PADGETT PRINTING — DESTINATION: DIGITAL
Don’t tell David Torok that the world of commercial printing isn’t viewed as a commodity. The president of Dallas-based Padgett Printing is all too aware of the perception given to an industry once known as a craft, sprinkled profusely with seasoned craftsmen, all but eroded by bottom-line pricing, reverse auctions and print buyers willing to forego longstanding relationships with trusted print providers.
Instead of crying in their collators, companies such as Padgett Printing have survived, and even thrived, by accentuating their offerings with value-added services and variable data digital printing solutions. The digital end has only strengthened Padgett’s position with traditional sheetfed and web printing, allowing the printer to sell deeper with existing clients who have multiple platform needs.
And while digital output accounts for only about 10 percent of Padgett’s business, Torok cannot imagine life without it.
“In the Dallas/Fort Worth area, the print buyers have their stable of printers,” he says. “Within that stable, they have qualified all that can meet their quality and service needs. As a result, the issue comes down to who has the lowest price on that particular date.
“The press manufacturers have implemented technology to level the playing field. And the consistency and quality of raw materials—whether paper, ink or plates—have gotten much better. Craftsmanship skills are no longer crucial to get the desired results. In combination, you have all the makings of printing becoming more of a commodity.”
Department Store Past
Established in 1903 on a piece of property where a Neiman Marcus store now stands, Padgett Printing enjoyed a rebirth in 1998. Torok and his management team noted a trend toward shrinking run sizes, the onset of the personalization revolution, digitalization and, of course, commoditization. That led to the installation of an Agfa Chromapress.
Having a digital color solution was paramount, and Torok believed it could help net “five or six customers a month, each providing $30,000 to $50,000 in business rather than having 800 jobs that were worth $130 each.”
Padgett Printing has since replaced its Chromapress with a trio of Kodak Digimasters, two Kodak NexPress color presses and a Xerox 92c for spot color.
Like any printer confronting new technology, Torok was dubious to the “if you buy it, they will come,” mantra of selling digital. Beyond that was the question: who will sell the digital offering? Finding the right salesperson to make success a reality might have been the toughest hurdle for Padgett Printing to clear.
“Over the last six years, we’ve kissed every frog in the pond trying to find those types of salespeople,” Torok notes.
Despite the anticipated warts, a few princes have emerged. “Obviously, the results are showing it,” he says. “Our digital sales were up 23 percent last year. It’s now more than 10 percent of our business, and I’d like to see it become 15 to 20 percent.”
Torok credits Kodak’s business development division for helping educate Padgett on the sometimes slow art of selling digital printing. He believes Kodak has helped pave the way for 90 percent of the printer’s new business.
The digital revolution has complemented, and not cannibalized, the offset platform at Padgett. Digital customers are now coming to the commercial printer for their offset needs, and those clients whose needs were once strictly offset are turning to Padgett for digital requests.
One customer, which generated $1.8 million in digital-based sales five years ago—a figure that is decreasing—is now bringing about $4 million in offset work to the printer. Padgett’s largest offset customer three years ago is now its biggest digital customer.
Digital color has come a long way at Padgett Printing. Where once the ratio of black-and-white to color work was 15:1, the printer now counts 30 percent black-and-white, 65 percent full color and 5 percent spot color. And where once a lion’s share of the product load consisted of high-end marketing and advertising collateral, more than half of its business is now direct mail jobs.
The offerings include retail direct mailing, insurance and banking offers. Roughly 80 percent of Padgett Printing’s digitally printed materials contains some form of personalization.
To that end, Padgett relies on its customers’ design teams to create files in Adobe InDesign, and introduce the variable elements using InDesign plug-in tools.
A VDP authoring tool, DL Formatter from Printable Technologies, allows Padgett to support customized communications campaigns ranging from two-color transactional printing to full-color advertising and promotional materials.
Torok firmly believes that without its Adobe workflow products, from InDesign and Acrobat to PostScript 3 and a PDF workflow, the company would not have enjoyed its transformation from an $8 million printer when he arrived in 1989 to one tracking $29 million-plus for 2005.
“The number one reason we’re growing is because of Adobe and its Acrobat and PDF-based workflows,” Torok says. “The ability to go CTP and work with the PDF workflow has been the biggest productivity gain and biggest reduction in cost of anything we have purchased in the past 20 years. When you’re running an offset and digital workshop, the ability to convert files either way allows us to maintain the same workflow.”
On the offset side, Padgett owns a pair of eight-color, 40˝ sheetfed presses. One is a Komori Lithrone with Coatermatic that is equipped for waterless printing, the other a Heidelberg Speedmaster SM102-8P. A Goss (Heidelberg) M-110 with in-line finishing is the centerpiece of the web division, which has been successfully sold out during several time periods.
Its mailing department has the capability of churning out 500,000 pieces per day. Rounding out the dossier is a pair of ink-jet lines with tabbers and an insertion line.
The company offers full binding capabilities with the exception of perfect binding, in deference to the many trade binderies in town that provide the service.
Up front are Kodak Creo Trendsetter Spectrums and a Prinergy workflow. Where once the prepress department worked seven days to make plates to run on-press five days a week, plates are now made over five days to run on-press seven days.
The future game plan calls for Padgett Printing to bolster its digital and mailing equipment roster. The next investment on the offset front calls for a 12-color, 40˝ six-over-six sheetfed perfecting press.
“The word going around our plant is that we need 94 feet of space for the new 12-color,” Torok says.
Padgett Printing is a big fan of maximizing capabilities and getting the most of its 125 employees and 80,000 square feet of manufacturing space. At $29 million, Torok notes the company’s sales-per-employee ratio is double that of most in his competitive bloc. The short-term goal is to reach the $30 million-plus sales mark.
In order to enjoy continued success, the company needs to concentrate on the core fundamentals that have brought Padgett Printing to this point. “We must continue to look for ways to be more productive,” Torok says. “We need to continue growing without adding expenses in the office area. We understand that we’re successful when we hear plenty of noise out in the plant. That means we need to find those customers that are buying printing today; in our market, those customers are changing from year to year.
“This is a good business to be in, and it’s still fun to come into work every day,” Torok continues. “We’re really a lean machine. My management team consists of a vice president of sales, a CFO and a plant manager. After that level, you quickly reach anyone in the plant. So we’re big enough to afford the technology, and small enough to make quick decisions and understand that the customers are what are most important to us.”