Manufacturing Industry In-plants Close To The Core

In-plants at manufacturing firms are often integrated very closely with their companies' core businesses. This can bring those in-plants some unique opportunities.

By MIKE LLEWELLYN &012;Mercury Marine Printing and Publishing Services doesn't merely support its parent company, a leading manufacturer of outboard motors.

"We're integrated with Mercury itself," says Mike Schrader, manager of the 25-employee in-plant, based in Fond du Lac, Wisc. "We print most everything that goes with the engine." That includes owners' guides, installation manuals and more, all of which gets ordered through the company-wide Material Requirements Plan.

"Fifty percent of everything we produce goes directly in the box," he says.

Few other segments of the in-plant industry require the in-plant to work in such close proximity to the core business of the company. Like Mercury Marine, other in-plants serving manufacturing companies also report a certain shared objective.

But it's more than just like-mindedness that sets these shops apart. It's integration. These managers work hard to maintain their mutually beneficial relationships.

Debbie Pavletich, Graphic Services manager for Milwaukee's Briggs and Stratton finds herself in this favorable position.

"To become integrated into [the company's] processes, you can offer solutions to lower costs," she says. "You may not make as much money, but they know that you're in their best interests."

Pavletich goes on to explain that as a result of this proximity to the core business of the company, manufacturing in-plants can grow as their companies expand into new areas. She says, for instance, that her 21-employee shop has begun working with the marketing department and the product development team.

Being so closely tied to the performance of the parent company can be a mixed blessing, though.

"The current economy has had a huge effect on our company," says Al Schmidutz, manager of Printing Services for Steelcase Corp., in Grand Rapids, Mich.," and our business fluctuates with the company's business."

But, says Schmidutz, he has used the slowing business to his advantage and has taken the opportunity to focus on bringing about a print-on-demand operation. The result has saved his company a lot of money.

"I know that with Kinko's, the company was spending about $120,000 per year," he says. That number has dropped drastically to $18,000.

"We're a lot more efficient," he says.

Still Must Prove Themselves

However, despite how closely these in-plants work with their companies, most managers say they still must justify their facilities to their parent companies.

"We're still not seen as core," says Mercury Marine's Mike Schrader, "even though what we produce goes with the product."

Briggs and Stratton's in-plant also produces the printed material that accompanies the firm's products. Whereas many in-plants don't know what the next job might be, explains Pavletich, her shop produces the same material day in and day out. Manufacturing in-plants can use this repetition to their benefit. Any purchase Pavletich makes, she says, likely will save money on a job the facility is already producing. That makes it easier to cost-justify new equipment.

Her shop, like most other manufacturing in-plants, got its start producing technical information to accompany the product, so she is able to outline the necessity, and return on investment, of a new purchases with less difficulty.

"An advantage of working for a manufacturing company is that when you purchase equipment, they're for specific, repetitive products," she says. "That's how you show your value."

At Mercury Marine, Schrader says his shop is directly connected with the technical writers who write and design the manuals he prints.

"They write the manuals and transfer them to us over a shared folder," he explains. "Then they e-mail us and tell us it's there."

Marketing Still Matters

But no matter how closely these in-plants work with other departments, they must still market their services. That's what Dave Heinbach, manager of Reprographics and Mailing Services at Merck, in Whitehouse Station, N.J., has found. He also must consistently illustrate the savings he brings to the company.

"We still have to run the shop as a business within a business," he says. "There is no mandate saying that Merck has to use us."

To advertise his 37-employee shop's services, Heinbach's approach is to set up a table outside the cafeteria entrance, distribute samples of the in-plant's work, and talk to customers.

In-plants On The Web

In Milwaukee, Briggs and Stratton has a unique network of dealerships, all requiring similar jobs on the double. So Debbie Pavletich had to come up with an equally unique strategy to meet the demand. She turned to the Internet.

The in-plant now uses a home-grown system to help out those Briggs and Stratton dealers in the field. While each one has its own location, pricing and special requirements, the dealers order similar four-page brochures, equipment labels and business cards.

Pavletich's online ordering system has standardized these pieces so that all a dealer has to do is go online, input its specific information, and select which of the standardized products it needs.

Then the variable data printing system, including several DocuTechs and a DocuColor 12, does the rest.

Similarly, Al Schmidutz at Steelcase has developed a comprehensive online job submission system.

"Most of the system was built with existing applications within the company," he says.

Users key in their information and click "submit." The information is then simultaneously loaded into the shop's Web queue and an e-mail is sent to staff notifying them it's there. As an added bonus, the job is also sent to the company's help desk.

"The advantage of the help desk tool is that the software acknowledges the receipt of the job to the customer, then becomes a trackable, numeric ticket," he explains.

Schmidutz adds that as a job progresses from stage to stage, his staff updates the ticket so the customer knows exactly where the job stands.

Insourcing Brings In Revenue

One thing many manufacturing in-plants have in common is insourcing. Curt Larson, manager of printing services for Land O' Lakes, in Fort Dodge, Iowa, says there's one reason why his shop decided to insource work.

"Bottom line," he says, simply.

To that end, the 11-employee in-plant has two outside salespeople who seek out customers in the manufacturing and recreation fields. He says his facility mainly produces brochures, direct mail, small posters and other marketing material for those clients.

Mike Schrader at Mercury Marine has worked out a number of unique insourcing partnerships to boost the revenue flow into his in-plant.

"There's one major printer in town who does some stuff for us. They have all big printers, and we have small ones," he says.

So Schrader has roped in some of the work that would not be economical for the commercial printer to produce. The Mercury Marine in-plant has also picked up work from Brunswick Corp., its parent company.

"We saved the corporation 40 percent," reports Schrader, who says his shop also looks for work in the surrounding area.

"One company...only has DocuTechs. We do $20,000 of work for them. And a school here in town doesn't have a color copier," he adds.

Altogether, the in-plant has picked up $50,000 in insourced sales.

"But that's probably going to go up to $100,000 this year," Schrader estimates.

Debbie Pavletich at Briggs and Stratton says she maintains an outside sales team to drum up work beyond the parent company. The $1.75 million in insourcing revenue the in-plant generates accounts for 20 percent of her shop's income.

"The sales team solicits business from southeast Wisconsin, and also from distributors," she says. "Due to our success at Briggs and Stratton, we can assure that we're successful with those clients."

As a result of those successes, says Pavletich, her shop also gets a lot of word-of-mouth business.

Marketing Opportunities

But word-of-mouth promotion isn't enough for the companies themselves. They spend a lot of money to market the products they make, and this has created a great opportunity for their in-plants. More than 65 percent of manufacturing in-plants say they provide more color printing today than two years ago, according to our recent survey of these in-plants. Much of that color goes into promotional items.

"We do quite a bit of marketing [material]," says Land O' Lakes' Curt Larson, indicating that his shop prints a large amount of direct mail pieces and brochures for the company's customer list.

"More work is definitely printing from marketing," agrees Al Schmidutz. "We installed some color digital equipment, and we do a lot of two-color brochures."

At the end of the day, whatever unique characteristics they may have, manufacturing company in-plants still face the same challenges as most others. They still have to market themselves. They still have to undercut commercial competition. And no matter how close they might be, they still have to live with operating slightly "outside the core" of their parent companies.