Catherine Diamond, Associate Editor09.09.14
For label business owners, the decision to invest in new equipment can be an arduous one. There are questions of capital, initial and ongoing costs, returns on the investment and the potential for downtime during installation. For small, privately owned companies, these decisions can make-or-break business.
Even for more established converters, the decision to invest in new equipment is often interwoven with questions of investing in new technology. Finding the balance between investing in technology that will allow companies to remain competitive while also staying “in the red” is very often easier said than done. The deciding factors are unique to each company, and as such, each has their own approach.
ID Images
Brian Gale, president of Brunswick, OH, USA-based ID Images, says that his company buys equipment both to meet demand and to keep up with technology and efficiency.
“Capacity constraints are a good reason to buy equipment,” he says. “Additionally, the world has changed. New equipment can run thinner substrates compared to older equipment. There is less scrap with new equipment.”
Before purchasing equipment, though, Gale says his company does a lot of research, which includes meeting with vendors, speaking with other converters, going to trade shows and going to manufacturer’s equipment demonstrations. The process can be lengthy.
“It’s anywhere from a six-month to two-year process, depending on the size of the investment,” he says. “Again, the world has changed. Equipment costs have gone up. Obsolescence occurs much faster in digital equipment than it ever did with analog equipment. Our business needs change quickly too; we have added to our capabilities via acquisitions and need to look at all aspects of our business before deciding to do a major capital investment.”
Gale adds that the most important factor in terms of equipment acquisition is the return on the investment. However, he emphasizes that ROI isn’t just a dollar amount.
“It includes improving our turnaround time, quality, customer service and so on. We have a wish list of new equipment, and from there, we decide what makes the most sense,” he says.
The Label Printers
For Lori Campbell, chief of operations at The Label Printers in Aurora, IL, USA, the decision to invest in new equipment is driven both by capacity and by the need to improve efficiencies of existing work.
“Improving efficiencies usually comes about when we learn about the manufacturers’ new products during sales visits or trade events,” she says. “We don’t like to buy equipment on the hope that ‘if we buy it, they will come.’ The one exception to the typical approach is when we made the decision to add digital capability. That was an almost universal gut feeling that the technology had reached an acceptable production speed, combined with the acceptance that digital would be in our future, so the timing was right to take the plunge,” she says.
Campbell notes that The Label Printers equipment-buying process is typically a quick one. Once equipment piques the company’s interest, she says, a small team will be assigned from production, prepress and executive management.
“We start with the preliminary sales literature and start a Q&A process with the supplier to refine and better understand the equipment specifications,” Campbell says. “We will request a preliminary quote based on our minimum requirements and then ask for separate pricing for add-ons that we may determine could provide additional capability not needed, but desired for future opportunities. Of course, the quoting stage is the most lengthy,” she adds. “It might include considerations for trade-ins and we will be as aggressive as we can be to get the most bang for our buck; not unlike any price negotiation.”
Campbell says that the company typically does not get comparative quotes because, by that stage, they have already identified the features of the equipment that they want. Given that there’s usually a specific reason for purchasing, Campbell feels it is easy for them to determine the ROI. The exception to this was when The Label Printers decided to move into the digital realm. “The process did take longer because we needed to understand more about the capability and some of the associated considerations, like the climate-controlled, clean space,” she says.
McDowell Label
According to John McDowell, president of McDowell Label in Plano, TX, USA, the process of evaluating and selecting equipment is a critical component to his company’s financial health.
“Making the right choice can result in a competitive edge and, in some respects, can help carve an all-important niche in a market segment,” he says. “Choosing incorrectly can leave us saddled with a financial burden that can be very difficult to recover from.”
While many converters rely primarily on data regarding capacity needs and potential growth to drive equipment purchases, McDowell says his company’s market focus causes it to operate a little differently.
“Because of our focus on innovative packaging, and because of the markets we serve, we are always on the lookout for a technological enhancement that will allow us to service our customer base in a way that will enable them to design and realize packaging effects that provide a market advantage in their industry,” he says.
McDowell adds that his company does not determine a specific point at which it evaluates equipment options. The company maintains an ongoing approach to assessing what is available in the market and how it can meet customer need. Once a piece of equipment has caught McDowell’s eye, there are several steps the company takes to evaluate the potential purchase.
“Our process includes a couple of factors,” he says. “We check with other manufacturers for consideration or elimination based on their own product offerings. That step is followed by equipment demonstrations to ensure that the equipment can do everything it is marketed as being able to do.”
McDowell says that his company believes very strongly in “trust-based supplier partnerships,” so the focus of his evaluation is not only on the quality of the product, but the service provided by the organization and, lastly, the price.
“We know that a large investment works best when supported by a strong and ongoing relationship,” he says.
Identco
Victor Holbein is the chief operating officer at Identco, a label manufacturer based in Ingleside, IL, USA. According to Holbein, his company takes a look at its equipment every year to evaluate whether or not an upgrade is needed. The deciding factors, he says, are to keep up with demand and to keep up with technology.
“We always like to see where the equipment is on our books, the value of it,” he says. “Has it depreciated? If it has and if we feel its an old technology, we’ll look at replacing it.
“Another factor is: what are we hearing from our customers? What are they telling us? What about their marketing, their engineers? What’s changing? Are they going more complicated with design, the number of colors ? What’s their influence on the products and what is our ability to meet their needs?”
Holbein says that Identco’s extensive experience with flexo means that the company can come to a decision on a piece of equipment within about three months. However, when managers started looking into digital printing this year, they launched a two-year project to determine what the right platform would be to meet customer need. They expected a longer-term project, he says, because this is the company’s first time venturing into digital territory.
“We first wanted to learn about the technology: who’s out there in the market and who are the major global players? We wanted an understanding of the different printheads, of the ink chemistry, we wanted to understand the quality and durability,” he says. “There was a lot for us to learn. First, we seek to understand and learn and then be sure that we’re ready to make the right choice in equipment.”
Holbein adds that because digital is an ever-changing technology, he felt it was very important to understand the digital process on a fundamental level.
So far, Holbein and others at Identco have had discussions with three different digital press makers. He says that the most important things to the company are the machine’s ease-of-operation, including how user-friendly the software is and the operator interface. Because Identco’s focus has been flexo, Holbein says a concern is how long it would take someone from flexo to learn how to use the new machine.
“We’re also looking to see what the durability of the platform is,” he says. “We’re looking to see what range of products can be printed and which raw materials they’ve been working with. Are they making their own ink, or buying from someone else? Some digital platforms have a click charge and some don’t, so we were interested in learning about that.
“We are also interested in learning about finishing; is it inline or offline? Can you print, laminate, varnish, and diecut? We are looking to see the full extent of their equipment,” he says. The most important factor for Identco, Holbein adds, is that they need an all-in-one-machine. It has to be fully integrated, able to do everything from printing to converting. With digital being predominantly four-color, another factor is color reproduction.
“How much of the Pantone color spectrum or custom colors are they able to reproduce? Are they able to reproduce colors using CMYK? Doing flexo, you can mix inks for custom colors,” he says. “A lot of companies are looking to go from four to six to seven colors; they’re interested in using more of the color spectrum. That’s critical for us. If we’re doing custom spot colors, we really need to know: How much of the color spectrum are they able to replicate?”
Like many converters, Identco has its own reasons for pursuing new equipment. Because of the unique needs of every company, Holbein says that his company relies strictly on its own internal, thorough evaluation of equipment, rather than relying on recommendations from other converters. Relying strictly on internal measures, he says, is part of the reason for the lengthy process.
The company will be ready to make its purchase at the end of 2015, so Holbein says that they will be paying special attention to what’s new at Labelexpo this year. “We’ve done a lot of research, had a number of conversations with manufacturers, and done a lot of testing,” he says. “And we are extremely encouraged by what we’ve seen so far.”
Even for more established converters, the decision to invest in new equipment is often interwoven with questions of investing in new technology. Finding the balance between investing in technology that will allow companies to remain competitive while also staying “in the red” is very often easier said than done. The deciding factors are unique to each company, and as such, each has their own approach.
ID Images
Brian Gale, president of Brunswick, OH, USA-based ID Images, says that his company buys equipment both to meet demand and to keep up with technology and efficiency.
“Capacity constraints are a good reason to buy equipment,” he says. “Additionally, the world has changed. New equipment can run thinner substrates compared to older equipment. There is less scrap with new equipment.”
Before purchasing equipment, though, Gale says his company does a lot of research, which includes meeting with vendors, speaking with other converters, going to trade shows and going to manufacturer’s equipment demonstrations. The process can be lengthy.
“It’s anywhere from a six-month to two-year process, depending on the size of the investment,” he says. “Again, the world has changed. Equipment costs have gone up. Obsolescence occurs much faster in digital equipment than it ever did with analog equipment. Our business needs change quickly too; we have added to our capabilities via acquisitions and need to look at all aspects of our business before deciding to do a major capital investment.”
Gale adds that the most important factor in terms of equipment acquisition is the return on the investment. However, he emphasizes that ROI isn’t just a dollar amount.
“It includes improving our turnaround time, quality, customer service and so on. We have a wish list of new equipment, and from there, we decide what makes the most sense,” he says.
The Label Printers
For Lori Campbell, chief of operations at The Label Printers in Aurora, IL, USA, the decision to invest in new equipment is driven both by capacity and by the need to improve efficiencies of existing work.
“Improving efficiencies usually comes about when we learn about the manufacturers’ new products during sales visits or trade events,” she says. “We don’t like to buy equipment on the hope that ‘if we buy it, they will come.’ The one exception to the typical approach is when we made the decision to add digital capability. That was an almost universal gut feeling that the technology had reached an acceptable production speed, combined with the acceptance that digital would be in our future, so the timing was right to take the plunge,” she says.
Campbell notes that The Label Printers equipment-buying process is typically a quick one. Once equipment piques the company’s interest, she says, a small team will be assigned from production, prepress and executive management.
“We start with the preliminary sales literature and start a Q&A process with the supplier to refine and better understand the equipment specifications,” Campbell says. “We will request a preliminary quote based on our minimum requirements and then ask for separate pricing for add-ons that we may determine could provide additional capability not needed, but desired for future opportunities. Of course, the quoting stage is the most lengthy,” she adds. “It might include considerations for trade-ins and we will be as aggressive as we can be to get the most bang for our buck; not unlike any price negotiation.”
Campbell says that the company typically does not get comparative quotes because, by that stage, they have already identified the features of the equipment that they want. Given that there’s usually a specific reason for purchasing, Campbell feels it is easy for them to determine the ROI. The exception to this was when The Label Printers decided to move into the digital realm. “The process did take longer because we needed to understand more about the capability and some of the associated considerations, like the climate-controlled, clean space,” she says.
McDowell Label
According to John McDowell, president of McDowell Label in Plano, TX, USA, the process of evaluating and selecting equipment is a critical component to his company’s financial health.
“Making the right choice can result in a competitive edge and, in some respects, can help carve an all-important niche in a market segment,” he says. “Choosing incorrectly can leave us saddled with a financial burden that can be very difficult to recover from.”
While many converters rely primarily on data regarding capacity needs and potential growth to drive equipment purchases, McDowell says his company’s market focus causes it to operate a little differently.
“Because of our focus on innovative packaging, and because of the markets we serve, we are always on the lookout for a technological enhancement that will allow us to service our customer base in a way that will enable them to design and realize packaging effects that provide a market advantage in their industry,” he says.
McDowell adds that his company does not determine a specific point at which it evaluates equipment options. The company maintains an ongoing approach to assessing what is available in the market and how it can meet customer need. Once a piece of equipment has caught McDowell’s eye, there are several steps the company takes to evaluate the potential purchase.
“Our process includes a couple of factors,” he says. “We check with other manufacturers for consideration or elimination based on their own product offerings. That step is followed by equipment demonstrations to ensure that the equipment can do everything it is marketed as being able to do.”
McDowell says that his company believes very strongly in “trust-based supplier partnerships,” so the focus of his evaluation is not only on the quality of the product, but the service provided by the organization and, lastly, the price.
“We know that a large investment works best when supported by a strong and ongoing relationship,” he says.
Identco
Victor Holbein is the chief operating officer at Identco, a label manufacturer based in Ingleside, IL, USA. According to Holbein, his company takes a look at its equipment every year to evaluate whether or not an upgrade is needed. The deciding factors, he says, are to keep up with demand and to keep up with technology.
“We always like to see where the equipment is on our books, the value of it,” he says. “Has it depreciated? If it has and if we feel its an old technology, we’ll look at replacing it.
“Another factor is: what are we hearing from our customers? What are they telling us? What about their marketing, their engineers? What’s changing? Are they going more complicated with design, the number of colors ? What’s their influence on the products and what is our ability to meet their needs?”
Holbein says that Identco’s extensive experience with flexo means that the company can come to a decision on a piece of equipment within about three months. However, when managers started looking into digital printing this year, they launched a two-year project to determine what the right platform would be to meet customer need. They expected a longer-term project, he says, because this is the company’s first time venturing into digital territory.
“We first wanted to learn about the technology: who’s out there in the market and who are the major global players? We wanted an understanding of the different printheads, of the ink chemistry, we wanted to understand the quality and durability,” he says. “There was a lot for us to learn. First, we seek to understand and learn and then be sure that we’re ready to make the right choice in equipment.”
Holbein adds that because digital is an ever-changing technology, he felt it was very important to understand the digital process on a fundamental level.
So far, Holbein and others at Identco have had discussions with three different digital press makers. He says that the most important things to the company are the machine’s ease-of-operation, including how user-friendly the software is and the operator interface. Because Identco’s focus has been flexo, Holbein says a concern is how long it would take someone from flexo to learn how to use the new machine.
“We’re also looking to see what the durability of the platform is,” he says. “We’re looking to see what range of products can be printed and which raw materials they’ve been working with. Are they making their own ink, or buying from someone else? Some digital platforms have a click charge and some don’t, so we were interested in learning about that.
“We are also interested in learning about finishing; is it inline or offline? Can you print, laminate, varnish, and diecut? We are looking to see the full extent of their equipment,” he says. The most important factor for Identco, Holbein adds, is that they need an all-in-one-machine. It has to be fully integrated, able to do everything from printing to converting. With digital being predominantly four-color, another factor is color reproduction.
“How much of the Pantone color spectrum or custom colors are they able to reproduce? Are they able to reproduce colors using CMYK? Doing flexo, you can mix inks for custom colors,” he says. “A lot of companies are looking to go from four to six to seven colors; they’re interested in using more of the color spectrum. That’s critical for us. If we’re doing custom spot colors, we really need to know: How much of the color spectrum are they able to replicate?”
Like many converters, Identco has its own reasons for pursuing new equipment. Because of the unique needs of every company, Holbein says that his company relies strictly on its own internal, thorough evaluation of equipment, rather than relying on recommendations from other converters. Relying strictly on internal measures, he says, is part of the reason for the lengthy process.
The company will be ready to make its purchase at the end of 2015, so Holbein says that they will be paying special attention to what’s new at Labelexpo this year. “We’ve done a lot of research, had a number of conversations with manufacturers, and done a lot of testing,” he says. “And we are extremely encouraged by what we’ve seen so far.”