IPMA 2005 Transforming Your In-plant

Providing low-cost printing is no longer enough. At IPMA 2005, in-plants learned they must improve their customer relations skills and integrate themselves into their organizations' core businesses to survive.

By Bob Neubauer

More than 100 in-plant managers gathered in suburban Chicago last month for IPMA 2005, the annual International Publishing Management Association conference. Appropriately dubbed "Winds of Change," the conference focused on the need for in-plants to transform from printing operations into providers of financial and strategic value to their parent organizations.

The conference took place at the elegant Oak Brook Hills Resort, in the midst of a Midwest heat wave that kept most activities indoors. A day-long vendor fair allowed attendees to visit with dozens of the industry's top vendors on the first day of the conference. Then, later that evening, In-Print 2005 winners were honored at the awards dinner, as were recipients of several IPMA awards. During the banquet, the University of Missouri-Columbia was revealed as the Best of Show winner, and Director Rick Wise was presented with a glass obelisk—the third earned by his in-plant.

Another highlight of the show was a tour of the nearby Allstate Print Communication Center, in Wheeling, Ill. Ranked number one on the last IPG Top 50, the 365-employee in-plant opened the doors of its 430,000-square-foot operation to attendees, who got to see its five- and six-color presses, its 11 DocuTechs, its iGen3 and lots of other equipment in action.

State of the In-plant Industry

To kick things off at the opening keynote, a trio of experts from the industry's top vendors—Eastman Kodak, Heidelberg and Xerox—offered their views on the future of the in-plant industry.

First, Barb Pellow, chief marketing officer and vice president of Kodak's Graphic Communications Group, noted that the world has changed and in-plants need to find out where they fit.

"No industry has been more impacted by technology than the one we're a part of," she said. New forms of communication have made some types of printing obsolete. As a result, printers are transitioning from the manufacturing business to the service business.

In-plants should be looking for new ways they can help their customers, she said. Understand your customers' needs and develop services that give them a different advantage than what your competitors offer.

Also, Pellow added, focus on your parent organization's goals and how your in-plant can help the organization reach those goals. In-plants should concentrate on becoming the communications hubs of their organizations.

Barb Anselm, vice president of marketing communications at Xerox, also urged in-plants to align themselves more closely with their organization's core businesses, specifically the marketing and client interaction processes. If you're an integral part of these important areas, she noted, it will be very difficult for the organization to outsource you.

"That kind of value is something that can't be replaced readily," she said.

In-plants can offer their graphics expertise to help make marketing pieces more compelling, Anselm said. One way to do this is help the marketing department move into variable data printing. Within a year, she said, one third of all digital work will be personalized.

Jörg Dähnhardt, director of product management at Heidelberg USA, noted that in the commercial printing industry, an increasing number of printers tie their future to the addition of value-added services. Selling printing based only on price is no longer a winning strategy, he said. He anticipates that over the next five years 5,000 to 6,000 printers will go out of business.

"If you don't improve, if you don't prepare, you might be one of those," he warned.

In-plants should get to know who their direct and indirect competitors are and concentrate on providing better service than them.

Benchmarking Your In-plant

Continuing this theme, the Prime Consulting team—familiar to in-plants as the presenters of the traveling xpedx in-plant workshops—gave some insights into how commercial printers think and how in-plants can compete. In the process they revealed a new Web site (www.xpedxworkshops.com) designed to let in-plants benchmark their operations against industry standards and evaluate their in-plants from a best practices perspective. Called "Indicators for Success," the Web worksheet scores an in-plant based on its answers and offers suggestions for improvements.

Prime's Don Kendall noted that in-plants can no longer survive just by providing the lowest-cost printing; now they must also be a strategic resource for the organization while providing customer service that makes customers feel they can't do without you.

In a survey, he said, 79 percent of executives felt that outsourcing improved customer satisfaction and reduced costs. Another 71 percent believed it enhanced productivity. These are the beliefs in-plants have to counter. By working with the marketing department to improve communications with customers or integrating with the IT department, in-plants make themselves harder to outsource.

Outsourcing Threats

Avoiding outsourcing was the theme of another session by Debbie Pavletich, of Briggs & Stratton. She said her operation faced outsourcing threats four times in her 13 years with the company. She took the audience through each of them, describing how she was able to show that her in-plant provided the best value for the company.

One key suggestion Pavletich had was to avoid being defensive when you learn your in-plant is being examined for possible outsourcing.

"When you get defensive, you look guilty," she said—like you're hiding something. "You need to stand tall and be professional." This confidence lets management know you believe in your operation.

Meet upper management's requests head on and stay optimistic, she said. At the same time, stay focused on running the business. Continue meeting deadlines and moving ahead with your plans. Don't let your employees know about the outsourcing study either, or they will start looking for other jobs.

Pavletich said that during a 2002 management-initiated attempt to sell off the in-plant, she worked with a venture capital group and was one of the bidders for the business. In the end, when the offers from commercial printers were revealed to bring no savings to the company, and the venture capital firm stood to make out well, the company backed off from its plan, realizing at last that its in-plant was providing it with a very good deal.

An Insourcing Success Story

The impressive story of how the Allstate Print Communication Center went from insourcing $81,000 in 1997 to $3.6 million in 2002 was recounted by Jerry Grouzard, senior print communication manager. He admitted that when the in-plant was told to test the insourcing waters eight years ago, he was not initially in favor of the idea. But after getting decent results the first year, the shop saw the potential of insourcing and hired a sales staff to sell its services.

The in-plant quickly saw that job files from the outside were coming in file formats different from the ones Allstate clients used, so it hired prepress staff with commercial printing backgrounds. Marketing materials—some printed on vendor-donated paper—helped spread the word.

Grouzard feels insourcing helped the in-plant in many ways. Seeing new types of work improved the skill level of employees, and having to compete with outside printers forced the in-plant to understand its costs better.

"It's made us a better printer," Grouzard said.

Also, the in-plant has returned some of the $50 million in insourcing revenue it has made since 1997 to Allstate, putting the shop in a much stronger position.

Humor and Insight

Frank Romano, of the Rochester Institute of Technology, offered his humor and industry insights to the group, taking attendees on a nostalgic trip through lithography's past and showing video clips illustrating how past generations viewed the future. He noted that the strength of in-plants lies in their ability to provide quick turnaround, a service commercial printers don't find as desirable. He urged IPMA to be more proactive in doing surveys and gathering data on the in-plant industry.

Looking at the future, he predicted that copiers would soon disappear, replaced by digital printers, and he said that eventually toner machines will be competing against ink-jet, which is continually improving in speed and quality. Also, he added, film costs will soon soar, forcing imagesetter users into the CTP world.

Among the other presentations at IPMA 2005:

• John Barron, director of Printing and Mailing Services at the University of St. Thomas, described how he worked with IT, purchasing and other departments to create a Request for Proposal that eventually replaced his school's multiple copier contracts with 147 new multifunction printers.

• Dave Thomas, of Blue Cross and Blue Shield of Minnesota talked about building a partnership with IT. While in-plants may feel IT is simply trying to block their efforts to partner and change things, he said, in reality IT has processes in place to maintain stability. To get IT people to be more receptive, show how your projects will help stabilize the environment and add efficiency.

• IPMA favorite Carrie Griffin, of Peopleware, talked about customer relationship management and why it's important to build relationships with customers and get to know their needs. Values differ from customer to customer, she said, so each should be treated differently.

• Don Landwehr, of Wisconsin Public Services Corp., shared his thoughts on customer service, noting that staff should also be involved in providing it. "You can't be the only one that can answer questions," he said. If you discover your bindery operator is a good CSR, give him or her more customer contact. Also, he said, learn how each customer fits into the company so you can better help that customer fulfill his/her mission and look good.

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A drastic change is in store for next year's IPMA conference when it moves from June to April. IPMA 2006 will take place in Las Vegas on April 22-26. For more information, visit:

www.ipma.org

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Photos courtesy of IPMA and Larry Clements.