The Challenge
Electronic delivery of information was growing at this provider of technical information, where previously 75% of information delivery was paper based; now only about 35% is being delivered on paper the balance being electronic. Even so, the volume of work over the past three years at the in-plant has remained stable. A recent re-branding effort at the company has resulted in outsourcing the production of letterhead, envelopes and business cards, which has contributed to a drop within the traditional offset production area while the addition of digital color has counterbalanced the net effect.
The challenge was to determine if continued outsourcing as cost effective and if there was additional opportunity within the company to save money by operating the in-plant.
Objectives
Working with the client, xpedx was asked to:
1. Determine what contribution, if any the in-plant was making to the parent organization
2. Make recommendations for increased contribution or efficiency
Analysis
In addition to an operational effectiveness evaluation and cost analysis, xpedx was able to determine the outsourcing of the offset work, such as letterhead and business cards, resulted in making the offset portion of the operation inefficient.
The digital operation was determined to contribute around 55% in savings to the parent organization, which could be mirrored by the offset side of the operation, given enough volume.
Lastly, xpedx was able to estimate that 1.2 to 1.8 million pages per year were produced at a cost of $0.035 per page for general office print and copy. This compares with B&W digital copy and print within the in-plant at $0.0154.
Key Improvement
Offset and digital work was redirected from being outsourced to internal production which resulted in a significant volume increase of work produced within the in-plant as well as a corresponding savings.
Additionally, a portion of pages produced on office copiers and printers were directed to the in-plant providing a 56% reduction in cost for those pages.