Most commercial printers print on paper. Seems simple and straightforward until one thinks about the different kinds of paper: coated and uncoated free sheet; coated and uncoated groundwood; newsprint. Even within each category there are gradations of quality, basis weight and brightness. It’s not so simple anymore.

Still sticking with offset, unusual but increasingly common substrates include folding carton and paperboard, card stock, plastic and lenticular. When there is a need for more specialized jobs, one normally thinks of flexo presses for flexible films and screen print for just about everything else.

During the past decade, thousands of printers have successfully and profitably adopted computer-to-plate. Initially viewed as an "unproven", expensive and confusing technology, requiring both substantial investment and infrastructure, CTP has not only matured but has become an essential requirement for most printers to stay competitive. The print industry has seen more colour jobs, shorter runs, jobs increasingly submitted in digital form and competition with other printing technologies. Printers must continue to improve their work flow to take advantage of their customers' increasing knowledge and expectations as well as the evolving improvements in technology.

Most printers that adopt CTP do so hoping to save money. They typically look for savings in film, which is eliminated, and labour. And the ROI from that is usually enough. But the true economic benefits go well beyond that simple analysis to improvements in print quality and increased press capacity (a mixed blessing, to be sure). Computer-to-plate is critical to improving manufacturing efficiency. The arguments in favour of CTP are not theoretical; it provides real economic benefits. First and foremost, it is a shorter process, with fewer production steps. Fewer steps mean less chance of error. CTP forces an all digital workflow, giving improved control over the entire prepress process. Perhaps even more important, it means faster turnaround, higher productivity and better throughput.

With first generation digital plates, you will get sharper dots, control dot gain and have the ability to incorporate CIP3/4 and preset the ink fountains. Printers find they get better registration, which leads to faster make-ready and less waste. Simply put, the press prints better. Indeed, perhaps the biggest surprise for the early adopters was the savings achieved in the pressroom, which were substantial.

While the majority of larger and increasingly mid-sized printers have installed. CTP many printers have still delayed and not yet implemented computer-to-plate. The main obstacle, particularly for smaller printers, is the initial capital cost of the platesetter and the associated digital infrastructure and required prepress.

Changes in work flow are probably most significant. Going CTP means the prepress process must be all digital. Trapping, imposition, proofing and file management must all be digitaL Problems with in-house and customer file preparation must be caught early. There is less tolerance for mistakes and corrections than in a film-based workflow. And although most jobs now come in as digital fues, merging film and digital jobs can still be a problem for many, such as forms printers.

Proofing was another issue, but that is mostly in the past. The days when digital proofing was not universally accepted are long over, with the overwhelming majority of colour proofs now digitaL.

Another objection that has been overtaken by events is plate availability, cost and quality. While digital plates still carry a premium over conventional plates, prices have fallen and the gap has decreased. This is particularly true for the smaller printer, who "pays up" more for conventional plates. The slightly higher price of digital plates now tends to be more than the cost of the film and chemistry it replaces.

For most, implementation of computerto- plate is fairly painless. Stories abound of problem-free platemaking within a day or two of setup. That's not to say there aren't problems. Implementation of a digital workflow will ease most of these, but staff needs to be retrained. And in many plants, press operator acceptance can be an issue. But these are not insuperable and well worth any shortterm inconvenience.

Now that you've been forced to move to direct-to-plate to improve quality, lower cost and shorten turnaround times, you have a number of decisions to make regarding technology; plate type; workflow; and supplier.

As this is a computer-to-plate system,you should start with the plate. If you currently use polyester plates, do you want to stay with this or move to metal? There are a number of excellent computer-to-polyester plate systems from suppliers such as Agfa, A.B.Dick and Heidelberg.

Next choice is format size and range of sizes. While printers typically buy a platesetter that matches their largest press, many 4-page printers have purchased 8- page platesetters. The incremental cost hadn't been that great and there was always the hope or expectation that they might eventually purchase an 8-page press. But don't ignore the smaller sizes. Make sure the CTP system can image your smaller plates as well.

Metal plates from all the major vendors perform well. You should choose the plate that is most appropriate for your environment - run length, quality and press performance. There are a number of plate choices, often associated with the imaging technology used by the platesetter, thermal or visible light lasers.

Both technologies work; one technology cannot address all market needs. Thermal and visible light have been competing since Drupa 1995; violet is the current visible light technology. Both can produce high quality. Print requirements, cost, and your preferred supplier will dictate your technology choice. Agfa, Heidelberg, Fuji, Creo, and Presstek, among others, offer thermal plates etters. Agfa, Heidelberg and Fuji also sell violet machines, as do other smaller manufacturers.

Thermal is the best choice if long runs, greater than 350,000 impressions, are required. Although you might hear otherwise, thermal is appropriate for short runs as well. Most thermal plates can be used with UV inks, high screen rulings, and abrasive substrates. Pre- or postbaking might be required, however, to achieve these results.

Thermal plates can be negative, positive or processless. Negative plates usually have a preheat oven but also fast exposure time on the platesetter. Examples include the Fuji Brillia LH-NI; KPG Thermal Gold, the Spectratech 830-n (now the Creo Mirus) and the Toray CL. Positive thermal plates usually do not require preheating, although they may be post-baked. Agfa's P970; the Fuji Brillia LH-PIE; KPG Sword; the Creo PTP; and the LT-2 (originally Western Litho/Mitsubishi Chemical, then Lastra, and now Agfa) are examples of positive thermal plates. Processless or chemistry-free plates have received a great deal of attention since Drupa and Graph Expo. They require no chemical processing: expose ana print. Examples include Presstek Anthem and Applause and Agfa :Azura. KPG has shown but not introduced ThermalDirect, and Fuji had a technology exhibit at Drupa.

Violet plates can either be silver halide (Agfa Lithostar; Heidelberg Saphira) or photopolymer (Fuji Brillia LP-NV; Agfa P91 V). Silver halide plates tend toward medium run lengths and have a high resolution. Pre-heating or post-baking is neither necessary nor possible. Violet photopolymer plates are best for small to medium run lengths; medium resolution; may have preheat integrated in the processor; and post-baking is possible for longer runs or UV inks.

Other factors that will enter into your decision include the overall cost of the plate-making operation (chemistry; processing; cleaning) and your relationship with your dealer and manufacturer. Once you've decided on a plate, your platesetter choices become much more limited. You'll also have to decide on your throughput requirements. How many plates will you make? What are your peak requirements? How many plates per hour will you need to image? What level of automation is appropriate? Most platesetters come in manual, semiautomated or fully automated versions.

Again, this is pretty much a matter of economics. How much throughput do you need, how many different plate sizes do you use and your local labour rates will all influence your decision to spend the additional money.

Finally, you probably will want or need to upgrade your workflow. This decision, while it will influence your choice of plates etter, can be independent. Popular workflows from equipment suppliers include Agfa Apogee, Creo Prinergy, Screen TrueFlow and Heidelberg Prinect. Many vendors offer workflow from software suppliers such as Rampage, Nexus from Artworks, EFI's OneFlow, or Dalim.

At the end of the day the advantages of going computer-to-plate for the typical printer are overwhelming. Despite the initial capital costs, which can appear high to a smaller printer, the on-going operational savings, improved quality and increased productivity make a compelling case. Your competition has lowered their costs, streamlined their production and shortened the time it takes to deliver a completed job. Increasingly, going direct-to- plate will be a requirement if you are an offset printer.

The old Walt Disney song may say “It’s a small world after all,” but for a few Canadian printers, “the world is wide, and I will not waste my life in friction when it could be turned into momentum.”

When one thinks of big presses, one immediately thinks about the huge web presses used for newspapers, publications, books, magazines, catalogues or directories. These presses get bigger and bigger, with manroland and Goss both introducing at drupa 96-page presses with a 112-inch web width. The sheetfed world isn’t being left behind, however, as there is increasing interest in larger formats – defined as a press larger than a typical 40-inch configuration (102cm or 105cm) here as well.

The current upheaval in the economy and the printing industry has once again raised the question of what type of firm is best positioned in this environment. The discussion has taken on a greater sense of urgency as the pace of plant closures, bankruptcies and acquisitions has quickened.

It has long been assumed that size was a prerequisite for success, and this has led to a spate of mergers and acquisitions. Although it’s not a new phenomenon, in the printing industry, the pace of activity among printers has given way to a new category of printer, sometimes called the “MegaPrinter.” The largest printers have always dwarfed most others, but the size and number of acquisitions in the past few years appear to be qualitatively different. The appeal is easy to understand: the quickest way to consolidate your market position, obtain additional assets and become more efficient is to acquire a rival. The industry is not only becoming more concentrated, but the demands on these large (mostly) public companies to continue to grow boosts the likelihood of increasing size and scale, primarily through acquisition, due to their need to continue to show growth and the difficulty many of them appear to have in generating enough organic growth.

Yet, these acquisitions clearly have not always worked out, as evidenced by the bankruptcy filings of Quebecor World and Grafikom. Making an acquisition work is difficult; multiple studies have shown that more than half of acquisitions fail. In the case of many of the industry’s consolidators who were active in the 1990s, most of the acquisitions failed, as integrating production processes, supply chains and cultures are far more difficult in reality than on paper. Furthermore, the downturn in the economy has accelerated the plant closings and consolidations of these large printers.

Smaller printers, however, are not immune from the storm buffeting our industry, as the weekly news releases of companies closing their doors remind us.

So what type of firm is best suited to survive in the new environment? Is the emergence of the MegaPrinter only a quantitative change, or does this portend a qualitative change in industry structure? Consolidation does not necessarily mean domination. It is not by any means a foregone conclusion that all of these MegaPrinters will be equally successful powerhouses, only that they will be big. Printers who are not in the MegaPrinter category have been able to compete effectively in many areas, even head-to-head with the giants, often due to their greater flexibility and responsiveness.

The Structure of Canadian Industry

The printing industry in Canada is dominated by small firms; 75% have fewer than 20 employees. If one adds those classified by Statistics Canada as “indeterminate,” which tend to be owner-operated with no permanent paid employees, the proportion increases to 90% with fewer than 20 employees. The average plant has only eight employees; yet, plants with 100 employees account for more than 40% of all employees, while only about one-fourth are in facilities with less than 20 employees. (For purposes of this discussion, we are excluding packaging companies.)

That is not to say, however, that Canada does not have large printing companies. The two largest Canadian-based printers, Quebecor World and Transcontinental, qualify as MegaPrinters by any definition, while others in the Canadian context, such as St. Joseph Communications, with about $300 million in sales, approaches. Many of the other very large Canadian printers are specialty companies, such as managed print services provider, The Data Group, envelope converter, Supermex or Canadian Banknote. Other large Canadian printers include Solisco, Friesens, Dollco, PDI, Webcom, Lowe-Martin and The Printing House. One should also note that many U.S.-based MegaPrinters maintain significant operations in Canada, including R.R. Donnelley, Cenveo and Bowne; even Consolidated Graphics recently made its first foray into Canada, and fast-growing Vista Print has a major facility in Windsor.

Nevertheless, one gets to a modest-sized firm fairly quickly. That’s not to say that a printer with $15 million in sales is small, but it surely doesn’t qualify as extraordinarily large.

The Advantages of Size

The very largest printers apparently see value in size, and one objective of continued growth is the ability to take advantage of the benefits of size on their overall businesses and on the market. There are a number of advantages that can accrue to size.

Single Source. Many companies in today’s increasingly cost-sensitive environment, especially the large corporations that tend to be the primary customers of most larger printers, are looking to improve efficiencies. One major area of their focus is the reduction in the overall number of suppliers, both to reduce the costs of managing them and to gain economies of scale by purchasing higher volumes at lower costs from fewer suppliers. For print service providers, being larger helps them remain on the preferred provider list.

Potential for lower costs. Size also offers the ability for these companies to lower their costs. While they may offer a wide range of services, each individual plant can specialize on producing a particular product or servicing certain markets. While large printers can drive overall costs down through their buying power, those cost reductions can quickly be offset by inefficiencies in the sales, marketing and manufacturing process as they enter new, less specialized areas of the business.

Load balancing. Larger printers with multiple plants can also load balance, shifting work to underutilized plants and equipment.

Cost of capital. Perhaps the most important long-term value large companies bring is their ability to obtain lower financing costs. They have better access to more diverse sources of capital and their lower overall cost of capital can drive significant and sustainable cost containment into their sprawling enterprises.

Disadvantages of Size

Size can have its disadvantages as well. While companies are moving to reduce the total number of suppliers, they are often loath to be dependent on too few. If a publisher prefers to have three suppliers and one of those suppliers buys another, the publisher will add another supplier, resulting in a reduction of revenues from that publisher for the combined companies.

Acquisitions also lead to disruption. Integration is not easy, even for those who have done it before. Key people leave, customers and projects can fall through the cracks and customer service can deteriorate. Different business and production systems present challenges in terms of creating an integrated workflow across multiple plants. The closure of plants and/or moving of equipment also create production disruptions. With good management, these disruptions are relatively temporary. But, for companies that continue to acquire, these challenges are never-ending. As soon as one is integrated, there is another one that must be addressed. And, despite due diligence, companies may acquire bad businesses, paying too much for poor operations, obsolete equipment and a less-than-loyal customer base.

The anticipated lower cost benefits of acquisitions are not always realized. Specialization can mask inefficient operations and the ability to obtain lower prices through higher discounts generally has a one-time impact. Cost curves shift downward, but do not necessarily represent sustainable improvement.

There is no magic associated with size. While MegaPrinters can certainly benefit from scale in certain areas, including access to capital and the ability to produce high volume, complex applications like magazines, catalogs and large direct mail campaigns, they can have difficulty addressing more specialized needs and keeping customer service levels adequate. From a competitive perspective, then, these large printers are primarily competing against each other in a flat or declining market and do not really compete with the more typical commercial printer.

Acquisition Drivers: Not Just for the Big Boys

Despite these issues, there continue to be acquisitions. Canadian companies tend not to be as acquisitive as found in the U.S. True, Quebecor World grew by acquisition, and Transcontinental’s stated strategy is for growth to be divided between organic growth and acquisition. Their most recent large Canadian acquisition was that of PLM. Most Canadian companies have tended not to make big splashy acquisitions, rather merging or acquiring assets as the opportunities present themselves. PDI’s recent acquisition of a Grafikom facility is a good example.

Nevertheless, mergers and acquisitions are common. They are part of our industry’s fabric and will be for the foreseeable future.

They are not just a mechanism for the largest printers. They are an increasingly important tool for use by companies of all sizes. Mergers and consolidation are a fundamental mechanism to re-align the industry with the market forces of shrinking demand and competition from other ways of communication.

Bob Rosen, of R.H. Rosen Associates in New York, has identified what he calls the “Seven Glacial Forces Driving Change.”

1. Overcapacity. The entire industry is suffering from overcapacity, a result of existing overcapacity and a change in product mix, with shrinking demand for many products. The situation is compounded by improvements in productivity and technology. Regardless of the sources, companies of all sizes are finding the competitive environment more difficult because of the extra capacity.

2. Price Competition. Burdened with extra capacity and high fixed costs, companies engage in an endless bout of price competition, with many companies selling jobs just to bring in cash.

3 & 4. Technological Change and Increasing Capital Requirements. As technology continues to advance, the cost of new equipment increases. Even new “disruptive” printing technology, such as digital, entails significant investment. Although the new equipment offers productivity and quality gains, it’s often at a cost that can only be justified by high levels of utilization. Unfortunately, the higher productivity of the new equipment has the unintended side effect of increasing capacity.

5. Customer Demands for Service. Customers continue to demand a broader range of services and higher levels of service. Costs continue to rise as companies respond to these increasing customer demands.

6. Increasingly Unpredictable and Variable Sales. Even well-managed companies have difficulty predicting monthly sales volumes. Even publication printers are increasingly faced with variable production volumes as ad pages shrink. While the MegaPrinters tend to have somewhat more visibility and predictability of sales because of the markets they serve, many smaller firms can spend most of the year catching up from a few bad months.

7. Management Succession. In addition to fundamental operating forces, management succession issues are becoming more urgent within privately-owned companies as the current generation of company owners advances in age. Looking towards retirement, those aging owners are less willing to be exposed to the risks of continued investment, even when their companies are profitable. This has made many relatively successful companies available for purchase by increasingly large acquirers.

As a result of these factors, mergers and acquisitions will continue. Facing sales shortfalls, growing costs and price competition, the concept of a merger or acquisition becomes even more compelling. The seller gains liquidity and freedom, while the buyer gains higher utilization of resources, the promise of new markets or customers, a broadening sales base and the opportunity to acquire new plant and equipment or production capabilities.

The Advantages of Being Small: The Role of the Mid-sized and Small Printer

With clear evidence that industry consolidation will continue into the foreseeable future, it is helpful to examine the role of the smaller and mid-sized printer in this changing landscape. As the accompanying chart shows, the proportion of Canadian printers with more than 100 employees hasn’t grown over the last five years. While the number of smallest plants with less than five employees has shrunk, those between 5 and 19 employees have become increasingly important. Likely, consolidation has kept the proportion of larger plants steady, some mid-sized printers have gotten smaller; but, perhaps most important, smaller ones have grown in order to survive or gone out of business, thus increasing the proportion of the small and mid-sized printer category.

So, how have the small to mid-sized printers managed? First, the geography of Canada provides some degree of protection. One of the reasons there are so many very small printers is they serve very local markets and are somewhat insulated from broader trends and competition.

Secondly, smaller firms compete with their larger counterparts primarily on service. They can excel in this area. Moreover, while the web interfaces and distributed footprint of today’s MegaPrinters do offer them a competitive advantage especially for large, distributed accounts, an increasing number of smaller printers are implementing web-to-print and automated production processes, positioning themselves to sell to larger accounts and removing some of the traditional geographic barriers their businesses faced. In addition to e-enabling their businesses, a growing number of small to mid-sized printers are identifying niche markets where they can meet customer needs in a way that will be difficult for the MegaPrinters to address.

Small commercial and quick printers also tend to have multiple revenue sources; they do not rely on any particular type of work. They are truly “general commercial” printers. They serve a variety of customers from individuals and small businesses to the largest print buyers. They provide a necessary and valuable function, including quick turnaround and convenience. Moreover, they specialize in, and are particularly efficient for, certain types of work, particularly small format and short run – two areas that have held their own. Their print-based revenue includes traditional offset, but also toner-based digital and inkjet-based wide-format. They also are able to provide value in front-end services, finishing and mailing and distribution, as their customers are less likely either to want or to be able to coordinate the full production process.

Smaller printers, therefore, are not forced into acquisition to grow. They have a variety of opportunities to achieve revenue and profit growth. They can expand their offerings: new larger press formats, add more colours to their offset presses, add new print products, such as wide format inkjet or variable image printing, or offer ancillary services, such as fulfillment or database management. A second way to grow is to acquire new customers. Alternatively, they can increase sales from existing customers. Other opportunities are more production focused, calling for investing in equipment, or lowering costs of production, labour and materials. Still, merging with or acquiring another firm is yet another path to growth.

The future success of small commercial and quick printers lies in their ability to differentiate themselves, to articulate that differentiation and to do a better job of marketing themselves to existing and potential customers. As new services are added to the mix, educating customers about those services – and how they can help customers achieve their business objectives – is critical.

Another opportunity is for a smaller printer to align or sell to someone affiliated with one of the major franchise networks, such as PrintThree, Kwik Kopy or Minuteman, all of which are looking to expand in Canada. Franchises benefit from the name recognition of the national brand. They also benefit from the significant infrastructure investments the franchisors make on their behalf in terms of shared services, technology, training, negotiated purchase prices for equipment, consumables and more, and the ease with which they can interact with their peers in the network to share best practices, support customers with shared capabilities and distributed printing, etc.

For those who survive, however, the good news is that sales per shop will continue to grow. While overall print volumes will continue to contract, the number of establishments will decline faster, leaving more work for fewer printers to do. At the same time, surviving printers will augment revenues with a growing share of value-added, non-print services and higher value digital print applications that will allow them to not only grow revenues, but increase profits as well. It is likely that segment revenue will be up as well, with successful shops continuing to outpace average growth numbers by a significant factor.

As small commercial and quick printers think about their future, there are a few key components they should be considering.
Succession planning: Will a family member or key employee be ready, willing and able to take over the business as the current owner approaches retirement? If not, will they continue to invest in the business?

Investments: If the current owner is not investing in the business, what will be the value of the business at time of retirement? Depending on how distant that time is, will it be able to survive that long? If an owner is merely taking money out of the business as he or she nears retirement, will there be a book of business to sell once the time arrives?

Sales channels: The winners in the segment realize they must invest heavily in sales channels as well, whether it is Internet-driven, outside sales resources or a combination of both. For those who choose to continue to rely on walk-in/retail and long-standing relationships, the future will look bleaker.

Diversification: What ancillary services can easily be added to boost revenues, profits and market differentiation? Does it make sense to build, buy or partner to deliver these services? Smaller printers should consider all three options as they strive to grow their businesses. Franchisees should leverage the capabilities that their larger sister franchises or the franchisor can offer to expand the range of services they can offer their customers.

Business support systems: Especially for the independent printer, it is growing more difficult to do everything it takes to manage a hectic business on a day-to-day basis, while at the same time keeping up with industry best practices in people, process and technology. Additionally, these smaller independent players are often at a cost disadvantage as compared to larger firms, and those that are affiliated with some type of network that offers them preferential pricing from vendors of equipment, service, supplies and consumables.

Small commercial and quick printers are small business people and, generally, entrepreneurs. Those who are successful would likely be successful in any business; those who are struggling cannot totally blame their lack of success on industry woes. Despite the surface view reflecting declining print shipments and a declining number of establishments, under the surface there are still vibrant, dynamic and growing prospects for those who wish to invest the time, effort and dollars to take advantage of new opportunities.

It’s official. After a year of hand-wringing, political posturing and uncertainty, the powers that be have declared what businessmen have known for some time. We’re now told that the U.S. has been in a recession since December 2007, and the Bank of Canada soon followed that pronouncement with its own statement that Canada, too, is in a recession.

According to the Bank of Canada, tighter credit conditions, weak external demand, particularly from the U.S., and declining commodity prices are the main culprits. The financial crisis and recession had its origins in the housing and credit bubble and the high leverage in the financial sector. It started in the U.S., but other areas were not immune (see housing prices in Alberta). Canadians initially seemed relatively insulated, at least through the summer. True, the manufacturing sector suffered due to the high loonie, but high oil prices, tax cuts and rising real estate prices alleviated it somewhat.

Canada’s real gross domestic product (GDP) increased slightly in the third quarter, after remaining essentially flat over the first half of the year. Most of the third quarter gain occurred in July. The increase was led by the mining sector, notably support activities for oil and gas extraction as well as construction. And, despite all the hand-wringing coming out of Ontario, the country’s manufacturing sector increased as did production in the services industries with notable gains in the public sector and, to a lesser extent, in retail and wholesale trade. Nevertheless, economic growth has been weak for a year, particularly in export markets, and the disaster in the auto sector will cause real pain.

But, does it really matter whether the Canadian economy is in a recession? If you’re a worker who has lost a job or whose plant or mill might close, it sure feels like one. Although the annual growth of seasonally adjusted real GDP was positive during the third quarter, the numbers mask a deeper slowdown that we are all experiencing. With the turmoil of Canada’s auto industry hurting Ontario’s manufacturing base, the fall in oil prices affecting Alberta and Saskatchewan and the continued problems with the forestry sector, the economy is likely to get worse before it gets better.

More to the point, however, is that the printing industry has been in recession for some time. Over the past 10 years, the nominal (current dollar) value of sales of Canada’s printing and related services sector has inched up by an anemic 0.7% per year. The situation is even less rosy looking at the past five years only, with total top line sales falling by more than 15%, and the situation is even bleaker after taking inflation into account.

As one would expect with the decrease in revenue and production, the number of plants has declined as well. While the consolidation hasn’t been as dramatic as in the U.S., principally because of the lack of acquisitive “mega printers” and the large number of “mom and pop” printers serving smaller communities, there are still fewer printers in Canada today than a decade ago.

Many printers got caught in an unavoidable downdraft. But, others have themselves to blame for making things worse. The crisis has been particularly hard on executives who gambled badly with their business – they got into the wrong segment at the wrong time, took on risky investments, piled too much debt on their companies or leveraged their own finances to a catastrophic degree. Clearly, the economic slowdown and pain among many Canadian print buyers will further exacerbate this situation. Last year began with Quebecor World’s filing for creditor protection and ended with the closing of its progeny Grafikom. We anticipate there will be more financial difficulties during the coming year.

As depressing as these numbers are, however, it also means that many printers have already positioned themselves not only to survive but also to thrive. For example, Mark Airdrie, president of Toronto’s Serv-a-Trade Lithographers, a 40-year-old family business that offers a wide range of services for the trade, started fine-tuning his business in anticipation of a downturn as long as three years ago. He invested in equipment such as a CTP-system to lower his costs and mid-production digital colour printers to expand his product offerings.

“Because of my timely investments, we are in good shape to weather some tougher times. I will be able to make some money when things pick up,” says Airdrie.

Not every printer is well positioned though, and even those who are will be challenged. That doesn’t mean there aren’t things that you should be doing. It should be remembered that each printer’s situation is different, and the focus of owners and managers will differ from their employees. Yet, there are certain basic principles that, nevertheless, bear repeating.

1. Cash is king

Most printers are used to focusing on profit-and-loss statements. Re-orient your thinking. Take stock of your balance sheet; it is the key to your flexibility and survival. Debt will weigh on you. If your balance sheet is weak, it limits what you can do. Talk to your lenders NOW. Keep an eye on coming debt maturities, interest payments and your lease commitments. In the meantime, manage your cash position as best as you can. Cut inventory. Be very careful on your receivables. (More on that later). Work with your suppliers on your payables. Try to make sure you have positive free cash flow, or, at the very least, avoid burning cash. You will need cash to survive.

2. Focus

Identify the two or three key drivers of your business. Deal with reality. Face the truth early. You cannot assume that things will automatically get better when the economy turns around. Printers will need to be proactive. Pay attention to demand, costs and cash flow. Differentiate between core and non-core operations and assets. Identify what is most important to your business and concentrate on them. It’s easy to get distracted fighting fires, but to come out of the other side of this, you will have to maintain your focus on what really matters to your business. This doesn’t have to be fancy. Doug McMillon, recently appointed CEO of Wal-Mart’s international operations, says when he was head of Sam’s Club that they were going to “manage expenses, be thoughtful about how [to] spend capital, and have conviction about where [to] take risk.”

3. Examine your costs

This is an excellent time to look at your entire cost structure and work flow. A bad economy is one of the best instigators for companies looking at cost containment. Jez Metcalfe, owner of Signet Graphics, a seven–employee Woodbridge, Ontario trade printer comments, “Recession makes you streamline your business and look at it from another perspective, eliminate and reduce waste and increase efficiency.”

Focus on improving productivity and eliminating waste. Both will reduce manufacturing costs and are likely to improve print quality as well. By looking at the entire production process and flow of work, you will begin to identify bottlenecks. If you have less work, where are things moving more smoothly? What processes can be automated? What steps eliminated? What mistakes can be removed? It is an ideal time to introduce lean manufacturing initiatives. Streamlining operations means that fewer people are required to accomplish an equal or greater volume of work.

4. Only cut where it makes sense

Make sure there’s a purpose. Don’t try to be fair, but target areas that you let slide during better times. While most printers don’t have a lot of wiggle room, it’s always possible to clean out overhead and fat, prune the product line and invest in higher-growth areas. Incremental moves won’t cut it.

Managing labour costs is clearly a priority for many. Layoffs, as unpleasant as they are, may be necessary. Avoid across the board cuts. Focus on poor performers, overhead and administration – anything that doesn’t directly add value.

Signet’s Metcalfe had expanded to a second shift after installing their computer-to-plate system in 2007. But, work began to slow down in the middle of last year, so the second shift was just performing maintenance.

“After eight weeks, the second shift asked to be laid off. They were disappointed that we couldn’t give them work. We were prepared to keep going on, but they felt bad. So, we saved some money that way.”

It is important, however, not to underestimate or overlook the costs of layoffs. There are expenses for planning, severance and redistributing work. They can also reduce productivity among survivors.

While layoffs and reductions in work force are most common, other tactics may be necessary or preferable. Cuts to benefits, raising employee contributions to health care, reducing pension contributions and plant shutdowns or reduced hours are all alternatives to consider – however unpleasant. Nevertheless, layoffs do provide an opportunity to get rid of the poorest performers and restructure the remaining work. And, it can be argued that alternatives such as salary freezes or even reductions hurt morale and can drive away top performers, so they tend to be the last resort.

If you do have to let people go, do so in the right way. Say the right things, privately, one-on-one, and clearly tell the employee he/she is being let go and why. Rehearse what you are going to say and bring notes. Be direct in telling people the company can no longer employ them and explain the financial hardship causing the need for layoffs. Your employees have seen what’s happening on the plant floor, so while they may be shocked, they won’t be surprised. Let the laid-off worker leave with dignity and self-respect. If you are providing severance or other assistance, let the employee know. And, any information you can provide to your former employee about continuation of benefits or government assistance will be very helpful in assisting with his/her transition.

5. Take care of your remaining employees

Layoffs and financial problems can wear on your remaining employees. Uncertainty is killing the economy; it can kill your employees too. It is particularly important to maximize your personnel resources. Communicate regularly with your employees to keep their morale up. Talk about what the financial crisis means to your company.

The current situation represents an opportunity as well. Invest in training. The Canadian Printing Industries Sector Council has put together a Standards and Certification Roadmap, which includes a set of standards for a host of production processes. That’s a good place to start. Encourage your employees to explore process improvements, to tackle projects that might have been put off. Are they up to speed on the latest software? Have them cross-train. Do you have a fully functioning website? How useful is it in meeting the needs of your customers for communication and purchasing? How can it be improved?

It is also important to keep your best talent. Don’t forget your stars, whether they are in production or sales. Set tough but realistic goals. Get everyone involved. Make your workers part of the solution. Empower your front-line supervisors and engage your top workers. People want to grow and be challenged. Give them new opportunities to take on responsibilities and build their sense of affiliation with the company.

6. Stay close to your customers

Communicate, communicate, communicate. Get information from where the customer action is, and get that information to your operating people as quickly as possible. Recessions provide an excellent opportunity to propose new ideas to clients and to disrupt business relationships of competitors. Understand your customers’ needs and focus exclusively on them. Strategies will vary from one company to another. Provide long-term vision when talking to customers. Not everyone is looking to buy solely on price.

Jamie Barbieri, president of the PDI Group, the largest independent sheetfed printer in Quebec, notes that they have been able to deal with the current situation primarily based on the relationships they have developed.

“You can’t continue to sell 40-inch output.” Barbieri believes there will be another big push from larger customers looking to consolidate.

“Customers want to do business with people who will be in business, so they are looking at service and quality. The RFPs we’ve seen are looking at our financial statements, strategic planning and vision.”

Be a resource in helping clients make the most of their marketing budgets, and help them get the most out of their print budget. Reinforce the value of print. Do you have any particular knowledge that can help them be more effective? For example, changes in postal regulations provide an opening to show prospects and customers how to save money. On the production side, work with them on improving better files. This helps you, of course, but also cuts their costs and cycle time. It’s to their benefit.

It is critical to differentiate business in some other way that competitors can’t copy or mimic. Provide some new product, alternative approach, or insight into the company’s business that you can aid them with. Inventory, fulfillment and administration all represent outsourcing opportunities that help them eliminate their costs. Sales of your clients who are buying print should be a major focus. Give them ideas on how to increase sales.

Also use this opportunity to evaluate your customers. Who is profitable? In bad times, managing cash and receivables are critical. Identify your higher risk customers and decide what to do with them. Options include cutting them off or working out a way to keep the relationships going. Extending longer credit terms can be a way of differentiating yourself, but it’s dangerous. You might win contracts, but it could be a real problem if they default.

Jez Metcalfe of Signet Graphics says, “My biggest worry about the recession isn’t [the volume of] my work coming down, but if my customers get caught up, either they go bankrupt or their customers go bankrupt and they don’t pay me. It’s not just that my sales go down, but it’s the loss of payment that hurts. I’ve never been strict on credit terms, but I am trying to reduce my risk. I’ve established credit limits. I try to rein people in on payments, even if that means they go somewhere else.”

7. Identify new markets and opportunities

Too often, businesses think they’ve taken care of execution by doing the same old thing, only better. Winning execution means doing it perfectly and then finding new customers and new markets. Some regions, industries and businesses are stronger than the others. Grow by identifying the growing businesses and going along for the ride.

So, where are the growth areas? For now, the growth areas are those areas heavy on bureaucracy: health services, educational institutions, government. Engineering firms, insurance, pharmaceuticals and biomedical also should hold up well. Tim Flaman, vice-president of sales and marketing at West Canadian Digital Imaging, a 240-employee firm with facilities in Calgary and Edmonton, notes that while a number of large engineering firms and their clients have delayed projects, it has not hit yet, as they continue with their current work. Given the pace of growth in Alberta the last two years, things might have slowed down a bit, but “it’s closer to normal,” he says.

Flaman also notes that West Canadian’s commercial business is holding up well and “hasn’t slowed at all.” Their clients have increased their direct mail operations and their signage business is also doing well.

“The digital world is slightly different than commercial offset,” he says. “Digital is more what it’s worth or for quick turn‚Ķa lot of work is fixed with customers, on contract, so we’re not quoting every job.”

Companies in more challenging environments might try some new tactics, however. If you are encouraging your customers and prospects to use direct mail, it might be a good idea to use it to generate new customers or to show your existing ones what can be done. Signet’s Metcalfe is “actively marketing the company,” which he never had to do before. He’s using his in-house prepress and design staff to develop a website and marketing materials. Metcalfe is even considering hiring an outside salesman.

8. Sell – or buy?

Sometimes it’s just best to sell assets, or even the entire business. While the price you get may not be the highest, you still may get a better return. Perhaps, you have a press that no longer fits your work, but that someone else might be able to use?

The ultimate resolution, of course, is to sell the entire business. Tom Blockenberger, of Vancouver’s Broadway Printers, did just that last year, selling the 97-year-old business to Thunderbird Press. Business conditions had become increasingly difficult in B.C.

“The market meltdown has affected everyone,” says the fourth-generation former owner Tom Blockenberger. Faced with increasing property taxes, Blockenberger was forced to evaluate his situation. “A lot of the value of the firm was in its real estate. It was too valuable to be used for a printing company.”

The latest round of property tax increases forced the issue. “We had to move anyway, but it was just too expensive.” The business was sold to Thunderbird, more than doubling their revenue, while the land was sold “for fair market value.”
For every seller, there is a buyer, and this market presents an excellent opportunity to buy businesses or equipment at attractive prices. You don’t want to compromise your current operations by overleveraging, assuming financing is available. Before buying another business, you need to assess whether you have enough of a cushion to survive a long downturn in the business. Can the business you’re looking to buy realistically generate enough cash flow? The last thing you want to do is take a good business and acquire a poorly operated competitor.

On the other hand, sometimes there is a good fit and assets can be acquired. Thunderbird Press’s purchase of Broadway Printers is one example. Another is the purchase of Grafikom’s Sherbrooke facility by Phipps Dickson Integria.
President Jamie Barbieri notes that the Quebec market has been poor for a number of years. Diversification of customers and printing capabilities is part of their long-term strategy. So, when the specialty plant became available, they moved quickly to acquire it. It was a good fit, Barbieri explains, adding new UV printing capabilities to PDI. It also provided the opportunity to add extended services and new applications for the specialty card market.

9. Keep building

There are other ways to build besides acquisition. While you have to cut costs and conserve cash, make sure to keep up product development, innovation and brand building. If you have the wherewithal, invest in new equipment or capabilities to be more productive as we come out of the recession.

For example, looking to counteract a decline in some of its core markets, BCT Ottawa, Business Cards Tomorrow franchisee, recently upgraded its print manufacturing capabilities to include high-quality, short-run four-colour printing with the installation of a Presstek 34DI press.

“Our traditional sales were flat so we were looking for a growth opportunity,” says Graeme Olmsted, co-owner. Since installing the press, Olmsted reports that sales are up 10%, even in the face of declining traditional sales. Olmsted realized that short-run colour was a potential growth area, and he wanted the next step up after digital, runs between 500 and 10,000.

Similarly, Melan, a full service marketing print products provider in Saint-Laurent, Quebec, near Montreal, recently installed Xeikon technology. Melan uses Xeikon to produce oversized posters, banners and signage for its expanding customer base. Garo Nazarian, owner of Melan, also sees “additional opportunities with the Xeikon for variable data printing.
In today’s economy, our customers are looking for more than “just a printer.” The Xeikon is our springboard to provide the value-added services that enhance our customers’ marketing print projects.”

West Canadian Digital has just moved into a new 60,000 sq.ft. facility. They laid it out to maximize efficiency. It’s had other benefits as well, improving employee morale. “Everyone has their own locker, and people love it,” says Tim Flaman. “Little things make a big difference.”

10. Maintain a sense of urgency

Finally, it’s critical to maintain a sense of urgency. Your survival is at stake, and you have to move quickly, if deliberately. As Andy Grove, formerly of Intel, puts it “Only the paranoid survive.” Remember, Alan Kay – “The best way to predict the future is to invent it.”

Good advice, in any economic environment.

The annual Canadian Printing Industries Association senior management conference, Strategy 08, recently wrapped up. More than 100 industry executives and others traveled to Halifax, Nova Scotia, to meet with peers, network and share insights with a range of speakers. Sub-titled “Protecting Your Profits,” much of the focus was on improving business operations, particularly through recruiting and retaining employees.

After a day of golf, which raised nearly $5,000 for the Canadian Printing Industries Scholarship Trust Fund, the two-day conference opened with a keynote from Gord Griffiths, president and CEO of Grafikom.

Griffiths provided the audience with a capsule of insights and lessons learned from more than 40 years in the industry at companies such as RBW, Lawson and Jones, Quebecor and Cenveo. He suggested that printers should be more innovative and be less modest about going to customers to promote ideas for new products or how to save money. Griffiths also encouraged printers to participate in associations to promote the industry, especially to young people – a theme that was echoed throughout the conference. He also recommended that printers should partner to compete against the “megaprinter” and go after a larger opportunity as well as to recognize that competition comes principally from outside the industry.

Louise Kralka, vice president of sales at Phipps Dickson Integria in Montreal and in-coming chair of the CPIA board, moderated a panel discussion that focused on the customer: “Do you really know your clients’ needs? What makes a print buyer tick?”

Margie Dana, founder of Print Buyers International, Jane Morrison of Colour in Halifax and Louise Marcil of Pulp and Paper Canada, via teleconference, shared their insights. All emphasized fast turnaround, different types of printing and the increasing importance of environmental factors, which developed into another key conference theme.

After lunch, motivational speaker Peter Davison energized and entertained the crowd with his talk on how to “Energize Employee Engagement.” Davison stressed the importance of promoting an emotional connection between the employee and his or her work and of treating each employee as an individual and important contributor to the whole.

The CPIA is a participant in the U.S.-based trade association Printing Industries of America/Graphic Arts Technical Foundation. Gary Jones, director of environmental, health and safety at PIA/GATF, spoke about the Sustainable Green Printer Partnership Program. Jones noted that the push for green printing is very much market driven. He discussed the various components of sustainability, including the product, the process and the envelope (the physical production environment). Jones then described the SGP program and how printers can participate. (More information is available at www.sgppartnership.org.)

The guiding principles of the SGP are aspirational; improvement is an on-going process. He stressed the need for both a systematic (step by step) and systemic (all aspects of the operation) approach. Green printing is very much about reducing waste – and therefore cost – and instituting lean manufacturing principles can be an important component of that.

However, it is not only environmental factors that lead printers toward lean manufacturing. With print under relentless margin pressure, the need for on-going process improvement is even more important.

Transcontinental has long been a leader in instituting lean manufacturing processes, and we were fortunate to have Transcontinental’s corporate vice president of efficiency and innovation, Réal Boulet, discuss the company’s approach and use of lean manufacturing techniques, including Kaizen.

Transcontinental’s operating philosophy focuses on five key elements: strong leadership, mobilizing and engaging employees, improving business processes, optimizing operational performance and customer focus. Boulet stated “In our industry, improving quality is reducing waste‚Ķor reducing lead time.” Lean is about eliminating sources of waste and shortening cycle time.

Day two opened with Marie Eveline discussing the Canadian Printing Industries Sector Council. The Council provides a national forum for collaboration, provides a leadership role in skills development and is working to improve the industry’s image as a career destination. Just two years old, the Council has already published a review of education and training programs, provided a needs assessment and is developing a skills and technology roadmap; the Council has also started developing skills standards for a variety of operations. Publication of a Labour Market Study has been postponed until after the election.

Following Eveline, Pascal Longpré of Mercer Consulting discussed how people issues can affect a merger or acquisition.

The highlight of the program was two panel discussions. After a brief presentation by PIA/GATF (and former CPIA) President Michael Makin on diversifying and moving into ancillary services, Jeff Eckstein of Willow Printing, Ruby Thomas from Harmony Printing and Jim Mayes of Colorcraft of Virginia discussed their move away from simple “ink on paper,” including digital print, special effects and mailing and fulfillment services.

The conference was attended by a number of students from Ryerson University’s School of Graphic Communications Management. Four of them discussed their passion for the industry as well as their hopes and aspirations. Not only was it an enjoyable hour, but it injected a healthy dose of youth, optimism and vigor. Indeed, printers of all sizes should be encouraged to participate in higher education internship programs and look to hire new grads.

Kevin Lanuke, founder and president of Blitzprint in Calgary, spoke of his journey from offset printer to digital printer to providing communication tools to help customers achieve their dreams. He spoke of the cost of opening niche markets and of the importance of a strong balance sheet – something that strikes close to home in the midst of the current credit meltdown.

The conference closed with an update on the current pulse of Canada, provided by John Wright from Ipso-Reid, a leading polling firm. Wright spoke both of Canadians’ attitudes and behaviour; he also provided an update and insight into the current election.

The final event was the Gala Awards Reception, where CPIA Awards of Merit were given to Mike McInnes (Transcontinental, Brampton) and Kris Bovay (Pacific Bindery Services, Vancouver). CPIA Supplier Award of Merit recipients were Cyndie Crysler of Muller Martini, Brian Ellis of Heidelberg and Graham Thompson of Vertex Graphic and Business Equipment in Vancouver. Dave Potje of Twin City Dwyer Printing in Kitchener received the Distinguished Service Award. The second annual Young Printer Award went to Todd Cober of Cober Printing in Kitchener. Don Gain of Harmony Printing and Rémi Marcoux, executive chairman of Transcontinental, received Honourary Life Member Awards. In his comments, Marcoux highlighted the two key trends of 1:1 and personalization and of developing a multi-channel platform.

Next year’s Strategy 09 Conference will be in Toronto, Nov. 10-12, 2009. For more information check out www.cpia-aci.ca.

John Zarwan is a PEI-based consultant focusing on business development and profit improvement. He provided drupa highlights at the Strategy 08 Conference.

Every four years brings us a U.S. election, the Olympics, the World Cup, and drupa. And make no mistake. Drupa is every bit as exciting as those other ones. This year was no exception. Around 391,000 visitors from 138 countries attended the two-week long “Messe”, which featured 1971 exhibitors from 52 countries. Although attendance was down slightly from 2004, the mood was upbeat and festive.

If you have never been to drupa, it is difficult to comprehend the enormity of the event. The fairground in D√ºsseldorf is one of the largest in the world, covering over 2.85 million square feet (170,000 square metres). That’s more than 70 acres! With 19 halls (really 20, as Hall 8 is split into two separate buildings) and 1.8 million square feet of exhibit space connected by covered moving walkways, the fairgrounds have barber and beauty shops, restaurants and cafes in each hall, several banks, and both a hardware store and a grocery store. Understandably, it is virtually impossible to see everything one wants to—though I did make time to stop at the beach area between two halls laid out with umbrellas and beach chairs for people to relax in the sun.

This year’s drupa had two new features, including a special event aimed at print buyers. The “drupacube” showcased answers to the question of how print and online media can complement each other in the future. Inside a pavilion on the Rhine, the drupacube featured a variety of marketing-driven applications for printed products, de-emphasizing technology.

Making its second appearance was the “drupa innovation parc”, focusing on new technology. Building on its 2004 success, this year’s expanded “DIP”—it was nearly four times larger than in 2004—contained eight themed zones (including online communication, document management, and buyer integration) and provided a venue for 160 exhibitors. Although intended to support and promote young companies, it was also the home to new technologies offered by more established vendors.

The drupa innovation parc also provided the venue for the popular “Red Sofa” sessions—interviews with industry executives including HP’s VJ Joshi, Bernhard Schreier from Heidelberg, Guy Gecht of EFI, and Xerox’s Ursula Burns. (All the interviews are available online at: http://tinyurl.com/3hhkob .

In addition, the Print & Media Congress offered a number of “Compass Sessions”— two-hour intensive workshops on a variety of issues, including digital workflow, PDF, automation, JDF/CIP4, colour management, printed electronics, and packaging.

Another popular feature was the “Highlight Tours”, each of which focused on a different aspect of the show and ushered attendees from hall to hall and booth to booth.

It is impossible in a short piece to cover even a fraction of what any individual could take in at drupa, let alone the entire show. So let this article be your own personal “highlight tour.”

Even with everything else going on, drupa is still principally a press show. For 50 years, printers have been coming to drupa to see the latest developments in presses.

Every offset press maker has upgraded their presses, both through new offerings and significant improvements to existing lines. Each manufacturer emphasized a number of common themes, including innovation, integration, service, and sustainability. The new offset presses cut make-ready and waste, increase productivity, ensure more useable sheets, and improve quality consistency.

Heidelberg once again had the largest presence, in their customary location in Halls 1 and 2, with 7800 square metres of floor space (about 2 acres) and 3500 Heidelberg staff. Heidelberg’s twin themes of “HEI Performance” and “HEI Value” were on display, and their exhibits were connected by a “HEI-way” (there was also a “HEI-School”). The centerpieces of the exhibit were the new Speedmaster XL 145 and Speedmaster XL 162, representing the most significant expansion of the company’s press line in a number of years. Of course, Heidelberg also had a full panoply of presses, 17 in all, with around 120 printing units, as it showcased its Speedmaster XL line developed for industrial operations with multiple shifts.

An important component of Heidelberg’s exhibit was its end-to-end integration. All prepress, press, and post-press equipment throughout both Halls were connected using its Prinect workflow software (see Graphic Arts Magazine’s June 2008 issue). All Speedmaster presses are equipped with a Prinect Press Center which combines press operation with colour and register control in a single, central console. A large screen gives press operators an overview of all press processes. The wallscreen also supports print approval processes.

Heidelberg dedicated Hall 2 to packaging, with offerings including a new Prinect packaging workflow, new VLF presses and existing 29” and 40” Speedmaster CD presses, and a variety of converting and finishing options. Although it wasn’t shown at drupa, board member Dr. J√ºrgen Rautert also highlighted the new LinoPrint inkjet system launched the previous month at InterPak.

The biggest news from the newly renamed manroland was perhaps its new name and logo. Two years have passed since they became independent of the MAN group, making drupa a good opportunity to change their name and logo. As befits the global market leader for web presses and second largest manufacturer of sheetfed presses, manroland had the second largest stand at drupa. With a floor area of 4000 square metres (about one acre) and a 1300 square metre gallery under the motto WE ARE PRINT, manroland focused on production efficiency and value. Manroland moved down-market with the 2-page Roland 50, a first for the company. At the other extreme, they introduced a 96-page LITHOMAN web press, as well as perfecting versions of very large format sheetfed presses. Improvements in automation included the InlineColourPilot that measures and regulates ink density of up to seven printing inks during production, their automated plate change system, printcom process system, and printnet networking system.

The Ryobi 1050 puts the small-press manufacturer squarely in the 40” format market. Rated at 16,000 sheets per hour, the 1050 will be offered in “S” (41.73 x 31.5 inch) and “XL” (41.73 x 33.46 inch) configurations. It will be interesting to see how this plays out in Canada, where manroland distributes Ryobi presses.

Similarly, KBA, which bills itself as the “world’s oldest press manufacturer”, provided a number of announcements, both of new presses and productivity improvements on existing lines. The focus of much of their attention was on providing a more compact press design, automation, cost efficiencies, improved print quality, and ergonomics. Long known for their large format presses—they announced a very large format (142 cm) 4 over 4 perfector—KBA is now aggressively targeting smaller formats as well. Alongside its high-end medium- and large-format presses, KBA showed a pair of highly automated presses suitable for price-sensitive printers. The 20x29” Rapida 75 will be available in up to 8 colours and with automatic 4/4 perfecting. The 28x41.5” 5-colour Rapida 105 is available as a straight press with a maximum of 7 printing units plus a choice of coaters, and in a slightly larger (29x41.5”) version. KBA is addressing the need for greater productivity, especially for shorter run lengths, through improvements such as the DriveTronic SPC (simultaneous plate changing) system and the QualiTronic inline sheet-inspection system. Video-based automatic colour register control and a choice of professional closed-loop densitometry systems help minimize waste, make-ready times, and quality deviations.

Digital Presses
Drupa 2008 made it clear that “big iron” is no longer the only big game in town. After Heidelberg and manroland, Hewlett-Packard and Xerox had the largest exhibits.

On the toner side, Kodak, HP, Océ, Xeikon, Xerox and others showed significant new products and upgrades, with more speed, improved image quality and enhanced productivity.

HP Indigo celebrated the 15th anniversary of its 1993 launch at IPEX by introducing three new models. Adding to the HP Indigo 4000 and 5000 series presses, the HP Indigo 6000 and 7000 series presses offer increased productivity. The HP Indigo 5500, the company’s best-selling model, has been enhanced with a variety of options, including an additional feeder, an in-line connection to a UV coater, and a kit for enabling printing on thicker media. The newly launched HP Indigo 7000 Digital Press prints 120 4-colour, A4-size pages per minute and is targeted at higher production volumes than the 5500.

The HP Indigo WS6000 and W7200 presses, also launched at drupa, are web-fed digital presses. The WS6000 offers twice the productivity of the successful HP Indigo press WS4500 and is targeted at labels and packaging converters with significant volumes of medium- and short-run jobs. The W7200 press is for high-quality publishing, direct mail and transactional/ transpromotional offerings. Both are expected to be available next year.

Also celebrating 15 years of sales, although with considerably less fanfare, Xeikon emphasized “quality and speed in digital print” with the introduction of three significant new products. The Xeikon 8000 is by far the fastest full colour toner device on the market. Boasting true 1200 dpi at 4 bits per spot, the Xeikon 8000 has been developed to optimize print productivity and to provide fast, cost-effective, and eco-friendly printing without compromising on quality. Web-fed, it prints full colour multi-page documents at a top speed of 230 A4 pages per minute, or 13,800 A4 pages per hour. Similarly, both the 5000plus and 6000 presses have been given a quality boost with the 1200 dpi print head.

Xeikon also introduced a new 5-colour label press. The Xeikon 3300 offers true 1200 dpi at 4 bits per spot and runs at 63 feet/minute, making it the fastest digital 5-colour label press on the market. It runs a variety of substrates, including foils, self-adhesive films, paper and more, making it a good fit for many short-to-medium print runs or just-in-time jobs. With five colour stations, the 3300 can apply spot colours as well as an opaque white and special security toner.

Xerox also made a number of announcements, continuing their move toward a services-led technology company, with strategic bets in colour and production digital print and an emphasis on co-marketing. In addition to their distribution (and development) partner Fujifilm, Xerox featured a Heidelberg offset press in their stand, as well as workflow from both Fuji and Screen. The company also introduced an integrated in-line digital packaging solution for the pharmaceutical industry that can produce customized, variable data on each package. Jointly developed with Stora Enso, the solution is powered by the Xerox iGen3 110 Digital Production Press and consists of an Epic CTi-635 varnishing unit with both aqueous and UV-coating options from Xerox, a KAMA die cutter and a stacker-conveyer unit from Stora Enso.

On the new product side, the biggest announcement was the iGen4. Although it offers the same rated speed of 110 pages per minute as the iGen3, it is noticeably “new and improved”. Xerox expects the iGen4 press to deliver 25 to 35 percent more productivity by automating operator tasks, reducing the need to interrupt the press for adjustments, lower maintenance requirements, a number of quality improvements, and decreasing overall operating costs. Xerox also made a number of improvements in the iGen3, including the Automated Colour Quality Suite Press Matching System, for new and existing users of the Xerox iGen3¬Æ 90 and 110 Digital Production Presses. These enhancements enable faster press set up, quicker time to production, greater colour stability, and automated Pantone colour matching.

Also of interest was the new 700 model Digital Colour Press. This is a small-footprint 70 ppm device that uses low-melt EA toner and delivers a matte finish to images. It packs robust production features such as coated paper handling, heavyweight media support, and feeding and finishing options at an entry-level price. It brings productivity, print quality and flexibility to print providers looking to adopt digital technology or expand their digital printing business.

As drupa is a show to highlight new technology, Xerox also showed the dual engine ColorConcept 220, a melding of two iGen3 presses to create a 220-ppm full colour perfecting press. The first engine prints the front and the second the back ( just as is done with the company’s Nuvera 288), making it the fastest, full colour cut sheet digital press ever shown publicly. The system also has a smaller footprint and is more compact than two Xerox iGen3s sitting side-by-side, which saves valuable shop floor space.

Xerox also used drupa to showcase their next-generation ink—“cured gel” ink, which offers more ways to print on many substrates.

Finally, Kodak emphasized what they call “offset-class output” in their solutions for conventional offset and inkjet and toner digital printing. They introduced a new NEXPRESS model, the NEXPRESS S3600 Digital Production Color Press, the fastest in its S-Series, with dramatically increased productivity. At 120 pages per minute (A4), the NEXPRESS S3600 allows print providers to achieve a higher level of productivity to produce more jobs per hour. Modular features of the NEXPRESS S-Class Presses include input feeder options with up to 11,000 sheet capacity, collation capability of up to five different media, and both cut sheet and roll fed paper on the same press. Output options support multiple high capacity deliveries, as well as inline or near line booklet makers. Along with the KODAK NEXPRESS Fifth Imaging Unit Solution, a near line KODAK NEXPRESS Glossing Unit can add a high gloss finish for surface protection and varnished look. NEXPRESS S-Series Presses can be upgraded on site to increase output speed, add colour imaging units and input/output options.

Inkjet
Drupa 2008 was billed as the “inkjet drupa”, and it certainly didn’t disappoint. It is clear that we have seen the future with these devices, as a slew of suppliers showed products, category demonstrations, and new technologies. Most are web presses, and most use thermal or piezo inkjet heads. And most are targeting, at least initially, just a few applications, particularly newspapers, so-called “transpromo” (transaction documents incorporating promotional materials), and books. Eventually, however, most expect them to expand into the broader commercial print market.

First, let’s look at those vendors who have presses that are available for sale and installation. The most mature is the Agfa :Dotrix, which has been for sale for a number of years. Although examples of broader graphics applications were available, the press was set up at the show for flexible packaging applications and folding cartons, for which it is clearly appropriate. The :Dotrix, built upon the iron frame of a flexo press, can have flexo units before the inkjet heads and UV coating and drying after them, just like a “hybrid” sheetfed lithographic press. Equipped with an inline sheeter that can cut its 28.5” web to various lengths, the :Dotrix, which is modular and upgradeable, runs on a wide variety of media at 24 metres per minute, and Agfa says it will increase the speeds to 30 m/min.

Océ expanded its high speed inkjet offerings with three new JetStream models. The groundbreaking series was launched in 2007 with a 492 feet per minute JetStream 1100 single-engine system and the Océ JetStream 2200 full colour, twin system. Now these models are joined by the new Océ JetStream 750, Océ JetStream 1500 and Océ JetStream 3000 systems. The series now offers high quality full-colour output speeds ranging from 675 to 2,700 A4 impressions per minute, with easy upgradeability throughout the family. The newly expanded Océ JetStream portfolio is positioned to meet customer requirements in terms of colour quality, speed, and duty cycles.

Perhaps the biggest changes in emphasis have come from Screen and Fuji. The two Japanese companies, long known as prepress suppliers, have announced their intention to enter the press market. The Screen TruePress Jet520, introduced in 2006, prints on a variety of stocks up to 20.5” wide. The roll-fed paper transport system affords faster turnarounds on high-volume projects. The Truepress Jet520 can print 210 feet per minute, the equivalent of 55,000 impressions per hour. As with many of these web inkjet presses, Screen focused their demonstrations on newspaper and print-on-demand book applications. Screen also showed a sheet-fed press, the Truepress Jet SX, as a complement to the roll-fed inkjet printing that is already available. It can output on A2-wide size paper, up to 530 x 740 mm. Screen says it can print not only on inkjet printing paper, but also on ordinary printing paper and thicker stock.

Another concept press was on the Fuji stand, The Jet Press 720, also a sheetfed inkjet digital press. Designed and built with technologies from across the Fujifilm Group—including those of FujiXerox and the inkjet head manufacturer Dimatix—its frame comes from a sheetfed press manufacturer. With a maximum sheet size of 720 mm by 520 mm, the Jet Press 720 offers a resolution of 1200 dpi at 4-level gray scale at 180 sheets per minute. Fuji is clearly targeting mainstream commercial applications. They claim a make-ready break-even of run lengths of approximately 2000 impressions.

Two other presses that caused a stir came from Hewlett-Packard and Kodak. The HP Inkjet Web Press is a digital printing platform based on the company’s Scalable Printing Technology. HP showed a 36 inch wide web at drupa, although the first announced product is 30 inches wide. It runs up to 400 feet per minute at 600 by 600 dpi, can print two-sided signatures, and is designed for production volume in the millions. Although the long-term objective may be general commercial applications, the initial target markets are those that do not require high colour coverage, such as books, newspapers, and direct mail. A key feature of the demonstration at the stand were the variety of finishing solutions from companies such as EMT, Hunkeler, MBO, Muller Martini, and Pitney Bowes.

Kodak Versamark showed its full-colour STREAM Concept press. The Stream technology uses a continuous inkjet system that is not limited to water-based dye inks, and can therefore print on a wide range of substrates. With a resolution exceeding 600 dpi and print speeds over 500 feet per minute, Kodak is looking to achieve “offset class” printing and is targeting high volume applications with monthly page volumes of 10 million or more. The press is for those who want to bring the benefits of digital print to jobs traditionally produced using offset presses. Kodak also demonstrated the Stream Concept Printhead, running inline on a Muller Martini press. Capable of delivering monochrome offset class variable data printing applications at up to 1000 feet per minute, the Stream Concept Printhead demonstration was intended to show the technology’s potential for hybrid printing and as a technology platform for future inkjet systems.

Wide format
Also on offer were a variety of wide format inkjet printers. One that was particularly interesting was the new Océ ColorWave 600, a wide format machine that uses TonerPearls jetted through an inkjet head,. Although targeted at CAD and other non-graphic wide format applications, where Océ is very strong, this machine offers interesting potential.

EFI’s VUTEk showed a high-speed, flatbed UV printer targeted at point-of-purchase and display graphics, printing at output up to 557 square metres (6000 square feet) per hour The Jetrion 4000 UV Inkjet System, a unique industrial inkjet printer, is now commercially available and is targeted at label converters for runs of up to 50,000 labels.

The largest array of wide format products was shown by HP. In addition to their Designjet line, HP is a major player in the super-wide category, with its recent acquisitions of NUR Macroprinters Ltd. and MacDermid ColorSpan Inc. to supplement the Scitex line.

Although there were a variety of other suppliers, one should pay particular attention to Fuji, which sells Inca devices, and to Agfa. While Agfa took pains to emphasize their commitment to prepress systems, introducing a revamped :Apogee workflow (see Graphic Arts Magazine’s June issue), new plates, and new CTP systems, inkjet dominated their stand and will clearly be a focus going forward, not only with the :Dotrix discussed earlier, but also the :Anapurna line and screen-hybrid :M-Press.

Postpress
Drupa is also the best place for those interested in postpress and finishing, as an incredible variety of products and vendors can be seen in one place. Innovation was present in abundance, as vendors offered in-line, off-line, and near-line production solutions designed to deliver the economic benefits of automation, shorter makereadies, and reduced labour. Finishing is particularly important as a way for printers to ‘add value’ to the printed product, and, I believe, represents the next wave of process improvement. As Heidelberg and others showed, the acceptance of JDF will increase the productivity of these systems.

Applications and Services
Another difference in this year’s drupa was the emphasis on applications and services. While it is impossible to cover all, a number of vendors exhibits stand out, particularly Heidelberg, Kodak, HP, and Xerox. All organized their displays around various applications and profit centres, rather than product categories.

Finally, I’d like to mention in particular one Canadian-focused service offering, from Fuji. “Getitfromtheexperts.ca” provides a customized and personalized response that highlights appropriate products and services, based on a short series of questions.

China
Another major difference in drupa this year was the increased presence of Chinese-based companies. There were at least 150 exhibitors from the PRC, and another 25 from Taiwan. It’s something to look out for in 2012.

Environment
While not the “Green drupa” that many thought it would be, every press conference mentioned the environment, although often as an afterthought. But all companies felt it important to highlight what they were doing to reduce the environmental impact of printing. As they say, “watch this space.”

For 14 eventful days, D√ºsseldorf was the centre of the printing industry, and it is absolutely impossible to cover it all or to summarize. I hope I’ve whetted your appetite for the next one—see you in 2012!

So what is JDF, where does it fit, what does it mean, and why should anyone care? And what is this thing called “workflow” anyway?

By the time this issue is in your hands, drupa 2008 will be history. We’ll see whether the promise of the “inkjet drupa” or the “green drupa” was borne out, and whether drupa 2008 will be more like the “CTP drupa” of 1995, where the impact was immediate, or more like the so-called “e-commerce” drupa of 2000 or even perhaps the “JDF drupa” of 2004, where it took longer for the industry to be affected. And make no mistake, although the typical hype and hoopla that accompanies a quadrennial show such as drupa may have overstated the case, JDF is being implemented and having an impact.

Although the term “workflow” really should refer literally to the way you get your work done, it is most commonly used to refer to digital prepress and is therefore a fairly recent concept. When digital prepress workflows started in the 1990s, “workflow” meant little more than the series of processes that were involved in getting a job from file to plate. More recently, however, the idea developed into a suite of productivity tools. With revenue growth difficult to come by, intense competition the norm, and margin pressure relentless, printers have to improve operating efficiency throughout the entire production process. A key piece of this is linking the various parts of production—prepress, print, and postpress—not only with each other, but also with MIS, estimating, and job costing.

JDF (Job Definition Format), a standard developed by the CIP4 (The International Cooperation for the Integration of Processes in Prepress, Press, and Postpress) organization, is an attempt to do just that. CIP4 was formed in late 2000 to extend the work of its predecessor, CIP3. CIP3’s Print Production Format (PPF) found some success in ink key presetting and postpress operations. JDF is an XML-based job ticket format that provides key information about the job to “JDF compliant” equipment and software.

Why is JDF important? The integration of production processes streamlines workflow. An automated environment tells when to start and stop a process, and it also communicates what functions should be performed. Anything that eliminates steps, takes time and cost out of manufacturing and, equally important, reduces the potential for error.

The lack of open standards allowing for communication within the print shop, and between production and MIS, leads to higher costs, slower production, and inefficiencies.

There’s been a great deal of misunderstanding about JDF. It is, first, an open technical specification, available to all. Second, not every piece of equipment, software, or production process will have to make use of the entire specification. By automating the “handshake” between devices, however, it provides the specific information for the particular step of the process. It provides a flexible methodology for building workflows and for producing jobs. JDF is a standard language for preserving the job data throughout the entire life cycle of a print job.

In addition to “informing” equipment and software of what needs to be done, JDF theoretically allows for the collection of quality control information as well as key production statistics about each process directly from the devices. These “MIS” functions allow management to identify differences between estimated and actual costs and recognize bottlenecks in the workflow. JDF thus can be used to improve overall efficiency and better allocate resources.

It’s important that communication be “two-way,” that is, able to send as well as to receive JDF specifications. The JDF-enabled workflow or MIS system must be able to actually implement the required task. And the JDF system has to be able to “organize” the job, that is, specify what actions are to be performed and what to do once they are finished.

As there are more than 300 companies developing to the JDF standard, you can imagine that implementation is a slow, laborious process. Not only do the products have to be developed and tested, the interfaces have to be tested with others to make sure they work. The certification process is long and arduous, but products are slowly and surely being certified as conforming to the Inter-operability Conformance Specification (ICS) by CIP4. But the good news is that the interaction is transparent, if equipment or software meets the specifications and is adequately tested. As a result, JDF-compliant or enabled equipment and software can be acquired in pieces. It is not necessary to implement a complete “end to end” JDF workflow or commit to one right away.

Another thing that’s important to remember is that JDF is not just for large printers. Indeed, all of the major workflow suppliers recognize that smaller and mid-sized printers are more likely to reap the benefits. Mark Wilton, Director of Partner and Sustainability Initiatives at Kodak and CIP4 Chief Education and Marketing Officer and Board member says, “More automation means you can be faster, more efficient. Every printer wants to get his Sunday back. [With JDF-enabled automation], you can be 10%-15% more efficient. Its real value is time. It cuts overtime, cuts process time.”

While all suppliers are facilitating automation, and supporting JDF, each has a somewhat different perspective and approach, or “unique selling proposition” in ‘vendor speak’. Although we discuss here only four major prepress suppliers, there are many other solutions available that may meet your needs.

Heidelberg was one of the four founding members of the initiative that developed the first draft specification of JDF and was involved with CIP4 from the beginning (and with its predecessor organization, CIP3). As one would anticipate from a supplier of prepress, press, and finishing solutions, Heidelberg’s approach focuses on the entire print production process. For Heidelberg, workflow does not revolve just around traditional prepress but incorporates everything from the print buyer through to finishing. Dennis Ryan, Prinect Product Manager at Heidelberg USA in Georgia, says “Heidelberg delivers on the end-to-end JDF workflow promise.”

Under its umbrella Prinect workflow, Heidelberg offers an integrated solution that links prepress, press, and post-press through a seamless system with a single master job ticket, workflow plan, and user interface called the Prinect Cockpit. This provides an advantage in tracking, archiving, and repeating jobs, according to Ryan. It is a single system, not silos with an interface. Also under the Prinect umbrella are press-based colour control and measuring devices. The JDF interface allows Prinect to link with and manage third-party applications and equipment such as MIS systems or digital print production devices.

The founders of Edmonton-based McCallum Printing Group, started in 2004, always had an appetite to be involved with the latest technology. With a target market that placed high importance on quick turnaround, the founders knew the importance of incorporating the latest workflow tools. Starting from scratch, but with extensive printing experience, the founders focused on implementing a highly-automated system and on establishing and meeting daily productivity benchmarks. McCallum Printing is the first printer in western Canada to incoporate CIP4 into its manufcatureing processes and last year received a CIPPI honourable mention for “Achieving Outstanding Customer Responsiveness As A Result Of Process Automation.”

McCallum chose Heidelberg’s Prinance as the centerpiece of their system. “We wanted to align our company with a vendor that would grow with our needs and have more at stake than just a MIS system‚Ķ.We believe Prinance has played a major role in our ability to provide exceptional service to clients. For our clients, sales, production or administration we have the information to create job data and manage production of the job data at a high level of efficiency creating it once and purposing it as needed.”

Using Heidelberg’s Prinect system, job details such as imposition, target press information, cutting, bindery, and shipping details travel with the job electronically via JDF. With Prinready, now re-named Prepress Manager, McCallum is able to process jobs much quicker than in the past and provide both online and hardcopy proofing. With the JDF enabled workflow and Prinance, McCallum has the ability to have precise schedules for the equipment and make effective decisions on equipment loading.

The JDF implementation has obviously been successful, although not without a few hiccups along the way. McCallum has grown in four years to 90 employees, sales of $17.5 million, and satellite centres at the University of Alberta and in Vancouver.

The profit margin has been “outstanding”, consistently in double digits as a percentage of sales.

Kodak’s approach is centered on developing workflows that are meant to be integrated or unified. According to Jon Bracken, Vice President, Marketing, Enterprise Solutions for Kodak in Vancouver, the goal is to combine traditional offset functionality and quality with digital print sensibility and cost structures. That means applying technology and automation to minimize requirements for operator intervention.

Bracken comments that the approach that Kodak is taking with its Unified Workflow is “not only the idea of a single workflow, but trying to identify the issues in colour, production, business, and data that affect the overall workflow.” Based on Prinergy and other existing Kodak products, it enables a printer to grow into digital print, including variable data, using the same workflow. Jeff Hayzlett, Chief Business Development Officer for Kodak, notes that Kodak’s goal with an integrated workflow is to provide consistent print quality, improve customer control, provide operational productivity and system output, and improve return on investment.

Kodak emphasizes flexibility. The core of Kodak’s workflow remains Prinergy. With its emphasis on database management, all activities in the workflow are tracked and managed, providing visibility to everything in the organization. Its rules-based automation (RBA) streamlines the production process by integrating business, data, colour, and production processes.

While there is tight integration with all Kodak products, the JDF linkage allows printers to incorporate non-Kodak solutions, or, through web-to-print programs such as Kodak INSITE, to communicate directly with their customers. “The INSITE System and PRINERGY Software offer print service providers a way to grow their businesses into high value services and capitalize on efficiencies via workflow integration and production automation,” said Bracken.

Ampersand Printing, a 30-year-old family-run company based in Guelph, Ontario, with 20 employees, is an example of a smaller printer already reaping the benefits of JDF. Last year, Ampersand was honoured with the prestigious CIPPI award for process automation. An early adopter of computer-to-plate to drive their two Komori presses, they also have an Indigo 5000 digital press and their bindery is fully equipped with Heidelberg JDF-enabled cutters and folders. Ampersand installed Hiflex MIS for order management and production planning and shortly thereafter began JDF implementation. Today JDF integrates the Hiflex MIS, Kodak Prinergy workflow, and the Heidelberg Polar cutting machine, and will soon be expanded to the presses and other departments.

Prior to implementing the Hiflex MIS System and the resulting automated workflow, Ampersand used several systems. Damian McDonald, son of founder Mike, says “As the systems were not connected to each other, the existence of multiple data pools inevitably led to inconsistent data at different stages of production and administration. Moreover, there was no online availability of up-to-date job information. We therefore lacked the transparency and flexibility to run production and customer responsiveness most efficiently.” The old paper-intensive system had redundant processes that were prone to errors and were not integrated. “With islands of IT application systems we lacked real time communication of job status.” Damian and Mike realized that if they were “to continue to provide our customers with the level of quality we were achieving, as well as remain competitive, we [had to] automate the process, make it as streamlined as possible and minimize errors.” Systems with JDF connectivity were “the only way to achieve this goal.”

They selected a Hiflex MIS system, which not only allowed them to capture detailed job specifications but also to generate and deliver JDF data and instructions to the production systems and equipment. The open standard of JDF allowed for standardized, cross-vendor communication among their many systems, from conception through production, delivery, billing, and job costing. Ampersand proceeded in phases, starting with the installation of Hiflex, then, using JDF, connecting it to their Kodak Prinergy Workflow System, proofing, finishing equipment, and, eventually, the pressroom.

McDonald concludes that “implementation of process automation helped us to realize considerable time and cost savings and significantly improve customer responsiveness.”

Agfa has a long history of workflow innovations, including being a leader in the introduction of PDF, integrated pre-flighting, and digital film handling, among others. At drupa 2000, they showed Delano, their close customer collaboration tool, and their recent developments have reflected this philosophy of moving upstream toward the document creator. Deborah Hutcheson, Senior Marketing Manager, Digital Solutions, says, “Agfa had traditionally started when [the] page [was] already built. We’ve always been strong in prepress. We’re now moving upstream into the design and creation phase, connecting to the customer‚Ķ. The intent is to create a good, printable PDF upfront. It makes it easier for the printer.”

This move extends the traditional benefits of :Apogee. :Apogee is modular and scaleable—the various components can be incorporated as necessary, thus making it appropriate for printers of different sizes, as well as specialties. Agfa, along with Heidelberg, MAN Roland, and Adobe, was one of the creators of the JDF standard. Recent revisions to :Apogee include full JDF integration and rules based automation; integrated colour management throughout the production workflow; and a flexible collaborative platform between printers and their customers that provides a more automated and integrated workflow from content creation through print and the web.

In addition to being able to output to the Web, Hutcheson also notes that :Apogee works well with digital presses; there is no need for multiple workflows. “Our workflow is not unique to any single press. :Apogee offers colour managed, imposed PDFs of all pages which can then be RIPed. It takes in [the press’s] imposition setups; colour and media profiles, etc. We can direct pages to various output devices, offset or digital.” She continues, “:Apogee provides one streamlined workflow. We are moving further and further upstream. Customers want to be involved in production. We not only drive various output devices but are connecting upstream to the customer and content creators.”

Fuji offers a number of different workflows, including Rampage, for which they are the exclusive Canadian distributor, TrueFlow from Screen, and Metrix from Lithotechnics. Jay Lalonde, product manager for CTP, workflow, and digital printing for FujiFilm Canada, says that the particular solution they would recommend depends on the target audience. Rampage is primarily for larger installations, while TrueFlow is good for smaller companies just moving away from film or perhaps acquiring a larger 4-page press.

Lalonde believes JDF compatibility is critical, as it saves labour costs, downtime, and reduces operator error. Fuji emphasizes the idea of setting up the right processes and web-based submission with Metrix JDF and the built-in JDF from Rampage Remote. Customer files can run through various ‘gates’ automatically, right to plating. They work closely with their customers to sell the idea of the web and JDF to their customers. “The less time the operator spends on a file, the more time there is to do something else, and there is less chance for errors.”

Workflow often gets short shrift. It is not as exciting as a new press or a new CTP system. It is more difficult to sell than FSC certification. But it is central to a printer’s profitability. Streamlining the production process lowers costs, increases productivity, minimizes mistakes, and shortens turnaround time. And that’s a good thing.

When digital colour production printers were first introduced, at IPEX in 1993, they were expected to compete with offset for “short run colour”, which was then defined as run lengths less than 5000 or 10,000 impressions. With improvements in offset presses, automation, and workflow, however, the economic run lengths at which they were able to compete continued to shrink, to 1500, 1000, or even less. Digital devices were constrained to very short runs.

Despite being squeezed out of the long end of the short-run market, however, digital printers are uniquely able to excel in variable data printing. Indeed, it is perhaps the single most important long-term differentiator, the true “killer app.” By being able to print each page and, by extension unique sets (often known as electronic collation), for each individual customer or prospect, the power and impact of any marketing campaign increases exponentially. You can communicate the right information at the right time to diverse audiences.

Despite all the discussions about one to one marketing, however, there are precious few examples. Indeed, Frank Romano, professor emeritus at Rochester Institute of Technology, claims less than 10% of all digital print is variable.

The fact of the matter is variable data marketing is hard. The technology for print-based personalized direct marketing has been available for decades and has been capable of much more than the marketers have used it for. Frankly, most businesses don’t even think about using a “one to one” approach, or, if they do think about it, they haven’t the time or ability to develop distinct messages.

Nevertheless, many Canadian businesses are making sophisticated use of their customer and other data to tailor their messages and offerings. They are increasingly both assisted and prodded by their print service providers, many of whom either started as or morphed into direct marketing companies.

Richard Bassett founded Bassett Direct as a full service provider of direct marketing services. Today, Bassett Direct, located in Markham, Ontario, is a $10 million firm. Owner Rich Bassett said “We are focused on providing complete services in the direct mail business. We offer total service around printing and direct mail. An important part of our work is managing databases, forms set up, Lettershop services and fulfillment. Naturally, everything has to be personalized. As a result, we are heavily involved in variable colour.”

The company has only digital equipment, including a Xeikon 5000, Xerox 8000, and Xerox iGen3 for colour, and four monochrome systems. They work with third parties for large quantities of offset, if the colour image is static. Bassett notes that he is seeing a significant rise around variable colour. The key for Bassett is database-driven projects, with a growing emphasis on 1:1 marketing.

Bassett feels it is important to start out simple, varying things such as gender or region. The key is using relevant information. Pictures are often effective, as they can be used to bring in lifestyle or other interests in a subtle way. “It’s not a lot of work to bring in appropriate images and messages. That’s where the creative process can combine with limited database knowledge and bring in unique, relevant offerings.” Bassett continues, “The beauty of variable colour imaging is that each piece can be unique to the individual.” For example, Bassett is currently doing a project with 2500 images being brought into a mail piece from a data file. “In traditional print, you couldn’t make that many plate changes.”

Another example of a successful campaign was done for a large financial institution. They wanted to contact customers over the age of 55 who held Registered Retirement Savings Plans (RRSPs), to get them to convert to a Registered Retirement Income Fund (RRIF), which by law seniors must do by age 69. The switch requires new investment strategies and a good understanding of Canada’s tax laws. The client wanted the letter to help customers better understand their financial situation. The marketing team decided that simply sending the relevant information via a standard form letter, even if personalized, would not be enough. So they included a photo of the local personal investment manager, along with other information and signatures, in each letter.

The project entailed 300,000 letters, in two languages, customized for each customer with the right photo, information, and specific branch. “The combinations and the variations were probably the most complex part of it, because there were a variety of different variable text messages and photos tied into specific investment managers,” Bassett said.

The campaign paid off, leading to the customer’s RRIF business growing four times faster than the market.

Bassett sees industry volumes of variable printing increasing, the price point going down, and the cross-over point rising. “We just finished a 1.5 million piece project. Technology is one thing, but managing client data and the forms set up is another. Eventually the two will merge together. Vendors are flogging variable, but what they don’t say is you need to invest hundreds of thousands of dollars every year to build a data department and a forms creation department. Iron won’t do that for you. Twenty-five hundred images into a direct mail piece requires a lot of skill, regardless of equipment.”

Dave Reeve founded digital printer Distributech in 1992 and has grown it to a $15 million company with locations in Brantford and Toronto, Ontario. Reeve says about 60% of their businesses is fulfillment and on-demand printing, with the balance divided between transaction printing (which, by its nature, is of course completely variable) and direct marketing.

Reeve emphasizes that no one model is appropriate for every service provider. Distributech use their own client-facing technology (called DOX), which combines digital asset management tools, storefronts, and Web-to-Print. Distributech has no offset, partnering with commercial printers as appropriate to complement their HP Indigo colour and three Xerox Nuvera monochrome production printers.

Reeve notes that variable campaigns are often no more expensive than static direct mail campaigns. He says “Even ignoring the dramatic increase in ROI‚ĶVDP can be similar in cost to traditional direct mail programs.” Nevertheless, Reeve notes that designing for digital is difficult, and companies, designers, and agencies have to be educated on the possibilities of variable data, particularly the opportunity of variable graphics. Even though he deals with large and sophisticated multinationals, Reeve says they are just beginning to see the potential. “We’re having some exciting conversations with big players who have never done true variable data. Most VDP projects in the past have been risks taken by entrepreneurial customers.”

To really understand the benefits of true variable, Reeve says it is critical to document and track results. For marketers today, ROI is the biggest issue. “The most important advantage of VDP is the ability to dramatically improve ROI through timely, personalized, relevant communications.”

Many clients are concerned their databases are inadequate. While that is often the case, Reeve would agree with Rich Bassett that something as straightforward as using gender-driven images or segmenting by industry or geography can be very effective.

While both Distributech and Bassett Direct specialize in direct marketing and digital printing, many general commercial printers also have found growth through offering variable printing. Avant Imaging and Information Management (AIIM), has a rich heritage in commercial offset lithography, including a 10-colour MAN Roland and associated services in post-press, creative, and graphic design. Since the late 1990s, the Aurora, Ontario firm has implemented a digital smart factory. The business expanded in the last few years to include digital printing—produced on Xerox 2060, Xerox iGen3, and an HP Indigo 5000—data analytics, and direct mail management.

Serge Grichmanoff, Vice President, New Technologies is a leading authority in the application of integrated modeling techniques for multi-channel digital solutions and has long been involved in predictive modeling of responses. Under his guidance, AIIM has further evolved what he calls the “digital circumstance”, leveraging customer information. Grichmanoff emphasizes the importance of centralizing the data, not only for variable printing, but all digital objects, whether for static or variable, printed offset or digitally. The key is to use the same images and theme across various media to build on the 1:1 experience.

As many companies have, AIIM started simply, initially using a simple web to print application with a limited ability to tailor content for static pieces, printed either digitally or on offset. Over the last few years, Grichmanoff has been augmenting customer data with external databases, such as census data, to help craft the language and communications more effectively. Adding analysis of responses and customer buying patterns enables AIIM to begin to craft the offer, tailoring price points and the language used. The key, according to Grichmanoff, is doing it consistently. “In order to do that, [you need to have] a longitudinal mentality, to create an operational system to collect data across various touch points to understand the customer’s needs, wants, and desires, so that you can create an offer that makes sense.”

Grichmanoff says customers are amenable to variable data imaging. He sees clients moving to smart statements and highly complex campaigns. “There are some remarkable programs that work‚Ķ They are on a road of discovery.” But, he cautions, it will take two years or more to implement—the first to clean up processes, and another year to migrate and make it an effective program. Grichmanoff says it is important to be in a position to help customers manage their customers. Having a data infrastructure is critical to being able to service customers.

“The key thing is helping [them to] manage data, do the analytics, normalize the offering, all in one place. It streamlines the output and the data management process.” Perhaps most important, it “enables them to calculate ROI.”

Grichmanoff sees emerging electronic technologies as complementary to print, and an additional opportunity. “When I design anything, the targeting mechanisms, whether for email, a dynamic web page, PDA, or print, the philosophy, approach or technology is the same. I’m doing the math, everything else. I may have a flag based on delivery mechanism, but it’s a canvas. I’m going to modify the content depending on the framework of the canvas, and develop magic around. It might be colour if it’s print, something else if it’s a web page or cell phone. But the approach, knowledge, logic, whatever, is going to be there regardless. But with print I am going to something that’s more creative to capture the eye.”

While all this may seem daunting for most commercial printers, variable information is of increasing interest to smaller printers as well. For example, Shawn Mackenzie, co-owner of Kwik Kopy of PEI, a 25-employee commercial printer located in Canada’s smallest province, does some variable now, particularly for his growing direct mail business. They also do monochrome variable with colour offset shells. “We’d like to do more variable data‚ĶPEI is as good a market as any‚ĶPeople are interested in it. They’ve heard of it. Some of our customers work with larger agencies. HP and Xerox have done a good job of marketing it, raising awareness. It will be very useful for some applications. I wouldn’t buy a machine just for variable.”

Andrew Hrywnak, president of PrintThree, one of Canada’s largest printing networks with more than 60 locations across Canada, also is a big believer in variable data as a revenue source. Hrywnak says “It’s important to concentrate on giving customers a better return on their investments.” A leader in digital printing and Web-to-Print, Print Three’s franchisees serve a diverse customer base, from small entrepreneurial businesses to Fortune 500 companies.

Print Three recently signed an agreement with Xerox to incorporate dynamic publishing software from XMPie into their ePower Online portal. The deal will allow Print Three to offer its customer base the ability to create custom digital printing, from personalized letters and brochures to complete marketing campaigns.

“Variable is a natural fit for us,” says Hrywnak. “With Xerox’s assistance, we can better help clients develop and execute marketing campaigns more relevant to their individual customers, regardless of the scope of the project.” “Xerox provided us with a solution that met the challenge of delivering custom printing services to two distinct customer groups, our national accounts and our small- and medium-sized business customers.”

Amato De Civita, vice president, Graphic Communications at Xerox Canada, comments that “In today’s competitive print environment, it is necessary for Canadian printers to deliver added value to their customers by differentiating themselves in the marketplace.”

Although some Print Three franchisees are as large as $2.5 million, the average size is $600,000, much closer to the typical small commercial printer. Print Three is implementing the program on two fronts, allowing local franchisees working independently to produce unique variable print campaigns for local clients, or working with and through the corporate office for larger or more sophisticated campaigns. Print Three will take on the management of the databases and assist in making the sales and marketing presentations on behalf of the franchisees.

Hrywnak says that it is critical for franchisees to educate their customers. In words that echo those of Rich Bassett from Bassett Direct, Hrywnak suggests starting with a small pilot campaign of 5000 or 10,000 pieces and monitoring and comparing the results.

An example of a recent effective campaign conducted by Print Three and some franchisees was done for a major tour and travel operator that wants to drive traffic to their resorts. They’re running a campaign that includes print ads with a web address. The information entered there can be combined with existing resort information databases to drive an ongoing variable campaign based on special events, interests, and past behaviour. Instead of sending out a simple generic catalog, they are targeting specific interests and activities.

It is clear that even smaller printers are excited about variable data printing’s potential, with high customer interest. The response to Print Three’s initiatives has been enthusiastic. “No one will say they don’t want to try it. They all have heard about it‚Ķ Our customers want to hear more about variable, the results, how to put a program together.” Lunchtime seminars in the GTA have generated “lots of work for the stores‚Ķ They learned another lesson. Some people [who attended] the event hadn’t been seen for years‚ĶThe appetite is tremendous. It’s virgin territory. There are not enough people going out and doing this.”

John Zarwan is an independent consultant living in Prince Edward Island. He has been involved with digital printing for twenty-five years. He can be reached through his website,
www.johnzarwan.com.