Graph Expo Workflow Seeks IT Expertise

Print Action, Nov 2004 by Bolte, Clint

Nearly 180 attendees gathered at McCormick Place for the traditional day-before-Graph Expo briefing on industry technology, trends, and Must See 'ems products to highlight the largest print equipment trade show in North America. Hosted by NPES, organized and moderated by Bill Eamparter, Principal of the PrintCom Consultancy, this seventh annual fete drew the largest contingent of foreign guests yet with 20 per cent of the attendees visiting from a dozen different countries.

NPES conducts over $325,000 of original market research annually to identify major trends in the printing, publishing and converting industries for its supplier members. The association's vice president and director of member services, Kip Smythe, drew on this research in his keynote presentation for this year's Executive Outlook.

Print growth

Long-time NPES consulting economist, Mike Evans, forecasts that economic growth in the United States, following the aggressive 3.25 per cent bounce back experienced this year, will slow to three per cent in 2005 and two per cent in 2006. Publishing revenues as reported for PIB-measured magazines are up, but page count is down and run lengths continue to slide. This trend is confirmed in the National Association of Printing Ink Manufacturers (NAPIM) statistics that show ink volumes topped out in 2000 and have been falling since. Smythe commented that the NAPIM figures do not include toner usage as a reflection of the growth in digital print, but because digital print is barely 10 per cent of total print shipments, this downward trend of ink tonnage would not be altered significantly.

Strategies for Management forecast the number of printing companies to continue to diminish by about 1,000 firms per year, reaching 23,500 in the U.S by 2007. Some of these closures will come from bankruptcies and part from mergers and acquisitions, as medium-sized firms will look to tuck in smaller regional competitors as well as the conventional lithographic print segment of corporate in-plants. Many in-plants continue to focus their resources and expertise on developing and offering digital capabilities while outsourcing the more capital-intensive conventional printing. Venture capitalists are looking for undervalued printing targets as well.

The difficulty in forecasting overall print sales growth, even short term, was highlighted by very different 2005 forecasts from two print trade association economists, who both clearly follow printing most closely. NAPL expects print sales for 2004 be recorded somewhere between a positive 3.2 per cent to a positive 4.1 per cent. In 2005, NAPL predict print sales will grow somewhere between 4.0 and 5.0 per cent, while the Printing Industries of America is about half as rosy in projecting a growth of 2.2 per cent for 2004 and 2.0 per cent for 2005.

Printers have been diversifying into other non-print graphic communications services for several years now. PIA says that these ancillary services amount to 7.3 per cent of total revenues while NAPL pegs that figure at 7.8 per cent, with expectations that this number will nearly double to 14.5 per cent by 2007. Smythe concluded that printers are redefining themselves by "unbundling" the traditional services built into their overhead costs, and actually creating new services.

New business plan

Rick Littrell, principal of MagiComm Consultancy and moderator of the Vignettes panel, set the stage by suggesting that the industry's data-centric print production workflows have made in-house Information Technology (IT) expertise mission critical. These IT professionals should have computer science training, as well as a strong understanding of networks, storage technologies and database software applications. Instead of assigning these responsibilities to the electronic prepress supervisor, a new position is becoming a core competency for even medium-sized printers.

Don Goldman, senior project manager for MIS supplier Prism-USA, in his vignette on Management Information Systems advocated, "For JDF and integration to fully payoff, management must first establish a computer-assisted printflow that uses the estimate/plan to direct, communicate and manage jobs throughout the plant. Number two, should use MIS to schedule and monitor jobs and production activities. And, number three, should have the discipline and commitment to make their print management system the system of record."

Joerg Daehnhardt, Heidelberg's director of small-format press product management, capsulized the direct imaging presses. From the 1991 introduction of the first GTO-DI, there are now 14 different commercial models on the market from eight manufacturers - a single plate cartridge source is now several competitive plate cartridge suppliers.

In presenting the converting and packaging vignette, Mark Vanover, Esko-Graphics North American director of marketing remarked, "The large consumer goods packaging print buyer dictates specifications, deadlines, and cost targets." This suggests that package printing may not be the Holy Grail of print profitability that some reports imply. An example of further competitive market dynamics is the fact that Wal-Mart represents 30 per cent of Proctor & Gamble's business and Wal-Mart's private label business is P & G's biggest competitor.