Don't Pull the Plug on Print Yet

(C) 2008 Business NH Magazine. via ProQuest Information and Learning Company; All Rights Reserved - Business NH Magazine

Jack Cummings has been around the printing industry for pretty much all his life. His grandfather stalled Cummings Printing in 1914. Young Jack forged his printing career working after school and during the summers, toiling in the mailing department, bindery and the pressroom. He also drove the company truck. After college, Cummings took a job in the typesetting department and eventually landed in sales at the Hooksett-based company. It was while he was in the sales department in the late 1990s that he realized that in order for Cummings Printing to weather the desktop publishing and Internet revolutions occurring at the time - and position the company for a more secure future - it had to become more than a local sheet-fed commercial printer.

In other words, Cummings Printing would have to become a company almost unrecognizable to his late grandfather and his small commercial press. To do that, Cummings invested heavily in new technologies and changed its business model. "If we had not laid it on the line and taken major loans to become a magazine and catalog printer - a Web printer versus a sheet-fed printer, which is what we were and what differentiates us from your local printer - then we would not be enjoying the success we am right now," he says. (Editors note: Cummings prints Business NH Magazine.)

Even with his firm conviction, however, Cummings endured his share of nerve-tacking moments - along with just about every other printer during recent yeas. Industry watchers predicted at the turn of the century that the Internet was going to make printers a thing of the past. "I thought we were dead. I thought we were in real trouble," Cummings says.

Today, Cummings employs 107 people and has embraced the Internet for all that it can do for today's printer. For example, its Insite prepress portal system streamlines customer interactions, allowing customers, via Internet, to track job activity and status, proof print jobs, collaborate with Cummings staffers, and approve jobs.

During the past decade, change has been one constant for printers. "Printing industries are less of a trade now, and things are more push button," Cummings says. "What used to take an hour of a skilled artisan's time now takes 10 minutes of a person with computer savvy." Gone are the jobs of the linotype operators, film strippers and conventional printing plate makers Cummings says.

When asked what his grandfather would think of today's Cummings Printing, the grandson says, "I think he'd be sad from a trades perspective - that the trade is much less a part of the industry. But also being a good businessman, he'd be proud that we stayed with technology, we've been able to remain an industry leader, and we've been able to evolve from a commercial printer to being a publication printer."

The Technology Blessing and Curse

The late '90s digital revolution has threatened the printing industry, but it's also enabled printers to become more efficient by allowing them to cut legacy machinery costs, trim headcount, speed up customer interactions and job delivery, as well as offer a wider range of digital services. "We're able to handle any file you can throw at us: from Word files to Publisher files to InDesign and Quark - all the different types of [design] programs out them," says Kevin Boyarsky, co-owner of Print Solutions, a commercial printer in Concord with seven employees that offers one- to four-color offset printing, and digital duplication services. His customers also use FTP (file transfer protocol) Internet technology to transmit computer files to Print Solutions. Boyarsky estimates that typical turnaround times have been cut in half, down to less than a week, from 10 years ago.

But all those efficiencies reaped from new and faster technologies have come at a cost. "Copiers and digital machines that used to last five years are now almost obsolete after two, and they're expensive," Boyarsky says. "We constantly have to re-invest in the company. We have invested a significant amount of money upgrading software, and digital and offset capabilities."

Re-investment in new technologies is an economic reality for Cummings as well. "Either we buy this new piece of equipment, which is going to cost us a lot of money, or if we don't buy this, we won't be competitive," he says. 'The companies that didn't buy them and didn't take the calculated risks, they're hurting now."

Peter Church, owner of Keystone Press, LLC in Manchester agrees. The company spent a quarter of a million dollars this past summer to install two digital presses to improve printing quality and efficiency. "It's state-of-the-art today, but it will probably be outdated in five years, so we have to make it profitable quickly," Church says of the challenge of keeping up with technology advances. "There are two kinds of printers - those who are not keeping up with technology and those who embrace it, invest in it and evolve with it."

Shrinking Industry

The most recent data from Printing Indus-tries of New England (PINE) shows that the Granite State ranks second to Massachusetts in terms of value of shipments each year ($1.2 billion) as well as number of printing-related businesses (226). Printers employ more than 7,500 people in NH; most significantly in the Manchester, Nashua and Portsmouth-Rochester areas, and the majority of the printing businesses have fewer Nan 20 employees, according to PINE.

At the national level, there's been a decrease of 200,000 printing industry jobs since 2000, according to an August 2007 report from the Rochester Institute of Technology. "Most of the decreases in employment can be accounted for by the increasing amount of automation present on printing presses and other printing equipment that traditionally had to be nm by hand," the report states.

The printing industry has long been known for its skilled craftsmen and artisans who worked the presses. But new technology has erased much of the need. "Highly skilled printing tradespeople aren't needed like they once were, and many of the skills that were once needed don't exist anymore," Cummings says. His business, for example, em-ploys 107 people, down from 165 six years ago. 'New technology has eliminated manpower and made it cheaper to run," he adds.

New Hampshire printers say that finding qualified people is difficult today. "There's plenty of people who apply for a job," Boyarsky of Print Solutions says. But there's not a lot of people qualified for the jobs."

The Rochester Institute of Technology report notes that many printers "have been having trouble finding qualified, trained workers to replace their retirees." In addition, there has been decreased enrollment in printing programs at colleges and other institutions across the United States. "Now that graphic design and other computer-based fields of study have become more popular, many graphic arts programs at high schools have been shut down due to a lack of participation," according to the report.

Boyarsky points to a troubling workforce gap in NH. "I don't think the people coming out of the schools necessarily have the skills because the focus isn't on the print side - it's more toward the Web," he says. And then there's the older people who came out of the old typesetting design, and they didn't upgrade their skills to the new technologies. So there is probably a gap in the number of qualified people."

New Hampshire printing executives all say that there are fewer printers in the state now than 10 to 15 years ago. But that doesn't necessarily mean that print is dying or there's any lack of competition. "I wouldn't say there's a dearth of printers around' Boyarsky says. "I think that the printers around have been able to do that same volume of work [when compared with I0 years ago], with less equipment because we am more efficient."

Church says his business is an example of the trends the industry will likely see more of in the future. He owned a smaller printing business when he acquired Keystone Press two and half years ago and merged the two businesses. "You will see a lot of that happening - two smaller companies merging to form a larger, more capable company," Church says. Keystone Press has 21 employees housed in an 8,000-square-foot facility in Manchester.

Challenges

New Hampshire printers are facing the same macroeconomic pressures as other industries face: economic belt-tightening and credit-market wariness, sky-high fuel and utility prices, and increases in health care costs. The printing industry, in particular, has witnessed steady price increases for paper and ink. The industry saw two rounds of price increases for most paper grades this year. "It used to be once every couple of years," Boyarsky says, "but it's now twice this year."

While there may be fewer local NH printers today, say printing executives, competition has only increased. A "survival of the fittest" mentality is apparent through digital printing trends, retraining or hiring employees with new skillsets, and investing in new technology. "There's a lot fewer players-" observes Frank Laguna, president of Papergraphics in Merrimack, a 14-person commercial printer founded in 1982. "But the equipment is more efficicntbecause there's more capacity, which leads to more healthy competition."

In 2000, Papergraphics was able to complete one or two color printing jobs in a day now the printer can do 10, he notes. An investment in a new HP Indigo 5000 digital press in 2007 has allowed Papergraphics to offer same day or next day turnaround on print jobs. That, in turn, has allowed Laguna to deliver short-run printing jobs simply not available just five years ago, he says.

Competition is not just about another printer in your town or one in the city 10 miles away. The Internet and its global networking reach have made any printer a local printer. Sophisticated venture capital-backed e-commerce printing Web sites are both technologically advanced (with design and other applications built in) and able to gain economies of scale that am tough to match - let alone beat - for some local printers, says Boyarsky. "I can't compete in that marketplace," he says. In addition, the desktop publishing revolution and its more user-friendly design software has enabled commercial and retail customers to do much of the work once resented for printers. "The common color copier being networked to a desktop has more bearing now [on the printing business]," Laguna says.

Church says customers are expecting more services, but for prices to remain stagnant. That's a challenge in an industry that is seeing its costs go up, he says. "You have to provide superior customer service," Church says, which will mean fewer customers bid-ding projects to other companies.

Lastly, the growing need to go "green" has affected some pieces of NH printers operations as well as their customer offerings. Boyarsky says that while "no printer can he totally green if they're doing offset printing," new innovations - such as assortments of recycled paper, soy-based inks and waterless presses - allow printers to be "as green as we can be with the technology were using."

Differentiate or Die

Even with the enormous army of challenges in front of them, NH printers are not hacking down. "When has this business ever not been competitive?" implores Cummings. "I've been here 31 years, and there's always some kind of competitive threat."

Print Solutions' Boyarsky says, in this economic climate, printers need to "look for other products and services to serve your clientele." For example, Print Solutions is looking at wide-format printos capable of producing outdoor banners and other types of large signage. "The machines have come down in price and become more friendly to the environment," he says. "That's enabled people to get into markets that otherwise they couldn't have."

The Rochester Institute of Technology report notes that many printers am attempting to reposition themselves as a communications or marketing partner and service provider as opposed to solely a print or commodity supplier. "Becoming a marketing partner or communications company involves going beyond taking print jobs to offering a wide range of print products and marketing solutions to consumers," states the report. "Thus, printing companies - manufacturers and suppliers alike - are striving to grow and sustain creativity and innovation to keep their competitive advantage in an industry faced with many challenges."

Church of Keystone Press says his company is increasingly working with marketing managers at companies where the company previously worked with purchasing agents. Church says he can help companies customize marketing pieces, such as a postcard campaign a company may be sending out. Keystone can individualize each postcard with customized photos and messages, and address them as they are printed.

Lisa Landry, president of Print Savvy in Manchester, agrees that targeted marketing and customization of printed pieces is the future of the industry. She points to Macy's, which developed a specific campaign for its bridal registry, as an example. After a couple was married, Macy's sent them a customized printed piece informing them of the items they did not receive on their registry and what's on sale. Landry says those customized pieces yielded a 70 percent return for Macy's. She says printers will need the capability to work with clients to deliver more pieces like that instead of flooding the market with a generic mass-marketing piece. "It will be more like harpooning. It's going to be targeted and specific," Landry says.

Print Savvy, which celebrated its 10th anniversary this year, has built its success on being a marketing partner with clients. The company manages printing projects for clients, finding printers with the appropriate technology to meet their specific needs. "We act as a sales and customer service office for printing facilities across the country," Landry says. That means Print Savvy can find printers with the latest technology, without having to bear the cost of investing in that technology itself, Landry says. It's a model that has worked well as clients' needs become more sophisticated, "If you have a sales tool kit with multiple components, there may be no one printer that could handle every piece," Landry says.

Printers say they are leaning on good old-fashioned customer service to compete - listening to what customers want and need, and helping them navigate through all the options available today - something that many of the online sites can't do. "A lot of times we get those clients who used an Internet site back - the card was wrong, there was no customer service, or they waited three weeks for a card and didn't get it," says Boyarsky. "I try to work with clients, understand their business and be able to provide a solution that fits with them. And it's hard to do that over the Internet."

The Rochester Institute of Technology report is cautionary about the future. "Print's long and illustrious history tells us that printing will remain. However, the form in which it will remain, the size of the industry and the types of output that will be produced are all things that no one can precisely predict." Boyarsky, however, is resolute. "I think that the business has definitely shaken out, but there am clients who still need printing," he says. "There's still a good future for print. A lot of it is that you have to be up on your technology to survive. You can't just muddle along with old equipment and old ways of doing things."