I spent 30 years on the ground in that industry before going into education and consulting. It's a great context to watch the play of GME forces.
Printing always been one of the largest manufacturing industries in the US. Yet, it has always been organized in a small units - average size, at least until recently, of about 20 people per location. As other industries are now trying to grow models of networked production, the print industry historically has always thrived with a connective tissue of job brokering, dynamic specialization, and local customer focused small enterprises.
The industry is now moving from a customized manufacturing system held together by managing client risk through trust built on reputation and customer loyalty. But risk has been mitigated by constant improvements in technology. Once the value added of risk management is taken away, margins have eroded. Add to this the crisis in advertising, information management, and marketing, and it really gets interesting.
Another factor is that print might be an industry that partially shielded from global outsourcing because of the time requirements and the need to deliver physical product.
Reading Dr. Joe's updates with fact based research and at the same time watching the common wisdom move to and fro is a great learning experience. It's a perfect place to see the GME wave hitting the ground and how small manufacturing business units are responding to it.
From PrintForecast Perspective Archives
It was recently announced that data base provider Harte- Hanks purchased a digital printing business, PrintSmart, located in Southeastern Massachusetts. For all of the talk about printers getting into the data base business, this is a data base business getting into printing.....
And after a discussion of the benfits of outsourcing, he gives the following advice to printing companies, his primary audience.
This brings out the most important and unrenewable management resource: time. Time cannot be replaced. Outsourcing implementation tasks creates time for corporate management because they can apply their managerial time elsewhere, and access expertise in implementation that they could not acquire personally or would have to hire at great cost.
Printing companies have significant opportunities to lift burdens and create time for their clients. Knowing how their clients use print, or would use print if they could, and what other information distribution methods they need to tie into, has been hard for many printers to understand. It's essential to focus not on getting ink onto paper, but on translating client ideas into actions. It will be quite interesting to see how (or if) Harte-Hanks expands their services in this way. It will be also interesting to see how many printers also view this as a core strategy for their own businesses. There are hurdles: clients typically do not think of their printers in this way.
Which printers will hear this clear and good adivce?
My own instinct is that most won't or can't. Only a few printers have the culture to recognize that a potentially huge source of value creation might come from knowing their customers - not in the sense of "owning" the relationship - but the granular knowledge of their customers' business problems and systems. Printers' problem is not having the time or capabilty to leverage that asset.
The most likely mix is that some printing companies will get it, while others will build on network partnerships, and many will do neither. Most printers' core skill is printing stuff. There are many other centers of expertise that will face the customer to create value and print will continue to be hidden from view in the middle of the value chain.
This is not bad news for any particular printer.
In fact, those that concentrate on dynamic specialization ( as described in The Only Sustainable Edge and www.edgeperspectives.com ) have the opportunity to do better than ever.