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When I read Eddy Hagen's "The Crossover Between Digital and Offset printing, In Real Life" from yesterday, September 1st, I wanted to add a dimension to the discussion - namely, the capital expenditures investing in technology! So here are my views on this exciting topic.

By Editor Morten B. Reitoft.

The most important question is to answer why this discussion is interesting. If you need variable data or copies of one, digital is the only viable solution. But what happens when you need, let's say, 30, 50, 100, or even thousands of copies?

This can be answered by understanding how printing companies calculate, and we leave out inkjet for a moment. Digital printers are, for the majority, click-based. The click includes service, consumables, and sometimes equipment financing. Offset machines are typically calculated on full-cost models, which, to simplify for understanding, is the machine's price divided by the expected utilization over a number of years, and then you will have an hourly rate.

In Offset, consumables are paid as consumed, so when PSPs use MIS systems to calculate a cost price, they have to use an average ink cost for a job unless the estimator specifically sets a value. Jobs are, for the most calculated before seeing the job file!

Both click and full-cost models have several disadvantages, but that's another story!
A full-cost calculated offset machine costs the same (minus the variable cost like labor (direct), plates, ink, and paper) whether it runs or not. This is, to some, an unpleasant reality, as many offset machines only run 25-30% of the potential.

So offset machines operate hourly and digital typically variably. This means that how the offset machine is calculated covers a percentage of the equipment cost + contribution to rent, energy, administration, etc., the digital is typically a cost-plus model.

As you can see, the challenge of comparing Offset and digital can't be done on sales prices (alone), and even online printers are not good examples. Utilization is, as usual, the most critical factor when it comes to pricing.

Online printers utilize their equipment way more than many conventional printers, hinting they will operate with a lower hourly rate.

If we simplify this for the example, you can see what I mean:
You have a machine that costs index 100. If the machine is used for 10 hours, it costs you 10, and if you use it for 5 hours, it costs you 20.

With digital, the pricing model is entirely different, and again if we assume a click-based model including financing, the machine does not contribute to overheads in its costing model!

The paper is more or less the same; the binding can differ but is probably marginal.

If we only look at the cost per sheet, the digital sheet price is higher than Offset, so the significant difference is setup time/cost! Remember, click-based prices are linear and, therefore, quite soon, are beaten by the offset machine!

For large online printers, the price for plates and inks is probably lower than that of an average commercial printing company, as its volume is much higher.

This week I visited one of Germany's most significant online printers - Saxoprint. With the newest automatic plate system and push-to-stop technology, the machine prints 18,000 B1 sheets an hour. Remember, this is comparable to 36,000 B2 sheets or more than twenty times faster than an HP Indigo 15K printing 4+4, and when it ran, it performed a complete 8-plates change over in about 1-2 minutes and used 30 sheets in total before being at speed again!

So as with everything in the industry, the actual price difference is less about technology - unless you need copies of one or variable data - but mainly about utilization and scale!

If you can fill up an offset machine with work, it outperforms any digital by all measures.

So why are people considering inkjet and other digital machines?

An offset machine can print so many sheets per hour, per day, per month, per year, in 10-12-15 years, and just imagining the volume it can produce, it becomes evident that sales are the number one bottleneck investing in a new press. The offset machines have become faster and faster in a decreasing market, leaving many printing companies with machines that most can't facilitate enough!

Nobody buys an expensive machine that can't be utilized, and now both inkjet and toner deliver competitive solutions on all measures (except speed). And the acquisition cost is lower, the operation simpler, and speed is getting to where it pays off having an operator managing the machine.

Imagine you pay, let's say, 20-30-40 euros an hour to an operator. You have a digital printer that can run 1000-2000 B2 sheets per hour. Now, even the labor cost is so low per sheet that labor cost almost becomes almost marginal - and quality - well!

Some digital printers deliver quality way better than Offset. Consistent, amazing gamut and substrate diversity give customers and PSPs endless options. Digital IS interesting for many companies, and no. This has not much to do with where the crossover is. The real thing to consider is where your business will be in five-ten years, and then invest based on that.

Ten years ago, a PSP had the same considerations. Still, the click prices were too high, and the quality was not worth considering without telling the customer it was printed digitally! But digital printers became better, cheaper, and faster, and as the job sizes shrank, digital became an obvious solution for many PSPs.

Times are changing for sure, and the reasons for buying digital continue to be overwhelming - decreasing volume and fast turnaround time are just two considerations!

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Paul Sherfield

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Offset machines running at only 25%-39% of potential? Please give some more data and facts to justify this figures.

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