1. © INCA DIGITAL PRINTERS LTD Company Confidential Making inkjet “Industrial”: A rough guide to the economics Stephen Tunnicliffe Wilson Inca Digital Printers

2. © INCA DIGITAL PRINTERS LTD Company Confidential What has limited inkjet's success in industry? Commercial reasons: Print cost ($/m 2 ) – generally higher than conventional print Machine cost – higher for same throughput as conventional printers Technical reasons: Print Quality – has previously been lower than conventional printing Reliability – particularly nozzle lifetime But these are related to the same issue – what are the economics of inkjet print compared to conventional print including all factors? 1

3. © INCA DIGITAL PRINTERS LTD Company Confidential How do you calculate the print cost of inkjet? The obvious factors: Ink cost – typically $100/kg for 1 ton/year usage Ink laydown – typically 10g/m 2 /colour, 15g/m 2 total (UV ink)..so ~$1.5/m 2 print cost is ink. Throughput value – e.g. ~$2000/m 2 /hr for Inca Onset..so 4000 hours / year at 20% amortisation adds $0.1/m 2 The less obvious: Cost of replacing nozzles Cost of ink performance Indirect cost savings, and value-added An accurate estimate of print cost must consider all of these! 2

4. © INCA DIGITAL PRINTERS LTD Company Confidential How does nozzle cost affect inkjet print cost? Example: If replacement heads cost $5/nozzle....and a printer with 100,000 nozzles replaces 1000 nozzles/year (1%) costing $5000..and uses 5 tons (5000kg) ink per year..then this adds $1/kg (or litre) cost which is $0.01/m 2 For a 15 nanograms (or picolitres) nozzle drop mass this equates to a nozzle life-time of around 300 Billion drops. But a printer with poor nozzle maintenance and no nozzle redundancy might achieve less than 1% of this life time, so the nozzle cost could be greater than the ink cost in print cost terms. 3

5. © INCA DIGITAL PRINTERS LTD Company Confidential How does the ink performance affect inkjet print cost? Pigments Light coloured inks increase print costs but can reduce image noise Spot colours use less ink but require more print heads Gloss level A Matte finish means lower optical density as less light goes through the pigment than with a Gloss finish A rough surface can reduce gloss and optical density but may improve adhesion due to increased surface area. A gloss coating can fix this. Substrate porosity If the substrate absorbs more ink then you see less of it. Ink is priced by the kilogram but valued in Optical Density! 4

6. © INCA DIGITAL PRINTERS LTD Company Confidential How does inkjet save cost indirectly? Reduced wastage during set-up. For example, an offset press might use 100 sheets to achieve acceptable registration, which could cost $1000. Lower cost logistics, by printing jobs pre-collated for shipping, allowing earlier deliveries of distant orders with reduced collation labour costs. Use of lighter, lower cost materials. This effectively reduces the inkjet print cost compared to conventional printing. For example, saving 100g/m 2 of paper weight at $1200/1000kg saves $0.12/m 2. Reduced “SKU-cost”. Conventional printing encourages the accumulation of large stocks of printed material. This incurs costs due to storage and recycling of unused/obsolete stock. Greater efficiency on your conventional printer. Moving short runs to inkjet allows your conventional printer to focus on long runs. These potential cost-savings require careful analysis. 5

7. © INCA DIGITAL PRINTERS LTD Company Confidential How does inkjet add value over conventional printing? Reduced time to market – responding quickly to competition without make-ready delays Better consistency – inkjet is more predictable and can more easily adapt to substrate changes Simpler workflow – can proof jobs on the printer itself to ensure colour accuracy Greater adaptability – images can constantly vary or even stretch to fit These advantages can increase the price achieved by inkjet print compared to conventional 6

8. © INCA DIGITAL PRINTERS LTD Company Confidential What are the costs of poor reliability? Down-time can be managed if it's predictable – e.g. Weekly maintenance, typically $1000/hour for a 500m 2 /hr printer But unplanned downtime is more expensive as it forces work to be re-scheduled or even subcontracted – at often double the cost Breakdowns can stop the whole manufacturing / converting line, e.g. > $10,000/hour for a box maker Industrial inkjet must deliver high reliability and an ability to keep running (even if slowly) when minor issues occur 7

9. © INCA DIGITAL PRINTERS LTD Company Confidential How can we reduce the costs of poor reliability? Increase MTBF (Mean Time Between Failure) – ensuring the printer breaks down as rarely as possible Improve RFR (Remote Fix Ratio) – the proportion of repairs which don't require a Service Engineer visit – saving time and money Reduce MTTR (Mean Time To Repair) – how fast the printer can return to production following a Breakdown Reducing reliability costs requires good remote diagnostics and enough service engineers and spare parts availability to minimise delays to repairs. 8

10. © INCA DIGITAL PRINTERS LTD Company Confidential How do we measure the printer's performance? Overall Equipment Effectiveness (OEE) is calculated from: Loading – the proportion of calendar time scheduled for production. i.e. weekly shift hours / elapsed hours Availability – the proportion of scheduled time the printer could run. i.e. accounting for both planned and unplanned downtime. This includes machine job changes, print head maintenance etc. Performance – the proportion of throughput achieved compared to the the printer specification. i.e. % of maximum m/min or m 2 /hour Quality – the proportion of usable printed product - i.e. (100% - the % reject rate) OEE = Loading x Availability x Performance x Quality. The real value of an inkjet printer depends on all these criteria! 9

11. © INCA DIGITAL PRINTERS LTD Company Confidential Where is inkjet cheaper than conventional print? An estimate of run lengths shows where to look in more detail.. 10

12. © INCA DIGITAL PRINTERS LTD Company Confidential How can you make your inkjet economics work? Understand the true costs of your conventional print, including wastage, logistics, materials and SKU-cost. Investigate the costs and hidden value of the inkjet alternative. Find an ink which really works and an integrator with proven ability. If you want to discuss inkjet economics in more detail, please visit Inca on stand D41! 11