Print 09 last week in Chicago showed us, via the low attendance, that printers are facing numerous challenges. Yet, this can be seen as an opportunity as well, a time f
`The Digital Future for the Printing Industry`
The printing industry is currently and will continue to experience many transitions in the form of `Digital Printing and Communications`. This also impacts on all businesses globally.
The printing industry will continue to evolve into new and exciting `electronic imaging driven by digital technology`. Digital technology, economic restructuring, global competition, market changes, emerging new media and other market forces are combining to `dramatically` change the operating environment of the Printing Industry. The traditional printing industry is very mature with over capacity in the established countries and also very poor training of personnel and very few people entering the industry. We are in the `emerging information society` driven by technology, where by the very nature of the role of the printer is changing rapidly, driven by `customer demands`.
The major drivers are first, technology, particularly the digitisation of data, is reshaping the communications industries. The rapid experience of the convergence of computers, telecommunications and television, plus the use of `multimedia` and the speed of change in the `information superhighway`.
The second major driver is the changing macro-environment, particularly the rapid restructuring of the world economy and global competition.
The consequence of these two major drivers is the movement in print markets worldwide. The emerging `new` countries who invest into the print/communications industries with the latest equipment are global players whom will significantly drive down prices by the economies of scale.
Print companies are redefining their business (or they should be) to one of identifying `customers` changing communication needs brought about by the digital processing and storing of information and delivering it through the most effective distribution channel. Since printer’s are/should already well be established in `imagery`, they are well positioned to participate in new channels as they develop. If print companies do not take on board new technology, they will not survive in this rapid changing environment.
Changes to Industry Structure and Profitability
The structural changes to the industry are occurring as a result of `technology` changes and market forces on a global scale. This restructuring and the pace have quickened and the impact on profitability has been profound. Over the last 40 years industry profitability has moved in cycles roughly corresponding to industry investment cycles. With the current need to invest in `new digital technology` coinciding with a slowing of market growth world-wide, printing companies profits will be `squeezed` further in the remainder of the decade as structural change continues on a global scale.
The implications for the printing industry structure and profitability in the future are;
* The number of large printing plants is declining. (costs out way benefits of net profit)
* Large printing companies will become larger by acquisition, at the expense of less well-managed large companies and medium sized companies.
* The less innovative companies will face serious issues in a slow growth business environment.
* The rate of failure for less well managed small companies will be high. This is the majority of the industry.
* Medium size companies particularly those without well-defined speciality niches will continue to be squeezed by larger companies.
* The impact on the printing industry profitability will be a continuation of the pressure on overall industry profit margins.
* The profit leaders will continue to make attractive profits by acquisition/cost controls/economies of scale/skilled and experienced personnel in `all` areas.
* The impact of `Print Management Service` programmes on the manufacturing sector that does not participate in this customer driven environment.
Management without Vision
A lack of management commitment to change and a failure to hold a compelling vision of the future with their employees are holding back global mature print manufacturers when they attempt to make a move towards `lean manufacturing`.
But addressing the attitude and behaviour of an organisation – in addition to the operating system and management infrastructure – could boost production by at least 20%, and improve stock, lead times, quality and capacity. The organisations with skilled and experienced people of any age and training programmes with business models will be the winners.
There are at least 12 major pitfalls which companies must avoid benefiting from making the journey to lean production.
The pitfalls are;
1) Lack of management commitment
2) Lack of shared vision and objectives
3) Failure to lead by example
4) Initiative fatigue
5) Constant firefighting
6) Employees` lack of understanding
7) Middle management not engaged
8) Stagnation after pilot
9) Failure in deployment
10) Lack of clarity over the future state of the organisation
11) Failure to build on a change which has been achieved
12) The understanding of Managing the `Management of Change`
All too often failure to make a lean transformation stems from a superficial, piecemeal approach. Lean manufacturing requires a holistic approach transforming not just the technical production system but also the organisations management systems and a comprehensive approach to change which addresses mindsets and behaviours as well as formal processes and structures.
Most common faults are a lack – lustre approach to change by a dividend or uncommitted senior management and unwillingness to properly consult and communicate with the workforce. This is why some European companies claim to have tried and failed to implement lean production systems. Communication, communication of the requirement and a `buy-in` programme by `all` people is necessary for change to be successful.
Lean manufacturing is now almost universally regarded as a panacea for European print manufacturers (also, all UK manufacturing) to improve productivity but, UK owned manufacturing companies are typically less productive than their UK-based, US - owned competitors.
A McKinsey & Company study showed that an average US manufacturing companies deliver a 22% annual return on capital. While UK companies return only 7.6%! (before the recession).
McKinsey & Company experience reveals that middle management and front-line staff are adept at spotting half-hearted support for production process improvements and adopt a `just-enough` attitude to tide them over until the effort is abandoned. Also, senior management (Directors) were complacent to act due to lack of knowledge of `management of change` process.
A typical scenario might be of an UK company undertaking a lean programme. But, sooner or later, after considerable diversion of company resources, they admit defeat and settle for a few small improvements here and they’re rather than a lasting and marked performance improvement. This type of company will not survive.
Having seen the `writing on the wall` for their business before being spurred into a lean transformation attempt, such businesses frequently join the list of statistical failures.
A lack of a `shared` vision headed the list of failures.
Alignment around `shared` objectives must begin with the `top` team and cascade through the organisation. It must also be seen to go hand-in-hand with visible commitment by `all` Directors/Senior Management so those staff sees their `leaders` are serious about change and play a full part themselves. Middle management are very good at spotting lack of commitment and respond in kind by supplying just the amount of effort they judge expedient until the latest initiative withers and dies. People know what they are expected to say and duly say it. But, it is meaningless if they are just going through the motions. Again, this type of company will not survive.
Failing to lead by example resulted in middle managers and production staff failing to `get on side`.
This most often happens where senior management is `out of touch` with all the employees. Top management must get close to the reality of the `people` to understand the issues the frontline staff are living with, and then take the lead to resolve them as part of the `change process`.
At the same time, management need to be aware of initiative fatigue, the `been there, done that, did not work` attitude. Change targets must be precise and stretching, but realistic and some early successes will galvanise the rest of the effort.
The tendency to firefight constantly must be stifled and while some managers thrive on firefighting and build a successful career on it, this only deals with symptoms and not with `long-term solutions`.
Just telling employees what to do is not enough. They must be involved at all levels in solving issues in the change process. All staff expect to see their line managers directing change, so these middle managers must be engaged from the outset.
Even when a successful pilot implementation is over, there are still several more pitfalls to trap the unwary. One is stagnation following a successful pilot as the focus shifts away. Another is the failure to deploy lean manufacturing to the wider business.Never stop looking to improve.
Conclusion – Lean manufacturing requires a holistic approach transforming not just the technical production system but also the company’s management system and a `comprehensive` approach to change which addresses mindsets and behaviours as well as formal processes and structures. The `right` trained and skilled and experienced `People` manage companies and these will be the winners in the future.
Keys to Bridging to the Digital Future
The central message of technological change is the accelerating pace of digitisation. Besides basic matters of understanding emerging printing technology, then integrating it effectively into the business and using it to enable expansion into `new` businesses. Two broad issues stand out as follows;
1. All print companies will have to address the question of how their internal operations are interconnected digitally and how they are also connected to their customers and suppliers. The question involves connecting through data networks to customers and suppliers; the consideration here are productivity, profitability and customer demands for `rapid` service. It also concerns customer demands for fast turnaround and shared data.
2. In the long run, higher growth opportunities will be available in `new` rather than traditional media. Printers of all sizes should be serving specialised markets also have opportunities to experience with new media today; with minimal effort. The greater the penetration of multimedia personal computers, for instance, the greater the opportunities for some printers to move into this medium.
Beyond these general issues, a number of specific opportunities exist. These will become imperatives for future success as customers become more demanding;
Participate in inter-enterprise systems that connect suppliers, printers and end users with systems for managing activities together and communications for digital data for printing.
Participate in the development and maintenance of digital databases of text, data, images for printing and other media. Publishers have already redesigned their own front ends to send the same information to their printers and to on-line databases.
Participate in new delivery options. These include both the use of database and mailing list technologies to enable direct mail and refined targeting capabilities and connection to the cable and telephone company with broadband information directly to end users.
Non Traditional Printing Services
Non-impact, primarily electronic, printing technologies will continue to improve in speed, process colour capability and quality and prices will continue to fall rapidly. Larger and specialised printers are already integrating such technologies into their production systems; quick printers basic businesses are based on such technologies. But there continue to be opportunities especially for small to medium size printers to meet growing customers needs for non-impact work and to offer convenience as one of their services.
Customer and Printer Alliances
Alliances with groups of customers and groups of other printers will increasingly become critical for small and medium size printers. The point is to bring together different capabilities that no one printer can afford to maintain. Larger printers on the other hand are already moving to ally themselves on a long-term basis with their customers to protect their investments and market share both in printing and emerging media.The Print Management Service organisations are a prime example of meeting customer needs.
Education and Training
The rapid pace of change in printing technology in competing media and in printers markets places a `premium` on ongoing education and training. Printers must ensure that `all` of their employees are up-to-date on the latest technologies and management skills that are required for now and the future. The degree of change expected in this and the next decades also places a premium on educating customers about emerging technologies, systems, media and distribution. We must use people of `any age` to further their education and skills to compete in a global market. Also, people of `any` age with experience and skills of `management of change` will be your main asset!
The most successful printers will be those who can meet rapidly changing customer needs. Inevitably, that will mean faster turnaround and lower costs in a more competitive business environment. It also means the ability to innovate rapidly either internally or by outsourcing work, provide new services both in front end and distribution areas and as stated above participate on new media. Creating and nurturing the best possible relationships with customers remains a critical success factor. A related issue will be the ability of printers to understand their customers in order to be more proactive in meeting their needs and to focus their `bottom-line` profitability.
The large printers will be driven to `dominating` the segments they serve trying to maintain the top positions in their business. Smaller printers able to grow comfortably in general commercial printing in the past will have to focus more on `selected` product and /or service niches either alone or through alliances.
With technological and market change, competition for critically important skills will increase across the board, raising the premium on attracting, training, managing and retaining the best skilled workers and managers. Managing technology, capital and costs will continue to grow in importance. Also, age should not be a factor, but the ability to carry out the function at the highest standards, using experience and skills that are required at each sector of the business.
Above all, printers will have to strategically - oriented businesses, be aware of changing technology, markets and other external developments and able to take advantage of them profitably. Indeed, for many printers hiring or developing a `digital champion` to act as a catalyst for change within their company will be a critical step.
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`The European Printing Industry and the Impact of China on the World`
Now and the Potential Future
The report is based on a combination of primary and secondary research. Original Cavendish data has been incorporated with information from trade sources, printing federations and EU Statistics.
Now and the Potential Future
This report analyses the prevailing economic environment, the current state of the printing industry and details the major forces the industry will have to contend with in the future. The report also takes a close-up look at the industry results on such hot industry topics as workflow automation, digital and variable-data printing, wide-format printing and more. Plus, the countries statistics that impact the printing industry.
Business conditions for the printing industry have not stabilised in the past year and, have—dare we say it—deteriorated rapidly in some of the developed countries worldwide. But does more turmoil lie ahead? What trends are driving current business conditions? How will these trends play out in the next year and ten years time? What can—and what should—companies in the industry do to better cope, succeed, and thrive? This report is in the unique position of being able to draw not only on data on the markets that produce print, but also data on the markets that buy print. It’s this ‘360-degree’ view of the entire market for print media that gives its open picture.
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This report provides an overview of the printing industry in Europe and the Impact of China on the World.
The narrative and analysis covers trends in the printing industry and provides forecasts in these countries that impact the future. We also review some of the key issues facing the industry today which influence the future performance of companies within the industry.
The industry has changed rapidly over the last decade. This has been a response to new technologies, competition on a global scale, which has led to other media and demands from customers for lower costs, higher quality and more swift response. A key technical transition has been from analogue data processes towards ‘digital workflows’ in which content is received and processed in electronic form. The result from this action is extensive investment in information technology hardware and software and a growing need for people with IT skills within the industry.
The future is about technical and other changes that impact the industry, which needs transfer from craft skills to IT skilled personnel. This means the changing balance between physical craft skills into computer-based process control and graphic skills are the future needs to challenge the global competition.
Open your mind to the ‘Challenges’ we face in a global trading environment to be successful.
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The potential market size to 2010 worldwide
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Key findings that will influence your decisions on future investments
Introduction to the future success for your company
The Current State of the Printing and Graphics Arts Industry and the future
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European Key Information
A Further View on the European Printing Industry and the challenges
The China Syndrome and the Impact on the World
This report is the result of a fresh in-depth analysis and evaluation of the state of the printing industry in Europe and the impact of China on the world and reveals how the landscape of this sector has been evolving dramatically over the last few years.
Printing continues to grow significantly year on year, fuelled primarily with China and the other Asia countries, enabled increasingly by the internet as well as a varity of other driving forces.
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People = Performance = Productivity = Profit
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About the Author Colin Thompson...
Colin is a former successful Managing Director of Transactional/Print Manufacturing Plants, Print Management/Workflow Solutions companies and other organisations, former Group Chairman of the Academy for Chief Executives and Non-Executive Director, helping companies raise their `bottom-line` and `increase cashflow`. Plus, helping individuals to be successful in business and life in general. Author of several publications, research reports, guides, business and educational models on CD-ROM/Software/PDF and over 400 articles published on business and educational subjects worldwide. Plus, International Speaker and Visiting University Professor.
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