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TMN 13 November 2002
Graphics Industry News with a Piquant Point of View
This is our 147th issue, thanks for reading it!
"TMN is an online newsletter 'dedicated to individuals in the
printing and graphic arts industry for the purpose of their self
development, their companies success and the enhancement of the
printing and graphic arts industry in society. It does this
through education, information and research.'"
From the Mission Statement of the IAPHC
Industry News
Look Boss, De Tattoo, De
Tattoo
With apologies to the diminutive actor-oid Herve Villechaize, the
lactose lubricated miens of the marketeers of mighty mystical milk
may well be contorted in furious affront. Spotted on a
bumper sticker:
Ink, it does a body good
Anchor Tattoo Ink Co
Monopoly Money inside the
Pearly Gates
OK, that's just swell, now that the legions of Juris Doctor types
have fallen on their swords and settled with the garrulous geeks
and other fine fellows in Redmond, Washington, how does it
inescapably follow that the knaves of Wall Street must declaim the
fortunes of Adobe Systems have dimmed as a result of the legal
settlement with Mr. Softee? (The analysts at Deutsche Bank
decided that Microsoft may add Xdocs to Office, thereby competing
with Acrobat, and never mind 500 million copies of Acrobat reader
in circulation worldwide!) T'aint necessarily so.
Indeed, Adobe can find fellow teeth gnashers in the ranks of
printers exasperated by a certain program. We found this
phlegmatic caveat emptor in a direct mail brochure from a
publishing concern down the road
"If you must use Microsoft Publisher, please call us early in
your project. We can output Publisher jobs, but there are
restrictions and limitations that we can help you
understand."
Think Global, Apply Local
Here's a four pack of items gleaned from the global swirl you may
be able to use right there at home.
1) Australia -- from Waterless, to Hexachrome, to Hi-Fi
Colour, printers have been doing the bump and grind to try to add
even more technicolor zing to the printed thing. Opaltone began
work as the 90's drew to a close. It now has found
proponents in Australasia, Europe and North America.
As any color mixmaster can tell you, Pantone gives one more than
1,000 color choices. Opaltone's Seven Colour Process is
reputed to offer more than 2,800, but importantly, a user would
only need seven cans of ink, standard CMYK, plus process red,
green and blue. Hmmmm.
http://www.opaltone.com
2) France -- folks who were paying attention found it interesting
when Xeikon acquired the black and white high speed digital
expertise of Nipson a few years back. Turns out, Nipson's
technology had the real legs. If one was a book printer, a
close look at the Varyprint 7000 and 8000 models would be in
order. They provide a means to match production to demand,
which is perhaps the highest calling of the printer seeking to
become "print on demand" enabled. http://www.nipson.com
3) Israel -- Scitex Vision has launched its Scitex Grandjet C3, a
3.2 meter wide format inkjet based printer with speeds of up to 65
square meters per hour. Readers in the US are recalling
their elementary arithmetic skills and saying holy cow that's a
very wide format! As was discussed in the last issue of TMN,
the wide format ink jet print market is worth billions to the
printer who can get on the radar screens of marketers seeking to
take advantage of this expansive technology.
4) United States -- recently this writer spoke to a group of
printers from across upstate New York gathered in Syracuse, NY.
It was intriguing to visit with so many who had recently gone
color digital with an Indigo or NexPress. In the gray old
days of 1994, an owner of an Indigo Press needed to use specially
treated paper, paper which had gone through a process called 'saphiring.'
Eastern Paper, of Amherst, Massachusetts announced last week a new
line of uncoated, untreated paper called "inspire" which
has been certified by the Rochester Institute of Technology, and
will run on HP Indigo 1000 and 3000 presses. The crowds
around the Hewlett Packard booth demonstrations of the Indigo
press at Graph Expo suggest that HP may leverage the technology as
it seeks to obtain an ever larger share of the waterfall of pages
printed worldwide, no matter what the method. Contact John McMahon
at Eastern Paper, jmcmaho@easternpaper.com
Behind the Red Door; or,
Feng Shui This!
The virtual pages of TMN have been ruminating over the curiouser
and curiouser bifurcation of the print market. To have or
have not, seems to be the rule. Flexo (indeed most all of
packaging) is rocking, whilst business forms have been bludgeoned
into a black hole. Nowhere is this cleft reality more
evident than comparing the replies from the highly nonscientific
straw poll statistical modeling of asking every dadgum person we
speak with: "How's business?"
The small commercial plant in Jersey, the quick printer in
Minnesota, the store front printer in Michigan, the small
publisher in Pennsylvania -- anecdotal testaments to be sure, but
each one somewhat sheepishly avers -- "hey we are busy!,
on-track for our best year!, had a $400,000 month last
month!" Whatever are they smoking?
A mid-sized commercial printer we know, wrote us in answer to the
how's business question: "All my cohorts at Graph Expo
indicate it has been a tough year. My standard statement is
that our sales were up 5% and our earnings were down 5%.
Most seemed to think that was a pretty good state to be in.
I think that any kind of significant improvement is still a long
way off, and that some more of the marginal players are going to
fall by the wayside."
Or as the prolific and profound Thumbledore of the UK print scene
wrote last month: "The rapidly changing print landscape
has left some printers flooded with work and others forced to
close the factory for 24 hours because there has not been a job in
the place.
What is happening is that those printers able to cope with shorter
runs and faster turnarounds are winning jobs, those that prefer a
single make-ready a day and to print above 50,000 sheets are
starving. And this vicious cycle is not going to get any
better any time soon.
In short, too many printers are trying to compete for a portion of
the printing pie with equipment that is just unsuited to the
task."
It's about positioning baby. Post up or get beat.
And one printer we know has even embraced feng shui, the ancient
Chinese art of positioning objects and buildings in the most
harmonious concert with positive life forces. Hey, who are
we to argue? His presses are backlogged with work! And
the Red Door means power, or a fetching perfume, but we digress.
To the Nimble go the Spoils?
The Baggage of Big
It has been noted before that the smaller shoppe may be simply
more systemically oriented around smaller jobs and faster
turnaround. The Print Ontario show in Toronto in late
November is targeted towards the 'not so big printer' who feasts
on smaller formats and shorter runs. If there has indeed
been some seismic shift the gravitas of graphics, the truly big
printers won't be able to stand on the ceremony of past largesse.
They have had really tough sledding. And a surprising number
of very well known names, although able to claim a 3rd quarter
profit in the earnings period just ended, are rarely able to claim
increased revenues.
23 October, Moore Corp reports a return to profit but sales
slumped to $486 million from $510 last year.
23 October, R.R. Donnelley reports increased profits but said
sales declined 8.6%.
23 October, Consolidated Graphics reported both nominal profits
and increased revenues (albeit a pesky accounting change resulted
in a first half loss.)
28 October, Quebecor World reported higher profits but said sales
were flat.
29 October, Banta says profits rose, but sales dipped from $378
million last year to $352 this year.
4 November, Mail Well reported a loss and said sales fell to $428
million from $465 last year.
6 November, Bowne and Co reported a profit but said revenues fell
12%.
Damnably depressing downbeats. And now consider that the
comparable quarter of 2001 was impacted by the horrors of
September 11.
The folks atop these behemoth print firms are not exactly
cheerleaders for the next bull run.
"We don't see the market developing any resilience until the
second half of next year." Charles Cavell, CEO of Quebecor
World.
Banta said it saw no signs from its customers of a revenue
recovery until the latter part of next year.
"We remain cautious about the timing of any improvement in
current economic and market conditions." Joe Davis, CEO of
Consolidated Graphics.
"We believe that even in 2003, the global economy will only
begin to pick up speed again slowly."
Heidelberg CEO Bernhard Schreier.
From our perch, we think the massive bloodletting may be coming to
an end. Joe Davis cautiously speculated "that market
conditions may have bottomed."
But even more heartening than that happy day, is the possibility
that just maybe folks are coming to terms with a new world order
in which grappling with clients demands for faster job delivery,
shorter runs, and all the rest is simply part of the tapestry of
competition. It becomes de rigueur and simultaneously
becomes no big deal, any longer.
Is that an Angel or a Devil
or a Client on your shoulder?
The adept and nimble printer will accept that digital solutions
are no longer a discussion point, but expected. The
opportunity becomes one of, dare we say it, partnering with
clients to develop a realistic business model for specific client
applications.
Done correctly, the printer who offers the digital means of
production that fully enables her client, and further comprehends
and offers the digital asset management skills to execute for the
client will find that the client is joined at the hip to said
printer by a very elastic umbilical cord of digital trust.
And that's a security blanket with few holes in it.
It may be uncomfortable to some, but clients do not want mere
access to your production scheduling software so as to keep tabs
on their pet project, clients want to be in your hip pocket, or
maybe even your wallet.
And the little buggers are clever. All the fuss over
offering fulfillment services a few years back may have had a
darker side. The printer under a fulfillment contract tries
to estimate the ultimate quantity needed and if the client moves
to a new brochure (perishable the thought?) who would one suppose
gets caught eating the overstocks? Clever client says, let's
see if we can shift the potential loss arising from out of date or
over-run printed materials on to the same poor sap that printed
them.
Naughty client.
Nonetheless, the September/October issue of the IPA Bulletin
drives home the point of how badly clients may be crying in their
cosmopolitans for lil ole us to (carefully, prudently, and with a
wizened gimlet etc) ride to their aid and succor:
"Recent studies by completed by Gistics Inc., and Frost &
Sullivan indicated that those who deal with digital assets spend
an average of 2.9 hours per week simply managing those files and
another 3.97 hours transferring them. Additionally, we look for
files 2,500 times per year and fail to find them 35 percent of the
time." Sound familiar pilgrim?
Benchpressing against
Benchmarks
In the public filing information associated with Consolidated
Graphics as was mentioned above, one finds an interesting comment
from CEO Joe Davis: "We are also pleased that we
maintained sequential operating margins at 6.3% in the second
quarter ..."
In this monstrously competitive environment, we hope all printers
have benchmarks against which to measure themselves, operating
margin ratios or other wise.
This writer was asked to provide a speech at the Executive Outlook
conference which took place one day prior to Graph Expo, on 5
October. (Graphic arts professionals in more than twenty
countries are receiving their first issue of TMN as the result of
their attendance at the conference, we trust they will soon become
IAPHC members to assure they continue on our e-rolls.) In
the statistical soup that is ladled out at any meeting, we found
these numbers to be enlightening.
66% of all process color jobs are less than 5000 in run length and
53% are less than 2,500 impressions. In other words, it's
true -- shorter run lengths are here now. (CAP Ventures.)
53% of all Variable Data Printing jobs require only that the
address and salutation fields change. Only 7% require
dynamic fields with graphics. In other words, VDP is not
necessarily complex.
(CAP Ventures)
62% of the printers responding to the NAPL's 2002-2003 State of
the Industry report said that price cutting was the most
significant issue in their market. It was, in fact, the
number one worry.
We quoted Susan Kelly of Raine Consulting during our remarks at
the Executive Outlook and heard anguished murmurs of agreement
over this item from Ms. Kelly's research:
"In a recent sampling study of identical commercial print
jobs averaging $20,000, there was a price differential of 38% from
the lowest to the highest bid."
As it happens, Raine Consulting recently provided a monograph for
the Graphic Arts Marketing Information Service (GAMIS) titled
"Globalization of Print Buying" in which 44% of surveyed
major print buyers believe there is a trend towards purchasing
print globally within their company. This trend may not seem
very threatening to the smaller shop, but in fact it can impact
the entire industry emboldened by the perfect application of
distribute then print.
If you have an opportunity to read the white papers produced by
Raine, DO SO! Quality research, provocative analysis. http://www.RaineConsulting.com
There was one other statistic that caught our ear -- sales per
employee. Altho this metric is very commonly used in retail
marketing, it is not often talked about in printing. The
NAPL reported that the inflation adjusted sales per employee
figure is $93,193 in 2002 ($158,240 before inflation.)
One quick print franchise we know says its sales per employee in
its franchised stores is $106,000 for 2002. The logical
extension of this thinking will be to compare sales per square
feet. Our numbers will not be very Prada-like we regret to
infer.
Getting Clubbed by Content
Also at Graph Expo we picked up these dead on observations from
Steven Schnoll of Schnoll Media Consulting:
"As printing seeks a new identity, one overriding
characteristic manifests itself -- content. Content
management does not involve any specific technology but rather an
entirely new business model.
Traditionally, most graphics companies viewed content as the copy
(camera ready copy) or files delivered to them for processing as
film or digital files. Content quite often gets repurposed
into many different uses, print and Web being the most obvious.
If a company learns to manage the content for its customers, it
has the potential to enhance the customer relationship. The
message is clear, control the content, and you control the
customer..."
Or as Dr. William Ray of Group InfoTech Inc., succinctly
embroidered the gauntlet you see whipping towards your forehead:
"Software is the future for printing, so get used to
it!"
The Pogo Principle
One printer who saw the roll-out of the Indigo E-print 1000 press
way back in the mists of time before the wicked web, said:
"I have seen the future and it ain't us."
Graph Expo marked the first real introduction of the Xerox iGen3
Digital Color Printing Press.
We had seen some evidence of the potential of the machine through
3 entries submitted to the 2002 International Gallery of Superb
Printing, one of which went on to win the KBA North America Best
Use of Emerging Technologies Award and was feted in the Xerox
booth at Graph Expo.
Rod Hayes, a 40 year veteran of the British printing scene wrote a
remarkable article about the iGen3 which was released as Graph
Expo was in full stream.
"To my mind, the iGen3 is capable of delivering colour of a
quality and kind impossible to produce in four colour offset,
matched with changeover and job flexibility that is on a different
planet to that which is currently enjoyed anywhere in the
industry. What is more, this is only the start of a journey
which will lead to changes in the way print is produced. And
this will take place in a time scale measured in months rather
than years."
If you, like many of us, are an embossed card carrying member of
the loyal order of moose/letterpress/elk/linotype/oddfellows, then
maybe you will appreciate Pogo's wistful remark:
"We have met the enemy, and he is us."
Industry Blurbs
If you have need for a Digital Readiness Assessment in your print
emporium, please consider the homespun digital deftness of John
Giles and give him a holler in the hollers of West Virginia. We
had an impromptu lunch with John and Charles Counts a member of
the Columbus Club while at Graph Expo. John retains his
quick wit and a quicker mind for the properly timed investment in
digital detritus in your plant. Contact him at JohnG247@aol.com or through his website http://www.johngiles.com
We had a pleasant chat with Yves Rogivue, CEO of MAN Roland Inc at
the conclusion of our speech at the Executive Outlook. He is
a most impressive man, a bright and charming soul, of the globally
cosmopolitan sort. Shortly after meeting Yves, we read the
amazing tale of the donation of a MAN Roland ROTOMAN web offset
press to GATF in Pittsburgh. Longtime Pittsburgh Club member
Lloyd DeJidas was a member of the Installation Committee for this
magnificent gift (the press took 12 sea containers to transport!)
Yves said that the donation of the press was part of MAN Roland's
ongoing Learning Leadership initiative: "Without a
skilled and knowledgeable workforce to operate it, even the most
promising advancement will not live up to its potential."
We applaud MAN Roland for this demonstration of commitment to the
industry. http://www.manroland.com
We also applaud Lonn Lorenz of Adobe Systems and the San Francisco
Club for his new program of online software demos/Q&A
sessions. The December topic is Illustrator 10 and is
scheduled for the first Wednesday of December at noon PST. Lonn
has conducted several of these gatherings so far and is interested
to learn from you whether the project is useful. As Lonn
says: "This is NOT a sales pitch from Adobe. It is for
your benefit, sharing knowledge, and for Adobe to benefit from you
and provide you with training and resources." Lonn is a
very skillful presenter of this crucial information.
Contact him at llorenz@adobe.com if you would like to learn more.
Club and IAPHC News
Duplicize Your Success
In the past week, Paul Clouser of Beard Printing and Publishing in
York, Pennsylvania and Chuck Timmerman of Woods Litho, in Phoenix,
Arizona have inquired whether it is possible to obtain duplicate
awards from prior International Gallery events. The answer
is YES! And we remind all winners that, as John Berthelsen,
president of Suttle-Straus Printing In Madison, Wisconsin has
said: "Duplicates are the most economical form of good
customer relations we can buy." With the holidays
approaching, you would be hard pressed to find a better way to say
thank you to your clients. If you need the duplicate order
form, you can find it on the opening page of the IAPHC's website,
CraftNet, at http://www.iaphc.org or by contacting Lesley Addy at laddy1069@aol.com
TidBits of Club News and
More
If you haven't received the first issues of TidBits a new
e-publication featuring IAPHC Club and other News of Note, you may
be added to the rolls by contacting TidBits author Lesley Addy,
IAPHC Member Services Director at laddy1069@aol.com Folks around the association have
expressed delight in the breezy and graphics filled TidBits, so
why not get yourself plugged in by contacting Lesley now?
Look For/To Do
Paul Clouser arranged for the printing of the IAPHC Communicator
which is on its way to a mail box near you. You can register
for the IAPHC's Mid-Year meeting online by clicking on the
appropriate link on CraftNet.
Your Knowledge Network
Obviously Works (Y'KNOW?)
Each day, below the radar screen of 99.9% of all other members,
IAPHC members use the Knowledge Network to access the incredible
capabilities connection of fellow members. Because these
requests usually have a sense of urgency attached, they are dealt
with quickly, and again, below the radar screen. We
encourage you to partake of this powerful benefit as well.
There is new business to be had in the global marketplace.
Here are a few recent requests.
Y'KNOW Requests
From Tammie Aaron-Barrada: "I'm looking for a waxer,
not a hand held unit, but a table version to fit at least an 8 1/2
x 11" sheet." You can reply to Tammie via e-mail
at aaronassoc@aol.com
From Lory Johnson Trost of the Cedar Valley Graphic Arts
Association: "I am trying to find a midwest vendor who
can provide plastic comb binding which has been foil stamped
imprinted."
You can contact Lory via e-mail at ljohnson@gandrpublishing.com
From a member wishing to remain anonymous: "I am going
to be upgrading from a Duplo 200 to a Duplo 400 unless someone can
tell me that a Horizon or some other machine would be a better
solution for a shop that does about 2 million a year in
revenue." If you will reply to this writer, your
confidential assessments will be passed on to the inquirer.
Thank you!
And thank you to all the members of the IAPHC who so willingly
assist when a Y'KNOW request pops up unexpectedly in their e-mail
box. It's a good idea to open these requests, there could be
new business from half a world away contained therein.
That's all Folks! --30--
Yours in Craftsmanship,
Kevin Keane
IAPHC
7042 Brooklyn Blvd
Minneapolis Minnesota 55429-1370 USA
800/466/4274
http://www.iaphc.org
And remember, the holidays aren't over until you celebrate
International Printing Week 12-18 January 2003. The theme
this year is "PIE 7" - The Printing Industry is
Evolving, Educational, Exciting, Enlightening, Empowering,
Entertaining, and Effective.
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