Tough economic time: why in-plants should invest now!

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Nov 4, 2011

In the last couple of months, the economic situation has been turbulent, to say the least. Fears of an economic downturn are growing, and if 2012 turns out to be a double-dip recession year, this will be a setback for the graphic arts industry, and particularly worrying for in-house print production facilities.

Yes, in-plants have faced drastic budget cuts in recent years, and yes, the need to do more with less has painfully reached them as well. Nevertheless, they have generally been more protected from the big downturn that  brought down so many print service providers in recent years. Whereas the commercial market has emerged stronger, there is a real need today for in-plants to invest in higher production efficiencies before the rising economic uncertainty forces companies or institutions to another round of downsizing.

This week I presented at a Canon-Oce event in the Netherlands that focused on the question how in-house printers can remain valuable. Coincidentally, my colleague Jim Hamilton wrote an excellent (Xerox-sponsored, free downloadable) whitepaper on the value of in-plants this week, which I can highly recommend as it will provide more depth on this topic.

My key points are that in-plants need to invest in operational excellence and need to ensure they measure their efficiency. By having measurements in place, they have a baseline on which they can improve while it also give them the ammunition to show management they provide value and are committed to improve. The case to close down or consolidate a well-run, highly-efficient in-plant is very difficult to make (again, see Jim’s piece for some interesting case studies).

We know from research, however, that many in-plants do not operate at maximum efficiency. Adoption of software solutions that improve the efficiency of the operation such as Web-to-print, MIS and workflow management is lower, sometimes much lower, than what we see in the commercial market. In many countries, the majority of in-plants do not sufficiently measure the effectiveness of their operations, nor do they have Service Level Agreements in place that allow them to be accountable on how they perform. In times of austerity, not having performance metrics in place is a luxury very few companies can afford.

The good news is that there is a lot of potential to improve the efficiency of in-plant operations. From a software perspective, we have recently seen renewed interest among software providers to develop solutions that specifically address some of those issues. By making them available through a hosted Software-as-a-Service model, it allows even small in-plants with limited investment power to keep up to date with the latest technology and make significant savings in workflow automation. This will free up costly labour that can be used to improve service or develop expertise in new areas. For in-plants, it is time to get ahead of the game and leverage these workflow enhancements to stay competitive.

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