Refocus Your In-plant
In-plant operations that are surviving and thriving in today's market are expanding their offerings beyond print and adding services that enhance value to the overall communications process.
An InfoTrends study titled "The Production Printing Industry in North America: Understanding Industry Transformation" reveals that value-added services generate, on average, 16 percent of an in-plant operation's income. Compare this with revenue from other services in-plants offer, like digital printing (25 percent), offset printing (22 percent), wide-format (12 percent) and finishing (12 percent).
The study surveyed almost 300 in-plants to uncover plans for equipment and software investments, service expansions and other improvements. Of those respondents, 68 percent reported revenue growth, 24 percent indicated no change in revenue and 7 percent experienced declines. One-fifth of respondents that reported growth experienced gains of more than 10 percent.
When asked to identify services offered today, most in-plant respondents report offering creative design and data-related services. Over the next two years, in-plants plan to ramp up services related to mobile communications and social media to power cross-media services.
Personalization Drives Growth
An important study finding was that a big differentiator between high-growth in-plants versus those that are flat or declining is the ability to meet the 1:1 communications needs of the end user departments. In-plants that report experiencing growth greater than 10 percent have created the infrastructure and ability to deliver digital color 1:1 solutions. The survey data indicates that more than 55 percent of respondents own variable data software.
Survey participants support a mix of technology that includes digital black-and-white, digital color, large-format and offset to respond to diverse customer needs. In-plants that reported higher growth (more than 10 percent) maintained a portfolio of both equipment and services that allowed their organization to be a one-stop shop for end user departments.
In-plants report solid investment plans in digital devices. The top reasons for investment were to replace an existing unit with a faster device or to replace/upgrade an older unit with more reliable technology.
Workflow Automation a Priority
Workflow automation is a key priority for successful in-plants, and many operations are investing in software to automate processes, eliminate manual touches and reduce costs. It is an area that in-plants need to pay attention to, to maintain competitiveness.
Still, bottlenecks persist across the entire print production workflow. Everyday tasks like preflighting, job submission and proofing continue to add time, manual touches and cost to production processes. With increasingly more print buying shifting online, driving higher volumes of short-run work, there's never been a greater need for workflow automation to streamline labor-intensive processes, maximize the return of existing assets and reduce production costs for both digital and conventionally printed jobs.
While more than 50 percent of in-plants surveyed have invested in critical workflow software tools—including creative layout, digital/conventional production workflow, print MIS and output management—more than 40 percent have not invested.
One of the keys to automated workflow is a connected system that allows user departments to submit jobs via the Web. In-plants reported that, on average, 34 percent of print revenue came in through Web-to-print systems.
Leaders Focus on Print Management
Three-fourths of in-plants that reported growing more than 10 percent had the right of first refusal on print work. These high-growth in-plants have established a print sourcing department to handle print buying for the entire company—whether that means printing in-house or outsourcing. While they have right of first refusal, lending their expertise and knowledge to the buying process for externally sourced materials has provided significant value.
Leaders of these in-plants looked at the industry and saw in-plants competing with commercial printers for work. Instead of wrangling with outside competition to survive, they established print sourcing departments to handle the responsibilities of being a print buyer as well as a print provider.
In addition, in-plants reporting the highest growth looked outside of their organizations for work and began "insourcing." Operations taking in work from external customers are bolstering their clientele lists, increasing income and consuming excess equipment capacity. While these in-plants benefit from having a captive customer base, this same "guaranteed" base of customers can also limit growth opportunities. It is difficult to justify equipment upgrades when a customer base doesn't increase.
Overall, in-plants are taking action to expand products and services to better serve customers and enhance relevance within their parent organizations. Adding new services is not an easy task, but it's a competitive essential.
The most successful in-plants are evolving operations beyond print services, while maintaining a focus on production efficiency. Those in-plants that can strike the right balance between efficient operations and service innovation will be poised to survive and thrive in today's increasingly competitive business world.
Lisa Cross is the principal analyst of NAPCO Research (a unit of NAPCO Media) where she conducts market research and analysis on emerging trends and changing dynamics in the commercial, in-plant and packaging industries, and the market forces that are driving those changes. With decades of experience covering the graphic arts and marketing industries, Cross has authored thousands of articles on a variety of topics, including technology trends, business strategy, sales, marketing and legislation.