Adding Value: Short vs. Long Runs

Printers continue seeking more accurate ways to evaluate and benchmark projects in order to determine the type of equipment and run lengths needed to get clients the biggest bang for their buck.

“I get asked this all the time: when should you go offset and when should you go digital?” says Bill Van Buskirk, National Sales Manager for National Sales Manager for xpedx Printing Technologies. “Generally, the number used to be around 1,000 copies – 1,000 or more single original, no variable data involved. It was cheaper to go offset.” That benchmark, however, has changed with the passage of time. “It is now getting closer to 1,500 since a lot of the companies have changed their click charges. It’s now between 1,000 and 1,500 that you would cross over between digital and offset.

“Now, if you’re looking at offset only and asking where is the crossover,” Van Buskirk continues, “it depends on the type of work you are doing. Obviously in a brochure, in a smaller area, it depends on whether it’s two-color or four-color, black and white, etc. Speed is the big thing for digital over offset. But if you’ve got offset presses it depends on whether you want perfecting – two-sided – (and) whether you’re doing labels or special substrates. It depends on a combination of the substrate and whether it’s a 2-color job, an 8-color job, packaging or whatever. It really hinges on what the end product is.”

Obviously, he adds, “for the more simple jobs – a brochure, a direct-mail piece, a small type thing -- you wouldn’t need a large press. But again, you can do long runs. Most of the presses are between 10,000 and 18,000 an hour.”

 “One of the great challenges that print service providers face every day is determining the tipping point between offset and digital in terms of run length and cost,” says Jim Aust, Business Analyst, US&C Region for Kodak’s Graphic Communications Business. “With no simple formula to apply, many factors must be considered.”

In general, Aust notes, print runs of less than 1,000 will be more economical on a digital press than on a typical 29-inch, 4-color non-perfecting sheetfed offset press. Runs of more than 1,000 will usually be more economical on the offset press, “but the real gray area comes in those runs between 750 to 1,500 sheets. This area will vary based on the current economics of the offset manufacturing process, but what’s changing is the number of jobs that fall under the cutoff. The current trend is toward more short-run jobs.”

Today, Aust explains, many printers may not have a lot of jobs under 1,000 impressions, “so they may feel they can’t justify a digital press. But each year that changes as more customers demand shorter runs. We have found that a printer doesn’t need to generate a lot of work to justify a cut sheet digital press such as the Kodak Nexpress Digital Production Color Press.”

A $5-million-to-$10-million shop might only produce 2% to 3% of all pages on a digital press, Aust continues. “However, the shorter runs are the most expensive to print. A typical offset job of 5,000 sheets or more sells for 5c to 10c cents per page. But producing shorter runs of 500 to 1,000 impressions on an offset press can cost customers 30c to 45c per page, while a digital press can produce these for 10c to 15c per page. In this scenario, digital is a clear winner.”

 “It’s job-dependent,” suggests Scott Brown, Scott Brown, District Sales Manager, Large Format Presses, xpedx Printing Technologies. “In the past it always used to be more cut and dried as far as the dividing line. But now, with the capabilities of digital, the speeds are increasing, the make-ready times are going down, variable data has gone up. So it depends on the job, 100%, as far as which -- offset versus digital -- is going to be better.”

“In the quick and small commercial printing segment, printers have been working with the print-on-demand concept for so long that it’s difficult to even remember the overrun mindset of the past,” says Karen Lowery Hall, Managing Editor of Quick Printing magazine. “The idea of warehousing thousands of prints or, worse, trashing them is almost unthinkable.”

Digital printing has been widely adopted by this segment of the printing industry, Hall points out, “and that technology brings with it an ability to better serve the needs of the customers in terms of run lengths. It just seems to be so intuitive that if your customer needs 250 copies of a document, you print 250. If you insist upon a minimum run of 1,000 or more, what happens to the remaining three-quarters of that run?”

Most business-to-business type print work is now created in-house by the customer “and is quite dynamic, changing frequently,” notes Hall, who has covered the printing industry for nearly 20 years. “This means that huge overruns no long offer the economies of scale that they once did.”

Digital printing or even short-run offset can accommodate updates and frequent changes, allowing the printer to be more responsive to the customer’s needs. “This flexibility,” she adds, “builds in a value-added aspect to the work and helps to establish customer loyalty.” Other factors to consider are the cost of warehousing — “real estate is not cheap” — and the environment.

“I’m not saying there’s no room for long runs,” Hall concludes. “That’s certainly not the case. Instead, I believe that printers should strive to provide more exact print runs. Whether the customer needs 100 or a million impressions, it just doesn’t make sense to print a lot of overrun matter that consumes resources needlessly and then must be dealt with in some way.”

“Xerox is constantly working with customers to make sure they maximize their technology investment, and when we’re talking about short versus long runs it’s important to look at each job individually,” says Tracy Yelencsics, Vice President of Production Marketing Communications & Programs, Xerox Corp. “There is no magic run length that guarantees the right ROI. Print providers need to look at the entire print job from pre-press to finishing to determine the right choice.”

Nor, Yelencsics emphasizes, must there be an either/or answer. “There are plenty of applications that require a hybrid between offset and digital. For example, certain sales collateral can be run in large static quantities using offset equipment and supplemented with customized digital pieces for specific target audiences. We also help our customers with a job estimation software tool to help them make this decision based on the parameters of each job.”

Determining Breakeven

Those printers trying to find a reliable rule of thumb for deciding run lengths and break-even points should know that there are tools available that can help.

“Actually, we have better than rules of thumb,” says Avi Basu, Director of Business Development Services for the Americas with HP. “This question, as you know, has been going on for quite some time.”

The company’s solution is HP Indigo Smart Planner 3.0, an advanced job estimator and business planning tool that can calculate the breakeven point between offset and digital jobs. The planner, an upgrade to the former HP Indigo Commercial Job and Label Job estimators, offers estimating tools for complex multi-step applications such as direct-mail jobs that require postage discount calculations in addition to overprint, warehousing, postage discount and advanced finishing costs. It also offers support for offset and digital continuous-feed presses, and has an available option for importing actual job data from PSPs’ management information systems.

“It is a tool we developed with some industry analysts,” says Basu, “and it’s something we make available to all our customers. They put in their data in terms of the costs of labor, substrate, time, everything and, depending on their cost, they are actually able to determine their break-even.”

Long to Short

Canon U.S.A. sees a “huge shift from long to short runs,” notes Forrest Leighton, Director of Production and Field Marketing for Canon USA. “Print runs are getting shorter, turnarounds are getting faster (and) jobs are targeting more diverse, niche audiences.” The increase in customization is one reason why print jobs are going short, he adds. “But the real question facing shops is, ‘How does the printer add more value to the printed piece?   Basically, what am I going to do with those applications to drive a better ROI for my customer and, in the end, myself?’”

It is, Leighton maintains, his and his colleagues’ challenge to determine “how we can educate print providers to put value into the document utilizing advances in technology that enable greater customization through variable data printing, while helping printers better market themselves to their customers.”

There has always been, according to Leighton, a break-even point when it comes to offset versus digital printing. Recently, he notes, “we've see that break-even point rising from the traditional level of 1,500 to 2,000 pages to one approaching 3,000 to 4,000  thanks to the greater performance of our digital presses.”

When considering ROI, however, he calls it critical to look at the individual shop's market, “especially in a down economy, as every print buyer is looking at the marketing spend and the allocation of dollars.” Canon, like many providers in this space, is seeing a lot of traditional marketing pieces go online or via some other media “if they are being done at all. We need to be smarter about the documents that we are going to print.  What are they, the customer, trying to accomplish with the printed piece?  Customer loyalty? New leads? The creation of good information for their employees to reference? How can the printer increase value in that chain?  These factors must also be considered when calculating ROI.”

How can printers evaluate each job to determine the type of equipment and runs to suggest to their clients to get the most bang for their buck? Leighton looks at it “in terms of what we offer from the Canon side, workflow integration.” Until recently, print shops have had one workflow for digital and another for offset, creating redundant processes. Canon imagePRESS equipment can be integrated into the most popular commercial pre-press workflows, such as Agfa:Apogee Prepress, Kodak Prinergy, Heidelberg Prinect, and Screen TrueFlow, to enable one streamlined, efficient workflow. “This allows the output location decision to be made upstream based on various favors such as turnaround time, page count, variable data, etc.”

When evaluating print jobs, Leighton insists, it is “overly simplistic to say that if it’s a static printing job, its evaluated on run length and cost per page, and (that) where you end up on the break-even point determines which device to use. By the same token, if it’s variable data the job will always go digital. Canon believes that the true cost of a print job is what it does for your customer and in ensuring that the marketing spend is providing the greatest ROI on a job. If the customer is successful and the printer delivers what the customer needs, they will be successful.”