Rr Donelly
1. How do the critical success factors of Donnelley’s traditional printing business compare with those for on-demand digital printing? How did these differences shape the agenda and tasks of Rory Cowan?
For traditional printing business, Donnelley considered long-term relationships with customers to be key, considering multi- year ‘enabling contracts’ from select customers and to build a plant specifically for each one, with equipment dedicated to its needs. This is because the traditional print business was one of high fixed and low variable costs, therefore, the longer the run length on the print machines, the lower the cost per page. This is a competitive advantage over other companies in the fact that the total cycle time would be reduced by orders of magnitude and customization. Therefore, the company could offer the opportunity for more tailored marketing and better sales.
In contrast to the traditional methods of printing, as industry trends were moving increasingly towards ‘mass communication’, customers’ required shorter runs, more versions, tailored inserts and greater use of colour. Since the introduction of desktop publishing, customers themselves were able to create and print their own documents. As technological advances were made i.e. digital four colours, computer-to-plate, customizable prints, it meant that the traditional printing business would go out of work. With on-demand printing (POD), there would be a lot of advances, such as the elimination of a range of costly steps- including warehouse and inventory. The underlying economics and selling process would be fundamentally different from traditional printing. Customers total system costs would get highly reduced when warehousing, transportation, obsolescence and throwaways were factored in.
Rory Cowan, executive of Donnelley firmly believed in digital technology. Over the years that he’d been working for Donnelley, he thought technology was the way to go. He even formed a
For traditional printing business, Donnelley considered long-term relationships with customers to be key, considering multi- year ‘enabling contracts’ from select customers and to build a plant specifically for each one, with equipment dedicated to its needs. This is because the traditional print business was one of high fixed and low variable costs, therefore, the longer the run length on the print machines, the lower the cost per page. This is a competitive advantage over other companies in the fact that the total cycle time would be reduced by orders of magnitude and customization. Therefore, the company could offer the opportunity for more tailored marketing and better sales.
In contrast to the traditional methods of printing, as industry trends were moving increasingly towards ‘mass communication’, customers’ required shorter runs, more versions, tailored inserts and greater use of colour. Since the introduction of desktop publishing, customers themselves were able to create and print their own documents. As technological advances were made i.e. digital four colours, computer-to-plate, customizable prints, it meant that the traditional printing business would go out of work. With on-demand printing (POD), there would be a lot of advances, such as the elimination of a range of costly steps- including warehouse and inventory. The underlying economics and selling process would be fundamentally different from traditional printing. Customers total system costs would get highly reduced when warehousing, transportation, obsolescence and throwaways were factored in.
Rory Cowan, executive of Donnelley firmly believed in digital technology. Over the years that he’d been working for Donnelley, he thought technology was the way to go. He even formed a