investment and integration

Manufacturing of print like any other product has gone digital and we all must adapt or die. Digital communications have revolutionised the way we communicate as consumers, yet too often within our printing companies we still use broadly the same processes in both back office and workflow that we were using a generation ago – still relying too often on spreadsheets to monitor progress and human intervention to move orders through the system.

This is equally true of analogue or digital print as whilst we rely on disjointed workflow tools and RIPs to process copy or PDFs into instructions for a plate processor or digital press, in too many cases that is about the limit of our digital world.

Yet stand back and just look at the revolution that has happened all around us in the way that businesses communicate with their customers and suppliers – a revolution driven by digital communications and the Internet. Companies are combining data and intelligent devices linked to the Internet [‘the Internet of things’] with intelligent systems and automation.  The result you can specify your car with dozens of options and it will be made promptly to your specific specification. You can order trainers with your own unique design and colour mix and have them delivered to your door within days. Marketing, ordering, design, manufacturing and distribution is now treated a whole, a singular process linked by digital communications to deliver a customer-centric service.

Still unconvinced of the need for radical change? Then please review just two things.

First, work out your average order value and then compare the result with the same figure for say three years ago.

Second, follow a typical job bag/order through your back-office/workflow from order to invoice and count how many steps there are and how many times the process requires human intervention to move the order forward.

I am confident that for most of you this will convince you that you simply cannot afford to continue to process orders in the conventional manner any longer. What you need is to automate so as to reduce cost, increase flexibility, reduce lead times and avoid errors.

So consider your next investment whether an analogue or digital press or a piece of finishing kit as part of a broader digital manufacturing process that needs integrating.

In a recent survey for drupa printers were asked what print applications they had recently installed, how much it cost them, how they planned them, how they integrated them, how they marketed them and what were the financial benefits in terms of both increased turnover and increased profit.

Size of investment

This varied from small – $17500 for wide format and 3D printing to substantial $300,000+ for most packaging and publishing applications.

Advance financial planning

It was alarming to find that less than 50% had prepared a detailed sales forecast and less than 40% a full profit and loss forecast to allow payback to be objectively assessed.

Integration and automation

Disappointingly roughly 80% of companies admitted they had made no serious attempt at operational integration ie automation of orders, works orders & workflow and subsequent production management.

Marketing

Perhaps not surprisingly the vast majority of printers admitted they relied on conventional means of selling the new applications ie via the sales team [67%] or via word of mouth [56%] or company website [48%]. Most of the new digital marketing channels were used by less than 20% of companies.

Payback

Payback was measured in simple terms – dividing the size of the investment by the additional profit [assuming the application had been operational for more than one year]. It varied between applications 1-2 years in commercial markets, 1-3 years in publishing markets and 1-5 years in packaging markets.

To get an objective measure of the impact of good practice, the survey participants asked to select the most applicable statement for their own company from a range of four statements that went from poor practice to good practice for a number of topics under each of the headings: planning, operational integration and marketing. Their answers were separated into two classes for each of the topics – poor and good and compared with the financial results.

The table shows the results in terms of the size of the investment, the additional turnover and the additional profit for poor and good planning, integration and marketing. In summary, those adopting good practice invested an additional $70,000 but gained an additional $175,000 turnover and an additional $63,000 annual profit. What is more, this result was statistically valid.

So what you see is  that good implementation practice makes a significant positive difference to the results you achieve.