Commentary & Analysis
FREE: Weighing the Industry's Mood on the Eve of Graph Expo
By WhatTheyThink Staff
Published: September 16, 2003
“Cautious Optimism” May Be Better Than It Sounds by Patrick Henry If the phrase “cautious optimism” seems to have grown somewhat stale as a take on the mood of the printing industry, a bit of linguistic analysis may be in order. According to a quartet of expert industry-watchers who shared their views on the outlook for Graph Expo, the “cautious” behavior of printers is a positive trait that will help them make the right decisions about upgrading their capabilities at the show. And, say these observers, the industry's growing sense of “optimism” for better times just ahead is genuine—if tempered by the sting of hard times just behind. Sources for this story included Craig Barnes, founder and president, C. Barnes & Co., a publisher of print industry directories and market reports; Werner Naegeli, president and CEO, Muller Martini Corp.; Yves Rogivue, CEO, MAN Roland North America; and I. Gregg Van Wert, principal of The Haven Group consultancy and former president of the National Association for Printing Leadership (NAPL). Following their comments, we offer a summary of Graph Expo presentations planned by various manufacturers of lithographic presses, postpress equipment, and printing ink. Our continuing coverage of show news in these categories will include another preview next week; daily bulletins from McCormick Place; and a post-show wrap-up. “The Worst Is Over” “The worst is over,” declares Rogivue, voicing the consensus. Although he foresees economic indicators rising as the U.S. economy takes the lead globally, he says that the industry should expect a “a little time lag” to occur between improvements in the big picture and improvements in print-related sectors. Naegeli, likewise, detects “optimism, but continuing caution, in regard to investment” as printers try to identify the best ways to re-equip their operations for faster makereadies and shorter runs. Barnes also sees a hopeful trend, but he also notes that for most printers, it's been “three years since they've seen any good news.” What's more, he says, “they feel that they've been tricked a few times already” by premature predictions of recovery. Price pressure and the fear of “driving each other into the ground” because of “commoditization” continue to worry printers and dampen their plans, according to Barnes. The restraint isn't universal: Rogivue, for example, thinks that the industry's “early movers and profit leaders” sense an upturn already and are taking advantage of the opportunity to invest in new equipment while a buyer's market remains. Nevertheless, he says, “the main part of the industry is still nervous” about terrorism and other potential shocks to the state of the economy. The message from print markets is also mixed. Barnes's report, Print Buying 2003: Demographic Analysis of Print End-User Markets covers 23 industries that are major buyers of printing. According to Barnes, the “hot” markets—those showing biggest positive change in 2002-03—are health care, home improvement, pharmaceutical, real estate, and government. But, there were declining markets as well, including telecommunications, computers, and technology. Barnes notes that the declines “mirror the economy in general” and don't necessarily imply a diminished need for print in these sectors. The equipment vendors, naturally, would like to see a return of the “very good stretch” that Naegeli says they enjoyed from the early 1990s through 2001. But the reality, says Barnes, is that all of the manufacturers “have fewer customers” because the number of printers of all kinds has decreased by something like 10 percent over the last three years. (The Graphic Arts Information Network reports a 13 percent decline in printing plants from 1994 to 2002.) The manufacturers also must face the fact that “they won't sell more until the printers do,” adds Barnes. M&As Move Up the Ladder Barnes says that his research into industry demographics, which tracks printing companies with 50 or more employees, doesn't reveal any clear trends in plant population by region. He does, however, claim to see a pickup in merger and acquisition (M&A) activity among bigger firms, as typified by Von Hoffman Corporation's announcement of its plan to acquire Lehigh Press. A few years ago, according to Barnes, most M&A campaigns targeted mid-sized firms. But now that acquisition targets in this range “have been kind of picked through,” he predicts that the consolidators will scale up their ambitions accordingly. Last year, says Barnes, the industry saw “closings all over the place,” with the result that now, “a lot of people are trying to pick up a good deal on companies in distress.” Barnes likens the M&A scene to “a kind of a housing market” and thinks that more venture money will be available to buyers who can spot and capitalize upon a good deal. Nobody keeps a more watchful eye on big printers than small printers, for whom the prospect of large-scale M&As may be only one part of the problem. Naegeli observes that emphasis on “customer retention” is prompting large printers to keep the small-quantity work that they once jobbed out to smaller shops, adding to the competitive pressure on these already-squeezed providers. Naegeli says that this trend contributes to his sense of a “big uncertainty” besetting the small-sheetfed segment and restraining its equipment-buying plans. Printers cope with uncertainty in different ways, according to Van Wert, but everyone, he says, is watching cash flow: “Cash is king.” Barnes contends that few printers are expecting “big things” from their businesses, at least for the time being; many, he says, simply are content “to make a living doing what they like to do.” Equal-Opportunity Recovery Here, though, is precisely where the experts think that the light of a brighter day is starting to seep in. Low-key though the prevailing mood may be, says Barnes, every printer wants to become “a better competitor” with a fair shot at sharing in the “real, sustained growth” that's commonly believed to be on the way. Buyouts of firms by former employees “just trying to salvage equipment and facilities that are there” give more evidence of the industry's determination to hold the line until the turnaround comes, Barnes adds. Rogivue acknowledges the array of pressures on printers, especially small ones, but insists that the auguries are good for “smart niche players” of any size that embrace the new paradigms of competitiveness. Rogivue stresses that the “early movers and profit leaders” spearheading the turnaround won't only be big firms. All printers, he says, can succeed by offering new services and by using technology to “drive down their own costs of manufacturing by doing more with less.” Van Wert agrees that the key to prosperity is something much more significant than size. The industry's star performers, he says, “understand the fundamental importance of moving from commodity printing to customer experience—of moving up the customer value chain by making the move from servicing demand to creating demand.” By so doing, notes Van Wert, they also move from low-margin economic survival to high-margin business excellence. Performance measurement and benchmarking form the core of Van Wert's advice to his printer clients. He says that self-scrutiny is especially crucial in difficult times because in slow periods, “most printers aren't making money on the revenue side—they're making it on the efficiency side.” Printers must analyze their efficiency in ways that might not have seemed as urgent when business was easier, says Van Wert, and their benchmarking must be based upon reliable data: “like Ivory Soap: 99.5 percent pure.” Answer Is “CIMplicity” Itself Rogivue concurs with Van Wert's prescription, but he has another name for it: CIM (computer integrated manufacturing), a technology that MAN Roland will push hard at Graph Expo. Rogivue admits that the term may sound “very dry and scientific,” but he says that it's really the essence of doing more with less to gain an advantage against “competitors anywhere.” Claiming sometimes to be “flabbergasted” by American printers' nervousness about competing with cheap, imported printing from offshore plants, Rogivue insists that the offshore producers' cost advantage can be erased through greater manufacturing efficiency. One of his paragons of manufacturing efficiency is CP Printing Inc. of Vaughan, Ontario, a commercial print and prepress provider that recently installed a five-color Roland 300 perfector. With this press, according to Rogivue, CP Printing can achieve sheetfed makereadies in eight to 12 minutes. It also can economically print quantities as small as 300 with true offset quality, thereby competing with digital color in an almost unheard-of run length range. The company can do this, Rogivue notes, because its management “lives MIS” and employs a “qualified and motivated staff” dedicated to optimizing every facet of the operation through workflow integration. “This is exactly what we try to bring across when we speak about CIM,” he says. MAN Roland and Muller Martini are among a number of Graph Expo exhibitors that will promote workflow integration as supporters of the Networked Graphic Production (NGP) initiative sponsored by Creo. NGP's objective is to create manufacturing environments in which its partners' production and MIS systems can be made interoperable through the use of open, industry-standard data formats including JDF, PDF/X, and XML. This goal is congruent with the aims of CIP4, the international consortium of vendors cooperating in the development of data exchange standards for graphic communications. Both Rogivue and Naegeli say that they see NGP as a promising route to plug-and-play system integration without the need for proprietary interfaces. Looking ahead to the international graphic arts trade fair in Düsseldorf, Germany, next year, Rogivue adds that the systems integration theme of Graph Expo “will be the main focus at drupa—every major manufacturer at drupa will be CIP4 compatible.” Let the Good Times... In the final few weeks before the Chicago show, many of the elements of a successful event seem to be converging. “The worst is behind us,” repeats Rogivue. “It's a good time to be in the industry—not an easy time, but a good time.” As a marketer of printing presses, he says that his company will bring the array of “heavy metal” that Graph Expo traditionally requires. But, he says, the main attraction of the MAN Roland stand will be “what is around that technology”: systems integration and other factors that will help customers to succeed with their printing equipment in the long term. If Van Wert is correct, Graph Expo exhibitors may well catch the industry at the cusp of a surge in shopping-mindedness. Van Wert (who in a long career at NAPL was one of Graph Expo's original planners and promoters) says that “100 percent” of the printers he's spoken with in the last 30 days have told him that their businesses have taken a healthybounce. He therefore expects Graph Expo to be “a good buying show” not only in terms of press sales, but in sales of CTP systems and other technologies that can help printers improve throughput and cash flow. In fact, says Van Wert, the only printers for whom the big lakeside show will hold no appeal are those whose “days are numbered” anyway: those selling “from a commoditized position,” i.e., scraping by on lowball prices. These bottom-feeders “are far more risk averse than those who are using this time to prepare for when things will be better,” says Van Wert. They will find, he adds, that “there is little room in this business environment for printers who are steeped in a job-shop mentality.” Once More into the Booths Following are capsule descriptions of what awaits showgoers in the booths of selected manufacturers of lithographic presses, postpress equipment, and printing inks. Use “The Attendee Assistant” feature for Graph Expo at www.gasc.org to obtain more information about these or any other exhibitors. A.B.Dick Company (booth #3419) says its exhibit will focus on the benefits of bundling various pieces of equipment, including components of the company's Digital PlateMaster (DPM) line of CTP products. Also to be prominently featured are A.B.Dick's Momentum™ Workflow software applications: ScanMaster™, MPROOF™, MTRAP™, and IKE™. They will be included in all DPM displays, which will feature the new DPM34 HSC platesetter coupled with the 4995A-ICS four-color press. Another demonstration will show the DPM2340 platesetter working in tandem with a 9995A two-color press. Also in the booth will be a separate DPM34 SC device and the DPM2508, a larger unit that makes plates for presses up to 20" and film for half-size models. Two-color options include the 9995A offset press and 9980 duplicator; the 9910XCD with a second color head; and the new 9920 with an electronically controlled Townsend swing-away second head. Postpress equipment includes a Watkiss Automatic SpineMaster bookletmaker with a system 3 collating device. Duplo USA Corporation (booth #1873) says that the centerpiece of its array of finishing solutions will be the System 5000, its recently introduced bookletmaking and collating solution. This “fourth generation” system incorporates DC-10/60 collating towers, the new DBM-500 bookletmaker, a face trimmer, and a precision stacker. Its state-of-the-art set accumulation system eliminates the need for separate solutions for traditional and digital users, according to Duplo. Producing up to 4,500 booklets per hour, the machine incorporates a center referenced paper transport system for fully automated sheet transport in all sheet sizes without manual intervention. Duplo says that the System 5000's capabilities range from producing CD and DVD sized booklets to 8.5" x 11", 11"x17", and oversize commercial print formats, with push-button control of alternation between formats. The System 5000 also features a redesigned fold unit and improved job-interruption and problem-detection systems. Also being showcased by Duplo at Graph Expo are the DF-920 folder, offering speeds up to 256 sheets per minute in 8.5" x 11" single-fold format; and the DocuCutter DC-545HC slitter/creaser/trimmer, developed specifically for the production of digitally printed products. Flint Ink (booth #826) will present several new ink systems and products for commercial and package printing applications: DURACURE™ inks are formulated to provide outstanding press performance and adhesion to nonporous substrates, according to Flint, for superior transfer, dot fidelity, and high-speed press stability. Flint says that DURACURE Inks are ideal for POP displays, signage, and customer loyalty and membership card applications. The ARROWMAX 1000™ ink system is described as a premium stay-open ink system for high-quality color reproduction with maximum gloss and print sharpness in commercial printing applications. MATRIXCURE™ WEB inks utilize high-quality resin and photoinitiator chemistry for high-speed UV web printing on paper substrates. Flint calls the formulation an excellent choice for commercial printers with narrow web capabilities who print inserts on coated paper; business forms; or direct mail advertisements on either matte or uncoated papers. It also is well suited to jobs requiring laser imprintability, according to Flint. Visitors to the Flint booth also will have the opportunity to learn more about Jetrion LLC, an inkjet product, service, and integration company launched recently by Flint Ink. Jetrion will present new high-performance continuous inkjet (CIJ) inks for a wide range of substrates in direct mail, coding, and marking applications. Members of Jetrion's executive team will also be on hand to provide “personalized digital audits” for attendees investigating inkjet technologies. Heidelberg (booth #1000) will display at least one press that it cannot sell: a Speedmaster SM 74 10-color perfector that can print up to four colors plus a spot varnish or PMS color on each side of the sheet in one pass. This particular machine has already been purchased by Colorado Printing Co., which will ship the press to its Grand Junction, Colo. plant after the show. During the show, the press will run two separate jobs: a multiple-color poster; and a 2004 calendar that will highlight perfecting using four-color process plus varnish on each side of the sheet. The 10-color SM 74 is one of 10 presses that Heidelberg will put on display during Graph Expo. Another is the new Printmaster PM 52, a 20" press that will debut at the show. Available in one- to five-color models, the Printmaster PM 52 is positioned in Heidelberg's 20" product portfolio between the Printmaster GTO 52 and the Speedmaster SM 52. Heidelberg describes it as a “scalable” press aimed at small and midsize businesses that print commercial jobs such as advertising material, brochures, business cards, stationery, and annual reports. The Printmaster PM 52 operates at a maximum speed of 13,000 sheets per hour in a maximum print format of 14.56'' x 20.47'' on printing stocks ranging in thickness from lightweight paper and cardboard to padded envelopes. It has a variety of automated features including push-button inking and dampening controls; simplified plate changing; optional automatic sheet reversing; and an inline option for perforation and numbering. The postpress portion of Heidelberg's exhibit will showcase the ST 400 saddle stitcher, the winner of a 2003 GATF InterTech Technology Award. The unit, capable of producing up to 14,000 pieces per hour, will be shown in live operation as the final step in Heidelberg's demonstration of a computer integrated manufacturing (CIM) workflow. Heidelberg's Web Systems division plans to unveil a new model of its 3000 series Sunday Press at Graph Expo. (A story on the development and features of the new press will appear here next week.) The Web Systems section of the Heidelberg booth will include three “Expertise Centers” offering visitors a venue for discussing value-added services that extend beyond the purchase of new equipment. These services range from training, parts and maintenance programs to production analysis tools, according to Heidelberg. Also to be highlighted are programs available through the division's newly expanded training center in Dover, N.H. KBA North America (booth #1830) will encourage visitors to “think outside the box” by running live, complex jobs with substrates including lightweight stock, paper, and board on its Rapida line of medium- and large-format conventional sheetfed presses. The centerpiece of the booth will be a Rapida 105 41" six-color (plus coater) machine that will print a variety of multicolor jobs including some with hybrid inks. Product introductions will include: • a “plastics” option for KBA's 20" x 29" 74 Karat waterless digital press, giving the press the ability to print on a variety of non-paper substrates including lenticular screens, synthetic stock, static cling, and crack-and-peel. • the Logotronic Professional System, an integrated data exchange system for job implementation, machine parameter setting, data and job tracking, and reporting of production results. Applicable to both sheetfed and web printing, it is a key component of KBA's Open Ergonomic Automation System (OPERA). The Logotronic Professional System can be retrofitted to any KBA Rapida 105 press, 41" and larger. Komori (booth #1045) will feature the newly redesigned Lithrone 28P in a six-color with inline coater configuration. Komori says that the half-size perfector includes a variety of new features to improve productivity and profitability, including push-button perfector changeover requiring no operator intervention or special tools. On the updated press, which features the Lithrone standard double-diameter cylinder configuration, the sheet is always controlled by grippers to reduce registration errors and dropped sheets. The Lithrone 28P also incorporates many of the new technologies in Komori's Lithrone S40 (the winner of a 2003 GATF InterTech Technology Award), including the ability to preprogram the makeready for the next job while the current job is printing. Among other enhancements to the Lithrone 28P are a redesigned inker that permits ink fountain key adjustments to be made in increments of 500 rather than the conventional 200, for enhanced print quality; the Komorimatic dampening system, said virtually to eliminate hickeys; and an improved, console-adjustable air-control delivery system that reduces marking on the down side of the sheet by enabling sheets to float through the press on a cushion of air. In the booth's Imaging Systems area, Komori will present the ColorConnection suite of software tools to streamline workflow production; Bladesetter software, which will generate CIP4/PPF files for presetting the ink key profiles on the redesigned Lithrone 28P; and K-Color Profiler color management software, working in conjunction with X-rite and Monaco color software tools. Komori adds that it will demonstrate its continuing commitment to open-systems architecture and to CIP4/JDF integration by simulating a production workflow with its JDF-compliant K-Station interfaced to Printcafe's Hagen OA job management system. By transferring JDF data from each system, Komori aims show the benefit of increased workflow efficiency throughout the production cycle. MAN Roland Inc. (booth #1030) seems determined to make its exhibit something different from the traditional showcase of print hardware—in its words, an exhibit “that will focus on process rather than product.” To be sure, the company will present an appropriate assortment of running presses and static units. But MAN Roland hopes that the real draw will be a continuous educational program consisting of a series of events aimed at promoting the advantages of CIM as enjoyed by users of MAN Roland systems. Among the highlights: • an interactive presentation on profit improvement through CIM by various sheetfed printers, packaging printers, newspaper executives and commercial web printers. • a demonstration in which the productivity of a six-color ROLAND 500 sheetfed press will be benchmarked by job costs rather than by production time. The demonstration will use metrics from MAN Roland's Press Operating Profitability (POP) analysis, a modeling tool it developed with the help of NAPL. • a live feed of data from the show floor to a 41" ROLAND 700 press in the company's headquarters training center in Westmont, Ill. The goal will be to create a CIM network enabling makeready and production on the 700 to be controlled from the booth via MAN Roland's PECOM press operating system. • a “CIM classroom” presenting mini-workshops by experts from MAN Roland and CIM partners Creo and Printcafe. • “Success Spoken Here”: a live/multimedia presentation that will, according to MAN Roland, transport Graph Expo visitors to a variety of pressrooms where printers are putting CIM into action. It will include video clips providing a “sneak preview” of CIM systems for print that MAN Roland plans to introduce at drupa next spring. Equipment on display will include a unit from each of the following: the DICOweb plateless offset press; the ROLAND 900 XXL, said by the manufacturer to be the industry's largest sheetfed press; and the LITHOMAN IV, MAN Roland's largest commercial web press. Muller Martini (booth #1062) is another exhibitor that will combine live and multimedia elements in a presentation on the benefits of CIM. The presentation, called “Connect to the Finish,” will combine videotaped visits to Muller Martini customer sites with live demonstrations of how CIP3's PPF (print production format) architecture can make finishing an integral part of a CIM workflow. The finishing systems that Muller Martini will demonstrate are: • AmigoDigital, a short-run, automated perfect binding system that can connect directly a digital printing system and produce up to 1,000 fully variable books per hour inline. It is designed to plug into a facility's on-demand workflow so that the parameters of each individual book are automatically transferred to the binder for hands-free setup. When used in-line with a digital press, AmigoDigital sets itself up directly from data supplied by the upstream printer or press. When configured near-line, AmigoDigital takes its settings from a built-in measuring/loading station to automate makeready on conventional short-run jobs. In either case, says Muller Martini, the electronic book size data are used to adjust the length, width, and thickness settings of the binder so that the machine “makereadies itself.” • BravoPlus AMRYS, a saddle stitcher with an automatic makeready system for setting up the unit between jobs. After job parameters are entered by the operator or captured directly from a company's MIS system, the BravoPlus uses a network of servo motors to adjust itself. Muller Martini says that its AMRYS technology's CIP3 interface is ready for “real world applications” and will ask an AMRYS user to detail one such application in a presentation during the show. • Presto saddle stitching with inline die cutting, said to make saddle stitching affordable for short-run and mid-range facilities. At Graph Expo, for the first time anywhere, a Presto stitcher will connect with a Multi 450 die cutter to produce miniature and uniquely shaped saddle-stitched books in a single pass. Applications, says Muller Martini, include mini-booklets for CD and DVD cases, pharmaceutical literature, and scaled-down saddle stitched books of all sizes. • CombiStack, a combination stacker/labeler/bundler making its debut for the commercial printing world at Graph Expo. Designed for use in newspaper mailrooms, the one-station system stacks, labels, and straps a high volume of publications coming off a finishing line or press to prepare durable bundles for distribution. CombiStack eliminates the need for a multi-machine tie-line and does away with multiple machine makereadies, according to Muller Martini. CombiStack can directly interface with a press or binding line or be fed by a gripper conveyor. The bundle is then wrapped, labeled and strapped in a single process, and the package is then directed either right or left to match the configuration of the plant's distribution flow. Sun Chemical (booth #812) has set up a dedicated Graph Expo Web site, http://www.sunatgraphexpo.com, where showgoers can get an advance look at Sun's products and presentations. The company's main announcement at the show will be the formal launch of Vivitek, a distribution arm for Sun-branded consumable products and for other kinds of pressroom supplies from a variety of manufacturers. Vivitek will offer an integrated product line ranging from fountain solutions, blankets, and washes to personal protective equipment, pH meters, densitometers, and spectrophotometers. It also will provide services such as color and brand management, print consultation, analytical testing, and safety systems. Vivitek (http://www.vivitekps.com), with headquarters in Fort Lee, N.J., will compete directly with established graphic arts supplier-distributors such as Pitman Co., Enovation, and Printers Service. Vivitek's general manager, William Glass, says that dealing with Vivitek will enable printers to consolidate their purchasing with a single distributor willing to “take responsibility for getting good printed impressions” from Vivitek and Sun products. “A lot of transactional costs can be removed” in single-source buying, adds Glass, who vows that in Vivitek's customer relationships, there will be “no more blame game”—the buck-passing that can occur in pinpointing the sources of printing problems where multiple vendors are involved. Such problems now can be addressed with a single phone call to Vivitek, Glass says. According to Glass, Vivitek will be able to leverage Sun's nationwide network of more than 70 branches and locations, where Sun personnel—including sales representatives, field support technicians, and R&D specialists—will add their expertise and services to the venture. Longtime customers of Sun's inkmaking divisions, GPI and Kohl & Madden, will continue to see “the exact same people,” says Glass, since the venture will “absolutely not” entail the creation of separate sales or support staffs for Vivitek. The new unit will have some equally new wares to display at the show. These include MicroSurf™ anti-static web conditioner, an alternative to silicone web conditioners that is said to reduce streaking; and Magnitek fountain solution, type 2100 for heatset printing and type 2600 for sheetfed. Sun also will show a third-generation version of its HyBrite hybrid U/V inks, and it will promote the U/V inks that it OEMs for digital print applications.