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GLOBAL WATCH MISSION REPORT

Digital printing: futuretechnologies, current best practice – mission to the USA

MARCH 2006

Global Watch Missions

DTI Global Watch Missions enable small groups ofUK experts to visit leading overseas technologyorganisations to learn vital lessons about innovationand its implementation, of benefit to entire industriesand individual organisations.

By stimulating debate and informing industrialthinking and action, missions offer uniqueopportunities for fast-tracking technology transfer,sharing deployment know-how, explaining newindustry infrastructures and policies, and developingrelationships and collaborations. Around 30 missionstake place annually, with the coordinatingorganisation receiving guidance and financial supportfrom the DTI Global Watch Missions team.

Disclaimer

This report represents the findings of a missionorganised by the British Printing Industries Federation(BPIF) with the support of DTI. Views expressedreflect a consensus reached by the members of themission team and do not necessarily reflect those ofthe organisations to which the mission membersbelong, BPIF or DTI.

Although every effort has been made to ensure theaccuracy and objective viewpoint of this report, andinformation is provided in good faith, no liability canbe accepted for its accuracy or for any use to which itmight be put. Comments attributed to organisationsvisited during this mission were those expressed bypersonnel interviewed and should not be taken asthose of the organisation as a whole.

Whilst every effort has been made to ensure thatthe information provided in this report is accurateand up to date, DTI accepts no responsibilitywhatsoever in relation to this information. DTI shallnot be liable for any loss of profits or contracts orany direct, indirect, special or consequential loss ordamages whether in contract, tort or otherwise,arising out of or in connection with your use of thisinformation. This disclaimer shall apply to themaximum extent permissible by law.

Digital printing:future technologies,

current best practice – mission to the USA

REPORT OF A DTI GLOBAL WATCH MISSION

MARCH 2006

Report printed by ProCo Print Ltd:

CONTENTS

FOREWORD AND 3ACKNOWLEDGMENTS

EXECUTIVE SUMMARY 4

1 MISSION OBJECTIVES 9AND CONTEXT

1.1 Background to the mission 91.2 Aims and objectives 91.3 Mission focus, scope and itinerary 101.4 Mission delegates 11

2 NEW MARKETS FOR 12PRODUCTS AND SERVICES

2.1 Identifying new markets and 12 products

2.2 Role of the Internet 142.3 Direct mail and transactional 15

print issues2.4 Customers for digital print 162.5 Models of profitability 17

3 ROLE OF PRINTERS IN 19EMERGING TECHNOLOGIES

3.1 Interaction with technology 19suppliers

3.2 Interaction with universities and 20research sources

3.3 Cluster theory in practice? 213.4 Integration of the Internet into 21

print technology3.5 New developments 223.6 Observations 23

4 ROLE OF MANUFACTURING 25BEST PRACTICE

4.1 Efficiency and workflow 254.2 Finishing issues 274.3 Software solutions – bespoke 27

or off-the-shelf?4.4 Adoption of new technologies 284.5 Observations on new 29

technology adoption

5 SELLING AND PROMOTING 31THE DIGITAL MESSAGE

5.1 Digital sales people 31– a separate breed?

5.2 Rewarding digital sales people 325.3 Training digital sales staff 335.4 Trade associations 33

– a promoting role5.5 Opinions about the PIA 34

6 EDUCATION AND TRAINING 366.1 Rochester Institute of Technology 366.2 RIT as a centre of research 376.3 RIT and new thinking 386.4 Education levels and recruitment 386.5 Lessons for the UK 39

7 ‘ELIMINATING THE 41GATEKEEPER’: COLORCENTRIC– A CASE STUDY

7.1 History, background and scale 41of operation

7.2 Business rationale 427.3 Conclusions 43

8 CONCLUSIONS AND 44RECOMMENDATIONS

8.1 Internet issues 458.2 Data issues 458.3 Technology issues 458.4 New markets and applications 468.5 Workflow systems and 46

software issues8.6 Sales and promotion issues 468.7 Role of academia 47

APPENDICESA Mission team 48B Host organisations 52C List of exhibits 62D Glossary 63

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DIGITAL PRINTING: FUTURE TECHNOLOGIES, CURRENT BEST PRACTICE – MISSION TO THE USA

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The printing industry has and always will bean industry in a state of change. Ever sinceGutenberg made his monumental step in thelate 15th century, change – as they say – hasbeen the only constant.

So why is digital printing different? Is it notjust another way of putting intelligible markson paper? Viewed at this level the answer isyes, but there is more to digital printing thanmeets the eye and it is the new opportunitiesthat are opening up that, in our view, makethe various digital printing techniques whichare currently and potentially available themost exciting technological developmentsince Gutenberg.

The British Printing Industries Federation(BPIF) has always strived to be able to bringto the industry the newest practical ideas tohelp keep the industry a vital part of thecommunications industry. We regard the DTIGlobal Watch Service as vital to this. Althoughthe UK is regarded, quite rightly, as being inthe forefront of printing technologyapplications we do not have the monopoly ongood ideas! It is for that reason that we haveused Global Watch Missions in the past tobring new ideas to the UK market, and it isprecisely for those same reasons that welooked to the USA to bring us new ideas indigital printing. However, we did not expectto find a complete new ‘Holy Grail’, andalongside some new ideas we expected tofind confirmation that the UK was alreadydoing some great things in digital printing thatwe could quite rightly celebrate.

We thought carefully about the actual area tovisit and settled on upper New York Statebecause of the almost unique combination ofprinters, digital printing manufacturers and aworld-renowned seat of learning focused onthe printing industry. We wanted to see theimpact of these three working in harmony forthe benefit of the industry as a whole, and tolearn any lessons for the UK.

BPIF maintains good internationalrelationships and it is those that helped us toput together the programme of visits. We areparticularly grateful to the Printing andImaging Association of New York State (PIA ofNYS) and its President Tim Freeman, whohelped by suggesting companies we couldvisit and then approached the companies onour behalf.

We would also like to thank the DTI GlobalWatch Service, especially Farida Isroliwala, for support and advice in putting theproposal together.

Finally, I would like to personally acknowledgethe contribution, support and good humour ofmy colleagues from the printing industry whotook part in this mission. Only they will knowof the time that they voluntarily gave up toprepare for, take part in and to contribute tothe final report and dissemination. I think thatthey represented our industry very proudlyand this report will fully testify to thatassertion. I hope that you enjoy reading it andthat it helps your business to prosper.

FOREWORD AND ACKNOWLEDGMENTS

Mike HopkinsDirector of Membership, BPIF

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A 2006 study by Cap Ventures noted that:

‘The digital production color market will grow20% a year through the end of the decade,creating radical shifts in revenue and pagevolume and transforming the face of theprinting industry.’

With such projections and opportunities inmind, this mission was timely. As part of theDTI-funded mission, representatives fromthe UK printing industry visited theRochester/Buffalo region of the USA. Thearea was chosen because of its cluster oftechnology providers (Kodak and Xerox) andthe presence of a world-renowned academicinstitution, Rochester Institute of Technology(RIT) and a high number of leading digitalprint solution providers.

The DTI Global Watch Mission wascoordinated and led by the British PrintingIndustries Federation (BPIF) and took placein March 2006. Its objectives were to seekout the best market-driven applications ofdigital print and engage with academics andtechnology manufacturers to understandfuture technology developments andapplications.

Identifying new markets and products

Contrasting approaches were noted toidentifying and pursuing new markets. Forone, a main impetus for innovation camewhen a pharmaceutical company requiredvariable data and numbering to be printed ondrug information sheets. Others grow newmarkets from existing customers, focusingmainly on education and servicing newcasinos with variable colour vouchers anddirect mail advertising.

Elsewhere, companies are promoting short-run books and demographic-basedmarketing using variable colour. ColorCentricCorp – the subject of a case study in thisreport – has identified a new market forultra short-run book printing and markets itsproducts via value-added retailers (VARs)using specialist websites such as Lulu.com,Google and Yahoo.

Integration of the Internet into print

technology

Some companies have made the Internetintegral to their business and are using it todrive volume and applications, while othersare struggling to understand how an Internet-integrated solution can work. There is ageneral understanding that the Internet canbe a means of reducing the supply chain,allowing companies to create new businesswith new technology rather than focus onthe migration of offset.

We found that print organisations in the USAare falling short of true integration of theInternet into print technology and that theconcept of a ‘printanet’ is some way off. Web links and e-mail marketing are allowingbusinesses tighter control of their marketing,but the impetus is to drive volume, notexploit the available technology.

Direct mail and transactional print issues

One of the most interesting perspectives onthe future development of digital print as atransactional vehicle was provided by KodakNexPress. There is a future market for thisas the cost per page reduces. Kodak isactively promoting using the businessdocument itself as an advertising vehicle.

EXECUTIVE SUMMARY

These are sometimes referred to as‘transpromo documents’. Echoing this, Xeroxhas been researching a colour machine thatwill print fit-for-print business documents ata reduced cost.

Niche markets and models of profitability

The prime example of a niche market is thatfor short-run book publishing, whichColorCentric is servicing successfully andwhich Kodak NexPress also identified as anemerging market. Lazer Inc has expandedinto digital asset management and is nowoffering its services on a consultancy basis.

We doubt that a single ideal model of aprofitable digital printer exists. In their ownway, each of the organisations visited isfollowing its own model effectively andsuccessfully. Professor Frank Cost of RITproposed that the way forward is to follow thebasic model of producing shorter and shorterrun lengths for more and more people.

Interaction with technology suppliers

and universities

The focus in the USA, as evidenced by whatwe saw in Rochester and Buffalo, is more ontechnology advancement and partnershipswith the printers than on volume/marketdevelopment, whereas the UK is morefocused on the end user.

There was much greater evidence ofinteraction with academic institutions and ofa strong appreciation of its value to theindustry. RIT is a key part of the area’sinfrastructure as well as a fabulouslyequipped facility. RIT has truly integrateditself into the print supplier network, forexample by testing materials and inks.However, although deeply impressive, RIT’ssignificance as a world learning facility doesappear to diminish only 70 miles from itslocation. In some senses, its economic,social and cultural impact is quite localised.

Adoption of new technologies

Most of the organisations visited shared theview that, while it was once true that the bigmanufacturers drove new technology, thishas completely changed and the market isnow the prime driver in its adoption. As themarket is buoyant and margins veryprofitable compared to traditional print, thecost of digital print is not seen as an issue ininhibiting wider adoption.

As both a stand-alone technology and as anintegrated technology, digital print is veryprofitable in the USA at the moment. Eventhose dealing in small volumes see digitalprint as a profitable business model.Academic institutions such as RIT clearlyhave a major role in challenging the marketto drive adoption of new technology but theonus is on all areas of the industry tomaintain the drive by working in combination.

New developments/technologies

These were some of the specificdevelopments highlighted by our hosts ashaving the greatest potential:

• Developments in inkjet technology will aidthe take-up of ‘transpromo’ applications,combining transactional printing andcommercial printing

• Near-line finishing using press technologyoffers the benefit of speed, smootherhandling and no waste

• Micro-capable inks• Greater colour accuracy linked to pricing

will bring new ways of costing• Auto-optimisation of images• In-line ultraviolet (UV) coater currently

under test• Colour and gamut mapping will increase

colour opportunities• Incremental improvements in

electrophotography technology to improvespeed and quality

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Beyond these specifics, our hosts identifiedareas where existing or new techniques (or acombination of both) are likely to have themost impact, including:

• Improved understanding among printersand clients of data, particularly with regardto tracking of responses

• Greater focus on distribution of products,packing and shipping

• Greater efficiency, speed and flexibility inbook production

• New avenues in book production, eg high-value medical books

• Greater focus on improved image quality,productivity and reliability rather thanspeed or lower prices

• E-mail portals and web developments areset to be more and more important inpurchasing decisions

• Short message service (SMS) messagingin combination with printed matter, SMSproofing and job tracking were high in thethoughts of the more advancedcompanies visited

If ink-jet can combine the quality of its largeformat with the speed of its small format(like Versamark) then it offers an outstandingbusiness proposition. The speed andversatility would be very difficult to ignoreand would allow pricing to be much closer tooffset on larger runs.

Efficiency and workflow

The primary emphasis is on leanmanufacturing as a means to increasingproductivity. For Xerox, an integratedworkflow allows the narrowing down of thesupply chain and consequently a reduction incosts and time. FreeFlow is an integratedworkflow solution that combines withmanagement information system (MIS) andcross platform to fully integrate all aspects ofproduction, both offset and digital.

The mission team’s view is that having oneworkflow to suit all platforms will be centralto increasing both presses and clicks. Wealso foresee it moving into the MIS market,as in FreeFlow and SMART Board, by linkinginto current MIS systems to analysebusiness needs. This will enable digitaltechnology to become the backbone ofcommercial printers rather than an add-onproduction capability.

Portable document format (PDF) is seen asthe most important way of working. There isa lack of understanding of, or inclinationtowards adopting job definition format (JDF)technology.

Digital sales people – a separate breed?

The mission team gained no real sense thatdigital sales people possess or require anydifferent characteristics to those sellingconventional print, beyond the technicalcompetence and knowledge to understanddata and information technology (IT) issues.

There was general agreement that salespeople do need to adopt a certain digitalmindset, focused on selling the value of thesolution to the customer rather than the costper copy. Solution sales encourage goodwill,repeat business, customer retention andword-of-mouth referral.

RIT is also an ongoing source of training inspecific skills – both technology- and sales-based – for companies and relies upon themfor approximately two thirds of its trainingrevenue. Otherwise, the main sources fortraining of sales staff are suppliers, whichoffer essential product training and casestudies, and trade associations which offerspecific digital print training.

Trade associations

Promoting the interests of the graphiccommunications industry in this corner of the

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USA is the Printing and Imaging Associationof New York State (PIA of NYS). Membershipalso covers the Printing Industries of America(PIA) and the Graphic Arts TechnicalFoundation (GATF) and access to the GraphicArts Information Network (GAIN). PIA/GATFand its affiliates deliver services that enhancethe growth, efficiency and profitability of theindustry through advocacy, education,research and technical information.

An example of the PIA/GATF effort inpromoting the digital print industry is theDigital Printing Council (DPC), established inJanuary 2006 and including Adobe, Canon,EFI, Hewlett Packard, Kodak and Xeroxamong its sponsors. PIA/GATF has declared2006 ‘the year of digital print’. DPC initiativesfor the year include the Marketing 4 Digital(M4D) educational outreach programme.

Education levels and recruitment

With regard to recruitment and skill levels,the organisations visited in Rochester andBuffalo had a similar profile to their UKcounterparts. Within the more production-based companies, the majority of employeesare below degree level. Within the moreprepress and Internet-business basedcompanies, a high proportion of employeeshave a higher education background. In some companies, up to 35% of theworkforce have degrees.

We noted significant differences amonggraphic arts companies in terms ofrecruitment criteria, educational backgroundof employees and interaction with academicestablishments such as RIT. The main reasonis the nature of the demand of companies forhighly science- and technology-based input.There appeared to be a higher percentage ofgraduate employees within the companiesvisited than in the UK.

Lessons for the UK print industry

The UK digital printing industry needs to bemore aware of the existence of knowledgeand expertise among several academicestablishments and more proactive inapproaching them regarding collaboration. At the moment there is no field (apart fromUV technology) in which the UK printindustry could claim to be leading the world.

UK government also needs to recognise thatthe printing industry is under major pressureto improve its competitiveness and maintainits international position. Relevantgovernment departments need to considerfunding initiatives through BPIF and theuniversities which would be aimed atimproving that competitiveness. To date, theUK’s national government has done little inthis regard, although regional governmenthas been more proactive.

Conclusions and recommendations

The mission team found many learningpoints and make the following observations:

• The most creative use of the web we sawwas by ColorCentric. Its model of printingbooks on demand enables books to bekept in print at no investment cost, withhuge cost advantages foracademic/medical publishers with nichemarkets.

• Whilst digital asset management is not anew technology, its commercialapplication is a promising new field,offering a total data and prepress solutionto clients and consultancy services tousers of digital print technology.

• The market for data-driven variable colourprinting for direct mail marketing is growing.There is a need for improved understandingof data among printers and clients,particularly regarding tracking of responses.

• There is potential for growing lithobusiness out of the colour digital business.Mercury Print Productions’ litho sales haveincreased as a result of digital because ofits ability to offer a total solution.

• Strong opinion was voiced among ourhosts that combining technologies – ink-jet, offset, digital, online – is the future.

• We anticipate new developments in inktechnology and colour accuracy withspecial inks. This will not only develop theoffering from the manufacturers but willallow specific applications such aspackaging to move to digital.

• The onus is on all areas of the industry tomaintain the drive to adopt newtechnology by working in combination.

• ‘Transpromo’ documentation – ie usingtransactional documents to carry promotionalmessages – is a major growth area.

• The casino market is massive inRochester, and has the potential to be apart of digital business in the UK should‘super casinos’ take off.

• One of the strongest messages to comethrough was the value of lean workflowand production, both as a cost saver andas a means of reducing the supply chainand speeding up the operation.

• Lean manufacturing and internal procedurestreamlining is seen as an essential part ofmaintaining margin. Those organisationswhich are really exploiting digital have anautomated online presence, workflows,front ends and finishing.

• No organisation can build a businessaround off-the-shelf software. Bespokesystems are the key to success as long asthey are placed at the heart of thebusiness.

• In the PDF v JDF debate, the former iswinning. A common view is that PDFworks perfectly, so why change?

• Sharing of information, opinion andtechnology within the UK industry is anarea for improvement and/or development.

• Compared to the USA, where companiesactively sponsor research, the UK printindustry does not do enough to exploitacademic resources for softwaredevelopment.

• The UK printing industry should be moreaware of the existence ofknowledge/expertise in academicestablishments and more proactive incollaborating with them.

• UK academic establishments need towork more closely with BPIF to bringmore in-depth technical knowledge andexpertise to the industry – eg byencouraging print professionals tolecture/advise on academic courses, asat RIT. Joint initiatives between BPIF anduniversities are likely to be mosteffective.

• Industry and academia should be sharingtheir experience, expertise andrequirements – for example, for testingand research. The US tradition ofinternships for students has no realparallel in the UK.

• The UK print industry should be looking toattract a wider spread of graduates –especially from the sciences – tocomplement those entering the industryvia established vocational routes.

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1.1 Background to the mission1.2 Aims and objectives1.3 Mission focus, scope and itinerary1.4 Mission delegates

‘Once you understand the true nature of thenew medium of print, you begin to realisethat the possibilities for future businessopportunities are nearly boundless. The onlynecessary condition in each case is the needor desire for some kind of materialcommunication product.’

(Frank Cost, The New Medium of Print, RITCary Graphic Arts Press, Rochester, NY, 2005)

1.1 Background to the mission

Predicting the future can be a dangerouspastime in any field of commerce or industry.Alexander Graham Bell, inventor of thetelephone, wondered if he would live to seethe day when there would be ‘a telephone inevery town’. In 1943, IBM Chairman ThomasWatson famously remarked that ‘I think thereis a world market for maybe five computers’.As recently as 1981, Microsoft Chairman BillGates opined that ‘640 K ought to be enoughfor anybody’.

The problem with not keeping up with futuretechnology is the obvious one of missingopportunities. For the printing industry in theUK, this is an ongoing concern heightened bythe speed and multifaceted nature oftechnological change over the past decade.The experience of the digital print industry inthe USA in pioneering and applying newtechnology has always been instructive, andexploring this experience was one of severalaspects of two previous Global WatchMissions to California, in 1998 and 2003.

A sense of where the US digital print industryis going can be gained from a study by CapVentures in 2006, entitled The Evolving USDigital Color-On-Demand Printing Opportunity.The study noted that:

‘The digital production color market will grow20% a year through the end of the decade,creating radical shifts in revenue and pagevolume and transforming the face of theprinting industry.’

This is an impressive and challengingprojection with obvious implications for theglobal market in digital print and for UKprinting companies in particular.

With such projections and opportunities inmind, DTI funded a mission of representativesfrom the UK printing industry to visit anumber of their counterparts on the eastcoast of the USA – specifically, in theRochester and Buffalo areas. Global WatchMissions form a key part of DTI’scommitment to helping British businessesidentify, access and transfer knowledge andtechnology developments from around theworld. The mission was coordinated and ledby BPIF, the trade association for the UKprinting industry, and took place during20-24 March 2006.

1.2 Aims and objectives

The specific objectives of the mission wereas follows:

• To seek out the very best market-drivenapplications of digital printing technology

• To engage with academics and technologymanufacturers to understand futuretechnology developments and applications

1 MISSION OBJECTIVES AND CONTEXT

Having investigated how the US printingindustry is using current technology, togetherwith the current state of academic andtechnological research, the mission teamwould then disseminate its findings via areport and seminar, with a view to:

• Assisting the UK printing industry ingrowing the market for profitable print as acommunications medium, by bringing to itnew market opportunity ideas incorporatingthe use of digital printing technology

• Helping printing companies improve theirprofitability by exposing them to the bestin current practice from their peers in theUSA and future technology developmentsfrom US industry’s leading companies andresearch universities

• Highlighting current best practice andtechnological developments by means ofcase studies of companies which areworking in the ‘real world’

Within these parameters, the main themes thatthe mission team sought to investigate were:

• The role of printers in emergingtechnologies

• The role of manufacturing best practice indigital print

• Whether cost reduction or marketdevelopment drives adoption of newtechnologies

• The creation, extension and developmentof new markets for products and services

• The role of the Internet in the above• Whether printers generalise or specialise in

the services they offer• How the digital message is marketed• The availability, provision and role of

education and training in the US printingindustry

• The role of the trade association inproductivity improvement, training anddigital market development

1.3 Mission focus, scope and itinerary

The focus of the Learning by Seeing1 missionin 2003 was the printing industry in Californiaat a time of economic downturn exacerbatedby the dot-com failure. For the 2006 mission,mounted at a time of relative economicbuoyancy, the focus was exclusively thedigital printing industry in the USA.

The reason for this particular focus is that theprinting industry is mature in its technologies,with many of them offering little or no marketgrowth. Digital printing, which first made animpact in 1993, is one of the few areas of theprinting industry in which the development ofthe technology has the potential to developnew markets and so allow printers to growturnover and profits.

Recently published research by Cap Venturesbears this out. It shows that demand fordigital printing – and especially colour digitalprinting – will show a startling growth in theUK of 12% compound annual growth rate(CAGR), from €4.8 billion (~£3.3 billion) to€8.5 billion (~£5.9 billion). The value of colourretail sales of digital print is set to increasedramatically from just over €1.5 billion(~£1.0 billion) in 2003 to over €5 billion(~£3.4 billion) in 2008.

In the USA the print industry is enjoying aperiod of relative buoyancy after thedifficulties of the late 1990s and early 2000s.The industry as a whole appears to be gettingleaner and smarter: although turnovers havedecreased, the numbers employed are alsodown significantly – from 97,732 in New YorkState in 2000 to 79,589 in 2004.

As well as focusing exclusively on digitalprinting, the mission team chose to narrow itsinvestigations to the Rochester and Buffaloareas of New York State. The area was

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1 Learning by seeing revisited – the second BPIF mission to the printing industry in California, September 2003, DTI Global Watch Mission Report, URN 04/541,

64 pages, published March 2004: www.globalwatchservice.com/missions

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chosen because of its unique cluster oftechnology providers (Kodak and Xerox) andthe presence of a world-renowned academicinstitution, Rochester Institute of Technology(RIT), as well as a high number of leadingdigital print solution providers.

The mission itinerary included visits to theresearch laboratories of Xerox and KodakNexPress, and to RIT, as well as a number ofcompanies identified by the Printing andImaging Association of New York State (PIAof NYS) as being committed to using digitalprint as part of the future development oftheir businesses.

1.4 Mission delegates

The mission team comprised the followingmembers:

• Mike HopkinsDirector of MembershipBPIF

• Jon Bailey Digital Services DirectorProCo Print Ltd

• Dr Long Lin Deputy Head of DepartmentDepartment of Colour ChemistryUniversity of Leeds

• Richard Knowles Chief ExecutiveBuckingham Colour Group

• Scotch Kirkpatrick Managing DirectorDatagraphic Ltd

• Tim Browning Group Director, Digital SystemsHenDi Group

• Geoff Thould Managing DirectorCyclic Digital Print Ltd

Further information about the missionmembers and their organisations is providedin Appendix A.

Exhibit 1.1 Mission team outside hotel in Buffalo, NY; L to R: Richard Knowles, Jon Bailey, Dr Long Lin, Tim Browning,Mike Hopkins, Scotch Kirkpatrick, Geoff Thould

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2.1 Identifying new markets andproducts

2.2 Role of the Internet2.3 Direct mail and transactional print

issues2.4 Customers for digital print2.5 Models of profitability

One of the objectives of the mission was todraw lessons from the experience of digitalprint companies in Rochester and Buffalo inidentifying and exploiting new markets for theirproducts and services. We were interested ininvestigating what part, and to what degree,the printer, customers and suppliers play inprompting or leading product/serviceinnovation, and the nature and scale of anyinterplay with academic institutions.

We also sought any evidence of whetherdirect mail is migrating towards shorterdigitally produced solutions, together with aclear understanding of how the role of theInternet is changing among the organisationsvisited. Is the Internet now an integral part ofworkflow or does it still have a primarysales/marketing or communication function?

Other areas of focus included defining whothe principal customers for digital print are –buyers, end users or marketers – and therelated question of whether our hosts were inthe business of offering solutions from avariety of processes or were primarily digitalspecialists. The latter prompts the question ofwhether a model of a profitable digital printerexists and, if so, what are the essentialcharacteristics of such a business model?Would the priority be to focus totally ondigital print, or to offer digital services amonga range of solutions – in other words, tospecialise or generalise?

2.1 Identifying new markets and

products

Contrasting approaches were noted toidentifying and pursuing new markets, oftendepending on the history and background ofthe organisation visited and the depth orrange of its existing portfolio of services.

In the case of Cohber Press, for example, itsmarkets had originally been developed byworking closely with Kodak NexPress. Themain impetus for innovation came when oneof its major clients, a pharmaceuticalcompany, required variable data andnumbering to be printed on drug informationsheets for testing. Once the technology wasin place, the company then worked withexisting clients to develop colour-variable andshort-run print on demand. Of Cohber’s$19 million (~£11 million) turnover, $5 million(~£2.8 million) is digital, with 60% of thatbeing variable data.

At Kodak itself, the policy is to work inpartnership with end users, existingcustomers and potential customers toidentify new markets and products for digitalprint. The company – which offers a completeestimating and order management servicethrough to billing – has business developmentspecialists who visit potential end users withtheir partners, and print media specialistswho meet with brand managers and othermarketing staff to spread the message aboutthe benefits of variable colour digital print.More broadly, Kodak has a strategy to helpusers of its NexPress equipment to developnew markets.

Like Cohber, Mercury Print Productions hasits roots in traditional print, and identifies

2 NEW MARKETS FOR PRODUCTS AND SERVICES

Richard Knowles, Scotch Kirkpatrick

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and grows new markets from existingcustomers, focusing mainly on educationand casinos. Its digital sales are growingand are expected to reach $10 million(~£5.6 million) in 2006 (out of total sales of$25 million (~£14 million)) and $15 million(~£8.3 million) in 2007. Currently its largestmarket for digital print is in personalisedbooks for schools and universities, but ithas also responded to the establishment ofnew casinos in the Rochester area byservicing them with variable colourvouchers and direct-mail advertising. An indication of how Mercury’s prioritiesmay be changing is that the company isrelocating its digital print division to new70,000 ft2 (~6,500 m2) premises to operate independently from the traditionallitho business.

To smooth its own expansion into thegrowing digital marketplace, the BoncraftPrinting Group – which comprises acommercial litho printer, a direct mailcompany and a specialist greeting cardprinter in addition to its digital division – has adopted something of a lateral strategy. Not only has the group recently acquired aXerox 8000 colour digital press, it hasappointed a former Xerox executive tosupport and train its sales force.

The company identifies its markets by training its sales people to research theirexisting customers and spot new product and service requirements.

Of particular note is that Boncraft ispromoting short-run books and direct-mailmarketing ideas such as demographic-basedmarketing – ie mailing in colour to specificsections of the community with relevantproducts and services, using variable colourwithin the run.

Like Boncraft, the Buffalo-based ZengerGroup has a portfolio of related servicesincluding photography; electronic digital

prepress; small, medium and large offsetprinting; poster prints; digital print ondemand; and transactional print and mailing.It is a Xerox Premier partner and worksexclusively with Xerox to develop itsproducts and services. As with Mercury,there are tangible signs of companyinvestment in and growth of its digital wing –indeed, the company credits its recentgrowth of 20 to 30% a year to the growth inits digital print operations.

Interestingly, Zenger also describes digitalprint as being the catalyst for creatingadditional litho sales. This growth in traditionalbusiness is to a large degree due to thegroup’s work with a major partner – LosAngeles-based RR Donnelley. Specialising inthe financial services market, Zengerproduces personalised financial documentsusing variable colour or black personalisationoverprinted on preprinted litho shells.

If Cohber, Boncraft and Mercury aretraditional print organisations which havedeveloped their capabilities in digital print,ColorCentric Corp is an example of acomparative newcomer (founded in 2003)with a very precise digital specialisation.Having identified a completely new marketfor people who wish to publish their ownbooks – such as photo books, fiction oracademic books – ColorCentric’s core offer isultra short-run book printing. President andCEO John Lacagnina explained that, giventhat only 50,000 of the 500,000 manuscriptssubmitted to publishers for appraisal everyyear are actually accepted, his approach was‘give me the losers!’ The ColorCentric modelenables books to be kept in print at noinvestment cost, which has obviousadvantages for academic or medicalpublishers with niche markets. There is alsopotential for personalised photo books. The company believes that the best way tomarket its products is via value-addedretailers (VARs) using specialist websitessuch as Lulu.com, Google and Yahoo.

A very different kind of specialisation isoffered by Lazer Digital Services, in the formof digital asset management (DAM). Workingfor major clients including Fisher Price andSarah Lee, Lazer’s studio provides a completepackage from photography to webpresentation of digital imaging artwork; itsservice includes the creation of programs andartwork for variable data imaging to be usedby digital printers.

Lazer was originally a prepress company buthas since moved more ‘upstream’ to offer atotal data and prepress solution to end users,packaging companies and advertisingagencies. Describing itself as a graphiccommunications provider, Lazer specialises indigital imaging, design and mechanical layout,electronic prepress, catalogue and packaging.

Another perspective on the identification ofnew markets was offered to the team byOser Press, in many ways a commercialprinter of the old school. Oser is a high-qualityfull-service commercial printer in Rochesterwhose portfolio includes four-colour processprinting, complete bindery, warehouse anddistribution. The company focuses onproviding quality and service in the short- andmid-range multicolour market.

Of all the companies visited during themission, Oser is the newest to the digitalprint market, having only entered themarketplace in January 2006 with thepurchase of a Xerox 7000 digital press. Thecompany’s principal customer is RIT, withwhich it has a print management contract. An online print order system is operative, and many of the products ordered online are being converted to short-run digital print.Oser has planned an Open House day towhich many of its litho customers will beinvited, to promote the concept of colourdigital and variable colour.

On the general issue of new markets, wewere given food for thought by RIT itself inthe form of Professor Frank Cost and PatriciaSorce, who is Administrative Chair of RIT’sSchool of Print Media. The former gave us aninsight into on-demand digital printing ofbooks, sold to users via Internet sites such asLulu.com and manufactured by companiessuch as ColorCentric. The market has beenboosted by the launch by Xerox of the iGen3and the black-only Nuvera series, whichprovide near-litho quality of print acceptableby both discerning print producers and thepublic at large.

Photo books, too, have become a large andgrowing market, thanks to the development ofsoftware such as Qoop Middleware whichfacilitates their online preparation and ordering.2

2.2 Role of the Internet

We found that some companies have madethe Internet integral to their business andare using it to drive volume andapplications, while others still fail to see itsvalue or potential. A major surprise was thatZenger Group does not have an onlinepresence for integrated print-on-demandsolutions – and that the company believesthat there is no demand for it among itscustomer base. This was in spite of SteveZenger’s comment that ‘the Internet hasmade print the most relevant media’.Boncraft Group has an appreciation thatInternet integration is crucial to the successof a digital supplier but it too has no onlineordering facilities as yet.

Management at Mercury Print Productions isclearly struggling to understand how anInternet integrated solution can work – acommon problem within ‘printers’ in both theUSA and the UK – while Lazer Inc is using theweb to make its product accessible.

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2 Susan Kuchinskas, Flickr to Add Print to Photo Service, 15 June 2005: www.internetnews.com/ec-news/article.php/3512866

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That said, it is generally agreed that the USAremains ahead of the UK in general in itsunderstanding of the power of the web, butmore importantly an understanding of how toexploit it.

We found most evidence of a more creativeuse of the web on the part of digital printspecialists as opposed to print generalists (iethose companies offering digital print as part ofa wider portfolio). ColorCentric is a primemover here. Not only has the companyidentified a new market – for self-publishedbooks on short print runs – it has found a novelway of marketing its products via VARs usingspecialist websites. The company reports thatover 90% of sales are generated from thesesites. Customers upload publishing data andpictures to the web and use the tools availableon the sites to create the required books.Once set up, the books can then be orderedon the web by anyone who logs on. Data fromthe order is downloaded automatically toColorCentric, which produces the books usingXerox iGen3 digital presses using a number ofstandard templates. ColorCentric’s exampleshows that the Internet can really drivepersonalisation within book publishing. Furtherdiscussion of ColorCentric’s products andmarketing strategy can be found in the casestudy in Chapter 7.

Cohber Press uses the Internet to generateand respond to enquiries. This approach, andthe imaginative strategy of ColorCentric, is incontrast to that of Mercury, which does nomarketing via the Internet beyond maintaininga web presence.

There is a general understanding that theInternet can be a means of reducing thesupply chain, like eBay. Precisely because itwill allow companies to create new businesswith new technology rather than focus on themigration of offset, this reduction may wellprove to be the secret of Internet-ledsuccess. This point is discussed further inSection 3.4.

2.3 Direct mail and transactional print

issues

Digital printing has revolutionised the directmail industry in recent years, allowing farmore sophisticated use of personalisation andvariable text than ever before. As part of ourinvestigations, we wanted to find out whetherthere was evidence of migration of direct mailto shorter run digitally printed solutions.

Cohber’s use of the Internet to fulfil requestsfrom students for digitally printedprospectuses is mentioned above. Zenger isproviding transactional and direct mail servicesusing variable colour, and the success of itsdirect mail campaigns has fuelled furtherbusiness for short-run variable colour.

One of the most interesting perspectives onthe future development of digital print as atransactional vehicle was provided by KodakNexPress, whose managers believe it to be alarge potential market that is slowly takingoff. They reported that the main problem hasbeen to convince the end user’s marketingdepartments. Kodak is using its influence tospread the message by ‘back selling’ tothese areas, but one of the key factors willbe the acceptance by marketing departmentsof the quality of the ink-jet colour producedon the high-speed Versamark printers. Thereis definitely a future market for this as thecost per page reduces. Cost is seen as amajor deterrent to longer run personalisedwork, and Kodak’s Versamark ink-jet pressaims to address this by producing acceptable‘fit for purpose’ colour at fast machinespeeds relatively cheaply.

Kodak’s research laboratories are activelyworking on reduced cost per page and onachieving increased speed and improvedquality to lower cost. In addition, Kodak isworking on combining ink-jet and lasertechnology on one device to producehigh-quality colour for the marketing piece withink-jet personalisation or black personalisation

with ink-jet variable colour for differentmessages or versions of stationery. Kodak isalso actively promoting using the businessdocument itself – a statement, for example –as an advertising vehicle. These are sometimesreferred to as ‘transpromo’ documents.

However, it should be said that the primefocus of Kodak’s 150-strong laboratory staff istechnical – specifically on improving the quality,speed and size of the image – and not onresearching the market for digital colour print.

We also gained some insight into variablecolour imaging and its direct-mail applicationfrom our visit to RIT, whose School of PrintMedia offers courses in all aspects of print,and in particular digital technology. Our hostat RIT, Professor Frank Cost, pointed out that,due to the increased computer power, it isnow possible to RIP (raster image process)colour graphics at the speed of most colourdigital presses, and that the market forfull-colour variable direct mail marketing isbeing further fuelled by case studies of highlysuccessful targeted marketing campaignsusing variable colour images.

The view from RIT on the future growth ofdata-driven variable-colour printing for direct-mail marketing is overwhelmingly positive,and the School of Print Media’s AdministrativeChair, Patricia Sorce, has written a book3 onthe subject which offers a comprehensiveview of the world of personalisedcommunications as they relate to print.

Our hosts at Xerox had some illuminatingpoints to offer regarding the transactional printmarket, acknowledging that they had beenresearching the possibility of introducing acolour machine that will print fit-for-printbusiness documents at a reduced cost,suitable for the transactional print market. Thishas the potential to revolutionise a depressed

business forms market by creating intelligentbilling documents containing variablemarketing messages at an affordable cost.This is clearly a development to watch. Xeroxalso reported getting returns on its own digitaldirect mail of an impressive 15% or more.

2.4 Customers for digital print

Digital print customers fall principally into oneof four categories, though there is someoverlap:

• Existing customers whose short-run lithowork can be converted to digital colour

• Customers in new and emerging nichemarkets such as book publishing and on-demand print

• Direct marketing customers (eg advertisingagencies and marketing companies)requiring personalised colour direct-mailusing variable data

• Customers requiring printing oftransactional documents which mayincorporate direct-mail advertising

As noted earlier in this chapter, some printingorganisations visited by the mission team hadonly moved into digital print in response tocustomer demand for particular facilities;others have been more proactive in seekingout and exploiting new marketing opportunitiesand indeed whole new sectors of the market.

Some observations can be made at this point.The prime example of a niche market is thatfor short-run book publishing, whichColorCentric is servicing successfully andwhich Kodak NexPress also identified as anemerging market. The former has around10 VAR customers that it refers to as‘application-specific providers’ (ASPs) who inturn have thousands of consumer andbusiness customers that order print-on-demand books via the Internet using the

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3 Patricia Sorce, Data-Driven Print: Strategy and Implementation, RIT Cary Graphic Arts Press, 2006, ISBN 1-933360-06-2: http://print.rit.edu/sorce/index.php

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VARs’ sites. ColorCentric produces books‘behind the scenes’, so the end user has noidea where the products are printed.

ColorCentric creates a physical end productby providing a service to customers which,for all its technological and marketingingenuity, is essentially an extension of thetraditional print industry model. Lazer DigitalServices, by contrast, offers a total data andprepress solution to its clients – who itidentifies as packaging companies andadvertising agencies. As mentioned inSection 2.1, Lazer has expanded into DAMand is now offering its services on aconsultancy basis to create solutions forusers of digital print technology.

Finally, what part do print buyers play ascustomers for digital print? Cohber – whichonly sells direct and does not work with printbrokers or print management companies – toldus that ‘print buyers have no loyalty and buy onprice’. However, by operating within a nichemarket (mainly casinos and the educationsector), the company offers its customers agreat deal of added value that makes pricealone less of an issue. The company handlesand cleans customers’ data and undertakestargeted mailshots such as personaliseduniversity prospectuses that highlight aprospect’s special interests or subjects.

2.5 Models of profitability

A number of different business models havealready been referred to in this chapter. Oneof the mission team’s points of enquiry waswhether there exists a single model of aprofitable digital printer; additionally, wesought opinion among the organisations wevisited about what would be the essentialcharacteristics of such a business model. Forexample, would it be one focusing totally ondigital print, on offering digital among a rangeof solutions, or one based on finding nichemarkets within the digital spectrum?

There is no straightforward answer – and thedigital print industry is no different to anyother industry in this. In their own way, eachof the organisations visited is following itsown model effectively and successfully.

Mercury’s model is to combine expertise inlitho with digital colour and apply to it itscapabilities in using customer data intelligentlyto create variable colour solutions. Printedproducts are often a combination of litho anddigital, and we have noted how Mercury’slitho sales have increased as a result of digitalbecause of its ability to offer a total solution.

Zenger appears to combine a number ofessential characteristics, which it expoundedas follows:

• Marketing and design capabilities• Understanding of data and data issues in

all their forms• Ability to develop database programs

in-house• Expertise to clean and manipulate

customers’ data• Ability to create data preparation and print

programs in-house• Expertise to undertake database mining• Access to a reliable supplier of litho base

stock used for digital production (ie its owngroup company)

• Flexible workforce• One large customer prepared to adopt the

new technology of variable colour in amajor way to act as a catalyst anddemonstrator for other customers

• Good working relationship with a digitalprinter manufacturer (Xerox) to providelatest expertise and up-to-date equipment

• Innovative management with the vision to‘get it’

Xerox’s role as a manufacturer and provider ofequipment gives its own business model aparticular slant. Its strategy is not just aboutselling boxes to printers but involvesexpanding the market by engaging with

‘demand generators’ (such as marketers andpublishers), ‘demand specifiers’ (such asdesigners and agencies) and ‘demandfulfillers’ (corporate). Xerox has also designedits own ‘profit accelerator’ kit to help printersbuild the right expertise in digital.

Another aspect of the Xerox model iscustomer support and support for training andeducation. Xerox produces a suite of tools toaid business development including profitaccelerator, sales tools and so on, whilesupport for the industry as a whole includesmarketing support, service and workflowintegration. On training, it works closely withRIT: there is a clear belief that collaborationwith the industry’s education facilities isessential to the success of the industry. Xeroxpersonnel also stressed the corporation’sintention of focusing resources on scientificresearch and development (R&D) through RITand the University Leeds in the UK.

Xerox is a well-established multimillion-dollarglobal corporation, so how far its businessmodel can be regarded as applicable to theeveryday digital print company is open toquestion. In his presentation to us on thefuture of digital, Professor Frank Cost of RITmade it clear that, in his perception, the wayforward is to follow the basic model ofproducing shorter and shorter run lengths formore and more people. He is a hugeadvocate of ColorCentric’s business model,which is considered separately in a casestudy in Chapter 7.

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3.1 Interaction with technology suppliers3.2 Interaction with universities and

research sources3.3 Cluster theory in practice?3.4 Integration of the Internet into print

technology3.5 New developments3.6 Observations

The theme of this chapter complements thatof the previous one, but has a slightlydifferent perspective. Whereas the focus inChapter 2 was on products and services andthe marketing of same, here the spotlight ison the technologies themselves and howprint organisations in Rochester and Buffaloare applying them. In the case of theInternet, for example, we have seen howprint companies use their web presence asa marketing or communications tool, but towhat degree the Internet is being integratedinto printers’ technology solutions is ofperhaps greater relevance in the long term.

The mission team members were particularlyconcerned with finding out how printers inthe Rochester and Buffalo areas interact withsuppliers of technology and with universitiesand research bodies. Related to this, does theconcentration of suppliers, universities andprinters in this relatively small area encouragecooperation?

Another key part of the team’s brief was toconsider the technologies themselves andnote and disseminate the latestdevelopments, specifically in inktechnology, hybrid printing technologies,electronic paper, SMS, small-format ink-jet,ink/toner technology, finishing options andwhat can be defined as unique digital printsolutions.

3.1 Interaction with technology

suppliers

In our discussions with digital print companiesand organisations in Rochester and Buffalo,there was a general acceptance thatcollaboration between printers, suppliers andother relevant parties is a good idea. However,on a practical level, there is still a lack ofwillingness and even a level of suspicion thatprevents the parties from working together.Among the printers we talked to, we noted aparticular underlying mistrust of suppliers’methods and motives. ‘Suppliers still say buyour presses and we will get you work. Why?Shouldn’t we be past this?’ was onecomment we heard. Much of the mistrustappears to be driven by the physical proximityof the companies concerned.

Against this, our hosts at Xerox emphasisedthat the role of the supplier in driving themarket is central to the corporation’s plans.As a senior Xerox manager put it to us,‘Increasing the clicks is the way forward, notjust selling boxes’. To this end, the Xeroxmodel includes working closely withmarketing managers to improve awareness,mounting customer events, giving specialproject managers responsibility to work withenterprises, and providing ‘how to’ support asspecialists in digital marketing applications.

Although most of the organisations visited didnot seem to focus greatly on input frommanufacturers and their roles in marketdevelopment, it was apparent from ourdiscussions that Xerox has had a markedcontribution to the way that the printingservice providers (PSPs) sell their services.As if to underline this, we eventuallyestablished that a phrase that we heard from

3 ROLE OF PRINTERS IN EMERGING TECHNOLOGIES

Jon Bailey, Tim Browning, Geoff Thould

several quarters during our visit – ‘Do you getit?’ – had its origin in Xerox salesdevelopment.

Zenger Group reported that it opens its doorsto suppliers in conjunction with new businessand quoted examples of forming strategiclocal partnerships. The company seesnetworking as a great way to share ideas,while founder David Zenger has had closeinvolvement with peer groups such as thePrinting Executive Network (PEN). However,its managers also believe strongly that Zengerhas established a head start in digitalinnovation; understandably, it is looking tomake the gap bigger. The company thereforefreely admits to being slightly more ‘selfish’ inits approach at the present time.

All our hosts agreed that educating themarketplace is important to their ownsuccess and essential to the success of theindustry. Boncraft intends to hold seminars,training days and offer case studies to clientsas part of that process, and the companyseems to have a real involvement in peergroups and sharing information, though notnecessarily within the local area. It isparticularly open regarding discussions andcomparisons with its peers, including suchtopics as reps’ salaries, MIS and even profitand loss.

Kodak NexPress reported that it focuses veryheavily on partnerships with both PSPs andend clients, and that collaborations with othersuppliers is key to developing workflow.People should want to buy a press becauseof its virtues, not because it happens to fit inwith current machines.

A general conclusion is that the focus in theUSA, as evidenced by what we saw inRochester and Buffalo, is more ontechnology advancement and partnershipswith the printers than on volume/marketdevelopment, whereas the UK is morefocused on the end user.

3.2 Interaction with universities and

research sources

If the degree of interaction with technologysuppliers among the organisations we visitedseemed mixed, there was much greaterevidence of interaction with academicinstitutions and of a strong appreciation of itsvalue to the industry. This was equally true of acompany like Lazer Inc, which regards itself asmore than a print organisation alone, as oforganisations that remain primarily print based.All this has much to do with the presence/proximity of RIT, and its importance as atraining provider, a research establishment anda source of potential employees.

RIT plays a major part in the community ofRochester and has a close relationship withprint organisations in the city. Indeed, it is akey part of the area’s infrastructure as well asa fabulously equipped and well-run facility.Many of the staff at Lazer Inc attended RIT,are still in close touch with its lecturers, teachat the institute on a part-time basis and tendto recruit from within it. Kodak NexPress iscurrently working with RIT on stockdevelopment for the market, while the Xeroxbusiness model involves working closely withRIT to promote the value of digital solutionsand how to design for digital print.

RIT itself maintains a long-term strategicfocus on the state of the digital print industry.There is palpable excitement surroundingdigital print and teaching its technologies.RIT’s numerous overseas projects mean thatits staff are continually working with suppliersworldwide, and the institute is actively tryingto develop the global market through coursesin the technology, sales, marketing andapplication of digital print.

RIT has truly integrated itself into the printsupplier network, for example by testingmaterials and inks. From discussions with RITmanagement it is clear that this has beendriven by a desire to relate theory to practical

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experience. This involves not just sendingstudents on six-month placements but onactually building the cause in an industry-focused way – eg applications, case studies,ink testing. Just as important, RIT’scurriculum includes modules on coststructures and business needs.

Some caveats regarding the presence of RITand the role of academic institutions wereexpressed by the Zenger and BoncraftGroups – which are both based at Buffalo,some 70 miles from Rochester. At Zengerthere is an opinion that, although studentsdemand higher salaries when graduating fromRIT, they cannot be put straight into aproduction or ‘live’ role without furthertraining. It is therefore easier and less costlyto recruit from within the industry or to traininternally. Opinion at Boncraft is that RIT’slocation puts Rochester companies at adistinct advantage, and that Buffalo,technologically speaking, is always two tothree years behind its near neighbour.Without this reliance on recruitment from RIT,Boncraft has always trained internally or haspromoted staff from within.

The geographical factor is significant.Although deeply impressive, RIT’ssignificance as a world learning facility doesappear to diminish only 70 miles from itslocation. In some senses, its economic, socialand cultural impact is quite localised. Awayfrom Rochester, migration of staff fromcompany to company is seen as a potentialsource of problems, while recruiting from RITis apparently not considered as a way ofcountering it.

3.3 Cluster theory in practice?

Does the presence of print organisations andRIT in Rochester represent Michael E Porter’s‘cluster theory’ in practice? Porter’s theory4

relates to local industrial agglomeration in the

form of geographic concentrations ofinterconnected companies, specialisedsuppliers, service providers, firms in relatedindustries and associated institutions whichcompete but also cooperate. Companieswork together to identify common concernsand needs, to increase the generalcompetitiveness of the region.

The essence of a cluster is that the value ofthe whole exceeds the sum of its parts, andthat there is a critical mass of competitivesuccess in a particular field, in one locality.Porter suggested that, to grow, clusters mustinnovate, improve productivity, improveaccess to employees and suppliers andinformation, exploit complementarities ofservice or manufacture, generate newbusinesses and engage locally. Regionalgroupings or ‘clusters’ of industry-specificbusinesses, supporting industries andorganisations act as a catalyst for the creationof an innovative environment.

It is clear that, if a cluster of this kind doesexist in this part of the USA, it is highlylocalised to Rochester itself and does notinclude Buffalo. But, as mentioned in Section3.1, the actual level of interaction seemslimited. Rochester’s economic environmentmay actually be too close and tight – toocompetitive in fact – to allow genuinecooperation and complementarity. In addition,as one of the managers at Lazer Incsuggested, the market may have advanced toa level where the need to educate clients inemerging technologies is less.

3.4 Integration of the Internet into

print technology

The observations recorded in Section 2.2 alsoapply here, while Chapter 4 considers therole of the Internet in manufacturing and theconcept of ‘web to print’ in particular.

4 See Porter M E, Clusters and the new economics of competition, Harvard Business Review, 76(6):77-90 (Nov-Dec 1998): www.isc.hbs.edu/econ-clusters.htm

Although Frank Cost of RIT made the shrewdcomment that ‘the Internet is a giant enginefor aggregating content’, the evidence wefound is that print organisations in the USA (if those visited are typical) are falling short oftrue integration of the Internet into printtechnology and that the concept of a‘printanet’ is some way off. Our hosts atCohber Press commented that the Internet islargely used to drive the business but is notreally automated: orders received via the webstill need to be put out manually on the press.Web links and e-mail marketing are allowingconsumers to become more brand aware andallowing businesses tighter control of theirmarketing, but the impetus is to drivevolume, not exploit the available technology.

Our RIT hosts made two key observations onthis subject. First, e-commerce solutionsrarely extend beyond showing marketingcollateral: no-one is using the Internet fullythrough to distribution or trading. Second,putting material onto the Internet enables thereduction of data to allow surfing and quickinteraction, while the production andextraction of data from the net into printallows the expansion of information, creatingmore information and hence a longerinteraction period. As Frank Cost of RIT put it,‘people surf the web but deep-sea dive into abook’. In other words, putting information onthe web allows quick access to a mass ofinformation so everything is reduced to allowus to surf and scan. When you then extractthat information into a published piece like abook, that information is massively expandedto become a very in-depth wealth ofinformation, so you spend a lot of time in it –hence, deep-sea dive!

As suggested in Chapter 2, a prime benefit ofthe Internet is that it reduces the supplychain. John Lacagnina at ColorCentric evenventured that he was not interested inprinting as such but more in creating ashorter supply chain – an example of what hecalled ‘disruptive technology’. By focusing on

reducing the supply chain, it is possible tocreate a new business genuinely based ondigital technology, not migration.

3.5 New developments

Inevitably, there was some reluctance on thepart of the organisations visited to discussparticular technologies. Xerox, for example,stressed the qualities of improved speed,quality and reliability but would not commititself more specifically. However, these weresome of the specific developmentshighlighted by our hosts as having thegreatest potential:

• Ink-jet technology will aid the take-up of‘transpromo’ applications, which are set tocombine transactional printing andcommercial printing (Kodak NexPress)

• Near-line finishing using press technologyoffers the benefit of speed, smootherhandling and no waste (NexPress)

• Micro-capable inks (NexPress)• A B2 cut sheet digital device (NexPress)• Greater colour accuracy linked to pricing

will bring new ways of costing (NexPress)• JDF standard is pending (ColorCentric)• Auto-optimisation of images (ColorCentric)• In-line UV coater currently under test

(ColorCentric)• Three-dimensional (3D) soft proofing

(Xerox)• Incremental improvements in

electrophotography technology to improvespeed and quality (Zenger)

Cohber Press identified ink-jet technology as‘the next big thing’ and Versamark as just thestart, a view echoed by Zenger, and it wasinteresting, but not surprising, to note somecoolness towards ink-jet on the part of Xerox.Kodak NexPress suggested that high-speedink-jet will improve over the next five years butwill take 10 to 15 years to really rival offsetquality – a view echoed by Zenger, which feltthat ink-jet would compete favourably withelectrophotography in about a decade.

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Beyond these specifics, our hosts identifiedareas where existing or new techniques (or acombination of both) are likely to have themost impact, including:

1 Improved understanding among printersand clients of data, particularly with regardto the tracking of responses (Zenger/Xerox)

2 Combining technologies – ink-jet, offset,digital, online (Kodak NexPress)

3 Greater focus on distribution of products,packing and shipping (ColorCentric/RIT)

4 Greater efficiency, speed and flexibility inbook production (RIT)

5 New avenues in book production, eg high-value medical books (Xerox)

6 Greater focus on improved image quality,productivity and reliability rather thanspeed or lower prices (RIT)

3.6 Observations

Even though most of our hosts stated thatthere is still a lot of life in electronic printtechnology, we were surprised how few ‘newand exciting’ developments were highlightedin relation to press technology. This may bedue to the general belief that it is the marketthat is driving new technology, not themanufacturers as previously.

Clearly, e-mail portals and web developmentsare set to be more and more important inpurchasing decisions. Likewise, SMSmessaging in combination with printedmatter, and SMS proofing and job tracking arehigh in the thoughts of the more advancedcompanies we visited.

Workflow is absolutely key to future thinking.There seems to be a consensus that theamalgamation of all technologies is the wayforward, in which case one workflow systemto suit all platforms is going to be central inthe sales strategy to increase both pressesand clicks in the marketplace.

Finishing developments are also high profileat the moment. Most see these as a way ofextending the offering, and PSPs believe it tobe a great way to add value. Xerox has madefinishing link into vertical markets by focusingon in-line. One very interesting idea thatemerged from NexPress was a near-linefinishing kit using press technology, whichwould allow excellent paper handling, speedmatching and flexibility.

We expect a great deal of new developmentwork on ink technology and colour accuracywith special inks (including metallic,magnetic, security inks). This will not onlydevelop the offering from the manufacturersbut will allow specific applications such aspackaging to move to digital.

Book publishing is seen as a major growthapplication. Those who have moved into it (eg ColorCentric) seem to be growing at thefastest rate. It may be only a matter of timebefore it enjoys similar growth in the UK.

‘Transpromo’ is the other application on manylips, meaning the combination of transactionalwork with promotional pieces to add value.Xerox believes that transactional printers willneed to start learning about colour andmarketing and that commercial printers willenjoy a head start as they already know thedirect-mail world.

The casino market is massive in Rochester,and all the digital companies spoke of it as abig part of their digital business. This issomething the UK should start tounderstand with the advent of ‘supercasinos’ on our shores.

There is a lot of discussion regarding ink-jetdevelopments. If ink-jet can combine thequality of its large format with the speed of itssmall format (like Versamark) then it offers anoutstanding business proposition. The speedand versatility would be very difficult to ignoreand would allow pricing to be much closer to

offset on larger runs. However, none of themanufacturers seem to be giving any hints thatthis is the way forward. This may be becauseeach would prefer to be the first to introduce it,or that they are simply trying to ensure the lifeof electronic print, which is still relatively young.

Hybrid systems combining the above mayarrive first. The US experience seems tosuggest that various combinations oftechnologies is a way forward. We have theone ‘solution’, we are starting to get the ‘oneworkflow’, so the next development may bethe ‘one output device’. Combining offsetwith ink-jet (Versamark) has arrived; perhapsoffset with a digital capability for longpersonalised runs may be next. Is there alsopotential for a combination of ink-jet andelectrophotography?

Finally, distribution, tracking and data issuesare also high on the agenda as companiesrealise that it is not only finishing that addsvalue to the printed page but the integrity ofthe products when they reach the end user.

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Exhibit 3.1 Mission team outside Kodak NexPress; L to R: Geoff Thould, Tim Browning, Scotch Kirkpatrick, Jon Bailey, Dr Long Lin, Richard Knowles; Mike Hopkins is behind the camera

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4.1 Efficiency and workflow4.2 Finishing issues4.3 Software solutions – bespoke or off-

the-shelf?4.4 Adoption of new technologies4.5 Observations on new technology

adoption

An important element of the mission team’sinvestigations was to look closely at the roleof manufacturing within the digital printindustry in Rochester and Buffalo –particularly with a view to identifying bestpractice and assessing the implementationand value of workflow solutions. In thischapter we present our observations and anumber of key conclusions. Some of theissues have already been touched upon inearlier chapters – most obviously, theadoption of new technologies – but the focushere is specifically on the manufacturingprocess and on the reality or otherwise of‘web-to-print’.

4.1 Efficiency and workflow

Efficiency in manufacturing is clearly afundamental concern of, and motivator for, allthe organisations that the mission teamvisited. As one of the management team atMercury Print Productions put it, the primaryemphasis is on lean manufacturing as ameans to increasing productivity – indeed, asJeff Quartley of Mercury commented, thecompany is ‘trying to shift into amanufacturing mindset, not printing’. Costsavings, not necessarily customerrequirements, are the main driver here. ForRIT, ‘lean manufacturing’ means focusing onproducing more with less staff, though ourhost from Cohber Press also emphasisedintegration of processes as being vital: he

suggested that one very important factor inthe success of a digital production house ishaving mailing facilities on site.

Integration was a keyword that we heard onmany occasions, usually in connection withworkflow. For Xerox, an integrated workflowallows the narrowing down of the supplychain and consequently a reduction in costsand time. Xerox informed us that the newestaddition to developments focusing onworkflow is FreeFlow, an integrated workflowsolution that combines with MIS and crossplatform to fully integrate all aspects ofproduction, both offset and digital. What isdifferent about FreeFlow is that it alsofocuses on business aspects, includingcosting and distribution.

Our hosts at Kodak NexPress suggested thatthe market is now demanding a singleworkflow solution to suit all platforms – MIS,digital, litho and online – and that the adventof JDF will allow this to become a reality.Cohber Press also echoed this view butpointed out that, while its staff are activelypreparing for JDF, not all departments cancope with it yet – finishing, for example, iswell behind. PDF workflow remains excellentfor proofing of static work and best forartwork/job creation.

ColorCentric ventured that workflow is key tothe success of the company, and that aproperly integrated workflow – one solutionand one output device for one product – is aworking reality here. ColorCentric does ofcourse perceive itself as an Internet companyrather than a printer, and the net is morecentral to its business than it is to any of theother organisations visited. On the issue ofPDF v JDF, company opinion is that, while

4 ROLE OF MANUFACTURING BEST PRACTICE

Jon Bailey, Tim Browning, Geoff Thould

JDF has great potential, global understandingand standardisation of JDF technology isessential if is to supersede PDF.

Like ColorCentric, Zenger Group believes thatthe market drives efficiency and workflow, yetit does not have an Internet approach assuch. With a main management team drawnfrom strong IT backgrounds, it focuses heavilyon software solutions. For its static workflow,the company has invested in a system calledNexus which is designed to complement allaspects of static work including offset, digitaland direct mail. It links into the MIS systemto allow complete control. For variable work,Zenger has just implemented XMPie but hasfound that it struggled to cope with a 17,000personalised colour run.

Boncraft Group is in the process of setting upa specific digital workflow. The companycurrently uses Prynergy but it wants digital tohave a different workflow initially so that it canretain more control over costs. For Boncraft,PDF workflow for static work remains thepreferred route and there are no plans forimplementing JDF or full automation.

In summary, it is fair to say that workflow isabsolutely key to everyone’s future thinkingand is being driven very much by themanufacturers. In each group of companies,there seems to be a consensus that theamalgamation of all technologies is the wayforward. The mission team’s view is thathaving one workflow to suit all platforms willbe central in the sales strategy to increaseboth presses and clicks in the marketplace.More than this, we can also see it movinginto the MIS market, as in FreeFlow andSMART Board, by linking into current MISsystems to analyse business needs anddeveloping further to be an MIS, too. This willmean that digital technology will become thebackbone of commercial printers rather thanan add-on production capability.

Workflow does not seem to be customer-driven. It is application-driven to an extent,particularly for the innovators in specificapplications such as ColorCentric, but thenthese applications are driven by the PSP. Theother workflow solutions seem to be linkedto the need for cost reduction to improvemargins and to aid the commercial printers towork with their ever increasing portfolio ofmachines and services. Manufacturingimprovements, however, all seem to bedriven by cost, not by the market.

The need to focus on reducing the supplychain is linked totally with workflow, leanmanufacturing and automation issues. Withan automated online presence, a company’soffering goes from local to global!

Lean manufacturing and internal procedurestreamlining is seen as an essential part ofmaintaining margin. As an industry, we mustbecome less intensive, with automation thekey. Those organisations which are reallyexploiting digital have an automated onlinepresence, workflows, front ends and finishing– up to 80% automated processes in thecase of ColorCentric.

PDF is seen as the most important way ofworking. There is a lack of understanding of,or inclination towards adopting JDFtechnology. An RIT professor summed this upwell when he commented on our constantdesire to adapt already very effectivetechnology – ‘It’s PDF until we die!’ The viewfrom RIT is that PDF works perfectly, so whychange? Too many are focusing on finding a‘big’ worldwide solution, such as JDF, ratherthan focusing on the small solution that willwork for the required application.

Web-to-print offers the global solution and willincrease a company’s business massively.Web-to-print is a reality but needs properfocus if it is to work. It cannot be simply‘expected’ to work and add value.

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To reiterate a point made earlier, web-to-printsolutions allow us to fully exploit currenttechnology. It is a reality, but only to thosewho realise this point.

4.2 Finishing issues

Our pointed question to all our hosts – ‘Isfinishing a pain in the neck or a chance tomake money?’ – produced a lively response.The Cohber Press view is that finishing cangenuinely add value and that it only causes aproblem on short-run work. Boncraft, too,described finishing as a real added-valueproduct and referred to its recent opening of afull in-house bindery service. ColorCentriccontradicted this, suggesting that no-one in theUSA has as yet put an emphasis on finishingas an added-value service with which they candifferentiate themselves from the competition.

RIT’s catalogue business model places aparticular importance on in-line finishing. ForXerox, finishing is far from being a source ofpain but is a major part of the corporation’simprovement plans. For Zenger, finishingneeds to be near-line as it deals in multipleproducts and so requires the flexibility; it alsohighlighted hand finishing as an area that iscontinuing to grow. As a company with a lotof applications, Mercury wants near-linefinishing as part of its digital offering ratherthan in-line finishing, due to issues ofcapacity and flexibility. It is noticeable thatMercury put more emphasis than others onfinishing quality.

It appears that finishing is not really aprimary business concern among thecompanies we visited. Rather, it is anafterthought. It is clear that in-line finishing isbest by far for specialised applications; near-line for commercial applications. It is likelythat finishing will play a key role in thedevelopment of digital technology, with moreand more people – suppliers, educationfacilities, end users – throughout the chainrealising its importance.

4.3 Software solutions – bespoke or

off-the-shelf?

The issue of the merits of bespoke over off-the-shelf software solutions is a perennial one.We canvassed our hosts for their opinions andexperience. Cohber Press reported that itsonline system is bespoke to allow mostflexibility, but that their MIS is off-the-shelf andhas limitations. The issue for Kodak NexPressis that, although many software solutions areavailable, none offer everything, so thebespoke route is most appropriate. It detectsa trend in decreasing the number of thesesystems to a small, elite group.

Lazer Inc uses bespoke software systemsthroughout, seeing them as ‘the backbone ofthe company’, and a massive amount of timeand resources has been put into theirimplementation. Oser Press paid what itdescribed as a lot of money for a bespokesystem, having found nothing appropriatethat was available off-the-shelf. This was alsotrue of Zenger Group, whose workflowsystems are all off-the-shelf purchases –which is surprising given the IT backgroundof its managers. They confessed toundertaking some ‘tweaking’ internally tosuit company needs.

ColorCentric and Mercury again offer avaluable comparison. ColorCentric managersinsisted that bespoke solutions are needed toensure that production is truly automated,and that off-the-shelf packages do not givethe degree of flexibility they demand.Because Mercury focuses on manufacturing,all its software is purchased off-the-shelf.ColorCentric argues that bespoke systemsoffer more integration, and it puts a lot ofresources into IT in-house to get softwaresolutions off the ground. RIT staff agreed thatsoftware must be bespoke if it is to be trulyintegrated: a company must have an ITdepartment integrated into its digital printsolution, and its personnel must be experts inits digital interface.

Our conclusion is that any off-the-shelfsoftware will only play a minor role in abusiness: no organisation can build abusiness around it. Bespoke systems arethe key to success but companies mustplace them at the heart of the business.Having said this, there is also a move froma multiplicity of off-the-shelf systemstowards an elite set of off-the-shelfsoftware that can do a lot more and so offermore flexibility.

A lot of the discussion regarding softwareseems to revolve around cost: bespokesystems will always appear expensive tothose companies which don’t have anapplication to pay for it.

4.4 Adoption of new technologies

The mission team sought answers to threespecific questions related to new technology:

• What drives the adoption of newtechnologies – cost reduction or marketdevelopment?

• Is the cost of technology impeding wideradoption?

• Does the relative lack of profitability ofmarkets inhibit the adoption of newtechnology?

Many of the organisations visited could speakfrom direct experience of what had promptedthem to adopt new technologies in the past.Cohber Press moved into digital print inresponse to market pressures. BoncraftGroup entered the direct-mail field inresponse to a client’s requirements (seeChapter 2) and went digital for the samereason. While this may seem a perfectexample of the market driving technologyadoption, the company also reported thatsome of its technology purchases –specifically, black and white lasering devices –were made to meet client needs but are nowsitting idle.

Boncraft suggested that client retention isalso an important driver of new technologyadoption: adding new services orcapabilities adds value and limitscompetition. Cost has been an issue inadoption but Boncraft’s policy is that thecompany needs to move on to ensure thatit stays up with the market leaders.

Cost reduction is an important motivatorbehind new technology adoption, which iswhy Cohber Press prices jobs on a’percentage of response’ basis, as initialcosts can scare clients away. However,opinion at Zenger Group is that cost does notparticularly impede wider adoption and thatlack of customer knowledge or education inthe possibilities of the technology – especiallyin relation to data – may also be an inhibitingfactor. Where the technology leads to cleartechnical improvements, the market iswelcoming. This is especially the case withsomething like colour accuracy,improvements to which have in part been aresponse to rising customer expectations.

Our hosts at RIT doubted the role of cost indriving the market: the beauty of digitalapplication is that its benefits far outweighthe costs. They also pointed out thatchallenging the market in itself helps to drivetechnology, as well as countering the lack ofknowledge and understanding of the benefitsof digital which remain barriers to adoption.

Xerox has the advantage of a globalperspective on this issue: it gets differentresponses from each European country as towhat drives the market and the technology.While agreeing that perceived high cost hasbeen a factor in the slow uptake of newtechnology, Xerox’s stance is that the marketis indeed driving the technology, especially inbook publishing. An excellent example of thisis the packaging market: the need for greaterprotection and security against counterfeitingmedical supplies was the catalyst for theintroduction of UV coatings on iGens and

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gloss mark technology. The comment fromTony Federino of Xerox that ‘we like to learnfrom our customers’ is apposite here.

4.5 Observations on new technology

adoption

Most of the organisations visited shared theview that, while it was once true that the bigmanufacturers drove new technology, this hasnow completely changed and the market isnow the prime driver in its adoption. From aPSP perspective, however, this is not always agood thing. A business has to be really carefulwhen investing in expensive technology forcustomers if it is not truly in the customers’long-term plans. Boncraft’s experience ofmachines sitting empty is salutary. Thishighlights the issue of companies moving intodigital print because they feel they have to.Most of the key players to whom the missionteam spoke, including suppliers andparticularly the industry associations, havebeen very specific in regarding digital as partof a commercial company’s portfolio toembrace all technologies, not as a solution tosave a company.

It can only be a good thing if all parties thinkthat they are responsible for drivingtechnology, as this will ensure that no-oneis relying on other parts of the chain to do itfor them.

That new technology can also drive oldtechnology is proved by the example ofMercury increasing litho volumes among itsclients. Offset volumes grow whencompanies go digital.

As the market is buoyant and margins veryprofitable compared to traditional print, thecost of digital print is not seen as an issue ininhibiting wider adoption. The issue of presstechnology remains, however. Looking at theindustry, many want to go digital, and see theneed for doing so, but it does require a verybig financial investment. There seems to be a

need to go into digital on a large scale – iGen,HP, NexPress – but Xerox do offer more cost-efficient press alternatives, so some areinvesting in this technology first. Will thiswork against the bigger, cheaper clicks andbetter quality machines?

As both a standalone technology and as anintegrated technology, digital print is veryprofitable in the USA at the moment. Eventhose dealing in small volumes see digitalprint as a profitable business model.Academic institutions such as RIT clearly havea major role in challenging the market to driveadoption of new technology, but the onus ison all areas of the industry to maintain thedrive by working in combination, including:manufacturers; PSPs who are passionateabout digital; partners, clients and end userswho have had application problems solved;and the education facilities who question anddevelop both the theory and practice of digitalprint application and implementation. Thedigital print industry is one of the fewindustries where all aspects of the chaincombine to drive the market, drive technologyand drive adoption.

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Exhibit 4.1 Inside an iGen3 at Xerox Corp

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5.1 Digital sales people – a separatebreed?

5.2 Rewarding digital sales people5.3 Training digital sales staff5.4 Trade associations – a promoting role5.5 Opinions about the PIA

As a relatively new technology with a growingnumber of applications, digital print has keyadvantages over conventional print which arebecoming progressively better appreciatedwithin the marketplace. A recurring theme ofthe mission team’s discussions with printorganisations in Rochester and Buffalo wasthe promotion of the digital message, both inthe broad sense of communicating thebenefits of digital printing to a wider marketand in the more specific, everyday sense ofselling digital products and services – in otherwords, are there aspects of selling digitalprint that the UK industry can learn from itsUS counterpart? Cohber Press, for example,uses free mailings to demonstrate theeffectiveness of personalisation to itscustomers – and gets a 10% response.

This chapter summarises our findings on bothcounts. On sales issues, we sought to findout how the sales teams at our hostorganisations operate – whether, for example,they sell both conventional and digital print;whether the priority is to sell the value of thesolution to the customer rather than simplycost per copy; whether selling digital printrequires a different approach from that ofselling conventional print; how digital salespeople are rewarded; and who trains them.

On the wider issue of promoting the digitalmessage, a particular area of interest was therole of the main local trade association, thePrinting and Imaging Association of New York

State (PIA of NYS), in the development of thedigital market. How does that role fit with itsother objectives such as productivityimprovement and training – and, mostimportantly, how do the print organisationswe visited perceive their regional PIA’seffectiveness and value?

5.1 Digital sales people – a separate

breed?

The organisations we visited all handle theirown sales via in-house teams, with only twoselling via traditional resellers of print such asbrokers or print management companies.However, a large amount of digital print salesto the consumer is now generated by VARssuch as Lulu.com, that market digitalproducts via the Internet.

We gained no real sense that digital salespeople possess or require any differentcharacteristics to those selling conventionalprint, beyond the technical competence andknowledge to understand data and IT issues.As Jeff Quartley at Mercury Print Productionssuggested, ‘technical knowledge makes youtrusted by the customer’. His view was thatthe ideal sales person should be able to sellacross both disciplines, as one feeds off theother and it is essential to understand bothprinting processes.

Boncraft Group reported good sales forvariable digital colour and that its sales peopleare promoting the new serviceenthusiastically. Sales personnel areencouraged to sell the advantages of digitalprinting as a concept rather than print as justa commodity.

5 SELLING AND PROMOTING THE DIGITAL MESSAGE

Richard Knowles, Scotch Kirkpatrick, Mike Hopkins

Steve Zenger at Zenger Group referred to thecompany’s reliance on an ‘integrated salesapproach’, ie combining digital andconventional and favouring one over theother only as the most appropriate solutionto a particular requirement. However, Zengerdoes not have a dedicated sales force assuch: the company is run by six brotherswho each have a hand in sales. The majorityof sales are handled by the managers andinternal staff who have a good technicalunderstanding of digital print and have theability to offer unique and effective solutionsto customer requirements.

John Lacagnina at ColorCentric disputed thatsales people could sell both offset anddigital. As he put it, ‘offset and digital are notthe same just because they share the wordprinting… a sales person cannot sell bothoffset and digital as they will always revertto selling volume’. Opinion at Cohber Press –whose ratio of 16 sales staff and 12 salessupport staff to a total personnel of 139 wasfairly typical of the organisations visited –was that digital sales require youngerpeople. Although Cohber’s sales people sellacross the range of products, it wasapparent that the younger generation ofsales personnel are gravitating towardsdigital print while the experienced, oldersales people (generally over 50) retain afocus on traditional litho products.

But if digital sales people require expertise inadditional areas – which is not dependent onage – do they also require a ‘solution sale’approach? The answer that came throughwas ‘Yes, but then a solution sale approachwould give an advantage in any salessituation’. There was general agreement thatsales people do need to adopt a certaindigital mindset, focused on selling the valueof the solution to the customer rather thanthe cost per copy (which is normally muchhigher anyway). This echoes Jeff Quartley’spoint about trust in the printer’s knowledge –or, as Steve Zenger described it, the

confidence the customer has that ‘we willfind a way to do anything – we have a lot ofsmart people’.

‘Solution sale’ is a form of consultancy,though none of the companies portrays itselfas a consultancy as such or charges forconsultancy services. The point is thatsolution sales encourage not only goodwillbut repeat business, customer retention andword-of-mouth referral, which is why SteveZenger was able to assert that his companyhas ‘no official sales force. We have 700customers, that’s the sales force’.

5.2 Rewarding digital sales people

The norm in the print industry in the USA isfor sales people to be paid a basic salarywith a commission based on a percentageof ‘added value’. Examples of salarypackages include:

• Cohber Press: between $60,000(~£33,000) and $100,000 (~£56,000) withcommission of around 6% and a lot ofincentives; basic pay is cut if the employeedoes not reach sales targets

• Lazer Digital Services: a ‘large’ basic +commission, usually after a probationaryperiod of one to two years

• Boncraft Group: packages linked to valueadded on turnover

‘Added value’ is a concept almost sacred tothe US sales milieu and has a doublemeaning. On the one hand it refers not just tohow a sales person performs in terms oftarget orders but to what they bring to thecompany in terms of fostering customerrelationships through solution provision. Onthe other, it refers to the sales person’s abilityto add value for the customer by providingsolutions – for example, by stressing the fullcapabilities of the equipment available and itsbenefits to the customer rather than sellingvariable data printing simply as a commodity.Steve Zenger was blunt on this matter:

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‘Doing stuff that doesn’t add value for thecustomer will get you fired.’

5.3 Training digital sales staff

The importance of RIT as a supplier of highlyskilled and well trained recruits to the digitalprint industry in and around Rochester (and toa lesser extent Buffalo) has been commentedon at several points in this report, and theinstitute’s role in maintaining and improvingskill levels via training is explored in Chapter 6.But is there as much emphasis on trainingselling skills as on training in technology?

Most but not all of the companies visitedrecruit from RIT. Around 35% of the currentworkforce at Lazer Inc are former RITstudents, while RIT graduates have a strongpresence in many of the companies’management teams. ColorCentric’s JohnLacagnina is a prime example.

Jeff Quartley at Mercury told us that hiscompany takes three or four ‘co-op’ studentsfrom RIT each year to work in production orproject work. He had just hired two RITgraduates – one of whom was a former co-opstudent – to start as customer servicerepresentatives (CSRs) and then use theirtechnical background in digital sales.

RIT is also an ongoing source of training inspecific skills – both technology- and sales-based – for companies in the locality andrelies upon them for approximately two thirdsof its training revenue. Otherwise, the mainsources for training of sales staff are thesuppliers of equipment and technologythemselves, who offer essential producttraining and case studies, and tradeassociations such as the PIA, Xplor and DMIA,which offer specific digital print training.

Having acquired a Xerox 8000 colour digitalpress, Boncraft Group appointed a former

Xerox executive in September 2005 to assistand train its sales force.

Not surprisingly, many of the organisationswe visited stated that the most commonform of training was regular on-the-jobtraining and everyday learning from directworking experience.

5.4 Trade associations – a promoting

role

Promoting the interests of the graphiccommunications industry as a whole in thiscorner of the USA is the Printing and ImagingAssociation of New York State. PIA of NYS isa non-profit making trade associationcovering upstate New York and northwesternPennsylvania. As its website5 states, it is ‘in the business of promoting programs,services and an environment which helps itsmembers operate profitably.’ It currently has275 member companies.

Membership of PIA of NYS includesmembership of Printing Industries of America(PIA) and the Graphic Arts TechnicalFoundation (GATF) and access to the GraphicArts Information Network (GAIN). Collectively,these organisations comprise the world'slargest association representing the graphiccommunications industry. Serving theinterests of more than 12,000 membercompanies, PIA/GATF and its affiliates deliverproducts and services that enhance thegrowth, efficiency and profitability of theirmembers and the industry through advocacy,education, research and technical information.

A key focus of their collective activities istraining and development. A quick glancethrough their events calendar for 2006 gives asense of the range of such services offeredthat are of relevance to the digital printindustry. Topics include:

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5 www.printnys.org

• Orientation to the graphic arts for salesand customer service representatives

• UV printing for sheetfed offset ‘to reducethe learning curve when implementinghybrid technology’

• Implementing colour management• Advanced PDF for print and beyond to

enable streamlining of workflow • Mission possible: seminars for creatives

and printers• Package printing for the commercial printer• Supervising print production • Implementing a JDF workflow

An example of the PIA/GATF effort inpromoting the digital print industry is theDigital Printing Council (DPC), established inJanuary 2006 and including Adobe, Canon,EFI, Hewlett Packard, Kodak and Xeroxamong its sponsors. The function of the DPCis to provide members and the printingindustry as a whole with informative toolsand publications that are designed to helpfirms be more productive, efficient andgenerate more sales with new digitaltechnologies. It focuses on building researchand awareness about digital and personalisedprinting to enhance members' knowledgeabout its applications.

Most of this information comes in the form ofpublications, newsletters and other printedproducts. The DPC also makes available anonline archive of materials for access by thepublic and by members. As part of theirmembership, members receiveDesigning4Digital, a multimedia customereducation package series.

PIA/GATF has declared 2006 ‘the year ofdigital print’. DPC initiatives for the yearinclude the Marketing 4 Digital (M4D)educational outreach programme, which isdescribed as ‘a unique and extensiveresearch project giving digital and

conventional printers the information andinsight they need to sell their services to24 specific vertical market segments’.6 Thefirst seminar in this series was presented inSan Francisco by Frank Romano, ProfessorEmeritus of RIT.

To paraphrase the same press release, M4Dwill provide companies and their sales staffwith the tools they need to understand therequirements of current and potentialcustomers in over 24 vertical segments,which include advertising agencies, thehealthcare sector, casinos, the hospitalityindustry, insurance and real estate.

In addition to M4D, DPC research studiesinclude ‘The Future of Direct Mail’,‘Compensating Your Digital Team’, and‘Compensation, Incentives, and Bonus Plans:Design, Implementation and Evaluation’.Further information about M4D can be foundat DPC’s website.7

5.5 Opinions about the PIA

All but one of the mission team’s hostorganisations is a member of PIA of NYS;each has a different take on the benefits ofmembership, which include privileged pricing.PIA has a national deal with Xerox whichgives members an excellent price on thelatter’s products and kicks back to theassociation at both national and local level.Though our host at Cohber Press thought thata slightly better price could be achieved byprinters acting individually, they felt theyshould be supporting their own organisation.Similarly, our host at Lazer Inc explained thatbecoming a member of the PIA is astatement – a means of showing that yourcompany is part of the wider industry.

Steve Zenger of Zenger Group alsomentioned price benefits. The company

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6 DPC press release, 20 February 2006

7 www.digitalprintingcouncil.com

bought its iGen3 through a PIA deal, eventhough it might have been slightly cheaperelsewhere. Zenger also quoted the PIA’sinsurance programmes, its ability to lobby onbehalf of the industry, its guidance regardinghuman resources and health and safety, andits role as a vehicle for sharing information asbeing prime reasons for membership.

However, Zenger was even more enthusiasticabout the Printing Executive Network (PEN)of which his company is a member. This is agroup of eleven like-minded companies fromall over the USA that enjoy a full and frankexchange of information right down to profitand loss. They visit each other’s businessesand share constructive criticism. This ‘veryvaluable’ vehicle is not PIA-organised.

Xerox is prominent in the PIA nationally andsponsors DPC initiatives. RIT is also active inthe PIA both nationally and locally, andwelcomes the M4D initiative for putting thefocus on what the client needs – steppinginside ‘the client’s shoes’ – rather than presstechnology.

Finally, it is slightly paradoxical that Lazer Inc,which is not primarily a printing company,wishes to associate with the PIA and otherprinter bodies while the owners ofColorCentric – which pitches itself primarily asan Internet company yet is in the business ofprinting one of the industry’s most traditionalproducts, books – do not feel that the PIA isthe right organisation for them. For all thecapacity of digital to blur the boundariesbetween the worlds of print, IT and theInternet, it is surprising that perhaps the mostinnovative company we visited chooses tostand apart from the rest of the industry.

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6.1 Rochester Institute of Technology6.2 RIT as a centre of research6.3 RIT and new thinking6.4 Education levels and recruitment6.5 Lessons for the UK

It goes without saying that focused, high-quality education and training is fundamentalto the future of any industry – and particularlyto the future of an industry such as digitalprint, where innovation and change are reliantnot simply on the imparting and exchange ofknowledge but on a constant process of R&Dof new products and applications.

One of the contributions to the growth of theRochester/Buffalo region as a printing hub hasbeen the presence in Rochester of one of thecountry’s outstanding vocational colleges,Rochester Institute of Technology (RIT). Overthe years, RIT has fostered the talents ofseveral important figures within the Americanprint industry including Tom Curley, Presidentand CEO of Associated Press and DanielCarp, former Chairman of Eastman Kodak.

RIT has developed close relationships withmany of the principal print and print-relatedorganisations at local, national andinternational level. It continues to be the mainsource of recruitment for the graphic artsindustries, both in or around Rochester andmuch further afield.

The mission team chose to visit RIT becauseof its reputation as a centre of knowledgeand expertise, and because of its record ofsuccessful collaboration with the industryitself. Although the UK does have somecounterparts to RIT, notably the University ofLeeds and the University of Arts, London,the scale and nature of collaboration

between Britain’s academic establishmentand its printing industry is clearly notcomparable. Our objective was to lookclosely at RIT’s philosophy and methods witha view to assessing how much the UK canlearn from them.

More broadly, we were concerned withexploring:

• The profile of training and education in theworkforce of the region’s print industry

• Interaction with educationalestablishments in terms of R&D,recruitment and training

• The importance of training and interactionwith academic establishments asperceived by the industry

6.1 Rochester Institute of Technology

RIT was founded in 1829 as a private highereducation institute, the RochesterAthenaeum, and merged with the MechanicsInstitute in 1891 to become the RochesterAthenaeum and Mechanics Institute. Itbecame the Rochester Institute of Technologyin 1944 and moved to its present site, justoutside the city limits in Henrietta, New YorkState, in 1968.

Today, RIT has over 15,000 students acrosseight colleges and disciplines includingengineering, business and computing. Thecollege also runs three schools in Europe – inPrague (Czech Republic), Dubrovnik (Croatia)and Kosovo. RIT has an annual budget of$423 million (~£235 million; 2005-06 figures).

RIT’s Chester Carlson Center for ImagingScience was founded in 1986 and began itsfirst doctoral programme in imaging science

6 EDUCATION AND TRAINING

Dr Long Lin

three years later. It houses six schoolsincluding the School of Print Media and offersprofessional courses in areas such asphotography, film, animation, design, fine artsand crafts. The School of Print Media currentlyhas 250 undergraduates and five postgraduatestudents. The School also runs web-basedteaching programmes which have provedparticularly attractive to international students.

The School follows an undergraduate andpostgraduate curriculum that is highly relevantand tailored to the graphic arts industry, withwhich it retains strong local and national links.Experts working within the graphic artsindustry (often RIT graduates themselves)give regular lectures at RIT.

Internship is an integral part of many of thecourses, cementing the links between theSchool and industry and providing companieswith excellent opportunities to recruit newemployees. For the student, internship offersan opportunity for hands-on learning – and tobecome familiar, comfortable and confidentwith their chosen career direction.

RIT also runs Industry Education Programs(IEPs) for companies which are designed toenhance production skills and keep personnelup to speed with the latest technologies.IEPs provide workforce training in traditionaland digital technologies using collegefacilities. They can be customised to suit acompany's specific needs and run on campusor at company sites.

Short training programmes (mostly run overthree days) include Colour Control for theProduction Pressroom, Workflows for Print,and Digital Colour and Variable Data Printing.

6.2 RIT as a centre of research

In addition to its educational provision, RIT isunique within the region in that it also

engages in a significant level of researchactivities – again in collaboration with theprint industry. These activities are themedaround two areas – business models, markettrends and logistics relevant to graphic arts,and imaging science and technology (S&T).

The focus of its research activities in thisregard is the Printing Industry Center, which isfunded by the Alfred P Sloan Foundation.Established in 2001 to become one of 22Sloan Industry Centers across the USA, thePrinting Industry Center is the jointresponsibility of the School of Print Media andRIT's College of Business. It follows the Sloantradition of applying a broad multidisciplinaryapproach to industry research.

With a mission to study ‘major businessenvironment influences in the printingindustry precipitated by new technologies andsocietal changes’8, the Center addresses theconcerns of the printing industry througheducational outreach and research initiatives.The Center acts as a forum for printingcompanies and associations ‘to access aneutral platform for the dissemination ofknowledge that can be trusted by theindustry, to share ideas, and to build thepartnerships needed to sustain growth andprofitability in a rapidly changing market.’

In addition to the Sloan funding, the Centerreceives a considerable amount of financialsupport from the graphic arts industries,including Xerox, Kodak and HP. It is, however,now self-sustainable thanks to the incomegenerated through services provided to theindustry. Those services include:

• Evaluation of printing consumables• Product development• Product audits• Troubleshooting• Printing process measurement and control

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8 www.rit.edu/~spms/research.html

The Center has also established itself as thecertified centre for print media evaluation forboth HP Indigo and Kodak NexPress.

The Center houses a highly impressive rangeof printing presses, both conventional (egGOSS Sunday 2000 Web Press; HeidelbergSpeedmaster 74 Sheetfed Press; Mark AndyLP3000 Flexographic Press) and digitalsystems (eg Kodak NexPress 2100; XeroxDCP/50D and HP Indigo 1000, w2000, 3050and 5000). The Center also has an enviablecollection of print and media test instrumentsincluding Image Pro Plus Image Analyser;KDY Image Analyser; and Datacolor SF00Plus Colorimeter.

6.3 RIT and new thinking

Every member of the mission team wasdeeply impressed by RIT’s facilities, by itsclose association with the wider graphic artsindustry, by the relevance of its educationand training programmes to the needs ofthe industry, and by its global outlook – itsweb-based educational programmes haveenabled the institute to attract a wideraudience and enhance its internationalreputation. Its establishment of the PrintingIndustry Center has strengthened itsindustrial collaboration significantly.

RIT is also important in another respect – as a centre of challenge to traditionalperceptions about the graphiccommunications industry and how printmedia will develop and change. It is clearlypart of the RIT culture not just to deliverprogrammes and services but to providenew thinking. This is exemplified byProfessor Frank Cost, Associate Dean of theCollege of Imaging Arts and Sciences at RIT,who gave a talk to the mission team on theimportance of book publishing in theInternet age.

Cost’s book, The New Medium of Print,published by RIT, is an introduction to theworld of print that takes as its starting pointnot the technology of print but how peopleuse print and why. Going against conventionalperception, he concludes that the emergenceof the Internet, far from reducing the numberof books printed, has actively promoted bookpublication. As he explains, 60% of all bookscurrently published are not sold whentraditional print methods are used. With theadvent of books on demand through digitalprint, all books are sold. To demonstrate thepower of an ‘Internet-driven print service’,Cost has created a number of instant booksthat are available from Lulu.com.9

6.4 Education levels and recruitment

The mission found that, with regard torecruitment and skill levels, the digital printorganisations visited in Rochester and Buffalohad a similar profile to their UK counterparts.

Within the more production-basedcompanies, the majority of employees are ofrelatively low educational background – iebelow degree level. Recruitment ofemployees is usually based on skill andcapability, and a higher degree in a relevantsubject is not essential. While they areexpected to work in a highly efficient fashion,employees are not generally expected toengage in proactive or innovative thinking. Thegeneral feeling is that most employees arenot highly paid. Basic training for theemployees is provided by the pressmanufacturers.

Within the more prepress and Internet-business based companies, a highproportion of employees have a highereducation background. In some companies,up to 35% of the workforce are educated todegree level. As mentioned earlier, a largeproportion of graduate employees had been

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9 http://people.lulu.com/users/index.php?fHomepage=84641

trained by RIT, and many companies retainclose links with RIT in both training and R&Dprojects – for example, ColorCentric andLazer Inc. Some companies had beenestablished and run by RIT graduates; somehave staff teaching at RIT on a part-timebasis as what are called ‘Adjunct Professors’.Pat Sorce at RIT told us that AdjunctProfessors play a key role in keeping theteaching fresh and up to date.

We witnessed examples of employeesdemonstrating strong working knowledgegained through training. It was obvious thatstaff operating the digital presses at RIT’sPrinting Industry Center had a much deeperunderstanding of the mechanisms of imaging,of the photo drum, of toner transfer and tonerfusing, whereas press operators at a digitalprinting company failed to explain thespecifications of an anilox cylinder (for thevarnishing unit).

Kodak NexPress has a particularly impressiveR&D team that handles very advancedprojects continuously at huge expense. Mostemployees at the R&D centre are graduatesand postgraduates from high-calibreuniversities, including RIT science graduateswho work on imaging research.

Interaction between print companies and RITdecreases dramatically outside the Rochesterarea. Proximity is clearly a factor. Theinclination of companies based in Rochesterto recruit RIT graduates at a higher level ofsalary than they would receive in Buffalomakes recruitment of highly qualified peopleeven more difficult for smaller companies inthe latter city.

To summarise, the mission team noted thatthere are significant differences amonggraphic arts companies in terms ofrecruitment criteria, profile of educationalbackground of employees, and interactionwith academic establishments such as RIT.The main reason is the nature of the

demand of companies for highly science-and technology-based input. Generallyspeaking, however, there appeared to be ahigher percentage of graduate employeeswithin the companies under study thanwould be the case with their UKcounterparts.

We also noted a preference for investing in atrained employee rather than training a newemployee. Employee training generally takesthe internal route and apprenticeprogrammes were rare among thecompanies we visited.

6.5 Lessons for the UK

Until recently, the UK had few universitieswhich were well established in education andtraining of relevance to the graphic artsindustries or which carried out relevantresearch. The reasons are mainly historicaland rooted in the UK educational system.Historically, universities have tended to regardteaching in printing S&T as a deviation fromthe traditional, more fundamental sciences,while carrying out high-standard R&Dactivities in imaging science and printing S&T.Colleges tended not to engage in R&D, whilestill providing highly relevant training forgraphic arts industries.

It is pleasing to see that this situation haschanged significantly in recent years.Examples include the Department of Colourand Polymer Chemistry (at the University ofLeeds) offering a part-time graphic artscourse, whilst carrying out high-standardR&D directly relevant to printing and print-related industries and a communications BScprogramme, and the London College ofCommunication (University of Arts, London)establishing the Materials and the ArtsResearch Centre, whilst providing reputableeducation/training in graphic arts. More suchactivities would help to improve thecompetitiveness of UK graphic arts industriesstill further.

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Also, until recently there have been fewacademic-based research centres whichspecialise in servicing graphic-arts industries.A Digital Print Centre of IndustrialCollaboration at the University of Leeds and aMaterials and the Arts Research Centre at theUniversity of Arts, London, have now beenset up. However, we are certainly falling farbehind our American cousins. The UKGovernment should be committing moreresources to supporting such centres in orderto help UK graphic-arts industries improvetheir competitiveness in what is a challenginginternational environment.

We conclude this section with a number ofobservations/recommendations:

First, the UK printing industry, and particularlythe digital printing industry, needs to be moreaware of the existence of knowledge andexpertise among several academicestablishments, and more proactive inapproaching them regarding collaboration. Thedanger at the moment is that there is no field(apart from UV technology) in which the UKprinting industry could claim to be leading theworld. This puts the UK printing industry in aweaker position than its US counterpart.

Second, the UK academic establishmentssuch as the University of Leeds andUniversity of Arts, London, need to workmore closely with the trade organisations,such as BPIF, to bring more in-depth technicalknowledge and expertise to the printingindustry. Joint initiatives between BPIF anduniversities are likely to be more effectivethan either working alone. The universitiesand BPIF need to seek, on a joint basis, themost effective approach to helping theprinting industry.

Finally, UK government needs to recognisethat the printing industry is under majorpressure to improve its competitivenessrapidly in order to maintain its internationalposition. As such, various relevantgovernment departments need to considerseriously funding initiatives, through BPIF andthe universities, which would be aimed atimproving that competitiveness. To date, theUK’s national government has done little inthis regard, although regional government hasbeen more proactive. Much more needs tobe done before it is too late for the industry.

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Exhibit 6.1 Mission team at RIT; L to R: Tim Browning (front), Jon Bailey (back), Scotch Kirkpatrick, Dr Long Lin, Geoff Thould, Richard Knowles, Pat Sorce (RIT)

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7.1 History, background and scale ofoperation

7.2 Business rationale7.3 Conclusions

A recurring theme of the mission team’s visitto the Rochester/Buffalo region was theapplication of digital print technology to oneof the oldest and most traditional of printingactivities – the creation of books. One of ourhosts, Professor Frank Cost of RIT, gives aninspired exposition of the future of books inthe digital age in his book The New Mediumof Print, arguing that digitisation givesunprecedented new opportunities for shortrun (or even single copy) publishing and that‘amateur’ publishing may well represent theemergence of a new mass market.

In this case study we look briefly at theexample of Rochester-based ColorCentricCorp, which has enjoyed 300% growth yearon year since launching in 2002. Although itsproduct offer is not restricted to self-publishing, ColorCentric has identified acompletely new market for personalisedbooks – whether works of fiction, academictexts or even commemorative photo books oryearbooks. The company has also pioneeredthe technique of marketing its products viavalue-added retailers or resellers (VARs) –officially known as application-specificproviders (ASPs) – using specialist Internetsites.

7.1 History, background and scale of

operation

ColorCentric was founded in September 2002by John Lacagnina, whose first company,Entire Inc, developed the first PostScriptfront-end RIPs for Xerox high-speed

mainframe printers. He subsequently startedElectronic Demand Publishing Inc, whichspecialised in document manufacturing forlarge software and computer companies, and sold the company in 1997. One of theoriginal pioneers of colour printing ondemand, he launched ColorCentric – ‘fromscratch, with a vision and deep pockets’ –because of the potential he saw in the XeroxiGen3 digital press and the potential he sawin the colour book publishing and marketingcommunication markets.

The company won its first orders in early2003 and had over 130 customers by the endof the year. It now employs 50 staff, withsalaries accounting for 10% of turnover.Between 600 and 2,000 orders areprocessed each day.

Publishing accounts for nearly two thirds ofannual revenue, while 35% comes frommarketing communications printing. JohnLacagnina is a believer in lean manufacturing:the whole business premise is set up onautomation with online finishing and bespokesoftware adding controls to incoming files,while the printers/finishers are set up as self-contained cells so that the operation isscaleable and repeatable in another location.

The company currently has three iGen3s withseveral Docutech 180s. To support its short-run business, it has a PDF workflow thatintegrates billing and financial informationwith print-queue management and automatesproduction from the web to paper andelectronic output. The system integratesproprietary Cobra software and severalmodules from the Xerox FreeFlow digitalworkflow collection, along with e-commerceand e-procurement systems from Four51.

7 ‘ELIMINATING THE GATEKEEPER’: COLORCENTRIC – A CASE STUDY

ColorCentric continues to enjoy a strong andfruitful relationship with Xerox, on whosebehalf it regularly tests new products. FrankSteenburgh of Xerox is on the ColorCentricboard.

7.2 Business rationale

Company strategy is to market directly via theweb and through print brokers and partnerswho sell digital full-colour printing to smalloffset-based businesses. Lacagnina definesthe key benefit of ColorCentric services(aside from cost reduction) as ‘getting ourclients’ personalised message to marketfaster’. On the book publishing side,ColorCentric customers are mainly small tomedium-sized publishers of children’s booksor coffee-table books seeking incrementalrevenue, to whom the company deliversquality, flexibility and affordability on shortprint runs.

ColorCentric has a matrix of products andapplications which is shown in Exhibit 7.1.

Lacagnina’s view is that the long-termpotential of on-demand digital printing inbook publishing is in short-run printing forniche markets such as university publishinghouses and also in self-publishing.Historically, the book industry has beenhamstrung by large companies whosepublishing policies and economies of scalemake it virtually impossible for an individualto publish their work. Around half a millionmanuscripts are submitted to publishersannually, of which only 50,000 will beaccepted and eventually reach thebookstalls. This leaves a huge gap offrustrated would-be authors who, until theadvent of digital print, would incur enormouscost in publishing their books themselves.

ColorCentric’s business model is based onultra short-run capability, with the additionalbenefit to a small publisher that a booksuch as an academic work – whose saleswill be small but steady and which will bein continuing demand among studentreaders – can be kept in print at noinvestment cost. Just as important, thespeed with which a book is physicallyproduced is drastically increased whenprinted digitally. It can also be continuallyupdated at minimal cost to reflect newacademic or scientific research, so thecumbersome process of producing secondor revised editions is sidestepped.

As John Lacagnina describes it, his priority isto create a shorter supply chain. ColorCentricincreases profitability and lowers end-usercosts by bypassing several steps in thesupply chain to sell direct to customers.Lacagnina calls this ‘disruptive technology’, inthe sense that it destroys the traditionalcontinuum. In his view, ‘The mainstreampublishing process is controlled by a handfulof publishing Goliaths. It’s burdened withtremendous waste, inefficiencies andunnecessary costs. We have eliminated thegatekeepers and put the power in the handsof the creator.’

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PRODUCTS APPLICATIONS

Photo products

Albums Real estatePostcards Travel logsCalendars Year books

Weddings

Collateral

Business cards Corporatecommunications

Sales literature B2B marketingLabel cards Individual collateralMag cards

Publishing

Manuals TrainingTrade Self-publishing

Universities

Exhibit 7.1 Matrix of products and applications usedby ColorCentric Corp

ColorCentric’s business is currently 90%Internet-driven, its key partner sinceSeptember 2004 being Lulu.com, a websitethat effectively gives everyone the power toget published. Authors and publishers uploadtheir book text to the site, set their ownroyalty and sell the book via the site, either inelectronic form or as a paperback, in colour orblack and white. When an order is placed, therequired digital files are downloaded direct toColorCentric in Rochester for printing on itsiGen presses using a number of standardtemplates. The resulting perfect-boundpaperbacks are high-quality items that cancost as little as $6 a title and are printed andshipped to the customer within 48 hours.Over 13,000 book titles are currently availablevia Lulu.com. ColorCentric’s other ASPpartners include Qoop.com, Sharedbook.comand RIT Open Book.

As of February 2006, ColorCentric’s strategicpartners also include Kirtas Technologies,whose automatic book-scanning/information-capture technology is the only automaticnondestructive digitisation process that useshigh-resolution cameras. The partnership willenable publishers to digitise out-of-print orbacklisted books and make them available tothe public on a short-run or single-copy basis.Not the least of the technology’s benefits isthat publishers will be able to create anddraw upon a convenient digital repositoryrather than store books in a space-consumingand cost-heavy warehouse.

7.3 Conclusions

ColorCentric has an approach that is visionaryon so many levels. Its pursuit of a perceivedgap in the market and its challenge to thetraditional publishing model – with all that thatimplies for lead times, investment, the author-publisher relationship, even the very basis ofadvance/royalties remuneration – make it aclassic example of a company which is notonly using new technology to genuinelyexpand the marketplace but is rethinking the

process of delivery. Its approach is alsoknitted tightly to the Internet in a way thatpushes the boundaries, particularly regardingits relationships with VARs.

As explored elsewhere in this report,however, workflow is key to the success ofthis company, and a commitment toautomation and lean manufacturing is whatenables it to make profits. Its development ofits own bespoke software to control theentire production and fulfilment process isalso exemplary here, making leanmanufacturing possible to a degree thatwould probably not be mirrored if off-the-shelfsolutions were implemented.

ColorCentric brings clients closer to themanufacturing process by integratingtechnology, and it matches benefits such ascost and time reduction to genuinelyinnovative products and services. That is avery powerful combination.

The last word should go to John Lacagninahimself, using a baseball analogy:

‘I believe in hitting singles, and that's howwe've built our business. We prove what wecan do, and it usually leads to more work –and to the occasional grand slam.’

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8.1 Internet issues8.2 Data issues8.3 Technology issues8.4 New markets and applications8.5 Workflow systems and software

issues8.6 Sales and promotion issues8.7 Role of academia

The mission delegates visited Rochester andBuffalo during a period of relative economicbuoyancy. Those members of the team whotook part in the 2003 Global Watch Mission tothe printing industry in California noticed amarked difference in atmosphere and a shiftfrom what had then been a prevalent concernwith business survival to a palpable sense ofconfidence – albeit one tempered by acontinuing concern for keeping costs downand for pursuing greater efficiency and ‘leanmanufacturing’ wherever possible.

Turnover and employment statistics for theperiod 2000-2004 show that the printindustry in New York State has becomeleaner and smarter, with a reduction inturnover of around 20% tempered by areduction in employment levels from 97,732to 79,589 as the industry moved more andmore towards automation and newtechnology.10

One of the major points of interest in seeingat first hand how industries in other countriesoperate is of course to assess how far ahead(or indeed behind) they are in technology andpractices in comparison with their UKcounterparts. Overall, while the missionfound many learning points and are able tomake the observations and recommendations

recorded below, we found little that waswholly new or unexpected during the visit interms of new technologies, nor any realsense that the US perspective on digital print– albeit only an east coast one – isnecessarily more advanced than in the UK.

Rather, we were left with an impression of asuccession of well run, well organised andaware organisations succeeding through goodpractices and a solid sense of where themarket is heading. One point of surprise wasfinding differences in approach andtechnological adoption between companies inRochester and Buffalo, in spite of there beingonly 70 miles between the two cities.Rochester companies clearly benefit from thepresence on their doorstep of RIT as a centreof education, training and research and asource of high-calibre recruits.

In some ways, the mix of companies inRochester and Buffalo – some wellestablished, some relative newcomers, anumber of big hitters – is similar to the UK,but where the USA most differs is in terms ofthe much bigger volumes with which theindustry deals.

The smaller scale in the UK may account forthe relatively slow rate of Internet adoptionand application of digital print whencompared to the US experience. We sensesome holding back in the UK, whereas anumber of the companies we visited –notably ColorCentric – have made real stridesforward in using the Internet to reduce thesupply chain and in applying automation.

Regarding models of profitability, we echo

8 CONCLUSIONS AND RECOMMENDATIONS

10 www.printnys.org

RIT Professor Frank Cost’s championing ofthe way forward as ‘producing shorter andshorter run lengths for more and morepeople.’ This seems a particularly appositesummary of what the digital print industry isabout, and an encapsulation of its numberone benefit. The remainder of our conclusionsand observations revolve around particularissues and themes. We particularly stress theimportance of our recommendationsregarding collaboration between the printindustry and higher education in Section 8.7.

8.1 Internet issues

• Some companies have made the Internetintegral to their business and are using it todrive volume and applications, while othersstill fail to see its value or potential. Weblinks and e-mail marketing are allowingconsumers to become more brand awareand giving businesses tighter control of theirmarketing, but the impetus is to drivevolume, not exploit the available technology.

• Perhaps the most creative use of the webwe encountered was by ColorCentric,which has identified a new market for self-published books on short print runs, andmarkets its products via VARs usingspecialist websites. ColorCentric’s exampleshows how the Internet can really drivepersonalisation within book publishing.

• As ColorCentric demonstrates, the Internetcan also be a means of reducing thesupply chain. By focusing on reducing thesupply chain, it is possible to create a newbusiness genuinely based on digitaltechnology, not migration.

8.2 Data issues

• Digital asset management (DAM) offers atotal data and prepress solution to clientssuch as packaging companies andadvertising agencies, and consultancyservices to users of digital print technology.

• The market for data-driven variable-colourprinting for direct-mail marketing isgrowing. Increased computer powermakes it possible to RIP colour graphics atthe speed of most colour digital presses.

• The ideal digital printer should appreciatedata issues. There is a need for improvedunderstanding among printers and clientsof data, particularly with regard to thetracking of responses.

8.3 Technology issues

• Even though most of our hosts stated thatthere is still a lot of life in electronic printtechnology, we were surprised how few‘new and exciting’ developments werehighlighted in relation to press technology.This may be due to the general belief that itis the market that is driving new technology,not the manufacturers as previously.

• There is potential for growing lithobusiness out of the colour digital business.Mercury Print Productions’ litho sales haveincreased as a result of digital because ofits ability to offer a total solution.

• Strong opinion was voiced among ourhosts that combining technologies – ink-jet,offset, digital, online – is the future.

• We anticipate new development work onink technology and colour accuracy withspecial inks (including metallic, magnetic,security inks). This will not only develop theoffering from the manufacturers but willallow specific applications such aspackaging to move to digital.

• The onus is on all areas of the industry tomaintain the drive to adopt newtechnology by working in combination. The digital print industry is one of the fewindustries where all aspects of the chaincombine to drive the market, drivetechnology and drive adoption.

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8.4 New markets and applications

• Print-on-demand and self-publishing: theColorCentric model or printing books ondemand enables books to be kept in printat no investment cost. This makes self-publishing economic for the author orsmall company and has huge costadvantages for academic or medicalpublishers with niche markets.

• ‘Transpromo’ documentation – ie usingtransactional documents to carrypromotional messages – is clearly agrowth area for colour print. Xerox iscurrently researching a colour machine thatwill print fit-for-print business documents ata reduced cost, suitable for thetransactional print market.

• The casino market is massive in Rochester,and has the potential to be a part of digitalbusiness in the UK should ‘super casinos’take off.

8.5 Workflow systems and software

issues

• One of the strongest messages to comethrough was the value of lean workflowand production, both as a cost saver andas a means of reducing the supply chainand speeding up the operation. There is aconsensus that amalgamation of alltechnologies is the way forward, in whichcase one workflow system to suit allplatforms is going to be central to thesales strategy.

• Xerox informed us that the newestaddition to developments focusing onworkflow is FreeFlow, an integratedworkflow solution that combines with MISand cross platform to fully integrate allaspects of production, both offset anddigital. What is different about FreeFlow isthat it also focuses on business aspects,including costing and distribution.

• Lean manufacturing and internalprocedure streamlining is seen as anessential part of maintaining margin. Asan industry, we must become lessintensive, with automation the key. Thoseorganisations which are really exploitingdigital have an automated onlinepresence, workflows, front ends andfinishing – up to 80% automatedprocesses in the case of ColorCentric.

• No organisation can build a businessaround off-the-shelf software. Bespokesystems are the key to success as longas they are placed at the heart of thebusiness.

• In the PDF v JDF debate, the former iswinning. There is a lack of understandingof, or inclination towards adopting JDFtechnology. A common view is that PDFworks perfectly, so why change?

8.6 Sales and promotion issues

• The UK printing industry needs to becomemore customer-focused and proactive inaddressing the needs of clients. If there isa better way to achieve a solution, thecustomer needs to be told it.

• Sharing of information, opinion andtechnology within the UK industry is anarea for improvement and/or development.There is no real UK equivalent to the peergroup network described to us by SteveZenger, which operates independently ofthe US trade association, the PIA.

• We gained no real sense that digital salespeople possess or require any differentcharacteristics to those selling conventionalprint, beyond the technical competenceand knowledge to understand data and ITissues. However, sales people need toadopt a certain digital mindset, focused onselling the value of the solution to thecustomer rather than the cost per copy.

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8.7 Role of academia

• Compared to the USA, where companiesactively sponsor research, the UK printindustry does not do enough to exploitresources for software development inacademia. The investment would not beenormous.

• The UK printing industry should be moreaware of the existence of knowledge andexpertise in academic establishments andmore proactive in collaborating with them.At the moment there is no field (apart fromUV technology) in which the UK printingindustry could claim to be leading theworld. This puts the UK printing industry ina weaker position than its US counterpart.

• UK academic establishments need to workmore closely with BPIF to bring morein-depth technical knowledge and expertiseto the printing industry – for example, byencouraging print professionals to lectureor advise on academic courses, as is thecase at RIT. Joint initiatives between BPIFand universities are likely to be mosteffective.

• In particular, the industry and academicinstitutions should be sharing theirexperience, expertise and requirements.There is untapped scope within Britishuniversities, for example, for testing andresearch. The US tradition of givinginternships to students – as a means ofencouraging talent into particular industriesand giving potential recruits a workingtaste of the industry – has no real parallelin the UK. Internship would be an obviouspoint of collaboration between the UK printindustry and higher education.

• More generally, the UK print industryshould be looking to attract a wider spreadof graduates – especially from thesciences – to complement those enteringthe industry via established vocationalroutes. RIT, for example, has a tradition ofsending physicists and chemists into theUS print industry.

• UK government needs to recognise thatthe printing industry is under majorpressure to improve its competitiveness inorder to maintain its international position.The relevant government departmentsneed to consider funding initiatives throughBPIF and the universities aimed atimproving that competitiveness. To date,the UK’s national government has donelittle in this regard, although regionalgovernment has been more proactive.

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Jon Bailey

Digital Services Director

ProCo Print LtdParkway CloseParkway Industrial EstateSheffieldSouth Yorkshire S9 4WJUK

T +44 (0)114 272 8888F +44 (0)114 250 2949www.procoprint.co.uk [email protected]

ProCo is a full-service company specialising indigital print, litho print and direct mail.Founded 14 years ago, the company now has96 employees with a turnover of £7.2 million.

ProCo has just completed an investmentprogramme of £3.2 million in new digitaltechnology and B2 litho presses in a52,000 ft2 factory. It recently launched itsown web platform for print ordering andfulfilment looking at dynamic databasing.

Dr Long Lin

Deputy Head of Department

University of Leeds Department of Colour ChemistryLeedsWest YorkshireLS2 9JTUK

T +44 (0)113 343 6735F +44 (0)113 343 2947www.colour.leeds.ac.uk [email protected]

The Department of Colour and PolymerChemistry is generally recognised as theworld's leading department in colour andcolour application S&T. The department hasmaintained extensive links with printing andprinting-related industries. It hosts the DigitalPrinting Centre of Industrial Collaboration – arecognition of its excellent track record incollaboration with the digital printing industry.The department has access to over 40 world-leading academics.

Appendix AMISSION TEAM

Richard Knowles

Chief Executive

Buckingham Colour Group1 Osier Way Swan Business Park Buckingham MK18 1TBUK

T +44 (0)1280 824 000 F +44 (0)1280 826 204www.buckinghamcolourgroup.com [email protected]

Buckingham Colour Group is a full-servicegroup of companies encompassing traditionalprint and design, marketing andcommunications. Established in 1976, theGroup now has 80 employees and a turnoverof £7 million.

Scotch Kirkpatrick

Managing Director

Datagraphic LtdCottage LeapRugbyWarwickshireCV21 3XPUK

T +44 (0)1788 535 383F +44 (0)1788 535 [email protected]

Datagraphic is an APACS accredited securityprinter that provides a one-stop transactionalprinting service for the printing,personalisation, fulfilment and mailing ofsecure documents such as cheques, payslips,invoices, statements, dividend warrants andshare certificates.

During the last five years, Datagraphic hastransformed itself from a manufacturer oflitho-produced sprocket-fed business formsand cheques to a specialist digital securityprint and mailing company. The company has57 employees and a turnover of £3.75 million.

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Tim Browning

Group Director, Digital Systems

HenDi Group10 East RoadLondon N1 6AJUK

T +44 (0)20 7250 0114F +44 (0)20 7608 1501www.hendi.net [email protected]

The HenDi Group employs 120 people and isone of the largest printers in the City ofLondon. The group specialises in financialresearch printing and uses equipment rangingfrom eight-colour B1 to two-colour Risos. In2006 the company replaced Xerox 2060swith three 3050 HP Indigo seven-colourpresses and Xerox DocuTech 6180s with fourXerox Nuvera 120C/Ps, making them thelargest digital printer in central London.

In 25 years in digital printing spent mostly onthe production side, Tim Browning has alsobeen an active member of Xerox electronicprinter user groups, serving on thecommittee as an ordinary member and forfour years as chairman.

Geoff Thould

Managing Director

Cyclic Digital Print LtdUnit 1 & 2Bridge End Business Park MilnthorpeCumbriaLA7 7RHUK

T +44 (0)1539 564 592F +44 (0)1539 565 756www.cyclicdigital.co.uk [email protected]

Cyclic is a digital printing company based onthe edge of the English Lake District,servicing the UK and Benelux countries withhigh-quality print solutions based on digitaltechnologies. Its main customer base isgraphic design companies.

Cyclic offers full design, prepress, digital andwaterless printing, plus full in-house printfinishing. Founded in January 2000, thecompany now employs nine staff in a 180 m2

factory unit.

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Mike Hopkins

Director of Membership

British Printing Industries Federation (BPIF)North Eastern Business Centre 142 Thornes LaneWakefieldWest Yorkshire WF2 7XGUK

T +44 (0)1924 203 331F +44 (0)1924 290 092www.britishprint.com [email protected]

BPIF is the premier trade association for theprinting industry in Britain with 2,500members. It has a turnover of £7 million andemploys 85 staff in six locations around thecountry.

In addition to representing the industry togovernment, BPIF provides direct services inhuman resources, health and safety, trainingand technical and is committed to bringing tomembers opportunities for market andbusiness growth.

BPIF acted as coordinator for this DTI GlobalWatch Mission.

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52


Boncraft Printing Group

4222 S Taylor RoadOrchard ParkNY 14127-2246 USA

T +1 716 662 9720 F +1 716 662 9578 www.boncraft.com [email protected]

Boncraft is a multi-award-winning $12 million(~£6.7 million) group of companiescomprising a commercial litho and digitalprinter, a direct-mail company and a specialistgreeting-card printer. It has 65 employees.

The company was founded in 1952 by JamesA Bubar and Chester Sasinowski and movedinto sublimation printing in 1974, providingservices to the sports industry. Boncraftbecame a full-service commercial printer in1985 with the acquisition of Akiyama Press; in2000 it bought up the Holling Printing Group.

Boncraft’s nerve centre is a 20,000 ft2

(~1,900 m2) facility at Orchard Park. The company recently acquired a Xerox8000 colour digital press.

Appendix BHOST ORGANISATIONS

Exhibit B.1 Mission team at Boncraft Printing Group; L to R: Richard Knowles, Scotch Kirkpatrick, two Boncraftpersonnel including Tim Bubar at far right

Cohber Press Inc

PO Box 93100RochesterNY 14692USA

T +1 585 475 9100F +1 585 475 9406www.cohber.com [email protected]

Cohber Press is a $19 million (~£11 million)company, founded in 1931 by Samuel Cohenand Howard Webber and now based in WestHenrietta. Built in 1991, its 36,000 ft2

(~3,300 m2) high-tech centre is adjacent to theRochester Institute of Technology (RIT) campus.Some $5 million (~£2.8 million) of its currentturnover is in digital print and ~$3.5 million(£1.9 million) of that is in variable digital print.

From basic collateral and marketing supportto customer relationship management (CRM)and strategically driven direct marketingcampaigns, Cohber gives clients andagencies a single source for integratedstrategy, production and analytical capabilities.Employing 135 staff, it is a full-service printingand communications company whose mainmarkets are the pharmaceutical industry,casinos and the higher education sector.

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Exhibit B.2 Mission team at Cohber Press Inc; L to R: Richard Knowles, Geoff Thould, Jon Bailey, Scotch Kirkpatrick, Bill Bachman (Cohber)

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ColorCentric Corp

100 Carlson Road RochesterNY 14610 USA

T +1 585 288 1240 F +1 585 288 1671www.colorcentriccorp.com [email protected]

Founded in 2002, ColorCentric has grownrapidly into a world-class digital full-colourprinting organisation specialising in directmail, short-run books (self-publishing),marketing communications and web-basedcustom-print applications.

See the case study in Chapter 7 for furtherinformation.

Exhibit B.3 Outside ColorCentric Corp

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Kodak NexPress

NexPress Solutions Inc2600 Manitou RoadRochesterNY 14653USA

T +1 585 726 1824F +1 585 253 5525www.nexpress.com [email protected]

Since 2000, NexPress Solutions has helpedtransform the graphic arts industry byintroducing award-winning digital presses andstreamlined workflows that add more value tothe printed page and generate greater profitfor businesses.

NexPress is now part of Kodak's GraphicCommunications Group.

Exhibit B.4 Mission team at Kodak NexPress

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Lazer Digital Services

70 Bermar ParkRochesterNY 14624USA

T +1 585 247 6600F +1 585 247 9647www.lazerinc.com

Established in 1981, Lazer Digital Services ispart of Lazer Inc and specialises in digitalimaging, design and mechanical layout,electronic prepress, catalogue and packagingdevelopment and digital asset management(DAM). It has a $6.5 million (~£3.6 million)turnover and 53 employees.

In January 2006, Lazer upgraded its graphicsplatform to Artwork Systems’ Nexuscomprehensive high-end workflow solutionfor label and packaging environments.

Exhibit B.5 Mission team at Lazer Inc; L to R, facing camera: Scotch Kirkpatrick, Dr Long Lin, Richard Knowles; Gary Stafford (Lazer) is at far right

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Mercury Print Productions Inc

50 Holleder ParkwayRochesterNY 14615USA

T +1 585 458 7900F +1 585 458 2896www.mercuryprint.com [email protected]

Valerie Mannix founded Mercury in 1969 andoperated from her basement with a $400(~£220) printing press. Mercury nowoccupies a custom-designed state-of-the-artfacility with over 70,000 ft2 (~6,500 m2) ofclimate-controlled space.

It is a full-service $25 million (~£14 million)turnover company, half of which is digital-based.

Exhibit B.6 Outside Mercury Print Productions Inc

58


Oser Press

1239 University AvenueRochesterNY 14607USA

T +1 585 442 5621F +1 585 442 7052 www.oserpress.com [email protected]

Oser Press is a full-service $2.5 million(~£1.4 million) commercial printer offeringfour-color process printing, complete bindery,warehousing and distribution.

The company has significant prepress andbindery capabilities, warehousing anddistribution facilities, and top-rated Heidelbergand Miller multicolour printing presses.Duplicator presses and copiers are alsoutilised in production.

Oser entered the digital print market inJanuary 2006 with the purchase of a Xerox7000.

Exhibit B.7 Mission team at Oser Press; L to R: Geoff Thould, Tim Browning, Scotch Kirkpatrick, Oser employee, Seth Oser (President, Oser Press)

59


Rochester Institute of Technology (RIT)

One Lomb Memorial DriveRochesterNY 14623-5603USA

T +1 585 475 2411www.rit.edu

RIT has over 15,000 students attending eightcolleges, including the Chester CarlsonCenter for Imaging Science housing theSchool of Print Media and five other schools.The latter has 250 undergraduates and fivepostgraduate students and follows anundergraduate and postgraduate curriculumtailored to the graphic arts industry. Internshipcements the links between the School andindustry, while Industry Education Programs(IEPs) are designed to enhance production

skills and keep personnel at print and mediacompanies up to speed with the latesttechnologies.

The focus of its research activities withregard to print is the Printing Industry Center,established in 2001. The Center addresses theconcerns of the printing industry througheducational outreach and research initiatives.

RIT has a number of students available towork for printing companies in the UK on ashort-term contract basis. Contact PatriciaSorce via the RIT website for details.

Exhibit B.8 Mission team at RIT; L to R: Geoff Thould, operator (RIT), Dr Long Lin, Tim Browning, Richard Knowles

60


Xerox Corp

Xerox Square – 25th floorRochesterNY 14644USA

T +1 716 423 4002www.xerox.com

Xerox Corp is a $15.7 billion (~£8.7 billion)technology and services company that helpsbusinesses deploy smart document-management strategies. Its stated aim is to‘lead with innovative technologies, productsand solutions that customers can dependupon to improve business results’ (Xeroxwebsite). Its Rochester site is a 2 km2 facilitycalled the Gill Hatch Center.

Digital systems offered by Xerox includecolour and black-and-white printing andpublishing systems, digital presses,multifunction devices, laser and solid-inknetwork printers, copiers and fax machines.

Xerox's services expertise includes helpingbusinesses develop online documentarchives, analysing how employees can mostefficiently share documents and knowledgein the office, operating in-house print shopsor mailrooms, and building web-basedprocesses for personalisation of direct mail.Xerox also offers associated software,support and supplies such as toner, paperand ink.

Xerox has over 61,000 employees worldwide,including over 35,600 in the USA.

Exhibit B.9 Mission team at Xerox Corp; L to R: Dr Long Lin, Richard Knowles, Tim Browning, Xerox manager, Geoff Thould

61


Zenger Group

525 Hertel AvenueBuffaloNY 14207USA

T +1 716 871 5432www.zenger.com [email protected]

Owned and managed by six brothers, theZenger Group is a $10 million (~£5.6 million)group of companies including ImageCore,Anderson & Wahl Photography, DowntownGraphics and Printing, Partners' Press andUlrich Mail, one of the oldest full-service mailhouses in the region.

Zenger is a Xerox Premier partner and worksexclusively with Xerox to develop its productsand services. The group reported growth at20-30% a year on the back of increasingdemand for digital print.

62


Exhibit Page Caption

1.1 11 Mission team outside hotel in Buffalo, NY; L to R: Richard Knowles, Jon Bailey, Dr Long Lin, Tim Browning, Mike Hopkins, Scotch Kirkpatrick, Geoff Thould

3.1 24 Mission team outside Kodak NexPress; L to R: Geoff Thould, TimBrowning, Scotch Kirkpatrick, Jon Bailey, Dr Long Lin, Richard Knowles;Mike Hopkins is behind the camera

4.1 30 Inside an iGen3 at Xerox Corp6.1 40 Mission team at RIT; L to R: Tim Browning (front), Jon Bailey (back),

Scotch Kirkpatrick, Dr Long Lin, Geoff Thould, Richard Knowles, Pat Sorce (RIT)

7.1 42 Matrix of products and applications used by ColorCentric CorpB.1 52 Mission team at Boncraft Printing Group; L to R: Richard Knowles, Scotch

Kirkpatrick, two Boncraft personnel including Tim Bubar at far rightB.2 53 Mission team at Cohber Press Inc; L to R: Richard Knowles, Geoff Thould,

Jon Bailey, Scotch Kirkpatrick, Bill Bachman (Cohber)B.3 54 Outside ColorCentric CorpB.4 55 Mission team at Kodak NexPressB.5 56 Mission team at Lazer Inc; L to R, facing camera: Scotch Kirkpatrick,

Dr Long Lin, Richard Knowles; Gary Stafford (Lazer) is at far rightB.6 57 Outside Mercury Print Productions IncB.7 58 Mission team at Oser Press; L to R: Geoff Thould, Tim Browning,

Scotch Kirkpatrick, Oser employee, Seth Oser (President, Oser Press)B.8 59 Mission team at RIT; L to R: Geoff Thould, operator (RIT), Dr Long Lin,

Tim Browning, Richard KnowlesB.9 60 Mission team at Xerox Corp; L to R: Dr Long Lin, Richard Knowles,

Tim Browning, Xerox manager, Geoff Thould

Appendix CLIST OF EXHIBITS

63


~ approximately≈ approximately equal to< less than% per cent€ euro (£1 ≈ €1.45, Apr 06)£ pound sterling$ US dollar (£1 ≈ $1.8, Apr 06)3D three-dimensionalAPACS Association for Payment Clearing

Services (UK)ASP application-specific providerB2B business-to-businessBPIF British Printing Industries

Federation (UK)BSc Bachelor of ScienceCAGR compound annual growth rateCEO Chief Executive OfficerCorp CorporationCRM customer relationship

managementCSR customer service representativeDAM digital asset managementDMIA Document Management

Industries Association (USA)DPC Digital Printing Council (USA)DTI Department of Trade and Industry

(UK)F faxft foot = 0.3048 mft2 square foot = 0.0929 m2

GAIN Graphic Arts InformationNetwork (USA)

GATF Graphic Arts Technical Foundation(USA)

HP Hewlett-Packard (USA)IEP Industry Education Program (RIT)Inc Incorporated (company)IT information technologyJDF job definition formatkm kilometre = 1,000 mkm2 square kilometreL left

m metrem2 square metreM4D Marketing 4 Digital (programme,

DPC)MIS management information

system(s)NY New York (state, USA)PDF portable document formatPEN Printing Executive Network (USA)PIA Printing Industries of America

(USA)PIA of NYS Printing and Imaging Association

of New York State Inc (USA)PO Post OfficePSP printing service providerR rightR&D research and developmentRIP raster image processRIT Rochester Institute of Technology

(NY, USA)S&T science and technologySMS short message serviceT telephoneUK United KingdomUS(A) United States (of America)UV ultravioletv versusVAR value-added retailer

Appendix DGLOSSARY

64

Grant for Research and Development – is available through the nine English RegionalDevelopment Agencies. The Grant for Researchand Development provides funds for individualsand SMEs to research and develop technologicallyinnovative products and processes. The grant isonly available in England (the DevolvedAdministrations have their own initiatives).www.dti.gov.uk/r-d/

The Small Firms Loan Guarantee – is a UK-wide, Government-backed scheme that providesguarantees on loans for start-ups and youngbusinesses with viable business propositions.www.dti.gov.uk/sflg/pdfs/sflg_booklet.pdf

Knowledge Transfer Partnerships – enableprivate and public sector research organisations to apply their research knowledge to importantbusiness problems. Specific technology transferprojects are managed, over a period of one tothree years, in partnership with a university,college or research organisation that has expertise relevant to your business.www.ktponline.org.uk/

Knowledge Transfer Networks – aim to improvethe UK’s innovation performance through a singlenational over-arching network in a specific field oftechnology or business application. A KTN aims to encourage active participation of all networkscurrently operating in the field and to establishconnections with networks in other fields thathave common interest. www.dti.gov.uk/ktn/

Collaborative Research and Development –helps industry and research communities worktogether on R&D projects in strategicallyimportant areas of science, engineering andtechnology, from which successful new products,processes and services can emerge.www.dti.gov.uk/crd/

Access to Best Business Practice – is availablethrough the Business Link network. This initiativeaims to ensure UK business has access to bestbusiness practice information for improvedperformance.www.dti.gov.uk/bestpractice/

Support to Implement Best Business Practice

– offers practical, tailored support for small andmedium-sized businesses to implement bestpractice business improvements.www.dti.gov.uk/implementbestpractice/

Finance to Encourage Investment in Selected

Areas of England – is designed to supportbusinesses looking at the possibility of investingin a designated Assisted Area but needingfinancial help to realise their plans, normally in the form of a grant or occasionally a loan.www.dti.gov.uk/regionalinvestment/

Other DTI products that help UK businesses acquire andexploit new technologies

Global Watch Information

Global Watch Online – a unique internet-enabled service delivering immediate andinnovative support to UK companies in theform of fast-breaking worldwide business andtechnology information. The website providesunique coverage of UK, European andinternational research plus businessinitiatives, collaborative programmes andfunding sources.Visit: www.globalwatchservice.com

Global Watch magazine – distributed freewith a circulation of over 50,000, this monthlymagazine features news of overseasgroundbreaking technology, innovation andmanagement best practice to UK companiesand business intermediaries.Contact:[email protected]

UKWatch magazine – a quarterly magazine,published jointly by science and technologygroups of the UK Government. HighlightingUK innovation and promoting inwardinvestment opportunities into the UK, thepublication is available free of charge to UKand overseas subscribers.Contact:[email protected]

Global Watch Missions – enabling teams ofUK experts to investigate innovation and itsimplementation at first hand. The technologyfocused missions allow UK sectors andindividual organisations to gain internationalinsights to guide their own strategies forsuccess.Contact:[email protected]

Global Watch Technology Partnering –providing free, flexible and direct assistancefrom international technology specialists toraise awareness of, and provide access to,technology and collaborative opportunitiesoverseas. Delivered to UK companies by anetwork of 23 International TechnologyPromoters, with some 8,000 currentcontacts, providing support ranging frominformation and referrals to more in-depthassistance with licensing arrangements andtechnology transfer.Contact: [email protected]

For further information on the Global WatchService please visitwww.globalwatchservice.com

The DTI Global Watch Service provides support dedicatedto helping UK businesses improve their competitivenessby identifying and accessing innovative technologies andpractices from overseas.

Printed in the UK on recycled paper with 75% de-inked post-consumer waste content

First published in June 2006 by Pera on behalf of the Department of Trade and Industry

© Crown copyright 2006

URN 06/1240

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