A New Source Of Business
Insourcing can bring in revenue to fund new equipment, while keeping your underutilized machines busy. But controversy surrounds the topic.
In June of 1997, Larry Sutherland was a little anxious. With outsourcing on the minds of so many business executives, the former manager of Eastman Chemical Creative Services worried that his Kingsport, Tenn.-based shop might be the next to fall in the name of cutting corporate costs. So he decided to take the offensive.
"We went to management and said, 'We think we can reduce our costs by bringing in income and offsetting our costs,' " Sutherland recalls. What he had in mind was insourcing—taking in work from outside organizations and producing it in the in-plant.
"Our management was open to us trying it out," he says. That initial effort yielded $280,000 in additional income for the company. In 1998, he adds, insourcing brought in $600,000. And next year he hopes to net more than $1 million—money that will offset the expense of maintaining the in-plant and help keep it alive.
In today's business world, insourcing makes good sense. In addition to bringing in new revenue to help fund the latest technology for your operation, it can help you keep underutilized equipment busy and fill up your slow periods. Additionally, managers say, working with external customers will improve your customer service and business skills.
Still, the concept of in-plants behaving like commercial printers bothers some in-plant managers, particularly at universities. At Muskegon Community College, in Muskegon, Mich., Graphics Manager Pete Hoekema insources a small amount of non-profit work, but refuses to go any farther.
"I think there's a place for commercial printers and a place for in-plant printers, and I hate to see either one invading the other's territory," he declares. "I don't believe that a true in-plant shop should do commercial work."