Extending the bindery to its fullest potential might seem straightforward, but commercial printers should be mindful of what they hope to get out of the investment, rather than just focusing on the start-up cost. Postage represents the bulk of mailing costs, so bottom-line benefits will more likely arise from indirect means rather than the invoice in hand. The issue that a printer has to address is not so much ‘should we’, as ‘what happens if we don’t?’
It’s not just about investing to keep the customer satisfied or, arguably, to keep the customer full stop. Printers with short-run capability in particular should be on high alert to the growing reverse tendency among mailing houses to move upstream into digital print.
Pitney Bowes product line manager Simon Illingworth sees digital as a major factor in the seamless transition from print to fulfilment. The new faster-speed, higher-quality colour definition generation of digital presses seems to be the touch point between the mailing industry and the traditional print sector. The reason we were at Drupa for the first time in a long while was in recognition of the changing nature of both sectors and the convergence that’s taking place. We’re looking for an opportunity to work much more closely with the printing industry.
Kern has latched on to the digital opportunity by recently agreeing for Xerox to sell its K515 EasyMailer system. Operating in conjunction with an iGen3 or a DocuTech system, the EasyMailer facilitates automatic personalisation of matching envelopes for A3 or A4 mailings with the aim of eliciting higher response rates.
According to Illingworth, while most of the major players have our equipment installed, it’s still early days at SME level. Is it though? Printers now account for 50% of the 200-plus Sitma inserting and mailing systems installed by UK distributor Integra. Demand is largely driven by print firms looking to provide a one-stop solution or add further services for their customers, says managing director Richard Maclean.
At the moment, I think that people will look at anything to try to add value to their businesses, adds Maclean. By bringing something in-house that you might normally outsource, you’re going to save money, and keep control of the customer and, of course, the work. Installing an inserter on the back of a stitcher will add value to the bindery very quickly; that’s an easy investment. And if you’ve got mailing capacity, then you can offer even more.
In cost terms, installing a fully automated Sitma SM15 envelope inserter including five feeders and a stacker operating at up to 15,000 units per hour (roll-fed or cut sheet) would be around £200,000. B1 commercial printer Woods of Perth’s experience also offers a good benchmark. Coming from a direct-mail background, production manager Alan Arnott joined the firm two years ago with a specific brief to extend the finishing line into inserting and mailing solutions. Woods invested £200,000 in a Buhrs BB300 inserter with seven feeders as well as a 1000 polywrap line. Within eight months, it added a second BB300 including a Muller Martini end-feed line. The net result has been a £1m boost to its £7m turnover despite losing a major client last year through natural wastage, says Arnott. You have to look for any extra revenue where you can. It’s all about anything that can give you a little extra edge, and mail fulfilment has definitely done that for Woods.
Pitney Bowes also has an eye on finishing departments, linking up with Horizon via its direct connect software to the SPF-30 saddlestitcher in the hopes of tapping into the growing market for production and distribution of short-run personalised books.
Germany-based Buhrs claims its servo-powered BB700 is the fastest envelope inserter on the market. The machine can process 16,000 C6-B4 units per hour up to a thickness of 15mm. Incorporating equipment intelligence attributes such as camera reading, selective inserting and job matching as standard, the system is very much at the cutting-edge of mailing solutions technology, but not necessarily what a first-time adopter should be looking for, says Buhrs UK managing director John Ricketts.
A lot of customers start off by buying a used system and then extend into new equipment as the work develops. For example, a secondhand inserter such as the BB300, running at around 8,000 units per hour, would be ideal.
While prices of new equipment are coming down below the £100,000 level, we’re quite happy to introduce new players into the market at what could be one-third of the investment, depending upon specification.
With 80% of all Buhrs’ first-time used systems customers either going on to trade up or else add new systems to the original purchase, it’s clearly a strategy that works; commercial printers now account for 20% of its UK customer base.
Ricketts also believes that digital print has given the mailing industry a new lease on life, facilitating shorter and more targeted runs as well extending the opportunities to evolve transactional work into transpromo, something on which commercial printers are ideally positioned to capitalise. You’ve got the mailing house that knows the data better than a commercial printer, but when you look at the finished product the commercial printer has got far more awareness about colour and image quality, adds Ricketts.
Ultimately, it’s a matter of doing the sums, says Illingworth. Typically, inserting is done quicker than printing. For a mailing house with three or four inserters to bring print in-house would result in a very high level of investment to generate the volumes to meet capacity. One man’s heavy investment is another’s competitive edge, making the in-house mailing move all the more attractive to the savvy printer.
MOVING INTO MAILING
• Moving downstream into inserting and/or mailing is unlikely to result in a major new revenue stream unless it’s by offering niche differentiation. Instead, look to bring in more contracts by offering a full customer service under one roof
• A clear understanding of long-term capability is required. A straightforward insertion service requires only a very rudimentary inserter, probably without a great deal of in-built intelligence or control
• Match volumes and handling capabilities with the use of an input channel that would allow you to take the material from roll-fed or cut sheet
• Get your maximum net output as high as possible. It’s fair to assume that the greater the complexity, the greater the added value; in which case, full return on investment should be achieved within two to three years
• While systems are largely automated, don’t assume that they’ll manage everything for you. Realistically, you’ll need a couple of dedicated operators
• The actual purchase and running
of the machinery isn’t dissimilar to
anything else that printers are already used to, but as everything is driven by
the data, a good level of computer
literacy is essential
• Allow adequate factory floor space for products stacked up around the lines