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InkJetsAge_0615

Lessons Learned Transaction Direct Mail Books General Commercial Area coverage Low Low Low High Substrates Primarily uncoated Mostly uncoated Lightly coated Primarily coated Feed Type Comfortable with Comfortable with roll-fed Primarily sheet-fed Moderate Moderate Moderate High POD; JIT manufacturing Short-run; quick turnaround; POD, JIT manufacturing, personalization Other factors MICR MICR Signatures Spot colors & coatings two-million-dollar acquisition price is spread out over five years and hundreds of millions of impressions, it ‘only’ amounts to a few mils (i.e., tenths of a penny) per letter-sized page. Consumables (primarily inks) and service/maintenance are important cost contributors for an inkjet system. Because of this, the area print coverage has a significant impact on the overall running cost. The higher the coverage, the higher the cost. Therefore a low-coverage page, perhaps just monochrome text and a logo, will cost less to produce than a higher coverage page with tints, solid areas of color, and/or photographs. (Note: The estimates above were made based on 20 percent coverage, which is a relatively modest coverage level.) Use of lots of color and photographs could easily double or triple the perpage ink cost. There is also a potential cost impact for high-coverage jobs on glossy stocks since these generally require pre-treated inkjet papers, which are typically more expensive than commodity stocks. roll-fed Quality Expectations Key digital advantages Forms replacement; use of variable color; personalization; lights out production There are also other trends driving the trend toward digital print, such as the move from black-and-white documents to fully variable color. On top of that, the speed of inkjet makes it possible to compete more effectively with offset presses for non-variable work. This is being driven, to a large extent, by the general industry trend toward shorter run lengths and quick turnaround. It also builds off of the use of digital printers to reinvent workflows, for example, for true on-demand printing and just-in-time production. Still, the point is clear: In the past few years the greatest area of success has been for print service providers who could shift high volumes of transaction, direct mail, and book work to a more automated process driven by inkjet print engines. General commercial print has been a harder market to crack, for reasons we’ll discuss later. Tracking the Cost of the Inks, Heads, and Paper While a purchase price of more than a million dollars can be a barrier, what early users also discovered was that the cost of the inks, the heads, and paper contribute more on a per-page basis than the equipment cost. We can illustrate this using a few basic estimates on equipment, paper, consumable, and service cost. At five million impressions per month, equipment is the largest component, accounting for a little more than a third of the total cost Comfortable with roll-fed Customization; personalization; mail automation per page. Not far behind is the paper cost. In general, fixed costs like the equipment and monthly service fee become a smaller part of overall cost as volume increases. Equipment, for example, drops from 33 percent at five million impressions to eight percent at 30 million. Cost components such as click (or service) charges and ink increase as volume increases. Both start at around 15 percent and end up at 23 percent at 30 million impressions. Paper is the second largest cost component (at five million impressions) and accounts for close to half of the cost at 30 million impressions though volume discounts for paper could bring this number down a bit. The Cost Implications of High Coverage As you have seen, acquisition price, though significant, is a relatively small portion of per-page cost, particularly if the device is driven at high volume. Why? Because when a The Impact of Print Volume Millions of Impressions per Month 5 10 5 20 25 30 Equipment 33% 21% 15% 12% 10% 8% Monthly 6% 4% 3% 2% 2% 2% Click 15% 19% 20% 21% 22% 23% Ink 15% 19% 20% 21% 22% 23% Paper 30% 38% 41% 43% 44% 45% Total 100% 100% 100% 100% 100% 100% 12 Inkjet’s Age | June 2015 MyPRINTResource.com


InkJetsAge_0615
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