Long before it opened last month in Düsseldorf, many graphic arts industry pundits were describing this year's drupa as the JDF drupa. If you've somehow missed it so far, JDF stands for Job Definition Format, and in this case the name is accurate. JDF is simply a computer data format that allows computers to exchange information. What makes JDF important is that it is perhaps the key enabler of computer integrated manufacturing (CIM) in the printing industry, and many believe that CIM will be the technological advance that returns the industry to prosperity by allowing printers to automate production, reduce costs, provide faster turnarounds, and improve quality. This year's drupa was billed as the JDF drupa because JDF and CIM related products were expected to dominate the new product announcements and demonstrations.
When drupa opened last month, the JDF label proved to be accurate. Virtually all graphic arts industry technology providers announced new JDF related products and/or demonstrated JDF enabled workflows. In making these announcements, vendor after vendor extolled the benefits that automated workflows and computer integrated manufacturing will bring to printers. Consider the following statements taken from just a few of the many drupa materials that appeared here at WhatTheyThink:
- This new capability (a JDF workflow) will enable faster turnaround, greater efficiency, reduction in costs and increased accuracy. Better, faster, cheaper now you can have all three!
- _____ software imports JDF files from estimating systems that allow planners or customers to job plan quickly, based on the original estimate. . . Using _____ software results in dramatic decreases in labor costs in the planning department because manufacturing plans require less time to prepare and their accuracy is greatly improved. Labor costs in prepress are also reduced when detailed and accurate job plans are created in _____. Materials costs are reduced as fewer plates are spoiled due to inaccurate layouts. On press, the benefits include efficiency gains in makeready due to more consistent use of standardized, accurate layouts.
- Connecting job ordering to print production to print management systems brings enormous efficiency, cost savings and productivity to printers, and right now the CIP4 JDF standard is making this concept a reality.'
No one can deny that technology, particularly digital technologies, have brought profound and far-reaching changes to the printing and publishing industries. When you consider page creation applications, print management software, digital prepress hardware and software, and digital communication tools like e-mail, it's fair to say that digital technologies touch virtually every job that a printing company produces. The implementation of CIM will make digital technologies even more central to the daily operations of printing and publishing enterprises.
As the power, functionality, and use of digital technologies have expanded, printing company managers have come to view those technologies as resources that are increasingly critical to business success. The expanded role of digital technologies has reinforced the long-held belief among many managers that technology can be an important source of competitive advantage. This belief is based on the assumption that the strategic value of technology increases as its capabilities grow and its use expands. This assumption sounds reasonable, but it's seriously flawed. Despite the undeniable significance of computer integrated manufacturing as a production technology, neither JDF nor CIM is likely to produce sustainable, long-term competitive advantage for most individual printing companies. There are two closely related reasons why JDF/CIM technologies alone will not produce superior long-term financial performance for most printing enterprises.
First, for any resource to be truly strategic, it must provide the basis for a sustainable competitive advantage. And, what gives a resource this capability is not widespread availability and use, but scarcity. A company can only gain a resource-based advantage over rivals by having something they can't have. Most of the digital technologies used in the printing industry have become widely affordable, and most have been acquired and implemented, at least to some degree, by all but the smallest printing companies. JDF/CIM technologies may not be inexpensive at first. But, if our experiences with other digital technologies are a reliable guide, JDF/CIM technologies will become widely affordable and widely implemented in a relatively short period of time.
In a recent article appearing here at WhatTheyThink, Margaret Motamed, CIP4's Chief Marketing Officer, was quoted describing the future of JDF. Motamed said, Two years from now, JDF will not even be news anymore. We will wonder why we ever thought it was exciting. It will become defacto, and will be as exciting as discussing plumbing or having a conversation about USB ports. A printing company may gain a temporary competitive advantage by implementing CIM early, but that advantage will be eroded as competitors deploy similar technologies.
Technology can also be a valuable strategic weapon if it is proprietary. A proprietary technology is one that can be owned by a single company. For example, if a company discovers a better way of imaging printing plates and acquires a patent on that invention, the company may enjoy a substantial competitive advantage for a considerable period of time. As long as a technology remains protected, it can provide the basis for a long-term, sustainable competitive advantage that enables the owner of the technology to earn higher profits than its rivals. JDF/CIM technologies, however, will not be proprietary to printing companies. In fact, JDF is designed to be an open industry standard. Think of how many times you saw the terms open or interoperable in the JDF materials coming out of drupa. That openness is the antithesis of proprietary technology. It is certainly true that one or more technology providers may patent some components of a JDF enabled workflow. But, even those components will not be proprietary to the companies using that particular workflow.
Like many other technologies, JDF and computer integrated manufacturing offer the promise of improved productivity and operating efficiency. For many years, printing company managers have attempted to achieve competitive advantage and improve financial performance by improving productivity and operating efficiency. Printers have invested substantial sums in faster and more productive equipment, and many have redesigned their workflows and reengineered their production processes to eliminate waste and errors. These investments of money and energy have succeeded in improving productivity and operating efficiency, but, in most cases, they have failed to produce long-term improvement in financial performance. For the most part, customers and equipment vendors, rather than printers, have captured the economic benefits of the very real and substantial productivity gains generated by these investments. In today's competitive marketplace, continuous improvement in operating efficiency is necessary to remain competitive, but it is not usually sufficient to achieve sustainable competitive advantage or guarantee superior financial performance.
Basic principles of business competition explain why improvements in operating efficiency alone do not guarantee long-term improvement in financial performance. In order for a printing company to outperform its rivals, it must create or establish a difference between itself and its competitors that the company can preserve. This difference is the essence of competitive advantage. A company can achieve competitive advantage by performing different activities from its competitors or by performing similar activities in different ways. These differences produce competitive advantage by enabling the company to operate at a lower cost than its competitors, to command a premium price for its products or services, or to do both. In contrast, improving productivity and operating efficiency is about performing the same or similar activities better than competitors perform them.
Improvements in productivity and operating efficiency do not produce sustainable competitive advantage for two distinct reasons. First, most improvements in productivity and operating efficiency are relatively easy to copy. This is especially true when simply purchasing and implementing off the shelf technology can produce the improvements. The second reason is more subtle. As competitors copy one another's improvements, and as they adopt and implement the same industry best practices, they look more and more alike. The differentiation that produces sustainable competitive advantage disappears, and the competition becomes a race that no one can win.
So, JDF and computer integrated manufacturing do matter. But, printing company managers must understand precisely how and why they matter. If CIM lives up to its promise, companies that implement CIM will become much more efficient. CIM may help make printed materials more competitive with alternative media from a cost standpoint. In fact, CIM may change the way print is produced as much as anything since postscript. For these reasons alone, printers should have a reasoned strategy and a well-conceived plan for implementing JDF/CIM technologies. But, printing company managers should not rely on JDF/CIM technologies alone to produce long-term competitive advantage. Without creative thinking, careful planning, and rigorous analysis, investing in and implementing JDF/CIM technologies will be more about keeping up than about getting ahead.