Inkjet Justification – Cost & Benefits of Manufacturing

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By Lois Ritarossi

With the evolution and variety of inkjet options now available, smaller volume print operations like small and medium size in-plants are now considering inkjet adoption. The justification and cost analysis for inkjet is not as straight forward as the cost of acquiring previous new printers. In evaluating the cost of inkjet adoption there are many considerations beyond the cost of acquiring the printer. While there are varying opinions and models for comparing total cost of ownership (TCO), a detailed cost analysis should compare total cost of finished pieces leaving the facility and the opportunity for impacting the results of printed communications.

While inkjet has proven to be less expensive than toner printers, new inkjet platforms also present many opportunities for improvements to the overall workflow, labor cost savings and improved throughput for the manufacture of final printed pieces.

Start at the end

In evaluating the cost and opportunity for inkjet, we recommend starting at the end of the process. In-plant operations are often measured on the total number of pieces they produce, by application type, in a given month or quarter. In the transactional world, most print is inserted into an envelope or enters the mail stream as a self-mailer. Adopting inkjet at the front end can have a dramatic impact on the insertion process.

In traditional transactional mail production, specific inserts are loaded into the various pockets on the inserter. This can be done intelligently – with the software running the inserter, or manually, –  with the operator breaking work into batches and changing the physical inserts. Both options require inventory management, accuracy in loading the inserts and, often impact the speed of the inserter. With inkjet, there is the opportunity to eliminate inserts, reduce the time and cost associated with inventory management, and loading inserts into pockets. There is also less time and cost for the programming teams tasked with calculating postage weights of individual inserts and the total weight for each envelope.

Reducing physical inserts also reduces the risk of jams on the inserters, lowering the number of reprints needed due to manufacturing defects. Automation with inkjet can improve overall operational efficiency by reducing the number of touch points, and potential points of failure resulting in less rework. Eliminating errors, delays in finishing and the number of reprints are real costs that impact not only the operation, but the timeliness of the customer receiving the printed piece.

TCO analyses typically measure the cost of equipment acquisition, cost of operation, maintenance, and consumables like paper, ink and power consumption. Looking at end-to-end workflow, inkjet offers faster throughput and reductions in labor and cost associated with insertion and rework. On the marketing and customer experience side, with the right tools for content creation and management, inkjet offers the opportunity to eliminate inserts, migrate content onto the document, and do away with a separate process for printing inserts.

High volume offset printing of inserts may still offer a lower unit cost, when exclusively looking at the cost of print. As noted above, traditional insert printing also has several additional costs to the operation, including warehousing and inventory management. And marketing teams are often faced with waste and obsolescence in pre-printed inserts that get outdated, lost and damaged during shipping and warehouse storage. Consumers regularly ignore and toss out separate inserts. Moving content onto the printed piece with inkjet can potentially increase awareness of messages or offers while driving higher conversion and cross selling. Several studies demonstrate higher response and conversion of offers included in the context of a transactional document.

These potential results are great for marketing and these considerations are NOT part of a typical TCO model. Inkjet adoption can potentially have a dramatic impact on strategic goals of awareness, cross selling and upselling if the operations and marketing teams work together to implement solutions that leverage the full capabilities of inkjet production with a focus on automation.

In-plants and other companies evaluating new technology will have more success in justifying inkjet when they expand the cost benefit analysis to look at the entire workflow – including opportunity for change and automation with inkjet. Inkjet production done correctly is much more than the cost of producing print. It enables organizations to change the way they communicate with customers, prospects and drive growth and impact customer experience.

Lois Ritarossi is the President of High Rock Strategies, an independent management consulting firm focused on sales and marketing strategies, and business growth for firms in the print, mail and communication sectors.

See her previous post “In Plants – A Rose by Any Other Name

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