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Commentary & Analysis

The Hidden Demands of Print On Demand

By Carro Ford Weston September 14,

By WhatTheyThink Staff
Published: September 14, 2005

By Carro Ford Weston September 14, 2005 -- On demand printing is constantly popping up in columns and articles, making appearances at events, every move studied and debated. For the end customer, it is an extremely appealing concept, addressing issues like better inventory management, reduced waste, faster turnaround, and last minute sourcing. But for the on-demand printing provider, there are hidden pitfalls that can make this business less desirable than all the attention and publicity would have you believe. Print-on-demand introduces new costs that have not been as well publicized or understood by its advocates. Someone who has consistently pointed this out is Dr. Mark Fleming ( stratondmd@aol.com), a 25-year veteran of digital printing and president of Strategies on Demand, LLC, a market research and management consulting firm focused on digital printing and publishing. Fleming notes that POD brings numerous cost advantages through reduction or elimination of inventory expenses and obsolescence. However, print-on-demand (POD) also introduces new costs that have not been as well publicized or understood by its advocates. How Do You Define Workflow? Part of the problem comes from defining the boundaries of POD workflow. Vendors are often inclined towards a more narrow focus to include only the order entry, prepress, and printing functions for which they have solutions. Fleming notes that, in the bigger picture, the workflow in a printing operation includes all the steps required to turn an order into a finished product and its invoice. These might include order entry, material and component inventory, production scheduling and tracking, prepress document management, printing, finishing, assembly, fulfillment and invoicing. "Each of these functions may entail a number of transactions with other departments, suppliers, the customer or the final recipient of the product," he says. The next layer of transactions could involve internal and external communications, negotiations, reporting, and financial accounting for materials, jobs, finished products and distribution. For a short-run job, the time required to manage all the transactions may be greater than the time required to actually produce the job! Unless a print provider gets a handle on all the associated transactions, they may be blindsided by unplanned costs and labor. Indeed, transaction management costs have been the biggest factor discouraging many traditional commercial printers from moving aggressively into POD. "Since many of the required transactions--and the associated costs--are independent of the size of the order, they can dominate the total cost of a POD job, where the value may be less than $100. Moreover, for a short-run job, the time required to manage all the transactions may be greater than the time required to actually produce the job!" Fleming declares. The high frequency of smaller orders in a digital POD operation requires a more efficient workflow strategy. "A typical POD facility may deal with 20 to 2,000 orders per day, in run lengths from one to 1,000 units, with turnaround times of eight to 24 hours," he says. "The largest color POD businesses print and fulfill more than a quarter million A4 impressions every day. However, in spite of all the supply-side promotion of workflow technology over the past two years, current off-the-shelf products represent only the first step toward a comprehensive workflow solution for a printing and fulfillment facility capable of handling thousands of orders per day." Current off-the-shelf products represent only the first step toward a comprehensive workflow solution for a printing and fulfillment facility capable of handling thousands of orders per day. There are many solutions to order entry -- the easiest part of the operation. "Web-based order entry is the low-hanging fruit for software vendors, which accounts for the proliferation of order-entry solutions over the past several years. However, in the bigger picture, order entry is only a small part of the overall transaction management challenge. No one offers a fully integrated workflow system to orchestrate all the other functions in the business," he says. "Entrepreneurs who venture into POD generally configure their own workflow integration solutions from standard database application software." Capacity Management by the Numbers For those who have managed to streamline and integrate their workflows to handle all the transactions, capacity management and equipment productivity remain challenges, "but they are tractable," he says. "Capacity management for short-run, quick-turnaround production is limited by the laws of statistics," Fleming states. "If a given service level is to be maintained--for example, if 95 percent of the incoming orders must be fulfilled within 24 hours, then a predictable amount of safety capacity must be reserved to handle day-to-day fluctuations in demand. "The shorter turnaround times of POD make it necessary to reserve more safety capacity to accommodate the wider swings in day-to-day fluctuations. If a POD facility must fulfill at least 95 percent of its orders within 24 hours, when the standard deviation in daily demand fluctuation is 60 percent of the average daily volume, then management should not plan for the average capacity utilization to exceed 50 percent of peak capacity of the equipment." Non-productive phases can severely reduce the net productive speed of a digital press. Fleming says most POD operations achieve only 50 to 70 percent capacity utilization, compared with up to 85 percent utilization in conventional print operations with longer turnaround times. "As a result, fixed equipment maintenance costs and depreciation must be spread over smaller monthly volumes in POD businesses." Productivity Considerations The lower capacity utilization in POD makes it even more important to minimize make ready and startup time and eliminate wasted productivity between jobs. In short runs, these non-productive phases can severely reduce the net productive speed of a digital press. Fleming explains that the net productive speed is equal to the total number of acceptable impressions divided by the total job time on the press, including make ready, startup, and run phases of operation. According to data compiled by Strategies on Demand, the total make ready and startup time on today's high-end digital color presses is about 12 minutes. This includes job setup, paper loading, generation of one or more press proofs, followed by adjustments to achieve acceptable quality, and subsequent startups following any mid-run shutdowns. As a result, the net productive speed of a 100 A4 ipm press works out to only 25 A4 ipm on a run of 100 copies of a four-page brochure. For a 500-unit run, the net productive speed increases to 63 impressions per minute--still less than two-thirds the rated speed. The net productive speed of a 100 A4 ipm press works out to only 25 A4 ipm on a run of 100 copies of a four-page brochure. "In a facility dealing with these shorter runs, the fixed maintenance, depreciation and labor expenses on the press must be spread over the smaller net productive capacity of the equipment," he says. "Until the digital press manufacturers reduce make ready and startup times substantially, printers can minimize the associated costs by grouping similar jobs together." So why should a print provider get into POD? Although Fleming is realistic about the challenges, he is also a strong proponent of this service. "POD is the key that unlocks the real value of digital printing by combining it with direct-to-user fulfillment," he asserts. "It's also the key to the greatest profitability in digital printing. But it requires a lot more focus and coordination than the traditional short-run job-shop business that print providers are most familiar with." In short, success in print-on-demand requires a comprehensive end-to-end workflow to manage the greater complexity and faster pace of operations that this service model entails. You can always reach Carro Ford Weston

 

 

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