In the past year I’ve run more news items on acquisitions, partnerships, mergers and collaborations in the printing industry than I have in the previous three years. Yet some shops still operate in virtual silos – where they seldom engage with suppliers after a sale and continue to get involved in cutthroat pricing with competitors. This is a formula for failure. This article is a glimpse of some of the creative ways that companies have partnered for profit. Not surprisingly, the industry’s original equipment manufacturers (OEMs) are quietly and consistently leading the way.
The advantages of partnerships
Today, if you want to succeed, you need to realize what challenges your business will face as it grows, as well as your strengths and weaknesses. The good news is that industry collaboration is now the new paradigm, as print shops fill their technology and service voids with new strategies and expertise from suppliers – and even from partnerships with former competitors!
Partnerships are typically used to grow existing businesses, provide better service and product innovations and ensure a stable future. Forming a partnership does not need to be complicated. Normally, a written agreement among the partners can bring a partnership into existence with surprisingly little legal formalities and/or expenses. A good partnership can accumulate larger resources as more than one contributes capital. The combined financial strength might be used to increase your scale of operations and new partners can be added to fill present or perceived future needs. Collaborations can also lead to improved expertise as persons with diverse skills come together.
Let’s begin with equipment supplier/print shop collaborations. Today, the printing industry’s OEMs have proven time and time again to be genuine leaders in partnering and collaborations. They’ve known for a long time that a printer’s success is their success, yet their efforts too often fly below the radar. Here are a few OEM/printer collaborations that I think are worthy of mentioning.
Goss and Newsday
Here is a project that obviously went well beyond a standard press expansion. Newsday in Melville, New York operates multiple presses to print its flagship Newsday daily newspaper. Last June, Goss International completed one of the industry’s most highly specialized, multi-press reconfiguration projects that eventually doubled Newsday’s colour capacity and press speeds. Goss combined components from existing Goss Metro presses at Newsday’s site to create three enhanced press systems with the capacity to print 96 tabloid pages, including 64 full-colour pages, at up to 60,000 impressions per hour. The ambitious project included the relocation of units and folders, modification of drivelines, repositioning of motors, and installation of customized stacking frames and platforming. Goss also added motorized registration capabilities to the presses and converted the web width of one press to 48 inches.
Edward Bushey, VP, Operations & Distribution at Newsday, said the size, complexity and tight timeframe led to the selection of Goss as its partner. “We needed a partner with far-ranging expertise in engineering, project management, manufacturing, installation and start-up, as well as the ability to coordinate all those elements,” he explained. “The Goss team also meshed very well with our own team from day one. That collaborative approach and the scale of their aftermarket resources in North America were vital.” Goss handled project management, installation and commissioning, with a technical team and press operators from Newsday assisting. Specialized structural components were produced at the Goss manufacturing facility in Kennedale, Texas.
A by-product of this collaboration was that traditional, often elusive virtue: trust. And word gets around. Just ask Sing Tao News Corporation of Toronto who ordered a new six-tower Goss Community Press last year for its Canadian Eastern Edition. “Our objective was to improve production efficiency and reduce waste while also increasing colour capacity for daily editions and supplements,” said Peter Li, VP of Operations for Sing Tao Daily’s Canadian Eastern Edition. “Goss is not unique in the ability to meet these needs, but we have always used Goss equipment so we know it well – and confidence in long-term support was also an important consideration.”
HP and Cober Evolving Solutions
Earlier this year, fourth-generation, family-owned Cober Evolving Solutions held an Open House and Tour at its headquarters in Kitchener, Ontario co-hosted by equipment partner HP. Founded in 1916, Cober has grown to become one of the most respected and versatile suppliers of print and web-based marketing in Canada, now employing over 170 people at four separate locations. Its main production facility occupies about 86,000 square feet. The tour’s centrepiece was Cober’s new HP Indigo 10000 – the very first installation in Canada. The system means that Cober can now process short-run to mid-range work (including variable) at breakthrough speeds. This gave them a huge advantage when it comes to speed-to-market, with full-colour folders, for example, printed and ready to deliver in only twelve minutes. And while the 10000 is now a key part of its portfolio, its success is due in part to having a great OEM partner that concentrates on solutions in addition to equipment.
In fact, HP treats its printer clients exactly the same as Cober treats its own customers. Vice President Todd Cober explained it this way: “The very first thing we do when we meet with potential clients is learn as much as we can about their core business. What are their goals and how can we help them achieve these goals? We must be more than just a commercial printer. We must add value to print, and thus add value to the partnership.” He went on to say that this includes services like targeted variable-print mailing, wide format options, special finishing options that differentiate, being meticulous about maintaining a client’s brand, on-site security, short-run digital solutions, impactful creative – even warehousing that includes a secure area for sensitive projects. Ergo, HP has been its partner of choice as it continues to expand.
Today, Cober has two other locations, one in Barrie, Ontario and another in the prestigious Kitchener Tannery high-tech complex in addition to its Kitchener headquarters. Not bad for a printer founded almost 100 years ago in a small grocery store! Moreover, it has recently changed ongoing collaborations into acquisitions by purchasing nearby CuteGecko Design as well as wide format specialist The Kempenfelt Group of Barrie, Ontario. These investments allow the company to provide a complete range of marketing solutions to its growing client list, backed by solutions provider HP.
Insource and binderies/mailing houses
The first time I sat down with Insource President Tim Wakefield was several years ago at AIIM in Aurora, Ontario. AIIM was looking for automation that would eliminate the number of times a customer’s product was handled. Wakefield suggested a system that would intelligently collect multiple sheets, nest, fold, tip-on a mock credit card and tab a label – in other words, one system all inline. Result? The company’s speed to market improved by 7-10 days and it went from press runs in the thousands to runs in the millions. Wakefield determined that a Buhrs Inserter combined with Kirk Rudy technology was the ideal solution. Intelligent read and print technology tracked every piece and digital inkjet printing assured maximum quality. Here’s my point: Wakefield didn’t simply sell this company equipment then disappear. He warned me then, that mailing was getting so sophisticated, that ongoing supplier partnerships were an absolute must. So it wasn’t surprising when, years later, I got a similar update from co-owner Suzanne Wakefield for this article.
“Execution of today’s slick, engaging direct-marketing piece is a huge challenge,” she insisted. “Moving vision to reality without a partnership may have you feeling like a fish out of water. Printers, binderies and lettershops must respond to a plethora of requests such as unique folds, cuts, flips, colours, insertions all personalized and time-sensitive. And a long-term partnership between creative, production and supplier is the key to successful execution and ROI.”
She added that this develops over time. “The equipment supplier has a responsibility to understand both the historic and future business focus and aspirations of its clients. It must nurture the relationship with solutions that will evolve as demands on production evolve. When the equipment sale is complete, the partnership never ends; it’s just getting started. Finally a good equipment supplier must be armed with manufacturing partners ready to bring to market breakthrough technologies to meet future expectations of end users.”
Now while Insource’s success is based on these philosophies, where it really excels, in my opinion, is its knowledge of products worldwide. For example, in the last few years it brought Micr-Mate Cheque Printing to Canada; introduced Canada to Tabzilla and Phoenix inkjet and variable mailing technology from Kirk Rudy; was named exclusive Canadian distributor for bookbinding, converting and finishing specialist Petratto; partnered with Riso, a global leader in digital technology; introduced scratch-off labels… and on, and on, and on. At the end of the day, these OEM partnerships with Insource spawned the same type of collaborations that Insource has with its own clients. That is, information sharing, expertise and trust in the fact that the perfect solution is out there just waiting to be discovered. You simply need to have a partner who knows the technology inside-out and can match it to your evolving needs and goals.
OEM & OEM collaborations:
Heidelberg and Fujifilm, Heidelberg and Ricoh
The global strategic partnership between Heidelberg and Fujifilm in the area of inkjet printing was unveiled last November and targeted commercial and packaging markets. Heidelberg gained access to Fujifilm’s inkjet technology and Fujifilm leveraged Heidelberg’s strengths in engineering and manufacturing. The alliance’s aim was to bring next-generation products to the digital market and give each OEM access to advanced technologies the other has in the prepress area, to continue to explore market segments with the greatest potential for growth.
“Heidelberg’s strong customer network opens new possibilities for state-of-the-art inkjet technologies,” said Shigetaka Komori, Chairman and CEO of Fujifilm. “With Heidelberg’s global market presence, we can introduce our products to new customer groups and increase their potential. For example, our cutting-edge inkjet technology, leveraged by the Jet Press 720, will gain a new potential.”
Heidelberg’s goal was also to become a global player in digital. “In Fujifilm we have found an internationally recognized partner with innovative strengths in future-oriented areas, namely consumables and inkjet technology,” said Dr. Gerold Linzbach, CEO of Heidelberg. “With Fujifilm’s prepress capabilities and inkjet technology, we can build on the experience in digital printing gained through other partnerships and quickly move into the peak performance segment. It’s our goal to become a global player in the growing digital printing applications market,” he added. We’ll be watching.
Heidelberg’s global partnership with Ricoh in 2011 enabled both OEM’s customers to combine the best of digital and offset printing, and fell in line with the goal of each to lead the way in short-run and variable-data colour printing. As a first step, the agreement enabled Heidelberg to sell the Ricoh Pro C901 Graphic Arts Edition (Ricoh’s high-speed colour digital press with Ricoh PxP Chemical toner) as well as appropriate future production presses in Ricoh’s pipeline.
The key factor here is that both companies realize that offset printers are seeking to add flexible digital solutions. By adding Ricoh’s digital technology, Heidelberg customers can offer variable-data printing, instant delivery of urgent print jobs and cost-effective production of shorter run lengths to its clients. Both OEMs’ future plans also include integration with Heidelberg’s workflow solution Prinect, as well as joint development activities for future print applications.
Bottom line: Ricoh views Heidelberg as the gold standard in commercial offset and packaging printing. Heidelberg views Ricoh as a rising star in production printing. By rounding off its offset portfolio (including Anicolor technology) with new Ricoh digital printing, Heidelberg is providing its clients with a combination of best-in-class offset and digital technology.
Konica Minolta Canada and Pitney Bowes
It seems that every time I turn my head, Konica Minolta’s bizhub printers are winning awards. In fact, the company reached a milestone recently with the 100th installation of its renowned bizhub Press C8000 in Canada. However, it was the OEM’s recent partnership with Pitney Bowes that should be even more beneficial to its customers, especially in the near future.
As part of its continuing efforts to expand Konica Minolta’s North American presence, the company acquired Pitney Bowes Canada’s Document Imaging Solutions (DIS) business. The purchase consists of Pitney Bowes’ hardware and document management software solutions. The acquisition allows Konica Minolta to expand its existing Document Imaging Solutions business to commercial and corporate accounts in Canada. As part of the transaction, Konica Minolta will represent Pitney Bowes Canada’s mailing business in the provinces of Saskatchewan, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, and other selected areas across Canada.
“The addition of Pitney Bowes Canada’s DIS business provides a tremendous opportunity for us to increase our market share within the Canadian marketplace, and continue to provide new value to benefit our customers,” said Chris Dewart, President and CEO of Konica Minolta Business Solutions (Canada) Ltd. “It allows us to expand Konica Minolta’s existing document imaging business to commercial and corporate accounts, and in key locations throughout Canada where we are working to grow our business. This acquisition expands our direct sales and service network across the country by more than 300 people.”
For Pitney Bowes, the sale of its DIS business is another step in its ongoing strategy to focus on delivering innovative SMB shipping and mailing, enterprise mail and services, and digital commerce solutions to its clients in Canada.
What struck me most about this deal was that Chris Dewart is the ideal person to move this partnership forward because his more than 30 years of experience also includes executive positions at Pitney Bowes, and so he is more than familiar with both companies. Dewart sees this as a tremendous opportunity to increase market share in some markets where Konica Minolta was formerly a minor player, and to organically grow this end of the business.
He also told me that while he sees synergies in various service and support areas – and while both brands will certainly benefit from the association – that he is very sensitive to dealer loyalties. Thus, its reseller strategy in the selected provinces mentioned previously will really be a test before moving into other provinces. He added that he has no intention of laying anyone off; rather he would prefer to employ as many as possible to ensure growth.
Hardware and software
Avanti and Ricoh
One of the biggest collaboration/investment stories in this industry occurred last summer when OEM giant Ricoh made a strategic, multi-million-dollar investment in Avanti Computer Systems, a provider of Management Information Systems (MIS) and solutions for the printing industry. Canadian company Avanti provides Print MIS software that helps streamline workflow, resulting in greater productivity and improved profit margins. The opportunity for Avanti was to bring its MIS tools to an even broader global market. As well, Avanti’s open-end core technologies were uniquely positioned to complement Ricoh’s offerings – especially for mixed production environments. The investment allowed Ricoh to provide its printer clients with alternative solutions that support open industry standards and connections to key production print technologies across vendors.
Ricoh stressed that Avanti’s workflow software was the perfect complement to its printing equipment portfolio. “In the same way we automate print workflow, Avanti automates the printer’s back office systems, including inventory management, job pricing, estimating and billing,” said Ricoh. The investment enabled the OEM’s commercial and in-plant printers to streamline their businesses and lower costs. The deal also fit well because Ricoh’s digital printers are only part of its huge worldwide portfolio that also includes data intelligence, document management software, and other technologies. For Avanti, the investment also allowed them to accelerate product development and expand into new markets. Most importantly, it ensured that both current and future customers of both companies have more flexible options when choosing a Print MIS system.
And yes, even Canada Post!
The much-maligned Canada Post is actually one of the best partners you can have, especially if you’re into (or want to get into) variable and mailing & fulfillment. So let’s give credit where it’s due. If you’re in this sector you should join Canada Post’s Registered Partner Program now! The program offers free marketing tools, education and training, and reference materials to help you understand and sell its products. As a registered Partner you’ll be listed on its online Partner Directory where businesses look for partners that offer mail and related services (such as printing) in their city or province.
Finally, for those who believe that direct mail is dying, it averages 22% of all advertising dollars we spend each year. In fact, about 76% of Canadians have made a purchase specifically as a result of direct mail. Even with the popularity of social media, Canadians consider direct mail to be 300% more trustworthy. Oh by the way, guess who’s one of the top users of direct mail in the entire world – ever heard of Google?
What can we learn?
To highlight every recent partnership, collaboration and acquisition in this industry would fill literally hundreds of pages. But what can a small or medium-sized printer learn from this new industry paradigm? Well, for starters, keep up-to-date on suppliers’ new collaborations with other companies. How will these partnerships help your shop in the future? Remember, OEMs have a vested interest in you, no matter how small your company. Your success is their success. The next step might be the most difficult. Open your mind to the possibility that the best way to eliminate a competitor is to make him or her a partner – not a legal partner, but a partner in delivering better value-added products and services to a wider, combined customer base.
I once worked for a printer who freaked out when a franchise operation opened one block away from his shop. Then one day he found the courage to meet with the store’s owner. One month later, he was getting dozens of referrals from this supposed competitor for his specialties – short-run digital, invitations, T-shirts, business cards, CD’s, etc. In return, he referred his walk-in clients who needed large format and longer-run offset (services that we farmed out anyway because the aggravation far exceeded our commission) to his would-be competitor.
Just something to think about moving forward.