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Jul 1, 2002 12:00 AM
The U.S. printing industry is composed of 46,000 establishments producing approximately $160 billion in annual shipments, making it the third-largest American manufacturing industry, according to Printing Industries of America (PIA) (Alexandria, VA). But big isn’t always better. Since the early 1990s, print sales have grown at a slower pace than throughout the 1980s. Print is a mature medium with revenues growing slower than GDP most years. And, although there are $4 billion to $7 billion new print sales each year, the industry is beset by challenges as it transitions from a growth industry to a mature industry.
Compounding the problem is the fact that the printing industry is shrinking. The number of U.S. printing plants peaked in 1993 at more than 54,000, according to PIA. Since that time, the number of plants has declined to around 47,000, reflecting mergers and acquisitions, closures and a decline in start-ups.
This decline has been most significant in smaller printing plants. The number of plants with fewer than 20 employees has decreased by more than 11,000 sites between 1993 and 2001. Some have been involved in industry consolidation; others have simply grown larger. But 1,700 printers have simply closed their doors. And the trend will continue. PIA predicts that 1,000 shops will close each year over the coming 10 years.
Now, more than ever, printers are looking for ways to ensure their survival and prosperity. They realize that adding new services is a viable choice. And, printers would like these services to differentiate their companies in a very competitive marketplace as well as improve internal productivity. For example, during the next two years, printers expect fast growth of services such as digital and four-color printing, fulfillment, mailing and database management, according to a National Assn. of Printing Leadership (NAPL) (Paramus, NJ) Business Panel Survey.
As printers look for ways to better serve customers while keeping their internal costs under control, other market issues are impacting their businesses. Today, almost one-third of all print consists of short runs, according to Frank Romano, industry guru and head of the School of Printing at Rochester Institute of Technology (Rochester, NY). He expects that number to grow to one-half by 2020. The trend to short runs is identifiable and will have an impact on every printing operation.
But don’t be deceived—short runs aren’t just simple black-and-white business cards. According to Romano, two-thirds of all short runs consist of complex work. And eight percent of short runs are delivered within 24 hours. PIA even projects that 30 percent of all printing will be delivered within a day by 2020.
How can printers adapt? What operational changes are needed in order to remain competitive in an industry that expects short runs ranging from one to 2,000, delivered in 24 hours? How can printers protect their core business while diversifying into new products and services? One answer is direct imaging (DI).
The value of DI is proven
DI is a growing phenomenon in the printing industry. Consider, for example, the increasing number of press models (14 at last count) using on-press imaging. Then look at the more than 2,100 worldwide installations, of which more than 95 percent are enabled by Presstek imaging and media technology. Why has it caught on? Because the system offers solid customer value. DI systems, which encompass imaging technology, press design, media and workflow, are credited with offering faster production and lower costs. Speed of operation means less time spent waiting for output and more time producing profitable work. The benefit of lower cost comes from eliminating steps in the print production process. These include processing, the speed at which operations are completed (such as makeready) and reduced labor costs.
The value of DI is in higher productivity and profitability for the end user. There also are other advantages. Shorter makereadies result in more jobs per day than conventional presses. Elimination of plate processing means fewer chemicals, which not only helps the environment but saves money.
In customer interviews, CAP Ventures found that printers survive and even prosper by serving such markets as print-on-demand. DI presses are an excellent way to grow new, more profitable businesses while continuing to serve the current needs of clients.
In 2001, CAP Ventures confirmed the results of a previous study conducted in 1999—customers who use the Heidelberg Quickmaster 46-4 DI press were considerably more successful than the industry average. The Quickmaster DI customers surveyed in the U.S. reported an average gross profit of 45 percent. This puts them 15 percent above the profit leaders in the industry and no less than 19 percent ahead of the industry average calculated by PIA.
Although the economic climate today represents a far greater challenge than it did three years ago, the yield advantage of the Quickmaster DI has risen a further 3.6 percent since 1999, while the industry average has stagnated over the same period. Although DI presses in the field comfortably handle jobs from 500 to 20,000, the CAP Ventures study points out that DI “profitably prints a 4/4 job of 450 to 600 sheets.” DI presses are therefore ideal for the growing short-run color market. “With the DI press, we can print jobs literally at the last minute,” comments Billet Graphics, Inc. (Vienna, VA) “And our clients are pretty impressed by our fast turnaround, excellent quality and unbeatable price.”
Another satisified DI user, PrintingFor Less.com (Livington, MT), is cycling 12 jobs per shift using a DI press.
A short-run printer must get its presses up and running quickly. Profit hinges on producing saleable products. With a DI press, makeready is highly efficient and automated, all to protect that profit margin. At 2540 dpi and 200-line screen, a typical makeready on a Ryobi 3404DI will take as little as 10 minutes.
Conventional presses offer only limited potential for improved makeready times. The DI press, on the other hand, has been designed to drive down makeready time and costs. DI printing integrates the press directly into the digital prepress workflow. A DI press holds PEARLdry plate media on a spool with 28 to 36 plates in the plate cylinders at every unit. At the start of a job, plate material is automatically drawn from the supply roll on to each printing unit.
Digital page data are then received from the prepress network. The media are imaged in minutes using laser diodes. Energy from the diodes removes tiny areas of the image-forming layer from the plate media, exposing a like area of the ink-receptive base layer.
Imaging of all plates is done simultaneously on press, resulting in excellent register, without the need for human intervention or adjustment. Inking and other major systems are prepared in response to digital control signals, and printing begins. Automated DI presses require no separate platemaking step. Because of their on-press imaging, no chemicals, processors or ovens are required before printing.
Most DI presses are waterless so color is reached quickly and remains consistent throughout the run. Waterless designs feature fast roll-up, low waste and are quick to print because of accurate registration.
The overall productivity of DI is very high. It is not unusual to get six to eight jobs on and off the press in one shift. Typically it takes only 10 minutes to set up a job, and some users report makereadies averaging seven minutes. This adds to the printers’ arsenal of services the ability to provide fast-turnaround and strengthen business relationships with customers.
And quality counts with DI. First-generation dots produce sharp, consistent, high-quality prints. With a DI press, users can achieve 2540-dpi resolutions; with most toner devices, available resolution is only 600 dpi. Printing off a DI press is accurate and repeatable—eliminating concerns over re-runs or long-run jobs printed in smaller batches over a period of time.
“DI is a printing press,” observes Lou Weady, owner of Royal Printing (Guilford, CT). “That means it can handle the 1,000, 5,000 and 10,000 color runs our customers are asking for—run lengths that are beyond the capacity of a color laser printer. I just can’t maintain good color consistency on a laser printer over that long of a run.”
Productivity has improved at Royal because of the automated features on the DI. The DI operator is pleased with the system’s ability to preset ink keys to match the customer’s expectations. All he or she has to do is stand behind the console and make adjustments. In addition, since the press is waterless, there are no problems with achieving ink/water balance, no misting and cleanup is easy. “We’ve run several types of stock from 60-lb. to 12-pt., along with vinyl, crack-and-peel and envelopes with no problems,” reports Mark Anthony, Royal’s press operator.
And, Royal’s DI press will pay for itself in less than two years. “DI gave us another profit center and increased sales $300,000 in a very short time. With our DI press, we can offer four-color work at affordable prices, which will help us to grow our sales to more than $3 million in 2002,” says Weady.
Finding the market
The Graphic Arts Technical Foundation (GATF) (Sewickley, PA) estimates that conventional offset’s share of the U.S. market will decline from the 65 percent it enjoyed in 1997 to 49 percent in 2006. Over that same period, the market for digital printing, including DI, is expected to rise from 20 percent to 35 percent. DI-enabled presses do well in the 500- to 20,000-impression market. In this niche, their true offset quality, color accuracy, substrate versatility and economy make DI systems highly profitable choices. Heidelberg claims that its Quickmaster DI’s core market is 200 to 5,000 four-color sheets, but points out that the system is competitive from quantities as low as 100 up to 20,000.
Of course there are other digital engines on the market. While it is true that toner-based machines are capable of handling one-off work, the savvy printer will consider a variety of issues when deciding on toner-based devices vs. DI presses. Of most concern for those considering toner-based, variable-data printing is the state of the market. Although variable printing offers marketers personalized communication vehicles, TrendWatch Graphic Arts (New York City) reports at least 98 percent of the digital printers worldwide are not prepared to deliver complex variable-data applications. “There are more than 50,000 digital presses worldwide capable of printing variable data,” notes Vince Naselli, director of TrendWatch. “Yet, recent estimates place the total number of variable-data applications at only 500 to 1,000 (one percent to two percent).
Before entering the variable-data marketplace, printers must consider who they will sell to and what applications will make printers and their clients profits. Issues such as database manipulation, internal customer dynamics and availability of customer databases tend to cloud the picture when it comes to variable-data printing.
Many marketers (who will be your customers) believe that one-to-one is better suited for e-mail distribution where the per-page cost is nothing. And, one-to-one campaigns need to be done correctly. Good databases are difficult to come by and a higher response rate is not a given. Putting together a successful one-to-one campaign takes market analysis and database manipulation expertise that most commercial printers don’t have today. Their core competency is putting ink on paper. Efficient short-run campaigns run on DI presses also can bring higher returns with a low cost per page. Automating the printing process eliminates human errors and process variables. For example, the Ryobi 3404DI (and its carbon copies the KBA 46 Karat and Xerox DocuColor 233 DI) is a highly automated and simple-to-operate digital press.
An area of potential value to printers is the combination of two technologies—the variable-data application and on-press imaging. A prime example of this is books. The high-quality four-color cover can be printed on a DI press and the text on a toner-based device. Sell sheets also lend themselves to hybrid applications with high-quality four-color shells printed on a DI and the black variable data added with a toner-based machine. The result of this combination is the lower cost, higher image quality, longer-run capability and output color/substrate flexibility (and versioning) of offset printing with the impact of personalization from digital printers, whether inkjet or toner-based. This “marriage of commercial need” is a way to get the acceptance of the “killer” application while meeting the expectation of the prospective customer for output quality.
Evaluating the total cost
When printers move toward purchasing a “digital” press, they often consider a variety of attributes, such as costs involved, speed, quality, volume capability and reliability. The issue, however, is not whether on-press plates cost more or less than conventional plates, but whether the total cost of the printed sheet that results from this process is less costly (and more profitable) than conventional and toner-based technologies. Remember, it’s the value that counts.
Profits are made by producing more jobs at a lower total cost. And lower labor costs and time savings are the keys to understanding how to make money with any technology. Plates are just a small part of the total cost of printing short runs. Before purchasing anything, printers need to compare and contrast the monthly costs for their total operation. Take into consideration the cost of the machine, but don’t stop there. What about service? In one comparison of monthly costs to produce 50,000 4/4, 8.5 x 11-inch sheets, service costs for a DI press were $1,000 to $2,500, in contrast to service for a toner-based machine, which ranged from $6,000 to $10,700, based on the model used.
Next consider toner costs vs. ink costs. For 50,000 4/4, 8.5 x 11-inch sheets, toner can range from $3,925 to $4,630, depending on the machine. Contrast that to DI presses that use ink. Ink is inexpensive and costs only $475 to print those same 50,000 copies.
Using these figures, plus the costs of plates for the DI press, cost per page ranges from $.17 for a DI press to $.19 for a digital color production system on runs of 300. When the run length increases by 1,000, however, the cost per page for the DI press drops to $.12 but remains at $.19 for the digital toner-based devices.
Perhaps of more importance is the percent of utilization. For toner-based machines rated at 100,000 impressions per month, a printer’s growth will be limited.
A real life example
Let’s look at an actual prospective buyer considering a Ryobi 3404DI and two toner-based digital output devices. The potential buyer wanted to know how much work he would have to produce to break even on a Ryobi 3404DI.
First the customer computed the profit generated if he did between one and eight jobs per day. The adjacent table shows the cost and profit/loss for doing one job per day on three digital presses. The daily lease and service costs are nonvariable and are spread over the number of jobs per day. As you can see, based on the selling price the printer believes is realistic for these jobs, only the Ryobi showed a positive gross margin for both runs of 350 and 500.
One job per day pays for the Ryobi 3404DI press and the profit ratios for all three presses are actually quite close. The DI has a quality advantage; toner-based devices have a convenience advantage.
However, if the run length is increased, the picture changes. When running 500 copies of an 11 x 17, 4/4 newsletter, the DI becomes more profitable (see chart). Both of the toner-based machines stop at three jobs per day. That’s because three jobs per day x 21 days per month x 2,000 letter-size toner impressions totals 126,000 “clicks.” The duty cycle of the two toner-based devices is 100,000 per month. In order to handle more than three jobs a day, more toner-based machines would have to be purchased.
Keep in mind that the 4/4 11 x 17-inch newsletter would take 20 minutes to image (front and back) and 10 minutes of presstime on the DI press. Eight jobs could comfortably be done on the DI at this rate in an eight-hour shift. That’s 24 jobs in a three-shift operation. To produce the same number of jobs would require nine toner-based devices, according to these calculations.
DI, as has been shown, is a proven print and imaging system poised to enter its strongest growth phase. Its proven speed, low cost per page and high-quality provide value to end users through access to new technology, and it improves productivity and business-expansion opportunities. The bottom line is more profit for the printer. So when making your buying decisions, use your common sense to put more dollars into your profit margins.
What is DI?
Direct imaging (DI) is the process of sending a digital file directly to a digital press. This process eliminates the production steps normally associated with film-based platemaking. DI presses allow printers to be more competitive in a market that continually demands faster turnaround time and shorter press runs, at lower costs—without sacrificing quality.
DI is an enabling process brought about by the interaction of three technologies—laser imaging, thermal digital media and unique press design.
DI-enabled digital presses provide a high degree of speed, quality and automation, bringing offset quality to the on-demand market with the push of a button. DI presses provide outstanding image quality because of Presstek’s ProFire imaging system. The speed at which jobs are prepared is a result of Presstek’s laser imaging, thermal digital media and press-design technology working in unison to provide a totally integrated solution.
DI printer finds new markets
Morgan Press in Manchester, NH, saw the writing on the wall. The world was becoming more colorful, and Morgan Press had to be one with the world. Using three two-color offset presses, Morgan had carved out a comfortable niche doing both spot and process color work, but saw a new opportunity in upgrading its four-color capabilities.
“The color jobs were getting more complicated,” explains Gary Morgan, president. “We needed to upgrade our equipment to handle the complexities that the new page-layout programs help designers create. So we looked at all types of four-color presses, and finally settled on a Heidelberg Quickmaster DI.” Choosing a direct imaging press was the logical choice for Morgan Press. The company had become a completely digital shop in 1995. “We were outputting one-piece film and had the front end working well,” says Morgan. “It was no trouble to install a DI press, and that saved us time by eliminating film and chemistry.”
With the addition of a DI press, Morgan greatly increased the amount of four-color work it handled. “Before the DI press, only 10 percent of our work was four-color,” comments Morgan. “Within two years, 65 percent was four-color. Today we’re doing even more.”
In March of 2002, Morgan Press added another DI press, this time a Ryobi 3404DI. “When we bought the Ryobi, we got rid of an older two-color press,” says Morgan. Another segment of work that Morgan is now producing more profitably is three- and four-color Pantone Matching System work. “We do that on the Ryobi because of its excellent registration. The name of the game is to get the work through the shop with the least amount of frustration and with the best quality. Our DI presses allow us to do that.”
Features that Morgan especially likes on the Ryobi DI press include “flawless” plate cleaning, automated roller washup, the pre-inking feature and fast imaging that is outstanding at reproducing the highlight dots.
Aside from building its four-color work, the big benefits of DI to Morgan Press include the elimination of film and chemistry. The pressroom is much cleaner now. One customer who was very environmentally conscious was thrilled to learn that Morgan Press had eliminated film and chemistries by using the waterless DI press.
Productivity, too, has improved with the addition of DI presses. “We run the Ryobi 40 hours a week, and it’s a workhorse. We just finished one job that was 74,000 impressions. But sometimes we do five or six jobs a day,” explains Morgan.
With its two DI presses, Morgan Press is well equipped to dominate the colorful market that its customers live in. “The DI technology allows us to remain a strong player in our market despite increasing price competition,” concludes Morgan.
Oklahoma printer serves national clients with DI
Odyssey Digital Printing is a digital printer and has been that way since its inception six years ago. Still, president John Roberds views his company in a more traditional way. “We are a commercial printer,” he states. “Our largest customers are retailers, convenience store chains, restaurant chains and a food-service distributor.” In fact, Odyssey Digital serves customers across the country and ships its finished products to international markets. That’s pretty impressive for a young company based in Tulsa, OK.
Roberds started the company with his partner Jan Fairless because “there was a lot of competition in traditional offset markets and no competition locally for digital print.” Starting with just one Xeikon machine, the company has expanded and now operates two Heidelberg Quickmaster (QM) DIs, two Xeikons and four large-format devices. “We found that we can exploit our digital capabilities by using the same knowledge set and applying it to a variety of output devices,” explains Roberds.
The DI presses are a good fit with the Xeikon. In the beginning, Roberds found that the Xeikon was cost-competitive up to 500 11 x 17-inch work. “But we had customers who had runs of up to 4,000 pieces. Rather than turn them away, we bought a DI press. That allows us to use our basic skill sets yet be competitive in longer runs,” explains the printing executive.
From job-to-job, quantity is the basic determination when deciding where to print a job. However, Odyssey has found opportunities to capitalize on both technologies. For example, the printer produces booklets for Home Depot that are run on the DI but proofed on the Xeikon. In fact, there are between 60 and 65 booklets, each anywhere from 16 to 60 pages that must be turned around in two weeks. “The QM-DI is perfect for the job,” says Roberds.
One copy of each of the 60 to 65 booklets is proofed on the Xeikon. After approval, the run is printed on the QM-DIs. For Home Depot, Odyssey runs 400 makereadies in order to do all the booklets. If all goes well, the operators can do 18 to 20 set-ups per 12-hour shift. And that’s important to Roberds. “We like to keep the presses running,” he says. Runs vary from 500 to 2,500 for each booklet.
The Odyssey DI operation is setup to handle these types of volumes every day. “We run two offline RIPs to prepare jobs,” explains Roberds. The operators get a list of jobs to run when the shift starts, and the work is setup and ready to run. That’s how we can produce so many jobs in one shift—we image (plates), print and washup, then start all over again.”
With such efficient internal operations and a definable market (“we do nothing but four-color,” says Roberds) Odyssey Digital has enjoyed success over the past six years. The firm recently moved into a new 29,000 sq. ft. building and runs two crews 12 hours a day, six days a week, plus Sundays and evenings when needed. In spite of the impact of the economy and 9/11, Odyssey continues to grow its business, always looking for new ways to build on its existing skills. And machines such as the workhorse DI presses are enabling the printer to serve its client base across the country.
Printer launches DI-based business
“We officially opened our doors for business on January 1, 2002,” reveals Ben Rossi, vice president of operations for Zooom Printing (Richmond, VA). “Our Ryobi 3404DI press had been installed the previous November. The first sales were in January 2002, and we are right on target for our six-month projections.”
For Ben and JoAnn Rossi, the past six months have been exciting. Starting a printing company in a competitive market and in a tight economy can be daunting, but the couple is showing its gumption by following a solid business plan.
Ben had worked in the printing industry previously, for both a quick-print operation and a midsize commercial printer. From this experience he realized there was a “real niche for short-run, full-color work.” From there, the entrepreneurial Rossis launched Zooom Printing.
The Ryobi 3404DI is the start-up company’s only press. “The 3404DI allows us to print high-quality images very quickly and very economically. As a new business, we like the flexibililty of being able to run four-color jobs as well as one and two colors and varnishes,” says Ben.
“We’ve done one-color, two-color and three-color Pantone Matching System colors plus a varnish,” explains Ben. “We also do five-color jobs on the Ryobi, along with four-color plus varnish work. Registration through the press on the second pass is top-notch.”
“Being a small company, we don’t want to take on too much—that’s why we are so focused,” explains JoAnn, who serves as president of Zooom. “We need to do quality work at a good price. And we want customers to be happy with our quality. That’s why the Ryobi DI press is such a help to us.” The waterless features of the DI press also were attractive to JoAnn and Ben. “The waterless aspects have helped in marketing and selling our services,” says JoAnn. “Several customers have come to us because we offer waterless printing, which is environmentally friendly. Then, too, the color gamut of the waterless press is a little wider than what you can achieve on a traditional sheetfed.”
“Our business model would not be possible without DI technology,” claims Ben. “Because of features such as the feedboard, push guide registration system and the underswing gripper we get accurate sheet-to-sheet and front-to-back registration. That means when we do a job, the first sheet will match the last and the front will line up with the back. That keeps our customers satisfied. And as a new company, that’s the best way to build business.”