TAKING THE PLUNGE--Driven to Go Digital

BY CHRIS BAUER

The reasons the management team at New Haven, CT-based Phoenix Press decided to move to digital printing were twofold.

First, they found many customers were ordering smaller volumes that were better suited for print-on-demand methods. Second, they believe digital printing will play a key role in the future of the graphic arts industry by introducing new capabilities and new services—such as variable-data printing.

The result of their findings and beliefs was the purchase of a Heidelberg Digimaster 9110, a Canon CLC 1000, Canon imageRUNNER 600 and 400, and DankaWare software—all supplied by Danka Business Systems. The new equipment is expected to pay big dividends.

"We know that digital printing is going to play a significant role in the future of this industry," contends Brian Driscoll, vice president and co-owner. "Last year we outsourced $250,000 in digital printing work. Now we are able to keep that work in-house."

The 75-employee company did not conduct a formal return on investment (ROI) study before making the purchase. Instead, Phoenix Press evaluated the opportunity represented by its existing customers' digital workflow, plus the prospect for new business the capabilities would bring. Not being able to offer digital services was allowing competing printers to gain business from its long-term customers. That was a primary concern. In addition, Phoenix expected to boost profits in its press area by targeting specific applications that it didn't have the capacity to handle in the past.

Brian Driscoll initiated the process, but all three owners—including Kevin Driscoll and Anthony Jasaitis—made the final decision to go digital after finding ways to justify the purchase.

Customer Demands
One of Phoenix's largest clients had converted a significant amount of its documentation to smaller volumes that could not be performed cost-effectively on traditional presses. The team estimated that the digital workflow for this client alone would account for 50 percent to 60 percent of the capacity of their new digital printing systems. They also anticipated that they could fill the remaining capacity with other digital work from existing customers, and by bringing in some jobs from new accounts.

The three then looked for a solution based on image quality, cost, local service and support, as well as expertise in digital imaging solutions.

Phoenix Press talked to four different vendors and examined output from several different printing systems. It decided that the Heidelberg Digimaster 9110 system offered the best image quality. Then it evaluated vendors on their service, customer support and equipment costs. Phoenix wanted comprehensive training and responsive support because this was its first digital system. Danka got the nod.

Although the situations are unique, stories such as this are nothing new. Commercial printers and prepress houses all around the country have reported catching the digital printing wave, and taking a ride to financial success.

In Milpitas, CA, K/P Corp. has been providing black-and-white digital printing since 1991 when the first high speed black-and-white production machines were introduced. It then dabbled in digital color in the early days of Indigo's e-Print machine, explains Nicole Olszewski, director of strategic operations for the Silicon Valley division. That was just the beginning.

"It wasn't until 1998 that the market really started to take off," she says. "Back then our business consisted mostly of black-and-white documentation printing and the turnkey services that went along with it. Our customers began to ask for smaller quantities and shorter lead times. The print-on-demand, just-in-time, zero-inventory models that we had been preaching were catching on."

In the past 12 months, however, K/P has upgraded its digital front-end systems and added a fourth Xerox DocuTech. Business now revolves around on-demand printing and fulfillment with proactive customer service and program management, enabling K/P to tie it all together and offer a comprehensive set of services, Olszewski notes.

But the big installation was announced in December—a Xeikon DCP 50D eXpert Plus digital press, a Canopy Internet-enabled print server and the PDF ProofStreamer on-demand proofing system.

According to Olszewski, the reasons for K/P to acquire the digital color printing press was simple:

• K/P Corp. was losing potential profits by outsourcing this portion of business.
• It saw a huge potential to grow existing business in digital color with jobs similar to those that it was outsourcing.
• Great revenue potential in variable-data printing and one-to-one marketing applications would tie into its existing direct mail capabilities.

Olszewski, who led the ROI study, looked at two factors: the number of saleable sheets that would need to run on the press per month, and the monthly revenue K/P would need to cover the cost of the investment.

"Until we understood these two elements, we could not make an educated decision," she confides. "Once we ran the numbers and determined that they were attainable within a four- to six-month period, we felt comfortable moving forward with the investment."

Since the Silicon Valley division was experiencing declining sales, she knew the company needed to make a change. "It was a logical progression to move from black-and-white digital to digital color," Olszewski contends. "The two services are complementary and we already had the infrastructure and operational expertise to ramp up quickly."

The move to digital color printing also was expected to position K/P for more future business, because it would be able to offer on-demand printing for all applications.

Down in Atlanta, Digital Color Group (DCG) needed to fill the opposite niche. DCG co-owners Lee Ribolin and Patrick Schanen installed their first Heidelberg Digimaster 9110 last year to bring digital black-and-white capabilities in-house at their full-service facility. Within 60 days they had a second 9110 up and running.

Jobs Submitted Nationally
In fact, the debut of the two systems was so successful that the company now offers Digimaster drivers for both Mac and PC users as a feature on its home page. Using the software and its FTP site, customers can access DCG's Digimaster services directly from their own desktops, regardless of their location or time of day.

In other words, with its Digimasters and a simple Website, DCG has extended its reach to wherever the Web is spun, with regular customers located across the country.

As its name indicates, DCG is fully equipped to handle all the color printing its customers require, but before installing the Digimasters, it distributed black-and-white work to a handful of outside vendors. By bringing those jobs in-house on its pair of 9110s, the company has significantly reduced its on-demand turnaround time.

"We used to have to call vendors and twist their arms to produce rush jobs," says Ribolin. "But with the Digimaster, we can turn on a dime. Something that used to take a day and a half now can be done in a matter of hours."

The Digimasters at DCG are equipped with optional booklet makers to trim, fold and saddle stitch covers and signatures into completed products. The feature gets a workout at DCG, because the group's core black-and-white business consists of software manuals, training materials and health care benefit guides.

"That means 300 books, delivered at 2 p.m. the next day, are no longer a problem," says Schanen. "Of course, we're also using the Digimaster for newsletters, proposals, financial reports, flyers and straight copying."

Meanwhile, in New York City, The Fifth Color—a new printing company, looked to Indigo last September to fill its digital color printing needs by purchasing its first Indigo UltraStream 2000 digital offset color press.

David Brody and William Ruzza, co-presidents of the firm, first saw the Indigo in action at last year's On Demand show. The Fifth Color opened its doors in August, and both presidents attribute their company's initial success to the digital color press' ability to perform multiple jobs within an hour's time.

"In New York, about 75 percent of the jobs that come in are short runs," Ruzza says. "On a regular press, you have to nail the color and then run the job. And when you run the next job, you have to clean the plates again and so forth. With the UltraStream, there's zero makeready. It nails the color on the very first shot. And once you're done with the printing, you don't even need to wash the plates. It's ready for the next job literally in two seconds."

A focus on quick turnarounds is also an integral part of The Fifth Color's overall strategy for profitability. In fact, from an estimated $6 million last year, they are expecting annual sales to reach $25 million within the next three years. Also, a second UltraStream is in the plans.

"We are doing jobs in a day that used to take a week," Brody enthuses. "If I am doing a 10,000 run and another customer needs as few as 50 pieces, the UltraStream will automatically spool in that job, then continue back on the original job."

No matter what part of the country you look at, digital printing is seeping its way into the mainstream of commercial printing.