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New Technologies Can Restore Profits to the Beleaguered Printing Industry Vendors of digital printing equipment, including direct imaging technologies (DI, or on press imaging), have done a good job marketing these new technologies. However, they may have overlooked some of the most important reasons that these systems can offer economic advantages to printers that implement them. While marketing comparisons may focus on the differences between direct imaging and computer-to-plate technologies, or even film versus DI, they might actually be more effective if they examine the larger workflow and staffing impact, and the efficiencies that can be gained in those areas, by adopting digital technologies. Just as important is end-to-end integration, common databases, and process automation. Integration of information systems, customer-facing solutions, and manufacturing processes will most likely lead to optimal profitability improvements in print service provider operations. There are two reasons for this. First of all, these technologies support the efficiency gains achieved by adoption of DI and other digital technologies. In addition, many costs can be recovered by streamlining labor-intensive processes via utilization of information technologies. Industry Trends Drive the Need for New Technologies The industry is under pressure from today’s print customers as well as alternative media markets. The key issues facing printers can be boiled down to just three factors:
Total Cost of Doing Business To solve these issues, we need to look at the total cost of doing business. Customer service, sales, and estimating are things that are going to remain part of the printing company’s overhead for the foreseeable future. Customers will continue to bring jobs that are hard to produce. How we translate “customer intent” into manufactured products will remain an industry-wide problem. To remain viable as businesses, however, printing companies need to become super efficient. They need to produce more complex work in less time, with shorter runs and a lower cost. One of the best ways to begin addressing this problem is by looking at legacy equipment, and making some hard decisions about whether or not that equipment remains economically viable. The two most important components driving that decision should be the labor hours associated with the device and whether or not they can be reduced, and additionally, the number of costs that need to be managed around the device. The lower the headcount, and the fewer touch points and costs that need to be managed, the higher the likelihood of achieving greater profitability. Stretching the life of legacy equipment is attractive to most companies, because on the surface it appears that this equipment drives margins. Because a 20 year old, fully depreciated printing press has been paid for, it may appear that a substantial component of the cost of doing business has been removed. Nevertheless, it is very likely that such a device is in fact costing money. The real costs of legacy equipment involve maintenance, lack of automation (mechanical as well as from the perspective of computer integrated manufacturing and/or supply chain integration), and the inability of the equipment to efficiently produce work in today’s demanding environment. For example, if you have to run twice as many jobs to stay at the same revenue run rate, or if it takes 15 minutes instead of 5 to switch from one job to another, many hours of time may be gained over the course of even one week of three production shifts. On the other hand, if you only need two people to run a new press versus four, you have saved considerable labor expense. Similarly, if an old press requires regular maintenance and a new one requires only an occasional service call from the vendor, that can be an enormous increase in efficiency. New technologies are emerging that have the potential to change the economics of printing as we understand it today. For example, MAN Roland’s new DICOWeb press is a web press that is intended to actually displace sheetfed presses. It does this by employing a Creo on-press imaging setup with new, patented reusable (i.e. erasable) imaging sleeves on direct drive cylinders. The amount of labor expense that can be saved by eliminating the need to mount and remove plates is enormous. That efficiency is coupled with the fact that the press uses the latest automation technologies and is also designed to support fully integrated folding and other finishing operations. This means that jobs come off the end of the press ready to ship, and you have a web press that can produce shorter run jobs with better economics than traditional offset sheetfed presses, especially if they are driven by traditional film or even CTP prepress technologies. Other systems like the Ryobi 3404DI, the DocuColor 233, and the Heidelberg Quickmaster DI address lower-end segments of the market. Nevertheless, these systems are similarly driven by paradigm-shifting technologies (in these examples, powered by imaging technologies from Presstek) that are continuing to shake up the status quo and recover profit margins for the printers who implement them. Finally, fully digital solutions address different market opportunities such as variable data and one-to-one applications and low run lengths that can be printed on demand, often with one operator running multiple machines.
We have not discussed the cost of consumables like ink, blankets, paper, plates, or other new materials involved with these technologies (you can count on new materials to be relatively cost-competitive compared to older processes). Streamlined purchasing and use of these consumables can greatly impact the cost picture. Finally, while actual manufacturing operations and technologies are extremely important components of the cost and profit equations of a printing company, one must also consider essential cost components like general and administrative tasks, sales, order processing and negotiating contracts, and estimating. Summary Contrary to popular sentiment, this is a very exciting time in our industry. New technologies are not the answer to all of the industry’s problems, but with due diligence, they can greatly and positively impact the profitability of printers. While this is a different approach for many organizations, the transition from traditional craft processes to a more collaborative, automated, and efficient end-to-end manufacturing process using new and automated equipment is the only strategy for long-term, sustainable profitability for printers.
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