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Jul 1, 1996 12:00 AM
Ever wonder what other printers worry about? Well, you need not wonder any longer. A new twice-yearly monitor of trends and changes in the industry asks printers, trade shops and service bureaus what major business challenges they face. SFM Trendwatch is based on research conducted by Dr. Joseph W. Webb, president of Strategies for Management (Harrisville, RI), and in this issue we are pleased to present the results of the first survey.
The top two biggest challenges reported by all types of graphic arts companies are increasing plant productivity (31 percent) and keeping up with technological change (29 percent). In third place, at 26 percent, is understanding where the business should go in the future.
Among commercial printers, increasing plant productivity was the number one response at 38 percent, as contrasted with service bureaus and trade typographers who were more concerned with understanding where their businesses would go in the future.
Not surprisingly, 30 percent of service bureaus chose keeping up with technological changes as their biggest challenge. However, this category was the only one that listed "finding qualified employees" as its second leading problem.
It is interesting to note that there are industry experts who have forecast the demise of service bureaus, even though the demographics clearly show growth trends. "Service bureaus exist because there is continued confusion, rapid obsolescence and severe financial risk to investors in electronic technologies who may not be able to utilize them productively," explains Webb.
"Most printers invest in as much electronic desktop publishing and prepress capability as they can use productively and profitably," reports Webb, going on to say that printers continue to be consumers of service bureau services. "These small trade firms allow printers to have access to the newest technology without the risk of equipment obsolescence or the required investments in employee salaries and training."
Bearing out this trend is the relationship between types of equipment operated and perceived challenges faced. For example, 59 percent of heatset offset plants identified "keeping up with technological changes as their major challenge in 1995. In contrast, 57 percent of non-heat-set printers cited increasing plant productivity as their major challenge, followed by the need for employee training at 38 percent.
Among plants whose largest press was an offset duplicator, challenges included local competition (33 percent), local economic conditions, understanding where the business should go in the future and increasing plant productivity (all at 29 percent).
What aren't graphics arts execs worrying about? At the bottom of the list of challenges was "competition from electronic black-and-white printing," with "competition from electronic color printing" cited by only three percent of the respondents. It will be interesting to watch these categories for the change in their priority as the effects of new product introductions and the expanding installed base start to impact the industry.
If increasing plant productivity ranks high in the list of printers' challenges, what do commercial printers view as the best new sales opportunities in 1995? Improving economic conditions ranked number one. This answer verifies [TABULAR DATA OMITTED] the nature of highly competitive markets in which most printers operate - often with lackluster profits.
"There is little differentiation between most printers," observes Webb. "Therefore, in order for them to see increases in their sales, overall print demand must increase. This is why concentrating on marketing is so important to break the cycle."
In addition, "adding print capabilities" (26 percent), "broadening print products offered" (25 percent) and "broadening prepress services offered" (23 percent) also are ways that commercial printers will garner new sales. "Short-run color" ranked fifth on the list (21 percent), but respondents indicated these products will be produced using traditional presses. In the initial survey, "short-run color using digital presses" only got a six percent response.
Web printers, in particular, envisioned their 1995 sales opportunities as resulting from adding printing capabilities, with 35 percent of heatset and 36 percent of non-heatset plants responding in this manner.
Heatset plants selected "helping clients with training" as their second choice, while non-heatset plants chose "improving economic conditions."
Among service bureaus and trade shops (typographers, separators and platemakers), broadening prepress services garnered the number one spot for increasing sales opportunities. Most service bureaus and typographers are expanding their operations to handle basic color and graphic design.
The third and fifth place responses, "partnership with other graphic arts firms" (22 percent) and "increasing sales through print brokers" (14 percent) suggest that service bureaus are flexible enough to work with other graphic arts entities. It also may indicate that these organizations are diverting financial investment to technology, not marketing.
Interestingly, in ninth place among color separators and platemakers was "short-run color using digital presses" (11 percent). Most of the installations of Heidelberg GTO-DI, Indigo E-Print 1000, AM Multi-graphics/Xeikon DCP-1 and Agfa Chromapress machines have been in the digital color firms, such as color separators and service bureaus.
Finally, it might be useful to look at what graphic arts firms are buying during 1995. Other than PowerMac workstations, the answers are many and varied.
Commercial printers, surprisingly, picked Macs and network servers as their number one and number two choices. Based on interviews conducted by Strategies for Management, [TABULAR DATA OMITTED] most of these servers will be used for internal networks.
But aren't commercial printers buying presses? Yes and no. Thirteen percent selected multicolor offset presses as a 1995 purchase; however, Webb indicates that most of these units will be small formats (two- or four-page) that will be able to handle an average of five or six colors.
Interestingly, metal direct-to-plate was cited by only eight probability of the commercial printers as was waterless offset. Hi-fi color printing is of interest to only four percent of respondents.
What are service bureaus and typographers buying? Macs, of course, with desktop publishing software coming in second. Digital cameras (16 percent) didn't make the top 10 list, nor did drum imagesetters and capstan imagesetters, tied at 12 percent of the respondents.
Color separators and platemakers also are investing in guess what? Macs! However, their second choice was network servers at 25 percent. Of this group, 22 percent indicated they would be investing in stochastic screening, digital cameras (19 percent) and drum imagesetters (18 percent).
The above information was gathered by Strategies for Management and is based on information received from more than 400 printers, typographers, service bureaus, separators and platemakers.
For more information on SFM TrendWatch, contact Dr. Joseph W. Webb at (800) 283-8063.
Jill Roth, Editorial director. This article is excerpted from "SFM Trendwatch," a twice yearly monitor of trends and changes in the graphic arts marketplace.