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PIA’s 2018 State of the Industry Report

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  • PIA’s 2018 State of the Industry Report

    PIA’s view for the print industry is strong with growth potential seen on multiple fronts. Market segments forecast to grow relatively fast over the next 12 months, include:
    • Packaging & specialty packaging,
    • Labels & wrappers,
    • Signage,
    • Direct mail, and
    • Point of purchase.

    Real or inflation-adjusted growth is expected to equal or exceed 3%/quarter, with print sales increasing slightly below the 1.5-2.5% range. They recommend taking a fresh look at pricing & estimating, citing that profit leaders have higher profits as a result of lower costs or higher prices. According to the report, the fact that a typical printing job consists of 40% fixed costs & 60% variable costs, printers have a lot of discretion in pricing.

    Their employee recommendations include:
    • Focusing on education & training,
    • Being all-inclusive in benefits, awards, profit sharing & bonuses,
    • Sharing in gains in good years & pains in bad years,
    • Sharing financial status, business plans, strategies & information,
    • Investing in education & training,
    • Linking performance & reward.

    Download your own copy here.


  • #2
    Originally posted by prwhite View Post

    They [PIA] recommend taking a fresh look at pricing & estimating, citing that profit leaders have higher profits as a result of lower costs or higher prices.

    Their employee recommendations include:
    • Focusing on education & training,
    • Being all-inclusive in benefits, awards, profit sharing & bonuses,
    • Sharing in gains in good years & pains in bad years,
    • Sharing financial status, business plans, strategies & information,
    • Investing in education & training,
    • Linking performance & reward.

    Download your own copy here.
    Hmmmm...

    "profit leaders have higher profits as a result of lower costs or higher prices."

    Now that's an insight - increase profits by either lowering costs or increasing prices. If you increase prices you lose business to your competition because the print services market is very price sensitive. So you can't do that. You might potentially lower costs though.

    "1 Focusing on education & training,
    2 Being all-inclusive in benefits, awards, profit sharing & bonuses,
    3 Sharing in gains in good years & pains in bad years,
    4 Sharing financial status, business plans, strategies & information,
    5 Investing in education & training,
    6 Linking performance & reward."

    #1 and #5 are basically the same. Both will increase your costs and will either motivate the employee to ask for a salary increase (cost increase) now that they are better trained for their job or to leave the company for a better paying job at your competitor's shop. You've invested in your competition. Oh, and if if they weren't already trained to do their job - why did you hire them?

    #2 and #3 are, except for benefits, basically the same. All those benefits increase your costs. Profit sharing and bonuses rewards employees, unlike management, for factors of the company's success over which they have no control or personal stake. The net effect is that it increases costs by reducing profit margins. And if employees are to share in profits, shouldn't they also share in company losses?

    #4 Sharing financial status, business plans, strategies & information. Really? If it's a public company then financial info is already shared. If private, it's none of their business. This only makes sense if the print shop is a cooperative and I doubt there are many of those. In any case, giving employees that kind of information will only demoralize them if they disagree with management's plans and strategies but have no power to change it except to quit. Interestingly, the PIA doesn't appear to share its financial information.

    #6 Linking performance and reward. In your typical printshop performance is linked to the equipment and systems that management has put in place. Performance factors over which most employees have no say. So, by linking performance to reward you are effectively punishing the employee for the performance of management.


    W. Edwards Deming, the father of the Quality movement, whose methodologies were key to enabling Japan's manufacturing to rise from the ashes of WW 2 had some thoughts worth considering:

    "The idea of a merit rating is alluring. The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good.

    The effect is exactly the opposite of what the words promise."

    "The merit rating nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, [and] nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in."

    "the system that people work in and the interaction with people may account for 90 or 95 percent of performance."

    "The supposition is prevalent the world over that there would be no problems in production or service if only our production workers would do their jobs in the way that they were taught. Pleasant dreams. The workers are handicapped by the system, and the system belongs to the management."

    Rant over. ;-)
    Last edited by gordo; 02-06-2018, 02:23 PM.

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    • #3
      Originally posted by gordo View Post

      Hmmmm...

      "profit leaders have higher profits as a result of lower costs or higher prices."




      W. Edwards Deming, the father of the Quality movement, whose methodologies were key to enabling Japan's manufacturing to rise from the ashes of WW 2 had some thoughts worth considering:

      "The idea of a merit rating is alluring. The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good.

      The effect is exactly the opposite of what the words promise."

      "The merit rating nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, [and] nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in."

      "the system that people work in and the interaction with people may account for 90 or 95 percent of performance."

      "The supposition is prevalent the world over that there would be no problems in production or service if only our production workers would do their jobs in the way that they were taught. Pleasant dreams. The workers are handicapped by the system, and the system belongs to the management."

      Rant over. ;-)
      Higher profits can also come from higher volumes without lowering variable costs. Fixed costs (burden) will drop due to increased volumes. Lowering prices can possibly do that. Taking away business from competitors, increases their fixed costs. Double benefit.

      I love Deming. A great man. The printing industry has no idea what he was talking about and probably never will. :-) I basically based my whole theoretical approach to solving printing process and resulting economic problems on Deming's views, which are still heads and shoulders above what is now being presented as manufacturing philosophy.

      Comment


      • #4
        Originally posted by Erik Nikkanen View Post

        Higher profits can also come from higher volumes without lowering variable costs. Fixed costs (burden) will drop due to increased volumes. Lowering prices can possibly do that. Taking away business from competitors, increases their fixed costs. Double benefit.

        I love Deming. A great man. The printing industry has no idea what he was talking about and probably never will. :-) I basically based my whole theoretical approach to solving printing process and resulting economic problems on Deming's views, which are still heads and shoulders above what is now being presented as manufacturing philosophy.
        The print mindset is based on doing the same thing over and over and hoping to get the same result. Now you want them to change the mindset to do the same thing differently in hopes of getting a different result? As Dr. Peter Venkman famously said: "dogs and cats living together – mass hysteria." To which Dr. Egon Spengler responded: "Sorry, Venkman, I’m terrified beyond the capacity for rational thought."

        Comment


        • #5
          Originally posted by gordo View Post

          The print mindset is based on doing the same thing over and over and hoping to get the same result. Now you want them to change the mindset to do the same thing differently in hopes of getting a different result?
          In Russia I see the print mindset is doing the same thing over and over hoping to get different result: "maybe this time it will work". Which is actually a schizophrenia symtom btw.
          Imagine that: whole industry in a permanent psychosis.

          Comment


          • #6
            brunnercolormetry.pdf I’m a big fan of Mr. Demming as well. No one in the U.S. would listen to him, not even GM! He said “you don’t inspect quality - you produce quality!”
            I have the same respect for Felix Brunner, he contends you can’t control color on press with Lab controls - see attached.
            Few listen to him either . . .

            Comment


            • #7
              Originally posted by danremaley View Post
              [ATTACH]n273103[/ATTACH] I’m a big fan of Mr. Demming as well. No one in the U.S. would listen to him, not even GM! He said “you don’t inspect quality - you produce quality!”
              I have the same respect for Felix Brunner, he contends you can’t control color on press with Lab controls - see attached.
              Few listen to him either . . .
              Almost totally agree with the Brunner view that colorimetry is not suitable for controlling the process. But it is hard to kill this idea. Even today, TAGA has papers related to the use of colorimetry for process control.

              Even though what the Brunner PDF stated was quite right, Brunner's approach still is not in the spirit of Deming. Brunner relies on measuring the result and then analyzing the problem and then to make an adjustment.

              Deming pushes for the correction of the fundamental cause of problems, by redesigning the process, so there is little need to measure it. So for Deming, the measuring is not for control but would only be to confirm that there is not a breakdown in the process. Deming's approach is very different from Brunner's. Deming would be shaking his head at how the printing industry deals with its problems.

              The subtle difference between these approaches is too hard for the industry to understand and no amount of explanation seems to be enough. They still think in the same old patterns and do the same old things except now they do it with fancier technology. At least Brunner has a better understanding of the process control problem. He just does not have the understanding of how to fix it at a fundamental level. He has just accepted variation as inherent and therefore it needs to be chased with measurements.
              Last edited by Erik Nikkanen; 02-09-2018, 10:57 AM.

              Comment


              • #8
                #1 and #5 are basically the same. Both will increase your costs and will either motivate the employee to ask for a salary increase (cost increase) now that they are better trained for their job or to leave the company for a better paying job at your competitor's shop. You've invested in your competition. Oh, and if if they weren't already trained to do their job - why did you hire them?
                Somehow that sentence makes me want to cramp. Don´t know if you have a apprentice system on your side of the pond, but even then how do you get a pool of people who are able to do the job if they are not trained and have at least a mediocrum of talent..? If you then have a person who is highly trained then it is up to the business to make sure that this person doesn´t want to leave, a good manager will be able to do this, if not then it´s one of the risks of the trade.

                Comment


                • #9
                  Originally posted by Slammer View Post

                  Somehow that sentence makes me want to cramp. Don´t know if you have a apprentice system on your side of the pond, but even then how do you get a pool of people who are able to do the job if they are not trained and have at least a mediocrum of talent..? If you then have a person who is highly trained then it is up to the business to make sure that this person doesn´t want to leave, a good manager will be able to do this, if not then it´s one of the risks of the trade.
                  I suspect that most training today is done by the vendors. IMHO, apprenticeships in this industry is an out of date training method. Once the worker bee is trained, by the printshop or product vendor, on which button (the green or the red) to press and when to press it the training is complete. As one simple example, the daily newspaper publisher in the city I lived in laid off it's entire prepress department as a cost saving initiative. They assigned that responsibility to their IT guy who knew nothing about prepress or printing. I was hired to show him the buttons and the paper got produced. That was 6 years ago.

                  Comment


                  • #10
                    So right Gordo - I would meet with the print shop owner and my first question was “how much is budgeted for training”. I have NEVER had an owner tell me he had a budget for training.
                    When consulting the owner would ask me “how much money will you save me?”
                    My response was always - “how much are you losing?” The owners never respond . .

                    Comment


                    • #11
                      Gentlemen,




                      As per norm a typical American mindset and philosophy the views echoed here !




                      I await the "Hue and Cry"

                      Regards, Alois

                      Comment


                      • #12
                        Originally posted by gordo View Post

                        I suspect that most training today is done by the vendors. IMHO, apprenticeships in this industry is an out of date training method. Once the worker bee is trained, by the printshop or product vendor, on which button (the green or the red) to press and when to press it the training is complete. As one simple example, the daily newspaper publisher in the city I lived in laid off it's entire prepress department as a cost saving initiative. They assigned that responsibility to their IT guy who knew nothing about prepress or printing. I was hired to show him the buttons and the paper got produced. That was 6 years ago.
                        It started with the idea that: "With DTP every secretary is a typesetter at the push of a button" I suppose it is our own fault for making ourselves redundant.

                        Comment


                        • #13
                          Gentlemen,

                          Who was minding the Printing Industry when the "Knowledge of Graphic Reproduction Processes" was purloined by the Disruptors of Silicon Valley ?



                          Regards, Alois

                          Comment


                          • #14
                            The idea that other groups of innovators, took away the future of the printing industry is strange because it was taken away without a fight. Much of the printing industry shrank due to electronic media's distribution of functions that were formally printed. No printing required. Other innovators also provided new digital printing methods which have also grown and are eagerly followed by the core in the print media, who have lost interest in offset.

                            The printing industry could do little to counter the electronic media's distribution but they could have done something to greatly slow the advance of digital printing. So how did they fight back? They whined and complained about what was happening to their beloved industry but did nothing to fight back and innovate their own process to make it harder for digital printers.

                            The whole point of my 30 years of effort to improve the process for consistency, predictability and extremely short makereadies, created no strong interest with the existing printing community. If the process would have been developed to be extremely predictable, the digital printers would have a hard time getting a foothold. Even today, it seems that digital print quality (Landa too) is only approaching offset quality but not surpassing it.

                            Offset has big advantages if one is not needing variable print because the inks and paper are less costly. In the end, the cost of materials is a big issue if the process can be made reliable.

                            I am personally sick of all the excuses I have heard over this time. What was needed were people who wanted change and were willing to take risks for potential benefits. What is not needed are whiners. And when people start to say how complicated the process is, I just hear blah blah blah blah and know that they don't want to change.

                            So yes, the printing industry is to blame for some of its problems they have now. If one does not make the changes needed, someone else will take things away from you. And they should because one does not deserve something if one is not willing to fight for. You fight by making innovations.
                            Last edited by Erik Nikkanen; 02-10-2018, 06:42 PM.

                            Comment


                            • #15
                              I don't see the folks in Silicon Valley as disrupters at all. They just saw a business opportunity in a market segment and exploited it.

                              In April 1984 I bought my first Macintosh.

                              Soon after I had an epiphany.

                              As a result, in the winter of 1985 I gave a talk to a graphic arts conference in Vancouver to share my epiphany to a crowd of graphic designers and printshop owners.

                              There were three key points to my epiphany that were embodied by my MAC experience that I tried to convey. I think they still have relevance today.

                              1 - Disintermediation. The notion that everything between the creative - i.e. the document creator - and the output (e.g. the printing) will disappear - just as it did between my MAC and my desktop printer. The net effect is that printshop will become just a plotter at the end of a wire from my computer.

                              2 - Automation. Everything that can be automated will be automated. I.e. if your production skills can be automated (as was beginning to happen with desktop publishing at the time) then your job will disappear - probably sooner than you imagine.

                              3 - Value-added differentiation. Unless you can differentiate your service and/or manufacturing offerings by adding value that I perceive as a benefit then you offer nothing over what my desktop printer offers and I will treat you as such.

                              I was laughed off the stage. Except for one prepress shop owner (that I'm aware of) who fortunately, soon after sold his shop while it still had value.

                              Printers aren't at the mercy of their customers nor their suppliers, nor the computer weenies. Printers are at the mercy of themselves.
                              Last edited by gordo; 02-10-2018, 11:38 PM.

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