Operations of a PSP

18- COMMERCIAL PRINTERS

Let’s dig into the operations of a commercial printer. In this series of modules, we cover the typical organizational structure, including the purpose of the department, along with the respective staffing and processes required.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Ryan McAbee: Let's dive into what a Print Service Provider is, how it is structured, and who does what to get the work done. For those of you who are curious, the picture is of someone about to cut a stack of paper using a guillotine cutter. Definitely, you do not want to get your fingers or extremities near that yellow line.
    • It is Ryan and... 
    • [00:00:16] Pat McGrew: Pat! 
    • [00:00:17] Ryan McAbee: From The Print University. Pat, can you give us a high-level overview of what a printing company actually looks like? 
    • [00:00:23] Pat McGrew: Print companies are funny places because they are equal parts administrative and manufacturing. It takes a lot to get all the printing done. It does not matter whether you are talking about a Minuteman franchise or you are talking about a giant book printing complex, or a general commercial printer. They have a sales organization, and the sales and administration piece of the business is responsible for going out and selling what the print shop is capable of. They also make sure that jobs are estimated and quoted correctly. Making sure that once the job comes in, all the billing information is captured for the customer, it goes through the manufacturing process, and we actually bill for it and do all the normal business-oriented things. There are whole workflows involved just in the sales and administration part. 
    • You have the job that has come in. We have to prepare that job for work, and we do that typically in a prepress department. A prepress department has professional color management experts, people who are experts in layout, people who are experts in the look and feel of the print, and who understand the layout for the type of substrate it is going to be printed on.
    • There may also be IT people. More and more today, an organization will have an IT group because so many of the programs and processes that we use are based on the computer. There may be a lot of automation going on as well, or at the very least, islands of automation where some color management and preflight might be automated to make sure that the file will actually print. That all goes on in prepress and IT. 
    • Then there is the printing department. That is where all the happy equipment is. Printing is interesting because it can happen on a lot of different devices, right? It can happen on offset devices, flexographic devices, digital toner devices, digital inkjet devices, and sometimes even hybrid printing goes on where a job starts on one device and then is moved to another device to be post-printed to finish it off, right?
    • A lot of coupons that are targeted and personalized are done that way. Once it is all printed, you have to get it ready for delivery to the customer, and that is in the finishing department. Finishing can be a lot of different things. It can be book binding for books, and catalogs can be perfect binding or staple binding or wire binding. It can be just cutting and stacking in a box. For flyers, that is all you need to do. 
    • It can also be things like bills and statements, or direct mail, that go into the mail stream, in which case they may be inserted into envelopes or have little wafer tabs put on them so that they can go into the mail stream. They may need to be sorted into the right delivery order and then delivered out to the post office. In a lot of cases, there is also some warehousing going on and shipping. 
    • If you are doing books, they are probably going to get loaded into boxes and held for shipping. If you are doing pallets of flyers or signs, again, loaded into some sort of pallet or box organization and put into a warehouse until the shipping people can get it picked up.
    • It is a really pretty massive operation. 
    • [00:03:16] Ryan McAbee: I think that it is the thing that the graphic makes look very simplified. There are really hundreds if not thousands of individual discrete tasks that are happening throughout. The other analogy to pull over from the restaurant industry is to think of the sales and administration as the Front of the House. All of the other pieces - prepress, IT, printing, finishing, et cetera, as the Back of the House where the stuff actually happens.
    • [00:03:35] Pat McGrew: Yeah, it is the kitchen, right? 
    • [00:03:37] Ryan McAbee: Where chaos makes wonderful creations, right? From a sales and administration standpoint, it is really about the people around that are interfacing with the clients and customers. That is your sales team, your customer support representatives. Once orders are placed, and they are communicating with them, they are also the people internal to the shop that are needed to manage the employees and the labor, and do all the important accounting and billing kinds of processes in the end. 
    • Here we are talking about things upfront in the house. You could shift these lines a little bit, we realize, but in this part, you are attracting the customer. It is the ordering process that includes the estimating, getting the price back to the customer, and the job ticketing to capture all that detail so it can go into the actual workflow and produce whatever it is that you are trying to make.
    • The big topic that we talk about a lot these days is job onboarding. If you do not capture the intent or what the request is from the customer upfront accurately and also get their files that you can work with - that is the data and also artwork files - then the further you go downstream, the more errors you are going to run into. And, the more costly it is going to be from a production standpoint. 
    • [00:04:40] Pat McGrew: It absolutely is. If you start to think about what comes next after sales and administration, it is this whole prepress and IT process I was just talking about. You do not really want these people having to constantly get on the phone to call the customer to say, "What did you mean about this specification?" "Did you really mean this paper?” “Did you really mean that you wanted it this size? Is this size finished or this size raw?" There are so many questions that go into building the specifications that you want that front-end process to really handle it all. By the time you get into pre-press and IT, you are really focused on preparing the file for print and preparing it in a way that will be appropriate for the substrate that you are going to apply to the finishing you intend to use. 
    • You have to have an eye toward "Gee, this design is really a great design, but if we fold it here, the way you have specified, we are going to fold the logo in half.” “If we are designing a box, when we put the flap on it, the whole tagline is going to be inside the box.” 
    • A little bit of art and a little bit of science in their job. They want to make sure that the files, as they are prepared, are actually going to deliver the product that the customer wants. That is why this universe is populated with a variety of people, from color experts to IT experts, to data experts, who can make sure that the whole job will come together - the files, the data, and the specifications - all doing the thing we want them to do.
    • Very often, we will recommend to people that they preflight when the job comes in the door. We will also recommend that the last thing they do before they pass it to the press is preflight it so they make sure that nothing they have done has caused the file to acquire anomalies that might make it difficult to go on to the next process.
    • [00:06:25] Ryan McAbee: Many people think workflow is very linear. I go from point A to point B to point C. That is not how our industry works. The printing industry is not like making cars where it is the same car on the same assembly line with the same input components all the time.
    • No, we are basically a custom manufacturer. One print job to the next can look completely and be completely different. You could go from doing a book booklet to a full-on book to a poster. You are using a lot of different equipment types typically in most print shops today to actually print this stuff.
    • Those different types of products or applications that you are producing and the finishing and the technology that you are using are really going to determine what your workflows, plural, actually look like at the end of the day. 
    • [00:07:02] Pat McGrew: Let's talk a little bit about that whole printing process.
    • [00:07:05] Ryan McAbee: When it comes to the printing process, you have two big buckets. You have analog methodologies or processes for printing. These are offset lithography, flexography gravure, and so on. The key technologies with these differentiate them from a lot of the digital printing technologies, which is the other big bucket. We would put things like electrophotography - think of making a copy on a copier in a simplified way - and inkjet - we know you can print almost anything with inkjet, including airplanes or tractor-trailer trucks if you want to. 
    • Regardless of those two big buckets, at the end of the day, what the operators are doing with this equipment, minimally, is getting the equipment in a stabilized state. That process is called calibration and linearization, typically so that it can print quality output. Then they are responsible for getting the materials that are required for the job loaded into the equipment, running the equipment, so that it is actually printed at a high-level and high quality, and then delivering that semi-finished print to the finishing department so they can actually convert it into its final product.
    • [00:07:59] Pat McGrew: Printing, as we know, is a labor-intensive business right now. One of the big talk tracks in our print industry right now is that there are a lot of labor shortages. It is very difficult to hire new people to come in. Something about print just does not seem sexy, I think that is maybe part of the problem.
    • We have an interesting challenge because the talent that we have been developing for the last 20, 30, and 40 years is maturing. They are retiring. They are moving on. We have not necessarily brought the required number of people back in to backfill. We are doing a lot with automation, and we are trying to find ways to use Machine Learning, to use Artificial Intelligence, to use software programs, and automated workflows to eliminate some touchpoints, right? 
    • It is not that we are trying to eliminate the people. It is that we are trying to make sure that the people we have are being used in the best possible way and that we are using the processes to move jobs along in the best possible way so that by the time we get to finishing, we have not touched this file a whole lot. That the job got onboarded in a nice, normalized, regular manner. 
    • By the time it gets to prepress and IT, the experts are only looking at problem files. Things that are normal, regular common work can go through in an automated way -  automated approval processes. Once they land in finishing, they are ready to go because everything upstream has prepared it to land in finishing using a lot of manual processes still today. There is still not a lot of automation. I think book finishing seems to be the most automated right now, but there are some organizations that have automated their print-to-cut-to-insert for mail. In general, when we look at finishing, we are looking at a lot of mechanical things going on, aren't we?
    • [00:09:46] Ryan McAbee: That is right. Because you might hear it called different things in different places, most printers call this finishing, or sometimes you might hear post-press. If you are a packaging producer, if you make labels, if you make pouches, that sort of thing, it is called converting. It is still taking that semi-finished product, and doing whatever you need to do to make it the final product that you are going to ship to your customer. 
    • The other thing to remember with finishing is usually it is the most dated equipment because these machines last a really long time. It is not uncommon to see a 50-year-old guillotine cutter on the floor that can still cut just like it did in 1952. Because of that, there is generally less automation in this area because the equipment may not be capable of it. There are different ways to counterbalance that. 
    • The other thing to realize about finishing and converting areas is that you are rarely just going to do one thing. Business cards might be a rare exception where you are just cutting them down into rectangular pieces. Most of the time, you are going to be stacking these processes on top of each other. You might be cutting, and you might be folding it, You might be stitching it or putting staples along the fold. All these different things. You may do a series of them. This is also where the labor costs really come into play, and you really want to minimize that as best you can.
    • [00:10:54] Pat McGrew: Yeah, the more you can automate your finishing, again, it impacts your cost of goods sold. We want to keep the cost of goods sold as low as we can. 
    • This is the last process that we are working at. After we go from printing, we go into finishing, and then we go into the warehouse. 
    • The warehouse has a couple of roles in the printing industry. It may be holding inbound raw materials as well as outbound customer materials. In some print environments, it is also holding items that are part of a fulfillment kit, right? There is a whole kiting process that may be happening in a warehouse environment as well. 
    • If you have ever bought a Barkbox or other subscription boxes, the box gets printed and folded, cut into a box, prepared, and then it gets staged. All the things that go into the box are in a warehouse. Somehow they have to get into the box, and the box gets sealed and then sent out for shipping. 
    • For some direct mail, there are multiple processes involved, where coupons are inserted into an envelope of direct mail. Or even with transactional statements and bills, maybe you have opened your billing statement and poured out all the external coupons that came in it. All of those things get staged in warehouses as well. 
    • Very often, they have their own IT programs that are used to manage everything in the warehouse to make sure that they understand their inventory levels, to manage the positioning and where things are located, in addition to all of the general shipping things that have to go on. In our case, shipping might be shipping boxes of things to someone, or it might be shipping into the mail stream with pallets of things that get delivered to the post office.
    • Finishing as a process can be really interesting. It has its own workflow. There are programs like Aprimo and Midnight that are designed to track all of that stuff. The best of these print shops, Ryan, we hope that they are gathering data in each one of these stages and sharing the data as jobs move through with a master dashboard so that the folks in that sales and admin office are aware of what is going on.
    • [00:12:51] Ryan McAbee: That is right. If we use that back-of-the-house analogy again, where all the work happens, you really want two types of software to help you accomplish your tasks. One is software that helps you automate processes as much as possible, realizing not everything can be automated. You want to try and get to the ideal state.
    • Then the other big piece of software to help us with this data and tracking and knowing exactly where things are in your environment. Being able to collect imported time and material usage so that you can do accurate costing. At the end of the day, that is the only way from a numerical and empirical standpoint that you can say, "Hey, I made money" or "Hey, I lost money on this particular type of work." That is where solutions like a print management system would come into play. 
    • Now, Pat, you were talking about fulfillment a little bit. I know you are a car fan, so probably the most interesting fulfillment item I have ever seen as I was walking through a printer was actually warehousing nice embroidered leather jackets from an Italian automobile maker.
    • [00:13:46] Pat McGrew: I once was in a fulfillment warehouse that was run by a major print management company where they had strollers. 
    • All sorts of things might be part of a fulfillment warehouse.
    • So the whole print environment is a massive operation. And it does not matter whether you are a Minuteman Press or a giant global manufacturer. There are a lot of touchpoints.

19- SIGN SHOPS

Operating a sign shop is more about controlling and optimizing the processes after printing than before. Learn why these types of shops have unique requirements for finishing/mounting through to installation.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Pat McGrew: Hey, I am Pat McGrew with McGrewGroup here with my colleague Ryan McAbee from Pixel Dot Consulting. This time we are going to talk about the operation of a Sign Shop Print Service Provider. Ryan, sign shops are interesting organizations because they can be extremely small or they can be gigantic. 
    • They can serve markets that are running devices, as you see here in our video. They can be operating not only these but much larger versions of these and even signs that are done on flatbeds and giant formats. Let's dive into sign shops a little bit. 
    • [00:00:33] Ryan McAbee: You are right; you do have that diversity. You can have a one-person operation in a garage to literally a warehouse base that is multiple football fields, thousands of square feet or square meters. Apologies because we know that from a terminology perspective outside of North America, they may not be called Sign Shops. They are more likely referred to as Sign Printers. 
    • [00:00:47] Pat McGrew: We are talking about signs, but in fact, a lot of organizations using the same equipment and workflow and process are vehicle graphic people who create vehicle wraps. They may be creating things that are paper-based. They may specialize in printing on glass or printing on board...
    • [00:01:03] Ryan McAbee: …lots of different plastics.
    • [00:01:04] Pat McGrew: Yeah, it is an interesting group of people because they do really small to really large printing on just about anything you can print on. 
    • [00:01:11] Ryan McAbee: From an overall operational perspective, the sales administration has a lot of similarities with most of the other types of printers out there.
    • The prepress work has a lot of similarities because you have to prepare the file and so forth. There is a little uniqueness because you can get into nesting, which we will talk about in a little bit. Printing is where it starts to get different. Often you have to really focus on the material that you are going to print on. That is going to determine what type of printing device and ink set is needed to do that. Printing on glass requires a different setup than printing on a vehicle wrap, et cetera, et cetera. Where it gets super interesting for me is in the finishing area, or the mounting area, as we called it here.
    • Many different ways these signs can actually be hung. In the case of window clings, they are just applied to the glass surface. Vehicle wraps - it is a master artwork class just watching someone put on a vehicle wrap, which is always a fun thing to do if you are at a trade show.
    • What kind of points should you think of from the sales and administration standpoint? The thing that strikes me is that if you are a salesperson, you really do have to understand the materials that are going to be used and the finishing that you may need to offer for that finished product.
    • [00:02:10] Pat McGrew: And to be pretty aware of where they are going, right? The constraints of hanging something in an indoor space versus an outdoor space. What part of the country this work is going to be used in? Hanging something outdoors in Louisiana is not the same as hanging it out in Montana. There are considerations in terms of finishing and coatings that make it more appropriate for UV.
    • As a salesperson, you want to have the ability to have smart conversations with the client. Signs are one of those things that might be bought by anybody. Sure, you might have a corporate buyer who really understands exactly what they are looking for and where it has to go and has a lot of expertise in it.
    • It is just as likely that the local PTA might be looking for a sign for an event, or the local football team is looking for something for an event. The people who are involved might change from year to year. Political campaigns are another one where the people doing the buying may not be as conversant in all the options.
    • You want to steer them. Maybe they saw something really cool, and they want to do something just like it, but it might not be appropriate for what they are trying to do. As the salesperson, you are also the counselor in terms of what they actually can do for the price that they have in their budget to meet the needs from a physical perspective as well as a budgetary perspective. 
    • [00:03:18] Ryan McAbee: You do really have to coach someone through, from a sales perspective, to understand the use case. How they are going to use it, and where it is going to be. The contextual environment that it is going to be in. Also, the physical and environmental things that could happen. 
    • You painted the picture for me in my head when you said Louisiana versus Montana because, in one location, you have to deal with a lot stronger UV. If it is outdoors, you want to have fade resistance, so it does not fade in a week. In Montana, they might have more wind to deal with. If it is a sign, you might want pockets to let the air flow through.
    • [00:03:42] Pat McGrew: Think about hanging something in a chemical plant versus hanging something in an agricultural plant versus in a place making tractors. Just because it is inside four walls does not mean it is all the same. 
    • The salespeople in this space have to be jacks of all trades and counselors to help people, especially the uninitiated, to understand how to buy the right product for what they are trying to do.
    • [00:04:05] Ryan McAbee: I think it is more critical, especially to maintain your profitability and understand what materials you have available, to have a system in place. In this space, it could just as easily be called a print management system or management information system, or MIS for short, or it could also be called an ERP system in some cases - Enterprise Resource Planning system. Either way, that tool is going to allow you to know your costs, know the materials that you have and the cost that relates to them, and be able to build a smart quote for the customer. This is what the price is going to be for these different signs - then also know that you are going to be making money once you produce those.
    • [00:04:35] Pat McGrew: That is critical no matter what size organization you are. If you are a one-person shop or you are a 150-person shop, the truth is that you are going to have to be very aware of your changing costs of goods sold against your profit margin - changing rent costs, changing electrical costs, and other utilities. That all goes into how you want to price. The sad ones are the people we talked to who set all their prices three years ago and have not changed them. A lot has changed. 
    • [00:05:01] Ryan McAbee: They are not making money. The good news is that these systems in this space do run the gamut. You can find very affordable cloud-based ones all the way up to multi-site, very robust ERPs. 
    • [00:05:09] Pat McGrew: There are some great systems out there. They are all worthy of taking a look at. 
    • [00:05:13] Ryan McAbee: Now, from a prepress perspective, you have to deal with either retrieving a file from the customer or maybe they are creating the actual artwork and layout.
    • The things that stand out most versus the other types of printers, it is often counterintuitive from what you do in some of the other spaces in terms of resolutions that are needed for the graphic output. The preflighting choices that you would choose to make sure that you can reproduce the file. Then, when it comes to imposing these things, we get into some different terminology around nesting and N-ups or multiple step-and-repeat patterns. What stands out to you to be aware of from the operations of a sign printer? 
    • [00:05:45] Pat McGrew: It is always important to understand the capabilities of your equipment, right? If you are working with a certain width device and you only have that one width device, you do not want to accept work that does not fit on it. Let's start there. That is always a good idea. Unless there is an agreement that it is going to be sewn together on the other side, which is also a possibility.
    • In general, your point about resolution is very important. Ryan, what happens if I walk into a sign shop with an amazingly well-designed poster that is extremely colorful and beautiful, and I try to hand it over at 2,500 DPI - what I want is something that is 24 by 36 inches.
    • [00:06:17] Ryan McAbee: It is probably too much. 
    • [00:06:19] Pat McGrew: It is too much data. What you have to think about with resolution is that it is a data processing challenge. These devices and the digital front ends that sit in front of them and the workflows that sit in front of them - you have to match your resolution to the capabilities of the device. Too much data is not better. 
    • [00:06:33] Ryan McAbee: Also, what is needed for the output? We talked about the thing in context. An education point for the salespeople that also gets into the technical process is the fact that if you do Grand Format and you are printing on billboards that are going to be viewed meters or hundreds of yards in distance, the resolution that they are often printed at is in the hundreds of dots per inch, not the thousands. You do not need it because your eye will basically do the trick to assimilate. 
    • [00:06:53] Pat McGrew: Yeah, fill it in. If you are new to signs or you have never bought a sign, it is often a learning experience. You are not looking for the highest resolution. You are actually looking for the appropriate resolution for the output environment that it will be living in. That is where we look to the salespeople to help the buyer understand what needs to be delivered. 
    • [00:07:10] Ryan McAbee: In terms of the toolset today, probably more than the other types of printing, it is a more RIP-centric thing. We can debate the differences here. A Raster Image Processor, is what takes the file and converts it into the right format for the printer. There are usually tools bolted onto those RIPs as well. They really do more than just that one thing. They can also help manage the jobs as they come in. There is some automation that is usually built-in with these toolsets. A big thing is color, too, right? 
    • [00:07:34] Pat McGrew: Color management depends on who you buy from. If you are buying a device from a dealer who sells the more popular brands of devices, it is likely that they have a sort of box that they can deliver to you containing everything that you need to run this device. These devices very often can support raster image processors from different manufacturers. We often walk into a shop where they have maybe five or six different RIPs that are available to them on a server. Depending on the nature of the job and the substrate that they are printing on, they might select one RIP over another because they know they get a better kind of output depending on what the customer is asking for.
    • You wind up becoming smarter about more of the technical bits and bites - the relationship between the file and the printing engine in this sign space. You might settle on a single RIP that you are going to use because you like it, you like what it does, and it maps into the rest of your business. It might be able to take feeds of print jobs and manage a print queue for you. You should always be watching to make sure that you are continuing to get the best output that you can possibly get, and that you are actually using the software appropriately, so you are getting the best benefit. 
    • [00:08:38] Ryan McAbee: This is one of the spaces that have a bit of oddity to it. Most of the devices that are on the market - it is bring your own RIP. You can go purchase something from a third party. In most of the other printing segments, it is one choice. 
    • [00:08:50] Pat McGrew: It is bolted in. 
    • [00:08:50] Ryan McAbee: The Model T approach to RIPs. 
    • [00:08:52] Pat McGrew: Some of them are really pretty comprehensive. They have really excellent color management tools, really excellent preflighting tools, and really excellent early warning systems. If you tell it that you are printing a sign that is going to be mounted with an overlap and a sewn line, and you put the logo in the middle of it, it will throw a warning at you. There are some really sophisticated programs out there. For my money, I would invest in them. I want as much help as I can get.
    • I know for smaller shops, and it is tempting to just do the cheapest RIP you can get and try to go for it on your own. It puts a lot of burden on the team, which might be one person or might be two or three people, to make sure that you do not make mistakes like putting the logo in the middle of the grommet.
    • There is always a good reason to be looking at the tools and having deep conversations with the providers to make sure that what you are using is the best for your shop and your circumstances. 
    • [00:09:35] Ryan McAbee: Your costs are really around the ink that you are using, the material that you are printing on, and the labor that is required to do that.
    • Having that software that can also maybe color manage so that you can do ink reduction, so you are not using as much ink. Also, the software that tells you how much ink is actually going through that machine so that you know how to properly cost and what it takes. It is very helpful. 
    • [00:09:53] Pat McGrew: Say somebody wants a bunch of smaller pieces. So we are going to do N-up. We are going to maybe do five across, right? We are still printing on a roll, but we need to know where those breakpoints are, right? We are going to be cutting them apart. How you style that can make a big difference to your profitability.
    • You have five jobs sitting there, ready to run. They all are these smaller sign formats. What you really want to do is run one job that gets them all printed so that you can get them into cutting and finishing. A lot of these solutions can help you determine how to do your step-and-repeat patterns so that you can gang these things together and, nest them together so that you can make the best use of the substrate without having a lot of waste and still get a lot of your jobs printed as one job run.
    • Those are the kinds of things where software can really be your best friend. 
    • [00:10:36] Ryan McAbee: In this space with the material cost, because it can be a lot more than paper. 
    • [00:10:39] Pat McGrew: You do not want to throw any of it out. 
    • [00:10:41] Ryan McAbee: You want to use every bit you can. When it comes to the actual printing step, I think the trend over the years has been that the equipment is getting faster. It is typically getting more capable. Does that mean that this printing is no longer a bottleneck step, or does it mean that the bottlenecks have moved to other parts of the operation in the sign printer world? What is your take on that? 
    • [00:10:59] Pat McGrew: This is a print environment in transition or at least in expansion. A lot of sign printing is done on these roll-fed devices. It might be narrower. It might be giant. I have a friend in Australia who prints the signs that hang from under helicopters. That is large. But at the same time, you may have people who bought hybrid machines which are capable of doing roll-fed when you need it but can also do flatbed when you want to put giant pieces of board through.
    • Most of these devices are what we call scanning head printers. They scan back and forth. You can sit there, and you can watch it build the image up, right? Our opening video shows the elephant's feet hanging down, and that is a scanning printer. It is building the image up. 
    • A new class of devices is becoming, I would not say common, more available in the next five years. That is what we call a page printer. Where the substrate - the fabric, the board - whatever is being fed on a conveyor belt basically that goes under a head that is static. It prints the whole thing as it is going under. It is not a scanning head. Instead, it is moving substrate underneath the head.
    • The new devices can do up to 20-point board. They are still not printing very wide. Right now, they are limited to 18-20 inches wide. I think that style of printing is going to become more available over the next five or eight years and probably wider in format over the next five or eight years. The advantage of it over the scanning head is it is significantly faster.
    • If you do a lot of that kind of work - if you do a lot of 18 by 40-inch boards that are hung from ceilings or stand up in displays, these kinds of devices could allow you to produce that work significantly faster. It is a transitional area. 
    • [00:12:32] Ryan McAbee: The other thing that is unique in this area is that if you deal with very large output, whether that be Grand Format banners or billboards or large boards of anything, it is probably more common in this space to see some type of automation or some physical assistant to the operator to be able to handle those materials. Whether that is a robotic arm or some other kind of mechanism to basically load and unload that material, you are going to need that just cause you physically cannot manage it otherwise. 
    • [00:12:56] Pat McGrew: There is a lot of innovation that I think will continue to come in this space. Some of it will be in this space that you have pulled up, Ryan, in the mounting space. Today, it is mostly manual. A lot of this process is very manual.
    • If you are in the sewing process - sewing a gusset across the top so you can put a rod through, sewing reinforced corners and edges, or putting grommets in, which often involves a hammer - a lot of these things are still very manual processes. But we are seeing the rise of more automation in this space.
    • Things like wind slits and things can be done with a motion cutter. Automated sewing is still coming. It is piloted mostly for smaller formats. We were just at a trade show where I saw some devices that have gone into the next generation with fabric welding. Instead of sewing, they are literally heating the fabric hot enough that it actually creates the seam needed where the gusset is needed.
    • This is an area you watch really carefully. For most people in the sign industry, when they need this kind of work done, it is going to involve a sewing machine and a big needle. 
    • [00:13:54] Ryan McAbee: Here are just seven examples or so of what can be done, but the sky is the limit, so to speak. Depending upon where it is going to be, and the environment it is going to be in, you might do a whole host of other things. There are often multiple techniques that are done for the same final output. You might have wind slits with something else in terms of how it hangs. So it is not that you just do one. You may be doing multiple finishing techniques or mounting techniques that are needed based on where it is going to be. 
    • [00:14:17] Pat McGrew: This does not include all the adhesive applications for doing window clings. A lot of times, the substrate comes preconfigured for being a window cling. Floor graphics is another one that has to meet certain constructs.
    • The other thing that we do not have a picture of is a bucket truck. Very often, signs require just a little bit more than just, "Hi, have a sign." There are some significant installation considerations for these things. As the sign provider, you may be asked to do that work as well.
    • [00:14:41] Ryan McAbee: The salesperson really has to know the entirety of the business so that they can coach the client. Some of these things are large enough or fragile enough that they require special packaging so that you can ship them.
    • The costs may be prohibited for the customer to ship some of these items too. Installation becomes a huge aspect or value add that you can do here. That can either be done by the print-the-sign printer themselves, or it can be outsourced to other organizations to take care of that.
    • Then we have the word warehousing here. You may think - what are you warehousing signs for? Can you just put them up when you need to? If you are servicing a retailer, you often have to do kitting for different seasonal promotional things. It is not just one sign; it is multiple pieces of marketing collateral. Everything to go with it that you will be sending to each individual location.
    • [00:15:21] Pat McGrew: And that is usually done months ahead of the season, right? Christmas signs have already been delivered. We are all the way on to the new year now. Kitting and fulfillment are really important to remember. Again, it is down to the salesperson understanding what all the constraints are when they sell the job.
    • Then think about who you are selling to. Some sign shops specialize in only doing work for trade events or for big shows. They have a very specialized set of skills that allow them to do that efficiently - package and deliver into convention centers and into big shows.
    • Other people specialize in smaller format signs. They might be very locally focused and serve window clings for the local nail salon. A lot of sign shops do specialize in who they serve, and others are more generalists. The salesperson has to know what it is they are selling to whom, and the salesperson is often the person who knows who to go to if the work is not right for them.
    • [00:16:06] Ryan McAbee: That is very true. They act as a facilitator in many cases. You normally focus on a singular niche or a set of sign applications. You typically do not do anything and everything as we see in the general commercial printing world.
    • Close us out here, Pat. What are some of the key takeaways?
    • [00:16:18] Pat McGrew: A big takeaway, operationally, for sign printers is that the salesperson is going to need to be extremely knowledgeable about everything, from a capabilities perspective, that the organization can do.
    • The people who are responsible for taking in files, ensuring that they will print, actually getting them onto the devices, and finished goods out the door. They have an interesting job because every job that comes in can be slightly different. They are juggling what substrates they are going to be printing on for a while. They want to try and group jobs so that jobs that are using the same substrates are printed as together. Changing the substrates out on the devices takes time, and time is money. 
    • The whole organization, in terms of how it gets printed, and how it gets delivered to the customer, must understand your operational capabilities and have a backup plan for work that customers want that is not exactly within your capability.
    • Over time, you watch what customers ask for and decide whether you need to bring those capabilities in. Over time that is how you see sign shops grow. They buy wider machines; they buy different kinds of finishing capabilities. They buy bucket trucks, right? 
    • It is a pretty wide-ranging group, but this is a great place to start. It is really easy to get into the sign printing business if you feel like you can sell. If you have a product that you can create and a market that is interested in what you can create. The technical aspects of running a sign shop are a great place to learn the printing industry.
    • [00:17:31] Ryan McAbee: With that said, we hope you have enjoyed this episode on the Operations of a Sign Printer, and hope to see you at a future episode here at The Print University.

20- IN-PLANT PRINTERS

Since in-plants are the dedicated print shop embedded into larger organizations, the sales and delivery processes are typically different from other types of printers. Learn what makes them unique in this module.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Pat McGrew: Hi, I am Pat McGrew with McGrew Group, and I am here with my colleague Ryan McAbee from Pixel Dot Consulting. Hey Ryan. Good to see you. 
    • [00:00:10] Ryan McAbee: Hello again, Pat. 
    • [00:00:11] Pat McGrew: This time, we are going to talk about the operation of print service providers with a focus on in-plant printers. The term in-plant printer means a lot of different things, and sometimes people use a different term to mean this august group of people who print inside a corporate four-wall environment. Think of the printing plant of a bank or the printing plant of an insurance company. Educational facilities are big in-plant printers. Sometimes they are still called CRDs, and that is an older term - copy repro department - left over from that era when a lot of the work was done on copy machines, right? And little tiny Didde presses and AM presses. 
    • Today, when we talk about an in-plant, we really mean something a little bit different. We mean an organization that looks pretty much like a commercial print shop. It just so happens to have a few extra challenges with regard to how they invoice for the work they do, how the work actually comes in the door, and who they answer to.
    • In some of these cases, these in-plant printers are doing work for the internal organization where they are housed and may also be doing external work for profit to fill in the capacity of the machines to make sure that they are always running and they are running as profitably as possible.
    • So what makes them really different? 
    • [00:01:47] Ryan McAbee: We talked about the three operational models in our other module, Inside an In-plant, so check that out for reference. 
    • We are focusing more on the operations of in-plants right now. You are right; it depends on what vertical or what market they serve as in what organization they serve first and foremost. They look a little bit different and profile a little bit differently.
    • If it is education, it is K-12 versus higher education. They are going to look different if they are supporting an organization that is a manufacturer, an insurance company, or financial services because that work mix is going to be completely different.
    • As a general rule of thumb, if you are talking about taking the transactional in-plant out of the mix, the remaining cases look like a “Honey, I Shrunk the Kids” commercial printer. 
    • They are more limited in space because these in-plants are often in the basement of the corporate infrastructure buildings. You do not have infinite space like you would as a commercial printer who is out on the outskirts of town and has a warehouse building that they can expand into. The equipment is right-sized for those smaller environments. We are talking about smaller offset printing equipment or analog printing equipment. We are talking about maybe the roll-fed - up to 60 inches - wide format printing equipment, so they can do signage work these days. That is very common. A lot of latex machines in that mix. Then we are also talking about just smaller-sized digital printing equipment with similar size finishing equipment. A lot of the same capabilities that a commercial printer would have, an in-plant would also have.
    • [00:03:15] Pat McGrew: Some of the larger in-plants I have worked with might have multiple B1 offset devices. It does happen. Those are not the norm today. 
    • [00:03:26] Ryan McAbee: And B1 is 40-inch sheet equivalent. 
    • [00:03:28] Pat McGrew: Yeah. 40-inch sheet size. More and more, we are finding that they will be the sort of smaller format devices. I think another gating factor for in-plants is that they have different charging models. From an operations perspective, the in-plant has to be able to understand the complete cost of goods. They have to be very well versed in their paper costs, their ink costs, their toner costs, and all of those things. 
    • They have a different kind of relationship when it comes to sales, don't they? They may have people assigned to the in-plant who are actively walking the departments trying to find work. That happens in some organizations. They have people who are responsible for maintaining the relationships with the departments that they do work for. They have people who may be assigned to external sales operations. Each one of those has a different costing model associated with it, and a different selling model associated with it.
    • It is really important to understand that the people all work for the parent company. It is not unusual to see people come into the in-plant from other departments. A job opens up, and they decide that instead of being a receptionist out front, they would like to be working in the print shop, or they have a programming role, and they would rather do it inside the print shop.
    • They may be asked to do a lot more roles, right? A salesperson might also be the customer service rep. They might also be managing relationships with suppliers. They might also be managing relationships with outside partners who are handling specialized finishing or specialized printing that cannot be done inside. 
    • [00:05:22] Ryan McAbee: There definitely is a mixed approach because it is, again, a scale thing. You cannot have a specialist dedicated to just one single task as you may find in a larger commercial printer. 
    • The roles that I commonly see as I walk into in-plants are - you usually have that customer service representative type role - that is the one that is the traffic cop making sure work is coming in,  liaising with the different departments, and anybody that is requesting the print work. Making sure that they communicate properly with all of that to get it fulfilled. 
    • Then you usually have one person who is more prepress/IT driven. They will prepare the files as they come in. They may do some more generic troubleshooting for the network and the equipment that you have inside the print shop. They may even be responsible to help do the RFPs, even for the equipment purchases.
    • Then you have more of the operations part of it. You have the helper in terms of the press operations or operators. Then they often have dual roles;  after they print it, they will step over and do the finishing part of it. 
    • [00:06:24] Pat McGrew: Exactly, yes.
    • [00:06:25] Ryan McAbee: The fulfillment and shipping part of it as well. So it is usually a lot of different roles. 
    • [00:06:29] Pat McGrew: People have to be very versatile in an in-plant because they may be doing a lot of different roles in order to keep the work moving. One of the big trends that we have seen is the addition of online order portals in this space, which changes some of the nature of what people might be doing.
    • Instead of having a guy walking the hall or a gal walking the halls, talking to the departments, trying to find the work, and making sure that it stays in the business - now that is being handled by an online portal that allows the departments to very easily place their orders using templates and things that make it easier for them to order what they need when they need it.
    • [00:07:10] Ryan McAbee: That is a value add if you are a salesperson that you can bring to an in-plant if they do not have that type of solution. We often find that awareness and leakage are two big problems that the in-plant has to deal with. 
    • The awareness part of it is that the organization at large may not know what the capabilities are or that there is an in-plant where they can get things produced. That is because, in a larger organization, you have turnover. And if that is not part of the new employee onboarding process, it gets lost. Awareness is a big thing. Then on the other side, it is the fact that it streamlines the order processing for everybody and just makes it that much more efficient.
    • [00:07:46] Pat McGrew: Yeah, and efficiency is really important in an in-plant, because in-plants are held to a different standard of profitability. Every process has to be as efficient as possible because that is how they justify their existence - by being the best place to get the print done. 
    • Prepress and IT are fun because if you are a corporate in-plant, if you are a bank, an insurance company, or a big manufacturing organization, IT services are probably provided by the corporate IT department. There might be somebody there who is the liaison person in your prepress and IT department, but you are not running servers, and you are not running the main brunt of the IT environment.
    • If you look at a transactional in-plant, those can be a little bit different because of security. It is not uncommon to see that a transactional in-plant in an organization requires a lot of security - data security might have an outpost, or a full IT setup in the in-plant group. 
    • Then, of course, if you are in an educational in-plant, it can go either way. Some educational institutions like to centralize their IT services, while others prefer to have them decentralized. You can see just about anything in the prepress and IT requirements set up for an in-plant. Over time, it is always good for in-plants to continue to visit where IT services happen.
    • As a rule, you want your prepress team to be there with your in-plant. How the solutions are acquired for them, and how they are managed on the server or in the cloud are things that are always worth revisiting. 
    • [00:09:31] Ryan McAbee: It is really two camps that we are talking about here. You have the transactional camp. Go watch our sessions and modules on Inside a Transactional Printer, and also how a transactional printer operates because they model much more closely to that. For the rest of the in-plants, it is that centralized versus decentralized model that will affect your prepress and IT infrastructure. 
    • But generally speaking, we find that there are the same kinds of processes that need to happen in prepress. You need to retrieve the files. You need to be able to convert the files. You need to be able to prepare and process and optimize those to the point where you are imposing them for the optimal output on whatever device you are going out to. A lot of that remains the same, very much like a commercial printer. 
    • [00:10:13] Pat McGrew: These guys have the job of making sure that the files that come in are actually printable so that by the time they get to the printing environment, it can be as efficient as possible. 
    • That sounds like it should be easy. It is not always. Files come in a lot of different formats and a lot of different source environments. The files that come into prepress may need some work done to them. 
    • Once they arrive at the printing presses, it is going to be one of two things, right? If it is a digital printing environment, the files that come out of prepress are going to be delivered to a digital front end, and that digital front end is going to convert that file into what the printer can print. Printing commences based on the job scheduling software and the queue management software.
    • If you have one of those lovely offset devices, life is a little bit different. They typically require plates, and your file is going to go to a computer-to-plate environment. A different set of processes is going to kick off and inform the way printing is done. 
    • [00:11:18] Ryan McAbee: There is a slight wrinkle in the offset part for in-plants. There are still offset presses around there that can actually image plates on the press itself. You still find some of those here. But you are right; the plating process is more upstream before you actually get the printing part.
    • The thing to mention here, operationally, is that in-plants are very much like other printers and the trends that we have experienced in recent years, they are probably dealing with the same number or maybe a higher number of jobs that they have to actually manage, but the counts in terms of the number of prints or final pieces that are being requested is shrinking. There is a lot of start and stop that has to happen, and you really have to figure out how to manage that flow.
    • You can batch things together as efficiently as you can so that you are not always changing out paper. You are not always having to do multiple makereadys on an analog offset press. 
    • [00:12:12] Pat McGrew: They typically will want to print as needed and set up their printing environment to make that as efficient as possible. They are not always long-term forward thinkers, so it is not uncommon for in-plants to have to deal with marketing emergencies. All of a sudden, we need a poster. We need some handouts. We need some tabletop signs - now. Good in-plants are able to manage their way through those environments. They tend to learn about their culture. They know what they are going to be up against. 
    • Now, finishing is fun because some in-plants do not do their own finishing, depending on the nature of what they are making. If they are making manuals or books that they want perfect-bound, they may choose not to do that inside. They may job shop that out. 
    • If they are doing large format signage that needs to have grommets put in it or needs to be sewn in order to hang from a rod, sometimes they will shop those out. For most of the things that an in-plant needs to do, whether it is three-hole drilling and sticking it in a binder or just cutting sheet paper and stuffing it in a pocket folder; they often have the facilities that they need to do that. Most of the in-plants that I have seen are still manual in terms of finishing, but I guess over time, that is changing too.
    • [00:13:34] Ryan McAbee: They are adding automation where they can, based on the format sizes that they can put into that physical space. A lot of times, automation brings larger equipment, so it is always a balancing act between those two. 
    • The other thing I would say about outsourcing... if someone in the organization comes to the in-plant and they cannot produce it, that decision is often made in the beginning to just go the outsourcing route. They are not going to print it and then try and do the finishing outsourcing. They will just outsource the whole thing from the beginning. 
    • The other type of in-plant that we really have not mentioned here is government entities. Government entities are unique in the fact that if they do outsource, they oftentimes are outsourcing to the government printing office or GPO. They can go to external vendors depending on what it is, and there are a whole set of rules around that, but they also are a type of in-plant. 
    • [00:14:24] Pat McGrew: Absolutely true.
    • When we start talking about what you do with it once it is finished, in-plants are interesting. It could be an in-plant delivery where literally it is put on a cart and rolled to the people who made the request. Might be the training department, might be the corporate marketing department, might be an individual department that just has some needs.
    • It can also be warehoused. We know they do not like to warehouse finished goods, but sometimes they do warehouse. Sometimes they ship, and that is because an in-plant can actually serve multiple locations of an entity. 
    • If you think about an average college campus these days. I know the University of Colorado has its Boulder campus, its downtown Denver campus. One in Colorado Springs. They have outposts up north, and an outpost to the south. They have a little bit of everything. There is often the requirement to package things up and ship them out the door. The people who handle all of that have their own software, and their own skill sets that they need to have.
    • [00:15:27] Ryan McAbee: Pretty much an in-plant can do any of the major methods of getting the product into an individual's hands, right? They can have a walkup. A lot of times, that is how the order starts in many in-plants - someone walks downstairs to the in-plant and says, “I want this printed.”
    • The same thing can happen on the pickup side - they basically get notified through email or whatever mechanism to say, "Hey, your order is ready. Come pick it up." That is one way that is more unique. You do not see that in a lot of other types of printers except for more retail-based printing.
    • Then the other thing that is probably a little unique to the in-plant situation is that they often run a fleet of vehicles to courier stuff. That decentralized model where they have multiple locations like you are talking about. 
    • [00:16:05] Pat McGrew: They run their own truck fleets. Sometimes that is the responsibility of the in-plant, and sometimes it is a separate organization. In-plants sometimes become the holding organization for all the weird stuff that has to happen to move things around. 
    • [00:16:20] Ryan McAbee: The mail sorting of incoming mail often gets lumped into in-plants.
    • [00:16:23] Pat McGrew: It does. If you think about the origin of in-plants where they were the copy repro center, they were the mailroom too, as you said. So inbound mail, outbound mail the development of what was going in the mail all happened within the same four walls. Some of these organizations are really quite large.
    • If you look in a bank in-plant, insurance company, manufacturing, financial services, in-plants, or educational in-plants, there can be hundreds of involved.
    • [00:16:52] Ryan McAbee: Yeah. So I think the takeaway for everybody on the in-plant side is that it is hard to draw a box around in-plants because they can look very diverse.
    • The best two groupings are the transactional-focused in-plants, and then every other type of in-plant. They do share a lot of similarities with the other types of print establishments. Whether it be a transactional printer on that side or more of a commercial printer profile on the other side of in-plants.
    • We hope you have learned a little bit to further your knowledge around the in-plant space and hope to see you in a future episode at The Print University.

21- DIRECT MAIL PRINTERS

Direct mail printers are masters of timing and tracking. Learn how they must optimize operations from the point of receiving the customer’s job through tracking the delivery of the mailed piece(s) through the postal service.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Ryan McAbee: Hi there! Welcome to another episode of The Print University. Today we have Ryan McAbee with Pixel Dot Consulting and Pat McGrew of the McGrew Group. And what are we talking about, Pat? We are talking about the operations at a Direct Mail Printer. What makes Direct Mail unique and special versus some of the other types of printers out there?
    • [00:00:21] Pat McGrew: Direct Mail brings together a whole lot of different aspects of print because you have content that is being developed. It is going to be either packaged into an envelope, or it might be a postcard, or it might be a wafered, folded in half postcard. 
    • Direct Mail has so many processes that are involved because it does not require any one specific format. The thing that it does require is that it has to be capable of being mailed, right? We not only have design considerations and brand considerations, and messaging considerations from the content perspective, but we have the USPS and post offices around the world setting specifications that we have to meet in order to be allowed to insert it into the mail stream for delivery to a mailbox. It has some interesting characteristics just because of that regulatory feature. That means that there is an IT component, as well as the prepress component, and there is a security component because you are dealing with people's addresses.
    • [00:01:31] Ryan McAbee: Let's get into it first here with the kind of sales and administration. I do not really see any unique outliers here, but you may have a different take on that versus some of the other types of print service providers that we have been going through. 
    • [00:01:44] Pat McGrew: Direct Mail typically is contracted communication, which means that there is a brand owner - somebody who wants to communicate. This is typically solicitation, customer engagement, or brand engagement, communication out to a targeted audience. That targeted audience might be a specific address, or it might be a demographic that they are trying to communicate to. 
    • When someone has made the decision that they want to launch a Direct Mail campaign, they may go to their favorite print service provider who has done it for them before. There is a relationship, and they understand how to work with each other. They might actually put out a Request for Proposal to a bunch of different print organizations. Maybe they like their printer, but they are looking for a better price, or they are looking for a different kind of format and different kinds of capabilities, and they would like to see who is willing to make a bid on that. 
    • The sales organization has to be capable of dealing with regular customer engagement and customer care of their good long-term customers. But they have to be able to also respond to new customers coming to them.
    • In many organizations, there is a group that is also responsible for what we call hunting and gathering. Going out and trying to find net new customers for their services. The sales team in Direct Mail organizations have to be Jacks of all Trades. They have to understand the sales processes and customer care processes. They have to understand what is going on in production. They need to be aware of what every new piece of equipment that comes in the door is capable of. They have to be aware of the supply chain issues. 
    • This customer always prints on this paper, and once it is formatted this way with this wafer tab and we cannot get those wafer tabs - what do we do?
    • It is a tougher job than it. 
    • [00:03:35] Ryan McAbee: Yeah, that is right. They have to have a working knowledge of the national postal system to understand when they are communicating to their customer, how to translate. There are promotions that happen if you do certain things during certain parts of the year. And there is added complexity because you are dealing with another entity to get it.
    • [00:03:51] Pat McGrew: I think this is one of the hardest sales jobs. In Direct Mail, you have to be brand sensitive. You have to be color sensitive. You have to be substrate sensitive. You have to be format sensitive. Some organizations only send postcards; others always send catalogs. You have to be very sensitive to the things that they do, they want to do, and your ability to produce them. 
    • [00:04:12] Ryan McAbee: In that RFP process, there are contracts that are usually at least a year, if not multi-year, in this space. That is very similar to transaction printers. There is this whole Service Level Agreement aspect of timeliness - having to get the print done and out the door and into the mail stream so that he gets where it is supposed to go. 
    • [00:04:30] Pat McGrew: The salesperson is on the line for that.
    • [00:04:31] Ryan McAbee: In terms of prepping the content and the data, because we are talking about data in many cases, you have to have an address that is personalized to where you are going. What kinds of things make Direct Mail more unique than some of the others? Particularly around the fact that we have data to work with, we have to be concerned with data security at this point. 
    • Also, one of the things I find interesting about this space is this whole proofing concept. You have to edit and manipulate the data, but then when you are going to marry it to your content, you have to know that it was done correctly.
    • And how does that all work? 
    • [00:05:05] Pat McGrew: You do, right? Let's start with data, and let's remember that another piece of this is color. Data is so highly regulated. We used to be a little sloppy about data. A brand would say, "Oh, let me just go buy a mailing list, and I will see if those people are interested in my product." They would go to a company called a list broker. They would say, "I'm looking for adult women between 23 and 29 who live in the Midwest and drive Volvos." You can buy that list.
    • Today that is some of the most dangerous activity you might get involved in because every state is working on privacy legislation. If they have not already passed it, they are in the process of passing it. Privacy legislation that is in play right now says that you own your data, and you can decide how that data is used.
    • That is your name. Public demographics are hard to legislate, but how data is used can be legislated. As a brand owner who wants to do a Direct Mail campaign, you want to be very sensitive to where you are getting the list of people that you are mailing to, even if it is your own customers.
    • In some states, your own customers might have had to opt-in to being communicated with for solicitation of buying new products. They might have to double opt-in, in some cases like opt-in, and then opt-in again through an email confirmation. Data is something that requires data specialists in your organization who understand your data, what data you have, and how you intend to use it.
    • Do not use people's buying histories. That tends to get you into some trouble these days. That used to be something we talked about a lot. We have a whole segment on Data Preparation, and we go into some of it there. I am going to encourage you, if you do that kind of work, that it is something that you want to take a look at.
    • Data will require IT people. They typically are where your security expertise lies. Make sure you have firewalls, and teach your team members not to respond to phishing emails - those are the emails that come in that might look like a customer email, and they ask you to click. It turns out they can shut you down with malware. It happens all the time. The IT team is responsible for trying to keep everybody educated and everybody safe. This is a team that is usually on-site, but it can be contracted IT services as well. They may not sit physically in your building.
    • Now let's jump over the wall and look at the other big thing - it is color, right? In Direct Mail, you are promoting a brand. That is whether it is the local nail salon or it is a major department store chain. You are promoting a brand, and brand colors are a thing. That is something that you have to be aware of because your customer will be. If you send something back to them that is three shades off of what they are used to for their logo colors, they are going to reject it.
    • That is where the concept of proof and approval comes in. We need to make sure that we have great color management. The files that come into us may not be well-color-managed. 
    • More and more, these organizations are using armies of freelancers to create their marketing content. Those freelancers may or may not be sensitive to brand-specific brand colors. While the brand should be responsible, ultimately, the printer will be held responsible. You will have to reprint it if they do not like what you printed. That means that once we feel the file is ready for print, we typically want to go through a proof process and have the customer approve it in writing. "Yes, this is the color I am expecting. This is the look I am expecting. And yes, I approve this for print." Then we need to make sure that when we print it, it actually meets those color specifications. 
    • [00:09:03] Ryan McAbee: Pat, I have a question for you. We spoke about the data acquisition part from the brand or the requester of the Direct Mail perspective.
    • If it is more pass-through data, the printer operationally understands the aspects of it and the hardening of servers, the firewalls, and educating the staff on phishing attempts. That is all good practice - but is it just really those things that we need to be concerned with?
    • [00:09:27] Pat McGrew: Data will arrive in your shop in a couple of different ways. Your customer might actually carve out a mini database, an extract of a master database, and deliver you a structured file that has the data that you need, organized in the way you need it. 
    • Alternatively, they might give you a live feed from their data that is set up very securely. There are logins and passwords that allow you to pull the data as you need it to run the job. Those are the two most common ways of doing it. We used to talk about people sending reel tapes full of data out to the printers. “Here is the tape with the printer data on it, and here is the file data.”
    • Most of these data connections are either a secure File Transfer Protocol, secure FTP of an entire extracted database, or they are a live feed. 
    • Now, what is in that database? Depends on what you need. In the best circumstances, a printer does not want any more of their client's data than they absolutely need to do the job.
    • If all they are going to be doing is putting names and addresses onto the mailing piece, that is all they really want. They do not want to know the customer's entire credit history, right? They just want the first name and last name. It can get a little interesting. Some databases will show up with the first name and the last name in one field, in one chunk. Sometimes you will get the first name and the last name as two separate data pieces. Sometimes the house number and the street name, and whether it is a street, an avenue, a boulevard, or a circle, is a separate field. It becomes incumbent on the team in the prepress and IT departments to understand what is coming at them so that they can use that data appropriately to either just move the name and address onto the envelope or directly print it onto the catalog or magalogue or postcards, or to use that data to trigger some event. Sometimes there is a field there that might tell you to trigger an event. By that, we mean to change the picture that is on the piece, right? So maybe the postcard is going to be mailed to the Northeast, the Southeast, the Midwest, the upper Midwest, lower Midwest, and they want different pictures. Let's face it; Fall does not look the same everywhere in the US. If you want to attract someone's attention, sending pictures of changing fall leaves to people in Florida typically will not get their attention.
    • By the same token - beach scenes to Canadians. Not probably the best idea in the winter. When we are using data for triggering events, we have to rely on our customers to have permission to use it in that way. That means there is a little bit more sophisticated programming in those files, right?
    • Sometimes the customer delivers the pre-composed file, and you just print it. No problem. Many Direct Mailers make very good money selling that merging and data triggering as a service. In that case, they have a much harder job to do because they have to make sure that the triggers actually work. They have to make sure that if the trigger is calling for a Fall scene, that is the way it is being triggered, and that there actually is a Fall scene to be pulled in and put onto the thing, which then makes proofing and approval a little tricky. 
    • [00:12:49] Ryan McAbee: From the print side, I think there are still two primary paths.
    • You could still use analog equipment to do massive quantities - long runs, as we say - and then go back and overprint those with the variable components. That might be the addressing or more of that unique variable data. Or we could be more white paper factory-ish in the fact that we could just print it all digitally and get it into the mail stream at that point. 
    • [00:13:15] Pat McGrew: I would say the majority of work that goes out these days that lands in your mailbox is probably hybrid. There is probably an offset component to it. Then there is over-printing with some digital technology, whether it is toner or inkjet. More and more, it is hard to tell. Sometimes it is four-color over-printing. It used to be that it was just black. "Hi, your discount is 5%” or “Your offer is 30% off this week." It would just be done in big black numbers. 
    • These days images can be variably printed. Text can be variably printed, and it can be in full CMYK process color. Hybrid is probably the most common way that things are going out the door right now. That allows them to not only get the kind of brand colors and the deep rich colors that they want to get for the majority of the piece, but it allows them to do variable imaging and also get the name and address variable content.
    • In some cases, interestingly smart people producing catalogs will pre-fill an order form inside the catalog. Then they will put a QR code on there that, if you hit that QR code, brings you that preset order form so you can type in the things in the catalog you want and ship it off to them electronically. 
    • There is a lot of interesting stuff that gets done with hybrid work. There is a lot of digital work, but even today, it is not the majority of Direct Mail that goes out.
    • [00:14:42] Ryan McAbee: You have similar finishing steps that can happen in terms of cutting, trimming, laminating, or putting some kind of coating on it. Also, binding - perfect bound if it is a magalog type thing.
    • However, I think what is more unique to this is that you really have to think about it from a finishing perspective. Number one is that you are meeting those guidelines of the National Postal Service so that it can go into the mailstream. Then, how they are sorting - equipment in the postal system often is not very kind to finished products.
    • [00:15:10] Pat McGrew: It is unfortunate. Across the USPS, the Canadian Post, and all the national posts out there, mail processing equipment comes in every age. It comes in every style. Some of it is highly digitized and automated. Some of it is very mechanical. 
    • There are all sorts of tales of direct mail pieces being mangled beyond recognition as they move through the mail process. I think that is something. That is going to be happening for decades because we are just not going to turn over all that mail-processing equipment anytime soon. That does mean that if we are going to be putting Direct Mail into the mail stream, you want to make sure that we are making it as robust as possible.
    • You want to stay away from things that have things that might lend themselves to causing a problem in the mail processing equipment. One of the popular things we started to see happening was this addition of tip-on things that look like Post-It notes, and those do not go through mail processing as well as one might hope. If you are doing a giant bulk mail campaign with these tip-on things, that can be a little tricky.
    • The other thing is that the postal regulations if you are folding something in half, they require it to be glued or wafer sealed. Wafer-sealed - those little round things that look like stickers - if you put one in the middle of a card, of a fold-in-half card, the two ends are floppy and prone to get pulled and eaten up.
    • Those are the kinds of things you want to have a conversation with your client about. They may say, "If you want me to put two stickers on there, it is going to cost me this much more." That is adding so much more to the cost of it. But what is the cost if it arrives mangled? 
    • The sales team wants to be having that conversation with clients about decisions that they make that are designed to cut costs and might not actually be the best benefit to the brand. There are some real physical realities of putting anything into the mail stream.
    • I have had envelopes show up from major credit card providers that actually showed up in a plastic bag with an apology from the USPS in the envelope saying, “This did not make it through our machine too well.” Literally, what they delivered to me was unrecognizable. They only figured out that it was mine because there was a barcode on the bottom that they could read because you could not read the address.
    • [00:17:34] Ryan McAbee: It definitely is a consideration in the direct mail. It is probably worth the conversation to get to your take and description of piece-level tracking, because you hear that term a lot with Direct Mail.
    • [00:17:45] Pat McGrew: Piece-level tracking is exactly what it sounds like. It is the ability to track every single piece through the mail system. They call it an IMB. It is a mailing barcode, and any bulk mailer, any Direct Mailer is already familiar with this. They are using it. It came into our worlds over the last decade initially as a recommendation and now as a requirement if you are going to be doing bulk mailing.
    • Any kind of bulk mailing permit, which most Direct Mail uses, is required to use an IMB. Just having the barcode on there is not enough. That helps the postal service, but that does not help you unless you have software that is connected into that system that is feeding you data that tells you where the pieces are.
    • There are a lot of solution providers out there who can connect to that system and feed that information into your brand management system, customer experience management system, and CCM system. They can connect it in different ways. It is tracking it from the point where the USPS accepts the piece into the mail system - we call it lodging - from the point where it is lodged into the mail system. They are scanning it on these big automated scanners. Every piece is going through, and they are scanning it. They are scanning it every step of the way. They are scanning it as it goes through mail processing equipment. They are scanning it as it gets put into the carrier sort packages. They are aware when it actually gets put into your mailbox, and all that information is delivered back. 
    • Very sophisticated systems are tied into customer experience management systems that then watch to see if you react so that they create this big closed-loop system with piece-level tracking. 
    • The challenge with piece-level tracking for some organizations is if they are working with very old software, sometimes it is harder to connect piece-level tracking to it. The benefit of knowing where it is at all times is really valuable, especially for a brand owner. It is one of those things that we have seen rise. 
    • Again, think about the mailpiece design. You have to leave room for that barcode. It is why you want to go to the USPS website and get all the specifications, not only for how an address has to be formulated, but where you need to leave the area for the barcode. The IMB that you are going to put on there, that the printer is going to put on there. Also, secondary pieces that the postal service will hit it with along the way. 
    • [00:20:14] Ryan McAbee: To recap here. It sounds like for Direct Mail operations, you have the whole data element of having to manipulate it to get it to where you can use it. Also, the security of that as you receive it and it goes through your operations.
    • Then you also have the design considerations for the mail stream, but also for the brand. You need the right balance between both of those that often compete. Then you have the piece here at the end, which is the tracking and being able to insert it into the mail stream so that it gets to the end consumer.
    • That is a very intricate operation.
    • [00:20:47] Pat McGrew: But see that warehousing and shipping. That still plays here. We said that a lot of direct mail marketing is still printed analog. 
    • If you have ever gotten a piece of mail from a car dealer, it is very likely that it was printed in January of the year, and they feed it out into the universe as it is needed. They know what car they are pushing for the year, so they do that.
    • It is not that there is zero warehousing and shipping. One, there is all the inventory that you have to warehouse, but you may be printing things and holding onto them on behalf of your customer until they are ready to do the secondary print and insertion into the mail stream.
    • [00:21:25] Ryan McAbee: Yeah, that is a very good point there. With that, we hope you have enjoyed learning about the operations of Direct Mail Printers and will join us for a future episode here at The Print University.

22- TRANSACTIONAL PRINTERS

Learn why transactional printers are experts at data and data security. While the work might be repeatable or “programmatic” there is a lot of expertise required.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Ryan McAbee: Hello and welcome to another edition at the Print University. I'm joined with Pat McGrew the McGrew Group, and of course, this is Ryan McAbee with Pixel Dot Consulting. We're here to go through how the transaction printers actually operate. What are the things that are unique that set them apart, that they have to deal with the headaches, so to speak, and the realities of how to do faster around work in the transaction world.
    • Pat, what what does that look like from an overview for most of these transaction printers? 
    • [00:00:23] Pat McGrew: Just a reminder, if you're not really familiar with the transaction space, these are the people who produce bills and statements and regulatory notices. It's the kind of mail you don't always want to get, but we mostly all get. We encourage you to go look at the other modules that talk to the transaction space in The Print University. These are organizations that specialize in not only the printing part of transaction communication, but all of the surrounding circles. We're dealing with personal data we're dealing with your personal financial data. Think about your credit card statement and everything that goes into, making that credit card statement. It means they know a lot about you, not just where you live, but what you bought. There's a lot of data there. 
    • Personal health information. If you think about the security requirements around handling that you're going to be looking at really robust IT departments and security protocols.
    • Salespeople tend to be specialized. People who sell in the transaction space, especially in print and eDelivery services in the transaction space, tend to be pretty specialized group of people. \ They're not only selling the printing service, they're selling the security that goes with that printing service. Trying to develop a rapport and provide a certain sense of confidence about how things will be printed and handled. 
    • The people who administer that are a group of people who have to understand how to work with auditors. They're not only worried about being able to bill for the work that they do, but they have to be able to have conversations with auditing organizations that may be government regulators or maybe the customer's audit group who want to come in on a regular cadence to make sure tha all the data's being protected and all the print is being handled appropriately. They really don't like it when they come in to do an audit and they see people opening envelopes and stuffing them by hand. That's not something that makes them really excited. 
    • Sales and administration have special tools. In the prepress department there's more than just prepress going on. There's very often a data security subdepartment. There's very often a customer communication management subdepartment that handles the delivery of outbound email and web delivered things.
    •  The printing department is more likely digital these days. In the past we used to see organizations in this space who would run offset presses to print preprinted shells. That's how they got the pretty logo colors and the pretty lines. Then they would take that preprinted work and then they would put it onto a digital device, a digital cut-sheet toner device, a roll-fed device or an inkjet device to add all the variable data. Your particular data. Your credit card statement. Your regulatory notice.
    • We see a lot less of that these days because over the last 15 years as digital devices have become more capable of producing logo brand colors, faster, lower cost of operation, lower cost per sheet. It is as likely today that you would walk into a print service provider and see only digital devices. Today predominantly inkjet, although there's still a fair amount of tone out there. 
    • They typically operate by moving files into a digital front end, causing them to print based on the scheduling requirements. Then move them into the finishing department for cutting and inserting and folding and inserting into envelopes, and then heading for the mail room.
    • It's a big operation with a lot of people and a lot of a lot of check. 
    • [00:03:19] Ryan McAbee: Now let's unpack this whole sales specialist because I think you're spot on here. You have to have a lot of deep domain expertise. If you're a transactional printer and you're going totalk to a hospital system, you have to know the lingo of the medical field. You have to understand the regulatory environments, which are quite complex because it's our personal medical information that's been dealt with. There's a lot of layers to all of that. 
    • [00:03:38] Pat McGrew: And a lot of jargon. 
    • Most of the people I've ever worked with in my life who are selling in that space do. They have a lot of years of expertise.
    •  You can take a course on Challenger selling or SPIN selling, right? You, all those courses are available. 
    • [00:03:50] Ryan McAbee: How to be a better salesperson.
    • [00:03:51] Pat McGrew: How to be a better salesperson. But there are really not classes on how to sell into an environment like this. We do have modules that we've built very specifically to address it because learning the lingo of selling into healthcare or selling into auto insurance, or selling into even government and regulatory or other, finance company kinds of work, there's a lot of stuff that you need to understand. Your customer assumes you will know it. They assume that when you say, "Hey, I'm using this particular EMR generator, are you guys going tobe able to handle what comes out of that?" If you're curious in healthcare, that's electronic medical records.
    •  Every one of these verticals has their own kind of jargon to go with it. So it's a really tough thing to learn. 
    • [00:04:30] Ryan McAbee: It puts a burden on the sales operation because you have to have that domain expertise. You also have to mix that with knowing how to sell, which is common across the board. Then the other thing that gets mixed in these spaces is that whole data element. You don't have to be an expert and actually do the data manipulation, but you have to understand the concept. I'm going to supply you with this XYZ type of data. You've got to understand how that fits into to your workflow and how you can actually handle that.
    • [00:04:52] Pat McGrew: This is a space where mainframes still exist. Mainframe data looks different from network data. If they are going tobe sending you data to merge with a, an electronic template on the way to the printer, you have to be able to handle that inbound data in whatever form is coming in.
    • [00:05:06] Ryan McAbee: Pat, help us describe maybe the two different ways that can come across. We could have raw data where we would have to do something called ETL, and I'll let you explain what it is. In the other sense we could get more fully baked formatted data and then we might have to still do something with that too, which is called a transform.
    • So walk us through those two different tasks. 
    • [00:05:21] Pat McGrew: So ETL is extract, transform, load. Typically that process happens when your customer has said, "you know what we're just going to build up a secure pipeline from you to our database." you grab what you need to fulfill our printing requirements. We're going to give you secure access to the records that contain the credit card transactions for the month for the customers that you serve us for printing. You will then extract the fields in the right order so that when the credit card statement is merged with the data, it looks like what someone expects their credit card bill to look like.
    • [00:05:52] Ryan McAbee: How does the composition come into that with the CCM acronym? Because once you have the data, then you have to put it in a pretty format. 
    • [00:05:59] Pat McGrew: Once you have extracted it and transformed it. In this case what we're doing is putting it into fields. We're putting it into name and address and transaction date and transaction ID and the description of the transaction and the dollar amount.
    •  Then there's some programming that rolls it all up to your final bill amount. There's some other programming that goes into determining what your payment should be. There's another piece of programming that determines the Schumer box requirements. What does it take for you to pay it off in three years?
    •  That form of interaction with your customer involves at the printer side a lot of programming and a lot of programming expertise that has to be done in a very secure environment. That work has to be done, whether it's delivered in print or it's delivered via email or a web link.
    • The goal is to get it into a common format tor printing. The way we do that, if we are handling all the data, is typically we also have a library of templates. We pour the data into the template. We have a page one template, a backer template, a page two template, maybe a different backer for that one. The programming, the rules that are built for that job make it possible for the credit card statement to come out the way you expect it. 
    • Same process, slightly different route. When we're going out electronically, because we typically are trying to go for the smallest files we can get. We do typically mostly deliver PDF these days. We want to make sure that PDF is as slim as possible. It may not have all the things that what goes out in an envelope goes into. It may not have electronic images of the inserts that go into the physical envelope, that's decisions that you make with the customer.
    • The alternative way of working with your customer in this space is that they deliver to you an already composed and ready to go print file. I guess the hybrid is that they deliver to you already formatted data, so let's go there first.
    • It might be that you have the library full of templates that things are going to be poured into. What your customer does is they feed you an already formatted data bucket that is the data in the exact order that it needs to be merged in with all the record ends, the page break information. 
    • Now data can be fed in a lot of ways. It can be name is one field. Whole name is a field, or it can be first name, last name as two fields. Address can be one address line, or one address bucket for your complete address or house number, street name, street avenue boulevard. 
    • There's a lot of different ways it can come in. That's the topic of negotiation at the point where the job is being set up. This is why the sales guy has to be really smart, because there are costs associated with how many fields you're going to be dealing with and how overflow is going to be handled.
    •  You can also get a totally pre-composed file from your customer where they've done all work. Inside their four walls, they have assembled the file and they are delivering it to you broken on page boundaries so that the job is ready to run. It's already been merged, everything's been done, they've approved it, and all you're doing is taking the data feed and running it.
    • There's a fourth thing that now happens sometimes. That is that jobs are composed on the fly on the way to the printer. The data is coming in and on the fly. The rules are set up to decide where to put a line, where to put a down line, what color the line should be, when to put the logo on, where to put the logo.
    • It allows for some really interesting co-mingling of different brands and different styles of of formatting. You might have one style of formatting you use for your high-value customers where you use a lot of color and you use, big bold fonts and there's a lot of marketing information in the file. Then for the people who are, making monthly payments and are your mid-tier customers, maybe not as much graphic richness to it. For the people who. Your challenging customers, you might be doing things much cleaner, highlighting amounts due in bright red.
    • Whichever style your company adopts, and you may be actually doing all of them if you're a large print service provider, requires a pretty substantial data security and IT departmen t. 
    • [00:09:36] Ryan McAbee: There's the four methods that you can choose to work and receive data from your customer to get it into a print and output format.
    • Let's walk through a couple acronyms. Because it's a very acronym heavy space. At a high level define what does CCM mean. 
    • [00:09:49] Pat McGrew: CCM: customer communication management. That is the big bucket that we put over top of all of the processes and programmatic requirements of delivering things via email or a web link or even SMS. Now there are organizations delivering bills through WhatsApp and Facebook Messenger. Customer Communication Management takes responsibility for all the customer records. How customer records are formatted. What information is in them. It's the set of tools and processes that we use to generate a monthly bill, a quarterly bill, a yearly bill, or regulatory notices as they're required. It may have document composition elements embedded within the CCM solution that's provided, but it most certainly has a lot of rule building, pattern building kinds of tools and a lot of tools that help make determinations. A lot of the CCM solutions can not only see when you've sent something out, but did someone actually open the email or click the link and it feeds that information back to create closed loop communication.
    • [00:10:49] Ryan McAbee: Is it fair to say that on the incoming side of a CCM tool, it can receive many different types of information and data. Then you've got the middle part of it is more on the composition side. It's where you tell it how to use that data, how to format it, how to create it into a document, if that's where it's going.
    •  In the end, on the output side over here. It really is the tool to manage a different kind of format if you're going through WhatsApp as an example, versus a physical printed bill. On top of that, the tracking mechanisms could be different for each, right? One, you could do absolutely do API maybe through WhatsApp, but then for the printed side, you might want a QR code. 
    • [00:11:18] Pat McGrew: Exactly. There are, so many companies out there that have built these end-to-end customer Communication Management Systems that are mostly built without regard to print. Print becomes just one more output channel for them. A lot of print service providers have invested in those tools so that they can be a comprehensive provider to the customers that they've been serving for decades. The customer doesn't have to become the expert in them. That means that every relationship in this space tends to have unique components to it. You might be serving 12 healthcare clients, but you're probably serving each one of them differently depending on the rules on their side of the equation and the tools they're using. 
    • [00:11:58] Ryan McAbee: Another term before we move on is that you hear a lot in this space is data transform, and I don't think we got to that yet.
    • So how would you describe that for me? 
    • [00:12:04] Pat McGrew: Data transforms happen because we've been sending bills out through the mail for decades and decades. In the early days might have used a line printer. Something that literally was almost like a mechanical typewriter to build your bill and print it on a piece of paper that was offset printed. Over the years that turned into electronic files to print on toner devices, and now inkjet devices. 
    • All of the data that winds up in a transaction print environment originates either on a big mainframe or in a cloud server or in a big network array. I keep coming back to credit cards because they're ubiquitous people know what credit card statements look like. The data may be generated by the business programs, the things the printer has no control over. They may be generated in very specific formats that haven't been changed in 25 years.
    • It might be just raw line records. It might be something called Advanced Function Printing, which was an old IBM format. It might be something called Metacode, which was an old Xerox format. It might be PostScript, which is now considered an older format or it could be PDF which is the lingua franca today of getting files to print.
    • The problem is that if your print process is built for PDF and what your customer is sending you is the AFP format, the IBM format, or the Xerox format or some other variation. PCL is a, another common one in finance which is an old HP format. Somehow you have to make those formats turn magically into PDF. That's what transform programs do. 
    • Transform programs have been around for 30 years. They are reliable. They are robust. They produce what we call light table fidelity. The goal is that however it was originally supposed to look when it printed. Even after it goes through the transform it will look exactly the same. You can hold the two versions on top of each other over a light table, and they should absolutely line up. A transform program is intended to take all the inbound information and turn it into the programming stream that the new format requires. So AFP to PDF, meta to PDF, PCL to PDF, PostScript to PDF and allow a printing organization, to standardize on one print file format for their archive, their printing, and their CCM delivery. 
    • [00:14:10] Ryan McAbee: So it sum it up. You're trying to work with what you're given, but standardized and streamline on a format that is the bedrock of your workflow as the printer internally.
    • [00:14:19] Pat McGrew: The really nice thing is that most of the solutions that are in the market today can be automated. It's not like you have to sit here and decide, oh my gosh, what is this inbound file format? What tool do I have to use to make this work? In fact, the best practice is working with the IT team and the customer team and your data security team, you the receipt of the inbound file, the transform process, the QA of it, the proofing of it, the approval of it, and the routing to print of it with nobody ever touching it. 
    • [00:14:48] Ryan McAbee: Highly automated, highly repeatable because you're expecting to get the same thing from the customer over and over again.
    • [00:14:52] Pat McGrew: Transaction is a weird space because it tends to be long-term contracts. Typically, people who are buying bill printing services are not shopping that work every week. What they are typically doing, it used to be five year contracts. Now maybe three is more standard, but the contracts have to be long enough so that the printing company can make any adjustments, acquire any software they might need to justify doing the work for the customer. They tend to be longer contracts. They tend to be very highly defined contracts. 
    • [00:15:19] Ryan McAbee: Let's talk about a few things in the printing arena and how it gets impacted by those. One we've mentioned SLA on the screen here, that's another acronym, stands for Service Level Agreement. These contracts that you speaking up that are three to five years, it really specifies the rules in terms of turnaround times, how quickly it has to be in the mail stream, and also any kind of penalties that the printer would incur if things are not done as to the contract.
    • We know we don't have a lot of time to get this work done because we've got all that processing up front to get it to the digital front end or to the plate maker based on how we're printing it. At the printing stage, what are some of the kind of techniques that we can use to speed that up or group jobs together?
    • [00:15:51] Pat McGrew: One of the things we do most commonly is we make sure we preflight the file in some way. We don't want it arriving at the press broken or missing elements that are essential, like fonts or having low resolution graphics mixed with high resolution graphics. 
    • We can also optimize the files so that they process more quickly, get to the DFE more quickly and may RIP quickly, so that the time from launch of the file to the first printable page is minimized . Generally, we want to do that for all the reasons you'd imagine. The faster we can get that first page printing, the faster the job will print, the faster we can get it into finishing and loaded out. As you said, there can be financial penalties for getting it into the mail stream. Most transaction work goes into the mail stream. If you miss a mail insertion time by as little as a minute, it can cost you hundreds of thousands of dollars. This is because the companies that are sending that mail out are also under some regulatory constraints. From the time your credit card provider cuts off your statement for the month to the time it arrives in your mailbox is regulated. The printer is what sits in the middle, so everybody points their fingers at the printing company. 
    • There are also constraints depending on health claims checks, insurance claim checks. The time from the decision to issue the check to sending you a check if it's not an electronic delivery, highly regulated.
    • Service level agreements are the contractual agreement between the printer and the person sending them the file. It's very heavily focused on all the things the printer has to do. Sadly, what's often missing in SLAs is what the customer has to do. If a customer is five minutes late sometimes those SLAs don't put a penalty on them.
    • [00:17:22] Ryan McAbee: We don't have a picture of it in our diagram here, but you mentioned before that it's really gone to a more digital printer centric workflow for many people. That's often called white paper factory because you start with a roll of clean paper and it's going to get that that formatted data feed through the DFE and print it on that white paper. 
    •  Then, it could go even one step further, which is getting into the finishing area, that it's highly automated even coming out of there, right? 
    • [00:17:44] Pat McGrew: It can be completely inline. Both roll-fed and inline transaction work can go directly into inline finishing equipment. You'll find more cut sheet white paper factories in insurance where they want to change the color or the nature of the pages. Sometimes you get your your insurance policy and it's got the telin feeling, the plasticy feeling page that has your ID card on it. The only way to do that is to do cut-sheet printing where there's a separate tray pull for the different kind of substrate. It may go into that same kind of inline finishing process. When it's coming off of a roll-fed device all the pages are the same and a lot of companies opt to do that because it's much more efficient and much faster than what the cut sheet equipment can do. It might need a perf where you're going totear something off or tear a card out. It probably needs to be folded to go into the envelope. Sometimes there's a stapling option in there. When we talk about perforating, sometimes it's a mechanical perforator. Chomp! Sometimes now it's a laser perforator and sometimes those devices can do a cross and down. They can do really fancy perforations, and can do that all in line at speed. They're pretty amazing pieces of equipment. 
    • Once they the pages are folded, they're gathered together by recipient. That's a whole process by itself, right? All of the finishing processes have to know what every new customer is because they have to separate each customer out so it goes into their own envelope because you don't want my bills, right? You don't even want one page of my bills and I don't want one page of yours and their data security issues involved in that. The very highly sophisticated systems in finishing that are reading the addresses, understanding where each breakpoint is, very often using barcodes that are included during the formatting stage of developing the print file, they get inserted into envelopes. The envelopes may be pre-printed with a bulk mailing permit or they may go into a franking machine, something that actually puts the postage on it. Both of those things are still really popular. Then they have to get sorted into mail trays for delivery to the postal service.
    • So it, it's a heck of a process. 
    • [00:19:34] Ryan McAbee: Let's talk about some acronyms that you'll hear in this space because of the mail part of it. We talked about barcoding and some of those barcodes can be used for what's referred to as piece level tracking.
    •  How would you describe that? 
    • [00:19:44] Pat McGrew: Piece level tracking. You'll see at abbreviated PLT, is the ability to track my bill from the time it is delivered to the printing company, through the printing process, through insertion into the envelope, through the point where it's delivered to the postal service, and now all the way to my mailbox.
    • If you look at envelopes that arrive in your mailbox from your, the people that you do business with. Your utility companies. Your government. Your banks. Across the bottom, under your address, you'll see this string of funny looking blocks and lines. That's a mail barcode used to track that piece all the way to your mailbox. Then reports are taken every night from the postal service because all those pieces are scanned before the postal person brings it to your mailbox. They certify that they did the delivery at the point where their route is done and that information is transmitted back to the mailing house to verify that piece was delivered.
    • [00:20:38] Ryan McAbee: That bar coding that we're talking about, it's often has another acronym. IMB Correct. 
    • [00:20:41] Pat McGrew: IMB and IMDB, you see both of those used and it's the international mailing data barcode. It took years to get it to where it worked and was actually a valuable piece. For organizations that are highly audited, so anyone producing any kind of health data communications, financial communications, those barcodes are a way for them to watch the mail get delivered. It also helps them understand how long it's taking. The USPS has some agreements with the mailers about how long it should take to deliver first class mail or marketing mail. 
    •  Those delivery timeframes were not always reliable and it's for all the reasons everyone else is fighting. Drivers call in sick. They can't find a replacement. Truck drivers who are trucking the mail. The USPS stopped flying mail in the us. They truck it all now, so that takes longer time. I live in the mountain west. When it snows life gets a little entertaining for the trucks trying to get across I-70 or I-40 down in New Mexico or across the North. That can delay mail getting to the next sort center. All of these things the peace level tracking helps the mailers understand if it looks like delivery into these areas is taking a little longer. Let me have a chat with my customer, see if they can those batches to me earlier so I can get them into the mail stream earlier. It becomes a point of constant conversation. 
    • [00:21:53] Ryan McAbee: Yeah, it's really multifaceted here in terms of how you can use that tracking and barcoding together.
    • One is to have a trail to make sure it's delivered to the point that it was supposed to be delivered to. That helps with the auditing process if you ever get audited. On the operational side, like what you were just running us through, is it taking longer to actually get these things to the delivery point.
    •  It's often used the other way toward the customer base who requested the work too, right? Because they want to look to see, maybe they need to look. Change a record or they need to see what happened from a customer support perspective.
    • [00:22:20] Pat McGrew: Because they want to see a number of things. They want to see if it was not deliver. They want to know if that client has moved and hasn't notified them. There are a lot of processes available to mailers that help them verify addresses. There's the CASS system, which is the address certification system that the post office manages. If you put in a change of address, they know. You might have put in a change of address with the post office and never told anybody else. It happens all the time. It is possible for a piece of mail to get intercepted by the post office and rerouted to your new address. Piece-level tracking transfers that information back to the original mailer so that they can update their databases so that the next month it actually arrives at the right place. They can communicate with you perhaps via email and let you know that they've made that change for you. 
    • We had some terrible fires here last year in Colorado and 1,082 houses went to the ground. That meant 1,082 people didn't have any way to get their. Yet, if you were their bank, all that stuff's already in the mail stream. You didn't have any way to pull it back, but piece level tracking could tell you pretty quickly that was undeliverable mail and you knew that you needed to make decisions about how you were going to reach out to those people and figure out how you could communicate with them.
    •  It's got a lot of uses on a lot of different layers. Definitely from the print and mailer's perspective, but absolutely from the customer's perspective. 
    • [00:23:33] Ryan McAbee: We talked a lot about getting the data, getting it to the point of printing, getting it to the point of insertion into the mail stream and how to track that.
    • That's not the only output that we're talking about here, though. Increasingly we're talking about multi-channel delivery into an app, like what you mentioned before with Whatsapp, Facebook messenger and so forth. Even just a custom branded app. Banking does that along where you can pull your statements down. More and more the transaction printers get involved with archiving. Can you give us just a little clip in regards to what they're doing? 
    • [00:23:58] Pat McGrew: Sure. Multichannel output, we've been doing this for 15 years or a little bit longer in some cases. We would send an email that either included a PDF of your bill or included a link that said, click on this link and you can view it through the online viewer. As mobile became more of a thing a lot of those communication options expanded. Every time you add a channel, whether it's email with a link or email with an attached PDF or it's out to a mobile app or it's out to a text message... every one of them has their own formatting requirements. Certainly size requirements. Some of the early attempts to deliver to people's phones weren't fabulous because they didn't scale them to fit on the phone. They tried to take the print format and put it on the phone, and I don't know anybody who could read those. A lot of them weren't designed to be able to pinch and move. It took us a lot of years to learn how to transmit this kind of information out to all these different platforms. Multi-channel output is an art form all by itself, and there are CCM vendors who specialize in providing the tools to try and make it as easy as possible, including resizing things. Sometimes even reformatting things to make them more appropriate for the output.
    • Video is a new one. We're seeing a lot of video. Audio. If you think about ADA to meet the requirements of people who are visually I impaired in any way. That often results in another channel producing those things to braille. Also more commonly today making it possible for a screen reader to read the file to someone. It's not just any file that a screen reader can read, it has to be formatted in a very specific way and meet a very specific set of requirements. It's still a PDF file, but it's what they call a PDF/UA for universal accessibility file. 
    • Because of all the files that are coming to them, archiving became a service that they could offer because they already had the files. For a lot of organizations they have to be able to prove that they mailed something on a certain date. They also have to prove what was in the envelope and who better knows what was in the envelope than the printer who printed it. A lot of organizations have found new revenue streams by being able to provide those kinds of archive services. 
    • They used to store them on arrays of hard drives that would be sitting in their IT area. Many of them are starting to move some of that work to the cloud. There's a financial strategy involved in providing archiving services because you want it to be available immediately when your customer says, I need it now. A lot of times that's happening for legal reasons and you really want to be fast. If you want to do it as fast as possible, you might put it in a cloud, but cloud's a more expensive than things that are on premise. So you might have short-term stuff in one location, long-term stuff in another location. There's a lot of strategies around it.
    • [00:26:25] Ryan McAbee: Ultimately it's another form of output and it is another revenue stream opportunity for the transaction. 
    • [00:26:29] Pat McGrew: Absolutely is. Every one of the channels that you support is a revenue opportunity and every service that you provide around mailing is a revenue opportunity. You don't give away piece-level tracking for free. As a rule, you're charging for that service because there will be cost to you to provide that service. Everything that you do you have to look at it with the eye of being a revenue. 
    • [00:26:47] Ryan McAbee: Very good points. Just to recap with transaction printing operations, we're talking a lot about data. How to manipulate that data. How to get it into a format that can actually be printed. Not only printed, but a lot of times going out to other channels which need their own specific formatting requirements. It's a very fast pace part of the industry because of those SLAs and those contractual obligations to get things in the mail stream or at least delivered on time to whatever the output channel is.
    •  We hope that you are much more familiar with how a transactional printer operates and that you will join us for a future episode here at The Print University

23- PUBLICATION PRINTERS

Understand how publication printers work, from major publishing houses to individuals self-publishing, and everything in between. Also covered are the unique finishing and binding applications required of some publications.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Pat McGrew: Hi, I am Pat McGrew with McGrewGroup. I am here with my colleague Ryan McAbee from Pixel Dot Consulting. Together we are The Print University, and our topic today is the operation of publication printers. We know that this is a space that is the domain of very large printing organizations, but also medium size and smaller organizations.
    • Ryan, what is the defining piece of a publication printer? 
    • [00:00:30] Ryan McAbee: To me, it really starts at the beginning with how and where the content is coming from. It could come from a publication house, it could come from a self-publisher, it could come from you and me wanting a photo book, or to basically self-publish a novel.
    • We mentioned several times we used to call it vanity printing, but I guess it is more just self-publishing is the…
    • [00:00:48] Pat McGrew: …term. 
    • Yeah. I think that is not the correct term now. 
    • [00:00:51] Ryan McAbee: That is one piece of it. Then you have the normal processes that you would have in any kind of print or provider: the sales administration - the preparing of the work to actually go to the press.
    • The other unique aspect - I think two more, are that this thing has to get bound in some way. That is always a given. Are we basically making a hardcover case-bound type? Or are we doing a catalog that is more of a perfect bound and glued cover kind of entity?
    • It is the binding, and then it is also finally how it actually gets into the hands of the consumer or the intended audience. That can include warehousing and different complex distribution models. What else do you like about publication printing here? 
    • [00:01:31] Pat McGrew: Publication printing used to be the domain of analog printing. It was litho. It was big operations, giant presses, and to some extent, it still is. The vast majority of the major books that you will find at the bookstore are printed that way. But the last 20 years have seen the rise of the digital publication printer.
    • Sometimes it is a separate department within an existing high-end publication printer. Sometimes it is a standalone net new entity that has come into the publication printing business with purely digital equipment. It has changed a lot of the operational concepts and a lot of the operational concerns.
    • When you are in an analog environment, your operational process, your workflow is largely revolving around the fact that you are taking in files, burning plates, putting plates on a press, printing, and then usually storing and archiving those plates so that you can go back and do reprints. That has been the traditional operational model. There is a lot of administration to keeping hold of those plates so you can find them again. It is not a trivial process. Then all those pages have to get collated in the right way. In our imposition module, we talked a lot about some of the other considerations that go into the printing of those sheets. Then they have to get cut down, and then they have to get bound. They have to be trimmed. There are a lot of touchpoints from an operational perspective.
    • When you look at digital publication, they have a different life because they are not archiving plates. They are not even burning plates. They are actually printing the books in page order so that they come out on the end of the printer, either sheets or rolls, in a way that makes them very easy to process into a book. Many digital printing organizations now, especially those that specialize in low volume, book-of-one, book-of-20 kinds of organizations, can do it all in line.
    • White paper in - we talked about white paper factories with respect to transaction. You can do it with books too. White paper in, book out on the other end with the cover already on it, already bound and glued, ready to go into a box and ship. 
    • Operationally, you have two different big tracks, and they make a big difference in your revenue model, the people that you employ, and the turnaround time you can promise the publishers, the people who are creating the content. 
    • [00:04:11] Ryan McAbee: We talked about that in our overview of publication printing. The demand curve for publications and books that you can satisfy every part of now because of the different equipment makes and business models of publication printers that you find out there.
    • There is a different variety. You can have pure analog printers. You can have ones that have both analog and digital to meet both requirements, and then there is pure digital. It is really across the gamut that we find here. 
    • When it comes to sales administration, I think what is probably more unique in the publication space is the relationship and the dynamic between the printer, who is basically the manufacturing arm, and the actual publisher, whoever is originating the content. 
    • How would you describe or paint the picture? 
    • [00:04:53] Pat McGrew: It is like a hydra. The sales and administration in this space have multiple heads. Some publishers actually operate in-plants where there is no selling. It is an internal departmental relationship for scheduling and making sure that all the costs are captured so they can be assigned to a certain title. Even some of the largest publishers do both internal and external printing. In that case, they look to form relationships with reliable book printers around the world. There is a very tight communication relationship between the sales arm of the printing company and the contracting arm of the publication who needs the printing done. That is the way it has always been done traditionally. It is a contractual relationship.
    • Some organizations actually contract with printers so that they can push any title to them at any time. In other cases, the contracts are on a title-by-title basis. The relationship of the salesperson at the printing company becomes really essential because they want as many of the titles coming to them as they possibly can. It is a complex relationship.
    • As you start to look at the rise of the digital printers and the rise of the web-to-book printers, sales take on a slightly different characteristic. While there may be salespeople who are working with mid-tier publishers to get their work in the door, there is also very often a digital storefront piece where there is not a salesperson calling on you and me as authors. Instead, you and I, as authors, are searching a whole lot of websites to see who will do the best deal for us in printing our book and make it as easy as possible for us to do the printing. 
    • There is still an administrative piece to that, right? If I decide to go to your website and use your services to print my book, I need to know how I am going to pay you. I need to know what formats you can print in and what the different costs are. Some of the best people in the best organizations have built websites that not only let me upload my file in the format that you know is compatible with the templates that they have, but also give me options for the kinds of paper. "It will cost you this much per book if you use this paper and this much if you do it on that paper. This much with a soft cover, this much with a case-bound cover." There are a lot of options that they give you, but they immediately tell you what your costs are going to be. They make it easy for me to pay you either by credit card or by ACH, or even by PayPal and Venmo these days. There are a lot of different kinds of business models that you find in this space.
    • [00:07:38] Ryan McAbee: In that self-publishing platform arena, it is a different end user, and they need a lot more support and education in terms of how everything works versus the traditional kind of publisher model.
    • When we are talking about preparing the content to go into a printed process, are we talking about PDF-based workflows, XML type workflows?
    • What does that look like from a pub publication printer's point of view these days? 
    • [00:08:05] Pat McGrew: It could be either. The vast majority of workflows these days are PDF-based. There is no doubt about it. I think even Postscript has largely waned in this space. The kind of book you are printing matters, right?
    • Photo books go through a different prepress process because they are trying to make sure that your photos will print as perfectly and as beautifully as possible. They are printed on glossier substrates. They are trying to create the best image possible. They put things through a pretty intense preflight process. To create your photo book. 
    • If you are printing a novel, if it is mostly text and there is not any color in it, prepress is pretty easy. The file comes in, and as long as the file preflights without error, which is to say the fonts are actually there and you can actually read the PDF file, you are in pretty good shape.
    • The complexity comes in when you start building books that have multiple components. The next step up would be a black and white book that has some color photos in it, but you want to do it on a matte stock. You want a very specific kind of color management to make sure that the resolution of the images is appropriate, but also that the color management is appropriate for the substrate.
    • You can take another step up where the decision is made to print the text on one kind of substrate and the pictures on another substrate. You are going to need to color manage those pages differently than you would normally for the text-based substrate. Often you will see them where it is 10 glossy pages in the middle of a matte book, on an uncoated stock. Those are another set of considerations. 
    • It gets even more fun when you have books that have fly leafs that fold out in the middle. Then there is not only a file management challenge, but there is a printing challenge. There is an inserting challenge and a final binding challenge. The prepress people have their hands full. It is even more fun when the books contain variable data, which these days they might. You get a lot of books, especially in the educational space, where they might be customized for a specific student in a school, or at the very least, a specific grade under a specific teacher or professor. That information is included as variable data in the book. So prepress can be complicated. 
    • [00:10:28] Ryan McAbee: The content coming in can be split in a number of different ways based on how it is supposed to be in the final finished product. Any special techniques that ride with those individual pages or sets of pages or book blocks, as they are often called. Prepress is using software tools to manage those different components of the finished product. But we talked about this in another episode - getting it imposed correctly so that when it is a finished product, it is in the right order.
    • Because you do not want a book that starts with the last chapter. 
    • [00:10:59] Pat McGrew: No, and you want page two to follow page one. Just like you want page 1000 to have 1001 on the back of it. There are complex series of processes that you go to. No matter how easy it is for me to write a book and generate a PDF, that is just the beginning. There is a whole lot of stuff that happens after. 
    • [00:11:18] Ryan McAbee: In terms of the printing operation, you probably do get into the splitting, the batching of different components together to run on different presses. Then having to stage those and arrange the book blocks back in order to then go into the remaining finishing processes. 
    • The thing that has really changed, and you have been involved with that over the years, is this whole revolution of inkjet that really moved into publication printing. 
    • [00:11:43] Pat McGrew: It is actually a combination of inkjet and toner because what you will find today is that most of the covers are done on high-end toner-based machines - soft covers - and the wrap covers on case bound. Whereas the book blocks today are most economically produced typically on inkjet devices. Inkjet devices today are very fast. Print quality is excellent across all the manufacturers.
    • I actually have two boxes of books sitting here. One printed on one manufacturer's device, and another one printed on another manufacturer's device. You look at them - you and I, as good as we are, might have trouble telling which one was printed where. That is how good the quality is from the presses these days.
    • So many of the digital presses are in operations that are books of one small batch book printing. You have also seen an amazing amount of innovation in the development of the presses and how they interact with binding and finishing equipment.
    • Just think about the process of printing a book on an inkjet press. Now it is all coming out in the right page order because it is digital, and we can do that. Now we are going to have to marry it to a cover. The cover came from a different device and is a different substrate. We have the book, and we have to glue it. We have to get the cover on it. We have to trim it. It is a pretty complex process that happens from the printing to the binding. 
    • [00:13:07] Ryan McAbee: That is where you are seeing a lot of barcode usage in what we call near-line finishing. If it is printed, even on different paths, then an operator can scan it and then confirm that things are in the right order as they load it into the finishing equipment.
    • There is a lot to cover in terms of how publications can be bound. Please look at our other episode that talks all about the different binding techniques so you can understand what we mean when we say case bound versus perfect bound. The key for the binding and finishing area here is that you have more of it in a publication printer than in many other types of print service providers. Just because everything that you are printing needs to be in some kind of format that can be carried around pretty easily by everyone. 
    • [00:13:49] Pat McGrew: Most organizations have the capability to do several kinds of bindings. Things for smaller books or bigger books. They can stitch  bind - some can sew the folios together that get put together in the book.
    • From an operational perspective, though, the analog printing processes kick off a series of other processes that group pages, cut grouped pages together, collate them, get them prepared, get them put together, and sent over into the bindery.
    • In a digital operational process, it is a little less messy. The book blocks are already collated in the right order. At the same time, things have to move. In an awful lot of organizations that have not developed complete inline end-to-end workflows. There is still a lot of physical moving of pallets of paper and stacks of paper around.
    • From an operational perspective, you have to keep track of all those jobs. You mentioned barcodes before in the finishing and binding area. A lot of the way we know what cover goes with what book is because there are barcode matchups. A camera is keeping an eye on things, making sure we do not put the first-year geometry cover on the new graphic novel from Ryan McAbee. It just does not work so well. There are a lot of operational things that, depending on the level of automation, the operational considerations will change. 
    • [00:15:10] Ryan McAbee: There is probably a higher likelihood of trade binderies. You take the book blocks that you printed, and you go to a specialist who does the sewn binding and the case binding, or any of the methods. 
    • [00:15:23] Pat McGrew: I think especially on the higher end and on the higher volume. The binding process was always considered such a unique thing that a lot of the larger organizations continue to work with trade binderies to get their books bound. The advantage for a lot of the smaller digital printers is that inline bookbinding equipment is not as massively pricey as it was 10 years ago. 
    • Today it is not that hard for someone to make the decision to build a white paper in-line process. It constrains what size book you can produce. There may be constraints in format size and how fast you can go because you're largely running at the speed of your finishing equipment. No matter how fast the press can go, you still have to consider how fast the bindery can go if it is in line.
    •  Operationally, it is a really fascinating space. 
    • [00:16:14] Ryan McAbee: Yeah, I agree. Then we have to distribute these publications somehow. If it is a magalog as an example, which is combining a magazine and catalog format, that is probably going into the mail stream to get into our mailbox.
    • But if it is a book - that may be going through distribution channels into stores, right? 
    • [00:16:31] Pat McGrew: Might go either way, right? In some cases, print publication printers are also the fulfillment piece. I might order a book on Amazon, right? Some of those books are printed on-demand and mailed out through the warehousing and shipping team at that printer directly to me. An awful lot of books these days are not held in warehouses. Especially if it is something that does not have high demand, but has somewhat regular demand. Print-on-demand is a really good option for a lot of those books, and there are an awful lot of organizations that fulfill that. 
    • The other thing to think about is that in addition to catalogs and magalogs there are all sorts of things that might be printed and inserted directly into the mail stream.
    • There is a small batch print. I might need five copies because I am going to teach a class. I order my five copies. It is more likely that they are going to put it in a package and mail it to me than hand it to a shipper, just because of the economies to get things delivered.
    • The mailing people still have something they call book rate, which is a discount version. It is media mail now, and it is very inexpensive to mail smaller groups of books that way. 
    • [00:17:44] Ryan McAbee: I think in terms of operations for publication printers, the uniqueness is where the content comes from, the massive amount of different binding techniques you can have. How it all weaves into splitting and coming back together when it goes into that bindery.
    • Here at the end, it can be in the mail stream. It can go through fulfillment, warehousing, and distribution channels. It really just depends on what type of product you are doing and who is requesting the publications to be made.
    • We hope that you have learned a lot in this session about publication printing and how it operates.
    • Join us on a future episode here at The Print University

24- PACKAGING CONVERTERS

Packaging converters often operate in a complex supply chain between consumer brands and distributors. Learn how the unique aspects of the packaging supply chain impact operations.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Ryan McAbee: Hello and welcome to another edition of The Print University. We are going to be talking about the operations inside a packaging converter. There is obviously more than one type of packaging converter, which we will get into as well. Ryan McAbee with Pixel Dot Consulting and, of course, joined by Pat McGrew, the McGrewGroup.
    • Pat, this is an interesting space. I think what we are trying to show here is that, unlike some of the other Print Service Providers that we have been talking about, this one has a pretty unique supply chain, right? 
    • [00:00:32] Pat McGrew: It does because it is a very compact supply chain in many cases. When we use the term converter, we are talking about that part of the industry where someone is creating packaging. There are two kinds of mainstreams here. One is a folding carton, and the other is a corrugated carton.
    • In both cases, there is a substrate that may be printed before or after cuts are made to create the packaging. Then it goes into multiple processes to crease it and fold it, and in some cases, glue it. There are some really interesting elements that go into the overall process, and it changes the nature of the business. 
    • Yes, there are sales and administration because every business needs to have those. Yes, there is warehousing and shipping because you have a product, and you must get it somewhere. But everything that happens in the middle is just a little bit different when you start talking about converting processes.
    • Some of them can start way upstream, where they are actually making the paper or making the substrate, and then creating the different bits and pieces that go into the carton board or the corrugated board. Then they are manufacturing boxes or pallet wraps or a few other differences in store displays.
    • So it really is a different kind of business. 
    • [00:01:55] Ryan McAbee: There is some wording that is thrown out there that probably needs some clarification. Definitely, the wording - box plant. What does that mean specifically?
    • [00:02:05] Pat McGrew: Box plants are exactly what they sound like in a lot of ways. As you can see in the picture, there is that little roll of paper that is sitting up there. In most box plants, the way things work is that there are these giant rolls of craft paper or bleached white paper that go into machines that then create the thing we see as the box.
    • If you think about your Amazon boxes, the way they get created is that there is that brown paper. Some of the brown paper is printed with the Amazon logo and all the little smile stuff. Some of it is left blank. That will be the inside of the box in most cases. Then there is one roll that is dedicated to the corrugate, which is the up-and-down flute stuff that is on the inside.
    • [00:02:51] Ryan McAbee: If you were to look at the side of a box. 
    • [00:02:53] Pat McGrew: If you were to cut it apart, right? That is what gives it strength. It gives it durability for shipping, and it gives it some weight and some heft. 
    • [00:03:03] Ryan McAbee: The structural integrity, I think, is the word that is thrown out.
    • [00:03:05] Pat McGrew: Exactly, structural integrity. The flutes can be done in different sizes and different heights. You can have thick boxes or thin boxes. You can have multiple layers of the liner material and the outer material. There are all sorts of variations of it. 
    • A box plant will be dedicated to taking in paper-based things, paper substrate rolls, and turning them into things that we know as boxes, and sometimes pallet wraps - the things that go around the pallets that you see at your local big box store. As you can see in this picture, it goes into a machine and magically comes out  - sometimes as flat sheets.
    • In some shops, they corrugate these giant flat sheets. Then those sheets are taken to a different machine, which then does all the cutting and creasing that actually allow you to form a box. In some plants, that is all one giant in-line operation where they literally go from rolls of paper to a box on the end. 
    • It is largely the same process for folding carton boxes. The difference is that we do not corrugate those. We are just using giant rolls of cardstock to go through effectively that same cutting-creasing process. 
    • [00:04:19] Ryan McAbee: If we were to paint with a broad brush here, because we also have labels and flexible packaging, the key to the supply chain is that in the very beginning, you have some kind of material creation. It may be a pulp and paper kind of plant. If it is a flexible packaging plant, it is more about an extrusion process with plastics. But you have that as a starting point. Then it gets to the point where you are actually at the converter, and you are either printing it or creating the shape and structure.
    • [00:04:48] Pat McGrew: Or both. In many plants now, they have the ability to print while they are creating the box, right? They will hang inkjet heads on the process so that they can add the tracking and marking information they need. In some cases, they actually do full-color printing on the outer liner piece so that they create full-color boxes. Sometimes very customized as they are making the box. 
    • [00:05:14] Ryan McAbee: When we get into sales and administration, what is unique?
    • Nothing really jumps out to me other than you are talking about pretty long-established relationships. In many cases because the lead times and just the scale of these things can be quite large. 
    • [00:05:32] Pat McGrew: What most converters will tell you is that they live and die by long-term contracts. Salespeople are typically contract specialists as much as they are anything else. They know who needs what. They understand product cycles. They understand holiday shipping cycles. They become experts in how long it takes different transportation to get packages from place to place.
    • They understand the requirements for how robust the packaging needs to be, so what size corrugating they might need. How heavy a cardstock they might need on a folding carton. They become specialists and the things that their customers need to ship. They tend to be operating in a world where orders can be placed in the millions and hundreds of millions of pieces over the course of the year. 
    • There is a new group of providers in this market that are growing up that almost look more like commercial printers in some ways. They have adopted something we will call web-to-pack, where they are accepting online orders for very specifically sized or templated kinds of packaging. They are converters, but they are converters for a different class of customers - those who might need shorter runs of packaging, more colorful packaging, specialized shapes, and boxes that are not necessarily as easy to do when you're trying to fit them between a hundred million boxes, right?
    • A lot of these folks will be working with preformed sheets of corrugate or a heavy cardstock. They have the ability to print on them and then do the cutting and gluing to form the final box, but in much shorter runs. Those salespeople become contract specialists. Also, web-to-whatever specialist, which opens up a whole new category of challenges working with people who may not understand the processes required to create packaging in quite the way someone who is used to ordering a hundred million at a time is. 
    • [00:07:40] Ryan McAbee: It is a different end user, customer, consumer, that is doing the ordering. With the web-to-pack, you can even have equipment to make variable-size boxes that you can then go and print and do whatever else you want to do. The equipment is changing and keeping up with the kind of business model changes that we see. It is, like you said, much more like commercial printing and the fact that it is small batch manufacturing at that point. You are not doing a huge number of runs. 
    • [00:08:04] Pat McGrew: This is where you see innovation too. There is a lot of innovation that happens in this space too. Now you are watching people use corrugated and folding carton packaging environments and creating, instead of the plastic rings on your soda cans, creating board-based holders. There is such a big move towards creating more sustainable packaging in other spaces that a lot of the innovation is taking place in these smaller organizations.
    • [00:08:34] Ryan McAbee: It is a good time to talk about some of the tools to help not only the sales process but more the management aspect of these different types of packaging converters.
    • It is not the domain where you would hear the term print MIS. Usually, it is ERP, so enterprise resource planning software tools. Also, in the corrugated space, there is this whole other system that is in place - that is the MES or Manufacturing Execution System.
    • Maybe give us 30 seconds on that. 
    • [00:09:00] Pat McGrew: You will find these are systems that are typically integrated with the back office - high-end enterprise. They will be integrated with Salesforce for customer management. They will be integrated with Oracle or SAP or one of the other big business backends like Microsoft Dynamics, right? Those kinds of processes. 
    • The manufacturing execution system is designed to ensure just-in-time material requirements planning, order entry, planning, and execution, and inventory management. These systems are designed to ensure that you have all the materials you need to execute on orders and to send early warning alerts if it looks like an order is being taken for which you do not have the materials to fulfill it. This can be a really bad situation and certainly something many organizations have experienced over the last several years. 
    • Think of them as super intense business backbone systems that are designed to ensure that every order that is taken can be fulfilled. 
    • [00:09:58] Ryan McAbee: Very good. We have paper-making here. There are probably a lot of parallels we could make to the extrusion kind of process too. It is basically taking the raw materials and converting them into something that a packaging converter can then use.
    • Anything to call out here from a supply chain perspective? 
    • [00:10:13] Pat McGrew: When we call it paper making, what we are really doing is taking some sort of pulp. It started as a tree, and we are turning it into either sheets of paper or rolls of paper to turn into the final printed or converted product.
    • This is a supply chain challenge right now. Over the last several years, we have seen a reduction in the number of plants that are out there in the world that are actually making paper. We have seen a lot of the larger, more well-known paper producers turning their eyes towards packaging paper and away from what we might think of as more document paper. The kinds of things your bills and statements, and envelopes are made of. This is a supply chain challenge on a good day. There is a whole class of market research, but also innovation research, looking at new ways to create the kinds of substrates that we need.
    • Everything from not using a tree, but maybe using rice or using easier-to-grow green plants to create our paper substrates. It is an area that has a lot of technical ins and outs to it. 
    • On the people here, we talk about materials scientists. People who figure out what things can we put into our paper-making plant that will let us extend the life or make it more robust, but maybe not cost more. Chemists who handle the processing pieces; machine operators; workflow specialists. It is a pretty fascinating area, and it is a study all on its own. 
    • [00:11:50] Ryan McAbee: It is a manufacturing process, but it is very chemically intensive. You have to know the basics of chemistry to actually make it happen. The other thing that you mentioned was that it starts as a tree. That is true in many cases, but particularly in corrugated, there is such a movement over the last decades to have recycled content. There are some that have a pretty high percentage of that.
    • [00:12:11] Pat McGrew: The goal is to use it six times. If you talk to people in the package converting industry, the goal is to take it from virgin corrugated stock to recycle it at least six times in the process.
    • [00:12:22] Ryan McAbee: I think that is where the art and the science merge a bit. When you are blending these with virgin material, raw material versus recycled material, you still have to figure out how to get that structural integrity and have it be a product that is usable in the end.
    • [00:12:37] Pat McGrew: This will be true even when we talk about the flexible things that we convert. All the plastics and the films and all those and in label stocks, we have these exact same conversations. There are always material people, and chemical people. There are a lot of people involved in creating the stuff that we use to manufacture the final products.
    • [00:12:56] Ryan McAbee: We have talked a fair amount about the corrugating process. I think it is probably worth pointing out that this equipment is typically very large, so you have a pretty big footprint in terms of just physical space.
    • It also has a more energy-intensive use than what we typically would find, maybe, in some of the other print service provider equipment. The capital costs or expenditures are probably a bit more than what we are used to in the other segments. 
    • [00:13:21] Pat McGrew: The innovations that are coming along in this space are interesting. We are seeing the big manufacturers of this kind of equipment start to link up more closely with people who have printing capabilities, especially in the inkjet space, to create inline machines that print and create the box you need on the fly.
    • We are seeing a lot of innovation where corrugate, instead of being pushed out in sheets, as we show in this picture, is being pushed out in rolls of corrugate. Then being used for those make-a-box-any-size-you-want kinds of machines. There are a lot of innovations in that space. 
    • On the other side of things like folding carton and flex packaging environments, there are equivalent pieces of machinery in those environments that are pushing out the rolls of plastics or films. The rolls of the cardstock or the sheets of the cardstock. Every one of them has innovations that are coming to market on an every-other-year basis right now.
    • The goal is to not just produce this raw material faster and hopefully optimize, but also at a lesser cost. Also, to make the raw materials available in different sizes. 
    • Traditionally these machines have been 3.6, and 3.8 meters wide. As you said, they are room-sized, if not building-size machines. You are starting to see some come down market where there are actually narrower format machines. A lot of these web-to-pack people can now do a lot of their raw material manufacturing once they have their hands on the original paper, plastic substrate.
    • [00:15:01] Ryan McAbee: It is also amazing, like you said, the different technologies merging together with the hybrid configurations where you have the analog and digital components coming together. In many cases, that is inkjet technology for the actual printing component. 
    • [00:15:13] Pat McGrew: And some flexo. We are starting to see a lot more flexo in this space, too, with the hybrid machines. Which is interesting. 
    • [00:15:19] Ryan McAbee: Walk us through package making, as it is called here. So are we talking about the converting steps itself? 
    • [00:15:27] Pat McGrew: In a lot of ways, we are. We think of converting as going from the flat to the thing that we can fold into our final product. I called it package making instead of package converting. When you start to think about building flexible packaging, the pouch type operations, even think about a priority mail envelope - that is a converting operation. There is a little bit of package making going on there. It is cardstock that is cut out in a certain way, but it also has gluing components to it in order to actually create the final envelope. 
    • You have a lot of different equipment that actually forms this from a sheet into a final product. It is not just the die cutters or motion cutters that create the final shape of the box. There may be gluing machines; there may be perforating that is involved so that you can tear things off and create shelf-ready packaging for flexible pouches. 
    • Think about it just for a second. Consider what has to happen to put a resealable zip on the top of a package so that you can reseal. Or a Capri Sun pouch where you have a straw piece that you are going to put in it or the ones that have the ability to open a spout and pour. Every one of those takes time. You need a plan for it ahead of time. It has supply chain considerations for the parts that you need. There are specific equipment considerations that go into making them into making that final product.
    • [00:17:03] Ryan McAbee: If we were going to draw any kind of big conclusions to this... in the folding carton realm where you are making cereal boxes, you are going to die-cut, folding, gluing, that sort of process after it has been printed. 
    • For corrugated, it just depends. You are going to have some kind of conversion into a box at the end. What I do find fascinating is the material science aspect with flexible packaging. Depending on the end use-case of what is going to be in that package, you have all these different layers of materials that get combined together to provide the characteristics that you need so that it can hold material. You might have something like a cleaner that is more caustic, and you need a different kind of material layer so that it will not degrade or deteriorate the package itself. Very fascinating stuff.
    • [00:17:46] Pat McGrew: It absolutely is. If you work in those plants, you know it is very difficult to wrap your mind around all the things you have to worry about. 
    • [00:17:56] Ryan McAbee: In terms of warehousing and shipping, I think we have probably covered that enough in many of the other episodes. You are storing materials to have on hand for the customers. You are fulfilling in some cases, and you have to get the product to wherever it is going. 
    • What is unique to this space that we probably will not talk about anywhere else, is who is inserting the final product into a box? It could be the actual converter in some cases. It could be a co-pack establishment or the actual CPG, the consumer packaged goods company that is doing it too.
    • [00:18:29] Pat McGrew: It happens that this is one of those cases where it has changed a lot over time as different organizations have decided that they can provide a certain level of service to add additional revenue streams to their business. It used to be that flat pallets and boxes were delivered to the consumer product goods company, whoever it was that needed the packaging box. They would have a division that was responsible for packing the boxes and getting them prepped and out the door. 
    • Over the years, a lot of intermediaries have popped up that are actually pure fulfillment. Their job is to take in the required boxes. Take in the required goods that go into those boxes, and they have the plants built. More and more of those plants are automated, and in more of those plants, you will see a lot of AGVs, automated guided vehicles, and a lot of robotic arms. A lot of quite automated processes, moving boxes, placing a good, and then arms coming up that fold the box and make it final. Then put tape on the outside and get it ready to go.
    • The people manufacturing those boxes took a look at that and went, "Oh wait, we could do that." You have people in each one of these sectors doing it. Then you also have the people who are becoming specialists in box-of-size. There are fulfillment organizations that specialize in building boxes on the fly that are just the size you need for the goods that you are sending out the door. Certainly, this is something that Amazon has piloted quite a bit around the world and continues to do a lot of work in. 
    • The other thing that happens in this area is that web-to-pack tries not to warehouse anything, right? Their goal is to print the packaging, convert it, get it out the door, and get it to you as fast as they possibly can. They tend not to be warehousers. They become expert shippers. How fast can we get it to the customer? Let's get it there and go. 
    • The guys who are selling a hundred million of the flat boxes, very often a service they offer is print everything you need in the month of January, but then we hold onto it for you for the rest of the year and ship it to you as you need it. Different kinds of business models, different kinds of pricing models, and service models. You find all of it in this space.
    • [00:20:47] Ryan McAbee: As we go forward and the technology changes and improves, it just offers up more flexibility in terms of taking a look and saying, "Can we augment what we're doing already? Is there a different kind of business model that we may be able to pursue and get the additional revenue stream?"
    • It is a space that is definitely evolving. It has been already versus where it has been in previous decades, and probably a lot of opportunity going forward. With that, Pat, any final comments before we wrap it up? 
    • [00:21:14] Pat McGrew: I think this is a space that is fascinating. It is going to keep on innovating. Look especially in those web-to-pack spaces for a lot of innovation because they are tending to start from nothing. They tend to invest in automation from day one, and that impacts every step of the converting cycle. 
    • [00:21:32] Ryan McAbee: To summarize it here. When talking about operations for packaging converters, it is all about the supply chain and the value chain, which is connecting all those distinct processes from beginning to end. Taking that raw material and then ending up with a finished product on the end.
    • Thank you for joining us on this episode of The Print University, and we hope you join us for a future one.

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