Taking care of your printing health

The dynamics of operating a healthy printing business are becoming more complex. At a time when the industry is buffeted by competing commercial influences and technology, printers need access to sound, well-researched advice. That’s where the Heidelberg business check up comes in. In the latest issue of Print21 magazine Patrick Howard talks with industry health professional, Andy Vels Jensen, managing director, Heidelberg Australia and New Zealand (pictured).

Before you go on that trekking expedition in New Zealand, or take up that gym programme, it pays to visit your medical professional for a check up. After all, none of us are getting any younger and while everything may seem to be working OK, it’s better to get a professional opinion before embarking on more intense activity. If you want more out of life you have to put in more effort; it’s a life-style thing that hinges on your expectations.

In the printing business too, there comes a time when decisions have to be made whether to take on a new challenge or to stay in the comfort zone and seek an easy way out. No one’s going to make you, so it all depends on what you want. However, in the current printing climate if you don’t take a decision yourself it is likely to be made for you. Standing still is not an option with the market changing at the rate it is. Continuing to do what you have always done is a recipe for leaving the industry – which is OK, if that is what you want.

For those who want a future in the industry it’s time to take stock as to what to do, when to invest, how to market and where do you want to be in five years time. It is also time to call in the professionals to give your business a check up, devise a sensible approach to investment, audit your management strengths and weaknesses and lay out a programme that will take you to where you want to go.

Business services – the new offering
The printing industry has long been deeply suspicious of consultants. Perhaps it is a hangover from a craft tradition that encourages the view that no one other than the craftsman knows what is required. But that view is rapidly becoming obsolete as printing enters the computer-integrated-manufacturing (CIM) age, with multi-million dollar equipment purchases by publicly listed corporations driving the pace of change and setting the bar for competition. Competing technologies aim at different segments of the market, optional business models allow for different capital expenditure, while human resource and training strategies define the corporate culture. Printers today need to be proficient across a wide array of management and technology skill sets. Many are coming to recognise that specialist advice is required and are prepared to pay for it.

“If every customer solely bought equipment on price, Heidelberg Australia and New Zealand would be half the size company it is today,” says Andy Vels Jensen, managing director Heidelberg Australia and New Zealand (HAN). “The ‘easiest’ way in which to achieve a quick and improved bottom-line is to cut costs. This was an option for Heidelberg when I arrived four years ago but was not the obvious choice. Personally I don’t think it is the way the industry should go. Printers need professional business services to help drive out costs and operate to world best benchmarking practice. That is what we provide.”

Fit for printing
Heidelberg has developed a complete management consultancy service, which has already been enthusiastically adopted by many of its customers, large and small. According to Vels Jensen, the concept is to send in industry professionals to conduct an audit of the customer’s company, identifying where things can be improved and what is needed for the company to come up to best practices benchmarks.

“It doesn’t necessarily mean having to buy new equipment. We will deliver a management plan based on our knowledge of what similar companies are achieving in a similar situation. Of course, if we recommend an equipment upgrade we hope they will choose Heidelberg, but we are more concerned about establishing a successful partnership for the future,” said Vels Jensen. "Whatever recommendations we make to a client is something that the client – and specifically Heidelberg – has to live with in years to come. As such, this is not taken lightly by any of the parties."

An imbroglio of choice needs thought
A commercial printer faces a bewildering number of options today, with many of the old barriers between markets disappearing. Vels Jensen relates the story of a printer with a Speedmaster CD74 (half-size press), who contracted with a major packaging company to take its short-run jobs. The major packaging company could not manage the short run work with their existing older equipment, due to long make-ready times, and at the same time produce their long run work. Within a short time the packaging company passed one of its most important short run accounts over completely to the printer who suddenly found himself in a whole new business. Being able to meet the delivery and quality demands of the customer, as well as develop the business procedures to address large corporate requirements, proved to be the right skills at the right place and time.

The decision to buy one of the newly-released Speedmaster XL105 presses for approximately 20 per cent more than a Speedmaster CD102 is typical of the fine calculations that have to be factored into today’s investment mix. The larger press runs faster and provides a different level of performance, compared the existing CD102 and SM102, but for a commercial printer it must be measured against, say, one of the long-perfectors that have swept the market in the past few years. The decision will involve many factors including, but not limited to, such things as type of work i.e. magazine or packaging, mix of customers i.e. large corporates or disparate SME commercials, the owner’s investment capacity and forward financial expectations.

Life-changing investments
Such major investments are life-changing, both for the business and its shareholders. They should not be taken in the traditional way, based on a ‘gut feeling’ or simply to keep up with Jones The Printer around the corner – the ‘mine is bigger than yours’ investment syndrome. They need and deserve professional consideration based on real world factors.

“Now more than ever printers need information to help them make the right decisions for their business. And it’s not just big printers. Many A3 customers make use of our business services. Some have big plans and are looking to grow. We can give them access to support in most areas of their business, not just supplying ‘heavy metal,’ but ideas as to how they can and should structure their business,” said Vels Jensen. Nobody can guarantee you success - as they would probably get in themselves first! - however, you can buy ‘insurance’ and improve your chance of success by taking a long hard look at yourself as well as seeking business guidance from the people your business is partnering with.

“When we sell presses we don’t just walk away. It’s an ongoing relationship that sees our specialists returning on site after three months and then periodically after that to make sure it is working out as both parties expected.”

Doctor, heal thyself
If the industry is very different today than previously, HAN is also a very different company than when Danish-born Vels Jensen came from South Africa as managing director four years ago. At the time the company was still struggling under the weight of its failed ambitions of the 1990s, beset by opulent industry palaces and sagging profit margins. Since then it has transformed into one of the highest achieving Heidelberg regions, clawing its way back into profit, and revamping its management structure, substance and style.

Vels Jensen has sought to introduce clear thinking and plain speaking into a corporation that was often short on both. Some rationalisation has taken place and a new management team of nine has a mix of long serving experience and new blood. Glenn Plummer is an example of the new organisation, new to the industry six years ago and having moved from Sydney in early 2005 to take up a new position in Marketing and Product Management. He joined a revamped team alongside both new and long-serving mangers such as Alastair Hadley, who oversees sales for Australia and New Zealand.

Tony van Broekhuzien came from Heidelberg South Africa to head up Customer Service, an area now branded ‘System Service’ in its own right, and poised for growth. Darren Davies also joined in 2000 from the finance sector, driving business development by undertaking consulting activities. One of Vels Jensen’s first decisions was to establish a HR Department; instrumental in developing a high performance customer-focussed company to meet today’s industry challenges.

Perfect health in long perfecting
Some facilities rationalisation has also occurred to lower costs and streamline activities, such as the closure of the Melbourne showroom in favour of one showroom under the PMA banner in Sydney and a reduction of office floor space in Sydney and Auckland through subletting. Costs that don’t serve to satisfy customers, employees or shareholders have been driven out of the company. But the new company’s success can be gauged by many factors; none more telling than the dominant market share it enjoys with long-perfecting presses. An impressive 55 of the 64 long perfecting machines in Australian and New Zealand bear the Heidelberg badge.

There is a new pragmatism abroad in the company, which well suits the changing industry environment. Vels Jensen is keen to point out that the new star of his fleet, the Speedmaster XL105 has delivered vastly higher productivity improvements during trials in Europe and the USA, than was expected by its developers. It is this achievement factor that is seeing the flagship press become of major interest to the commercial printing sector as well as packaging printers, who were its original target.

XL under-promises, over-delivers
“They [the press designers and engineers] were expecting an eight to twelve per cent improvement over current Heidelberg and competitive technology but it more than doubled that at actual beta production sites. In today’s production environment it’s not only a question of how fast you can print, it’s a question of saleable sheets on the floor. Printers want to run lean integrated manufacturing with an emphasis on profit. We’re dedicated to helping them achieve these goals.”

“Over the past 30 years printers have seen speed improve by some 50 per cent, whereas make-ready and set-up time, as well as automation and quality gadgets built into the press and solutions, have improved productivity by more than 500 per cent. The XL has proven to take these productivity gains to a new peak performance level - and don’t expect Heidelberg to stop there. All R&D money now goes towards bringing new and better technology to our customers; much faster than was the case in the past,” says Vels Jensen.

And that is a recipe for good business health.