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Addressing the issues

Sep 20, 2006 12:00 AM

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Direct mail has been booming and will continue to do so for the rest of the decade. In fact, direct mail expenditures are projected to increase to 29 percent by 2010, according to a recent study by the Print Industries Market Information and Research Organization (PRIMIR). Advertising mail is expected to grow 3.1 percent in 2007 and 2.4 percent per year from 2007 to 2010. And those figures do not include catalogs.

The bottom line, says the PRIMIR study, is that real annual growth of direct mail expenditures should be in the range of 5.6 percent in 2006 and about 4 percent from 2007 to 2010. Being a supplier to the direct mail industry is a good place to be right now. But you must understand the need to serve customers that expect flexibility, versioning, fast turnarounds and the ability to do all that at a competitive cost.

As direct mail continues to grow it will become more complicated. Advertisers will want to work with proven suppliers who can meet their production and cost specifications. At no time has efficiency and flexibility been more important to printers and mailers. As a result, it is imperative that all aspects of the production and mailing process be evaluated—addressing and personalization included. Profiting from the mail

Inkjet printers have become so common in print and mail businesses that they often are overlooked as a place to increase efficiencies. Unfortunately, some of these systems contain hidden costs that have a significant impact on operations and profitability. So let’s take a closer look at the different types of inkjet printers with an eye on total cost of production (TCOP).

Inkjet printing is one of the quickest and most economical ways of addressing and adding basic graphics to large volumes of mail. It works on multiple substrates and virtually any-sized document. It is reasonably reliable, more versatile than laser printing and tailor-made for the various needs of different-sized mailing operations.

The question remains, which type of inkjet system is the fastest and most reliable with the lowest operating cost? With more than a dozen manufacturers currently offering a wide selection of inkjet addressing machines, the decision is not always obvious.

Technology choices
Three types of inkjet systems dominate the market: continuous inkjet and two types of drop-on-demand—thermal (cartridge-based) and piezoelectric.

Continuous inkjet systems utilize stationary printheads and ink supply systems that pump ink under pressure through tiny apertures continuously. Droplets of ink that aren’t needed to form an image are electrically charged and recirculated, while uncharged droplets fall onto the paper substrate. Continuous inkjet systems are highly robust and capable of achieving speeds of up to 1,000 feet per minute with minimal operator maintenance. Using water-based inks, they are also not as susceptible to clogging issues that cause downtime on other systems. Continuous inkjet systems are well suited for economically producing over 500,000 images per month and are flexible enough to be integrated onto a wide range of mailing or bindery equipment - even on web offset presses.

Thermal cartridge systems rely on disposable cartridges with the same type of integrated print heads used in desktop inkjet printers. The small heads—which print an area only half an inch wide—can be “ganged” together to print wider areas. These cartridge-based machines can economically print volumes up to 500,000 images per month and are moderately priced. The down side is that they tend to carry a high cost for consumables.

Piezo drop-on-demand systems use one or more industrial-strength print heads fed from a single large reservoir. They are designed for thousands of hours of use. Their initial cost is higher than cartridge-based units, but lower-cost consumables and greater reliability make them less expensive to own over time. In addition, faster print speeds and less operator intervention increase productivity, further offsetting the higher acquisition cost.

The key differences between piezo and cartridge-based are operating costs, total cost of ownership, speed and throughput, with Continuous Inkjet being used for higher volume applications. These characteristics influence labor costs and operational efficiency.

Operational issues
All types of inkjet devices can experience clogging or misfiring print heads. These print errors must be corrected immediately, especially if barcodes are not printing properly. Barcodes directly influence how a mail piece is handled by the U.S. Postal Service (USPS), especially when going through the USPS’ Mailing Evaluation Readability Lookup Instrument (MERLIN).

MERLIN inspects individual pieces of bulk mailings, checking a list of standards that includes barcode accuracy, straightness and readability. If the piece does not meet the standards, not only is the print house fined, it also has to cover any reprinting costs. This could have a direct impact on its bottom line.

“With the implementation of MERLIN, barcode imaging quality has become a paramount issue,” says Brian Schott, president of AdMail Express Inc. in the San Francisco Bay area. “The quality and readability of the image has to be absolute.”

Engineers refer to print errors as “incidents.” The typical Mean Time Between Incident (MTBI) on cartridge-based machines is about 30 minutes. Correcting an error requires stopping the machine, cleaning print heads or changing a clogged or failing cartridge, and restarting the print queue. These steps might take only a few minutes, but done twice each hour, they can amount to as much as 50 minutes of downtime over an eight-hour shift. That leads to significant losses in total productivity.

By comparison, industrial-strength print heads on piezo inkjet printers have an MTBI of 90 to 2,450 minutes. Cleaning the head usually is just a matter of wiping it with a lint-free cloth. In addition, piezo devices can run a broader range of paper stocks at higher speeds than cartridge-based devices because the ink dries faster, even on glossy, coated surfaces. Continuous inkjet systems, being designed for higher volumes and faster speeds, typically experience even longer MTBI intervals.

Ink costs
The high cost of inkjet cartridges can add up quickly. On a typical three-line, address-plus-barcode application at 300 dpi, cartridge-based consumables can cost about $2.16 per thousand addresses, compared to 20 to 35 cents per thousand for piezo drop-on-demand systems.

Piezo drop-on-demand systems use a single ink reservoir that feeds one or more print heads. The entire system is designed to work together and deliver the reliability needed in a busy operation.

As shown in the chart to the right, the differences in ink costs for cartridge-based systems are more than seven times higher than the cost for running the same two million mail pieces on one Kodak DS4000 series printer—even with deep discounts on ink. The difference results because ink for the DS4000 series costs just 20 cents per thousand addresses at 300 dpi, compared to $1.50 per thousand for ink cartridges.

In the real world
Mailing Pros, Inc., located in Huntington Beach, CA, produces 900,000 to one million pieces of direct mail a month-a figure owner Chris West hopes to increase to 2.5 million pieces per month with the purchase of the Kodak DS4000 series printing system. West relied on a cartridge-based system in the past but ran into issues with throughput, MERLIN compliance, cost of operation and printing on coated stocks. “Everybody knows Kodak Versamark is the Cadillac of inkjet printing systems,” says West. “So I was surprised to learn that the DS4000 series was so affordable.”

System price was only one factor that made the DS4000 series attractive to West. “Not only am I printing perfect barcodes and text with blacker ink and no jagged edges, but I’ve increased my throughput by at least 50 percent.”

West also has noticed a considerable decrease in his cost of production with the DS4000 series. “I expect my cost of operation to decrease by 65 to 75 percent. We’ve been printing from the same ink container for two weeks. With my other system, I would have already gone through a slew of cartridges.”

West also reports his operators are experiencing a significant decrease in downtime. The cartridge-based system required cleaning approximately every 30 minutes. West’s operators now run the DS4000 series three to four hours before a cleaning cycle is required. “Where runnability and downtime are concerned, there is just no comparison between the DS4000 series and my old cartridge-based system.”

Continuous inkjet
Of course, not everyone requires the same type of equipment. Instead of a standalone unit, some printers and mailers prefer to address inline on mailing or printing equipment, thus creating a digital printing system.

Companies that offer printing have to continually look for a competitive advantage to differentiate themselves in the marketplace. Of course, keeping the price economical always is a factor.

“For every piece of paper I print, I make money,” says Troy Fischer, owner of On Target, a Denver-based print shop. “Kodak offers an extremely fast printing system. There is no comparison between the speeds of the DS5120 and cartridge-based systems. The DS5120 is much faster.

“If I were doing a million images on a cartridge-based system, I could get a maximum speed of 15,000 pieces per hour, regardless of the material,” Fischer adds. “With the DS5120, I can get up to 60,000 pieces per hour, depending on the material.”

After doing the math, Fischer also realized he could achieve a higher production rate at a lower cost per piece. He estimated that running images on a DS5120 would deliver a 10:1 cost advantage over cartridge-based systems. “The overall cost of operations is a big advantage with the D-series. When you have a very large job or are looking at your costs over a quarter or year, the DS5120 is significantly less expensive to operate.”

Quality stands out
AdMail Express Inc. (Hayward, CA) is a full-service printing, data processing and letter-shop operation founded 30 years ago. Facing stiff competition and a growing customer demand for letter-quality imaging, owner Brian Schott wants to provide the best possible image. He uses both the Kodak Versamark DS5240 and DS5120 printing systems on his equipment.

“The driving force behind our decision to go with systems from Kodak was the quality of the image they provide,” says Schott. “Customers are demanding better images and Kodak systems have the best overall image quality, providing letter-quality, crisp character definition from start to finish.

“We try to operate at a speed of 12,000 to 15,000 completed pieces per hour. With most other equipment at that speed, the image basically falls apart. It stretches out and becomes distorted,” continues Schott. “This limits the number of completed pieces you can push out in a day, which has a major impact on the bottom line.

“The great thing about our Kodak printing systems is that they can provide the image quality required to be able to run at maximum speeds,” Schott says. “They have the ability to produce a consistent image at a high throughput rate, allowing us to run more high-quality jobs in a day.”

The big picture
In the competitive environment of the printing industry, business owners must look at the big picture. Part of that picture is understanding how a change in their inkjet printing system can have a major impact on their bottom line, capabilities in the marketplace and growth in the future.

At first glance, it’s easy to be wooed by the low cost of entry for cartridge-based systems. But savvy printers and mailers should look at the total cost of ownership. It’s not just the initial cost—it’s the ongoing investment that needs to be factored into a buying decision. Look at the cost of production. How reliable is the system you plan to purchase? How much downtime will be required for maintenance? Can you afford the time to do daily maintenance?

Look at the quality of the image. Will your barcodes be accepted by MERLIN? Will your customers be satisfied with less-than-letter-quality products?

Look at the production efficiencies. How fast can the inkjet printing system operate and still maintain high quality? Look at the cost of ink. Are cartridge-based systems your most cost-effective, even with generous discounts? How much downtime will you incur changing ink cartridges? Have you calculated the cost of ink per thousand addresses imaged?

Look at the competitive environment. Will you be able to meet your customers’ demands at an affordable cost? Is your inkjet printing machine versatile and flexible? Do you have the equipment to support growth plans into the future?

Look at the big picture. Consider continuous inkjet, thermal (cartridge-based) drop-on-demand and piezo drop-on-demand. Determine your best configuration and make the choice that will open the window to new opportunities and new profits.

For more information about Kodak inkjet printing solutions for addressing and mailing, visit or call (888) 563-2533 (reference code 4462).