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Issue Twenty-two, Winter 1999


Print On Demand...and Other Trends in the Printing Industry

As we look into the future, it is common for printers to pose many questions. Are we positioned correctly for the future? How can we best serve our customers, our investors, and our employees? What is the best fit to ensure our survival?

Many will tell you that investing in the latest and greatest equipment is the answer. Others might say that being able to produce everything "in-house" is the way to attract customer loyalty. The truth is no one knows for certain what the future holds, but we can use our past to make some predictions. For years our industry has been told that it is only a matter of time before society turns completely paperless. Computers, e-mail and electronic commerce will make it almost unnecessary to ever leave your monitor. That has yet to become evident. On the contrary, it seems more apparent that industries are not going paperless, just becoming more specialized.

Specialty printing is starting to become popular. Customized or variable data printing is being requested. Even the shift to electronic mail has left individuals preferring to print the letter in order to read it. The latest and greatest software packages are still making a printed manual available. In addition, new companies are emerging with the primary focus of printing and storing massive amounts of data.

The printing profession is not antiquated nor is it soon to be replaced, but it is changing. We have seen several types of customers emerge in our industry. We have the "offset clients." They tend to demand perfection. They will look at a piece of print through a loop and have in-depth discussions regarding line screens. They have an ample print budget and plenty of time to produce the project. They distribute all that they print and have very little print product in inventory.

Then we have the "copier clients." They are mainly looking for inexpensive solutions. If time allowed, they would have an internal person to copy it on the "in house" copier in black and white and staple the document in the upper left corner&emdash;and be perfectly satisfied. The quality is not as important as the price, and they are in too much of a hurry to care. These customers are willing to spend $6,000 per month on a copier and .03-.05 per copy for toner, paper and maintenance contracts just for the convenience of it.

Until now a majority of print customers have fit into one of these two groups. However, a new type of customer has emerged. That is the "POD (print on demand) customer." This customer is causing our industry to reevaluate our focus. The popularity of the personal computer has created these discerning users who are caught somewhere in the middle. They work in a dynamic environment. The word "change" is always on the tip of their tongue. And, their volume is not sufficient enough to afford the extensive costs associated with high-end offset printing, yet they want quality beyond second generation copies.

Then the burning question is, "How do we react to this new type of customer?" In my opinion, we do it by establishing partnerships. Link yourself with a partner, each of you providing specialized services to meet the needs of the customer. To be successful in business, you simply cannot be all things to all people. Capital investments are too great.

In our industry, we will continue to see a need for high-end printing. Advertising pieces, annual reports, and marketing materials all continue to require the offset press. Customers needing 10,000+ copies for massive distribution will continue to find the offset press the most cost-effective solution. Web presses and 1-6 head presses will continue to have their specific niche.

POD has its niche as well. For example, when an offset house is asked to print a million copies of an annual report, they are often asked for 50-100 proofs so that many people can view it before such an investment is made. A possible solution would be to ask a POD provider to print these proofs on a color copier. It is cost-effective for the customer and just makes sense.

POD shops are set up to do short to middle run lengths. They can print in color or black and white and have a wide variety of bindery options. Their customers print books, software documentation, and company manuals. These applications are perfect because these items are electronically stored onsite and can be reordered and/or changed by telephone or submitted through the Internet. There are no plates, negatives, stripping, collating or storage issues. It is a good system for the niche that POD serves.

The industry does, however, require extensive capital investments since it travels hand-in-hand with the computer industry. This is one of the reasons that many companies have partnered with a POD provider instead of making the capital investment.

I would also like to address "in-house" print facilities. I believe that there will always be a need for an onsite service or copier. Many outsourcing services do not want a job allowing them only a few hours to produce the documentation. There must be a way for these types of applications to be produced. Copier sales have been better than ever and yet the printing industry has not been dramatically affected by its presence. In my opinion, in order for all of us to survive, we must first understand our differences and begin to see how we can help each other help our customers. Partnerships are key to becoming successful. Specialization and becoming an expert in your specific business niche is clearly the objective of business in the nineties.

The digital age is upon us, and if we work together we will ensure that when we tell our customers that we will look out for their best interests, we can actually do it.

Article written and submitted by Greg Groenemann, Director of Sales for IKON Document Services, BDS-Houston.


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