Turn Your In-plant Into a Profit Center
If I told you there was a way to change your accounting department from a cost center to a profit center would you listen? It is my guess that 99.9% of people would take the time to learn how to do this.
Unfortunately, I don't have the secret to make your accounting department a profit center. What I do have is a way to make your in-plant a profit center. I use the accounting department as an example, because the two are treated similarly. They both provide a service and they are both seen as a "cost" or overhead. The in-plant is viewed this way even though it has the capability to be a profit center.
I have worked with many university in-plants, and there has been a common theme between all of them—the departments within the university are largely not required to use them. For instance, the School of Business can have its marketing materials or stationery printed anywhere it chooses. This is true even though the in-plant (a department that is owned and operated by the university) has the capability to print those same materials.
I liken it to a legal firm. Imagine if the marketing department within that legal firm was being sued for using a logo without proper authority. Instead of using the attorneys within its own legal firm the marketing department hires another firm—a firm that is just down the street and a competitor of its own firm. It sounds ridiculous, but that is what happens to university (and corporate) in-plants throughout the United States.
Prove Your Value...Again
Many times these in-plants are required to only "break-even," but in some cases they are required to show a profit. They are constantly asked to prove their value. Most in-plants have to undergo periodic outsourcing reviews. These reviews are conducted by outside consulting firms. The results are then shared with the executive staff at the university and can mean that the in-plant gets shut down. In the meantime, all of the departments are using outside print vendors to produce their materials.
When I ask the presidents of these organizations why they do not require the internal departments to use the in-plant, the usual response is that the departments complain about the restrictions or the in-plants don't offer all of the services needed.
I don't mean to sound difficult, but don't departments in every organization complain?
They complain about having to do monthly accounting reports, but they still have to do them. If the departments are ordering products the in-plant doesn't offer, how can the in-plant provide those services if it doesn't know they are needed? Universities are structured environments and have rules and policies for various reasons. Why is a policy that supports a fellow department in exchange for a service so appalling?
I'm not one to just complain. My father always told me that I shouldn't complain unless I had a proposed solution. This proposed solution is specifically for university in-plants, but it can be applied to corporate in-plants, as well.
- Step One: Institute a university policy requiring all university departments to use the in-plant for all print requirements. All print jobs must be submitted to the in-plant for the opportunity to produce the materials.
- Step Two: Create and institute waivers for circumstances where the in-plant is unable to assist the client. If a particular department requires a printed product that is not available at the in-plant it must submit a waiver form detailing the description of that product. The in-plant manager and executive staff are provided copies of this waiver.
The idea is to allow the in-plant manager to begin seeing documentation on products that have been ordered but that the in-plant does not get to print. The accumulation of these waivers can eventually lead to proof for capital expenditures.
Choose Your Waiver
Two possible types of waivers are:
- Price Waiver: If a particular department can provide documentation that the price at the in-plant is not competitive with an outside vendor, a waiver would be submitted with a copy of the vendor's estimate. The in-plant manager would then have documentation showing that the in-plant's pricing is not competitive, and he/she could adjust accordingly.
- Complaint Waiver: If a department has ongoing issues with the in-plant, a formal complaint would be submitted detailing the specific problems. The in-plant manager would have the opportunity to respond to those complaints, and the customer would be given a three-month waiver to procure printing outside of the university while the manager addresses the problems.
Having the waivers listed above would:
- Allow departments to ensure they are getting market price and quality.
- Provide back-up documentation for equipment purchases or needs.
- Provide documentation of the value the in-plant provides.
The data achieved by the waivers would provide for an immediate and real-time needs analysis and review of the value the in-plant provides. This is especially true if the waivers are received and documented via the Web. The requirements for "outsourcing reviews" are eliminated and money is saved.
Let Print Experts Procure Printing
There is another suggestion that I would have, as well: For those jobs that the in-plant doesn't produce, the in-plant should be the one to procure them from outside vendors. Who better to buy print than those who understand it? The in-plant knows printing and what the outside printer needs to produce a quality job.
Also, letting the in-plant become a customer of these commercial printers lets the in-plant build a relationship with them instead of just being seen as a competitor. There would be increased customer service requirements for the in-plant, but the relationship rewards would far outweigh these costs.
Strengthening the internal support of your in-plant is, in effect, supporting your organization from within. An organization that is strong from within can stand on its own and provide support to those around it.
Isn't that what a university is all about?
Related story: Transforming In-Plants into Profit Centers