July 7, 2008— How time flies! The year is more than half over, and what a year it's been so far. There have been major product announcements, we have drupa under our belts for another four years, and as always there's been a slew of news making and shaping our industry.

With that in mind, Printing News asked our Advisory Board to weigh in on the year so far, and tell us what they see in our near future. They had some interesting—and informative—answers to give.

We'd also like to welcome the newest member of our board, Andrew Featherman, manager, OnDemand Solutions Division, Muller Martini. He'll be bringing the perspective of the finishing market, among others, to our elite gathering. Welcome, Andrew, and it's great to have you with us!

1. Out of this year's drupa (whether you attended or not) what do you believe the most important technology launch or announcement was? Why?

AF: The most important technology launch at drupa was the various inkjet presses from manufacturers such as HP, Kodak, Océ, Screen, etc. In particular the 30-inch wide inkjet press from HP (shown as 36 inches wide at drupa, but only as a concept) created the most buzz from the showgoers. The print quality and substrate variability shown on the line has alleviated some of the traditional concerns with utilizing inkjet presses for the production of commercial products.

In digital book manufacturing, for example, the holy grail has always been high speed, four-color digital book reproduction, and it is now a lot closer than before. This not only excites equipment manufacturers like us, but also book manufacturers and, most importantly, publishers. If this technology continues to evolve over the next couple of years, we will see a paradigm shift in the way printed products are produced.

DL: High-speed color inkjet for production printing in general. In some cases, this is a technology that is not just about speeds and feeds, it is about the potential to move digital into new markets, such as newspaper publishing.

Digital printing overall showed its importance—future trade shows will be examined to some degree by the types of digital print applications shown, which is a significant advancement that speaks to digital as a maturing technology.

NP: Noted by many observers and colleagues, drupa 2008 showcased a new level of inkjet performance and workflow synergy, which became known as "Offset Class Output." This new standard represented a culmination of reliability, productivity, right cost, substrate flexibility, and quality. Supported by a stream of alliances that reinforced the value and need for a tight integration of conventional and digital solutions, almost all leading companies showed inkjet technology, including Kodak, Xerox, HP, Fuji, Agfa, and Screen. Inkjet was heralded as the technology of the future.

RG: I believe the new inkjet output equipment released by many of the suppliers—even though it is not really new technology—is the most important announcement at drupa. The reason I believe this is because inkjet technology advances the overall potential for transpromotional color printing, as well as digital direct mail color printing. This will affect the reliance on traditional offset technology. This will be accomplished by a continued reduction of the cost to print color from this equipment, and eventually be less expensive then certain Web-offset equipment.

2. With the year half-over, is 2008 proceeding as you anticipated it would? Why or why not?

AF: This year started off as projected, but the slowdown is a bit more severe than originally forecasted. Although people are still purchasing equipment, many projects have stalled, or are experiencing unexpected delays. Fortunately the projects are still there though. The current projections for the remainder of 2008 are quite modest. We do expect a boost from the tax incentives on new equipment purchases in 2008, but the upcoming election uncertainty and inflation impact of rising energy prices will continue to put pressure on most people's bottom lines (e.g.: rising transportation costs, etc.).

DL: From a technology standpoint it is pretty easy to predict that any year you have a drupa, you are going to have some big steps forward in technology. The industry is taking big steps forward, as it must in every drupa year.

In terms of whether 2008 is unfolding as expected for printers, I think you have to have the perspective of the industry being in the same boat as the rest of the economy. It seems as if none of the forecasts have been pessimistic enough with regard to the economy in 2008, especially with housing. Printers can expect that they have to compete in this environment, and already know and anticipate it to be a challenge. I am sure many are seeing the tough environment as a call to do things differently.

NP: Considering the tough economic climate so far in 2008, we are very optimistic about the growth expected for the year. Results are in line with expectations, and we have achieved strong performance in critical digital business sectors. We are continually encouraged by the positive response of customers and the very positive inertia of drupa as a catalyst for renewed advancement of print and graphic communications.

RG: I believe at the half year point, 2008 is proceeding as I had expected. I believe that new applications and new opportunities are continuing to help printers find new sources for increased revenue. However I have concerns over the effect of the higher fuel costs for the second half.

3. What do you believe printers can and should expect for the last half of the year? Is there anything they can do to prepare for it?

AF: The last half of the year will continue to present a difficult economic climate for printers. In addition, there is a growing sentiment toward "going green," which will force print operations to become more efficient. The printers that take advantage of the tax incentives on new equipment installed prior to the end of the year will be able to better address the green initiative, and position themselves better for the economic improvements forecast for mid-2009.

DL: In many cases, they can expect to see some of the real innovations shown at drupa come to market and begin to have a real impact on productivity. A good number of the solutions on display are actually for sale today, or will be soon. Printers can expect to really engage with the latest and greatest of what the industry has to offer today if they go to Graph Expo in the fall.

NP: Printers will continue to see pressure on cost reductions. Understanding that this is a reflex response to upper management pressure, printers should be proactive in shifting the business relationship to value and not price. Discussing the needs of the campaign, the cost per response, or how to effectively improve the sustainability of the job can help set the stage for a win-win relationship, and prevent a reflex response solely centered on price.

RG: I believe printers can expect a rough second half, with budgets being cut to accommodate the increased energy costs. However, if the cost for oil comes down substantially, I believe 2009 can be a banner year!

4. The economy and consumables, such as gasoline, are major stories in the news right now. How does this affect the graphic communications industry, and is there anything printers can do to help mitigate the effects?

AF: Rising commodity prices will continue to impact printers during the second half of 2008. Since much of this effect is out of most printers' control, senior management at each company have to find ways to work smarter and more efficiently. For example, simple things like consolidating shipments can help reduce the cost effect of rising fuel prices. Although most printers stop investing in new technologies during times like this, the ones that invest in new platforms and workflow strategies now will have much greater success when the economy turns around. This has been proven time and again in the past, but many people are too intimidated to make these types of investments in difficult economic climates.

DL: With gas prices being what they are, it might be interesting to see if there will be a shift to local print buying. For the first time in a long time, fuel costs, if passed along, have the potential to eliminate the competitive advantage some printers might have in marketing themselves nationwide, and living off high volumes and low prices. Higher transportation costs also give more credibility to the whole concept of distribute and print, where companies, or networks of companies, work to ensure that jobs are printed as close to the delivery site as possible.

NP: Indeed the cost of raw materials will trickle down and put added pressure on pricing and profits. This, however, can be a needed catalyst for change in operational practices. Customers may be more willing to listen to alternative workflows, proofing, and digital print options because of their ability to improve efficiency, cut down waste, improve cycle time, and help the environment. Process changes like this can help offset the higher costs of operation for both and printers and their customers.

RG: The main way printers can mitigate the costs for fuel, is to move into higher-end digital color technologies that promote print-on-demand, and multichannel marketing applications which basically give their customers more value from the printed piece, which increases the customers ROI, and therefore reduces the customers cost per lead generated. This will not work for all applications, but it will definitely help purchasers and printers better cope with the situation.

BM: The cost of oil has a very significant impact on the printing business. It is devastating to the ink business, driving up prices that are difficult to past along. The same holds true for the paper manufacturers. How about the energy it takes to run the pressroom, not to mention premedia or the bindery.

These are very difficult times for printers. However, the carbon footprint of print is still a lot less than other communication methods. What do you think the carbon footprint is for all those servers and computers? Talk about using energy....ouch!

5. Are there any other issues or technologies you feel printers need to be more aware of? Why, and what would you like to see them do about it?

AF: The impact of digital print technology must be analyzed by every printer in the industry. If they haven't already started to look at digital workflows, then they are already way behind. Although inkjet was referenced above as the hottest technology at drupa, it is not the only technology to consider. Many advancements have been made in one-color, spot color, and four-color toner-based systems from companies such as Océ, Infoprint Solutions, Xerox, Nipson, etc. Almost any printing application can be complemented with a digital workflow. Each printer should analyze their work mix and determine what portion of their work would be better suited to be printed digitally. Even digital finishing technologies have advanced considerably to meet the commercial quality requirements of most printers.

NP: The crescendo of the environmental movement now under the expanded banner of "Sustainability" will become a critical driver for the print supply chain. Pressure from investors concerned about environmental sustainability will be a leading factor in the move to sustainable practices by the corporate customers of the printing industry. While product and price can force printers into commodity selling and marginal profits, a redirected focus on people and the planet can showcase the consultative value a printer brings the customer beyond the technology and price of the printed page.

RG: I believe printers should begin to implement "green" initiatives in their operations; sooner rather than later, clients will begin to request proof that a printer has green initiatives and is either on the path to, or has already adopted "green processes." This will ultimately generate increased business for the printers that adopt these green practices.