The Anatomy of an In-plant Closing
Several years ago I was retained by a large public university to do an assessment of its printing department. A long-time director had retired, and her replacement passed away unexpectedly. The director’s duties were divided between two acting co-directors—what could possibly go wrong there?—but service levels declined and financial performance became problematic. My task was to analyze the situation and make recommendations on how to proceed.
The previous two or three years had been a nightmare for print users on campus, and administration wanted it fixed. The vice president responsible for the unit was optimistic, but he lacked the information to make an informed decision.
On the last day of my site visit, I met with the VP. He explained the pressure he was under and how he really didn’t want to close the shop. Then he hit me with the bomb. He said, “I get these reports that tell me all sorts of things: the number of jobs processed, and the number of impressions, or the sales volume—but I don’t know what they mean! How do I tell that the print shop is doing a good job? And more importantly, how do I tell other administrators?”
My task became one of helping the VP understand what the reports meant and how to ask for information that he needed. In my report I was able to point out the efficiencies and relate the shop’s performance to the academic mission of the university. I guess I was successful because the university hired a full-time director and continued operations for several years.
The Rest of the Story
Unfortunately, this story does not have a happy ending. Fast forward to January of 2014 when the university signed an agreement with a major equipment vendor that effectively closed the university’s print shop after 40 years of continuous operation and a 98 percent “good” or “excellent” rating from customers. The not-so-new director had turned the shop around. He replaced and upgraded equipment, reduced staff through attrition, brought in substantial amounts of outside work and was operating in the black. In short, the new director was doing everything right.
And yet the shop was closed, employees were terminated and printing and the copier fleet was outsourced to one of the major equipment manufacturers. Why? If they were doing everything right, why were they closed?
Several influences are in play. First, the VP I had worked with had retired. His replacement came from an organization that had outsourced its printing unit, so the new VP was predisposed to the idea that outsourcing printing would be a good idea. Further, the university was under pressure from state government to reduce energy consumption, and vendors were aggressively pitching their “solutions” to university administration. Office machines, including copiers, became a primary target. A proposal prepared by the eventual successful vendor promising to cut energy consumption in office machines, especially copiers and laser printers, gained wide-spread circulation on campus. And finally, the always-present argument “the university shouldn’t be in the printing business” resurfaced.
The closure was the culmination of a two- to three-year process, one in which the university did a “comprehensive” analysis of its print spend and gathered information from interested vendors. At the end of the day, a single vendor—the one that submitted the highest-priced proposal—was selected to operate the print shop and multifunction device (MFD) fleet—even though the proposal raised printing costs by about $500,000 annually.
Documenting a Disaster
This story isn’t new. Indeed it has become all too common. What makes this story unique, however, is that the director documented the entire process, starting with the release of the request for information (RFI), which gathered information about vendor capabilities and was used to narrow the field to a manageable number; the intent to negotiate (ITN) that first introduced the project to vendors; and most, if not all of the analysis and campus deliberations.
I reached out to the former director, Patrick Bruchs (PB) and asked for the story from his perspective.
RC: The agreement was signed Jan. 29, 2014. What is the status of printing on campus today?
PB: The vendor kept two staff and brought in two or three replacements. Two management positions were allowed to retire, and three or four FTEs were given other positions in the university. I was given six months severance. The offset equipment has been removed, and the digital equipment has been upgraded. Workflow is still managed by the system I installed several years ago, even though the new vendor promised to replace it with a new one. The new system promised by the vendor is not yet operational.
RC: What about the fleet machines?
PB: When the leases on the existing fleet expired, the former vendor allowed us to continue the leases on a month-to-month basis. As far as I know, the fleet machines have not been replaced, even though replacing the fleet was a major part of the agreement.
RC: Were there promised savings, and has the vendor delivered?
PB: Funny you should ask. During the ITN analysis we were able to show that the entire cost of operations for the printing department and fleet of MFDs was right at $2.5 million annually, but the selected vendor is to be paid $3.0 million, so savings don’t appear to be part of the equation. I’ve been able to track some pricing, and what I’ve seen has become more expensive. For example, we charged $19.95 for 500 business cards, but that price has more than doubled to $44.95 for 500. I’ve been told that other standardized print items have increased as well.
RC: Interesting. Are you aware of follow-up activities to measure the impact of the agreement?
PB: No, I’m not aware of a process to measure performance. I believe the final agreement calls for an annual review, but there doesn’t seem to be a process to provide feedback during the year.
RC: Looking back, what would you have done differently if given the chance?
PB: My biggest mistake was thinking that our performance was enough to solidify our value to the university. It turns out, that was not the case at all. Many of the decision makers were convinced that outsourcing print was the right thing to do, even though the numbers didn’t support that position.
I also dropped the ball with the new VP. I used to meet with the former VP several times per month, and I think I was able to demonstrate our value in those meetings. But I only met with the new VP four or five times over his 18-month tenure. In retrospect, I should have taken the initiative and at least attempted to meet with him more frequently.
RC: What advice would you offer to print managers in a similar situation?
PB: Well first, be aware of what’s going on. This vendor was calling on my VP for weeks, if not months before I became involved, so I was always playing catch-up. In fact, no one from my unit was assigned to take part in the ITN analysis, even though we were the only folks on campus with knowledge and experience in print. When I finally learned of the initiative, I petitioned my direct supervisor to be included in the analysis committee. He was able to get me appointed, but much of my feedback and analysis was ignored.
I would also recommend that print managers work hard to be a part of the campus culture. Every print manager I’ve known has a demanding schedule. We all tend to focus on our jobs and getting the work out the door. But we forget that we are a part of a larger culture that has nothing to do with printing.
We need to include outreach as a fundamental part of what we do. We need to get out there, serve on committees, sponsor a club, volunteer to help out, hire students, support extracurricular activities. We need to be visible. People need to see us as a face and a person, not just a name. It’s really hard to eliminate a position held by someone that you go to the gym with, or served on a program review with, or eat lunch with, or who gave their kid a part-time job. And this is true for businesses as well. We—print managers—need to be visible. We need to be part of the “family.”
And whatever you do, don’t wait for someone to ask you to justify your value. You need to be continuously educating your administration about what you do and why what you do is important. Outsourcing analysis takes months, if not years, but if you wait until the process begins, you probably waited too long.
So my advice to other print managers is this: don’t wait for the vultures to knock at your administration’s door. You should spend a part of every day selling yourself and your work.
RC: One last question: are you willing to share the documentation you compiled?
PB: Absolutely. Just email me at email@example.com.
Related story: Debunking the MPS Myth
Ray Chambers, CGCM, MBA, has invested over 30 years managing and directing printing plants, copy centers, mail centers and award-winning document management facilities in higher education and government.
Most recently, Chambers served as vice president and chief information officer at Juniata College. Chambers is currently a doctoral candidate studying Higher Education Administration at the Pennsylvania State University (PSU). His research interests include outsourcing in higher education and its impact on support services in higher education and managing support services. He also consults (Chambers Management Group) with leaders in both the public and private sectors to help them understand and improve in-plant printing and document services operations.