Survivor!

When GPU began yet another reorganization, rumor had it the in-plant was doomed. But careful documentation helped bring about a different ending to the tale.

In 1990, the Rochester Institute of Technology (RIT) conducted a study of the printing needs of GPU Corp., a Reading, Pa.-based electric utility company. RIT recommended GPU centralize and expand its printing operation. The reasons stated were to maintain confidentiality, control the accuracy and quality of work and to save the company 15 to 30 percent in printing costs.

In the 10 years that passed since that initial recommendation, GPU has formally reorganized four times, and is continually realigning to stay abreast and ahead of the ever-evolving electric utility business. Every "re-org" and realignment means intense investigation of all business processes, especially those deemed "non-core."

GPU's core business is to deliver energy. Printing is a support function. All support functions are closely scrutinized to determine the benefits to the parent organization. It's a fact of life we know all too well.

The printing department has been under the microscope many times. It has fared well and even benefited from such scrutiny. Because reprographics is only a support function, the complete contributions to the parent organization were not known to management. Therefore we welcomed audits and internal investigations; they always revealed our real value. The more management knew about our services, the more valuable we became. We took on more projects, expanded our services, and the department grew and prospered.

In April, we were caught up in yet another reorganization. According to the rumor mill, the printing department was to be closed and services outsourced by the end of the month. It was time to justify our existence once again. If the numbers were good, the department might stay. If not, we were history. In fact, the numbers had to be very, very good. Needless to say, employees were concerned.

Proving Ourselves

This was another opportunity to prove our value to upper management. We knew we could serve our organization better then anyone else. A team was assembled to prove and document the contributions of the 25 employees that comprise our department. The team established a plan of action that included comparing the costs, service levels and value-added benefits of our department with outsourcing.

Our company president asked an independent auditor to conduct an analysis of the cost, service level and image impact if the services of the GPU reprographics department were outsourced. Results were requested within three weeks. A presentation would be made to the Senior Leadership Council, which would determine our fate.

Our procurement and contracts department identified 14 local and six national printers and facilities management companies as candidates for outsourcing printing. Of these 20 candidates, 14 were asked to bid the printing work based on their ability to meet our needs. Those 14 companies were invited to send two representatives to a pre-bid meeting held at our corporate headquarters. At this meeting of 31 printing representatives, (for those keeping score, that's 14x2=28 plus an additional three from another company) all questions and concerns were addressed for all to hear. Each company received a bid package that included 16 actual job specifications, including samples and deadline specifications of the wide range of work required by GPU.

Four national and four local companies returned bids. Those sealed bids, along with our department's bids were opened by the purchasing supervisor and cataloged for comparison.

Stringent Validation

All methods and formulas used to determine our print shop costs and estimates were examined and validated by representatives of our accounting and financial planning department. Every imaginable cost incurred by our print shop—including our share of accounts payable, accounts receivable, utilities, executive salaries, purchasing, HR, etc.—was added to our bid figures.

The result: Our internal bids were 24 to 30 percent less than the lowest bidder.

The auditor also conducted interviews with our six top clients to identify the type of work they request, the nature of the requests and the service levels provided. The clients were also asked if they had any outsourcing concerns. All clients interviewed expressed concerns involving outsourcing and gave strong recommendations to retain in-house printing services.

The presentation was given, and the decision was made. We emerged as champions again.

We survived…for now.

The Proof's In The Documents

How did we survive again? Documentation. Fortunately, we had the documentation to justify our claims of better pricing and service compared with that obtained in the commercial world. We documented every job sent outside. Sometimes we sent work outside just to compare service levels and costs. If you are thinking, "I don't have time for all that," you had better think again. My advice to you is: Take the time now—or you may have lots of time later.

Fortunately, we had the documentation to justify our claims of better pricing and service compared with that obtained in the commercial world. We documented every job sent outside.

Why did we survive? I believe a major factor besides cost savings, is our flexibility. "No" is a four letter word here. Downsizing and cutbacks have reduced staffing levels throughout this corporation. We've customized our services to fit the needs of other departments. We will take all print-related projects. If it doesn't make sense to keep a job in house, it goes outside. We make that decision. We pick the right vendor. The job is completed right, the first time—on time. Everybody wins. Our reprographics department increases our value to the parent organization.

We are not the core business, but we enable those core processes to function more efficiently. And by doing so we add value to GPU.

by DEAN FOCHT