Getting the Scoop in Israel —Sherburne
THIS MONTH'S column is a little bit off topic, but I thought it would be worthwhile writing about my recent visit to Israel, hosted by HP Indigo and Dscoop, the Digital Solutions Cooperative, an independent HP Indigo users group beginning its fifth year of operation. A report on a visit to the Holy Land also seemed somewhat relevant to the upcoming Holiday Season.
Israel is an amazing place, for whatever reason you choose to go—business, religious reasons or just to soak up the history. HP and Dscoop hosted a group of about 50 journalists, partners and Dscoop members (including some spouses/significant others).
The primary purpose of the visit was to spend time at two HP Indigo sites. These locations included Rehovot, which is the primary site of HP Indigo's R&D, test labs and customer service/support organization and Kiryat Gat, which is the primary manufacturing site for both HP Indigo presses and ElectroInk.
Israel is a small country, geographically. It has a population of about 7.5 million people, and HP has more than 5,000 employees in Israel, from various parts of the organization including HP Indigo. HP is the second largest non-Israeli, high-tech company in the country after Intel, and there are a number of different HP sites, mostly along the coastal area.
We began with a business update by Alon Bar-Shany, vice president and general manager, Indigo division, HP. Although not unaffected by the global economic crisis, Israel has continued to show positive GDP growth (4.2 percent in 2008, although it dropped to 1 percent in the second quarter of 2009). Prior to that, the country had four straight years of GDP growth in excess of 5 percent.
HP's Imaging and Printing Group, according to Bar-Shany, has been impacted by the dramatic changes in the printing industry, with the number of overall printer hardware units sold down 23 percent year-over-year. Inside of that, consumer printer hardware units are only down 16 percent, with commercial printer hardware units down 42 percent.
Less Sales, More Pages
The division showed an operating profit of $960 million in its most recent reports, representing 17 percent of revenue. Interestingly, the Indigo digital press page volume was up 16 percent (through the first half of 2009), indicating that while it is harder to place new units, Indigo owners are generating increasing volumes on presses already in place.
For the second half of 2009, Bar-Shany indicates HP Indigo's focus was on the launch of the Indigo W7200 with SmartStream Director workflow and a Creo DFE; gaining net new Indigo 7000 users; ramping up sales and manufacturing on the Indigo ws6000; and, of course, planning for IPEX 2010 and Drupa 2012. Throughout the visit, we heard a great deal of emphasis on ensuring that all systems were fully engaged to address "peak season."
For many HP Indigo customers, especially those who produce photo-related products, peak season is the November/December time frame. It is critical to keep machine downtime to an absolute minimum during any peak production period.
We met a dedicated team of people whose mission is to make that happen. The testing center in Rehovot has 19 presses and produces more than 70 million impressions (20 million sheets) of print annually in support of its customers, application development and testing of new products and features.
In 2010, Indigo plans to continue its focus on page growth, especially ongoing conversion of offset and flexo pages to digital, and keeping the focus on applications that are particularly suited for digital production. IPEX 2010 and Drupa 2012 will stay firmly on the radar, and the company is planning its support for Dscoop 5 in Dallas in February. Bar-Shany indicates that HP Indigo will have the largest stand of any exhibitor at IPEX.
Many years ago, Benny Landa, the founder of Indigo, said, "Everything that can become digital will become digital. Printing is no exception." In 2008, Indigo presses produced an estimated 10 billion pages. The company's aggressive goal is to increase that by a factor of 10 to 100 billion pages by 2016.
Bar-Shany is optimistic that this is doable, and that the company will see a return to 30 percent annual page growth in the coming months and years. He believes this growth will comprise a blend of offset and flexo migration to digital and new digital applications.
There is a great deal of printing industry innovation coming out of Israel, probably a disproportionate amount considering its size. This is due to the availability of a strong base of scientists and engineers, accessibility to venture capital investments and a large government expenditure on education. It has been called the most important place for innovation outside Silicon Valley (California).
Benny Landa is one such innovator; most of us remember the splash he made at Drupa 1995 with the first Indigo press. He was featured on the cover of Business Week that year as part of the cover story, "Israel: The Technology Pioneers."
I remember in the mid-1990s when Landa brought in a group of Xerox executives, including Wayland Hicks, Frank Steenburgh and Rich Cutri, to run the company and, presumably, to take it to the next level. I recall hearing a fellow employee quote Hicks after his first visit to Israel, saying that it was a "kitchen table" manufacturing operation. Of course, Hicks came from Xerox, where process was king and he had been a leader of the quality movement there. So, his expectations were especially high.
Today at HP Indigo in Israel, you can see the fruits of the labor Hicks and his team began, and since continued by HP.
Kiryat Gat is a highly sophisticated, lean manufacturing operation in both the equipment and ink operations.
Time in the Field
I was also very impressed with the amount of time that headquarters technical experts, both from Rehovot and Kiryat Gat, spend in the field with customers. This is critical to ongoing development and improvement of the presses. But it is a huge investment, and often hardware manufacturers skip this part of the process.
The company has built a significant database tracking print quality, including defects, and color quality and consistency, including banding, which was a huge problem in the early days. That helps them in both improving the product and in troubleshooting customer products.
One example is the banding ruler HP Indigo provides that tells customers how to fix specific banding artifacts that might occur.
While the trip to Israel was a once-in-a-lifetime experience for me, and the historical nature of what we were able to see in the country was amazing, I also found the visit to the two HP Indigo sites very worthwhile. PI
About the Author
Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries. She was recognized as a 2009 Woman of Distinction and was awarded the 2009 Thomas McMillan Award for excellence in journalism. Sherburne has written six books, including "Digital Paths to Profit," published by NAPL; and, most recently, "No-Nonsense Innovation: Practical Strategies for Success," written with Bill Lowe, the Father of the IBM PC and available on Amazon. She can be reached at Cary@SherburneAssociates.com.