Heidelberg’s expansion of subscription service is a key element of digital transformation

App-based vendor-managed inventory solution for consumables

L-R: Lensing Operations Manager Ascan Schulz, Heidelberg Business Specialist Maximilian Schnippering, Heidelberg Project Manager Business Development Alexander Driss, and Lensing Head of Printing Guido Thesing
L-R: Lensing Operations Manager Ascan Schulz, Heidelberg Business Specialist Maximilian Schnippering, Heidelberg Project Manager Business Development Alexander Driss, and Lensing Head of Printing Guido Thesing

The first print shops to try out the Heidelberg Subscription pay-per-use contract model are now seeing positive results. A significant improvement in the productivity/performance of all customers already benefiting from subscription-based production has led Heidelberger Druckmaschinen AG (Heidelberg) to further expand its subscription service. The company is now offering to manage the entire consumables logistics chain for its subscription customers. This app-based vendor-managed inventory solution takes the contract model’s customer benefits to the next level. Customers have even less capital tied up in consumables, enjoy greater flexibility, and can focus even more on their own customers while Heidelberg takes care of warehouse management. The vendor-managed inventory approach also uses Cloud-based interaction with the Heidelberg Assistant to give subscription customers complete transparency with regard to goods flows. Heidelberg is working with customers on an ongoing basis to develop this function using the design thinking process.

Chennai’s Rajams Digital first print shop in India to opt for subscription model

In September 2018, Chennai, India based Rajams Digital installed a Heidelberg Speedmaster SX 74 through Heidelberg’s indigenous subscription model. An established commercial and digital printer in the southern Indian region, the company was witnessing growing demand for better quality and quantity, which led its managing director, GN Visvakumar, to go for an upgradation. After looking at several presses from leading machine manufacturers, he opted for the Speedmaster SX 74 through subscription model. “We were looking to get into the 20 x 30 inch printing space and with the installation of the Heidelberg Speedmaster SX 74, we were able to target that segment quite effectively,” says Visvakumar. The press has been running optimally at Rajams Digital unit for almost a year now and Visvakumar is extremely satisfied with its performance.

“Just like any other print service provider, we too have our fixed targets every month. With the installation of the machine, we have met more than double the target so far and we are very happy with the results. According to our subscription deal with Heidelberg, we are providing only the space, power and manpower while Heidelberg, which remains the sole owner of the press, is taking care of everything else related to the press. We don’t have to worry about the maintenance part though, to be honest, we have so far never faced any technical glitch,” he shares.

Significant optimization of inventory management at Lensing Druck

Lensing Druck in Dortmund is a pilot user of the vendor-managed inventory solution and was also one of the very first subscription customers. Consumables stocktaking at Lensing is carried out using an industry-standard mobile device that runs the app developed by the company. Revised stock levels are automatically relayed to the Heidelberg Assistant. The Material Requirements Program (MRP) ensures sufficient stocks are available to cover the customer’s needs. “Since the launch in mid-May, our inventory management has been getting better and better. Optimized goods delivery means Heidelberg can plan supplies of the materials required virtually in real time while also conserving resources,” says Lensing Druck’s managing director, Robert Dembinski. At the same time, purchasing and logistics processes are also becoming less complex for the customer.

Further expansion of subscription service is a key element of digital transformation

Due to the positive response from customers, Heidelberg is quickly and systematically further expanding the portfolio of pay-per-use contract models. In conjunction with the vendor-managed inventory solution, Heidelberg also offers its customers the option of taking out subscription contracts for consumables even without a press. Further development of the portfolio and the associated capture and analysis of usage data from numerous presses means that increasingly accurate forecasts can be made for deliveries and, ultimately, material production. As a result, Heidelberg is able to develop ever more customized services relating to the life cycle of its equipment portfolio.

As for the Prinect workflow, Heidelberg is gradually converting the entire operation from the sale of individual licenses to contract business with a monthly usage-based charge.
“Contract business has become a firmly established part of our solutions portfolio and also the main driving force behind our digital transformation. Our customers benefit from improved productivity and can focus more closely on their own customers’ needs. The subscription model gives Heidelberg a stable sales volume and makes it less dependent on economic cycles. At the end of the day, it’s a real win-win situation,” says Professor Ulrich Hermann, member of the Management Board responsible for Lifecycle Business and Chief Digital Officer at Heidelberg.

More information about the Heidelberg subscription model is available here.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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