COMMERCIAL PRINTING Outlook -- Shadows Cast on 2006
|Sheetfed Printer Profit Leaders vs.
|Variable||Profit Leaders||Profit Challengers||Difference|
|Factory Cost of Product (% of sales)||72.40%||78.00%||7.60%|
|Selling/Administrative Expenses (% of sales)||17.90%||20.60%||2.70%|
|Sales per Factory Employee||$174,395||$170,701||$3,694|
|Machinery/Equipment per Factory Employee||$105,114||$96,087||$9,027|
One finding that stands out in this analysis is that profit leaders tend to make a significantly greater investment in machinery/equipment per employee, thereby enabling them to employ fewer people to produce the same dollar volume of work as a profit challenger. This seems to bolster the case for automation.
Forecasts of any sort ultimately amount to educated best guesses, especially when the human factor and Mother Nature are among the variables. NAPL's Paparozzi agrees with the assertion that there is a greater than normal degree of unpredictability in the economic outlook heading into the new year.
"There is much more uncertainty about the economy going into 2006 than there has been in three or four years," he says. "At the same time, our industry is not simply changing, it is being redefined. That is creating historic opportunity for companies that are prepared and profound threats for those who try to do business the same old way.
"Enduring success will come from cultivating leadership skills and expertise in one's staff, not technology," Paparozzi continues. "It will require the ability to understand your client's needs and become a solutions provider, while looking beyond the traditional print buyer."
Judging by the level of interest, growing installed base and expanding monthly production volumes, it seems as though digital printing is finally becoming a force to be reckoned with for the broader market. PIA/GATF's Digital Printing Council is in the midst of a research project—Marketing 4 Digital—that promises to define the scope of this opportunity. Full results will come out in 2006.
TrendWatch Graphic Arts, meanwhile, has already declared digital color printing a mainstream service, with the publication of its "Digital Printing 2005: It's Mainstream, Baby!" special report. Among its notable findings are that: