By Andreas Weber | GERMAN version
My comments: This was probably the most productive and therefore the most important event (with the business press) associated with drupa. Yes, market figures were given, but only as a guideline and to demonstrate that print is a growth market. The focus was far more on explaining from various perspectives how successful print business has transformed. No doubt some things will sound familiar. The important thing, though, in the run-up to drupa 2016 – which must cover a wider range of topics and exhibits than ever before – was to clearly establish the true context. And it was revealing to see how wholeheartedly all the key players (in this case the main decision-makers) at drupa, the world’s number one industry trade show, are behind their statements and publicity.
There’s no doubt about it – the world of printing isn’t what it used to be, but people have stopped bemoaning this fact and pressed the reset button. Nonetheless, anyone who still believes buying new equipment will ensure business success is mistaken and will fail. The new recipe for success will include holistic thinking outside the box, a comprehensive knowledge and excellent command of all process steps, automation, and the right, enlightened approach to digitization in the context of the sudden and rapid change in the demands placed on the printing sector.
In what was in my personal opinion the key speech, Dr. Gerold Linzbach talked about the true significance of digitization. Here’s an extract: “We’ve taken the vital step from focusing on technology to focusing on customers. (…) The benefit to customers is the top priority. We don’t simply apply technology for the sake of it.”
As Linzbach stressed, technology has to deliver “the optimum benefit for our customers and ultimately for whatever takes the industry forward.”
Welcome to the “Haus des Buches”
My report: The time and place for the exclusive pre-drupa business press conference were well chosen. We met on April 4, 2016 at the Haus des Buches (literally: house of the book) in the heart of Frankfurt am Main, a key financial center. The topics under discussion were market analysis, packaging, Print 4.0, and digitization. Our host was Dr. Markus Heering, Managing Director of the VDMA Printing and Paper Technology Association, who optimistically pronounced: “Print is an industry with a future.” As he sees it, print products are more than ever an everyday part of our lives and exhibit greater diversity than ever before. In his brief words of welcome, Messe Düsseldorf President and CEO Werner Matthias Dornscheidt was confident that the preparations for drupa 2016 couldn’t have gone better and it would be a resounding success, with appealing special events such as the drupa cube and an excellent supporting program providing the icing on the cake.
Werner Matthias Dornscheidt from Messe Düsseldorf and Dr. Markus Heering from the VDMA Printing and Paper Technology Association. Photo: Andreas Weber
Broad-based dynamic growth
“The global trend toward flexibilization and automation is currently playing into our hands. Germany’s press and paper machine manufacturers have been more successful than virtually any other mechanical engineering sector in making Industry 4.0 a reality,” continued Dr. Heering. Print 4.0, he said, was supporting Industry 4.0, and the extent to which print shops can improve their productivity and flexibility using fully networked digital work processes was already evident. Incoming orders for printing and paper technology were 10 percent up on the previous year in 2015, while press manufacturers saw a 9 percent increase in orders along with a slight fall in sales, especially in Germany. For manufacturers of postpress equipment, the increase in orders was as high as 21 percent. As Dr. Heering explained, “The sales figures also show it’s a long time since postpress technology was in such high demand. Sales climbed 13 percent in Germany and 9 percent in other countries.” He sees this as good reason to approach drupa 2016, the industry’s leading trade show worldwide, with renewed energy.
According to the VDMA, the key elements of networking and flexibility are emerging as visions and guiding principles for printing press and paper machine manufacturers, and there are three topic areas to be addressed:
- Flexibility in meeting specific customer needs
- Merging of technologies and functions
- Cooperation and standardization of interfaces
The focus is on the declared goal of strengthening print and paper by moving into new applications.
drupa president Claus Bolza-Schünemann, Chairman of the Executive Board of Koenig & Bauer AG (KBA). Photo: Andreas Weber
Packaging printing as a driver of print shop business
drupa president Claus Bolza-Schünemann, Chairman of the Executive Board of Koenig & Bauer AG (KBA), trained the spotlight on the packaging sector as a growth driver, stressing that traditional printing methods are leading the way here and are indispensable for the time being, but digital printing offers the possibility of new uses. “Together, flexographic and offset printing currently account for around two-thirds of the international packaging printing market, which was valued by Smithers PIRA at around US$415 billion in 2015. Digital printing’s share is still relatively small at approximately 3 percent, which leaves plenty of room for growth,” he said, adding that the packaging market for print shops is growing at a high level of 4 to 5 percent annually.
Bolza-Schünemann underlined that the total global sales volume for print was so high that it was hard to imagine. According to forecasts, sales will rise from their current level of just over US$900 billion to almost US$1 trillion by 2018. “The fact that ten years ago KBA was still generating a good 60 percent of Group sales in media-oriented print markets and only around 20 percent in packaging printing highlights the extent to which the printing world has shifted in the direction of packaging. Not entirely unintentionally, packaging now accounts for over 60 percent and publication printing just over 10 percent,” added the drupa president. In addition to outer packaging with high design and production standards, everyday packaging is now also becoming more important. Bolza-Schünemann is expecting the brown corrugated cardboard packaging currently used as standard in e-commerce to become increasingly colorful and believes this makes high-performance rotary inkjet printing ideal for the corrugated cardboard market.
My interim comments:
Global sales figures always sound good. And the prospect of print media manufacturers soon generating US$1 trillion is impressive, but at the same time highly abstract. Newspapers such as the Frankfurter Allgemeine Zeitung did pick up on this after the VDMA business press event, referring to signs of life from the world of printing on page 18 of its April 5, 2016 edition, confirming that print is a growth market, and pointing out that the printing industry’s turnover exceeds that of the automotive industry – but what does that really tell us? What’s more, these figures have been around for nearly 15 years. manroland AG defined them as the basis for its market research, but they were evidently little use given that the company went bankrupt. Far more exciting in my view is the question (which is not easy to answer) of the role print media are playing in the improvement in overall macroeconomic performance. If packaging is now being called the printing industry’s growth driver, all companies that are looking to physically sell products must focus 100 percent on print. That’s a clear and obvious statement, isn’t it? The imaging group Canon – also known for excellent specialist surveys about print and multichannel applications – has developed a convincing chart and is using it for
presentations. This makes the significance of print even clearer!
drupa president Bolza-Schünemann listed the following reasons for the strong, sustained growth of packaging:
- Printed packaging serves a protective, preservative, and advertising function for its contents and, increasingly, a communication function, too. Just think of consumer protection with appropriate references on the packaging.
- Packaging cannot be replaced by flatscreens or smartphones. Unlike printed newspapers or catalogs, it remains unaffected by the changed media behavior and actually tends to benefit from this.
- The global population is rising and international prosperity is increasing. The middle class with disposable income is growing in emerging markets such as China, India, and Brazil. Growing prosperity goes hand in hand with higher consumption and that in turn means more packaging and printing, all the more since shopping malls are springing up everywhere in emerging markets, too.
- Packaging is becoming increasingly classy and sophisticated – the only way to attract the necessary attention at the point of sale. This trend results in greater added value for the printing industry and machines with more elaborate configurations for the supply industry.
- More single-person households with a preference for ready meals and the booming online mail-order business are also driving growth.
What’s more, the influence of multichannel solutions, augmented reality, and personalization – which make all types of packaging the starting point for new contact and dialog options with the buyer – is creating huge potential for brand organizations (see the ValueDialog with multichannel developer Jacob Aizikowitz).
Kai Büntemeyer, Chairman of the VDMA Printing and Paper Technology Association and Managing Partner of Kolbus GmbH & Co KG. Photo: Andreas Weber
The only solution – digital networking of the entire value-added chain
Businessman Kai Büntemeyer, Chairman of the VDMA Printing and Paper Technology Association and Managing Partner of Kolbus GmbH & Co KG, dismissed the prejudiced view that postpress is more or less an add-on to print media production. He warned against being tempted by offers to buy attractive new presses without thinking, and thus failing to consider the entire process chain and assess all networking options within and outside the print shop. It’s essential to have “a process world characterized by interoperability, open systems, and harmonized interfaces. The speed of the evolutionary processes under Print 4.0 stands and falls with the transparency of the players involved,” emphasized Büntemeyer, citing the example of the interface syntax provided by his company to download free of charge.
In the case of the printing and paper industry, he said it was important to distinguish between digitization on the one hand and digital printing on the other: “Digital inkjet printing is simply another process to be integrated into digitized process chains in the same way as conventional offset, flexographic or gravure printing. The printing process is just a small part of the complete chain.”
According to Büntemeyer, the overall process chain is as follows:
- It starts with the receipt of digital job data;
- continues with software-based job planning for optimized machine capacity utilization with minimal makeready times;
- includes purchasing and HR planning;
- and naturally all prepress and postpress process steps;
- and it only ends with automated packaging, addressing, and shipping of the print products.
Although all this has long been established, he explained, it is only now feasible thanks to today’s high-performance technology, because only very recently have processor capacities, real-time communication, and big data software solutions enabled implementation in a way that is geared to the market.
Büntemeyer developed the following scenario, which shows postpress in a whole new light: “Sensory inline monitoring ensures consistently high quality, but the data collected can unlock added value. Monitoring the status of machines makes it possible to carry out preventive repairs, which enables downtimes to be planned. And service specialists can rectify many a fault remotely. The data collected is also used for anonymized benchmark comparisons in cutting-edge printing systems. Users can compare their performance and productivity with that of other users of the same systems.”
However, Büntemeyer also recognizes that, broadly speaking, the industry’s equipment is lagging behind these possibilities – by at least 10 to 15 years. During this period, there was too little process/solution-oriented thinking and insufficient investment. Networking between print shops is also recommended.
My interim comments:
It’s good that this has now been made clear, because I conclude that it’s ultimately no longer a case of optimizing details and maintaining the traditional silo mentality. New, sometimes disruptive, holistic, automated business processes and the corresponding reorientation of business models are now the order of the day. (N.B.: The 4th Online Print Symposium, which took place in Munich on March 17 and 18, 2015, revealed how far this has already progressed at extremely successful online print shops such as Onlineprinters, Flyeralarm, United Print, and CIMPRESS (see the article entitled “Zipper’s Insights: reporting from the 4th Online Print Symposium”).
Dr. Gerold Linzbach, CEO of Heidelberger Druckmaschinen AG, has realigned Heidelberg to focus on customers. Video: Andreas Weber (in german language).
“Digitization isn’t the same as digital printing!”
Dr. Gerold Linzbach, CEO of industry leader Heidelberger Druckmaschinen AG, followed his statement at the VDMA press event by summing up the company’s new role: “We’ve taken the vital step from focusing on technology to focusing on customers.” He said it was important not to make digitization just another buzz word that everyone uses without really knowing what it means or agreeing on a standard definition.
According to Dr. Linzbach, Heidelberg has, in discussions with customers and numerous market partners, defined three essential elements or levels of digitization for the print market. When understood correctly, digitization thus makes it possible to embrace the digital era through the automation and flexibilization of print.
The first essential element is networking in the sense of automatically passing on data (for press and downstream postpress operations) between machines with adequate interfaces to make all process steps transparent to users. Especially these days, when fragmented order books set the rhythm, automation through networking is absolutely vital. It’s the only way Heidelberg customers can, among other things, complete 3,000 or more orders per day. Success in smoothly incorporating digital printing systems via the print shop network also really pays off. In a short space of time, this has enabled Heidelberg sales staff to succeed in selling 1,000 OEM digital printing systems from Ricoh to print shops.
Once the job data has been received, the customer – that is to say the print shop – is automatically relieved of the decision as to the best production process to use, i.e. offset or digital printing. According to Dr. Linzbach, then, it’s all about seamless integration of all production resources that a print shop must use to minimize the data handling outlay. This is already standard in online printing and will spread to all areas of the printing industry. It’s also necessary if, as in the area of packaging, there is a huge increase in the amount of documentation required to prove, for example, that food was packaged in line with regulations.
Dr. Gerold Linzbach at the press conference. Photos: Andreas Weber
The second essential element is the variabilization of print, that is to say personalization or customization in the sense of frequently changing the print content, together with a wide variety of substrates/printing stock – by its very nature a strength of digital printing processes. Heidelberg has configured and developed a whole package of digital printing solutions for drupa 2016. This even involves printing at different locations, for example end customers printing muesli packaging with personalized designs at the mymuesli.com shop.
Connectivity plays an important role. According to Dr. Linzbach, it’s a mistake simply to rely on equipping presses with thousands of sensors that can read data in seconds and then store it in huge volumes. For a responsible technology manufacturer like Heidelberg, the challenge is to move from big data to smart data. In other words, data that is essentially suitable for any use needs to be filtered, selecting only the most important details from the mass of job, customer, and application data – that is to say the very things that are really relevant. It must be possible for this to happen automatically. To stop this sounding too theoretical, Dr. Linzbach gave an example. Heidelberg will be creating an e-commerce platform that automatically tells customers, for example, if something they order is incompatible with the equipment installed at their company. The aim must be to avoid outlay and above all mistakes, and to lessen customers’ workloads so that they can concentrate on their core activities.
Dr. Linzbach holds out the prospect of soon being able to operate even the most complicated technologies very easily, almost at the touch of a button – just like smartphones and tablets, which operate in a virtually self-explanatory way and produce exactly the desired results without the consumer needing to know about each and every technical function.
This is the only way to ensure that customers from the print shop sector can get on with their real work. According to Dr. Linzbach, the main task of someone running a print shop is not to deliver perfect print quality – that must be ensured by the company providing the technology – but above all to manage jobs and high order volumes, undertake marketing activities, and maintain contacts with customers.
And that brings us to the third essential element of digitization –reduce to the max– using appropriate filters developed from customer and application know-how to combine all the technical possibilities and focus on what is actually relevant so as to turn data into productive information.
Dr. Linzbach’s conclusion: “The benefit to customers is the top priority. We don’t simply apply technology for the sake of it, nor do we simply install the maximum that is technically possible. We always try to combine it in such a way as to offer the optimum benefit for our customers and ultimately for whatever takes the industry forward.”
N.B.: ValuePublishing offers comprehensive reports and constructive criticism relating to the important and above all relevant pre-drupa events. See in particular:
AT A GLANCE:
Clippings from selected german newspapers