Recent In-plant Closings Don’t Add Up
The ACUP conference wrapped up not long ago. I had planned to devote this blog to describing the conference—the informative educational sessions; the opportunity to network with peers and colleagues from many parts of the world; and, of course, our gracious host, Bucknell University. But, ACUP, as great as it was, was overshadowed by the number of in-plant closings announced in the past few weeks.
First, the University of North Carolina (UNC) Chapel Hill announced that it was shutting down its in-plant and laying off all remaining employees sometime this summer. The plan, according to sources quoted in the Daily Tar Heel and the University Gazette, is to outsource the department.
Administrators broke the news to the staff in late March, saying that they hope to find a new company by August. Another source stated, “The university will close Printing Services at the end of July, but intends to recruit a company to manage those services for the Carolina community without disruption.”
That’s right. The university announced that it is closing its in-plant and eliminating 12 positions, and it has set a tentative date for closure, but it hasn’t written the RFP to bring in a facilities manager, let alone evaluated the proposals.
Folks, these things take time.
Things are moving along in the State of Washington as well. The legislature has merged the Department of Printing with four other agencies to form the Department of Enterprise Services (DES), which may not be a totally bad idea. However, its award-winning print director, Jean-Luc Devis, has been placed on temporary assignment working with process improvement, and the state is planning to outsource much of its printing business.
I guess successfully operating one of the largest printing organizations in the United States, in-plant or commercial, earning national recognition, and saving the state a boatload of money isn’t enough to ensure employment. What more could they want?
So, the state eliminates the position of Public Printer and sets out on a course to outsource a great deal of printing, but the one individual best qualified to write and manage an outsourcing agreement—the Public Printer—is out of the loop. Go figure.
But wait! There’s more.
Last week, administrators at two other large public universities announced to staff that the schools would be closing their in-plants within a few weeks and setting up a facilities management agreements with unknown vendors. Following the UNC model, the staff was informed of looming layoffs, even though the RFP to contract with a vendor has not been written and the schools have no idea what the new pricing structures will be.
What is going on? In-plant closings are nothing new; we’ve all been under the outsourcing cloud for years. But why so many in such a brief period of time?
Financial performance appears to be one contributor. At least two of the shops, and maybe more, have sustained large financial losses for the past several years. Administrators, faced with declining revenue, have few options. The shop is bleeding money, and the in-plant manager doesn’t seem to have an answer, so...
And when one combines poor financial performance with declining demand for print, the answer seems all the more obvious: Print’s going away, they conclude, so why prolong the agony.
Problem is, that’s the wrong conclusion.
These institutions are planning to shut down their printing plants even though they have not seen proposals from potential outsource vendors. They assume that the commercial alternative will solve the problem, but they have no idea what the proposals will look like or what the cost structure of the proposals will be. It certainly appears that they’ve made up their minds that internal print production has no place in their organizations.
In my doctoral research, I have found that cutting costs is usually one of the top two or three stated goals for outsourcing a support service like printing; but I have yet to find anyone that can actually document savings from doing so. In fact, and I’m repeating myself again, there is emerging research that indicates just the opposite—outsourcing support services may actually increase costs (see “DISD Terminates Deal with Kinko’s” for an example).
One factor, and I’ve said this before, is that we—the in-plant community—lack a voice. We don’t have the equivalent of a PIA or a NAPL to tell our story to management and decision makers.
- Why is having an in-plant important?
- How do we contribute to bottom line performance?
- What value do we add? How can we help the organization meet its goals?
- How can we be strategic?
Current management thinking often follows the print-is-not-a-core-competency mantra: “We (parent organizations) are not in the printing business, so we should turn our print needs over to someone who is,” they argue.
But the concept of internal production of support services (in-plants), also known as Vertical Integration and introduced by steel magnate Andrew Carnegie, is well founded and has been successfully practiced by the oil industry, manufacturing companies, computer companies (Apple, for one) and large telecommunication companies for years. In fact, one airline recently announced plans to purchase an oil refinery. Why? For the same reasons other companies take control of support services: to control costs, manage the supply chain and control quality. And that’s exactly what we do as in-plants.
I want to see an organization that advocates for in-plants. We need an organization to:
- fund research and publish results;
- encourage scholarship on the topic by encouraging and supporting students that study support-service outsourcing;
- write and publish position papers describing in-plant contributions;
- help in-plants perform self-evaluations to document performance;
- provide on-site response assistance (SWAT teams) to troubled in-plants;
- provide expert testimony to legislative and administrative bodies;
- speak at professional conferences; and
- write books.
We need an organization to tell our story to upper management and decision makers.
Currently, I don’t see any organization filling that role. That leaves it up to us—the individual in-plant managers. We need to position ourselves to be part of the solution, so we won’t be seen as part of the problem.
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.