IPMA Report: How to Audit Your In-plant
Howie Fenton speaking at IPMA 2024.
The recent In-plant Printing and Mailing Association conference in Des Moines, Iowa, was chock full of valuable sessions for in-plants. One of the most relevant was a keynote presentation by consultant Howie Fenton on “How to Audit Your In-plant” in which he revealed some of his methods for assessing and improving in-plant operations.
Fenton started by showing a “report card” he produces during audits rating in-plants on benchmarks such as world class, average, or laggards for metrics like revenue generation, competitive pricing, page growth, turnaround time, cross training, and others. He noted that measuring sales per employee is his No. 1 benchmark of staffing and productivity. He uses $128,780 to indicate average sales per employee, $98,145 to show below average, and $179,582 to denote leaders in this metric.
Fenton cautioned that for in-plants, calculating payroll as a percentage of revenue is not a good metric because in-plants tend to offer rich benefits packages, skewing the comparison with commercial printers.
Measuring volume and growth is very important, he said. Steady volume earns an in-plant an average rating in his reports, while those with increasing volume earn an above average rating.
“The problem with volume going down is you get to a point where you’re no longer breaking even financially,” he said. When the cost to manufacture exceeds the amount invoiced, he said, in-plants should consider outsourcing that product rather than creating an overall loss for the in-plant.
Howie Fenton speaking at IPMA 2024.
He noted that bottlenecks are the No. 1 issue impacting productivity.
“Bottlenecks determine the overall throughput of the entire plant,” he said. “You want to find your bottlenecks.” Fix them and productivity will rise.
Fenton also pointed out that measuring volume is only valid if your in-plant’s rework numbers are low. He said if 10% of your volume is rework, that is considered average, while 5% is world class (and 15% is laggard territory).
The important thing, though, is to start measuring, he said.
“Just the act of measuring increases productivity,” Fenton declared. One in-plant he worked with posted its measurements in the shop, which motivated employees to improve their productivity. On the other hand, he added, never use measurements as punishment, or staff will sabotage the efforts or hide their mistakes.
To be effective, Fenton said, data collection must be automated and accessible for reporting, and most importantly it must also be actionable or it is useless.
Fenton concluded by reminding in-plants to pay attention to the “voice of the customer,” particularly any criticisms of price, turnaround time, and billing procedures.
“Deal with them before you are forced to deal with them,” he said.
