Production Inkjet: A Cost-Effective Solution?

The inkjet market has changed dramatically in the past few years. That may make this an opportune time to step back and ask an important question. Is production inkjet a cost-effective printing solution? Does it deliver return on investment? And if it does offer ROI, how can you be sure?

According to Scott Wagner, manager, product marketing production inkjet, graphic communications, with the production inkjet business team of Webster, NY-based Xerox Corporation, production inkjet is the most cost-effective way to get to high-speed, full-color and full variable data, vis-a-vis older technologies.

“It absolutely does deliver ROI, but there are caveats,” he said. “You must have the volume.” These systems require an entry level of between two and six million prints a month, and the industry in general has duty cycles that range from 50 million to 100 million prints per month, he added.

“Thus, because these machines are so robust and so fast, approaching the speed of web presses, their capital costs are higher than EP technologies. It’s not dissimilar from purchasing a web press. The capital cost is higher, and the run cost low.”

For those coming to digital from offset, one of the foremost benefits is the relatively new capability of variable data and personalization, he added. In many cases, personalized applications will garner a higher response rate, higher opening rates, higher read rates and longer times holding the piece. “The return on these applications helps justify the price of the equipment,” Wagner said.

Adding to returns, digital also eliminates the plate-making process, brings about a decrease in work in progress, and dramatically reduces both paper waste and overruns typically experienced in the offset world. What’s more, digital also typically requires less labor or allows use of lower-skilled labor.

“All these speak to return on investment,” Wagner said.

For those migrating from other digital equipment, the advantage of moving to inkjet includes higher speed, higher duty cycle and more volume, he said.

In addition, fewer devices will be necessary, because of the duty cycle and the speed. Fewer devices mean less labor needed to run them. “And the cost of color in inkjet has come down, allowing more people to enter the full-color digital workspace who might not have been able to enter before,” he said.

“It’s basically a consolidation message. You could consolidate multiple slower, traditional or older pieces of equipment, but if you don’t have the volume, you’re not going to get there. Or you could be at the lower end of the volume scale, but if you have a couple high-return applications, still achieve ROI.”

Wagner reported his team has seen customers enter the market from offset, and simply by personalizing a couple key applications, gain increased response rates and increased orders, resulting in increased revenues.

Customers can confirm the ROI by running a couple test market jobs, he added. Rather than run all a client’s order, they run part of the order, personalize pieces to a couple ZIP codes or do a couple versions of personalization to two ZIP codes. “And after getting the results, they scale up,” Wagner said.

Further Confirmation

Also confirming production inkjet is a cost-effective printing solution is Mike Shafer, director of sales and marketing for TKS USA in Dallas.

“That’s not only my view, but it’s been proven at our first site in Chicago at Topweb,” he said. “They’re a printer of newspaper-type products, including a lot of the ethnic newspapers, school papers, dailies, weeklies and others.

“Before they purchased our JetLeader, our inkjet press, they had been printing only on a single-wide offset press. On the offset side, they were being killed by a lot of waste product. There is also the limitation of paging and color they can do, and of course there’s the labor factor that goes with offset press. They had been looking at inkjet press technology for close to 10 years, because they suspected the benefits would be more advantageous with inkjet.”

The inkjet solution offered by TKS USA gave Topweb the ability to do finishing as part of the process online. In addition, Topweb now had the ability to print color on every page, an ability the company didn’t previously enjoy.

Topweb ended up reducing labor and waste, Shafer said. As well, the inkjet press eliminated the need for printing plates and blankets. Additional benefits included a smaller footprint, and reduction in electricity utilization.

Topweb’s first inkjet press was installed in October 2012, and the company added a second a year later, reflecting the results it attained.

First-Hand Experience

UK-based Adare installed a Ricoh InfoPrint 5000 digital press in 2011 for both transpromo and direct mail printing purposes. Adare sales director Marytn Viquerat reported the company was attracted to the InfoPrint’s flexibility and upgradeability. He noted that because having sufficient volume is a key to ROI with an inkjet press, it is very important to have an enabling contract or client.

“You need the client to move forward,” Viquerat said. “Customer acquisition and retention are usually the triggers.

Having six years of experience with the InfoPrint, including three years at a previous employer, Viquerat is able to relate a number of experiences that point to the achievable return on investment. For instance, one customer was a large UK catalog retailer that spent an additional 2.1 million British pounds for additional business with the firm after its printing technology capabilities were upgraded. The digital press cost 1.5 million pounds, leaving .6 million as ROI.

A transpromo customer used third-party affinity marketing in the white space of its redesigned billing statements. That paid for the cost of the statement production and in addition generated another 15 percent profit.

“Investing in inkjet print engines is not enough,” Viquerat said.

“You need to look at your overall infrastructure and marry [that investment] with investments in multi-channel capabilities.”             

What You Need to Know

Inkjet’s Age asked experts to address several issues in sizing up the benefits of inkjet in providing a cost-effective printing solution. They included:

Cost of a production inkjet printer

Inkjet printers start at just under $1 million and range all the way higher to $5 million from some vendors, Wagner said. The cost depends on the speed required, the width of the web itself, and the duty cycle. Not everyone needs a printer that will run 700 feet a minute; some can make do with 200 feet a minute, he noted.

Noting “it’s a big expenditure,” Shafer added that like any piece of machinery, inkjet presses have to be kept busy. The cost of the TKS USA JetLeader is toward the higher edge of the inkjet price range, Shafer said, but adds that the cost includes the entire system, including the finishing.

Capabilities

Offset and electrophotography still offer the best image quality, but inkjet is gaining ground and evolving in image quality, Wagner added. “Every six months there are improvements from multiple manufacturers in inkjet technology. That’s the nature of this very dynamic industry at this time,” he said.

Shafer finds the first thing TKS USA inkjet press customers address is taking on the smaller runs that are more cost effectively on the inkjet than on offset. After that, they usually begin taking on the variable print runs.

“The flexibility of the product is a big factor,” he added. “With the offset, you’re kind of locked into certain formats in terms of page widths and cutoffs. With JetLeader, you have the flexibility on both the cutoff and the page width.”

Factoring in ink and media

Water-based inkjet technologies will deliver the highest image quality with inkjet treated papers, which of course are more costly than plain offset or laser bond paper.

And though you can run plain paper through most inkjet machines today, there typically is a tradeoff in image quality. “This also depends on the inks that are used,” Wagner added. “So we’re starting to see positive results with new formulations that enable the use of plain, low-cost papers. Then there is the unique Xerox CiPress production inkjet printer that uses solid ink technology with no water and this enables direct mail caliber image quality on plain offset papers.”

For his part, Shafer noted that at the beginning, TKS USA suggested Topweb should print on an inkjet-treated paper. “But they later went to an offset paper and now print exclusively on that paper,” he added. “That saves them a lot. The offset paper is about 60 percent of the cost of the inkjet-treated paper.”

Productivity

Shafer reported there is a “tipping point” where it makes sense based on the print window and the run length to embrace inkjet. That tipping point is 5,000 and fewer prints. “In that range, you’re better off going to inkjet,” he said.

He added: “Everything that can go inkjet is going to go inkjet. Years ago, we saw a transition from letterpress to offset on our side of the business. And now we’re seeing the same transition, this time from offset to inkjet.”

As for Xerox, because it acquired Impika a year ago, the company has a full portfolio of water-based inkjet systems, which complements the company’s existing waterless inkjet printer, CiPress.

“If you just look at all the vendors in the industry, Xerox now has the largest portfolio in the inkjet industry,” Wagner said in conclusion.