Purchasing a Flexo Press: How to Negotiate for a Narrow Web Machine

FLEXO’s Questions: What should printers ask for and how should they ask, in issuing a formal contract? What is typically offered? How can a converter have it amended? What’s common? What’s extra? What might be truly unique? What finishing options might be worth exploring?

Consensus: The key to any contract negotiation is good communication. Investments are large and everyone rightfully needs to protect themselves. Configuring a press specific to a converter is truly an artform:

• The end goal is to invest in hardware and software solutions that reduce the cost of operations, while improving services to customers
• In addition to the legal contract, it is important that both parties strive to build a trust-based relationship
• Define performance expectations
• Perform Factory Acceptance Tests (FATs)

Offering Commentary: Simon Gross, CEO and Todd Kotila, director of business development, Converting Equipment International (CEI); Jeff Cowan, director of business development, Mark Andy Inc; Paul Teachout, vice president sales and marketing, Nilpeter USA; Kregg Albrecht, sales manager, label market, Matik Inc; and Mike Weyermann, vice president, sales and marketing, MPS North America

Gross: The better we know the buyer’s present and future business concerns, the better value the overall system will become. Systems like CEI’s BossJet are entirely modular, so converters can add processes—such as additional flexo stations, die cutting, lamination and the like—in the future.

By far, it is most cost-effective to purchase an integrated hybrid from the start, versus attempting to upgrade a digital printer after the fact.

Kotila: In the case of a digital inkjet hybrid press, there are several important considerations. A converter may want to purchase the system turnkey from the integrator—that is, from the company that puts the hybrid together (converting elements plus digital print module). Or, for financial reasons, it may want to negotiate the purchases and integration separately; for example, leasing the printer and paying the manufacturer to integrate it into a hybrid at delivery. This allows the buyer to negotiate ink prices and a service contract for the print module separately.

Most customers buying the CEI BossJet order them with one or two upstream flexo stations—preprinter—and two or three downstream flexo stations, plus cold foil or lamination and die cutting per their specific needs. The upstream flexo is often for pre-coating the substrate for best results or putting down slip or spot white in order to save big money on digital white inks.

Customers typically purchase a 5- or 7-color press and negotiate the price of a service contract and possibly their pricing on ink for the digital asset—sometimes separately, sometimes through the integrator. Regarding the finishing configuration, make sure the hybrid manufacturer makes all the finishing components and doesn’t subcontract significant pieces to vendors. Integration gets exponentially more difficult if the manufacturer does not own the entire process; it becomes nearly impossible to maintain precise registration from flexo to digital printer to flexo to die cutter, etc.

Finally, if a buyer wants future expandability and has current finishing capacity, the printer may decide to order the digital asset “hybrid ready,” so it can upgrade in the future. Printers should not assume that if they buy a roll-to-roll digital inkjet system, it can easily be upgraded in the future. It often cannot. At best, they might add an inline digital finisher, but that configuration costs much more in the long run, due to redundant hardware expenses and the efficiencies lost on the operating side in setup time and waste. Because each digital hybrid press is unique, customers should ask about everything.

Cowan: Each and every converter has needs that are absolutely unique to their book of business. Standard configurations may serve the needs for many, but a thorough technical sales representative will have the knowledge needed to work collaboratively to determine the best path forward for customers.

From unwind to rewind, the innovations coming to market both in the flexo and digital realms are astounding to aid in productivity and thus profitability. We’re noticing a trend of more print stations on both flexo and digital hybrid presses, allowing endless opportunities for additional rail stations for cold foil or a web translator for extended content, added varnishes, expanded gamut (EG) and spot colors, and more. Configuring a press specific to a converter is truly an artform.

Teachout: Narrow web converters—our customers—have been investing in the latest production equipment and workflow solutions that allow them to do more with less.

Any company with multiple locations can take advantage of these innovations to streamline operations. It can even remotely manage and interpret data to improve production through the Industrial Internet of Things (IIOT). IIOT network-based production systems and data exchange shifts roles and responsibilities from machine operators to machine monitors. Throughput is greater, with higher quality and reduces lead times to the customer.

I recently visited a narrow web converter who has successfully transitioned into a modern smart factory and production workflow. It is one of the pioneers and visionaries of these practices, beginning the journey more than a decade ago. It has now tripled the size of the company while maintaining the same head count that it started with, all by utilizing modern methodologies.

The journey for every production environment will be unique. Production mix and markets will dictate the opportunities that will have the largest impact on your workflow. We first need to map the potential of where these technologies and investments will have the largest impact on your workforce and production. We want to employ an MIS/ERP-based platform that is integrated into your business management systems. This can involve everything from plant management, production planning, sales and CSR through logistics.

We also have to consider the type of automation that would most benefit operations. There are two kinds of automation that each independently has a tremendous effect. The first is automated labor, which can help overcome workforce challenges and the skills gap. Much of this can be managed by the software and workflow solutions currently available. This includes any repetitive or predictable task performed by a human that can now be done through IOT automation. The second is automated manufacturing. This is the hardware that allows you to streamline a manufacturing process into a series of predictable automated processes and results.

From order entry to logistics, everything can now be managed through IIOT software automation. There are many leading software suppliers that can now provide solutions to drive production requirements. The end goal is to invest in hardware and software solutions that reduce the cost of operations, while improving services to customers. The entire customer experience can now revolve around data transfer. This starts right from placing an order online, online estimating and offerings, to having the order processed and approved through preflight. The order can then be managed through software solutions that expedite it through production planning that drives supply chain requirements, management and scheduling.

The process continues right through logistics, shipping and invoicing. These sophisticated workflow solutions have reduced the requirements on the workforce by automating any repeatable or predictable task. The other added benefit is that all this big data and information can be cloud-based for ease of management and retrieval amongst multiple locations.

Utilizing automation in both software and hardware will allow us to achieve a much higher level of efficiency. You will be more productive with less downtime and waste. Quality to customers and speed to market will improve.

Albrecht: The key to any contract negotiation is good communications by all parties throughout the negotiation. In the end, an agreed-upon contract that is viewed as a “win-win” where both parties secure their minimum needs is ideal. This means there is often a give-and-take negotiation. If there are true “musts” to absolutely meet, these should be made clear up front and documented. The legal nature of any contract is important to both parties and necessary in case any issues arise that cannot be easily resolved.

It’s important the language is understood and often, it will be appropriate to have a formal legal review. In addition to the legal contract, it is important that both parties also strive to build a trust-based relationship. For the printer/converter, you are not just purchasing a machine but gaining a partner to support your business. And for the equipment manufacturer, you want your client to be successful, help them grow the business and continue to supply machines into the future.

One thing that is often overlooked in the contract is a definition of performance expectations. FATs are very common, but the details of the FAT should be included in the contract and agreed to by both parties. This helps ensure that the machine is meeting all the requirements prior to delivery.

Weyermann: Contract negotiations are commonplace today. Investments are large and everyone rightfully needs to protect themselves. There are a lot of delivery and performance guarantees being added to contracts. Most contracts are easily amended if both parties agree to the amendment.

At MPS, we know our capabilities and stand behind our promises to our customers. Typically, MPS offers guaranteed delivery times, cost-free warranty periods, spare parts packages with the machine, and maintenance and service level agreements.