Equipment Buying

By Jack Kenny | July 20, 2005

Thoughts from some top converters about making those large machinery purchases.

Cautious as they are, narrow web converters are showing their optimism these days by sending clear signals to equipment suppliers about future purchases. The economic restraints felt by most label and packaging printers in the past couple of years have not fully relaxed, but the forward-thinking converters have blown the dust off of shelved expansion plans and have begun the process of exploring new and revitalized markets by adding new machines or replacing older ones.

The process of buying large equipment is lengthy, demanding and risky. Prospective buyers often must choose between upgrading the capabilities already established in-house and increasing their capacity by adding to their printing and converting equipment base. A third direction, at once thrilling and scary, is to boldly go where the customer says to go — into new manufacturing capabilities.

Consolidation among supplier companies has narrowed the field of choices in some cases. But good options remain, and technological changes and improvements have increased the attractiveness of new equipment in most areas of package printing and converting.

We know what comes out of the buying process, but what goes into it? Skilled decision makers weigh a multitude of variables: the vendor's reputation and base of installations; equipment capability; service and warranty; delivery time; adaptability of the product; technological advances. The buyer must consult with many people during the process, at several levels inside the company, at the vendor, and with competitors who use the same machines.

We asked several converting company owners and executives who have had years of experience acquiring equipment to share their thoughts with our readers about the buying process. Most of their choices in the past have been successful, and the mistakes that they have made have transformed them into even more savvy shoppers.

Incumbents and contenders
If press operators and production managers are pleased by the performance of a particular press in the plant, the manufacturer of that piece of equipment has an edge in the buying process.

"The incumbent has a tremendous advantage," says Elisha Tropper, president of Prestige Label, Burgaw, NC. "If you're comfortable and your operators are comfortable with the product, and you already have all the tooling for it, there's an advantage to wanting to stay with the same piece of equipment. You can move jobs back and forth from one press to another, and operators, too."

"The incumbent absolutely has an advantage," says Mike Dowling, president of CL&D Graphics, Oconomowoc, WI. "Unless you're trying to buy the exact same piece of equipment the advantage is not as great, but it's there. We will change brands if it's more product specific to what we are trying to make, but we don't change just because we don't like something. We have been fortunate in being able to make things work here."

"If I'm satisfied with a piece of equipment, I will look at that manufacturer in the future," says Bill Weernink, chief operating officer of Smyth Companies, St. Paul, MN. "But it depends on how you build your business leading up to the decision. I've seen a lot of vendors who have too wide a variety, and not enough flexibility. We are in the midst of a lot of change, and we are driving costs down to become the lowest cost producer."

Vendor consolidation has changed the equipment landscape, notes Tom Spina, president of Luminer Converting, Lakewood, NJ. "When you're buying a press, you are more limited than you used to be because there has been so much consolidation. All the vendors out there are very good manufacturers. It's tougher to decide what you're going to buy because they are all good. When I go into the buying process I involve at least four of the major companies."

Spina says geography can have an impact on equipment choice. "There are some very interesting machines in Europe, but I am concerned about buying a machine from another country from the service perspective. It doesn't really matter where it's made, but I want to be certain that servicing is readily available and quick."

Converters agree that first stages of the buying process focus less on price than on internal needs and equipment capabilities. "The process doesn't really take that long," says Nick Van Alstine, president of Macaran Printed Products, Cohoes, NY. "We can negotiate to price fairly quickly." But in Macaran's case, the process has dragged for another reason.

Van Alstine says that he is working with a customer on a large order, one that will justify the addition of a new press and a new rewinder. If the business comes in, the equipment will be purchased. "I'm at the point where even if I don't get the business, I might go ahead and buy the press anyway. We might need it. When the capacity and capability conditions change, it will generate interest in new business."

"Certainly price is not a beginning factor," says Weernink. "First we assess our needs in the marketplace, and determine what we will use the equipment for. It needs to meet our requirements, which are changing dramatically these days."

How the new press will be used is perhaps the biggest factor in the buying process. "We're not necessarily looking to expand our capabilities at the moment," says Spina, "though that would be a good thing. We slowed down our capacity over the past few years, and we have to upgrade now. The equipment we are looking for is more in terms of replacement. If we can gain more flexibility that's great, but it's not the priority."

"We want to see that the equipment fits our goals," notes Weernink. "We're looking at makeready on the fly, servo drives, registration on the fly — all of that is certainly next generation equipment and it fits our business philosophy right now. Our equipment, which is several years old, doesn't fit that today. It's not where we need to be this year or next year."

New generation presses have taken "a big leap", he says, adding that he knows of only one manufacturer with a completely servo driven press ready and available. "But others are quick to follow."

"Different presses have different strengths," says Tropper. "Even though 90 percent of them can do 90 percent of the jobs, we have to find out how they can differ on the other 10 percent. We take into account how similar the machine is to what we already have, how much training would be required. If it's a different press we want to go look at it.

"Also, it depends on whether you're adding a press or replacing a press," he observes. "If you're adding one, you'll be adding personnel, and they'll have to be trained no matter which press you put them on, so that might be less of a factor. The big issue with presses is capabilities, and the cost of the capabilities, and how they fit into your business."

The inside team
Who gets involved in the decision process? Personnel from several levels often are tapped for their input.

"Internally, we have four people involved: myself, our plant manager, the floor manager, and the quality manager," says Spina. "They take the operator information and know what they are looking for. If they have to take the same set of products and make them on a new machine, they know what they would like to work better. Our segment of products is mature, and we know how to make them right, but now there are ways to make them more efficiently.

"Another area is the prepress department. When we began using digital plates, we got our older presses to print twice as well, so we didn't need to go out and buy a new press right away."

Smyth Companies involves its press operators directly in the equipment buying process. "The operators understand the shortcomings of the equipment better than anyone else," says Weernink.

Sales people, though they don't touch the equipment, play a crucial role in the process. "They help us understand what the market requirements are. They're not technical people, but they have their ear to the marketplace."

"The process involves many people," says Van Alstine. "The quality assurance and senior technical person, the plant manager, the CEO, of course; but also the sales department is very much involved. They tell us what the customers are asking for, what new capabilities we should be looking into.

"We try to look where the customer's business is going, what their requirements are down the road. Do those requirements match our capabilities?

"And it's helpful for customers to know that we are investing in new equipment. They are always interested when we do. It's good for a customer to know that their supplier is investing in their business."

Seeing is believing
Taking a road trip to the plant where presses are manufactured is a necessity, converters say. But of equal — perhaps greater — value, is watching a press run at another printing plant.

"The most valuable place for information is from other converters who have the equipment we're looking at," says Mike Dowling. "We love talking with them. If we can see it in another manufacturing environment that's the best. And it's one of the benefits of the Tag & Label Manufacturer's Institute; I can pick up the phone and talk to a member who has this piece of equipment, pay him a visit and get the inside scoop. A manufacturer won't tell you the bad side of the equipment; that's something you have to learn. You might not have the experience, but you cut your learning curve by getting the benefit of other people's experiences. Why reinvent the wheel?"

"It always helps to network," says Bill Weernink. "We all have our proprietary information, and we keep that tucked away, but we do network. Talking with converters in Europe is very intriguing, not necessarily better or worse, but we learn from them and bring ideas back."

Converters stress that delivery time of new equipment is critical. In many cases they have to hire new people, and the last thing they need is idle hands while waiting for the press to arrive. Several converters note that they insist on contractual delivery dates with penalties for late shipments.

Sometimes a piece of equipment doesn't work right. Tropper recalls that one machine endured operational problems for a year and a half, and even stymied the manufacturer, until he brought in an outside engineer who fixed the problem in a day. "The mistake was in taking somethings on faith, believing that it will do what the manufacturer says it will do. And it didn't do what they said it would do."

Van Alstine says that he once ignored a strong gut feeling and bought equipment "that did more than what we needed, but which soon became obsolete."

Mike Dowling says that his company bought a press a dozen years ago that did not work right, no matter what they tried. "We sent it back. They gave us another press, and it's still running."

"I don't think I've ever been 100 percent happy with what I've purchased," says Tom Spina. "Everything could always be a little better. But I've never been totally disappointed."

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