Automation advances in 2017 can help your shop be more profitable.
By Craig Miller
It was first stated by Christopher Bullock in 1716, then by Daniel Defoe in 1726. But, it was most famously written by Benjamin Franklin in 1789: “… In this world, nothing can be said to be certain, except death and taxes.” I would posit an additional certainty in our industry. As historically exemplified by the market for billboard printing and more recently, vehicle graphics, it’s certain that prices will fall.
As a market matures and more companies enter, the competition results in reduced selling prices. It’s the American free-market way; supply and demand. How can a print-for-pay company prosper in a world of diminishing returns?
What our company has historically done is abandon the market and move on to other products and industries. But this is a radical solution and can be very disruptive to the company.
So, face it. It doesn’t matter what your gross sales are. It matters what your net profit is. If you reduce your “cost of goods sold” significantly, you may be able to maintain profitability, even in a market of falling prices. But what’s the best way to do that?
I can tell you what I have witnessed over the past two decades: Too many companies have responded by using cheaper, and usually inferior, materials. I believe this strategy becomes self-destructive because it ultimately hurts those companies’ and our industry’s reputations.
Companies with deep pockets can fight lower prices with investment in capital equipment. Faster printers, heat presses, laminators, CNC machines, etc., save on overhead and labor. As we know, speed is money. The key is having the volume to fill the queue. If you have the sales volume, this method works and has been the most replicated. The problem is that it may actually contribute to the downward spiral in prices. Let’s say a company buys a million-dollar printer that prints beautifully at 40,000 square feet per shift. The sales effort to feed a printer that fast puts downward pressure on pricing.
However, today’s evolving technology offers us another path to solve this problem: automation. There are automated solutions coming to market that affect the efficiency of every aspect of our manufacturing process. From prepress to finishing, there’s a myriad of solutions.