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Dickeson--Here There Be Dragons

March 2000
Is there such a thing as "The Printing Business Model?" Not really, because printing—putting ink on paper—is too diverse to be defined by a single business "model." The business model that fits a plant with five heatset web offset and three gravure web presses certainly can't be used to characterize the DocuTech operations at Office Max/Depot or Staples.

"Obviously," you chuckle. "Can't compare them to each other." Yet we call them both "printing," don't we? Both are members of the 40,000 business entities that comprise the "Printing Industry" for census classification. What's the problem?

Between those extreme models of web printing and document copying lies a whole range of differences in focus and concentration on productivity and liquidity management. Both represent duplicating information onto paper. But that's as far as business similarity goes, isn't it?

Each of the 40,000 entities has a set of marketing, materials and labor patterns that comprise the culture, paradigms, set of habits and beliefs of the enterprise. It's the "way we do things here" for each company. "The way we do things here" and "The way we think about things here" is the individualized business model. And "Here Be Dragons," as ancient cartographers labeled the unknown areas on maps.

When we venture to modify the model or "shift the paradigms" we run smack into deadly problems. Let me illustrate: Acme is a successful commercial printing business with four sheetfed presses. It has a set of entrenched work habits and thought patterns that comprise its business paradigm or model. Acme decides to enlarge its business by installing a web offset press.

"It's still just printing, isn't it?" the Acme CEO asks blithely. Wait a damn minute, Mr. CEO; for a move to web, you're talking about "disruptive technology," to use Clayton Christensen's term from "The Innovator's Dilemma." You're shifting paradigms by moving from sheets to rolls. Here be big, fire-breathing dragons! Doubt it? Just ask any CEO who's made the move.

First thing you discover is a corruption of Gresham's Law that bad money drives out good money. Selling web jobs drives out sheetfed work.

Dragon 2 is called Liquidity. Suddenly great gobs of working capital are needed for roll inventories and accounts receivable.

Then comes Dragon 3: materials waste to gobble up all the margin of profit.

Dragon 4 is a family of web production beasts you never dreamed of with sheets: tension, web breaks, stops, butt rolls, makereadies that take untold hours, cocking plate cylinders, lifting forms to meet schedules, warehouse space to inventory in-process and finished goods, customers standing by the press saying "add some blue ink."


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