A new digital press; the anatomy of a new acquisition…

So you are in the market for a new digital press? Well then you are in luck as you have many choices to look at. With offerings from every major player in the market the job of making an intelligent choice is quite daunting. No one machine can be perfect for every situation and no one manufacturer can be everything to everyone.
Before walking down the digital printing isle to chose something off the shelf, you will want to review carefully at your current customer base and the jobs that they are providing to you, the skill sets of your people and the current equipment capabilities and capacity and your business as they are today. A bit of dream building and having a clear vision of what you want to accomplish both in the near term and the future can be a job by itself.

Take into account that a digital press acquisition in not an inexpensive one and is a decision that you will have to live with for a while. Whether you purchase or lease and what options you chose will have a lot to do with the current state of your business and your short and long term vision is for your company. A solid business and marketing plan are essential when undertaking such an expense.

Environmental considerations, Electrical needs, Space requirements, Speed, Reliability, Output Quality, Throughput, Substrate Handling, Duty cycle, Image Processing in both Accuracy/Power & Speed, Initial Acquisition Price, Cost to operate, Serviceability, Operator Control, Uptime, Training & Ongoing Support, Color Management and the ability to put this new asset in line with a workflow system or MIS system are all considerations that you must take into account when shopping. Companies that cannot answer your questions and provide you with a reasonable level of confidence cannot be considered seriously.

Let’s face it digital printing has come of age and is a serious rival to offset lithography. Run lengths for digital are getting longer while the average run lengths of offset lithography are getting shorter. At the GATF/PIA training I received in PA last month we were told the national average has dropped to 5000 sheets per run. At the same time the digital printing technology has evolved to the point that the delta between digital and offset has risen significantly from on average 1500 sheets to the 2500 sheet neighborhood. Even with the industries greatest achievements and innovations set up times are still 30 to 45 minutes on an average 4 to 6 color press. Highly skilled labor, Chemicals, Plates, Make Ready are still serious pricing components to any offset job. The systems required to drive these new offset presses are expensive and have many cost factors associated with them as well.

Now that the economic pressure has put companies on alert CMO’s are being pressured to do more with less both in marketing budgets and in labor. Companies are reaching out to find new ways to increase ROI of their marketing campaigns and are seeking to increase revenues without increasing the money spent to bring in those revenues. Marketing and Communication departments have redefined what “good looks like” and have looked to the science of timing and relevance to increase response to their offers.

With this science the advent of cross media advertising and elaborate relevant campaigns have become the norm. Print service providers have also had to redefine themselves and have been stretched from selling a commodity in their chosen craft to becoming a practitioner of a manufacturing science and participating in a solution based sale. Reaching out to expand their horizons the common print service provider has had to look for new revenue streams and retool their staff in their transition to marketing service providers.

Now many printers are selling a product based service instead of just a cost center product. With 1 to 1 marketing and the ever increasing sophistication of conditional variable data printing the choice of a digital press has become a very important one indeed for the printer that intends to be around in 2020. With many companies looking at variable data printing the ability to print long digital runs has changed the way to make a digital press choice.

So where do we start in the dissecting of a digital press acquisition? Well let’s start with the workflow surrounding a digital press. Many companies have already invested or will invest in a make-ready/workflow tool. Whether you use something simple like a suite of applications, or something more advanced like a server based solution there are many options available; one must look at what solutions are supported by the equipment and what training and ongoing support is also available.

If your sales rep and his/her team do not have a strong resume and experienced background you cannot take them seriously in their recommendations for your business. As important as the attributes of your press are so is the connection to that company both from a training and support side and from a recommendations side. You cannot spend enough time to know everything therefore you have to have a relationship that is strong enough to be able to count on their recommendations at a certain level. Sure you have to be a student of the business but the reality is you have way too much on your plate to learn about everything involved.

Pick a company that locally has a strong presence both in production print and in the ancillary services and has the relevant knowledge to help you become successful. Make-ready tools, Workflow systems, Business Development, Hardware setup and support, Business system integration, Initial training and long term support along with the typical financial services and flexible billing options are all key elements to take into account. Listen for people with vision but that are not unrealistic or that sound like “perfection in a bottle.” People that don’t talk about the risks associated with a solution are not being realistic. You should always be presented with options and a well thought out upgrade path so you are not caught off guard.

Make sure to know what level equipment you need and that the company you are looking at has a sufficient upgrade path for you and your business. Make sure to take the time to understand all of the cost elements and product limitations and upgradability. Digital presses can cost from $50,000 to millions of dollars. Ensure that your system is modular and has a way to add feature sets as your business adds new revenue streams and takes on new offerings. The last thing you want to do is short change yourself by buying the cheapest machine on the market without taking into consideration what you may be doing in 3, 5 and even 10 years.

Companies that don’t show interest in your business processes and rush to offer a “solution” without taking the time to observe and ask questions are not going to be good business partners now or in the future. Reluctance to slow the process down to seriously talk to you and your key operators and production managers are not going to offer anything but a nightmare down the road. Without a true understanding of your current capabilities, capacity and business offerings any proposal given to you would be futile.

Look for companies that not only have a good product but have local talent that understands both your needs and business model. Listen to the questions being asked and the level at which they communicate with you and their responsiveness to your requests. Be willing to give a serious contender the time to be able to fully grasp both your current situation and your future vision. Companies that are not interested in your future will under or over sell you and compromise you and your company.

Many a printer has gone out of business by over extending themselves. There are almost as many companies that have gone out of business by not taking new technologies seriously and not having the firepower to compete in the marketplace effectively. The effective use of technology is a delicate balance and sometimes it takes someone from the outside to help. Look to sound organizations that can help like the GATF/PIA who have a broad understanding and membership that crosses all sections of the industry. Whether you are a specialty printer or a general commercial printer they can offer invaluable advice as they see things from a 50,000 foot view.

After you have narrowed the field to a manageable list of potential suitors it is time to look closely at the hardware and software solutions that are being presented to you. In the next segment we will look at the hardware considerations of a digital press and what options are available.

Pirate Mike

Seven Deadly Sins of a New Equipment Purchase; how to buy your next press and be happy about it…

From being involved with the printing industry for now almost 20 years I have seen a lot of purchases go bad. Most of the time I was the guy that had to operate the new toy in hopes that it would magically bring in the "motherload" and pay off all of the other poor purchases before it. Now I am on the other end of the stick trying to help owners maximize their next purchase so that they can maximize their production and profitability through the shop.

Traditional printers have been very good at finding used presses and making due. But in this new world of digital printing and automated systems each owner has to become a better buyer. Many times the next purchase is not going to be a used piece of gear but something that fills a gap and brings him/her closer to the overall vision of the business.

In an age of globalization and increased competition on a regional and national level companies are being forced to make sure that each purchase they make is in fact the right one. As systems become more interdependent and "connectable" to our workflow and information systems we are increasingly becoming aware that each purchase is critical to the overall success of the shop. Purchases that may have taken a phone call now are taking 6 months or longer. Since we cannot just start over we find that most shops started off traditionally buying a piece of equipment for a particular task or customer. Now each purchase needs to be taken into consideration so that eventually we can "plug" them all in to an automated manufacturing system. Between "Green" and "Lean" there is a lot for the printing entrepreneur to learn and master.

From being on both sides of the fence these are the 7 most common mistakes that I have seen made by printing professionals and their production management when looking to make a new equipment purchase.

Sin #1 Not knowing the nature of the orders being taken and the needs of the customer base

• Many owners when asked are not sure of the nature of the jobs being brought in or how many jobs are being sent out. It is critical before buying a new piece of equipment to have a comprehensive understanding of the current jobs being taken in.
• Understanding the customer base is very important to. Most owners will tell you that they are generally a "commercial printer" but when you take a closer look they tend to have a clientele that leans one way or another. Knowing who your customer is and what they need will help you look at your equipment palette to know where you are lacking.
• Knowing how many deals are being lost and why. Are you losing to price or because you are outsourcing and are not competitive? Are you losing due to antiquated equipment that is not in line with today's practices? Most of today's presses are automated, you may be able to save money buying a press that isn't but lose to your competitors because your set up time is 4x longer. In today's short runs if it takes you longer than 15-20 minutes to set up your job you are already losing.
• As jobs are being completed it is always a good idea to hand deliver some of these to get a pulse of what changes may be taking place in your customer's requirements. Some shops do not have dedicated sales staff or customer service representatives, so it is imperative that the owner do these deliveries to ensure he/she is in touch with changes going on inside of their customer's organizations.
• Take your best customer to the equipment demo and run one of their jobs on the new device and ask them, "Is this what you want?" If the sales person can sell them you are possibly looking at a good acquisition.

Sin #2 Not keeping up with the industry economics and technology advancements

• Printing is a complex and ever changing industry; the closer you are to your clients and competitors the better you will be able to make decisions.
• As the industry evolves it becomes more and more digital and automated. Do not let the technology slip away from you. You must stay on top of what is going on and not rely on someone else in your organization to do it for you. Be proactive it's your business so drive it!
• Technology brings advancements that can fill holes in your product offerings, streamline your workflow, and increase your profitability & productivity. Make it your business to know what is out there and keep a list of questions ready for anyone that wants to talk to you about equipment.

Sin #3 Buying a piece of equipment based on the payment with no plan

• You would think this one would be a no brainer, but many times companies will make decisions solely on the monthly payment and have no plan on how to implement the new acquisition.
• Look to your equipment vendors for help, lean on the top 2 or 3 choices in your area and ask them for ideas. Many times manufacturers have invested hundreds of thousands of dollars into industry experts to devise plans and give advice to their customers on how to maximize their investment. Most companies that value your business will offer plans on how to best utilize your new "potential" investment.

Sin #4 Buying on relationship only and not looking at the company behind the relationship

• This happens equally as often; you know the sales rep so you forget to investigate the company behind them. True sales reps are a bit migratory like pressman and other positions on the floor, but more often than not sales people looking for a job get sold on grandiose ideas of their new employer and may not know what they have gotten themselves into before it's too late for them and you!
• Make sure that you are dealing with a reputable dealer or direct manufacturer branch. Take the time to get references and look into what level of service that they are willing to offer and guarantee.
• When dealing with a dealer or authorized reseller make sure that the company you are dealing with is solvent. The contact may be for 3 or 5 years but they need to be around to honor it! Getting service after they go out of business may be a lot more difficult than you think! Companies do not like taking over service on equipment that they didn't sell and could charge you exorbitant fees to go through and bring the machine up to spec.
• When making a large acquisition take the time to review what you think you need and take the time to sit down with each of the reps from the companies that you are considering. Walk them through the plant and explain what you need to get done and why. Don't leave out anything you think is material, good reps have worked in the industry and are students of the business.
• Good sales reps are truly entrepreneurial and have valuable ideas. They are walking in and out of shops all day long and may have valuable ideas on how to improve your operation as they have seen what has worked and failed in other shops. On the other hand it is not wise to buy from a rep that has not walked the walk. People pushed by greed will say anything.
• Relationships are good and many times they keep you away from bad purchases and untimely deals, just always remember to do your research. Don't think that a relationship is a pass to not do your homework!

Sin #5 Buying for today and not looking out for tomorrow

• Be aware of what is going on in your shop and don't let equipment decisions be put to the last second.
• You know your lease expires in a year, then it is time to start looking; waiting till 2-3 months out is a disaster waiting to happen. You have spent all your time running your business and dealing with issues how are you going to get caught up in 2-3 months. Most contacts have odd requirements know exactly what you need to do to notify your current vendor upon lease end.
• You know you have a customer that needs short run digital but you're not currently doing variable data so you short change the system with a built in controller. Know the industry trends, look at what is going on with your customers do not get caught off guard in a 3 or 5 year lease for jobs that require a reconfiguration of equipment you have already purchased.
• Things are constantly changing look for equipment that is versatile and can grow with you. Look for equipment that may not be the cheapest but that might outlast the lease.

Sin #6 Buying equipment based on hardware specs alone

• It is easy to get hung up on the science of it all. Whatever you do look at each equipment purchase in light of the other equipment in the shop and the systems that you have in place or may put into place. As JDF and Cip4 become more widely used you will want all of your equipment to be able to participate in the automation. Do not let the fact that someone else's equipment is 5 pages per minute faster or $50 dollars cheaper a month discourage you from looking at the big picture.
• Implementation process, be sure to know what is involved and do not get caught off guard. What seemed cheaper and better was only if you did a bunch of things on your own that could cost you a small fortune like install special environmental controls or create a separate room for the device.
• Ensure that you have a clear understanding on how your operators are going to get trained, support after the sale and ongoing training.
• Substrate Flexibility. Yes it's fast and yes it's cheap but if you can only print on 1 brand of paper that is 3x more expensive than your competition then it's not worth buying! Don't just stop at the equipment; look into everything that will go into the system.

Sin #7 Biting off more than you can chew; not all deals are created equal

• Everyone wants the lowest click charge, but what people do not seem to ever understand that it is better to hedge your bets than to bet the farm. If you are only doing 60,000 don't vouch for 100,000, set your monthly at 50,000 and pay the overages. Sometimes companies will do a cost per copy but many times the rates for them are quite a bit higher than setting a reasonable base and paying overages when needed.
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• Understand exactly what your responsibility is toward the servicing of the new system and how your operators are going to be trained and kept current.
• When looking at your needs plan 3 to 5 years out. Depending on your financial situation don't get caught up in keeping up with the printer next door. On the other hand don't under buy because you are not willing to take the time to plan and execute a plan to afford the right equipment.
• When moving into a new area or product offering, look at the strata of the equipment for that arena. Typically there are light production, mid and heavy production devices in all areas of the shop. If this is your first step in an area make sure to make the distinction and know what volumes are needed to support each level of equipment. Look hard at what you have "in hand" and what you can readily access through your current customer base. If you are boarder line step up to the next level now but put into action a plan to get you to a sustainable level quickly. If you are well below what you need to enter the arena with your own equipment look at used or "rental" equipment if none exists look to your fellow printers that are not direct competitors to you and work out a deal, they have payments to make as well!

All in all printers are becoming better buyers all the time. With experience being the best teacher many of the best buyers have made a few mistakes along the way. Unfortunately some of those mistakes make have cost them a shop or two. In today's economic environment it pays to be a student of your business and reach out to those that can help.

Today most manufacturers have representatives that do not do the end selling but can offer technical advice and offer suggestions. Taking advantage of these people can be a valuable asset in looking into a new equipment purchase. Most Sales Reps for "big iron" production equipment understand the financial metrics that are required to make a piece of equipment profitable. Asking is free so don't be shy when digging for information.

Treating your sales person with respect and as a person goes a long way when the chips are down. Many reps need a poke or two to keep them jumping but they will work much harder when treated as professionals. Don't buy what you think is a good product from someone that cannot help you. The rep that is sent out to you is your connection to the company.

Sure there are 1-800 numbers and online this and that but the flesh and blood being sent out to service you is what you will know from the company you choose. Your experience will be based on their ability to get you connected to the resources inside of that organization. Almost all manufacturers of production products have some great people but depending on the area you are in you may not have access to them. Make sure you have met the service personnel and the sales management so that you have plenty of touch points to keep your boat afloat!

Pirate Mike

This is a bit over simplified, but I am going to produce a series that will look at this process in depth, but for now enjoy!