The printing industry in all high salary areas fights a survival war with low salary areas regarding jobs, while outsourcing continues to increase daily. Aggressive pricing based on lower salaries seems to be driving this development. However, it makes little sense macro-economically and environmentally to transport raw materials to far away areas and later re-transport the finished products to highly developed markets where the majority of printed matters are consumed. Something should and can be done to produce energy efficient, environmentally friendly and competitively priced printed matters as close to the consumer as possible.
A careful examination points to a lack of productivity and not low salaries in finishing as the main cause for outsourcing. The obvious paradox is that while the total printing process lacks competitiveness, the newest and highly automated sheet-fed offset presses with their highly paid and skilled operators show a strong competitive edge. So the lack of competitiveness must be related to the lack of appropriate automated finishing machines giving the highly paid and skilled labor in finishing the appropriate productivity. Productivity is purely about input and output. The term ‘productivity’ can be used in relation to labor, capital, companies and all other production factors, but in the public debate environment it normally relates to labor. It does not refer to working hours, but rather what one gets out of the hour. Working longer will improve the production volume, but not the productivity, except if salaries are decreased.
Assuming that all employees can perform the same input of work (which obviously is wrong), the key to increased productivity is to invest in more and better machines. Sooner or later it might not be possible to force more productivity out of employees, so apparently there should be a limit to automation (the economists call this the diminished return of capital investments). Or, more correctly, this was the overall accepted macro-economic theory until the mid 1970-ies; but, the theory did not match what happened in real life because the productivity continued to increase even when the capital investments dropped and the machines matured. The economist, Robot Solow decided to investigate this paradox and came (not surprisingly) to the conclusion that the individual employee and external factors had a significant impact on productivity. The productivity increase generated by other factors than capital is officially called Solow’s residual factor and gave him the Nobel-price in 1987. Others call it Total Factor Productivity and various observations show that it generates up to as much as 60% of a specific productivity increase. This should be easy and logical to understand for most people living in developed areas where one can observe daily how a good general infrastructure (education system, roads, healthcare, access to broadband etc.) and highly skilled and motivated employees have a very positive impact on any investment.
Printers and bookbinders in high salary areas should, consequently, get much more out of a specific investment than their competitors in Bulgaria, Angola or China; but they don’t. So where do the potentially better returns disappear? They simply disappear into something, which all macro-economy theories forget: the human lifting capacity. Even the most educated employee cannot lift more than what their bodies allow. An unskilled employee in Bulgaria, Angola or China lifts the same weights as his highly skilled colleague in the high salary areas. The employees in the low salary areas will, in fact, probably lift more because limited concern is taken in relation to employee health and safety. If one employee is worn out, 10 others are prepared to take over and thus the average “lifetime” of these exploited employees is probably short.
Productivity gains generated by experience are lost when good employees are quickly worn out and substituted with new and unskilled ones. However, this is what happens in most low salary areas and the paradox is this makes sense. What limits productivity is human lifting capacity and not lack of education or experience, which is the same factor that prevents employees in high salary areas from increasing their productivity.
How much can an employee lift? This depends of course on each individual’s lifting capability and whether lifting is performed once or continuously over the day; we all get tired! A good estimate is that an average employee lifts around 1.5 tons per hour (corresponding to 2 pallets of each 750 kilos or 7,500 sheets) and if this is the figure in high salary areas, it is most probably the same or even higher in low salary areas.
Faster and more automatic machines give more capacity, but this is without real impact if each employee’s productivity does not increase – and the heavy human lifts prevent this. For example, a fast saddle stitcher, which is a standard machine for nearly all bigger printers, runs up to 14,000 tacts per hour (corresponding to 2 standard pallets (1.5 tons) per hour). One employee can consequently handle one feeder per hour at full speed. If 6 feeders are used, 6 employees are required and as the same quantity of paper is delivered in the other end, another 6 employees are required here. Has anyone ever heard of a saddle stitcher with 12 employees? Even if we assume that it only runs 50% of the time (50% make-ready and 50% production) and even if each employee can lift more than 1.5 tons, it is a fact that it is the human lifting capacity and not the machine’s speed or level of automation that determines the productivity. This gives the low salary areas another competitive edge because it is far cheaper to use the appropriate number of employees to profit more from the machine’s full production capacity.
An examination of the total production chain for brochures, magazines, books, labels and boxes etc. in sheet-fed printing (offset and digital) shows that only the offset presses, the die-cutters and some folding machines work with printed matters on pallets. All other machines require the printed matters to be lifted, manually from a pallet to the machine and after processing, back to a pallet again. Any increase in production capacity can only come from adding more employees; not by increasing their productivity, which simply makes the production even more labor intensive and less competitive.
If a printer changes an old sheet-fed offset press with a new one, the production capacity will probably double; and if the manning remains constant (it could be reduced), the productivity doubles. To match the doubled printing capacity the number of employees in finishing must be doubled and as finishing is much more labor intensive than printing, this requires a significant increase in the labor force. Average employment figures show no significant correlation between increased investments in sheet-fed offset presses and increased employment in finishing. This means that in spite of heavy investments in highly automated offset presses, the total production capacity does not increase because of the lack of increased production capacity in finishing, which reduces, or even worse, eliminates the return on investment in the offset press.
Increased productivity in finishing – the key to increased competitiveness in the printing industry – can simply not be obtained without addressing the heavy human lifts.
The proposed solution is to automate the human lifts in finishing, which can only be done through the use of robots. Eliminating the human lifts gives each employee more time to concentrate on the production itself. Further, faster and more automated finishing machines will be in high demand in high salary areas because companies can now profit from their highly paid, educated and experienced workforce. As a spin-off, physical tiredness and boredom should be significantly reduced, which should lead to increased creativity and innovation, which should further lead to increased productivity. Robotizing the human lifts allows Solow’s productivity factor to turn the printing industry in high salary areas competitive, not only on price, but also on delivery time and in terms of environmentally friendly production. This should draw work back from low salary areas.
The printing industry can be even more competitive by investing in the optimization of logistics, automation and robots. However, most who are familiar with printing know that handling paper is highly challenging and that new and automated solutions require access to creative thinking and R&D. Scandinavia is a high salary area and Sweden is one of the world’s most robotized countries (10% of all industrial robots work here). Therefore, the universities in Denmark and Sweden have together with some of the world’s leading robot manufacturers, established close cooperation with selected companies to develop robotized solutions for the printing industry. Once these new solutions are marketable, new possibilities for increasing printing productivity should quickly be available.
When measuring the number of highly paid and skilled employees, number of computers and their storage capacity etc, the printing industry is considered a high-tech industry and a significant player in the communication industry. Experience shows that high-tech companies perform better in high salary areas – because of Solow’s productivity factor. The appropriate investments in automation and robots combined with the better infrastructure and skilled labor force should change finishing, and consequently printing, from being labor to capital intensive. This will eliminate the hopeless price competition so that focus can change towards quality, fast and reliable deliveries and shorter distances between producer and consumer. These are fundamental for an energy efficient environment in the 21st century. This exercise requires vision and investments in technology and marketing, as well as the perception that automation and robots will help skilled labor become more productive instead of just simply substituting it.
Robots in the printing industry are still not common in sheet-fed printing. Drupa 2012 is not far away and one can hope and assume that Drupa 2012 will be a robotic Drupa.