Seven mantras on how to purchase a machine in a very tough marketplace

Sanat Seth, chief executive of Sanat Printers explains how he is prudent about his investments.

13 Dec 2013 | By PrintWeek India

It all began in 2002. Then my father, Ramesh Seth started commercial operations in 2004. This was dependent on two single-colour Heidelberg presses. On cue, we boosted our capacity. In 2008, we invested in our first new Heidelberg Speedmaster CD 102 four colour press backed by pre-press, press, post-press and digital kit. Much of my investments have been in pre-owned equipment. Today, Sanat Printers has Elsevier, Wolters Kluwer, Cambridge University Press, Jaypee Brothers, on our roster.
It's a tough marketplace out there. So it's important to get the purchase right. If you do so you can get a crucial edge over your competitors. Get it wrong, and you could be next on the chopping block.
The first step before any investment – big or small – is to know the market – what’s out there and what’s on offer. When we decided to invest in a new CD 102, we thoroughly researched the market for its space, viability and acceptability for a new press.
Besides capital expenditure, we looked at trends in the industry and for the need of quality of a new press in the domestic market. 
We also liaise with clients to get a feel for the direction of the market and worked on our ROI by inquiring about the total range of work that they need, how often they need it, in what quantities and the price they are ready to pay for a quality to these highest standards. Then we endeavour to progressively supply more of that range.
While selecting a secondhand kit, printers must also know that their machines may become less efficient with age. If the maintenance bills go up, it may be time to look at new technology. That is why if your budget allows go for a machine which should not be more than 10 years old. Because apart from price benefit you get a good 8-10 years of trouble free running of the machine; considering life span of a new machine to be 15-20 years.
To circumvent this, printers should accumulate basic data. Once you have the data, it is back to vendors for more details. We make comparisons based on price and functions. More automation means more production, efficiency and less labour dependency. Our general internal assessment also includes logistics such as floor space and staff or training requirements. Having said that any major equipment requires a detailed cost analysis.
One thing with secondhand kit is an established relationship with vendor. This is important; it also pays to review new offerings from others in the market. Plus there are trade-offs, including warranties, training and service supports, and expected life expectancy and capacity of the machine, versus price and availability.
The investment checklist which we follow:
1. Check performance indicators of existing equipment and identify gaps to reach optimum productivity. With offset, these could be overlong make-readies or plate changes or low productivity and high maintenance. Or else you can identify where the bottle necks are in your production flow which lowers efficiency of your other machines.
2. Visit trade shows, talk to vendors, scan data on sites like pressXchange which keeps you updated with latest machine and pricing available globally. Find referrals to similarly sized print businesses in your territory or overseas running equipment identical or near-identical to what you want to buy.
3. Sit with your team ( finance, production and maintenance) , do a cost-benefit analysis of the new kit, clearly defining all costs and all benefits that will flow from the potential new gear through its life on your production floor. If possible, also look ahead and factor in when the new machinery is likely to need replacement or upgrading.
4. Make sure your production room is ready to accommodate the new arrival, and that the flooring slab and electricals are suitable and layout is ergonomically solid. One thing which is important is that your new kit should be supported by your other infrastructure to reach optimum levels. For example your new CD 102 will not achieve the optimum production without CTP plates, accurately trimmed paper, good quality substrate, standard conditions. A nicely printed text for a book won't make much of a difference if the cover and the binding is not similar to the standards achieved in text printing through your new machine. 
5. Secure finance through your bank or other lending institution - but be aware that conditions on loans for capital equipment in the printing industry are particularly strict now; given the fragility of some sectors of the printing. A clear cost-benefit analysis could make the difference between a "yes" and "no".
6. Factors in the waiting period between signing the contract and commissioning the new kits and, for post-commissioning, set a calendar of ROI goals.
7. Make sure the vendor has included has included an effective training component where necessary and that your human resources are up to operating the new technology.

Sanat snippet
We find great pleasure in introducing our unit Sanat Printers to you. Our story is an odyssey from letterpress treadles to automated multicolour offset presses. Founded about a decade ago, Sanat Printers has today grown into a dynamic and fast growing, state-of-the-art company committed to the highest standards in print production.
Sanat’s strong foundation has its roots in the tradition nurtured by three generations in the trade, right from 1948. It is a family-owned business which had its modest beginning as letterpress typesetter for advanced scientific and mathematical books. In keeping with this tradition, Sanat has now emerged into a fully professionally managed state-of-the-art integrated company with an established name, trust and track record in domestic publishing market.