They may be the printer's best friend, but at what cost to ink companies?
A key issue that often arises in the ink industry is the importance of value-added services. It is a theme often discussed at industry conventions and at meetings in board rooms. In so many words, how does a company get a customer to discuss other aspects of ink rather than just pricing?
One approach that is often utilized is the use of in-plants. As part of the quoted price, ink companies supply their own personnel and equipment to larger customers. This allows the printer to be able to keep costs down and quickly repair problems that may arise with inks.
An in-plant system can become fairly complex: depending on the size of the customer, an ink manufacturer can have a part-time person stopping in to a variety of locations, or have as many as a dozen technicians working round-the-clock, seven days a week.
However, there are questions as to whether having in-plants is really cost-effective for ink companies, and whether in-plants are really necessary in all cases. As such, some companies eschew offering in-plants.
An in-plant can do any of a variety of functions, ranging from billing jobs to keeping records of consumption, transporting the ink totes to the presses, doing press profiles and testing fountain solutions, and running tests including tack, rub grind and washouts. Of course, the in-plants are there to make sure the ink is also running smoothly.
Executives at companies that do supply in-plants say there is no better way to help their customers.
“It’s an extra value-added service,” said Harvey Brice, Superior Printing Ink president. “It allows the printer a comfort zone. It’s a selling tool that allows the printer to have their own ink company in house.”
“In-plants are among the best added value services we can provide to our customers,” said Dr. Edmund Funk, vice president of sales for Sun Chemical. “First, they have built stronger partnerships between us and our customers, and they allow us to really feel the pulse of our customers by being on-site.”
“It furthers and strengthens the partnership between an ink company and the customer,” said Bill McDermott, Sun Chemical regional manager. “The aim of the in-plant is to take the worry of day-to-day ink movement out of the customer’s hands so he can concentrate on printing.”
Ink Systems, Inc. utilizes in-plants as the main focus of their sales. “That’s our niche,” said Tim Van Scoy, vice president of sales for Ink Systems. “It’s where we focus most of our energy, on ‘ink systems,’ as we call them. It’s our mentality. It’s who we are.”
“The in-plants are working out very well,” said Richard Breen, Central Ink president. “Printers know there are not enough skilled technicians in the field, and an in-plant guy is their guy. They’re like a liaison.”
Advantages for Printers
In-plants provide a number of major advantages for printers, whether it is eliminating the need to maintain inventory, making sure the right ink blends are on the presses, or providing instant corrections during a press run.
“Why does a printer want an in-plant?” Dr. Funk asked. “Because it assures the printer that he has product on-site at any given moment, and that he has on-site technical service at a moment’s notice.”
“It’s the ultimate advantage to the printer to have an ink technician or ink technicians on hand,” Mr. Brice said. “It cuts out down-time and guesswork and increases production for the printer. It allows them ease of color matching and fixing inks on the press, and it helps them program their production.”
An important benefit of in-plants is that the customer can have service right in their plant. For ink manufacturers supplying large customers outside of their immediate area, offering an in-plant service can provide peace of mind.
“If you deal with a large customer, they have a quick turn-around and heavy demand,” said Tak O’Haru, general manager, Graphic Arts Division of Toyo Ink. “If you don’t have your own facility in the territory, in-plants provide on-site service.”
“The main thrust is that we take care of ink needs, from inventory to providing direct costs,” said Mr. Van Scoy. “We take printers out of the ink business. They own no inventory.
“You establish a partnership,” Mr. Van Scoy continued. “By having a person in the plant, it allows you to be proactive rather than reactive. We can make suggestions regarding equipment. It gives customers the leeway of changing jobs on the press. By writing our own software, we can provide all types of information, build archives on the history of the inks. We’re in there 24 hours a day.”
The in-plant facilities themselves are like a miniature ink facility, allowing the technician to do whatever testing and mixing is necessary for each job.
“These are full-blown labs, 200 square feet, with the same equipment as an ink manufacturing facility,” Mr. Van Scoy said.
“An in-plant operation can be as simple as having equipment to do QC tests to a full-blown color matching lab with spectrophotometers, microscopes, support and manufacturing equipment, and test apparatus,” Mr. McDermott said.
In the Field
Are in-plants valuable to printers? “I think very much so,” said Herb Zebrack, president, Lithographix, a California printing company with $90 million in sales.
“The benefits are two-fold,” Mr. Zebrack, a customer of Ink Systems, said. “They’re right there to change ink color or whatever else, and secondly, I don’t have to deal with ink. I just tell them what the job is, and they provide the ink.”
Mr. Zebrack said that the ability to have an in-plant cuts down on concerns about inventory. He noted that in the past, Lithographix would estimate the ink needed for a job, and then, to be safe, have to exceed its ink needs. With an in-plant, the ink manufacturer figures out the exact needs, and provides the right amount of ink.
“I don’t have to keep any inventory, and there’s no waste,” Mr. Zebrack said. “Before, we’d have a big job, and we’d be concerned if we’d have enough ink.”
Bob Weis, an in-plant manager for Sun Chemical, has been an ink technician in the field for 20 years. “Our function is to provide technical support to the pressroom and troubleshoot any problems they might have,” said Mr. Weis. “It’s a big added benefit for the printer.”
At What Cost?
Of course, the cost of an in-plant is largely dependent on the number of technicians in the field. Estimates range from as low as $30,000 for a full-time in-plant, to hundreds of thousands of dollars for a large, round-the-clock staff.
Having qualified technical people working out in the field, instead of at the manufacturing facility, is another concern some ink executives have. They believe that there aren’t enough skilled ink technicians available, and setting up in-plants further dilutes the resources of talent.
There are also serious equipment costs. A typical in-plant operation requires all of the equipment that would be necessary within an ink-making facility. For example, these facilities may include mills, mixers, blending stations, computers, and spectrophotometers, among other equipment. This requires a capital outlay.
A question that also arises is whether an in-plant operation is really a necessity for a nearby customer.
“I think in-plants can provide some real advantages to a customer with high service needs where the ink supplier is not located nearby,” said Phil Lambert, president of Wikoff Color, which has more than 30 in-plants in the field. “I think the advantages have been oversold in cases where the ink supplier is nearby and is committed to giving a high level of service and on-going technical support. In many cases, the advantages of an in-plant can be achieved without the customer having to give up the floor space needed for the in-plant facility.”
Ultimately, each company has to decide whether it wishes to become involved in supplying in-plants. An ink manufacturer must look at the bottom line, to determine if there is sufficient return on the investment to justify committing to an in-plant facility. “A lot of companies don’t want to be bothered,” Mr. Brice said. “It’s a harder way.”
“We think it’s a big advantage to the printer,” Mr. Van Scoy concluded. “It has to be a total commitment.”