C. Clint Bolte & Associates

Executive Outlook was originally conceived to be a fast paced day of print technology tutorials coupled with a juried glimpse of the leading, and often, newly introduced products, couched as Must See 'ems and Worth a Looks. These were to be seen the next day at the opening of North America's largest annual printing equipment trade show at McCormick Place in Chicago. This leading continental venue, called Graph Expo, gets supplanted every fourth year by the world's leading trade show. In this case September 9-15 was Print '05 and Converting '05. The "Converting" ties in the equipment of the packaging industry, which is complimentary and supplementary to the printing industry. This eighth Executive Outlook, sponsored by NPES and organized by Bill Lamparter of PrintCom Consultants, drew a near record 243 attendees with a full 20% visiting from foreign countries.

NPES Vice President William K. "Kip" Smythe gave a kickoff of the challenges and critical economic trends confronting print in 2006. While there are a number of highly respected economists concentrating on this industry, their projections occasionally may appear to the layman to be in conflict. Smythe's reconciliation of these diverse opinions was quite insightful. For example, the Institute for Supply Managers reported the overall economy growing for the 45^th consecutive month with the exception of the printing and publishing which was among seven industries reporting declining growth. And yet the two national printing trade associations, NAPL and PIA, both report growth. U.S. Printing Ink has shown a year over year decline each of the last four years when measured in pounds of ink sold. These ink figures do not include toner and inkjet volumes being consumed by the wide format and digital printing units being embraced by printers that are diversifying. This dichotomy continues, as the Magazine Advertising trends show steady increases in dollars while count of actual Magazine Advertising Pages are flat.

Further reconciliation is explained in the structural changes in the printing industry where value-added, non-print services are being offered by printers are providing the bulk of actual growth as the changing print buyer model is increasingly using alternate communications media, which is often linked to the Internet.

Additionally offshore printing contributed to a decline of $75 million or 38% in the Printing Industry surplus in the first half of 2004. The Far East and their cheap labor originally concentrated on producing the "coffee table" books, which had elongated production schedules. As more US manufacturing has moved offshore, the packaging and label printing to hold these products has also moved out. Plus since the North American Free Trade Agreement (NAFTA) of 1993, the Canadian Printing Industry reports as much as 40% of their revenues being exported into the United States due to their more favorable currency exchange rate.

These ancillary value added services have been reported to be less than 8% of the printing industry's gross revenues in 2003, up a point in 2004 and expectations by NAPL's economist, Andrew Paparozzi, of growing to 16.7% by 2010. The trend is clear. Printers are seeking to get a larger share of their client's graphic communications spend by diversifying into complimentary services both creative and prepress all the way through mailing, fulfillment and distribution management.

Bob Kutschke, General Manager of Kodak's Business Workflow Products Group, discussed the new role of MIS as being both an internal and external focus with four objectives: first, linking CRM (client relationship management) across core business applications; second, optimizing not just automating processes such as intelligent estimating, production planning and dynamic scheduling; third, providing pro-active monitoring like real-time dashboards showing metrics when processes exceed acceptable ranges; and finally, using JDF connectivity and web-based portals to integrate customers, plant operations and suppliers. Kutschke introduced Kodak's EMS (Enterprise Management Solution) package intended to fill these management information system objectives. EMS will be comprised of leading edge third party programs and is expected to be available for beta site selection in 2006.

The printing industry has treated the IT function as an after thought. Big and small printers alike have traditionally looked at business management information systems, as opposed to application production software, as overhead rather than a strategic resource. Lamparter reflected on studies conducted by PrintCom Consulting Group that concluded there are fewer than 2,000 North American printers who had a single MIS system installed that was running on the latest software version available from the supplier and was utilizing the full compliment of software modules available. Don Goldman, Senior Project Manager for MIS supplier PRISM and moderator of this MIS panel, concluded, "If you don't make a MIS (strategic) commitment to drive your company, your company will be out of business."

IPA's President Steve Bonoff in speaking on prepress and proofing trends indicated the three primary change drivers being "shorter product life cycles driving the need for integrated marketing campaigns, promotion spending driven by ROI and globalization driving the need for more effective brand asset management." Monitor or virtual proofing is a clear trend for large magazine and catalog publishers. With dedicated proven packages costing less $2,000 soft proofing appears posed for general acceptance except for the lack of standards. Standards efforts are being compiled around ICC technology, which is at the heart of color management. Manufacturers still want to differentiate their own product offerings, which slows this standards process somewhat. Printtools.org is the one stop web site for a free monthly newsletter and the latest info specifications, standards and digital calibration tools.