Offset: Good for Business — and Getting Better
If you could temporarily overlook the fact that the printing plant John Yerger manages has a long-standing tie to an academic institution, you could easily think of it as a well run, thoroughly equipped, economically competitive commercial printing business.
The in-plant at the University of Nebraska-Lincoln (UNL) doesn’t belong to the commercial world. But, the busy shop mirrors the best characteristics of the mainstream industry in many ways — including its faith in the tried-and-true productivity of offset lithographic printing.
With the help of a full-sized litho press slated for installation before the end of the year, Yerger expects to bring back nearly all of the long-run offset work that the in-plant had been sending out. In an arrangement being worked out now, the shop will partner with the digital-only print centers at other branches of the university to handle their offset production needs, curtailing outside purchases there. The press will also give the in-plant more capacity for its lucrative insourcing business.
When Yerger declares, “Our market just demands that we stay in offset,” it’s easy to see where the demand is coming from. Besides printing, metering and mailing 4.5 million pieces of direct mail per year, the in-plant turns out booklets, catalogs and marketing collateral for the school’s Big Ten Conference football team and athletic programs as well as recruitment materials for UNL’s admissions office.
Offset: A Big Revenue Generator
“We just about print it all,” Yerger declares. “If they’re printing it, we’re doing it.” In this high-volume atmosphere, offset accounted for about 46% of the in-plant’s $7.1 million in revenue last year. He expects the share to grow sharply when the new press, a late-model, 40˝ perfector, replaces a similarly sized machine nearing the end of its useful life.
Though the shop has digital printing capabilities in the form of a new Canon imagePRESS C80
00VP color digital press, and despite the fact that it isn’t handling as many very long runs as it used to, the in-plant continues to regard conventional offset production as its mainstay.
“We haven’t abandoned offset,” Yerger says. Nothing else offers the same combination of economy and quality, and for that reason, a future without offset is a future he doesn’t foresee unfolding at UNL.
According to Yerger, sticking with offset lets university in-plants offer their customers enhanced value from the branding, quality and service that the process makes possible. Operations that retreat from offset, he contends, risk seeing their markets shrink, “and as many have found out, once you lose the offset equipment, it is too expensive to start anew.”
The UNL in-plant — which Yerger took over two years ago when he became the university’s director of print, copy, merchandising, mail and distribution services — has impressive credentials as a production center and an equally impressive trend of recent revenue growth. Established in 1924, it operates out of a 42,500-sq.-ft. facility housing digital, offset, wide-format and mail services near the University of Nebraska’s main campus in downtown Lincoln.
For 10 years, it had been under the direction of Dave Hadenfeldt until his death in a motorcycle accident in August 2015. Hadenfeldt earned praise for bringing cost-saving efficiencies to the in-plant and for introducing 3D printing as one of its services (later transferred to another part of the university).
Together with a pair of satellite digital printing operations, the in-plant serves a population of 27,000 students, faculty and staff. Yerger and his staff of 45 full-time employees also partner with University of Nebraska at Kearney Communications & Marketing and University of Nebraska Medical Center Printing Services for their offset production needs. The three in-plants work together to provide the best printing solutions and services for the entire Nebraska University system.
UNL’s in-plant also oversees the cost-per-copy program for the Lincoln campus’s fleet of 450 MFDs. It did a $750,000 business in promotional products last year and even helps out with internal moving and parcel delivery services.
Born to Print
Yerger’s initial objective upon joining the in-plant had less to do with changing its equipment mix than with refocusing its efforts. To that task, he brought a track record of more than 30 years of senior management experience in the public and private sectors, including two previous university affiliations. Born into the craft, he comes from a family that operated a newspaper and commercial printing business in Yazoo City, Miss., for 100 years.
Instinct told him that at UNL, “we had to turn ourselves back into a customer service business, providing quality, but supporting the business.” Meeting break-even business requirements would come from doubling down on production efficiency (“everything has to be multiple up”) and from emphasizing customer outreach (“my CSRs have become salespeople”).
Yerger also is a strong believer in comparative measurement, using regional statistics from the In-plant Printing and Mailing Association (IPMA) and Printing Industry Midwest (PIM) as the baseline. He says that assessing the UNL in-plant’s performance in the light of these statistics makes it possible to “validate pay scales, monitor new products and services, as well as benchmark our live and historical data with the private, higher-education and in-plant sectors.”
The results can be seen in a steady improvement in revenue, from $6,095,796 in the 2015 fiscal year to $6,248,663 in 2016 and an even more substantial $7,108,638 last year. Offset’s share of the revenue at UNL is three times higher than the percentage it claims in the higher education sector as a whole, according to Yerger.
Another of his principles is that when in-plants “let stuff go by the wayside” by allowing print jobs to be produced by outside sources, they aren’t giving full service to their parent organizations. Because it was outsourcing about 12% of its offset volume, the UNL in-plant had an opportunity to recapture some of the work and an incentive to acquire the equipment it would need in order to do so.
The Search for Offset
Having received permission from the university’s Board of Regents to make the investment, Yerger began searching for a 40˝ sheetfed press to complement the six-color, 29˝ machine the in-plant had been relying on. He found it after six months in a 40˝ Manroland 706 PLV HiPrint, a 10-year-old press with about 128 million impressions to its credit. Yerger expects to have the machine, which is presently in Germany, delivered and installed in October or November.
When it is in full production, the new press will take the UNL in-plant to a new level of offset capability. Eight times faster than the 38-year-old press it is replacing, the Manroland 706 PLV HiPrint features automated plate changing, ink presetting, washup and in-line quality monitoring. Configured as a 4/2 perfector, the coater-equipped press also can be run in straight mode (6/0). The rule of thumb for utilization will be to reserve it for everything with run lengths higher than 10,000 impressions.
Yerger believes that by running the press to capacity, the in-plant should be able to achieve ROI for it within four years. Within that time, he also anticipates recovering up to 90% of what the in-plant now sends to commercial web shops. This work consists mostly of longs runs of static content for football-team publications for which the in-plant produces the variable sections. All but a few externally produced campus magazines and newsletters are expected to return to the in-plant as well.
Insourcing Brings Revenue
The machine will also add capacity for work insourced from non-university customers. According to Yerger, this line of business brought in about $378,000 worth of revenue last year — a contribution all the more remarkable in view of the fact that jobs from these state agency and nonprofit sources aren’t solicited, but originate from word-of-mouth referrals.
When it arrives, the new offset press will join the G7 Master Printer certification process that Yerger has set in motion with the shop’s Canon imagePRESS C8000VP color digital sheetfed press, upgraded by Canon from a C7010 platform to increase output speed and quality.
Profiling it to G7 color reproduction standards, says Yerger, “has already generated positive responses from our digital customers in just two weeks.” The shop’s other digital equipment will follow suit, as will the 29˝ offset press and the incoming Manroland 706 PLV HiPrint.
Although offset and digital work in harmony at the UNL in-plant, there’s no mistaking which one is and will remain the shop’s predominant process.
“While we expect digital to continue to grow, I think that offset will outpace digital growth,” Yerger says. “Roughly speaking, I think our offset printing growth over the next two years should outpace digital by eight to one based on new revenue, not number of orders.”
Operating as a Business
Guiding all of the effort is Yerger’s conviction that in-plants maximize the value of their operations when they choose to operate as businesses do. “We found that being a resource is one thing,” he says. “Being a proactive resource that is engaged as a partner is a totally different concept.”
Being this kind of resource means being prepared to produce the parent organization’s work internally whenever the opportunity arises. “We keep to the principle that nobody will pay us like we pay ourselves,” Yerger says, noting that when a university spends $1,000 on print procurement with its in-plant, the internal provider retains as much as 60% to pay for labor and other costs. An external print order, on the other hand, pays for nothing but itself.
Another standard operating procedure is contribution pricing, a cost-based calculation that permits discounts while still making overhead-reducing contributions against operational costs. “It is much more than an arbitrary discount,” Yerger says. “Because we cost analyze and review every job, we are able to better control our competitiveness” in bid situations.
Although the UNL in-plant has learned how to make the most of private-sector business practices, Yerger readily acknowledges that private-sector printers do not face the kinds of internal challenges that in-plants do.
“We have to work with budgets, labor and materials, and at times we have to catch up to the private sector in equipment and technology,” he says. “In this service, we have to meet branding, quality and service consistently for each and every one of our clients, all with short deadlines, Champagne tastes and beer budgets.”
Solidarity with other in-plant professionals helps to keep the struggle winnable. “Being able to look at common results from your industry helps provide the tools to move forward with new technology, new services, tighter ROI projections and preparations. It’s great to know that you can reach out to another IPMA member and know that they have been there and done that.”
Related story: University of Nebraska In-plant Wins Local Recognition