Finding Your “Sweet Spot”

I JUST returned from an in-plant presentation where I spoke about the importance of knowing and shifting your "sweet spot." Every in-plant has its own unique sweet spot—the products you make most (volume) and make best (most cost effectively). The importance of this concept has percolated to the top of my mind lately as I work on an in-plant assignment designed to identify work currently outsourced that may be done more effectively by the in-plant.

Knowing your sweet spot and making sure it evolves as your customers' needs change is more important then ever. Why? Because if your sweet spot does not align with customers' needs, then you're not making the products your customers want at a competitive price, or offering the services they need most. This can result in questions about the value of your in-plant.

There are two ways to measure what you do most and what you do best. Calculating what you do most is pretty easy. Take all your invoices for a year and divide them into categories based on the application (business cards, envelopes, etc). Your highest pile is your highest volume or most popular application.

Figuring out what you do best is tougher. For each job, you have to estimate whether you made money or lost money. If you group them by product again, you can find out which products made money and which products lost money. As long as your pricing is competitive with outside sources, then the products you made the most money with are the ones you are most cost efficient at producing, and therefore your best products.

Good or Bad Sweet Spot?

The question then is, are those good or bad sweet spots? That is determined by changes in demand. If, like many in-plants, you are seeing declines in your sweet spot, then that is a problem. The reasons are obvious: the equipment, workflow and applications in many in-plants today are almost exactly the same as they were 10 years ago. Most work today is created by the same workflows and printed on the same small-format, two-color duplicator presses.

To avoid being blind sided by your customers' changing needs, you have to constantly listen to the voice of your customer, and monitor and build new workflows to create new sweet spots. A great way to do this is through the use of surveys to (1) assess customer satisfaction in product quality, (2) assess satisfaction with the services offered, and (3) compare your in-plant to the outside services. NAPL has a proprietary tool called the eKG Competitiveness Survey that does exactly this.

Another integral tool I use is called Market Pulse. This is a customized survey that asks customers how their business needs are changing, how this will change the demand for existing products and services, which new products and services they are starting to purchase and the likelihood that they would purchase these new products and services from your in-plant.

Each in-plant is different, but we at NAPL are conducting enough of these surveys to start to see some trends. In higher-educational in-plants we are seeing increased demand for online registration and automatic reordering. In large enterprise in-plants we are seeing steady demand for large-format printing. And across all in-plants we are seeing increased demand for online quotes, online ordering and online design. But of course, your unique workflows will determine your sweet spot, and your local competition will also shape your customers' demands. So you should always listen to your own customers.

Changing Is Good

Knowing how well you are competing and how your customers' needs are changing will help you create a strategic plan to better align your production sweet spot with your customers' needs. Getting better information and making better decisions can help turn an in-plant around from struggling to surviving—and even thriving.

As part of a recent analysis, I used these tools to create new workflows that reduced errors and manufacturing costs, and created new products with higher value to the in-plant's customers. It's important to recognize your customers' changing needs and use that to modify your workflow to create a new production sweet spot that is aligned with those changing customer needs. The alternative is not listening or responding, which only drives customers to outside vendors, decreases the perceived value of the in-plant and forces administration into conversations about outsourcing or facilities management.

If you're interested in aligning your workflow and production sweet spot with your customers' needs, drop me a line and we can talk more about it. IPG

Howard Fenton is a senior consultant with NAPL. He is one of the leading advisors to in-plants and focuses on: benchmarking and streamlining print and digital operations; conducting customer research; and analyzing, identifying and implementing higher-value products and services. For more information call (201) 523-6328 or e-mail Howie at hfenton@napl.org