To Battle In-Plant Threats: Focus on Core Competencies, Cost and Customer Satisfaction

Recently, I was preparing for a presentation for in-plant printers on how to overcome threats based on core competencies, cost, and customer complaints. The message of the presentation was that measuring, comparing, and benchmarking in-plant performance can be powerful weapon that can be wielded against threats from companies offering outsourcing and facilities management (FM) services.
Large enterprise companies have a choice of how they acquire printing. They can make it themselves, which means using an in-plant. Or they can buy printing services either by outsourcing or allowing another company to manage the in-plant, which is known as FM services.
Over the last few years, companies offering outsourcing and FM services are becoming more aggressive in their sales. Every day salespeople from these companies walk into organizations with in-plants in place and talk about how they can offer printing services for less money and how print production services are not the company’s core competency.

Preparing to Battle on Three Fronts
Knowing the value proposition of the outsourcers and FMs can help you prepare for this battle. When you talk to administrators considering outsourcing or FM services they talk about three things. First, of course, are the assertions of cost competitiveness and core competencies. But the straw that breaks and prompts the investigation into outsourcing or FMs are complaints from customers. Administration assumes those complaints are representative and not just a handful of vocal customers. Therefore you have to prepare to battle on three fronts: core competency, cost competitiveness, and customer satisfaction.
Demonstrating cost competitiveness requires an analysis of popular applications first and then a make versus buy analysis comparing internal pricing to typical purchase pricing. One of the most common misconceptions is that bidding prices are truly typical charged prices. The best way to determine typical charged prices is to take some files that are received and send them out for work. Once the work is completed, compare the original bid to what was actually charged and you will often find charges for set-ups, preflights, file repair, or rush fees.
Competitive Customer Satisfaction
We use two tools to fully understand customer satisfaction with existing products and services as well as future products and services. To look at current products and services, we use the NAPL Competitive Index Profile or eKG, which measures the facility’s value and competitive strength versus their customer’s perception of the best alternative. We have thousands of data points to compare to, which allows us to understand world-class performance.
To assess responsiveness to customers changing needs we use our Market Pulse Survey to determine how customers purchasing habits are changing and how their demands are changing. To demonstrate world-class performance we have adopted Net Promoter Score Analysis first described in the Harvard Business Review article, “The One Number You Need to Grow.”
If you can demonstrate cost competitiveness and world class customer satisfaction, you have proven that, for your staff, printing services is your core competency and thus overcome the benefits offered by the other companies.
The take-home story is that there are companies walking in the doors of enterprises with in-plants and discussing core competencies and pricing. Benchmarking operational performance can help demonstrate core competencies, but analyzing pricing requires more than simply asking for bids. Just as important, if not more important, is benchmarking customer service because customer complaints are often what prompts the investigation into alternative sources.
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Howie Fenton is Associate Director of Operational Consulting at InfoTrends. For 25 years, he has worked with in-plants and commercial printers on: benchmarking operational and financial performance, recommendations to increase productivity/reduce costs and strategies to increase value.To email click here.