Did Heidelberg make the right choice?

By | November 19, 2008

Heidelberg’s CEO Bernhard Schreier was asked in a recent interview whether Heidelberg had missed an opportunity by exiting the digital-printing market and focusing on offset. He thinks (understandably) that Heidelberg’s choice was correct. About offset, he says: “It offers the best price/performance ratio with respect to quality, productivity, and length of print run. None of that will change, even in the long run.”

I’m not so sure about that. Do you think Heidelberg made the right choice?

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11 thoughts on “Did Heidelberg make the right choice?

  1. Patrick CAHUET

    hello
    As a former Digital Printing Solutions Director for Heidelberg , I believe that Heidelberg did not make the right choice by exiting the digital market in the long term.
    Nevertheless this decision was mandadory when it was taken for at least the 2 following reasons:
    # 1: The NEXPRESS technology choice was not the right one. The original Nexpress 2100 Press was too big, too expensive and not enough reliable when it was launched in september 2001.
    It seems that Heidelberg had forgotten that its tremendous success had been based on two small and robust and affordable machines : The letter set Tiegel in 1911 and the offset press GTO in the early 60′.
    Instead of designing an entry level but quality oriented laser digital press, Heidelberg took the decisison with Kodak to manufacture a big heavy expensive tanker.
    A s a result, the expectations of the customers were much higher than the quality and productivity the machine could handle.

    # 2: This second reason is sales force oriented and directly related to the previous one. Instead of selling an entry level and entry price digital press to existing offset presses customers or prospects, Heidelberg chose to launch a Nexpress which was as expensive as a 4 colours 2Up SpeedMaster 52.
    Bad decision! After I have left Heidelberg, I fully realized that the Heidelberg sales people considered Nexpress like a competitor preventing them to reach their sales targets of PM52’s and SM52’s.
    As a result, instead of encouraging their customers to go digital and of promoting the advantages of digital printing, they told them how risky this digital business could be for a commercial printer. And doing so they left the door open for Xerox!!!

    As a conclusion, I do believe that Heidelberg should have designed, with a japanese partner for instance, an entry level digital press allowing their customers to learn about this technology and the digital printing opportunities.

    Hard to tell if it is too late now, since KonicaMinolta is now KBA partnering and Agfa just signed an agreement with Canon… it seems that Heidelberg has just to forget laser toner printing and go ink jet !
    Patrick – France

  2. Robert Carlson

    Offset will continue to be an affordable way to reproduce quality color pieces but it also will continue to spiral down as a technology as more affordable options present themselves. I expect Inkjet to move into the offset arena within five years displacing most of that business as it will impact flexo and screen printing as well. Digital is the path to direct imaging without the variables of Offset reproduction, with their costs and time and labor. It only makes sense that as technology improves and it becomes affordable, the huge labor intensive offset machines will fade like the llinotype machines.

  3. Erik Nikkanen

    Heidelberg has a history of good and poor choices.

    Giving up on digital printing was definitely the right choice for Heidelberg. It does not seem to fit their culture.

    Giving up on DI technology was also the right choice because the on press imaging capability has nothing to do with short run printing. The Anicolor press, even though it is not the right technology for the future and is a wrong choice, demonstrates that.

    Giving up on web press technology might have been the wrong choice. By only staying with sheetfed technology, Heidelberg may have painted itself into a corner. There is a good chance that a large percentage of sheetfed technology will eventually be replaced by web press technology where the print repeat can be changed quickly and inexpensively. This technology is already in the market and can be further developed.

    For the size of the company, Heidelberg does surprisingly little innovation. It does a lot of technical engineering but not very much innovation in new approaches and in science. It is probably part of its culture of having a very stiff and controlled development environment that result is very well engineered machines but no new ground breaking thinking.

    And now with the economy falling apart, they will even cut back more on development activities. They don’t seem to understand how to develop ideas at low cost. This will turn out to be their biggest poor choice of all.

  4. Jim Olsen

    When Heidelberg left behind the Nexpress, my immediate thought was they had s digital rabbit in the hat that they would pull out after any non-compete agreement expired with Kodak. After all, as I came through the printing ranks starting in the 50’s, Heidelberg led the way in the press room. They were the elite. The all-Heidelberg plants flaunted themseves as THE printers.

    I could not imagine Heidelberg not having the forsight that digital printing was where it was at. I even thought I was “in on a secret” that they had an interest in an avant garde company that was developing ink jet.

    Hey maybe they do, and maybe the rabbit will still pop out. I doubt it, but it’s fun to fantasize about it.

  5. Jim Bozek

    Staying true to its core competencies, it was the right choice for Heidelberg, which never seemed to fully embrace with joy the short run business model if it meant doing so without using real ink.

    Though it floundered the first two years, the DI was a sensical step and Heidelberg’s reputation and brand power carried it through the hiccups and made it a success. After all it was a hybrid digital device that used real ink – not that sissy toner stuff.

    The Nextpress, by contrast, was the counter culture stepchild to Heidelberg, sold by a largely imported copier and ex-patriot digital press sales team sprinkled with a few internal crossovers who pitched it with offset press FABs (a hunk of iron). It just wasn’t going to take.

    Recognizing that it is impossible to get one’s own spots off the leopard, Heidelberg made a smart & timely decision IMO, and stayed true to their offset ideology. Makes sense once you consider that none of the digital players in today’s market place offer an offset choice as part of their product line expansion – no one is heading in that direction.

    Instead, the next gen of digital printing with ink jet and similar technology will serve the demands of longer runs, but for now how many can successfully crowd the transpromo market? It fits, makes sense, that the digital brands will extend the digital print model by sticking to their core competencies in digital technologies.

    Doing what you do best is always the right choice.

  6. Steve Urmano

    I was shocked when I first heard that Heidelberg was exiting the digital arena. Immediately I thought that’s it for them – and if the culture can’t change — the products can’t change. Because of this they will eventually go the way of the dinosaur.

  7. Emilio Lazcano

    I’m also an exheidelberg employee I was the Digital Manager for Mexico and as my excolleague Patrick Cahuet explains, Heidelberg build a giant digital press. The Nexpress was a heavy metal digital press, the problem was that the market in that moment was not enough for this press. The main competition for the Nexpress was the QMDI on short runs, so again there was a little market for it. If Heidelberg has build a lighter version of the Nexpress in price, size it will have enter hard time the digital market.

  8. Alex Smith

    As a regional direct that has moved toward Xerox’s digital variable color in addition to offset, I would assume a brand as significant as Heidelberg would at least attach said brand to a digital solution and structure some incentives for their offset salesforce to provide leads for the digital salesforce.

    It may prove to have been a good move to shutdown their in-house digital R&D and manufacturing, but to completly abandon an emerging technology could cause brand erosion. I agree with much of what Jim Bozek said above, but keep in mind many investors assume digital color technology will eventually equate with the best price/performance ratios Schreier equates to offset. Developing a sales alliance with one of the digital purveyors in the interests of workflow, etc. wouldn’t necessarily create a conflict of interest and perhaps become a prudent defensive strategy.

  9. Jack

    I have a bit of a different take. In my opinion, Heidelberg did not really want to sell digital, it was forced to by its parent company RWE in Germany. At the time, RWE was looking to unload Heidelberg and was I believe in the process of trying to shed all underperforming pieces of the business in an effort to better position the company for a sale. Is it a coincidence that the transfer of NexPress to Kodak was announced March 8, 2004 and then RWE announces the shedding of Heidelberg 3 weeks later? I don’t think so.

  10. Jim Corrigan

    First, to Jim Olsen: Jim, I think we are all happy the child labor laws have changed since the 1950’s, and 12 year olds aren’t permitted in the pressroom any more ;).

    Heidelberg is stuck in a specific business surrounded by a greater industry. By analogy, I offer you Fischer Body. Fischer made the carriage bodies for horse-drawn vehicles. They were the biggest, best, and most innovative for decades. Then the automobile moved in. Did Fischer die? No! It made its bodies for autos, eventually being bought out by GM about 100 years ago. Where will Heidelberg go? Maybe eventually exit the printing industry entirely. It does a lot of things well, and understands the physics and scientific principles of many things, such as adhesion, substrate movement, gear and gear production, etc. Does Heidelberg ever have to go digital for printing? No, as long as it can use its know-how outside of printing. Maybe that’s the rabbit, and they don’t even know it yet.

  11. Henry Freedman

    Hello all.

    in this November’s ’08 issue of Graphic Arts Monthly magazine p.22
    I published about Heidelberg’s offering a new packaging press
    integration with 720 dpi drop on demand pharama and box UV dried
    inkjet. Thiis can print up to 288mm wide onto foils, blister packs
    etc.. Packaging is a grwoing business and Heidlelbeg could find
    a diversified future in digital here that leverages their Prinect
    JDF management system as well as a transfer some CTP technology
    precision controls over to inkjet. They will have this installed and running first half of ’09. So Heidelberg as a digital specialty press systems integrator places them in digital printing today.

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