The successful launch and establishment of the InPrint Show proves that industrial print is key growth sector for the development and integration of print technology for manufacturing. But why is the timing right for industrial printing? What trends are assisting this growth and optimism? What we believe to be the main trends are laid out here.
The Renaissance of Manufacturing
Manufacturing is enjoying a renaissance, particularly for advanced economies. Governments have realised that the service economy model is simply not a sustainable one. That is clear following the worst recession in living memory. In Europe, only the German economy has supported their manufacturing sector and the many ‘mittelstand’ businesses that make up the backbone of the manufacturing sector. Consequently, Germany did not suffer as much after the banking crisis and recession as the rest of Europe. Germany’s robust economic performance proves that strong manufacturing and the creation of high quality products results in a sound and sustainable economy as exports make up a significant proportion of German output. The EU itself now has targets in place to increase the manufacturing sector’s share of GDP from 15% currently to over 20%, which is more in line with Germany's. This is clearly a positive fact for industrial print.
The German governments ‘Industrie 4.0’, is a great example of how German governmental policy can encourage the building of a framework and environment for sustainable economic growth. The principle is simple. Manufacturing is changing from a mass manufacturing model primarily focused upon efficiency towards a fulfilment model which means more production that is catered for specific needs. This change requires a third IT platform that will enable automation optimisation and just in time manufacturing that is as responsive as possible in order to constantly meet adjusting market demand. As the emphasis is on utilising smart technology, industrial print, an advanced technology, is set to benefit.
This is not merely a quirk of a trend that leads to conveniently rising employment levels. The re-shoring of production back to advanced economies now makes financial sense as governmental policy to increase employees’ salaries by 15% per year, makes China a less compelling place for low cost manufacture.
Add to this fact the significant distance and time it takes for production to reach markets and China’s advantages as a manufacturing centre start to contract. It is impossible for the mass manufacturing, long distance model to compete with that which is closer to the end consumer because it is plainly not as responsive and therefore competitive. This doesn’t mean a decline in manufacture in China. At least not in the short run, such is the demand which remains high for many products. But I can’t see how China based print production can meet this new demand for mass customised industrial printing in Europe.
The European Parliament Research Unit believes that the trend for re-shoring will continue especially for industries where heavy machinery dominates, where technology is a vital tool in science, pharmaceutical and medical production and where safety and responsiveness to consumer change is important. This is virtually a script for industrial printing.
Localisation and Consumerisation
We should not confuse localisation with re-shoring because the force for change comes from a different direction. This is more consumer pull as opposed to economic, technology and market push. Goods produced locally are more congruent with local customer taste, style and fashion. Whilst there will always be a demand for brands that indicate status, most of which may have an image that is outside of the immediate area, these brands will adapt their supply chain to better suit their customer base. The scale of this change will be new as brands realise their competition will be newer, smaller companies that may seem more relevant. These companies will develop niche products in smaller amounts and are more nimble and responsive to the market whilst being adept at exploiting the power of new media.
Consumers prefer to buy products that are reinvested back into the local community. They like the visibility, the ethical element, as well as the style. Industrial print, whether speciality, screen, pad, digital or inkjet is set to grow to meet this heightened demand.
The Smart Consumer
It makes sense that if you have smart manufacturing and smart technology we will get a growth of the ‘smart consumer’. Well informed, with the ability and desire to communicate to either enhance or improve a product or indeed to warn others of the negative aspects of any product, service or experience, the smart consumer cares about how a product is made. The quality of production increases in its importance and service and support are also highly valued. Local based industrial print production is able to meet this demand more effectively and quickly.
A product that is manufactured in a far flung place could have travelled the world a couple of times before it arrives at our home. For the smart consumer, manufacturers have to account directly about how their products are made, not just to link in with legislation but to align with customer ethics. No longer will excuses be accepted due to poor production from the supply chain or indeed for poorly paid or maltreated workers. As manufacturing becomes more visible and more integrated with the community in which it serves, industrial printing becomes more important as a very visible and vital functional and decorative component of production.
This is the single characteristic that all manufacturing companies will agree is very important. This isn't just speed of production. It means speed from ideation to consumer. This trend is economic. It is a race and supply chains have to join it in order to stay relevant. The IPAD generation want things now, not 6 months later.
The IDC ‘Future of Manufacturing’ White Paper which was published in February 2014 highlights that for manufacturers to take the next step towards a fulfilment model that isn't focused entirely on mass manufacturing and efficiency, the culture of teams and their leadership will need to change. The white paper cites a shift in people management towards self-forming teams in a flatter, flexible structure that allows for more individual decision making and leadership. The top down hierarchy, whilst effective for command and control mass manufacturing, is ineffective for speed, responsiveness and innovation. Mass manufacturing, the model found in emerging economies, is a classic hierarchical system which is not designed for innovation. European and US culture are both rich in innovation containing organisations that are flatter and more able to innovate quickly.
Technological innovation’s principle aim is to create new value. In markets where the speed of production and proximity to customer is important from a competitive standpoint, new technologies are being integrated into the manufacturing process. Digital technology enables smaller stock inventories, quicker time to market, customised and sometimes personalised production deploying digital industrial print technologies. This is not necessarily at the cost of replacing traditional analogue technologies. In fact, to some extent digital is integrated to run with analogue so that output benefits from both. Growth for industrial printing comes from general consumer growth, but it is also expected to grow considerably due to the integration of digital printing technology into multiple supply chains from textile through to packaging. The value, whilst currently relatively small for digital technologies involved in industrial printing, is expected to swell in the period up to 2022 to be worth in excess of $20 Billion.
Coalescence of consumer demand and technological capability
Consumer demand alone cannot fully drive a market. Cast our minds back to the science fiction films of the 1960's, the vision and desire to communicate from a mobile device was in existence then. Yet at that time technology could not meet this demand. Only now, 50 years on, has this smart communication technology developed and along with it, the staggering growth of smart technology and the upward sales trajectory of mobile devices. For industrial print technology, this has heralded a potential bonanza. Smart technology requires Smart printing. Print, whether functional or decorative, must withstand the most rigorous testing whilst remaining intact and retaining quality with exposure to the sun, wind, human touch, physical, geological and all of the combined forces that can provoke deterioration. This requires industrial printing that fuses a blend of high science, chemistry, precision engineering and manufacturing excellence.
Screen printing and inkjet printing are well placed to meet the challenge and are perfectly positioned to exploit the coalescence of consumer demand and technological competence for products made to fit specific needs.
Europe leads with industrial print
It is a fact Europe leads the world with industrial print integration. There are several reasons for why this has occurred. Crucially, for any trend to become substantial, economics will be the main driver. Europe suffered more than any other region in the world from the recent recession. This means the European market has reached optimum consolidation and cannot get any more efficient. Large companies acquired the smaller and what remains is a marketplace that is very difficult for any new business to enter. Europe has always been fragmented and highly competitive. Europe only has one choice, to innovate, to be open-minded and to adopt new technologies.
Europe has the advantage of the German mittelstand. The mittelstand is the German term given to the large number of mainly family owned small to medium size businesses that make up a large proportion of the manufacturing supply chain. These companies are able to make decisions on new technologies more quickly than companies that have multiple shareholders.
These factors combine to create an environment that is more conducive to advanced manufacturing technologies, of which industrial print is classified.
InPrint 2015 & 2016
It is clear that the excellent progress made with the show and the growth potential for both the exhibition and the sector I truly believe stems from these mega-trends which will only continue to grow.
InPrint 2015 which also features nearly 40 new exhibitors has the most advanced technology in the world for functional and decorative print. With screen, speciality, digital, inkjet and 3D print technologies being showcased the industrial print segment is clearly a vitally important aspect of the creation of any production line in most industries from pharmaceutical to packaging and from automobile to aeronautical.
More news and insight will follow in the future but if you have an opinion or would like to discuss this further do not hesitate to contact me, I would welcome the dialogue!
Written by: Marcus Timson
- IDC Future of Manufacturing Report February 2014
- European Parliamentary Research Service – Reshoring of EU Manufacturing 21/3/2014
- InPrint/I.T Strategies White Paper ‘What is Industrial Print’? 2014
For further information on InPrint – Show site www.inprintshow.com