went through the sales department.”
While it was not a conventional outsourcing pitch, the idea made its way up to the company CEO. At that point, the in-plant didn’t have a lot of leverage.
“We had all our data and made many attempts to show our value,” the former manager reveals. “We had really great internal reviews and fought off several other attempts at outsourcing. This one just took us by surprise.”
By the time the in-plant employees heard about the outsourcing attempt, the shop only remained open another 4-5 months. Most of the in-plant staff got laid off. Others took on new roles with the parent company. A handful were hired by the vendor.
“Their big thing when they came in here was ‘better, faster, less expensive,’” the source notes, pointing out that the in-plant’s budget at the time was north of $20 million for print and postage. “They never really saved us anything financially.”
The source says the outsourcing firm struggles to make on-time deliveries and often adds on courier fees; makes promises about technology upgrades that never materialize; and has allowed service levels to fall off.
“Even the staffing they provided to us was lacking,” he says. “I could tell at first they gave us their top-notch folks, and then after a year or so they moved those people on to another project. Then you notice that the new person just doesn’t have the talent that the previous expert had.”
An in-plant will accommodate the parent company’s needs much better than an outside printer, the source stresses. He points out that the outsourcing firm his company works with is slow to fix IT issues, isn’t deadline-oriented and has made some costly printing errors.
“Since we changed over to the vendor, I can think of at least two large print runs of checks that were duplicated and distributed multiple times, so the same individual got two checks in the mail,” he contends. “Those types of things never happened when we had an in-plant. The vendor had a lot of employee turnover so there isn’t as much experience or expertise that stays on the jobs.”
One manager who has lived through an outsourcing situation and fought back to eventually reopen an in-plant is Becky Goldsmith, manager of Mail, Print & Distribution Services at Yavapai College in Prescott, Ariz. Goldsmith recalls putting out a request for proposal (RFP) for copiers in 2011. During that process, vendors came back with information about outsourcing printing for the college.
“I looked at it and laughed, thinking that [the college] would never do that,” Goldsmith says. “But the administration took a look at it and decided to try it.”
She went from managing university print shop employees to managing a print vendor contract.
“A lot of what they said they would do is not what they did,” Goldsmith reports. “We were promised the world and might have gotten a little piece of Arizona out of the deal.”
Goldsmith notes that the vendor’s site supervisor was constantly asking for overtime in order to finish work. Turnaround times suffered and management of paper and other consumables took a downward spiral.
“I’d look in and see [the site supervisor] playing games on the computer or doing personal stuff,” Goldsmith reveals. “That started eating at me.”
The outsourcing print team did not gel with the mail and distribution departments, Goldsmith says, likening the vendor’s on-campus shop to “an elephant in the middle of the room.”
“So instead of having a cohesive team, I had a team on two sides and then the vendor,” she says, adding that the vendor’s employees would get in trouble if they went above and beyond to help out the college staff.
Goldsmith continued to track costs over five years and was convinced that reopening an in-plant would be the best course of action.
“[The vendor] kept telling me it was a good deal,” she stresses. “I did the math, and financially this was not a good deal.”
She presented the proof to the administration and they agreed.
“We took it up the chain and made a presentation and they said ‘O.K. let’s do it,’” she announces. “It was actually really easy once it came down to it.”
Since the in-plant reopened with just one full-time and one part-time employee, no overtime has been necessary. Envelope printing has been brought back in-house with the addition of a Konica Minolta AccurioPress C2070. Additionally, a two-week turnaround time on business cards with the vendor is now down to same-day service.
“It was an extremely smooth transition,” Goldsmith reports. “The whole atmosphere changed within our department. We cross-train everybody, and I think we have a much more cohesive group.”
University of Bridgeport
Meanwhile, at the University of Bridgeport in Bridgeport, Conn., Esther Bessell van Winden was hired five years ago to open an in-plant on campus as well as bring mailing services in-house. Serving as director of the Print and Mail Center, she has been able to improve print quality, offer a broader range of services and save the university money.
“The vendor had been there for eight years, and the biggest challenge that they were finding was the lack of quality control,” Bessell van Winden reports. Some of the most glaring quality issues stemmed from the vendor lacking proper finishing equipment.
“They would use scissors or a small tabletop cutter, and quality was very, very poor,” Bessell van Winden reveals. “So we invested in a Titan 265 26˝ cutter so we would be able to offer a clean and neat cut for any of our products.”
The in-plant also installed a Standard Horizon CRF-362 creaser/folder and a Standard Horizon BQ-160 perfect binder to further support quality control, she says, “while maintaining the same budget that was previously spent on the vendor.”
The shop also now offers soft-bound and wire-bound booklet making, which is especially important when producing student manuals or work for the university’s health sciences department and for administration. The in-plant’s five full-time employees and 12 student workers utilize a Xerox Color J75 and a pair of Xerox D125s to produce a variety of course packs, syllabi, mailings (up to 10,000 pieces) and materials for prospective students and alumni.
Bessell van Winden also took over copier fleet management duties from the accounts payable department. The university’s copier fleet was old and in bad shape when she arrived on campus, she points out. By dropping the copier fleet from 68 to 50, she was able to save the university $250,000 over the life of the contract with Xerox. She also took on student printing, expanding the solution from two to four copiers and reducing costs by 40% over the life of that contract.
“The savings was one big component, but I love being able to streamline the process and make the day-to-day experience more positive for all UB employees,” she notes, adding that all the copiers have a scanning function, which is important, as increasingly more educational materials, as well as business processes, are digitized.
“One thing we have worked on is to build trust with the other departments,” she continues. “We stay up to date on the developments in the industry for mail and production.”
To foster better communication with customers, the in-plant holds ongoing copier training sessions, frequently updates its intranet site and uses social media.
“I am excited to see that we are able to offer more support to the departments so they can focus on what is most important to them: UB students,” she says.
Keuka College, an independent, liberal arts school in Keuka Park, N.Y., traditionally had limited in-house printing capabilities, explains Meg Crocker, Digital Imaging and Mail Center manager. As the printing needs of the college community grew, the administration contracted with a print vendor to manage the process.
“Service improved, but there were limitations using a third-party management process regarding quality control,” Crocker says. “As technology in the print arena changed, the equipment quickly became outdated.”
After a five-year contract with the vendor, the college decided to transition to an in-plant in 2014. The educational institution was looking to boost print quality and improve turnaround times while reducing costs.
“One thing I looked at was the ROI, and we had surpassed the needs of that [vendor] operation,” CIO Andrea Campbell recalls. “This included [both] the skills of the operators and the equipment.”
Campbell stresses that the vendor wasn’t very flexible and that the college was incurring a lot of extra costs.
“Also, the industry was changing,” Campbell adds. “The vendor was unable to handle changes in technology.”
Campbell pitched the college president to bring printing in-house. The administration was enticed by the potential for significant cost savings. The team was able to show that marketing materials could be produced in-house at a 30-40% lower cost while being turned around in half the time.
Keuka College’s in-plant and the college’s copier fleet are outfitted with Konica Minolta equipment. The shop now has two full-time employees and six student workers and is aligned with the Information Technology department.
“The benefit of working in the Information Technology department is utilizing the developers,” says Crocker. “We came up with software that is going to help automate the [print] process, and is going to drive down our costs.”
The shop has already provided the college with a 20% overall cost reduction while bringing in 30% more volume. And it is optimizing the printing equipment by insourcing work from local businesses.
“We think this is going to be a big revenue generator for the college,” Campbell suggests. “We see it as helping the community while keeping down our costs.”
An additional service the Keuka College in-plant offers its customers is 3D printing. The shop is home to three MakerBot 3D printers, which help infuse new technology into the college curriculum, especially for science and occupational therapy students. The shop has created detailed renderings of human brains and other models to enhance the classroom learning experience, explains Laurel Hester, professor of Biology
“We are a strategic partner and we are at the table with our customers,” Campbell concludes. “Our print center is not a backroom operation. We provide a service, but we are also a part of our institution, and we want it to be successful.”
In-plant Printing: A Major Benefit
In the end, the in-plant managers agree that producing print jobs in-house is a major benefit for their parent organization. They stress that all managers need to keep accurate financial and production documentation in order to justify the existence of their shops. In-plant managers also should strive to keep lines of communication open within the organization, they add.
Similarly, the anonymous former in-plant manager warns against the temptation to outsource. His experience leads him to conclude that promises of potential cost savings can be misleading. He maintains that companies that decide to outsource will need to retain experienced print employees to manage the vendor.
“I think the in-plant team has the company’s back and its best interests at heart,” he attests. “Outsourcing companies are commercial printers who want to make a profit and do what they can for their own company. You are just another customer.”