Back from the Brink

HERE’S A nightmare that no manager wants to face: Being hired to run an in-plant only to have your boss decide to outsource the whole shebang six months later.
After being hired in August 1996 as manager of Printing Services for BlueCross BlueShield (BCBS) of South Carolina, John Fabian awoke to find his dream job turning scary.
“They hired me because the former manager was retiring,” he says, “Work had been slow to get to the customer, and I had a digital background in addition to offset know­ledge and tried to tell them that the thing of the future was computer-to-plate.”
Before Fabian could bring the in-plant into the present, much less the future, six employees were let go, and four Heidelberg presses were sold off in a print room purge.
“The in-plant closed in April 1997, and aside from myself, four other employees were retained to process the outsourcing of all work,” says Fabian. Two employees—one with more than 20 years of print experience—served as print buyers, sending bid requests to dozens of vendors in three states.
The remaining two employees worked two shifts on a lone analog Xerox DocuTech, which had survived the purge only because it had recently been leased.
“As the work came in, we saw what we could do in-house and did it,” says Fabian, who oversaw both pairs of workers.

The Road to Recovery
That DocuTech—and the roughly 3.5 million copies Fabian’s employees produced on it that year—proved to be the seed for future growth.
“Management saw that we could do things with that sole piece of equipment faster than shops could outside,” says Fabian, “but the DocuTech kept breaking down on us. That generated cries from our customers, which convinced management to allow me to rent four Konica copiers.”
Having four smaller machines that cost less than the DocuTech let Fabian save money while avoiding the downtime that comes from relying on one machine.
“That concept was what springboarded the changeover,” he says. “The redundancy was essential. The company was growing, and we were able to keep up.”
As for the cost of work sent outside, Fabian says, “Without a doubt, the cost per printed page went up.”

Beefing up the Bindery
The next step back towards full service came thanks to the in-plant’s former largest customer.
“They had gone to an outside printing vendor, but after two years they came to me and said, ‘We’re not being serviced as we need to be,’ ” says Fabian.
At the time, the BlueCross BlueShield in-plant had only a manual booklet maker that produced 150 books per hour, so Fabian put together samples of work from perfect binders and convinced management that the equipment was essential. The in-plant was able to add a Standard BQ-460 perfect binder. The former client returned and is once again the shop’s biggest buyer.
“We’re now doing 50,000 perfect bound books a month,” he says.

Color Conversion
As time went on, Fabian was able to pull more work into the in-plant by demonstrating how much various BCBS customers could save.
“The CFO thought that letting us have color copiers would only encourage people in the company to use them,” he says. “But every division in this company has its own checkbook. No one has to use us.”
As Fabian explains, potential customers were already going outside the company for color work, but once the in-plant managed to get access to one color machine, their quick service brought customers back in-house and encouraged future growth. Now the in-plant can handle many color jobs that would have previously gone elsewhere.
“If we have someone who wants a 50- to 100-page manual in full color, it would cost them a fortune to go out,” he says, “but if we do it here, the cost savings for the company is tremendous.”
Color jobs over 3,000 copies and monochrome jobs over 300,000 are still outsourced, but almost every other job is once again the in-plant’s prerogative. The numbers tell the story of the in-plant’s growth:
• In 1998, Printing Services produced 21 million images.
• By 2005, that total had grown fivefold to 100 million, despite holding the number of full-time employees to a mere eight over the past five years and working only a single shift.
“The technology lets you do that,” says Fabian. “Going from pure saddle stitch to perfect binding let us go from 150 books an hour to 1,200.”
While the growing numbers are good, Fabian says the best sign of the in-plant’s success is the company’s estimate of dollars saved.
“[Purchasing] accepts bids for our ‘overflow’ work, and from those bids, they apply the lowest figure to our work,” he says. This low-bid figure is multiplied by the volume of the in-plant, and the difference between that value and the in-plant’s actual operating costs shows how much the company saved by using the in-plant.
“In 2004, the ‘savings’ was computed to be over $480,000,” he says.
What’s more, since the original offset operation was closed, Fabian estimates the new digital in-plant has saved the company more than $3.3 million.

Into the Future
Despite the savings produced by Fabian and his employees, the “what have you done for me lately” attitude experienced by most in-plants is a familiar one.
“Every year for the last four years, upper management has bid this operation out because they constantly want to keep a check on the cost savings,” says Fabian; the most recent bid went to Kinko’s. “We opened up our operation and let them know anything they wanted—but their bid was about three times what it costs us to do the work inside.”
Immediately after the failed Kinko’s bid, Fabian says, “Management let me go out and do 60-month leases on the Konica 1050s.”
The in-plant’s low prices result from a mixture of efficiency and savvy planning.
“Normally a vendor will charge a click for one 81⁄2x11˝, but I negotiate with them and pay one click for a 11x17˝ sheet and print two flyers,” says Fabian.
The in-plant also does its own preflight work, so on something like tab jobs, they’ll print the job with tabs in place so they can perfect bind it or place it in a three-ring binder immediately.

Better Quality, Faster Than Ever
Cost is only half the picture. Fabian’s in-plant provides a turnaround time and level of quality that would be hard to match at any price.
“The company had a big project a while back, and while they worked around the clock, we worked with them, staying until 2:00 or 3:00 in the morning to finish the job,” he says.
“We’re at the leading edge of all the tech out there and can do things others around us can’t,” says Fabian. “We can saddle stitch books up to 200 pages and put covers on them; we can do gate folds or punch and fold at the same time. We do a lot of variable on a daily basis.”
Other jobs include numbering carbonless at the time of printing, the merging of MS documents with mainframe data, and manuals that have tabs, color pages, and black-and-white pages mixed during the job.
That service should only improve in the years ahead thanks to a new company-wide intranet. Customers can currently e-mail orders, but Fabian still needs a clerk to key in data for every job.
“In the next year or so, customers will fill out the order online and that data will be forwarded throughout the process,” he says. “We’re looking to the future, but I don’t foresee adding more people because we can do up to 150 million copies with the current technology. Well, going over that amount maybe we’ll need one more person in shipping to handle the volume...”