Guildford Borough Council printing services manager Mike Cheshire says that after half a century in print, 25 years of which have been in inplants, the current commercial print market is as bad as he’s seen. In the current climate, I really feel for commercial printers. They face absolutely shocking trading conditions. That’s one thing we’re a little bit immune to. While Cheshire admits that the print unit is affected by the same cost savings applied to other services within the council, he adds: But we’re not going to go into administration because we can’t pay the month’s paper bill.
Although exact figures on the number of inplants across the UK are hard to pin down, there has been anecdotal evidence of a decline. Inplants probably had their heyday in the 1980s and it hasn’t been quite the same since, says PaperCo commercial director Chris Grice, who counts public and private sector inplants among his clients. At that time there was a great rush to return to the core business and in-house printing just didn’t fit in. More recently, the government-driven Gershon Efficiency Review in 2004-2005 pushed public sector inplants to deliver savings, according to Danwood, the largest supplier of Konica Minolta and Sharp production equipment in the UK and Ireland.
In-house boom
But is there a resurgence of inplants? Danwood should have some idea – inplants make up 80% of its business. Managing director Gerry Mulvaney says: The incidence of inplants is growing. Whether those operations are run by the organisation themselves or given over to a third-party, it’s a major area of growth. He thinks the economic downturn will boost inplants, especially in the public sector. Any organisation that is receiving government money will be receiving less of it and will be under pressure to cut costs. They’ll be looking at ways of doing things cheaper and producing something in-house is going to be a cheaper option.
Mulvaney’s comments are backed up by a survey conducted by Printing World of 34 in-house print units, with assistance from inplant industry association Apcom. The survey can be viewed here: http://tinyurl.com/5cjfhj. Half the respondents to the study, which included mostly local government, along with charities and corporate print units, said internal volumes were increasing while external work was falling. Only 17.6% said they were increasing the amount of work sent out to the commercial market.
In their own opinions, these inplants reckoned they have the edge over external printers in key areas. Nearly half judged themselves better on cost and 56% said they offered better value for money. Considering that inplants are often on site, it’s not surprising that 76.5% said they were on par or better in terms of speed, but it may come as more of a shock that 70% thought their environmental credentials were as good or better than commercial printers. Putting aside any self-aggrandising, it shows modern inplant printers have become strong rivals to their commercial counterparts. I think a lot of work that’s disappearing from the traditional printing industry is now being done by people who would ordinarily have been putting work out to a commercial printer, says Mulvaney.
Some 76.5% of the respondents said they were in competition with commercial printers for their organisation’s work, although the only types of job they regularly sent out were long runs of more than 10,000 and large formats. And 68% said they were looking to increase the amount of work they produce for commercial customers.
Of those who responded, three were operated by facilities management (FM) companies, a growing sector populated by digital manufacturers such as Xerox and Océ, resellers like Danwood and Ikon, along with print management giant Williams Lea. Danwood’s Mulvaney believes the growth in FM is down to the significant cost savings possible. Use of new technology can reduce costs. It could be that there are greater efficiencies to be made by transferring to a third party, he adds.
This is supported in an April 2008 study into the US print market by research body Gartner, which showed that enterprises spend between 1% and 3% of revenue on print, yet by managing their print environment more effectively, they will save between 10% and 30% of their print-related spending.
It also reports in a study from July 2008: Organisations are telling Gartner that by managing their printer, copier and fax fleets, they saved up to 30% of their printing costs. This same study, however, also lends credence to the internal inplant model. According to the report, It can be less expensive for organisations to manage their printing needs themselves if they know exactly how to proceed and have the resources to do so.
Finding these resources, whether time or technology, can be the biggest problem, says Jo Pitt, head of print services for the House of Commons. The difficulty is that a lot of the in-house print teams are non-profit making, in which case they don’t have the same freedom as people elsewhere in the industry. It’s much more difficult for them to keep up to date with what’s going on in the business. For public sector print units in particular, financial propriety precludes them from accepting invitations from manufacturers to get out and kick the tyres on a new piece of kit or software. They can rarely get the budget to fund a trip to an overseas manufacturing plant, or even the nearest showroom, reckons Pitt.
So if an organisation doesn’t want its print units to fall behind technologically, but isn’t prepared to relinquish control to an FM provider, are there other options out there? Yes, says Peter Vincent, who conducts inplant audits in his role as head of technical services for BPIF. He says that over the last three years, there has been a general tightening of the belt as inplants have been forced to prove themselves efficient and economically viable.
Independent advice
Organisations turn to the BPIF service for a number of reasons, often for advice on how investment can help plug technological gaps. It could also be a justification as to whether it’s right to continue with an in-house operation or consider external procurement for most or all of their work, says Vincent.
He says that 95% of the time, it is a case of improving production through further investment and training. However, he adds that 5% of the time, it is too little, too late and the unit has been run down over time. In one case, I’ve had to recommend closure of a unit. Sometimes there is no choice, says Vincent.
A couple of years ago, Vincent was called in to Kirklees Council’s print unit. Inplant manager Oliver Renshaw says: We decided to employ the BPIF to do a warts-and-all survey on the department. Peter Vincent came in and recommended we either invest in high-end digital print, close or facilities manage. Renshaw put the case to senior management, which gave the green light to a reinvestment programme for its new Document Solutions print and mailing centre. This came to fruition in September 2008. Enviable new additions to the plant list included a Xerox iGen3 along with a DocuColor 700, a mono Nuvera 120 and a 4127 copier/printer.
We went externally to get the consultation, which rightly or wrongly has more credence if it has someone like the BPIF’s name on it rather than mine, says Renshaw. Investing in heavy production digital wasn’t the only outcome of the review: Document Solutions has taken on a central role in the council’s overall print procurement and design strategy.
The same can’t be said of many other inplants. One respondent to the Printing World survey sums up the problem: The council invested £300,000 two years ago, including a full MIS system, but departments are still allowed to purchase ad-hoc print from where they like. We have this crazy situation where printers and finishing staff are doing nothing while social workers are buying print.
The problem of Yellow Pages print buying is a widespread complaint and can be a major cause of friction between inplants, their parent organisations and commercial printers. Mark Barlow, head of print and post services at Blackpool Council and Apcom president, says that while a large percentage of the council’s jobs go directly to the inplant, some users go direct to external printers for pricing comparisons. All work should come via inplant. However, it is very difficult to enforce this without the backing of top management, adds Barlow.
Renshaw says Document Solutions acts in an advisory capacity to ensure print procurement fits with Kirklees Council’s financial procedurals. We try to steer everybody to come through this department as their first port of call. Whether we actually print it, we’re not really bothered: there will always be work that needs sub-contracting, he says. Renshaw says inplants need to be just as savvy at marketing and internal sales as commercial printers. Get out of the unit and tell everyone what you can do. Question why others do the work. Make a bit of a fuss of yourselves, he says.
Renshaw thinks the inplant printer should have the edge because customers are already sitting on its doorstep. But if traditional print work is disappearing, such as the trend toward financial reports and advice booklets going online, inplants may need to diversify. Guildford’s Mike Cheshire faced this lull two years ago. His answer was to move into bulk mailing. Following an investment in the PrintShop Mail variable-data tool, Satori software for addressing and a Neopost folder-inserter, the new niche has been a lifeline for Cheshire’s unit and saved the borough council £40,000. Plus it puts the inplant where it should be: at the centre of the organisation’s document process workflow.
If inplants can get the right business model to keep winning the work from their internal client list, it could offer some safeguard against the gathering economic storm that threatens to decimate the wider commercial print industry.
However, many will still feel the pinch. Devon County Council, for instance, announced the closure of its print unit in December in a bid to save £210,000 in costs. Print will always be peripheral to the core activity of most parent organisations. Cheshire says that inplants must evolve to survive, as there is always an alternative in the private sector. There is an idea in the trade that inplants are immune from recessionary pressures. We’re not. We have to change to survive. If we don’t, we fade away.
INSIDE JOBS: TECHNOLOGY CAN HELP
For any printer – commercial or in-house – the right technology can be the deciding factor between a strong and a weak business model. For inplant departments, the advent of digital printing technology was a major turning point, with heavy duty devices from vendors once better known as copier or desktop printer manufacturers, such Xerox, Ricoh, Canon, HP, Konica Minolta and more recently Sharp. According to Printing World’s survey of 34 inplant printers, 83% operated high-volume digital kit, meaning it had a higher install base than any other printing technology. Digital was also the biggest growth area – 63% planned to invest in full-colour digital over the next two years. Some 48% said they would complement this with variable-data technology.
BPIF head of technical services Peter Vincent believes inplants should also be having discussions about MIS, particularly with an eye to resource efficiency. You see a lot of very simple estimating/job-costing systems at inplants that are very limited, so they’re not getting the benefits of stock control or production scheduling, he says.
Danwood managing director Gerry Mulvaney agrees that software has a vital role to play. It’s not the technology in the digital engines themselves necessarily: the key has been a simplification to colour management and external controllers from companies like Fiery and Creo.
The other major factor has been the evolution of front-end solutions aimed at office market applications, such as ‘rules-based’ and ‘follow-me’ printing. Rules-based printing, such as from Denmark’s SafeCom, evaluates every print job across an organisation, for example when employees press Control+P on their desktop computers. If that job is more suitable to the print department – because it’s more cost-effective or requires a lot of finishing – it can be redirected to the print room, says Mulvaney. Follow-me software means jobs print to a group server rather than one specific device. Staff can then print their work on any machine across the company, including sending it to the inplant.
Finally, Mulvaney says his customers are turning to web-to-print portals like Xralle and EFI’s Digital Storefront – it effectively puts the inplant on the desktop of the customer anywhere in the organisation. Oliver Renshaw, manager of Kirklees Council’s Document Solutions division, says the print unit now gets three-quarters of its work through online ordering system iPrint. Jobs such as stationery and letter-heads can only be ordered via the portal.
