What Equipment Do You Really Need?

There are few industries that have changed more than ours. In the last few decades we have seen mergers, buyouts, outsourcing jobs, and competitors “commoditizing” print by selling it over the Internet. Put in the specs and we will send you a price. What’s more, the actual market has contracted as cyber marketing has eaten into what was once exclusively print territory. In short, the pie has shrunk a bit and competitors have become more aggressive in pricing.

This would be a lot more manageable if our industry were not so capital intensive. We don’t just have a set of client files. We have equipment, fixtures—whole physical plants.


A Brief Review of the History

Time was when the conservative—and often intelligent—approach to the equipment issue was to keep your current presses well oiled and maintained rather than leaping into buying this-is-the-latest-and-best five-star press or production system, mainly to keep up with the Joneses who just went from two- to four- to six- to eight-color.

And waterless. Remember that? Then it was Deming and ISO and other things.

In fact, the number one reason so many companies bought “whatever” was because their owners heard others were buying. And more than one printing company went under by over-leveraging itself in pursuit of the Joneses.


The Big Shift

Then things changed—almost overnight.

Technology has ramped up so incredibly that companies that did not keep up the Joneses of those more recent times were no more relevant to the market than a rotary phone is to communication. Big bucks clients became more sophisticated, wanting equipment lists and other assurances that you had the best horses in the production stable. You either kept upgrading or you were out of the tournament.

It was not a conservative or liberal approach. It was about survival. Many could not keep up, and the industry herd was thinned further.


What now?

We may be closer to the past than ever before. Equipment is very expensive. Sure, there is plenty of hardware on the secondary market, what with the belly-flops and mergers, but even that can’t be bought with frequent flier miles.


Two Good Questions

Good equipment costs money. Lots of money. Often more money than many companies can afford. So what should you do? In a word, be selective.

There are a few questions I encourage you to consider. The first one is this: What equipment do we absolutely need to have to be relevant to the marketplace?

The key words in that sentence are absolutely need. If dollars are not plentiful, here is where you need to be conservative. You have got to stay in the game, but decide what the minimum is.

The second question is more important. What market are we in or should we be in, and what are the equipment demands?

The market keeps specializing. Of course, you don’t want to turn any work away, even if it doesn’t fit perfectly, but I’m not talking about that. I am talking about where the profits and market edges are for your company. Determine that and a lot of equipment questions will be answered.


A Word About Niching

In the 1980s all you heard about was niching. You could not be all things to all people, as the tired expression had it. You had to find your niche.

A lot of companies wisely ignored that. Yes, wisely, because often there were two problems with niching. First, many of the niches were fads and dried up, as did the Joneses who invested in them. Second, many Joneses were not always sufficiently sophisticated in seizing a large enough market share of a given niche.

Smart companies did experiment a bit with specialties, and some hit the mother lode, finding a solid and enduring niche. The smart ones, however, proceeded very deliberately, consulted with others, and so played their economic cards wisely, all the while remaining able to handle meat-and-potatoes printing business outside of any given niche.

Today we need to think again about niches or specialties. I encourage you to study your own company, the market, and the capacity demands. This can be as exciting as it is scary. It may mean plunging ahead a bit on faith, but it can also mean spending more prudently and not going under with the Joneses.


Dr. David Claerbaut has spent more than 25 years consulting in the graphic arts industry. You can reach him directly at 702-354-7000 or email him at drdavid@fcbb.com. Learn more at MyPRINTResource.com/10746916.