All things offset: Finding value in offset

An excerpt from AP September 2020 – by IBS Cards managing director Scott Siganto 

Run lengths are getting smaller and digital quality is always improving. This has caused the digital market to put pressure on offset. With less volume on the offset presses than ever before, it has made it harder for businesses to reinvest, expand or maintain a healthy ROI.

But offset technology is still in demand. The offset technology of today allows for far more automation, the machines are extremely fast, the make-ready times are quicker, there is less maintenance required on the machines, and there is a significant improvement in waste output. The technology has stayed stable, but it has also come a long way.

As a trade printer servicing Australia and New Zealand, the bulk of IBS Cards’ print and stationery work is produced on two KBA Waterless Genius offset presses. We produce everything from typical office stationery such as business cards, flyers and letterheads, to promotional products such as coasters, tags and presentation folders, all on our offset presses.

As one of the first trade printers in Australia, IBS Cards realised we could combine the buying power of our client database to gang work and pass on the savings to our customers. Although we’ve expanded dramatically over the past 24 years, ganging work and printing solutions offset has allowed us to keep expanding our range at competitive prices.

This is because offset has enabled the business with a number of positives, which include the following:

  • Offset printing allows us to gang our runs more cost effectively and pass those savings onto our customers.
  • Our waterless presses mean we can produce more efficiently with no harsh chemicals whilst producing brighter, sharper and more consistent colours.
  • Offset is also a very stable technology that has proven itself over years. It’s because of this stability that offset presses hold higher trade in values than digital.

With digital becoming a huge part of the industry, there certainly is a threat to offset, but there are a few different pricing models at the moment. Manufacturing options are currently split to include:

  • PAYG: Offset, where you pay for the consumables you use (500+ sheets per run)
  • PAYG: Inkjet, with no plate costs but the cost of ink is so high that it makes it impossible to quote correctly without getting an ink report from the artwork
  • PPC: Inclusive rates for toner and Indigos and the new Heidelberg rental model (less than 500 sheets per run)

With the industry average now under 1500 sheets per run, the gap is so close for someone in the PPC option to disrupt the market by introducing a tiered approach to their costings. With user interface and reports available on each of these machines these days, it would be reasonable to think it is doable.

The goal would be to get the per sheet rate to around the (plate + time + consumable) of offset up to 1500 sheets. A tiered structure maybe able to achieve this, with the software delivering a per job costing.

When choosing between offset and digital, some of the main factors to consider are your average run lengths, the volume of work you produce (in order to gang efficiently), and if your jobs are produced on similar stocks so you can minimise blanket changes.

When determining between offset or digital, the most important factor to consider is the type of clientele you have. Ask yourself, “Do your customers frequently order short runs, variable data, or specialty stocks?” If so, then offset is probably not for you.

Knowing your average run length is another major factor, as you can’t beat offset on price for long runs. And finally, gauge for yourselves if you see future opportunities for your business in the capabilities that offset can offer you.

The packaging market seems to be where printers can find the biggest value for offset at the moment. From all accounts, commercial printing is well down, whilst packaging continues to climb. Within packaging, offset allows businesses to produce long runs, on thicker boards quickly, and most importantly, cost effectively.

Going into the future, I envision the offset space to include:

  • More deals that include consumables in fixed monthly rentals of machinery to make it easier for the manufacturers to get printers to buy, and for printers to fix and spread their ongoing costs.
  • More pressure from digital, especially if the digital options become more cost effective for longer run lengths.
  • Consolidation of the offset market as it will become less attractive for printers to reinvest and those that do in a large way, will need to gather as much work as possible, therefore continuing to drive down prices.

The digital version of the magazine is available here.

 

 

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