Part 1: Boom or Bust in 2003 Depends upon you

It’s the beginning of 2003. Both of The EAGLE’s editors have been involved with the “printing” industry for more than 25 years. Over that time period there has been rapid change in the technologies being used throughout the printing process. In the late 70’s we remember hot metal operators asking us at trade shows if they should learn this new phototypesetting technology or just retire. Years later, we watched the industry bring pre-press, color separation and full page makeup into the computer age and again, many of the best manual page makeup artists, the strippers, who should have been really good at doing online prepress, either gave it a half hearted try, or retired out of the printing community.

More recently, we’ve seen computerized tools applied to the press and again many of the old time press operators have left the business even though they had valuable experience.

- Since the technology developments from design through print have improved productivity and significantly reduced both the necessary skill levels and the number of people necessary in the industry, perhaps this exodus hasn’t been such a bad situation.

And yet, we feel that the way it has come about and is discussed represents what’s bad about our industry, rather than what’s good. The thought process seems to go something like this: I’d better try to get out now while I still can, or preaching doom and gloom instead of thinking about what opportunities there might still be for advancement of the business and for careers.

At the recent NPES Print Outlook 2003 Conference, the major theme was that “A rising tide is not going to raise all boats evenly.” A wide variety of industry executives and professional economists made presentations that surprisingly bore this common message that “print” is an industry in transition. Some other key and important comments were:

-- Economic growth cannot restore the health of the industry in its present structure. Many traditional products have disappeared, such as Print on Demand for Manuals, now replaced by having the manual on a CD, probably “printed” by a non-traditional printer.)

-- Consolidation of printers will continue. We can expect further mergers and acquisitions, but at a lower rate than in 2000-2001; more bankruptcies/exits; further diversification up and down the supply/value chains; and fewer players in total.

-- ”Value-added differentiation” is emerging as the major focus for competitive advantage in the future. This is the essence of “the future of print in a converging information world”.

-- It is no longer prudent to sit back and let customers bring print jobs to you. Going out and “selling” the versatility of print is now necessary; it can augment and improve response rates combined with other efforts.

-- In an increasingly risk-averse climate print in its traditional forms is not a particularly attractive prospect for investors with mobile funds.

-- Products come to market more often so that the issue of “time compression” is becoming increasingly significant. Business strategy life cycles are also shortening, requiring change more frequently.

-- The web, digital print technologies, mass customization and continuous process improvement are bringing about major changes in the factors that determine competitiveness in the print business as it proceeds through its transition. These are reflected in the business model, and suggest:
- Greater incidence of partnerships, alliances and project-based collaboration
- Communication-based product offerings rather than simply print-based solutions
- Customized product offerings for niche markets, reaching down almost to the individual
- Minimal inventory processing based on Just-in-Time logistics

-- Print is still a growth opportunity if, and only if, companies:
- Can understand the forces that will affect profitable growth in the future; and
- Are prepared to make the changes that are necessary in product offerings and business process that will align themselves more closely with customer requirements and will even identify the potential for value-added customer requirements before customers themselves do so.

Out of this set of negative comments, we could have come away pretty disturbed about the future. Fortunately, as we will discuss in Part 2 of this article, we also heard from 3 very different printing companies who are very successful despite the doom and gloom.

Their success and other opportunities will be introduced in Part 2.