In-Plant Market

StatisticsA THOROUGH ANALYSIS OF TODAY'S IN-PLANT INDUSTRY

2

METHODOLOGY

The names used for this survey were taken from In-plant Graphics' subscriber database. In December 2011, we e-mailed 14,370 readers/in-plant managers asking them to participate. We followed this up with two reminder e-mails.

When we closed the survey in January 2012, we had received 277 responses from managers/directors/supervisors of in-plant printing operations. The data in this report are based on a computer tabulation of the 277 qualified completed surveys that we received.

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IN-PLANT MARKET AT A GLANCE

Budget2012 Average: $2,293,7122012 Median: $887,500Average two years ago: $2,028,124

Employees2012 Average: 15.122012 Median: 7Average two years ago: 15.65

In-plant Funding

Self-supporting 39%

Services In-plants Provide n 2012 n 2010

Digital Printing/Copying 97% 96%

Bindery 96% 97%

Prepress 75% 79%

Graphic Design 73% 72%

Offset Printing 69% 75%

Variable Data Printing 62% 61%

Mailing 60% 59%

Wide-format Ink-jet Printing 59% 58%

Online Ordering/Job Submission 56% 65%

Print Procurement 47% 40%

Fulfillment 38% 37%

Scanning (for archival purposes) 38% 41%

Copier Program Management 35% 40%

CD/DVD Production 24% 29%

QR Code Creation 24% —

Photo Printing 22% —

Data Center/ IT Printing 18% 17%

Copyright Clearance 16% 18%

Selling Promotional Items 12% 13%

Photography/Videography 12% 13%

Web Site Design/Maintenance 9% 12%

Other * 9% —

Cross-media Marketing 8% —

Database Management 8% —

Engraving 7% 4%

E-marketing 5% 4%

Garment Printing 4% 3%

In-plant Funding

0 50 100

* Writing/editing, custom framing, lamination, padding, flex labels, education, address maintenance, faxing, braille printing, fine art reproduction, envelope manufacturing.

Funded 26%

Mostly funded, some revenue generation

16%

Mostly self-supporting, some budgeted funds

19%

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BUSINESS GROWTH

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What In-plants Produce | Compared with 2008 figures, there has been a notable increase in in-plants producing business cards, stationery, posters, direct mail and annual reports.

n 2012 n 2010

Brochures 94% 96%

Newsletters 90% 91%

Business Forms 86% 86%

Pamphlets 82% 84%

Stationery 82% 84%

Business Cards 81% 85%

Posters 81% 81%

Reports 77% 77%

Envelopes 76% 77%

Manuals 74% 81%

Banners/Signs 71% 67%

Tags/Labels 69% 71%

Direct Mail Pieces 68% 73%

Calendars 67% 68%

Annual Reports 65% 68%

Directories 55% 62%

Bills/Statements 40% 39%

Pocket Folders 32% 36%

Magazines 27% 25%

ID Cards 26% 25%

Engineering Drawings 17% 18%

Point of Purchase 14% 14%

Photo Books 13% —

Packaging 12% 9%

Vehicle Wraps 5% —

In-plant Expansion | In-plants continue to expand in a variety of ways:

n Past 3 years n Next 12 months

Moving to a new facility 7% 7%

Adding space to facility 7% 10%

Increasing staff 11% 16%

Adding equipment 41% 70%

Adding services 37% 68%

Manager to oversee additional departments 10% 15%

Merging with mailing operation 4% 7%

Expanding mailing operation 8% 12%

Merging with data center/ IT printing operation 2% 3%

No growth 35% 13%

No new services 23% 10%

Reducing shop's size 8% 15%

0 50 100

5

INSOURCING AND BEST PRACTICES

Growth in Insourcing | Taking in work from outside their organization has helped in-plants fill up idle equipment time, recover costs and pay for shop improvements.

• 72% say insourcing has strengthened their in-plant.

• 44% are providing revenue back to their parent organizations.

• 22% say insourcing has allowed their in-plant to add new equipment

• 8% say insourcing has allowed them to add employees.

• Just 7% say insourcing has created conflicts between their organization and outside entities.

Yes, we insource 53.4%

Growth in Insourcing

In-plant Best Practices

n 2012 n 2010

Charge back for printing/binding. 78% 81%

Compare our costs with outside printers. 72% 79%

Self-promotion/marketing of in-plant. 63% 63%

Report savings to upper management. 56% 59%

Provide education/training to employees. 30% 37%

Right of first refusal for all printing. 28% 28%

Market in-plant using social media. 9% — 0 50 100

Impact of Outsourcing | Facilities management firms have approached 46 percent of in-plants in the past two years, offering to take over their printing. Here are the results of those meetings:

The FM could not save the organization money. 59%

The FM could not provide all the services the organization required. 37%

Being challenged made the in-plant stronger, with improved services. 32%

The in-plant manager now has more responsibilities. 16%

The in-plant now outsources more printing/copying. 7%

All printing/copying will be produced by an outside firm. 3% 0 50 100

No, we don’t 46.6%

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OFFSET VS. DIGITAL

Offset, Digital or Both? | Though most in-plants handle both offset and digital, nearly a third are now all digital.

Offset and digital printing.68%

Four-color | Percentage of four-color pages produced via: Monochrome | Percentage of

black-and-white pages produced via:

Offset Presses 25.41%

Offset Presses 27.34%

Offset | Percentage of in-house offset printing that is: Non-offset | Percentage of

in-house digital printing that is:

Black-and-white 43.82%

Black-and-white 57.76%

O�set, Digital or Both?

Four-color

O�set

Monochrome

Non-O�set

Offset presses/duplicators only.1%

Digital printers/copiers only.31%

Digital Printers 74.59%

Digital Printers 72.66%

Multi-color 26.69%

Four-color 29.49%

Multi-color 10.6%

Four-color 31.64%

7

NEW EQUIPMENT

Purchasing Plans | 67 percent say upper management supports their requests to upgrade equipment. About 41 percent plan to buy or lease new equipment in the next 12 months. Here's what's on their lists:

Bindery Equipment 29%

Digital Color Printer (30+ ppm) 22%

Design/Prepress Software 16%

Wide-format Ink-jet Printer 12%

Mailing Hardware 12%

Mailing Software 10%

Computer-to-plate System 7%

Offset Press 5%

No purchases planned 39%

0 25 50

0 25 50

Recent Upgrades | In the past two years, 81 percent of in-plants have added equipment or software. Here's what they installed:

Digital Color Printer (30+ ppm) 39%

Bindery Equipment 39%

Design/Prepress Software 26%

Wide-format Ink-jet Printer 25%

Mailing Hardware/Software 14%

Computer-to-plate System 13%

Offset Press 12%

Copiers

Average number of copiers/ multifunction printers used for in-plant production:

6.34

Average number of copiers/ multifunction printers in-plant manager is responsible for:

99.19

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VDP AND CTP

VDP On The Rise | More than 62 percent of in-plants produce variable data printing. They say an average of 15.23 percent of their digital print jobs contain variable data. Here are the types of variable information they print:

Address information (including bar codes) 89%

Recipients’ names (on the printed piece) 85%

Paragraphs of variable text 32%

Images 30%

Color (text or images) 27%

Personalized messages on envelopes 22%

Transpromo* 8%

Personalized URLs 6% 0 50 100

* Personalized promotional or educational messages printed on bills, statements, etc.

Computer-to-plate | Of those with CTP equipment, here are the types of systems they have.

Thermal Laser 22%

Visible Laser (e.g. Violet) 7%

Ink-jet Imaging 7%

Processless (Chemistry-free) 17%

Metal Plates 31%

Polyester Plates 28%

Do not use 37% 0 25 50

Are You Green? | Have you made changes in the past year to be more environmentally friendly?

Not really 27%

A few changes 29%

A lot of changes 12%

Major changes 2%

VDP Issues | • Many customers don't seem interested in VDP but prefer static printing. 49%

• Poor database management has been a roadblock to our providing VDP. 24%

• We have brought VDP ideas to customers to demonstrate what our digital presses can do. 48%

• Data security concerns have led to more VDP jobs for our in-plant. 9%

Are You Green?

More than 2 years ago 30%

9

PAPER TRENDS

Shopping Around | Most managers rely on multiple merchants to get the best paper deals.

More than one paper merchant 74%

Office supply companies 18%

A single paper merchant 21%

Retail paper store 7%

Online suppliers 6

Direct from mill 6

Manufacturers’ paper sample books 4%

Other* 4% 0 50 100*State contract, bid process, paper converters

...Though their customers do not.

Always 43%

Always 3%

Brand Name Paper?

Most Popular Papers | Once again colored paper tops the list as the most common paper purchased by in-plants.

Cover 92%

Colored 87%

Bond 87%

Copier 84%

Coated 81%

Carbonless 80%

Index 75%

Uncoated 75%

Label 69%

Text 69%

Offset 66%

Recycled 64%

Laser 52%

Multiple-Use 50%

Premium 46%

Wide-Format 46%

Ink-Jet 21%

Synthetic 19%

Magnetic Material 17%

Roll-fed/Web 10%

Other* 3%

0 50 100* Permanent paper, Tyvek, security paper, C1S

In-plants often specify paper by brand name.

Paper customerPaper InPlant

Sometimes 28%

Rarely 47%

Never 22%

Sometimes 45%

Rarely 10%

Never 2%

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EQUIPMENT AND SOFTWARE AT IN-PLANTS

SoftwareDigital Storefront/Online job submission 38%

Shop Management (e.g. Estimating, Inventory) 50%

Workflow 42%

Proofing 31%

Color Management 39%

Design 71%

Imposition, Trapping, Preflighting 64%

Variable Data 53%

PrepressProofing 59%

Densitometer/Spectrophotometer 64%

Imagesetter 23%

Computer-to-plate (CTP) system 70%

PressesSheetfed Offset (up to 20˝) 84%

Sheetfed Offset (21˝ to 29˝) 35%

Sheetfed Offset (30˝ AND UP) 8%

Sheetfed Offset – One, Two-color 54%

Sheetfed Offset - Four-color or more 28%

Direct Imaging Offset Press 9%

Envelope Press (Offset) 17%

Envelope Feeder 39%

UV Coating 5%

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Digital Copiers/Printers

B&W Copiers/Printers (up to 80 ppm) 32%

B&W Copiers/Printers (81-99 ppm) 27%

B&W Printers (100+ ppm) 70%

Color Copiers/Printers (up to 40 ppm) 24%

Color Printers (41-99 ppm) 75%

Color Printers (100+ ppm) 20%

Digital Duplicators (e.g.Riso, Duplo) 11%

Wide-format Ink-jet Printers (20˝-36˝) 19%

Wide-format Ink-jetPrinters (37˝-60˝) 43%

Wide-format Ink-jetPrinters (> 60˝) 4%

Digital Envelope Press 11%

Bindery & Finishing

Collators 64%

Folding Equipment 97%

Saddle Stitchers 83%

Perfect Binders 34%

Double-loop/Spiral Wire Binders 35%

Paper Cutters 97%

Laminators (wide-format) 43%

Laminators (conventional) 59%

Drills/Punches 93%

Scoring/Slitting 71%

Addressing & Mailing

Mailing Software 62%

Ink-jet Addressing/Bar Coding Systems 51%

Inserters 61%

Labeling Systems 30%

Postage Systems 66%

Mail Sorting Equipment 24%

Tabbing Equipment 54%

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Editor:Bob Neubauer215.238.5321bobneubauer@napco.com

Publisher:Glen Reynolds215.238.5097glenreynolds@napco.com