Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.

Print '05 & Converting '05

Plenty for Everyone-Too Much for Many

The largest printing and package converting trade exposition on the globe in 2005 expected to draw 70,000 attendees to browse the over 750 exhibitors occupying three quarters of a million square feet and to attend the nearly 90 educational seminars put on September 9-15 at the McCormick Place in Chicago. There was new technology and enhanced equipment for every printer of any size. And for those who have been saving their sheckles in recent years and not investing, the new tech options could be so voluminous as to be nearly overwhelming.

Many of the more interesting and possible impact products will be discussed later. However, there were a few observations gleaned from overheard aisle way conversations that reflect on possible opportunities for select printers in the immediate and longer term time frames, such as: (1) the proliferation of far eastern printers not looking for print buyers but rather potential North American printer partners; (2) the view of many printers that the automated postpress equipment is a superfluous production cost rather than a marketing investment; and (3) the numerous instances of exhibitors using their live trade floor production as philanthropic in kind contributions to Chicago area social service agencies to be sold as fund raisers as well as to elementary schools as part of curriculum support. Let's consider each a little more closely.

Far Eastern Partners?

Global commodity-engineered manufacturing has always sought its lowest denominator of cost for specified quality. Many American jobs have and will continue to move to these offshore less expensive countries. Specific printed products that have yielded to this reality have been the less time sensitive "cocktail table" books and assorted types of packaging. In the later case the decision was to move the goods being manufactured to the Far East and the packaging used to protect the finished product naturally went along.

Many of these ventures have been fraught with quality control and digital workflow problems despite the availability of English speaking contacts in the Far East.

RR Donnelley solves these type problems by simply buying a leading foreign printer and installing the workflows that have proven satisfactory in the United States in serving their global clients' corporate headquarters. For the rest of the printing industry a more practical opportunity appears to be emerging.

Packaging buyers are asking their favored North American printers to intercede in transplanting the proven digital work flows and the quality assurance check points. In many cases the GRACoL standards are being implemented across all borders. This double-edged sword results in the local printer losing major volumes but by taking the high road of cooperation, he is retaining technical consulting revenues and in many cases a facilitation fee based upon the volume of throughput. The consideration also exists for replacement work from this same client.

Mr. Naresh Khanna, Editor of the Indian Printer & Publisher (indianprinterpublisher.com), and Mr. A Jixin, Project Manager for the Printing and Printing Equipment Industries Association of China (chinaprint.org.cn), were both expressed interest in this collaborative approach between printers for the benefit of mutual clients. "A successful project is much preferred to a quick sale," concluded Mr. Khanna.

The Hot Potato of Automated Postpress

For many printers who have invested in JDF-enabled prepress and press with varying degrees of solid ROI results there still seems to be hesitancy to extend that effective network into the bindery. And yet there seems to be no concern about the proven capabilities of the automated CIP3/4 compatible cutters, folders, stitchers and binders.

Commitments to digital printing are forcing many printers to set up segregated finishing operations because their older legacy bindery has such slow make ready times. These new dedicated binderies are tabletop accessories resulting in heavy labor content. This move again is to save money presumably because there is not enough short run digital print yet to afford the full bore solutions.

The software compatibility issues between prepress, press and bindery from 2-3 different manufacturers may be a concern as there are only isolated successful case studies of across the grain compatibility. The in house print IT staff rarely exists, but that staffing decision is inevitable if this strategic and marketing opportunity was acknowledged.

There may in fact be more purchases being made than reported, as the printers simply don't want their competitors to know of their investments. Such secrets rarely remain close-to-the-vest very long.

Creative Philanthropy

Trendletter has had a number of articles highlighting the benefits of "cause marketing." Firms are "doing well financially by doing good socially is a winning brand building formula." (February 14, 2005 issue, page 8) An effective example of that at Print '05 was Komori's producing the annual holiday greeting card for the Greater Chicago Food Depository on their Lithrone 628 during Print '05. Last year this holiday card raised $170,000 for GCFD, which helped to pay the overhead for this social service agency as it provides 84,000 meals a day, 365 days a year to 300,000 residents of Cook County Illinois.

The Smithsonian Institution Libraries had an exhibit in courtesy space provided by NPES featuring book illustrations. A number of suppliers including AGFA, Automatic Graphic Imaging, Brandtjen & Kluge, D&K Group, Flint Ink, Heidelberg, MAN Roland, PIA/GATF and UEI Group produced marketing support materials which will assist this group to take the same exhibit to a number of regional locations throughput the country. This same collaborative group also produced a 24-page, 8½ by 11" booklet to be donated to Chicago elementary schools to teach writing skills.

It is important to note that quite often these in kind contributions do not have the logos of the contributing manufacturers prominently displayed, but a more subtle acknowledgement. Word of mouth and pride of the employees in their knowledge that their employer is actively committing resources to help such worthy efforts pays strong dividends. Small printers can be just as creative in their own neighborhood markets by being sensitive to philanthropic projects that they might contribute to in conjunction with other suppliers like a paper merchant, a converter and a specialty designer.

MIS Offerings

The leading management information system supplier, EFI, with 8,500 plant installations has the unenviable task of convincing their vast client base, who are overwhelming utilizing software that is several version generations outdated, to move up to their current software version. Rather than "fire" these clients, who are at least providing some modest annual maintenance revenues, EFI has chosen the high road and announced at Print '05 that their new Executive Information System (EIS), which is a crafty web-based dashboard visualization tool for quick data analysis and business intelligence, will be available to all clients free who are on the most current software version of Hagen^TM, Logic^TM and PSI^TM. Additionally a "production planning" module, which will be invaluable to the CSRs of general commercial printers, is under development and will be shown at Connect '06.

Having had a number of faltered starts at responding to their clients' urgings for a warehouse management system (WMS) to manage their fulfillment services, EFI is offering a proven solution from third party software integrator, Manhattan Associates. MA also has a nifty shipping management capability honed with their many product fulfillment clients but unfortunately no real mail services management component. The two firms have an exclusive agreement relative to the printing industry according to Chuck Gehman, EFI Director of Print MIS Product Marketing.

Inexperienced as an MIS supplier but an unabashed technology entrepreneur, Kodak announced their product development efforts toward an all encompassing print management information system to be called Enterprise Management Solution (EMS). Initiated by Kodak's subsidiary Creo, EMS is being touted as a leapfrog of the market leader EFI by having both scalable and highly integrated software modules that go beyond estimating, costing and accounting to embrace sales force management, customer relationship management and the unique demands of the more popular value-added services such as digital print, fulfillment and mailing. Additionally through JDF connectivity the integration with PREPS^TM imposition software and the Synapse Upfront^TM job planning tool could make EMS a formidable MIS package. Beta sites will be selected in 2006 (creo.com/ems).

Finishing Opportunities Embrace the RFID Pavilion

NPES very wisely organized for the first time an RFID pavilion. While there were less than a dozen exhibitors, this was plenty to let printers begin the process of learning how these specialty tags and labels can fit into their postpress and fulfillment workflows and be of distinct benefit to their packaging clients. At this stage printers should be learning the basics in order to position themselves as their client's technical consultant with regard to this supply chain management trend.

For these specific products as well as all others at the trade show it would be helpful to refer to the following website which will allow quick and easy product search: http:/printattendeeassistant.com/attendee/prodsearch1.cfm. Hopefully NPES will leave this website active for some time.

Efficient production of digital short run or on demand printed books includes finishing solutions that can accommodate either perfect bound or stitched requirements. Muller's SigmaLine^TM or the IBIS Smart-binder can fill this bill. The SigmaLine^TM, with its fully integrated and automated eight-module concept, has gained a lot of press including a 2005 PIA/GATF Technology Award but only a single North American sale thus far. The IBIS was shown running effectively in the Xerox booth.

Muller reports that their Supra automated stitcher can replace up to three legacy stitchers while the smaller tempo automated unit might still replace at least two analog units. Of the latest technology machines being installed by Muller only 20% are immediately being integrated into plant wide JDF enabled networks. At least that's 20% that are making hay while keeping a low profile among their competitors.

The PIA/GATF Digital Print Council has stepped up with a Marketing 4 Digital (M4D) program intended to give printers very specific and detailed incites into 24 different vertical segments. They will be sold as three separate packages of eight reports each for $199 for members or the complete two dozen for $499. The Executive Summary of the HealthCare application was shown at Print '05 while the initial eight will be released at the VDP Conference November 6-9 in Phoenix.

Oce introduced their DPconvert^TM software which allows a customer to process Xerox DigiPath^TM RDO files across the entire printing environment to include Oce equipment. The DigiPath files are converted into industry-standard PDF and XML formats by DPconvert^TM. This software was developed to allow Oce to replace Xerox in taking over the huge Boeing aircraft in-plant facility that needed access to their Xerox Digipath archived files.

Wide format digital printers are taking the industry by storm. The wide format pavilion has grown steadily in the four years of their dedicated space. Only the Photo Marketers Association (PMA) national convention draws more wide format vendors, suppliers and manufacturers. AGFA made an interesting observation when queried about the breakeven point between wide format inkjet digital devices and the large format automated presses; their answer was 170 prints. The cost breakeven is one element. However, the extended time required to produce inkjet prints may also play a role in the large format printing direction.

Komori had three interesting announcements: their largest single sheetfed order for $15 million of nine 40" variously configured presses to different Consolidated Graphics plants, their reentry into the commercial web press market and their pulling the plug on the DI press. Considering that none of the Consolidated presses were simple or little, the $1.7 million average was a real discounted deal. The justification by COO Stephan Carter for getting back into the web press market with the long proven single or dual web System 38 is that the consolidation of general commercial printers means that several of them are as big as $30-40 million in annual sales. At that size they want a web component to complement their sheetfed stable. Mr. Komori announced a $10,000 gift to the victims of hurricane Katrina while Carter announced a corporate gift matching all employee contributions for the same purpose.

While the main line manufacturers had no earth shattering product releases, there were interesting sales announcements. KBA has doubled their sales in the last three years with six 64" or larger presses sold in the last six months alone. Forty of the huge Rapida 205s (59.5" by 80.75") have been sold in less than two years with ten coming to the USA. Every manufacturer reported strong sales into the Far East. While these countries might have some of the cheapest labor rates on the globe, they now also have the finest printing technology available.

While none of the traditional German, old line European or Japanese manufacturers express any desire to move manufacturing to these cheap labor venues, Ralf Sammeck, KBA's President and CEO, described two acquisitions in the former east German block that were clearly motivated by a high regard for the engineering talent and their accompanying lower labor costs relative to Germany's highest European scale.

Bill Esler, Editor in Chief of Graphic Arts Monthly, was awarded the 2005 McMillan Award for editorial excellence. This lifetime achievement acknowledgement was the seventh annual award issued. Though a classic journalist, Esler has always impressed me with his engineering-think and ability to get to the core potential strength or weakness of a new product/technology offering.

NAPL's 2005 Soderstrom Award designee was Harris DeWese, Chairman and CEO of Compass Capital Partners, Ltd. Ever popular for his oft self deprecating humorous Printing Impressions articles cajoling print salesmen to "get out there and sell something," DeWese tweaked his audience in his acceptance speech on the passionate need for leadership, not management in the printing industry.

Yves Rogivue, CEO of MAN Roland, has earned the respect of clients, prospects and competitors alike with his challenges to non-traditional management thinking. Two years ago at Graph Expo '03 he threw the gauntlet down to competing press manufacturers to stop offering "creative financing." This practice was propping up failing printers and resulting in printing price wars.

This year he challenged the Print Trade Associations to rethink how best the suppliers and manufacturers might support conventions, educational venues and other projects all of which needed supplier financial support. Suppliers simply don't have the bottomless pockets of moneys to contribute to worthy industry endeavors as they once did. Consolidation of associations and collaboration of meetings will add some relieve, but not enough. For example, PIA/GATF's Tech Alert Conference ended its run with its February 2005 conclave because the suppliers said there were more manufacturers representatives, consultants and journalists in attendance then printers. Yves is not making a threat. He is simply addressing reality.

On a similar note there are now five world wide mega print shows: IPEX in England, Print in Chicago, DRUPA in Düsseldorf, IGAS in Japan, and the newest kid on the block - China Print. With the key press manufacturers being from Germany and Japan it is difficult to imagine those venues going away. With China and its 90,000 printers emerging as the world's fastest growing print equipment market that one has another generation of growth for sure. That means that IPEX and Print will probably be relegated to regional shows, which quite frankly makes sense.

Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.