State of Louisiana Consolidates Printing and Mailing
Printers, including in-plant professionals, usually don’t like the sound of the word “consolidation.” It implies losing facilities, staff, and control — the stuff of sleepless nights for those caught up in the changes that mandatory restructuring always brings.
But when consolidation modernizes production capabilities, eliminates redundancy and waste, saves money, and makes better use of people’s time and talents, it can be the best friend an in-plant printing organization ever had. Happy to testify to this is Ethan Gremillion, who as a print production analyst for the State of Louisiana showed how consolidation can be a transformative force for good in a sprawling and inefficient in-plant system.
Gremillion’s full-dress title is statewide printing consolidation lead, Office of Technology Services (OTS), Production Support Services, State of Louisiana, Division of Administration. Starting about five years ago, he oversaw a series of changes that merged a patchwork of agency-level printing departments into a unified, centrally managed production facility. He also brought about a much-needed reform of the state’s practices for sourcing print from outside contractors.
The organizational changes spanned the print shops of nine agencies belonging to the state’s executive branch. Gremillion explains that although legislation directing the branch to consolidate printing and mailing functions had been passed in the 1980s, action to implement it was never taken. This left the agencies free to do exactly what each did: operate its own print shop to service its specific needs.
‘Wild West’ on the Mississippi
That was a recipe for dysfunction, according to Gremillion. “Each agency lacked either the expertise or the wherewithal to upgrade equipment to keep up with the times,” he says. “They just preserved the way things always had been.”
What it amounted to in organizational terms was “the wild, wild West,” he says.
The situation in outside print procurement was no better. When the agencies needed “traditional” (i.e., non-lettershop) items like business cards and brochures, they obtained them from their usual sources without seeking comparative bids. Gremillion says this was why “most of the state’s traditional print orders prior to consolidation were simply bleeding out all over the place, non-competitively.”
As if that weren’t enough, he continues, “we saw lack of consistency, not just in branding, but in the quality of products received, in the message that those products were communicating.” It wasn’t uncommon to see agencies with two sections doing two different things. “You could look at both of their business cards and not even realize they were affiliated.
“What we ultimately found was that the cost of operating that way was astronomical,” Gremillion continues. A centralized print shop, the Office of State Printing, did exist, but with nine other large-scale systems operating independently, attrition shriveled that in-plant from 60 employees to 10.
The agency shops, meanwhile, were hemorrhaging money.
“They were not recovering enough money, and as a result, it came down to a question of, is this a sustainable model, or should we be outsourcing?” Gremillion recalls. “Clearly, where we were at, it wasn’t working.”
The Turnaround Begins
Things began to change in 2014 when Gremillion, then a consultant to the Office of State Printing, was tasked with taking a holistic look at the external contract structure and how print work was coming in.
“We found that eight of the state printing contracts had been held by the same vendor for decades,” he says. “The way the contracts had been written, they were almost unbiddable. And as a result, they were being awarded with virtually no competition.”
The solution was replacing a commodity-specific contracting system — based on one bid for brochures, another for books and pamphlets, and so on — with a master printing services program that identified the maximum costs vendors charged for various quantities of all the items being purchased. Armed with that information as it opened the solicitations to the market, the Office of State Printing now had a way to get the vendors to bid against one another.
What this yielded, says Gremillion, “was a pool of vendors who had given us their best price. Once we had this newly revamped system of contracts, we were able to use the underlying legislation that had never before been activated to rescind purchasing authority from all state agencies of the executive branch.”
Bidding for Bargains
The policy memorandum implementing the change directed the agencies to refer their print orders to the Office of State Printing, enabling it to become the centralized brokerage for traditional print demand. Exercising its right of first refusal, the office bid out print requests among the prequalified vendors and awarded the work to the lowest bidders.
By procuring print in this way, says Gremillion, “the state reaps tremendous rewards. We’re able to take advantage of every peak and valley in the vendors’ production schedules. They love it, because they don’t have to bid if they don’t want it, or they can be as aggressive as they want.” The contract program, he concludes, has been “a massive success,” and not least of all because the work is being entirely handled by just five people.
The next major change came about in 2016, when the state directed the executive branch agencies to consolidate their information technology operations under a new, statewide IT division, the Office of Technology Services (OTS). This brought the agencies’ transactional print shops under the jurisdiction of the new office along with their IT departments. OTS absorbed the Office of State Printing as well, and suddenly, says Gremillion, “they were in the printing business, and they didn’t know what to do.”
The formation of an OTS sub-unit called Production Support Services was the first step toward finding out. Through it, says Gremillion, OTS began scrutinizing the legacy print systems it had inherited from the agencies. As a result, “we were able to look at opportunities to make some real reinvestments in printing infrastructure.”
Transition in Tandem
The plan was straightforward. OTS would acquire new equipment and, for a transitional period of one month, run side by side with the legacy shops and replicate whatever work they were doing. The aim was to demonstrate that OTS could make life easier for everyone by producing the same volumes of print at lower cost and with less waste and duplication of effort. And eventually, everyone bought in.
“Not a single agency gave us significant pushback,” Gremillion says. “When they gave us the final go-ahead, it was quite simply a flip of a switch, and suddenly the work came out of my shop, the next day.”
Because personnel from the agency print shops were reassigned to OTS, the consolidation cost no jobs. But, it did eliminate large amounts of now-unneeded production space that the shops used to occupy in the downtown capitol district of Baton Rouge.
“We were able to vacate tens of thousands of square feet of space over the last couple of years in those buildings,” says Gremillion, noting that the costs of rent, supplies, and consumables associated with them also are gone. With its 65 employees, the consolidated print and mail facility operates in 18,000 sq. ft. in the basement of a high-rise on the middle of capitol park, no more than a mile away from any of its major accounts.
There, eight Xerox digital presses — six Nuveras, a DocuTech 180 HLC, and a recently installed Iridesse — print the work that used to come from 28 outmoded, underutilized monochrome devices in the legacy shops. Four Nuveras handle transactional/mail printing and two provide MICR/check printing. The Iridesse, with its expanded dry-ink capability, was added to help the shop re-insource certificates and other specialized jobs that previously had been sent out, Gremillion says. Thanks to its improved cost structure, the shop has also had good luck in reclaiming short-run books.
Where the Savings Are
Using a cost recovery model, the shop operates on a budget of about $24 million: $12 million to $14 million for postage, $6 million for in-house printing, and $3 million for outsourced print. Cost reduction continues to be a major objective, and one way Gremillion says the shop accomplishes it is by running as much work as possible on common stock.
Envelopes, too, have been standardized, with 70% of all outgoing notices now being mailed in the same type of envelope. As a result, Gremillion observes, “the price for envelopes has fallen by 50% even though the price of paper seems to be kicking upwards.”
Saving money on postage has been another clear benefit of consolidation. According to Gremillion, the shop’s mail discount qualification rate on outbound first-class mail improved from a daily average of 94% to 99%, with mail metered at 38.3 cents per letter versus the unsorted, 50-cents-per-letter rate that the legacy shops were content with.
“It shows what happens when you take a lot of mail from agencies that send generally to the same ZIP codes, and you put it all in one place,” he says. “We’re now co-mingling the vast majority of outbound daily mail in the state, and that’s an additional 20 to 30 million pieces a year that we’re able now to mix in with our print volumes to leverage postage discounts. And it’s just been a phenomenal success.”
Giving another boost to the shop’s mailing efficiency is inserting technology that applies a unique, 2D-matrix bar code to every piece of paper destined for mailing. As Gremillion describes it, the bar code acts almost as a license plate.
“If a page is out of sequence, or if something is accidentally double-stuffed, the cameras throughout the inserting machine recognize that, stop it, the operator trashes that piece without intervening except to throw it away, and it automatically reprints,” he explains. “So it gives us that full, end-to-end process integrity.”
Start-to-Finish Job Tracking
Complementing this is inbound mail tracking software that lets the in-plant place a tracking bar code not just on incoming mail, but on any job in progress on the print side. By scanning the codes with handheld computers, operators can determine when a job arrived on the server; what printer it was assigned to; who pulled paper for the job; and what problems, if any, were encountered. Job-tracking data gathered in this way can be shared with customers through the same portals they use to monitor their mailings.
“It gives them a self-service option with almost complete transparency into us,” Gremillion says. “We have complete visibility at every step, so we can trace the full history of any job at any stage of production.”
The shop’s customers are by no means limited to the executive branch agencies whose in-plants OTS was created to absorb. In fact, it has as many as 1,800 different customer entities including state boards, commissions, and other public-sector organizations ranging from federal agencies and public hospital systems to nonprofit organizations supporting state causes. Gremillion adds that the shop has begun to gain a foothold in higher education by taking over mailroom operations for Baton Rouge Community College.
He notes that at this point, OTS has completed the first phase of its mission by capturing 80% of the state’s printing: everything it was mandated to consolidate. Gremillion says the next phase of the initiative, mailroom consolidation, will have the effect of pulling in some smaller print systems operating in their respective silos.
“I’m always interested in expansion,” he remarks.
The in-plant itself has expanded close to the limit of its existing space with the addition of a new inbound mail sorter and smart lockers for streamlining mail distribution. Likely to come, according to Gremillion, is inkjet press equipment, which he is researching for potential acquisition. “We have concluded that the future here is going to be inkjet,” he says. “Just the simple cost per run makes this very attractive.”
‘I Fell in Love With It’
Gremillion’s personal journey toward the responsibilities he now bears started 10 years ago in the forms warehouse of the Office of State Printing, where he was a student worker. Upon graduating from Louisiana State University in 2013 with a degree in political science, he was offered a job as a print consultant — a role that morphed a year later into the position of statewide printing consolidation lead within OTS.
Gremillion had no occupational background in print, and his assignment didn’t require him to get involved with production per se. Nevertheless, he says, something about the day-to-day routines of operating a print shop drew him in.
“Being able to see a product go from a designer sketching it on a notepad to prepress and to printing plates and inks, and all that other kind of cool stuff — I fell in love with it.”
That fascination remains with him as he continues to assist the State of Louisiana in discovering the best ways to print and mail. His focus, he says, is always on the bigger picture: how the pieces currently fit together, and how they could fit together more productively for the customer entities and the people they are serving.
“It’s more important to ask why things are done the way they’re done sometimes,” Gremillion reflects.