In-plant 
Audits Help Improve 
Performance

WHENEVER ANYONE wants to put a positive spin on something, it's usually evidence that spin is needed because things are not that great. That was the impression NAPL Senior Consultant Howie Fenton had after attending the National Government Publishing Association (NGPA) conference and the in-plant programs at Graph Expo 2011 (including the In-Plant Printing and Mailing Association luncheon). At all of these events, the shaky status of many in-plants was a common refrain.

For example, says Fenton, during the first five minutes of the NGPA conference, the opening speaker, Virginia Beach Deputy City Mayor Dave Hansen, "was supposed to make a simple welcoming speech, but instead spoke about how the budget for printing had been cut in his city because of the availability of mobile technologies, and that this decline had resulted in staff cuts."

Fortunately, adds Fenton, Hansen was followed by the Public Printer of the United States, William J. Boarman, who took a different tack in his keynote address. Boarman explained that, as a printer, he knows many people make incorrect assumptions about the costs associated with in-plants.

"I think [cutting staff] is a common misconception, and a false positive by managers who get rid of print shops," he said. "They think that by moving a line item that is very visible they will save money. Someone in a city council can look at this and say, 'There's $1.5 million that we can save,' but they don't know how much they are going to save in the long run.

"Often they lose track of the expense because it is broken out and into small numbers across multiple jobs and multiple vendors," said Boarman, "and may take years before anyone realizes that the older way was the cheaper way to do it."

'Prove and Improve'

"It was a good rebuttal," remarks Fenton, "but the overall threats to in-plants have been an underlying theme at all the in-plant shows this year, including ACUP (the Association of College and University Printers) and the IPMA show.

"Everyone who understands the importance and value of in-plant printing wants to paint an optimistic picture," he continues, "but the simple fact is that, with overall business down (affecting commercial in-plants), higher education enrollments down (affecting university –in-plants) and state budget cuts (affecting government in-plants), there is a greater focus on cutting services that are considered non-essential or could better be provided on an 'as-needed' basis. In-plants that want to survive must themselves cut costs, improve productivity and enhance ROI."

This is why the National Association for Printing Leadership (NAPL) has produced a white paper that will help in-plant managers understand how to measure, prove and improve the value of their operations. Authored by Fenton, who has more than 20 years of industry experience, the new white paper, "How to Improve In-Plant Performance," covers a range of performance-enhancing ideas, metrics and proven tactics that are based on first-hand experience with today's in-plant production and management issues. It also includes real-world examples of how in-plants have put these ideas into practice to improve their operating outcomes.

In-plant managers and the executives in their parent organizations must have accurate performance data on which to base their decisions and actions—and accurate data begins with measurements.

"Solid, quantifiable performance data and benchmarking are the best tools," Fenton says, "but measurement is only the first step. Just as important is using measurement data to build and implement an effective improvement plan."

The Big Six

A proactive evaluation of an in-plant's performance and productivity is the place to begin—and it means going far beyond click charges and pressroom metrics.

"Many evaluations stall at the outset because the evaluators do not know where to start," says Fenton, noting that "NAPL recommends building any in-plant audit on six key areas." These are:

1. Financial Performance. Is the in-plant profitable? Losing money? Breaking even? Why?
2. Customer Satisfaction/Value Perception. Is the in-plant providing good service for its clients? Are clients being surveyed on a regular basis?
3. Competitive Alternatives. How does the in-plant compare to the competition in quality, pricing and customer service? Do its price points and services meet the needs of a broad spectrum of internal customers?
4. Operational Metrics. Is the in-plant's workflow as efficient as it could/should be? "Every aspect of the workflow, from order entry to delivery, must be measured during both peak times and slow periods," says Fenton, who also cautions managers to keep in mind that a workflow audit is only one part of an in-plant audit.
5. Service Offerings—Present and Potential. Are the in-plant's offerings meeting its customers' current needs? Is it on track to meet those of the foreseeable future?
6. Industry Benchmark Comparison. Is the in-plant performing at or near the level of industry leaders?

"Understanding your in-plant's products, run lengths, specifications, volumes and level of customer satisfaction is the first step in the performance analysis," reports Fenton. "The financial evaluation starts with a break-even analysis and a cost competitiveness analysis. The competitive benchmarking of financial, operational and customer service metrics identifies realistic opportunities for improving the in-plant's financial results."

Keeping Track

For each of these six critical areas, the new white paper details specific action items in-plant analysts should include in their evaluation. In the Financial Performance section, for example, one of the action items is "Keep Track of What Gets Done."

"One of the problems of overseeing a busy in-plant operation is that you are so busy pushing out one job after another that you seldom have time to step back and look at the totality of what you are producing," explains Fenton. "But you cannot reasonably assess your productivity, cost-effectiveness or competitiveness if you don't know what your organization's in-plant investment has achieved for your customers and your parent company. A key evaluation step, therefore, is to pull together a realistic assessment of what you have done over the last one to three, or even one to five years." (See sidebar for a list of what you should measure.)

An Unbiased Assessment

Fenton notes that an evaluation must be conducted in a professional manner to get realistic, useful answers, and that it can be done by an internal team, by interested third parties—generally business service providers that want to make a case for taking over management of the operation—or by neutral third parties.

"An independent assessment by an objective evaluation specialist is preferred because it doesn't support an agenda, and thus can yield the most reliable results," notes Fenton. In addition, he says, "an association-affiliated expert can be highly experienced and objective, and associations can put the evaluation in an industry context.

"NAPL, for example, can also provide a comparison of the in-plant being evaluated to the best practices of leading in-plant operations by measuring it against an in-plant database built on extensive research collected over a number of years from a wide variety of commercial, government and university printing facilities," he continues.

"An objective approach to evaluating operations is likely to yield the most authentic and dependable results," says Fenton. "A neutral or independent evaluator isn't trying to sell anything. It seeks solely to help you measure and improve performance with tested evaluation techniques and develop a customized action plan."