Propelling Your Business Forward—Part 4

noelward

Well-known member
Propelling Your Business Forward—Part 4
Positioning Your Commercial Printing Business for Success

By Noel Ward, Editor@Large

Every business plan is predicated on success, but our turbulent times make success, which is different for every type of business, a moving target. What are other Print Service Providers (PSPs) doing to ensure success? It often comes down to technology and sound business decisions.

Finding out some of the details behind this was the goal of the latest Canon market study done in conjunction with NAPCO Research. I did not play a part the study, but Canon gave me an early look at the latest findings. As in the past I thought Print Planet readers might be interested in some highlights. Several findings reinforce earlier Canon research, indicating that PSPs see a mix of equipment, software and business strategy and information-based planning as the basis for success.

Challenges for PSPs
  • The common and well-known experiences of shortages, especially the inability to obtain needed supplies, combined with higher costs result in higher prices being charged for work. This continued challenge pushes some customers to lower cost providers.
  • While slowly disappearing, the “race to the bottom” on retail pricing remains a fact of business life for many PSPs.
  • While some PSPs have increased the levels of automation there is more to be done to make end-to-end automated workflows a reality.
How PSPs are addressing challenges
  • The survey data shows current and projected growth by commercial printers. This growth is not only change but adaptation. The expansion of digital printing—which began more than 20 years ago—has rapidly grown to be the technology of choice for work produced by many commercial printers as well as small to mid-size shops. Throughout this period print quality, press speed, and media range has continued to expand. Moreover, the trend to digital printing is now exacerbated by inkjet presses, which many print providers in the study saying they plan on adding (or increasing) high-speed inkjet capabilities. A driver for this is improved print quality on inkjet presses. This is making image quality less of a concern for many communications buyers and PSPs.
  • According to the study, PSP owners expect demand for offset printing to continue declining over the next two years as digital printing increases. This may indicate that in at least some shops, the advantages of production inkjet is decreasing reliance on offset presses.
The growth of digital print has been further fueled in part by overcapacity on offset presses which is heavily influenced by communications buyers’ expectations shifting to shorter (and more frequent) runs, just-in-time delivery, and the growing population of press operators who are aging out of the print industry. These changes have led some offset press operations to close, while many of those remaining attract offset business from PSPs that offer only digital only printing.
  • The above changes are also driving differentiation and a business transition in commercial printing. Commercial shops are increasingly adding labels, packaging, and direct mail to their mix of offerings. Although such changes can be fraught with an assortment of challenges, the somewhat specialized presses and finishing equipment needed for these applications can be acquired and the expertise needed to make them viable can be hired, enabling a PSP to expand the range of services s/he provides. More importantly, most print providers know labels and packaging are the fastest growing segments of the print industry and want a piece of the action as a way of keeping their businesses healthy.
  • Number don’t lie, and successful PSPs know collecting and analyzing data about their businesses provides an accurate picture of their operation. As many as seven in ten PSPs are drilling into data derived from the automated workflows they have put in place. Using such data and financial analytics helps business owners track more elements of their business performance more closely. The more this is done, the more likely a business is to improve because changes can be made based on accurate and actionable data.
  • Although strategic mergers and acquisitions will decrease the overall number of PSPs the ones that remain in operation are likely to be stronger, more competitive, and more capable. Savvy PSPs see the potential. Nearly half of PSPs responding to the study are interested in acquiring another business or merging operations with another firm.
The new study also reached out to communications buyers—the people who buy from, and work directly with PSPs. As noted in other Canon and NAPCO research, high-quality color printing (however that may be defined) remains a priority, closely followed by reliability, turnaround time, customer service, and the ability to order online. The allure of digital printing checks all these boxes.

Interestingly, although price was not noted as a leading factor in PSP selection, communication buyers still echoed the responses of PSPs about pricing by saying that price increases were a leading factor when terminating a relationship with a PSP. Price, therefore, remains a driver in deciding where a job is printed, although being able to provide the quality and service levels a buyer requires may in some cases make up for price differences.

Positioning for Success
The real issue of the day is how PSPs are adapting their businesses for success in a changing and challenging time. Many are increasing the services they provide while expanding the range of products they offer. Others are adding specialized offerings that address the needs of vertical markets and provide a larger presence in their market. For example, some PSPs are venturing into various healthcare markets, labels and packaging and direct mail. All require printing yet have unique needs that enterprising PSPs can meet. Other PSPs can do the same by studying their markets, talking with potential customers, identifying the technologies required, and above all, see if the ROI makes sense. These all enable growth and align with the thinking from other PSPs.
  • Almost eight in ten PSPs are re-tooling their operations to increase automation and productivity. More than three quarters say they are funding investment in business growth, technology and people.
  • As noted previously, high-speed inkjet has growing appeal for PSPs, with more than 60% of PSP respondents saying they plan on placing a high-speed inkjet press on their production floor. This appears to be driven by the reliability, print quality, and speed of these devices, as well as the availability of both cut-sheet and continuous-feed inkjet presses.
  • The extent to which a business is automated directly influences how likely it is to reach its productivity, sales and profitability goals. Over half of all PSPs responding said prepress makeready, color management, job reporting and preflighting topped the automated processes already in place. And they aren’t done yet: there is still room to expand automation in job submission, estimating and pricing, and press makeready. The most aggressive PSPs have these targets on their radar, knowing that automation can break bottlenecks in production, reduce human touchpoints and errors, and even reduce headcount.
  • As automation becomes more commonplace—and moves to the Cloud—more PSPs are likely to integrate automation into their workflows because it will be less expensive, easier to use, better integrated into PSP workflows, and be automatically updated. As a result, more PSPs are likely to adopt automation and by paying attention to the stream of data being collected, become more successful.
What this study indicates is that doing nothing, maintaining the status quo, or not taking advantage of what new technologies bring to the party are sure ways of driving your company off a cliff. The PSPs that will succeed are the ones who make investments in equipment, software, people, and training to help their businesses more successful, more profitable and that pave the way to a more promising future.

Be sure to read the previous three reports about Propelling Your Business Forward:

Part 1: Print 2022 and Beyond
Part 2: Enhancing In-Plant Product & Service Offerings
Part 3: Pinpointing and Pursuing High Growth Applications
 
Last edited:

What About Profitability?

Canon 2022
The Video You Really
Need To Watch

Modern offset press performance comes with several nuances.
Chris Travis, Director of Technology at Koenig & Bauer, shares some details.
View The Video

   
Top