The Bindery—No Longer the Bottleneck of the Printers’ Workflow

It seems that nobody wants to talk about the bindery. . .except perhaps the many NPES member companies that manufacture and market these solutions to the printing industry. After all, the bindery just isn’t sexy like the pressroom or prepress departments. Talk is one thing, but action is more important. Are printers investing in new bindery and finishing technology? If not, why not? After all, many people claim that the bottleneck in the print workflow is the bindery. Nothing goes out the door and gets billed until it’s cut, folded, perffed, diecut, foil stamped, embossed, stitched or bound, stuffed or mailed or shipped to the customer. It seems the bindery is very important to printers’ overall workflow, yet it seems many printers do not invest heavily in the bindery even though dollars can be gained or lost there.

The last major study of bindery trends and purchases was conducted by NPES in 1996 through Dr. Joe Webb’s consulting firm, Strategies for Management. According to the study, “Overall, commercial printers aren’t buying much when it comes to binding and finishing equipment. Even the number one planned purchase among these shops—a stand-alone folder—garners only 11% of responses. One of the reasons, of course, is that these plants already have much of this equipment.”

This is true. . .most printers do have bindery equipment, and some have quite a lot of different devices. When touring printing plants, it’s often the oldest technology seen in the plant. The owner prides himself on his press, be it offset or digital, it’s the centerpiece of the discussion. The next thing they want to show you is their prepress department and their recent purchase of CtP equipment. When you tour their bindery, many times their newest acquisition is over 10 years old and that device was purchased on the used equipment market. In fact, you may even have to specifically ask the owner to see the bindery otherwise he may show you his computer room or the loading dock first! Clearly, the new technology available today is far more efficient from a make-ready, production speed and electricity usage basis. Plus the automation available makes these machines far more productive than the older technology, but most printers seem satisfied to get by with what they already have in their shop.

In order to get a clearer picture of the atti-tudes of printers about the bindery, the Print Industries Market Information and Research organization (PRIMIR) commissioned State Street Consultants and Larry Tanowitz to do an update of the 1996 NPES study. The new study entitled The Market Potential and Installed Base for Traditional Bindery/Finishing Technologies analyzes the same forces that transformed pre-press and press rooms over the last decade and are now reshaping the tradi-tional bindery. This study profiles the North American installed base of in-line and off-line production bindery/finishing equipment by type, format (size), cycle speed, age, market, and shop size, to characterize the status of the current bindery, broken out by in-plant, production digital printer, commercial printer and trade bindery. The study also addresses barriers and drivers for bindery investment decisions including automation, JDF readiness, and CIP4, among others. The study also identifies bindery areas where printers still depend upon manual hand-labor operations, and areas in greatest need for automation. So what are some of the major findings?

Finishing: The New Prepress

Today, anyone with a computer and a digi-tal camera can create layouts and bring them in for the printer to run. So the prepress expertise that drove so much revenue is now quickly drying up, leaving printers looking for new ways to attract business. The answer lies in the bindery, where the ability to cut, fold, trim, bind and die cut sets its expertise apart. That means the ability to finish, assemble and fulfill work opens new opportunities.

Changes in Customer Demand Drive Finishing

Short runs and fast turnarounds have become the hallmark of today’s printing envi-ronment. This means that time and labor-intensive processes like makeready are no longer profitable. To make jobs profitable, binderies must be able to set up the machines in a matter of hours, the longer and more labor-intensive the work to set up the machines, the lower the profit on shorter runs.

Availability and Cost of Skilled and Unskilled Labor

Today’s workforce lacks the mechanical skills that had been commonplace during the previous generation. Binderies must compete with the local Starbucks in the same labor market, making it more difficult to get inexpensive labor. This labor problem creates opportunities for manufacturers. There are several ways manufacturers can help and create revenue opportunities. The first is to follow Apple’s lead in creating easy-to-use equipment that features such simplicity as a “press here” and uses graphical user interfaces to help guide users through operations, thereby enabling even the least skilled individuals to operate the equipment.

However, some binding and finishing steps do require knowledge of paper characteristics, so the process cannot be made entirely “foolproof.” This opens the door for manufacturers to create and run operator training programs. Beyond that, they can get into the staffing side of the business by helping match job openings with skilled, trained personnel, either through active participation and recruiters or by simply setting up sections of their websites to handle this kind of task. Donating equipment to trade schools and supporting training at this level may eventually lead to future sales as trainees familiar with a particular manufacturer’s equipment make purchasing decisions.

Trade Binderies: A Changing Business Model

The business model for trade binderies has changed. The old model: provide all finishing work. The new model: bindery specialists. Existing trade binderies are looking for ways to differentiate themselves by offering more specialized binding and finishing services. Some of the services they offer include: die cutting, laminating, perfect binding, tabbing, indexing, long-run mechanical binding, short-run mechanical binding, case binding, assembly and fulfillment.

The Bottleneck Is a Myth – for Those with Resources

Conventional wisdom holds that the bindery bottlenecks production; that the speed of production in the prepress and press departments overwhelm the mechanically-inclined bindery and jobs cannot turn around as quickly. In-depth interview respondents, typically companies at the high-end of the market, universally rejected the notion, pointing out that modern machinery does a fine job of keeping pace with the output elsewhere in the shop and they can regularly meet production needs.

Mailing and Cobinding

Every few years the cost of mailing goes up thanks to a rise in postage (See the PRIMIR study entitled The Effect of Postal Reform on the Demand for Print: 2007-2010 for more information on this topic). Customers noted that each rise in the cost of mailing sees a small dip in the mailing rate, something that quickly rebounds. The fact is the effectiveness of direct mail campaigns remains constant no matter the cost.

Where in-depth interview respondents hope to see a bump in revenue is in the new products they can offer to feed the need for mailing personalized pieces. Most are looking to add inkjetting to their bindery lines in order to easily address mailing pieces. What’s more, many are interested in advanced sorting and collating machines. These machines can cobind pieces to create personalized mailers, not only for creating packaged pieces that are a combination of different pieces sorted into a single envelope, but also for personalized perfect bound books that have one or two additional pages that can be easily inserted into the final product. The goal is to offer personalization down to the address level.

Replacing the Old

As stated earlier, many printers seem content to buy used equipment for the bindery when they have to have state-of-the-art new technology in the prepress and press departments. Intuitively this doesn’t make sense, and illustrates that NPES members need to do a better job of promoting the benefits of new bindery equipment. Salespeople need to be able to explain the financial justification for replacing older equipment. Increased productivity of newer equipment may allow replacement of multiple older machines with one new one. However, the desire for redundancy may remain as business owners are unwilling to rely solely on a new machine that could wreak havoc with production schedules if it breaks down.

Purchasing Behavior

With run-lengths dropping, customers must be able to justify a purchase with existing work and not count on new work that a piece of equipment may generate. Overall, in-depth interview respondents said they will wait until a piece of equipment is completely used up before bringing in something new. This means that for manufacturers, up-selling is key. While replacing some pieces of equipment, like guillotine cutters or folders, is rare, there are ample opportunities to sell material handling equipment and in-line add-ons such as scoring, perforating and inkjetting equipment.

Purchasing Influences: Peer Groups

A growing trend is the formation and rising impor-tance of formalized peer groups which have emerged to act as an alliance of sorts to both share information and provide detailed advice. Comprised of anywhere from five to seven business owners or managers, the group acts as a de-facto board of advisors to help run the printing business. They often gather as a group once or twice a year, but speak almost daily. One of the key things that the peer group does is share recommendations on equipment purchases. So, one sale into a peer group can lead to many other sales if the equipment performs as expected and improves that printer’s business.

Purchase Plans

Based on the results of the survey, we found that folders and cutters are the most likely categories for purchase intentions. These two categories are also most likely to be installed, cutters (97% of the sites in the survey) and folders (83%). All sites surveyed own at least one piece of floor model equipment in one of the categories covered by this study.

There is opportunity to improve efficiency and increase job profitability through upgrades to a print-er’s binding and finishing operations. Printers have seen the light when it comes to press decisions. Often times they are able to replace two presses with one new press—the efficiency of the new machines far exceeds machines only 10 years old. The same production efficiency enhancements can be made in the bindery and the savvy printer will find profits to be made in the bindery. It’s up to us as NPES members to drive that message home!