The Digital BinderyFebruary 2000 By Erik Cagle
Among the trends Countryman has noticed is product redesign for printed versions, particularly where the product has limited life—one to two years. He notes that printed products, which can be digitally composed then digitally printed and finished in-line, can be manufactured very economically.
As for Bice, he believes digital printing system vendors such as Xerox and Océ are working aggressively with a combination of finishing systems companies like Roll Systems to provide complete solutions.
There are some printers for whom in-house, on-demand finishing is not viable—and for them, a trade operation like Woburn, MA-based Seaboard Bindery is an option. Its Fastbind division specializes in Wire-O, plastic coil and perfect binding services in as little time as 24 hours.
Outsource: A Relief Valve
"Companies outsource to us for a variety of reasons," notes Frank Shea, president of the Fastbind division. "Often, there is an in-house work overload, and we are the relief valve. Most often, though, we offer services that are uneconomical to provide in an average on-demand plant. We can take larger jobs that a small printer cannot handle with existing equipment."
Shea notes that one challenge for his company was accommodating smaller quantities and small-format work after years of turning out lengthy runs for large-format commercial printers. Binding and finishing machinery has changed considerably and, he notes that, with the average sale much smaller, it takes more customer service and overhead to do a typical on-demand job.
One of the adjustments Fastbind has made includes the purchase of a Muller Martini Amigo binder for smaller runs, which joins a Muller Martini Panda binder, to create an answer to the short-run, DocuTech-produced book blocks.
"Perhaps the most important adjustment we have made is in our mindset toward on-demand work," Shea says. "There was a point in the past where we dismissed it as not worthwhile, since we were working with average jobs of $2,000. However, once we saw that efficient equipment existed and realized that there was profit in on-demand work, we took it more seriously. We identified and trained new operators, put together a marketing plan, and off we went. To date, our Fastbind subsidiary is growing substantially in the on-demand market, with perfect and mechanical binding services."
In-line vs. Off-line On-demand Finishing
By Jules M. Fried, vice president of Roll Systems
The debate over whether to finish in-line or off-line is not a new one to commercial printers. It has raged for some time, and the issues and trade-offs are familiar to most.
In-line systems, among other advantages, tend to reduce labor requirements, speed turnaround, improve integrity (by reducing opportunity for error) and require less floor space. Disadvantages include higher equipment cost, greater complexity (which leads to higher failure rates with reduced throughput; stopping the press because of problems with the finisher is very expensive) and the need to dedicate equipment to a single task.
Do these considerations change when moving from traditional offset to digital printing? To answer that, consider how digital printing differs from offset.
An important characteristic of digital printers is their ability to stop and start instantaneously. Significantly different than the typical offset press in this regard, this makes it possible to handle shorter run lengths and still change setup between jobs. But if format changes are frequent, setup and makeready costs take on greater importance. To finish many different jobs effectively and economically requires finishing equipment with sophisticated features to automate setup and make-ready, especially if a wide range of sizes must be processed.
A second difference is that digital printing run lengths are starting to become "run lengths of one," i.e., each document is now unique. In this situation, setup and makeready between runs are no longer the issue—the only way to do this is with standardization of format using variable content. Also, with each document unique, the value of each document is now much higher. It is not simply a matter of printing a few "overs" to take care of waste. This creates positive pressure for the job integrity associated with in-line finishing.
Time is also an issue; digital print customers want faster turnaround. In a digital world, the time required for an off-site trade binder to finish output is likely to become unacceptable. And the off-line bindery, even if in-house, will be pressured, as well.
While these factors argue for in-line finishing, there are real barriers to widespread adoption any time soon. The market is going to have to accept standardization of output, and new products will be needed.
The promise of the "run length of one" has the primary advantage of handling everything as an electronic file all the time. In theory, there is no end to the variety that can be built into applications, if everything is digitally based. And, since change is instantaneous, invisible and virtually cost-free, we can only expect this to increase. The paradox is that, while shorter run lengths become feasible, it will still be difficult to change the format of each run. So, we will need standardization of media and finishing formats to make the resulting products feasible from a cost standpoint, and to drive print volume, so the advantages of in-line finishing can be realized.
The market for digital finishing equipment is not yet as mature as the traditional graphic arts equipment market across the broad spectrum of finishing requirements. Relatively little finishing equipment has been designed specifically to work in-line with on-demand printing equipment. As the market starts to see more products specifically designed to work with digital printers, we will see more in-line finishing. Until then, the flexibility of off-line finishing will argue in its favor.
Finally, whether in-line or off-line is better for a particular printer and print job may well depend on factors that have little to do with the inherent, or perhaps we should say theoretical, advantages of finishing in-line or off-line.
Thus, what digital printer is going to be used? Black-and-white or color? Continuous-web or sheetfed? Is the finished document a composite of materials that need to be printed on separate presses? Does the printer have the appropriate finishing equipment? These are the most important factors in deciding how to finish the job.
Completing the Digital Printing Service Bundle
By Dr. Mark W. Fleming, president of Strategies on Demand L.L.C.
The investment in a digital printing press is one of the more significant business decisions that most commercial printers will make. With prices ranging from $100,000 for entry-level systems to $750,000 for top-of-the-line models, and service contracts costing thousands of dollars per month, digital presses can have a strong imprint—both on the budget and on management attention.
In the digital printing arena, the bright lights are focused on the presses. Unfortunately, the media-handling and finishing technologies for digital printing tend to get relegated to the shadows. Finishing strategies become afterthoughts for many commercial printers. However, from a marketing and operational perspective, finishing is literally the "bind that ties" the digital print service bundle together.
A successful digital printing enterprise involves much more than printing. In our audits of digital printing businesses, we find that the range in the direct costs of digital printing among different clients is much smaller than the range in their total manufacturing costs or in their pricing. In other words, the differentiation in digital printing businesses is driven more strongly by factors other than the printing operation itself!
One key to profitability lies in the ancillary services that are bundled with digital printing to solve the customer's entire production and distribution problem in a seamless manner. Finishing, in particular, is a capability that should not be outsourced. The compelling driver for on-site finishing is time. Our market surveys have shown that as much as 60 percent of the price premium that print customers pay for on-demand production and distribution is directly attributable to cycle-time reduction. Yet, we frequently talk with print providers who have invested in one or more digital color presses, but little in the way of finishing capabilities. Not surprisingly, these printers are more often the ones who struggle with commodity pricing for their limited service.
Although finishing services are an important component of the service bundle, we find that the finishing operation, if not managed properly, can be a significant drain on profitability. Careful management of the digital bindery is every bit as important as efficient operation of the digital pressroom.
Finishing: Speed vs. Flexibility
In a traditional printing business, where order quantities range into the thousands, the temptation is to buy speed in the bindery equipment. However, in digital printing operations, one of the most common mistakes that we see is investment in high-cost finishing equipment designed for speed rather than flexibility. As a result, the printer's fixed manufacturing costs are weighted down by underutilized bindery capacity. Moreover, with this "oversized" equipment, the printer is more inclined to avoid the sort of short-run, on-demand business that his customers actually want to give to him.
In on-demand finishing, the make-ready is more important than the run. Low-cost finishing systems from Standard, Bourg and other manufacturers are designed to minimize makeready time and waste, with speeds more appropriate to the short runs in an on-demand environment.
Before turning to the commercial printing industry, most of the digital printing equipment manufacturers sold their products in data-center printing and mailing operations, where the long runs, homogeneous work mix and simple finishing requirements (for products such as statements and insurance policies) were easily handled by in-line finishing systems. Although many vendors continue to advocate automated, in-line finishing for publication and commercial printing applications, the fit can be a difficult one. The range of stocks, trim sizes and binding styles in these applications is a challenge for an integrated printing and finishing system.
Recently, we were engaged to help improve the profitability of a commercial printer whose state-of-the-art capabilities have been well-publicized in the industry. One of the things we discovered was that he had invested heavily in the latest in-line finishing capabilities to automate the production of books and manuals. However, this automation was actually limiting the productivity of his digital printing equipment, as well as his flexibility to deal with the range of trim sizes and binding styles that his customers and the market required. As a result, he was carrying the cost of the in-line equipment, as well as the cost of an underutilized off-line bindery. And, at the same time, he was outsourcing the finishing on some jobs.
In commercial printing, on-demand finishing is not necessarily in-line finishing. This is not to say that bindery automation is always wrong—it's only wrong if it is implemented before the requirements of the business and manufacturing process are understood.
Moving downstream from the finishing operation, fulfillment is a natural extension for a digital printing business. Although generally characterized as "print-on-demand," most digital color printing today is short-run production, followed by bulk shipping to the customer. On the other hand, most of the highest-value digital print applications involve production and direct fulfillment of print and related products, in quantities and cycle times driven by actual end-user demand.
For example, instead of printing, packing and bulk-shipping 3,000 brochures and 3,000 price lists to the customer, the print provider sends one of the brochures and price lists, along with a product sample, an order form and a reply envelope, to each of 3,000 consumers specified by the customer—sometimes over a period of days or weeks, in response to consumer demand.
As a standalone business, fulfillment is not always a highly profitable enterprise. However, in combination with on-demand production of some or all of the printed products, direct fulfillment to the customer's customers can significantly enhance the time value of digital printing and the efficiency of the distribution channel. The result is a higher-value digital print service bundle—and higher profit opportunities.
In summary, as digital printing enters the mainstream of publication and commercial printing, many of the traditional paradigms of finishing need to be reexamined. As in other marketing and operational aspects of digital printing, the best approaches may be non-intuitive. But therein lies the opportunity for differentiation and profit.
(Editor's Note: A 20-year veteran of digital printing on both sides of the industry, Fleming heads Naperville, IL-based Strategies on Demand, a market research and management consulting provider. He can be reached at 630-983-7746 or at firstname.lastname@example.org.)