Creating Value Strategies: Print On Demand

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Since 2008 offset print volumes in North America have declined by nearly 30%, while color digital printing in the production market has nearly doubled to 67 billion pages in 2012. So despite the overall market decline those companies focusing on opportunities enabled by color digital printing have been part of a large growth trend.

The first application for color digital printing was a replacement for short run offset printing. With virtually no make-ready costs, but higher running costs digital printing is more economical up to a certain run length. The math puts the breakeven at roughly 1,000 impressions on an offset press, but that figure can vary significantly from shop to shop. In the beginning the margins were great, it was common for shops to be getting $1 per sheet for output, but those days are gone. Go online and you can find firms advertising color digital printing for as low as $0.09 per page.

Business management guru Michael Porter says there are only two strategy options that offer long term competitive advantage: either add value or be the low cost producer.

Today’s successful companies are doing more than short run color digital printing. Firms are combining digital printing with new workflow and/or other digital technologies to create added value or lower costs. Examples of this strategy include

  • Print On Demand
  • Data Driven Applications
  • Print to e-formats
  • Marketing Services – from collateral management to campaign design and delivery

In this article we’ll focus on Print On Demand and in future articles we’ll address the other strategies.

A Print On Demand operation is geared to enable customers to order just what they need, avoiding storing items in inventory and avoiding potential waste and obsolescence. Print On Demand operations are lean and are characterized by the ability to handle a large number of small orders. Automation of the order entry and prepress operations is a key part of a successful Print On Demand strategy.

Here’s a typical workflow for a print service provider (click to enlarge):

Standard Workflow

It is clear from the diagram that there are many steps from first contact with the customer to the printing step. The yellow stars represent pain points in the process and nearly all of them are prior to printing.

  • Estimating & Quoting
    • Often a very manual process for anything beyond a reprint order or simple print job
  • Ticket
    • Rekeying information from one system to another
    • Often the result is a physical ticket that travels with the job
  • Hand-offs
    • Migrating the job from one physical station or point solution with all ticketing information is often manual
    • Especially challenging to offline binderies and to shipping/fulfillment centers
    • Capturing processing for reentry into cost management systems is also often manual
  • Proofing & Approval
    • Manual proof creation
    • Approval sharing & communication
    • Revisions
    • Change Management
    • Rework due to changes

Many of these pain points can be eliminated creating a lower cost operation that can deliver faster than ever before. One of the key pieces is to be able to take orders over the internet. You can’t get to the lowest cost operation unless a customer can order a job without human involvement. Here’s what a number of print service providers have done to create a Print On Demand operation:

  • Start by transferring the work of submitting the order, creating the proof, approving the proof, and collecting payment to the customer  (Most customers will prefer it)
  • Eliminate all manual order entry into workflow software and MIS software (If you don’t do this you can’t scale)
  • Automate preflight checks and imposition
  • Create a priority system that automatically queues the jobs, either by due dates or by paper types
  • At this point you have automated the orders to the press and orders should be in a print queue ready to go. Typically an operator intervenes here to make sure the order looks right and the press is set up properly
  • As JDF finally works its way into finishing equipment many jobs can be finished automatically as well

The resulting workflow will look something like this (click to enlarge):

Digital Workflow

Moving to a Print on Demand operation often starts with manually reconfiguring your workflow to eliminate touch points and then implementing software to automate the process.

Dave Zamorski, of IMG Results, has been through this process a number of times. Below is a diagram created to map out the process for ordering a trifold brochure. The original process had 24 human touch points leading to high labor costs, slow turnaround times, and numerous errors.

IMG before

When automated the touch points were reduced to four, sales per employee skyrocketed to $232K vs. the industry average of $125K to $150K, productivity increased by 80% as the number of jobs that could move through the plant was greatly increased, cycle times decreased, and quality improved. The entire case study can be found at http://www.caslon.net/Workflow-Solutions/Workflow-Case-Studies.

For companies who aim to be the low cost producer, a Print On Demand strategy powered by digital printing, web to print technology and workflow automation can be a winning combination.

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