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Oct 1, 2007 12:00 AM
What is value, and how does a printer measure it when it comes to evaluating printing ink suppliers? What can be gleaned from a price list, a proposal or even trial runs?
Ultimately, the value of a printing ink supplier must be determined by looking far beyond the price list toward the full capabilities an ink supplier delivers. This is where the rubber meets the road in the pressroom and on the bottom line.
Most of us learned the meaning of the value of a dollar early in life. Weekly allowances had to be earned, saved, and spent wisely. As a kid, I recall pondering whether I should buy the bubble gum that might include a coveted Mickey Mantle or Sandy Kofax baseball card — or the jawbreakers. Through trial and error, we also learn the value of doing things the right way rather than cutting corners and doing a job “on the cheap.”
The experts tell us the equation for value is “perceived benefit divided by perceived price.” Most of us don't consciously use the equation when we make a purchase, but we instinctively know when we've gotten our money's worth in a purchase or a business deal. Likewise, we know how we feel when we took a chance on a deal that was too good to be true.
For printing ink, printers are bargaining for much more than the ink in the can. Printers depend on their ink supplier for responsive service and support, problem solving, consulting and more. All too often, purchasing decisions are made independently of the manufacturing and production managers, and the production managers are left trying to turn a bad agreement into a good result. If the purchasing decision is made strictly on a price per pound basis, this can be a very costly decision. In business circles, you hear the cliché, “Service and quality are a given — all that matters now is price.” It's a clever line, but it simply is not true. Service and quality may be expected but definitely are not a given among various ink companies. Technical service, responsiveness and the quality they provide are the biggest differences among ink companies. True value will be determined when what is promised in a sales presentation is executed successfully in the pressroom.
Without printing ink, printers would have nothing to sell — just plain paper and certainly no differentiation among their peers. Printing ink is the only consumable in a pressroom that directly affects both the revenue and cost lines on a printer's income statement.
First and foremost, the print job and the printer are judged on the graphic quality of the printed piece. Do the graphics fairly represent the original art of the graphic design? In the case of a package printer, for example, will the finished product inspire a consumer to purchase the product? The printers who print the best consistently capture the best accounts and typically command a higher price for their work. To control graphic reproduction, a printer attempts to control density, dot gain and trap in the process area, along with color density and accuracy for spot colors. Inks used for tonal reproduction might be stronger than ones used for large solids. With screen work, you want a minimal ink film thickness; this allows for sharper dots and a much cleaner image. When dealing with solids, you would choose a slightly weaker formulation to reduce the chances of hickeys and picking.
Often, in addition to the graphic reproduction of the print job, there is a functional property the ink must perform — particularly on packaging. These properties include high rub resistance, COF, low odor, fade resistance, moisture or heat resistance, and special chemical resistance. Fade resistance can range anywhere from 12 hours (or less) to 500 hours (or more). The cost of these pigments increase significantly as the level of fade resistance increases.
Now that we have addressed the revenue side of the printer's income statement, let's take at look at the cost side. Certainly, price per pound and mileage must be considered, and I will talk about them later. Of more consequence, however, are the pressroom efficiencies that are influenced by the quality and formulation of the ink. Ink represents less than five percent of the cost of a printed job, but it can have a tremendous impact on the bottom line. Press speed, ink related downtime and waste are affected by the ink formula.
An experienced formulator who has a good understanding of the press, pressroom conditions and substrate to be printed can formulate a product using quality raw materials to maximize press speed while cutting downtime and waste.
Let's take the example of a printer we'll call “ABC Litho” with two sheetfed presses assigned an hourly rate of $300 running 24/7 at 70 percent production efficiency. The shop purchases $400,000 annually in inks and generates $12,000,000 per year in print sales. The owner has just received a business proposal that promises to save 20 percent in ink costs ($80,000 annually).
Here's a hypothetical conversation between Dick and Jane at ABC Litho:
Dick: “Jane, with these new inks, our usage is up more than 15 percent on average and they are piling on the blankets. As a result, we are stopping to do a blanket wash every 45 minutes. Aside from that, the dot gains are anywhere from five to 15 points higher than the inks we were using.”
Jane: “Now Dick, settle down. I got a great deal on these inks and you will just have to try and make it work so we can save money.
Dick: “Save money? Even if you ignore the fact that our ink usage is way up, the extra downtime and waste is killing us. Please tell me how we're going to explain this ‘savings’ to the press operators?”
Based on the two presses and the $300 hourly rate, if ABC Litho suffers a mere five percent reduction in press speed, that translates into $181,690 on an annual basis. If ink-related downtime goes up three percent, this equates to $155,736. With a sales volume of $12,000,000, a 0.5 percent waste increase would add up to $60,000 per year (if one considers materials, the figure might be more like $40,000). Our example illustrates that very small changes in pressroom efficiencies can have a significant impact on the bottom line, and an apparent $80,000 savings in ink costs can be squandered quickly — in this case, costing the customer $397,426 even before we consider mileage.
Mileage has a direct impact on the price per pound that one pays for ink. In general, the stronger the ink, the better the mileage (although other factors can influence mileage). The more pigment in the ink formula (stronger), the more costly the ink. It is not uncommon in offset printing to see significant (sometimes over 25 percent) differences in ink mileage. In the case of ABC Litho, a 10 percent mileage difference is equal to $40,000. A cheaper ink might not yield any savings due to less mileage.
A weak ink can create problems on the press; namely, ink and water balance problems. Push more ink to get color density, and you'll need more water.
At the end of the day, ABC Litho's new ink cost more in reduced pressroom efficiencies and reduced ink mileage.
Certainly, the flip side of this argument and the moral of the story is that buying quality inks formulated with the proper raw materials designed for the press and considering the end-use requirements can help. An ink supplier's job is to help the printer make money in the pressroom with inks that print great, get good mileage, and increase press speed while reducing downtime and waste.
So, if purchasing strictly on a price-per-pound basis is risky, then the printer's management, production, purchasing and sales teams need to do their homework before purchasing ink.
For example, consider four quotes for a strong Reflex Blue color to be printed as a spot color with heavy coverage: $7.82, $8.33, $11.34 and $7.25. Which is the best buy? In this example, the lowest price ink is 10 percent weaker than the other three, and it is not coatable or heat resistant; the highest priced ink is full strength, coatable, and heat resistant; and the other inks priced in the middle range have two or three of these properties. In this example, the best value and choice depends on the job requirements. Aqueous and UV coatings both react with amine-sensitive pigments, causing them to discolor (commonly called “burnout”). To reduce this risk, Rhodamine, Reflex Blue, Violet, Purple and Warm Red pigments are replaced. The substitute pigments are considerably more expensive.
This is the reason an unsolicited general price list must be viewed with caution. Don't get me wrong; I agree that price negotiations are a necessary component of buying and selling, and I do not advocate using expensive ingredients in ink unnecessarily. But, have you ever been told, “I have to charge more than the price list I gave you, because I did not know you were going to UV coat the job (or need extra rub resistance, foil stamp, heat seal, laminate, etc.)”?
Remarkably, the experienced formulator and his/her ability to custom manufacture the ink for the press, substrate and end use is still only part of the story.
The value of a great printing ink and coating supplier is the ongoing technical support the local branch provides — led by a professional technical sales consultant. This resource can have the greatest impact on helping the customer run an efficient pressroom — giving the kind of sound advice that can maximize print quality and prevent problems. When there are problems, and there will be, remember this is the printing business; quick response and a solution to correct the problems is critical.
One last piece of the puzzle is a sound research and development team that backs up the efforts of the local branch in applications research and new product development.
If you choose the right suppliers — those who will help you build a strong company — you'll find the value shines through for your business.
Daryl P. Collins is the vice president of national sales and marketing for Wikoff Color Corp.