Where's the Money? Binding

In-house or outsource? That’s a particularly delicate question printers must ask themselves each day. For many commercial shops, the question never arises about prepress or printing; that equipment is solid bedrock in a shop’s key requirements. But postpress equipment is another matter. Printers need to have a well-thought-out financial and business model with a thorough grasp of their customer and potential customer’s needs especially relating to the bindery.

Do I purchase finishing equipment or outsource the work to a trade bindery? What are the costs involved? Do I lose control over my job? How many extra employees do I need to hire? Will I have enough work to keep the machine busy?

As the economy begins to percolate once again and jobs begin to re-emerge, printers need to take a hard look at their bindery department. Will it be an efficient revenue source or do they need to partner with a trade bindery already equipped with finishing equipment?

On one hand, Justin Goldstein, executive director of Binding Industries Association (a division of Printing Industries of America), suggests that commercial printers remain experts at printing and leave bindery specialization to trade binders.

“I would recommend to printers to not bring their bindery in-house,” said Goldstein, who admitted his bias toward independent binderies as chief promoter of this segment. “If a commercial printer does bring the bindery in-house, they are going to need to think about supplies, maintenance and training. If they don’t have a steady stream of business to keep the bindery operating it doesn’t make sense from a cost perspective. Plus, printers do not have a knowledge specialist to operate the equipment or produce finishing work.”

Goldstein said his organization counts 700 to 800 independent trade binderies and graphic finishers in the United States, a steady number over the past year. “We’re not seeing a lot of printers purchasing bindery equipment to bring in-house,” he said. “In fact, we’re getting calls from printers who are looking for specialized binderies to help them finish their work.”

But bindery manufacturers are continuing to produce equipment that is easy-to-use, economical and productive. “It makes perfect sense to outsource highly specialized and long-run jobs, but some printers are bringing basic finishing in-house as run-lengths drop and turnaround requirements become more extreme,” said Mark Hunt, director of marketing at Standard Finishing Systems. “Binding, saddle stitching and folding machines today are easy to operate and have intelligent automation that flattens the finishing learning curve, making it easier to produce a top-quality finish without the need for dedicated experts. There are certain advantages to outsourcing, but with sufficient volume a printer can justify the investment, grow ancillary finishing profits, and gain full control of their schedules.”

Many commercial printers agree with Hunt’s assessment and are not only maintaining control over their jobs but increasing their revenue. Last year, Ryan Printing, a Blauvelt, N.Y., general commercial printer, posted its best sales ever in its 18-year history. In March 2009, the 12-employee shop located in Rockland County installed its first digital printing press—an HP Indigo 5500 model. Designed for the production of marketing collateral, direct mail, photo merchandise products, books and manuals, the HP Indigo press 5500 supports an extended range of media—including recycled, FSC-certified and SFI-certified papers—and prints in resolutions up to 1,219 dots per inch (dpi). But what about finishing the digital jobs? Would Ryan need to install new equipment or outsource himself?

In fact, he did neither. His bindery equipment for conventional work, including a Stahlfolder USA B20 continuous folder, Stahlfolder TH 82 and a Eurobind 600 hot-melt adhesive binder, is being used to finish his digital output. “We’re getting the same high-quality results with digital output that we achieved with conventionally printed materials. We haven’t had to purchase a single new piece of equipment nor have we had to outsource either.”

Initially, the company wasn’t sure if the binder and folders would work with digital jobs. “We didn’t expect the Eurobind hot-melt glue to work with digitally printed materials,” said Ryan. “But we were genuinely delighted when it did.”

Rather than outsource or buy new specialty digital finishing equipment, other printers are coming to Ryan to finish their own digital jobs. Ryan regularly fields outsourcing requests from other digital printers who are seeking to finish their digital capabilities with his high-quality conventional bindery methods.

“We’re predicting that 2010 will be even better than 2009,” he said. “The economy is recovering and we now have both digital and conventional presses to produce work.”

Ryan continues to look at other pieces of new equipment to add to his shop. “Right now we outsource die-cutting and mailing,” said Ryan. “When it’s not under your own roof, it takes longer to produce. In this market climate, we don’t want to lose any jobs to competitors.”

Another printer who added digital printing to its repertoire is Hopkins Printing, a leading high quality sheetfed commercial printer in central Ohio. Three years ago, the firm installed a Kodak NexPress digital production color press to produce variable data, postcards, PURLs, and other short-run jobs; at the end of 2009, the firm added a Konica color device to its digital department. In the beginning, the firm would take the digitally-printed jobs over to its commercial printing bindery to finish them. But Hopkins quickly learned that in the 24/7 world of digital printing, the firm needed dedicated finishing equipment just for the digital jobs.

At first, Hopkins purchased a separate folding and scoring machine for its digital work. But recently, the firm added a new Morgana DigiFold one-step scoring and folding machine, which is proving to run five times the speed of its two separate pieces of equipment.

“We’ve found that our digital work requires quick turnaround and therefore we do not do any outsourcing for our binding or finishing,” said Roy Waterhouse, vice president of sales and marketing at Hopkins Printing. “Due to the fast turn times, the need for high-quality, the ability to control your product and the logistics, outsourcing is not an option. We can print and finish in one day by having our equipment in-house. And we’ve prepared a cost analysis in which we’ve found it is cheaper to buy our own equipment rather than send the work out.”

When Miller Printing & Litho Inc., an upstate New York commercial shop located in Amsterdam, decided to in-source its perfect binding, the firm chose to spend $300,000 for new equipment from Standard Finishing.

“Technology is a valuable asset,” said Scott Miller, president. “Marketing and performance are key to a shop’s success. We believe that adding perfect binding as an in-house capability was important and gives us a value-added service for our short-run fast-turnaround work. It improves our value to our customers and allows us to quickly meet short deadline jobs. It has also helped us to find efficiencies to better serve our customers.”

While the majority of Miller’s customers are regional, the 27-year-old shop is beginning to extend its reach to other parts of the country, where it produces financial and sports publications. Miller believes that binding in-house will more quickly develop its business on a national level. The shop’s press department features a two-color Speedmaster SM 74 press with coater, a Quickmaster DI press and a pair of two-color Printmaster QM 46 presses.

Miller praised the computerization and automation on the Standard Horizon perfect binders. “The intelligence in the machines maximizes our labor force,” he said. “There are a lot of us here who can run the equipment. The staff in our mailing department can crossover to run the equipment.”

“Purchasing equipment in this economy is very risky,” said Miller. “But we chose Standard Finishing and their dealer because they listened to our needs, cooperated with us, helped with our training, and I feel that they have been in business for many years and the dealer is only 40 miles away.”

Debora Toth is a freelancer who has been writing about the graphic arts industry for 25 years. She is a public relations specialist and operates Coastline Public Relations. She can be reached at coastlinepr@aol.com.