Managing by the Numbers

I work primarily with colleges and universities to help them optimize their investments in in-plant document solutions. That means I spend a fair amount of time wandering through print shops of all sizes and configurations, talking to the folks doing the work, and watching what they do.

At the end of the site visit I like to meet with the in-plant manager and his/her boss to go over my observations and discuss next steps. On one memorable occasion, the manager asked for my general observations and I responded by saying, "You don't know what you're doing!" The manager was visibly shaken, and rightfully so, because he thought I was talking about his, and his shop's, abilities.

This was a bad choice of words on my part.

What I meant to say was that the manager did not have a clear idea what the shop printed in terms of types of work, what the work consisted of, or whom the work was printed for. How can one manage workflow, prioritize jobs or manage resource allocation without a basic understanding of the volume and types of orders flowing through the shop? Sadly, I rarely see shops that collect even the most basic production data.

Management guru Peter Drucker famously advised managers to use performance metrics in their work. "If you can't measure it, you can't manage it," he said, and he was right. His advice has been discussed and kicked around for years, but it's just as relevant today as it was 40 or 50 years ago when Drucker first made the observation.

The problem is, we still don't do it. Not knowing what we print, and for whom, is a big problem that will only increase in importance as we move forward.

Perfect Storm Brewing

The in-plant industry may be headed toward a perfect storm. Funding for our parent organizations, be they private or public, has suffered for the past few years. A sluggish economy has caused businesses to re-think sourcing strategies. State and local government, as well as public higher education, have run out of stimulus money and are frantically looking for areas to cut.

And to top it off, the commercial print industry, which was never able to compete on price, has seen print sales drop dramatically over the past few years. Hundreds of printing companies have closed, and those remaining are scrambling for new sources of revenue. And where do commercial printers go when they need to expand market share or increase sales? That's right, they look at all of those pesky in-plants.

A participant from a university in-plant approached me during a break at a workshop my wife and I led recently and said, "My VP asked me just the other day why he should invest in my shop instead of new equipment in a science lab." That question illustrates the type of pressure that is building and frames the discussion you need to be prepared for. Management doesn't know what we do or why what we do is important.

As hard as the past couple of years have been on in-plants, the next few years don't look much better. If anything they may be worse. As funding streams shrink, stimulus money dries up and commercial competition continues to grow, corporate management and public sector administration will keep on looking for savings. Trade groups and professional organizations focused on print and graphic arts, as well as commercial printers, have been throwing us under the bus for years, arguing that profit-driven companies are more efficient and can reduce their document sourcing spend.

Successful or Just Surviving?

The problem with a lot of in-plants these days is that they don't know whether they're actually successful or simply surviving. They don't know what they're doing.

We led a workshop for college and university in-plant managers recently on managing for survival, and fewer than 10 percent of attendees could quantify the number of jobs in their shop, how many were late, break the amount of printing down to a few meaningful categories or provide even a rough estimate on the amount of work they did to support the major areas of the organization. Forget about cost data on a job-by-job basis. Their only measure of financial performance came at the end of the year when they closed their books, and folks, I'm here to tell you, that's too late.

We see very few shops that are closed for financial reasons, although that is frequently the excuse given. In my doctoral research, I've noticed that cost savings is the most frequently cited reason for closing an in-plant in higher education; however, I've yet to find a college or university that can actually document any savings at all. In fact, I've yet to find any study that meets academic standards for research design (meaning that it was not produced by a special interest group or outsourcing/facilities management vendor) showing that outsourcing a non-academic service in a college or university delivers savings in any amount.

Why do organizations outsource printing and close the in-plant? Most of the reasons I've seen hinge on a perception that the in-plant is not competitive, or that it provides poor service, or that a vendor convinced management that the in-plant was inefficient, or that the organization needs the in-plant's space for some other purpose.

Explain Your Contribution

To address this trend, in-plants need to do a couple of things. First, the in-plant manager must be prepared to explain how the in-plant contributes to the strategic imperatives of the organization. What specifically does your shop do to further the goals and contribute to long-range success? Who do you print for? What kinds of things do you print? What are they used for? How do your prices compare to those available from commercial sources?

Next, be prepared to demonstrate the importance of your shop to the organization. That means you need to be able to present documentation on how your pricing compares to your competition and project overall savings. If you buy printing for the organization, you should develop a database of the quotes for every job you buy; and you should also include an estimate of what you would charge if you printed the work. If you are buying printing because you lack the capacity to do the job, get quotes on the types of work you can do and compare the results to your own pricing. Here's a hint: If your vendor pricing is consistently lower than your pricing, you may have a problem.

You also need to be able to define and explain the importance of the services you provide at no cost to the organization. These may include confidentiality, brand protection, consulting with customers to create efficient and attractive documents, and ensuring that the organization buys print wisely, to name a few.

Here's the bottom line: If we want to be seen as effective, competent managers, if we want to be recognized as playing a critical role in our organization's success, and if we want to minimize or at least reduce the risk of closure in the next several years, we need to act like managers. That includes identifying and using a few key measures to illustrate your performance and tell your story.

It doesn't matter whether you use a sophisticated print management information system (MIS), write your own application using a spreadsheet or database manager, or tabulate your numbers with pencil and paper. In-plant managers will increasingly be evaluated, in part, on how proactive they are in reporting what they do and why it's important.

To paraphrase Mr. Drucker, if you're not measuring it, you're not managing it.