Mind Your Business
To effectively compete in a cut-throat world, in-plants must learn to operate like any other business, concentrating on cost, quality and customer service.
There was a time when in-house print shops had it made. They knew work would keep flowing in; all they had to do was sit tight and wait for it.
Incredibly, even as companies trip over themselves in their haste to outsource "non-core" operations, some in-plants are still pretending to live in that dreamy time of eternal job security. Unfortunately, their dream is destined to take a nightmarish turn unless they wake up and start running their in-plants more like what they really are: businesses.
"We are a business, and we're going to have to run very efficiently," proclaims Dan Thurke, Mercury Marine's in-plant manager. "If we do that, we're going to stay in the in-plant printing business." And if he doesn't maintain an efficient operation—if the quality, customer service and cost savings aren't there—then Thurke knows his business will go down the tubes.
"If you don't have the customer satisfaction, you ain't going to have customers," he notes.
This issue is confronting today's in-plant managers full force. To survive, they must eschew their nostalgia for the simpler times and dive head first into the business world.
Like other businesses, in-plants must learn to effectively compete in a cut-throat world; they must market themselves vigorously—with non-existent marketing budgets; they must control their finances, know their expenses and prove they're saving money; and they've got to supply the same quality and stellar customer service that their clients have come to expect from outside vendors.
Watch Your Wallet
One of the most crucial elements in any business is money—particularly, keeping track of it. If you can't manage incoming and outgoing cash flow, you'll be out of business in a flash.
"If you don't have a chargeback system to show checks and balances, explaining where your costs are, you're blowing in the wind," remarks Larry Ruhlman, manager of corporate printing at Intergraph, in Huntsville, Ala.
If you've been getting along fine for years without charging back, it's time you acknowledged that you're working in a different world now. Facilities management companies are going to be talking with your upper management soon, showering them with numbers, insisting that your shop is inefficient—and you won't be invited to the meeting. You won't have a chance to defend yourself. And when management asks for your costs, you're going to look stupid when you don't have them.
"If a facilities management operation were to approach your upper management," Ruhlman notes, "they're going to dangle so many attractive cost benefits that if you haven't already [compiled cost information], it's going to be way too late, because management is not really going to believe much of what you say after that. We constantly are doing that and floating those costs in front of upper management."
Ruhlman lends credibility to his figures by getting another department's help. Intergraph's purchasing department obtains price quotes from outside printers, acting as an independent party to ensure that the figures management sees are not perceived as being biased in favor of the in-plant.
Collecting these numbers is essential, true, but showing them to management in a way that really hits home is even more important. The executives of the parent organization—who can be thought of as the operating board of the in-house business—want to know how you are helping the company, and studies show that they prefer to get that information in visual form.
"So provide the kind of information top management likes and wants," urges Richard Durtschi, a Dublin, Ohio-based consultant and former international president of the International Publishing Management Association. Create charts showing such things as your return on investment and a savings analysis of the in-plant versus the vendor's prices.
Durtschi also insists that in-plants develop a continuing business plan that includes three- to five-year fiscal and projected budgets for both operating and capital expenses. The plan should address financial, equipment and staffing intentions and should include a mission statement, like an outside business. Then, you should continually control the operation based on this plan.
"It is important to know in detail the business's financial status and trends at all times," Durtschi maintains.
The importance of knowing and measuring every last detail of your operation can't be stressed enough.
"If you're not running an in-plant as a stand-alone business entity, with its own quantifiable, measurable elements —everything from profit and loss to customer satisfaction—you are primed for the chopping block," declares C. Clint Bolte, principal of C. Clint Bolte & Associates, a consulting firm based in Chambersburg, Pa. He says he has done more outsourcing studies for companies in just the last 18 months than in all the rest of the '90s.
Bolte strongly recommends that in-plants install management information systems to measure items like on-time delivery, spoilage, individual job cost and customer satisfaction. Only with this precise information can managers prove their productivity and cost savings and hold vendors to their promises when equipment doesn't perform as expected.
"You just don't manage without measuring," he insists.
Keep An Open Ear
Before you can measure customer satisfaction, though, you have to provide it—and this means more than just service with a smile.
"The in-house business should set a clear policy for handling complaints," advises Durtschi. "The employees must understand that a complaint is a positive sign compared to the alternative of a customer not coming back for service and not telling you why."
Successful businesses take their customers' opinions and criticisms very seriously; so should in-plant businesses.
"If a customer makes a complaint about a job we have done, regardless of whether it was their lack of information that made the job turn out like it did, we always do it over immediately, at no cost to them," comments Ruhlman. "And that's bought us a lot of good will."
Service has become one of the most important offerings of any business. It's what often helps buyers decide between two companies with similarly priced products. So let your customers know that their feedback is important to you.
"Actively solicit their opinions through surveys and other devices," recommends Eric Mosher, director of Publications Services at the University of Washington (UW), in Seattle. Before making changes, he advises, involve significant clients in pilot tests and utilize their feedback.
Thurke, of Mercury Marine, agrees. Surveys go out with every print job, and he makes sure his employees know what the customers are saying. His employees, in fact, are involved in much more than just running equipment.
A Focus On Quality
Thurke, IPG's 1993 Manager of the Year, has turned his Fond du Lac, Wis.-based in-house staff of 19 into a quality-focused team, just like many commercial business have done. The team has developed a quality manual and is concentrating on cycle time reduction. Jobs and procedures are carefully documented so that any employee can pick up where the main operator left off. Cross-training is the norm. Corrective action teams analyze problem jobs to discover what went wrong and fix it.
"It's a total quality-type policy," notes Thurke. "The bottom line is, we're going to have the best quality job around."
Concentrating on quality is one way to keep customers from considering going to your competitors. But unless you get those in-house customers to try you out in the first place, you won't even get a chance to impress them. That's why marketing is so important.
Just like any other business, in-plants have to advertise. But unlike other businesses, they usually have no money allotted for it. So they have to improvise. Turning scrap paper into scratch pads emblazoned with the in-plant's name is one method. Passing out calendars that include in-plant contact information is another. Creating a Web page for the in-plant is one more way to make your capabilities known. But often just getting out and meeting with potential customers is the most effective form of advertising.
"Be visible in institutional activities," suggests UW's Mosher. And while there, he adds, ask people for advice on how to improve services. Show them that you're interested in their opinion.
"It's very easy to think of us as just another vendor," Mosher says. "So we have to keep reminding people about our ties to the institution and the things we can do better because we are a part of the organization."
Communication is extremely important. Sometimes it's virtually the only tool managers have to build up their clientele. But make sure that you're listening more than you're talking.
"Eighty percent of this communication is listening," asserts Durtschi, "and the other 20 percent is your business staff providing information about how your group can help them do their job easier, better and at the lowest cost possible."
Perhaps most important of all, however, is making sure that you are in complete control of your business—and your business is printing. All printing. Even jobs that are being sent out.
"In-plants must be an integral part of the planning process for every graphics project initiated by the corporation," insists Bolte. "The technical expert on any graphics project...is the guy who runs the duplicating shop. He or she knows more about printing than anybody. You should be part of the technical planning team to ensure that the most qualified vendor and the best value are procured by the corporation."
by Bob Neubauer
