A View From The Top

Not all executives are fooled by outsourcing's empty promises. At many companies, outsourcing is out, and upper management gives its in-plants a ton of praise.

It's a question every in-plant manager asks, but few get answered: what does management think about my in-house printing operation?

In the past several years, the answer has too often come in the form of a decision to eliminate the in-plant and outsource printing. That, however, is certainly not the whole story.

Many forward-thinking organizations stand squarely behind the quality, cost-effectiveness and convenience of their in-plants. To find out why, In-Plant Graphics spoke with upper management at several successful companies and organizations. The following article contains more information than appeared in the original article.

Allstate

Northbrook, Ill.

• Vice President Technical Shared Services/Field Support: Jim Plotts

• In-Plant Manager: Bob Tierney

• In-Plant Employees: 350

• In-plant annual budget: $80 million

IPG: What's your impression of the performance of Allstate's in-plant?

Plotts: Bob and his folks have developed such a great operation over there that we get nothing but praise from it. When it comes to the quality and timeliness and performance of Bob's operation, we get absolutely no complaints whatsoever from the people we have to support.

IPG: And it's working out financially?

Plotts: I'm convinced we're savings loads of money. They do studies to price themselves against the competition, and they're always right there or better. We think we're so good we're actually starting to insource. We've got the equipment and the people to do it. We don't necessarily have the excess capacity, that's not what it's about, but we think we're pretty good at it, to where we could probably make a pretty good profit on the business.

Last year I think Bob did 87 projects from outside of Allstate. They weren't big projects, but we've got a new initiative underway where we're going to use print as one of our revenue streams, because we feel we can market this.

One customer we're having conversations with is the Chicago Bears, we're talking with them about printing their season tickets. We're confident that if we want to go out and invest in some additional equipment, we've got the talent to sell our services on the market and make some money at it. So I guess that answers the question if I think I'm making money or breaking even.

IPG: You seem very familiar with the in-plant. How does that translate into management support?

Plotts: Keeping our printing in-house is something I feel strongly about. We've invested in some state of the art equipment over there. So someone can't say 'we would have used you, but it has to be multicolor, or bound in a certain way'.

The thing is, you've got to have invested in the right equipment to do the job, and then have the right personnel in place to do the job. You can put a lot of money into anything and it's still not going to return your investment if you don't have good people managing it. Fortunately, we've got some very innovative, outward-thinking people running that operation that are always looking for better ways to do things, and so the money we've invested in state-of-the-art equipment has paid us back many fold over.

IPG: Is that the key in deciding whether or not to outsource?

Plotts: If you haven't invested in the talent in management to run a good operation, then yeah, you probably ought to outsource. Because it's a commitment on the part of management to build that print center, it isn't something you can just do overnight.

IPG: I get the idea you feel the situation at Allstate is the exception from the rule.

Plotts: I personally feel strongly that you have to go with your core competency, so if you don't have a core competency in something, you probably ought to take a hard look at whether you want to stay in it. If I were a company wondering if I should be dealing with all the hassles I have to deal with versus outsourcing it to somebody who's core competency might be in that area, I might look at it differently, but

In our case, if we can have Allstate people taking care of Allstate people, we'll do a far better job of understanding the priorities. If you start outsourcing to other people, they're just not going to have the same dedication.

IPG: If you were running an in-plant, how would you demonstrate your value to senior management?

Plotts: If I were an in-plant manager, the first thing I'd do is get senior management to come in and look at me. I'd invite them over, have them come tour. In Bob's case, he's got a nice visual display of some of the brochures and stuff that he's printed, a regular montage of things where people can look up and say, 'Oh, I didn't realize you guys did that. I thought it came from outside.' You have to market yourself that way, and establish a relationship with senior management so they know that you're there and what you're capable of doing.

IPG: So what you're saying is, don't be bashful about discussing your talents.

Plotts: Yes, we highlight ourselves a lot, we brag about ourselves whenever we can. I just sent a letter to the 200 officers of the company announcing that for the third straight year our in-plant had won an award for their work. It's our way of blowing our own horn, but it's also our way of saying hey, do you realize we've got one of the best in-plant operations in corporate America?

Mellon PSFS

Philadelphia, PA

• Chairman and CEO: Bill Stallkamp

• In-Plant Manager: Mike Renn

• In-Plant Employees: 8

• In-plant annual budget: $1 million

IPG: You cast aside any suggestion that outsourcing is a viable option. Why?

Stallkamp: We absolutely are saving money by doing it in-house. We can save, at times, up to 50 percent. This whole financial services market changes frequently, and we have to be able to react quickly. Mike has been able to do that for us on a cost-effective basis, and he can prove that—otherwise we'd be outsourcing. He has a good team. I've gone down and toured his shop, and you can eat off the floor down there.

IPG: It sounds as if they've come through in the clutch a few times.

Stallkamp: He's done it many times, and I can testify to that personally. Just last month I had a desperate need, and his group came through. The management group at the bank had to put on a daylong presentation in Pittsburgh that starts pretty early in the morning, and part of it requires that we have everything laid out in a book, so we had to make about 20 copies of this book. We were still here at 10:30 at night, and they really helped us assemble those books quickly. For me, it's the turnaround, the quality and the advice that's most important.

IPG: How well-known is the in-plant among Mellon employees?

Stallkamp: They have a good presence. There's a lot of recognition of what Mike's done, even on the outside. Once I was managing a charity event, so my wife and a few other people were helping me. They were going to spend X amount of money for the invitations. I said absolutely no way if I'm running this thing are we spending that kind of money, which we could otherwise use for a social benefit. So with Mike and his people down there, they designed everything and cut the cost, then came out with what I considered something as good if not better than what was done in the past. Everyone was impressed.

Brigham Young University

Salt Lake City, Utah

• Assistant Administrative Vice President: John Stohlton&019;

• In-Plant Manager: West Barton

• In-Plant Employees: 43 full time

• In-plant annual sales: $5.5 million

IPG: What is most important to you about keeping your printing in-house?

Stohlton: I feel we're getting better quality. You have more control over the quality of your product if it's being produced on campus or in-house than if you're just another customer of a large printing operation.

The fact is, our employees are very dedicated to the university and eager to support the university in any way it can be supported, so they go out of their way to do their jobs above and beyond what you would expect from the normal employee. I don't think you find that sort of loyalty or dedication in an outsource situation, where you're just one of dozens—if not hundreds—of customers. They know what we need, and they know [we're] their only customer, so they take great pride in what they do. I'm continually amazed as I go through our press services operation and see the extra time that the skilled craftsmen take in making sure that it represents the best that they can possibly do.

IPG: How does that affect deadlines and delivery schedules?

Stohlton: We feel we have greater control over deadlines, and what the work product is. If we feel we need to adjust schedules, we can do that. We don't have to worry about having to convince somebody to put aside somebody else's work, because it's all our work, so we can say what the priority assignments are. That's why the advantages of an in-house plant that's properly managed far outweigh outsourcing.

Another thing is, our people are willing to work overtime or put on additional shifts if we have a crash project, so it's just much more convenient to have it on campus than to go off-campus and have to deal with all the other priorities they have.

IPG: What about the economics?

Stohlton: That's another factor: we do save money. Our departments have a choice: they can go off campus if they want, but if so they're required to get bids from both the off-campus providers and from us. It's a rare job where it isn't cheaper to have it go with us than to go off campus. So we feel like it's certainly in our financial best interest to have an operation on campus.

IPG: Are there confidentiality advantages as well?

Stohlton: That's definitely another reason you do things in-house. Your own employees, if they're proper employees, understand the sensitivity of documents. We wouldn't dream of printing some things off campus just because of sensitivity, but we have no hesitancy of sending it up to West and his people.

IPG: What's the reaction of management and other employees to the quality of your in-plant's work?

Stohlton: People are definitely impressed with our operation. I forever get letters of appreciation or calls from people that have had a job done and want me to know how smoothly it went or how accommodating the print services people have been. Many of our on-campus customers who have dealt with off campus providers have had just the opposite experience.

Washington Metro Area Transit Authority

Washington, D.C.

• Assistant General Manager for External Affairs: Gwendolyn Mitchell

• In-Plant Manager: Rick Levine

• In-Plant Employees: 15

• In-plant annual budget: $2.75 million

IPG: Most transit systems are always under tight budget scrutiny. Is operating an in-plant conducive to that kind of cost-conscious environment?

Mitchell: We find it's cost-effective and gives us greater flexibility. We tend to be a really high production-oriented organization, and we are always coming up with new ideas for working with our riders and prospective riders, so it's really handy to have an in-house plant where you can pick up the phone and use them without incurring substantial costs. It's not unusual for my manager to say 'I'd like to do such and such by Friday. Can you do it?' So it's handy having them in-house.

Another advantage of keeping things in-house is you know their strengths and weaknesses. We have a good dialogue with the pressmen—we're all on a first-name basis. The people really pull together as a team, and that's what makes it work, that's part of the magic.

IPG: Have you actually drawn up comparisons?

Mitchell: We have looked at outsourcing from time to time to see whether or not we're cost effective, and we are. On many different types of jobs we do have outside printers bid...and I think it's fair to say that we can produce the work for 20 to 30 percent less.

IPG: What kind of equipment expense is there to remain that competitive?

Mitchell: Over the past few years we've been upgrading our equipment so that we can do the work more efficiently, bringing down the average age of our presses. In fact, we do such a good job that, for a number of years, even when we only had two-color process we were producing six-color work and you could barely tell the difference between having it produced in-house and having it produced on a major multi-color press.

The thing is, you can always do it outside, but they charge you a premium, and it's nice not to have to deal with that.

IPG: What's the most important thing for an in-plant manager to do to impress management?

Mitchell: Keeping the customer satisfied. Every part of this organizational unit is a customer of the print shop, so they have the responsibility to be as accountable for their work as they would be if they were an outside print plant. It's a matter of having clear communications with clients, developing realistic schedules, adhering to timetables, all the basics. I think the organization recognizes that it's really been to our benefit to have an in-house print shop, and so as long as our clients are satisfied they'll be okay.

IPG: What are some other advantages of having an in-plant?

Mitchell: Keeping things in-house lets us keep control of the quality of the product and the timing of the product. We can best do that by having an in-house plant that's accountable. The print shop here produces millions of pieces of material each year, roughly eight million timetables, and we like what they do.