Heidelberg Services White Paper

8/6/2019 Heidelberg Services White Paper

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Services

for the print media industry

A Heidelberger Druckmaschinen AG white paper

Status: 24.03.2011

Since the start of financial year 2010/2011, Heidelberger Druckmaschinen AG has been

operating via the three newly founded divisions Heidelberg Equipment, Heidelberg Servicesand Financial Services. This white paper summarizes the portfolios of the Services and

Financial Services divisions. It explains the market context and describes the development of

the Service division's portfolio, which was originally centered primarily on technical and

machine-based support, but has since grown to encompass a broad-based pallet of service

and consulting offerings. The division now helps companies in the print media industry to

strengthen and extend their performance and competitiveness on a sustainable basis. The

Financial Services division supports companies worldwide by enabling them to invest in

Heidelberg technology.


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Contents

Services in mechanical engineering ...................................................................................... 3

Services boom drives growth ................................................................................................. 4

Heidelberg Services an overview of the portfolio ................................................................ 6

Technical services and consumables ................................................................................ 6

Performance services ....................................................................................................... 6

The service portfolio in detail ................................................................................................. 9

Technical services and consumables ................................................................................ 9

Systemservice ............................................................................................................ 9

Better performance through consumables .................................................................11

Performance services ......................................................................................................15

The Prinect print shop workflow and the Suprasetter CtP family ...............................15

Exploring new business models with Web-to-Print ....................................................18

Print Media Academy Education and Consulting .......................................................20

The industry's largest supplier of remarketed Heidelberg brand equipment .....................25

Heidelberg Services in Germany ..........................................................................................27

Heidelberg Services in the U.S. ............................................................................................30

Financial Services ................................................................................................................31

Links .....................................................................................................................................33


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Services in mechanical engineering

Building and selling for decades, these were the focal points of any mechanical

engineering company. However, long product life cycles, the growing complexity of

machinery, globalization, and the desire to expand classic core operations with additional

business areas mean that service and consulting portfolios are becoming increasingly

important.

At the same time, competition in the mechanical engineering sector is being played out more

and more through services rather than the products themselves. As a result, companies have

had to satisfy their customers' high expectations with suitable service offerings, while also

keeping the associated costs well under control. In the mechanical engineering sector as in

any other sector services are now a strategic success factor for any company.

According to figures from the German Engineering Federation (VDMA, 2008), German

mechanical engineering companies currently generate an average of around 18.7 percent of

their sales through services. The international average is approximately 30 percent. These

services primarily cover established areas such as maintenance, servicing and service parts

business. For many companies in the industry, after-sales service is a stable and predictable

pillar of their operations. In the service parts business, the growing importance of customer

service has also meant that innovative business models such as web-based, predictive

remote maintenance concepts are becoming ever more important.

These services benefit the customers of mechanical engineering firms primarily by helping to

cut maintenance and servicing costs. Across the sector, average annual expenditure in this

area amounts to 4.7 percent of the original procurement costs of machinery and systems.

After just 20 years, cumulative service costs are as high as the original procurement costs.

More emphasis is also being placed on additional, innovative services that accompany

products, such as consulting, business and production process optimization, training, and

consumables. When combined with product innovations, innovative services such as these

are able to tap into new export potential and growth prospects.

With its greater focus on services and consumables and its new dedicated division, the

development strategy at Heidelberg is in line with that of other innovative mechanical


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engineering companies. Having recently generated annual sales of approximately EUR 1

billion, this sector is also playing a key part in the company's business success. Thecompany's long-term aim of generating more than 40 percent of total sales in this area

underlines the potential and innovative strength that consumables and services offer.

Services boom drives growth

Service pays?! (Dienen und mehr verdienen?!) was the title of a study produced by

Germany's Fraunhofer Institute for Industrial Engineering (IAO) in 2009. Putting in place a

portfolio of various services can help tap into a number of different ways to create added

value. These opportunities range from simple additional business to organizing production

operations through services based on operator models. During the IAO study, companies

graded the current and future economic importance of the various service types.

At present, top in the list of most economically important services are basic or standard

services such as warranty and service parts services. However, the study also showed that

these areas offer only limited potential for further economic growth.

There was far greater potential for growth in the area of consultancy services. Although

consultancy services are currently less significant on the whole than basic services, it is

important to point out that a number of companies do not yet offer these services. Even

greater potential compared to current economic importance is ascribed to services that

can help boost the operational availability of machinery.

Productivity services are also seen as a high-potential area. These services are designed to

boost the productivity of a customer's machinery by, for example, automating upstream and

downstream processes or introducing telematic and information service offerings for

productive machinery utilization.

At the time the study was conducted, these services were of virtually no significance to the

companies surveyed. However, their future potential is much more striking. In fact, the

biggest difference between current and anticipated economic significance was recorded for

these services. The study also found that operator models are of low economic importance at

present, but are expected to play a much greater role in the future.


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Heidelberg Services an overview of the portfolio

The Heidelberg Services division of Heidelberger Druckmaschinen AG (Heidelberg) offers a

full service portfolio that is divided into two segments:

Technical services and consumables

The productivity and availability of equipment remain key issues. Heidelberg offers a tried-

and-tested portfolio of machine-related service packages and individual offerings, 'Saphira'brand consumables, service parts, and technical support. Examples of offerings include

preventive machine maintenance concepts that incorporate Remote Services, round-the-

clock access to the global Heidelberg network of experts, on-site support in print shops, and

the supply of Original Heidelberg Service Parts. All these services form a key pillar for

productivity in print media companies. Besides paper, the range of consumables supplied

under the Saphira name covers all the materials used in offset printing, whether in prepress,

press, or postpress operations. All these materials are tested and coordinated through a

combination of lab work, processes at Print Media Centers (PMCs) and field testingconducted at selected customers.

Service packages such as Systemservice 36plus, which are automatically taken out when a

customer buys a new machine, and individual service agreements such as the Heidelberg

Partner Program help companies take preventive measures to minimize equipment failures

and get a clear idea of service costs in advance.

Performance services

With the industrialization of print production, the focus of decision-makers is shifting to

management issues such as lean processes, production concepts, and sustainability.

Heidelberg covers all these areas with its performance services. This service segment

covers process and productivity optimization and incorporates the Prinect print shop

workflow as well as employee and company development. Heidelberg Services offers a

wide-ranging portfolio of consulting and training offerings (Print Media Academy Education


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and Consulting) as well as services for integrating processes, optimizing business

processes, and enhancing productivity. The portfolio for this segment is furthercomplemented by services relating to the sale of remarketed equipment.

Performance services are primarily concerned with looking beyond the pressroom and

optimizing a company as a whole. A two-pronged approach is required stabilizing and

building on profitable sales of the print shop, and cutting costs through enhanced efficiency

and productivity. Lean processes, differentiation from the competition, and ideas for new

areas of business are much more important than they were a few years ago. The same

applies to the task of managing complex business operations an area where the objective

view of an outside expert can be particularly helpful.

The Prinect print shop workflow optimizes processes, raises quality standards, and improves

cost-effectiveness. By connecting prepress production, the pressroom, and postpress

operations to management processes, Prinect makes the concept of an integrated print shop

a reality. This renders each individual process transparent, thereby enabling end-to-end

management of all processes.

Consulting and service go hand in hand in the consulting and training portfolio of the PrintMedia Academy Education and Consulting. It offers consulting and training packages

covering areas such as company, business, and commercial management, including

additional technical, process, strategic, sales, and marketing training.

Remarketed Equipment operations provide services related to every aspect of dismantling,

installing, overhauling, marketing, and shipping remarketed equipment.

As a result, the approach at the new Heidelberg Services division goes far beyond classic

service operations for machinery. By complementing technical service portfolios with

company-related and consultancy services, Heidelberg is helping print shops improve their

overall economic performance.


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An overview of the Heidelberg Services portfolio:

The extended portfolio offers print shops far-reaching support for responding to challenges in

a whole range of different areas. The major challenges are Web-to-Print, environmentally

friendly production, digital printing, differentiation from the competition, marketing, and price

pressure from all sides. Many companies in the sector have realized that their existing set-up

is inadequate for heading off these market challenges. However, external service providers

and consultants with specialist knowledge can play a key role in finding solutions be it with

equipment-related services or advice on the know-how and processes required for business

development.


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process steps are to be covered and to what extent. As a result, they are able to take

preventive steps to protect their production from downtime.

Depending on customer requirements, Heidelberg also provides service packages and

services at calculable costs that cover the entire service life of a press (up to eight years).

Systemservice also encompasses a wide variety of individual services that range from the

planning and building of print shops anywhere in the world, service parts, and modernization

and upgrade projects to Remote Services, IT integration, installation services, and on-site

operator training.

Depending on the task at hand, Systemservice experts can also call on colleagues from

other service sectors, for example when implementing long-term improvements in pressroom

productivity, color management or sustainable production.

The Remote Service platform enables Heidelberg Systemservice to resolve issues online,

which it does in around 70 percent of all service incidents related to press electronics and up

to 90 percent in the case of Prinect software making service visits to customers far more

efficient. With Prinect Performance Benchmarking, Heidelberg offers print shops an Internet-

based solution they can use to compare the productivity of their presses anonymously with

those of their competitors. Participating customers have personal access to the

benchmarking server, which enables them to call up productivity reports for their presses and

additional anonymous comparative data. A performance benchmark reveals how a print shop

is performing in comparison with competitors, and where there is still room for improvement.

And to ensure this potential is used to the full, Heidelberg Business Consulting offers

professional support for optimization strategies. Heidelberg is also developing a process that

compares this data with internal data to calculate the likelihood of error messages and thus

enable the proactive resolution of associated causes in the future.

Similarly, the Remote Service connection is used by Heidelberg to deploy Netprofiler

software. This software checks via the Internet whether a color measurement system is

producing measurements within the standard or whether deviations are occurring. This

enables Heidelberg to notify its customers immediately of any changes that could ultimately

impact quality and then resolve the issue before the problem escalates into costly post-


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production or even customer complaints. Netprofiler is part of the Prinect workflow from

Heidelberg.

As part of a pilot installation with a packaging printer, Heidelberg is also testing an additional

series of options for continuously monitoring the performance of printing presses. Such

monitoring data and continuous analysis can be used to detect production bottlenecks early

on, optimize resources and processes, and thus achieve long-term improvement in overall

production through consulting and other services.

Better performance through consumables

Printing is process engineering. In the complex interplay between press, paper, ink, coating,

dampening solution, blanket, and other printing chemicals, it is the optimum composition of

the consumables that determines the productivity of the printing process and the extent to

which print quality can be reproduced. That is precisely why almost all print shops are

engaged in an ongoing process of testing and mixing new consumables from a range of

manufacturers. Their aim is to find the ideal combination of ink, coating, paper, and otherconsumables for their press. This testing is enormously expensive in terms of material and

personnel costs and significantly reduces the productivity of the presses used. And that's not

to mention the outlay involved in managing numerous suppliers and keeping a firm grip on in-

house logistics.

Heidelberg has an altogether simpler and more reliable solution. The Saphira range of

consumables comprises products that have already been perfectly coordinated and offer

quality and performance that has been tested by Heidelberg for the various requirements in

commercial and packaging printing. In the case of specific Heidelberg technologies such as

Anicolor, coating upstream of sheet reversal, and primer/UV combinations, the range

naturally includes materials that have been optimized in cooperation with the relevant

manufacturer to maximize performance. In practice, this approach supports printing at higher

press speeds and reduces makeready times, material consumption, and paper waste, while

often producing better printing quality at the same time. It also offers printers the opportunity

to secure more reliable and stable production processes and significantly reduce the outlay

involved in selecting materials.


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Heidelberg is continuing to expand its product portfolio for sheetfed offset print shops by

entering into cooperation agreements with consumables manufacturers. In calendar year2009, the associated market segment had a volume of some EUR 8 billion. More than 80

percent of this was accounted for by printing plates, inks, and coatings. Heidelberg currently

has a market share of some 4 percent, which is set to grow to approximately 7 percent by

2015. In the medium term, Heidelberg aims to generate more than 15 percent of total sales

through consumables.

The market itself is dominated by numerous small and medium-sized dealers that mostly

operate on a local or regional basis. Since customer specifications for products such as ink

vary greatly from region to region, Heidelberg offers a number of products from regional

manufacturers that are specially tailored to the requirements of the relevant markets.

In terms of its consumables operations, Heidelberg operates solely as a dealer, with the

exception of coatings. In 2008, Heidelberg took over Hi-Tech Coatings and with it two

production sites in the Netherlands and the United Kingdom. These sites produce some

20,000 metric tons per year of standard and special water-, oil- and UV-based coatings for all

applications in commercial and packaging printing. All in all, Heidelberg markets some 5,000

different consumables worldwide. All the consumables marketed in Europe meet the

requirements of Europe's REACH chemicals regulations.

Better quality, higher productivity

Heidelberg has amassed considerable experience in using Saphira consumables on its

presses. It has also built up broad-based specialist know-how through its own research and

development work, in-house Print Media Centers, and practical tests conducted in

cooperation with customers. The company analyzes all its findings and then puts them at the

disposal of its customers through Saphira products and the services delivered by its

application specialists.

Direct access to the Saphira application technicians and press specialists of Heidelberg

enabled us to resolve an application issue that was affecting coating operations on our dual

coatingpress, reports Artur Benz, head of technical operations at print shop Meinders &

Elstermann GmbH & Co. KG in Belm near Osnabrck, Germany. Up until mid-2010, we had

been repeatedly testing and experimenting with combinations of inks, UV and dispersion


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coatings in dual coating applications. We tried products from a range of manufacturers in an

attempt to discover a way of achieving the desired gloss effect on a reproducible andsustainable basis, explains Benz. A simple solution to the problem was foundthanks to the

wax-free inks and coatings from the Saphira range and the application know-how of

Heidelberg. We can now apply both coating types in a single operation with the

corresponding art paper and achieve a far better quality gloss effect in the coa ting.

Another difference between Heidelberg and conventional consumables dealers is the scope

of Saphira consumables. Heidelberg does not cover just one individual area but offers

optimum combinations of consumables that span the entire process chain. If there is a

reciprocal effect between certain products such as ink, dampening solution, and blanket

Heidelberg tests the products together. This is the only way to ensure that the products truly

work together smoothly and deliver optimum results.

Besides improving print quality, the one-stop shop principle plays a big part in simplifying

internal processes at a print shop. This does not just apply to the printing process itself, but

also to procurement processes and the commercial activities they involve. By focusing on a

single supplier for all consumables, print shops can reduce stock levels by an average of

around 30 percent and thus significantly lower their capital tie-in. Furthermore, they can also

cut the volume of invoices being processed by the bookkeeping department by up to 70

percent.

For about a year, we have been sourcing all our CtP plates, inks, coatings, and chemicals

from the Saphira range marketed by Heidelberg, says Marc Spitzlei, Managing Director of

Grres-Druckerei und Verlag GmbH in Koblenz, Germany. As a result, we have just one

contact for equipment and consumables a valuable advantage when it comes to resolving

application issues quickly and efficiently. What's more, the all-inclusive Saphira range

enables us to centralizepurchasing operations and buy consumables online, explains

Spitzlei. According to estimations from Heidelberg, concentrating on a single supplier for all

consumables enables print shops to reduce stock levels by an average of around 30 percent

and thus significantly lower their capital tie-in. Furthermore, they can also cut the volume of

invoices being processed by the bookkeeping department by up to 70 percent.

Results in print production quickly showed that Saphira inks enable a more brilliant color

effect with lower ink consumption. In addition, carefully coordinated inks and chemicals have


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enabled us to achieve greater production stability and better all-round print results. Another

advantage is that we have been able to cut our alcohol consumption for printing operationsby some 50 percent which is a major boost for our sustainability strategy. Since the start of

2011, we have also been using chemical-free CtP plates from the Saphira range. Grres

works with Saphira consumables on three presses an SM 102 eight-color press, a CD 102-

5+L and an SM 74 five-color press.

Full packages for ideal performance

To enable print shops to start using a newly acquired press straight away, with minimum fuss

and optimum print results, Heidelberg offers 'Saphira Starter Kits'. These are complete

packages comprising consumables that have been individually combined for the specific

requirements encountered in commercial and/or packaging printing. The individual

components of these packages such as printing plates, rollers, ink, blanket, and

dampening solution have been designed and approved to complement each other and the

applications. The kits enable Heidelberg customers to achieve optimum, reproducible

production results, lower their makeready times and paper waste, and increase production

speeds. For specific Heidelberg technologies such as Anicolor and dual-coating presses with

perfecting devices, Heidelberg offers 'Saphira Performance Kits' that enable users to

leverage the full productivity of the presses.

Heidelberg delivers its consumables via its own distribution network or selected partners

such as paper wholesalers. Deliveries are dispatched up to twice a day. This just-in-time

delivery service virtually eliminates the need for print shops to keep stock on site. As a result,

logistics also play a big part in delivering a cost-effective solution for consumables.

Sustainable printing

Environmental concerns are also playing an ever greater role in the field of consumables.

The demand from both print buyers and printing businesses for materials that enable

environmentally friendly production is growing all the time. Key issues include using

sustainable raw materials, substituting environmentally harmful substances with more

ecofriendly alternatives, reducing material and energy consumption, and offsetting the

remaining CO2 emissions. In estimating the environmental compatibility of consumables,

Heidelberg has voluntarily set itself a number of demanding criteria based on the


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requirements of the major environmental certificates currently in use. A corresponding

product range is expected to be available from the 2nd

quarter of 2011.


The Prinect print shop workflow and the Suprasetter CtP family

A central integration system that covers every area of a print shop and uses central data to

maximize transparency that is the concept behind the company-wide Prinect print shop

workflow. Besides being available for commercial print shops, the integration system also

offers solutions for packaging printers. Management Information Systems (MIS) from other

manufacturers can also be connected to Prinect, as can digital printing systems and hybrid

workflows for splitting the production of print jobs between offset and digital printing systems.

Basic functions are already available for Web-to-Print applications. Software solutions can

also be connected to the web front-end as part of a partner program with suppliers

Neo7even, BrandMaker, RedTie, MS Visucom, and Bitstream. Heidelberg offers an entry-

level workflow for small and medium-sized businesses, too, in the form of Prinect S.

Besides the major markets in Europe particularly Germany, Switzerland, and the UK print

media companies in emerging markets such as India and Brazil are also investing more in

establishing and extending operational integration based on Prinect. By 2014, Heidelberg

aims to have implemented end-to-end Prinect integration at 1,000 print shops worldwide

the figure currently stands at around 200.

When a print shop buys new CtP systems from the Suprasetter family, they normally also

buy a package comprising Prinect Prepress Manager, Prinect Pressroom Manager or

modules of these. Heidelberg Systemservice handles the software roll-out at the customer's

premises. When a print shop buys a Suprasetter, they normally also take out a service

contract for the platesetter. In many cases, customers choose to invest in printing plates from

the Saphira consumables range, too. The possibility of connecting the Prinect prepress

workflow seamlessly to a full Heidelberg workflow has become a convincing argument for

purchasing the prepress technology.


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Additional service packages range from technical implementation to support for process

management. A total of around 500 support staff are available worldwide for Prinect and CtPservices. The Prinect and CtP service portfolio of Heidelberg also incorporates hardware

maintenance and the calibration and installation of upgrades, which can be performed

remotely or on site.

Services boost color fidelity and production quality

Services related to color management with Prinect provide on-site support. They cover

everything from the calibration of platesetters and the printing of test forms to the correct use

of color measuring systems and color profiles and precise implementation of the functional

principles of Print Color Management. During regular audits, color management experts help

operating personnel in print shops to take measurements and make settings themselves.

Heidelberg Systemservice also actively supports customers in introducing ProzessStandard

Offsetdruck (PSO, the German Offset Printing Process Standard).

The future production data online

In the near future, print shops working in partnership with Heidelberg will be able to leverage

the data obtained through end-to-end integration to optimize their processes. Following

careful analysis by Heidelberg experts, data stored in the central JDF file and comparative

data from the manufacturer could help answer important questions such as: Is the process

workflow efficient? Have productivity targets been achieved? Is a particular press generating

too much paper waste? Analyses such as these uncover immense potential for company-

wide improvements and are only possible thanks to the data material that Prinect now offers.

It then just takes another small, logical step to make the results of these analyses available

on mobile terminals.

The future will also bring greater convergence between the commercial and production

information systems in print shops, which are currently still run separately. This will enable

print shops, for example, to identify whether the level of production downtime for a press is

related to a specific type of paper. Repeat orders for ink and paper could then also be

processed automatically and based on the consumption of the press. Consequently, the role

of IT in print media companies still offers a great deal of potential for further boosting a

company's success.


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Exploring new business models with Web-to-Print

The Internet also enables print shops to explore new business models. Standardized print

originals can be created online, print jobs assigned in a few clicks, and job statuses tracked

transparently throughout. Web-to-Print is a megatrend in the industry and brings productivity

improvements that are on a par with previous milestones such as the introduction of CtP

technology. In terms of print production and upstream work, time savings and optimized

processes can reduce total costs by up to 40 percent. In terms of prepress operations,

potential cost savings can amount to between 60 and 80 percent. As a result, many print

shops are currently integrating Web-to-Print applications in their business model.

When asked in retrospect about the challenges involved in Web-to-Print, users often cite the

process modifications necessary and the introductory phase as problematic. To help prevent

problems when introducing a Web-to-Print portfolio, Heidelberg offers comprehensive

consulting services before Web-to-Print is introduced. The company can also support print

shops in selecting suitable front-end software, deliver technical support for connecting up to

the Prinect workflow, and make the first steps in Web-to-Print production a great deal easier

through training and workshops.

The approaches to integrating a Web-to-Print model vary greatly. However, two main

business models have become established.

The first is the 'open shop solution' (also known as 'the Internet print shop'), which

offers print media companies a potential branch of new business with new customers

and at least some new products. This solution requires a high-performance web front

end that can be integrated with the existing print shop workflow and necessitates

exceptionally lean and efficient processes. Print jobs and all the materials used in the

production process must also be standardized if Web-to-Print is to be successful.

Case studies show that when it is rolled out on a large scale, Web-to-Print can easily

cope with well in excess of 1,000 print jobs per day within just a few years. Moreover,

this capacity continues to grow with no end in sight. Companies such as these will

normally run several production sites and consume, for example, 150 metric tons of

paper every day. Consequently, they also need to ensure that deliveries of printed


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products are steadily dispatched on a daily basis. This provides striking evidence of

the pressure under which pressroom equipment is expected to operate. Essentialrequirements include maximum-size mixed forms, maximum sheet utilization, rapid

job changes, minimum startup waste, continuous inline quality control, and high

production speeds. All of these are met by Heidelberg presses in the XL 145 and XL

162 model series.

The second business model, which a growing number of print shops are

implementing, is the 'closed shop'. This model involves creating a link between the

Internet and the print shop, through which much-improved and brand new services

can be offered to existing customers, thereby boosting customer loyalty. Demand for

this type of Web-to-Print model is particularly high among the younger generation of

print buyers.

In both these cases, the introduction of Web-toPrint is primarily a process-based undertaking

and therefore requires significant consulting support. Only by an increase in the number of

jobs to several hundred or even thousand a day places entirely new requirements on process

organization.

Finding the right business model

To help print shops find the right model for them, Heidelberg offers situation and needs

analyses as a first step in implementing Web-to-Print. What is the print shop's core

business? What products are currently being printed that in the future could be covered by

Web-to-Print? Which new products should be added? What does the future business model

look like and what resources are available? In finding the answers, Prinect service experts

work closely with colleagues from Business Consulting and Systemservice to offer process

consulting and support for the implementation phase. This support also includes IT

integration and connecting up to the MIS, the Prinect workflow, any other workflow systems,

and production.

To help track down the right front-end solution for each print shop, Heidelberg is currently

working with six suppliers of Web-to-Print software solutions Bitstream, BrandMaker, EFI,

M/S-Visucom, Neo 7even, and RedTie. These collaborations serve to ensure that partner

products can be connected to Prinect efficiently and reliably. The partner program covers a


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broad spectrum ranging from open web shops that handle standardized print products for

end customers, via sophisticated web publishing systems for the professional B2B sector, toWeb-to-Print applications that form a marketing department workflow. The scope of the

systems varies according to the areas of application from simple web-shop solutions to

systems with a very wide range of functions.

Even before Web-to-Print is rolled out in a print shop, Heidelberg offers staff training via the

Print Media Academy that will ensure the introduction of the new model runs smoothly and

that the new system is being used efficiently from the very outset. Heidelberg can also hold

training units directly at the customer's premises.

Print Media Academy Education and Consulting

Over the past few years, the pace of change and the competitive pressures in the print media

industry have rocketed, and both will continue to grow in the future. To meet these

challenges, print shops need much more than just the best equipment. Carefully conceived

strategic approaches to market positioning, improved management qualities, and efficientprocesses throughout the value-added chain are all just as important. Heidelberg offers a

comprehensive consulting and training portfolio that is designed to help print media

companies put all these factors in place. This portfolio is run by the Print Media Academy

Education and Consulting (PMA Education & Consulting).

The various offerings are aimed at all print media companies, and demonstrate the objectivity

and neutrality that are key features of consulting and training.

Change drives demand in the consultancy sector

The print media industry is changing at an ever-faster pace, particularly as regards

technological issues. Moreover, in times of crisis as in the past two years competition

becomes dramatically tougher. As a result, print shops need external consulting services

more than ever.


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The Heidelberg consulting portfolio offers print shops worldwide a range of services that are

on a par with those offered by classic consultancy firms.

A key focal point of this portfolio is to optimize print shop workflows and processes.

Heidelberg consulting projects have shown that business process optimization can unlock

some 20 to 30 percent extra capacity or reduce production costs by the same amount on a

sustainable basis. Projects such as these also boost a print shop's competitiveness to the

same impressive extent. Significant potential can also be harnessed when building or moving

to new premises. Heidelberg can provide consulting and other services to ensure optimum

print shop planning and an ideal material flow.

The portfolio of the PMA Education & Consulting includes services such as vulnerability

analysis and consultancy, training and coaching, process optimization and integration, Print

Color Management, and assistance with environmentally friendly printing. In concrete terms,

this may involve anything from plans for implementing lean enterprise concepts and process

and IT consultancy to value stream mapping and production simulations at a print shop. The

PMA also facilitate workflow integration and IT infrastructure projects for Web-to-Print

solutions. The training courses offered by the Print Media Academy help print shops optimize

their marketing concepts or quality management, for example. The courses have a strategic

orientation that creates extra added value for print shops, thereby making them more

successful.

One example is measuring a print shop's overall equipment effectiveness (OEE). This

creates transparency regarding its productivity a key starting point when seeking to change

processes, for example. OEE is a recognized measure of productivity in many sectors,

including the automotive industry. It can be used to calculate in concrete terms what potential

remains untapped and the benefits that changes to processes can bring the company. This

provides objective statistics that can also be used to accurately calculate the return on

investments in external services and consulting.

Additional Heidelberg offerings that support decision-making in print shops include company-

wide analyses of

- the general strengths and weaknesses in a company (SWOT),

-

capacity, for instance when planning to expand production,


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- workflows, when seeking to reorganize processes and

- processes at the printing press, when seeking to improve the productivity of

equipment and operating personnel.

Two-day introductory workshops give print shops the opportunity to develop an overview of

the areas where they might be able to take action and enable them to draw up an agenda

for change in cooperation with Heidelberg.

Consulting made by Heidelberg

A second focal point of the Heidelberg PMA Education & Consulting covers classic

management topics. In contrast to process optimization, these offerings are not just designed

to reduce costs, but also to increase revenues. For instance, consultants support print shops

in analyzing their strengths and weaknesses, identifying potential for improvement, and then

deriving the optimum market positioning strategy. They also help to realign marketing and

sales strategies, train staff in a wide variety of positions on a broad range of topics, improve

controlling and financing know-how, and pass on strategies that ensure investment decisionsare made on a sounder basis.

All consultants have an in-depth understanding of the print media industry. They can also tap

into the wide-ranging know-how of the Group as a whole and call on specialists in specific

areas such as personnel development whenever they need to. As a result, the PMA

Education & Consulting can also cover topics such as organizational development, executive

coaching, corporate succession planning, and change management.

Engineering consulting consulting inside and outside the industry

Heidelberg can provide corporate users of NX and SAP with consultancy services, products,

IT support, and training for development and production environments. Users in mechanical

and plant engineering companies who wish to optimize their processes, systems, and

methods on a sustainable basis can turn to Heidelberg Engineering Consulting for

consultancy services that cover every aspect of the product creation process. The team of

experts at Heidelberg pools in-house CAx/PLM skills, can tap into the wide-ranging know-

how of the Group as a whole, and call on specialists in development, production, or IT


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whenever necessary. In addition to products and services, the portfolio also includes the

supply and professional operation of complete hardware packages ranging from CADworkstations and network components to end-to-end IT infrastructures.

Growth in demand during the crisis

Demand for consulting services, including implementation support, continued to grow despite

or perhaps as a result of the recent crisis and the extremely difficult economic

environment it brought. Many print shops tend to invest in consultancy services on an

anticyclical basis when planning their company's future operational alignment. To meet the

growing demand for consultancy services, Heidelberg recently significantly expanded its

consulting capacities.

Print Media Academies knowledge platforms for the print industry

When it comes to education and training, the PMA Education & Consulting of Heidelberg has

a worldwide presence through its Print Media Academies (PMAs). It is also one of the

leading suppliers in this field. No other company in the sector has a portfolio as wide-ranging

and global as that of Heidelberg. Besides product training courses, the Print Media

Academies also offer numerous management seminars on successful print shop

management. The first PMA had been established in 1997 in Atlanta, U.S., the second

followed a little later in Tokyo, Japan, and, in 2000, a PMA was founded at the Group's

headquarters in Heidelberg, Germany. The establishment of what is today by far the largest

institution of its type was also the prelude to the formation of a global PMA network that

currently extends over 18 locations on all five continents. Today, Print Media Academies

represent Heidelberg in virtually every key market besides Heidelberg, Tokyo, and Atlanta,

there are also PMAs in cities such as Shenzen (China), Sao Paolo (Brazil), Kuala Lumpur

(Malaysia), Cairo (Egypt), and Melbourne (Australia). Some 17,000 participants worldwide

utilize the services of the Print Media Academies, which in 2010 offered a total of around 250

training topics.

As in the case of consulting, Heidelberg has been active in the training sector for several

decades, too. In addition to business training, the curriculum also focuses on product

training, with approximately half of all courses devoted to getting the most out of prepress

components, presses, and postpress equipment. The training portfolio also differs from


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region to region, whereby the installed base in each region and therefore customer needs

are crucial in determining what courses are offered.

By contrast, the topics related to print shop management and leadership are the same all

over the world business models, pricing structures, cost-cutting measures, and efficiency-

enhancing strategies are the most prominent issues. However, seminars are also available

on corporate succession.

Cooperation with universities and other institutions

Many training courses are developed in Germany and exported. Several PMAs work with

local organizations from the printing trade. The Academy in Sao Paulo, for example, works

with SENAI, a national training service for industry in Brazil. The PMA in Heidelberg

collaborates with the prestigious Stuttgart Media University, the University of Wuppertal's

Faculty of Media Technology, and other institutions on a project-by-project basis. In addition

to addressing the requirements of print shops, it also implements activities sponsored by the

German Federal Employment Agency that relate to the press and postpress sectors.

For a number of years, the PMAs have organized a Winter University respectively a

Summer University that lasts several days. International experts and managers from the

print media industry use these intensive courses to expand their specialist know-how, share

their experience, and discuss success strategies. Another special University is devoted to

print buyers. The Print Buyer University comprises a special program developed specifically

for advertising agencies, publishing houses, and manufacturers of branded goods. Over a

number of days, marketing experts, buyers, and print production engineers engage in a

program that focuses on the professional and efficient management of print projects.

As in the case of consulting, the portfolio of the PMAs enjoyed far stronger growth in demand

during the global economic and financial crisis. Seminars on strategy and marketing were

particularly well subscribed. Furthermore, the biggest demand did not stem from established

industrialized nations, but rather from up-and-coming emerging markets.

The entire portfolio of the PMA Education & Consulting is also aimed at companies,

organizations, and individuals that are not Heidelberg customers. And although objectivity

and neutrality are high on the agenda, the seminars still help to create a sound footing for

expanding the Heidelberg customer base.


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Additional focal points to be added in the growth regions

The process of change in the industry will continue to gather pace over the next few years,

and this will also see the demand for training increase. As a result, Heidelberg will continue

to expand its global PMA network concept. Its main focus will be on the growth regions in the

Middle East, South-East Asia, and Africa. However, the range of offerings will also include

sectors outside the print media industry, such as IT and mechanical engineering. Further

information is available athttp://www.print-media-academy.com.

The industry's largest supplier of remarketed Heidelberg brand equipment

Higher capacity requirements, expansion into new areas of business, or a change of

technology or format may mean it is time for new equipment. But what happens to the old

machinery? It has to fetch a good price to help fund its replacement. Heidelberg provides

customized services worldwide, advises and assists sellers, and puts them in touch with

buyers of remarketed equipment. Heidelberg Systemservice also looks after the specialist

cleaning, servicing, and overhauling of remarketed equipment, as well as the dismantling and

re-assembly.

At present, the remarketed equipment market is virtually deserted an after-effect of the

economic crisis, during which fewer new machines were sold and existing equipment stayed

in production longer than usual. The biggest buyer markets for remarketed printing presses

are the emerging markets, and global demand is stable in the long-term.

Unlike other press manufacturers, Heidelberg will assume responsibility for all aspects or

remarketing if requested to do so by the customer in keeping with its philosophy of

monitoring presses throughout their life cycle. Used equipment is overhauled and

reconditioned in centers at the main factory in Wiesloch-Walldorf near Heidelberg, in Vienna,

in Kuala Lumpur, and in Yeysk, which is situated in the Krasnodar region of Russia. To

ensure used equipment is marketed as efficiently as possible, the same central contacts at

Heidelberg handle remarketed equipment sales as do the marketing of new machines.

Customer service representatives are supported by Heidelberg Systemservice, which
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depending on the requirements of the remarketed equipment buyer takes care of cleaning,

servicing, and general refurbishment work, together with professional dismantling and re-assembly.

The task of coordinating the sale of remarketed equipment goes hand in hand with providing

advice and support for buyers. The local customer service representative knows the

customers requirements best and is therefore ideally placed to locate the right piece of

remarketed equipment within the global Heidelberg network. This benefit is one that would

be beyond the capability of most independent used machine dealers.

Heidelberg enters all planned equipment sales in a database. And since customers all over

the world use the global Heidelberg network, this increases the chances of sellers quickly

finding several interested parties, as the sale is no longer restricted to regional markets.

Often, Heidelberg equipment is earmarked for sale to a particular customer before the end of

its period of use.

Moreover, sending experts to the plant to remove the equipment eliminates the risk of

equipment having to be marked down in price as a result of improper dismantling. Heidelberg

uses its own service staff to deal with remarketed equipment on a daily basis to removemachinery that is being sold on. Expert dismantling is then carried out with the support of a

network of tried-and-tested service providers.

For smaller companies in particular, good remarketed equipment from Heidelberg represents

a real alternative to a new model from a different manufacturer. Remarketed equipment

obtained through Heidelberg in Germany can include a Heidelberg Partner Program

agreement if required. Depending on the contract, Heidelberg may cover necessary repairs

and associated expenses under warranty agreements. This enables customers opting for

remarketed equipment to rest easy and avoid any risk. They can rely on the same service

network and the same services as they would if they were buying a new Heidelberg press.

The consulting services Heidelberg provides for remarketed equipment come into play at the

very moment a company considers buying a new press, particularly when questions are

asked about how specifications and configurations affect resale value. After all, the

attractiveness of a particular configuration and the remarketed equipment price that can be

anticipated are key criteria when planning an investment. Whats more, equipment covered


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by Systemservice 36plus or the Partner Program agreements that have undergone regular

servicing sell much quicker and for better prices.

Heidelberg Services in Germany

In many respects, Germany is the proving ground for Heidelberg service offerings. For more

than ten years, Heidelberger Druckmaschinen Vertrieb Deutschland GmbH (HDD) has been

offering its customers services that help them to lower costs and improve processes. Some

450 service technicians work for HDD in Germany.

The productivity of machines, services aimed at improving production and business

processes, and services to support the development and implementation of sustainability

strategies are all given equal weighting. This approach not only improves productivity, but

also unlocks new opportunities to boost profitability, and helps print shops counter price

pressures in the market. The service specialists at HDD utilize the consulting resources of

Heidelberg Consulting for service projects, and offer their customers training courses at the

Print Media Academy.

The services provided by HDD can be commissioned either as one-off orders or in the form

of fixed-price service contracts. The latter of these two options is becoming increasingly

popular with customers who want to keep service costs transparent from the outset when

looking at overall costs. When a press is purchased from Heidelberg in Germany it comes

with the Systemservice 36plus service package as standard. This package includes all

repairs, service parts, preventive inspections, and Remote Service for a period of three

years. All other service contracts offered by HDD are marketed underthe name Heidelberg

Partnerbrief (the German equivalent of the Heidelberg Partner Program).

The services of HDD are divided into technical services and performance services.

Technical services

The technical services of HDD Systemservice benefit customers primarily by safeguarding

machine availability through regular and preventive maintenance. Technical services are still

the key focal point of activities at HDD Systemservice.


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The technical services of HDD comprise a total of several hundred individual offerings and

service contracts and cover areas such as repairs, troubleshooting, maintenance work,Remote Services diagnostics, extended engineer availability, and software maintenance for

the Prinect print shop workflow. Delivering and installing service parts and supplying Saphira

consumables also come under this category.


The service organization of HDD offers customized services under the name 'Performance

Plus'. These comprehensive services range from optimizing makeready times and reducing

paper waste in the pressroom to training machine operators and providing consulting for

everything from potential hardware upgrades to whole new business models. HDD is

continuously extending its performance services portfolio based on its know-how and the

resources at its disposal.

The performance services of HDD cover a number of areas including:

- The Prinect print shop workflow

- The pressroom

- Postpress operations (folding machines and saddlestitchers)

- The retrofitting of equipment such as the Prinect Inpress Control inline measuring

system to presses

- IT and networks

- Print Color Management

- ISO certifications

Availability of production resources becomes more important

The availability of production resources is becoming increasingly important to industrial-scale

commercial print shops and packaging printers in particular. Through its technical services,

the extended availability of service engineers, and short response times, HDD Service puts

availability first. However, service contracts are also becoming more important in this regard,


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as they allow HDD to proactively measure the real availability of equipment. They also

enable engineers to use equipment and production data analyses to predict or rapidly identifychanges in the status of machinery, and to issue appropriate recommendations for

preventive maintenance.

Environmental protection

As a result of legal requirements and growing customer demands for sustainably produced

print products, environmentally friendly production is becoming increasingly important.

Avoiding and reducing paper waste, energy, VOC emissions, powder, noise, and process-

related waste are just some of the main focal points. To help print shops efficiently implement

sustainable print production, HDD Systemservice offers a number of special service

packages that have two main aims to enable reduced-alcohol printing and reduce energy

consumption in print shops. Furthermore, consulting projects run by the German consulting

group play a key role in helping to reduce waste and energy consumption by optimizing the

material flow within print shops, for example.

Harnessing untapped potential in staff and equipment performance

One of the most pressing issues in many German print shops is the training of pressroom

staff. When it comes to application technology and machine operation know-how, many

companies have been left behind by the rapid pace of change. As a result, consistently high

quality, low paper waste, short makeready times, and sustainable printing are much more

difficult to achieve. Several print shops also have the same room for improvement in their

prepress operations, as many are still not fully utilizing the automation options of cutting-

edge platesetter technologies and the associated prepress workflows. HDD can help its

customers achieve sustainable production success by combining technical services on the

press, training measures at the Print Media Academy, and on-site training for operating

personnel.


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Heidelberg Services in the U.S.

One of the biggest challenges for delivering services in the U.S. is the vast distances

involved. Services, spare parts, and consumables have to be transported across five time

zones with the same response times and delivery conditions as in smaller countries. Service

operations in the U.S. cover seven regions, each with its own team that provides services

spanning the entire value-added chain of a print media company. Most of the offerings are

very similar to the services that Heidelberg provides in Germany.

However, there has been a far broader take-up of Remote Services in the U.S., with some 95

percent of Heidelberg presses in the country connected to Heidelberg Service via Remote

Service concepts. For large-format presses, the figure rises to 100 percent. In view of the

large distances involved, the remote connection concept is crucial for efficient servicing. For

example, some 60 percent of all service callouts relating to press electronics can be resolved

directly online.

Since 2005, presses sold in the U.S. have been supplied with the Systemservice 36plus

service package. Approximately 98 percent of presses are currently being sold with this

package. At the end of the three-year service contracts, service agreements are taken out for

around 50 percent of the installed base.

Proactive services take center stage

In addition to regular and incident-based service callouts, proactive and preventive services

are also gaining in importance in the U.S. One of the more recent focal points of

Performance Services in the U.S. is the consulting portfolio. These offerings center on the

measurement and optimization of Overall Equipment Effectiveness (OEE), which is a key

criterion when producing productivity reports. Based on these reports, Heidelberg then works

with the customer to develop improvement strategies that will help the print shop boost its

productivity and optimize its costs. Such strategies could include training for operating

personnel, improvements in the area of color management, or measures designed to cut

makeready times and paper waste so as to fully utilize the potential productivity of

equipment.


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Financial Services

Any company that wants to do well in the printing sector needs to keep on investing in new

solutions. In view of this and the predominance of small and medium-sized customers in the

industry, it is essential that Heidelberg, as a leading company in the industry, provides

consulting services for investment financing.

Professional network for more than 20 years

The international team at Heidelberg Financial Services is an important and acknowledged

source of expertise and solutions that bring together the print media industry, financial

service providers, and state-run export credit insurers.

For over 20 years, the financial services pooled in the Financial Services division have been

providing print media companies worldwide with sound advice based on wide-ranging

specialist know-how. Heidelberg is thus able to offer customers skilled and reliable support

on all issues related to financing a service that it provides for almost every second machine

that it sells.

The Heidelberg strategy is primarily to act as an agent between customers and selected

financing partners and oversee the sometimes difficult relationship between these two very

different parties. A skilled team of experts works intensively to clearly set out to selected


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banks and leasing firms the special features of the print media industry and to help

customers find financing packages that suit them. Particularly in markets where there is nofunctioning infrastructure for financing investment goods, Heidelberg Financial Services also

finances investment in Heidelberg products directly, through the group's own financing

companies.

Tried-and-tested financing solutions for small and medium-sized enterprises in

industrialized nations and emerging markets

In many instances, it is the financial services Heidelberg has carefully developed over the

years that make it possible for its predominantly small and medium-sized customers to invest

in its cutting-edge technology in the first place. And that applies equally to both industrialized

nations with their mature financial markets and emerging markets such as China and Brazil.

This service, which is virtually unrivaled among competitors and other mechanical

engineering firms, was acknowledged in 2010, when Heidelberg Financial Services was

declared Captive Finance Provider of the Year. On announcing the winners of the

competition, which is run by the leading European journal for the leasing and investment

goods financing sector, the panel of judges highlighted the intensive industry understandingand consistent, long-term strategy that benefits Heidelberg customers.


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Heidelberger Druckmaschinen AG

Kurfursten-Anlage 5260

D-69115 Heidelberg

Germany

Phone +49 (0) 62 21 92 00

Fax +49 (0) 62 21 92 -69 99

www.heidelberg.com

Media contacts

Corporate Public RelationsKurfuersten-Anlage 5260D-69115 HeidelbergGermanywww.heidelberg.com

Business media:Thomas FichtlPhone +49 (0) 62 21 92 -59 00Fax +49 (0) 62 21 92 -50 69

[email protected]

Business/trade media:Matthias HartungPhone +49 (0) 62 21 92 -50 77Fax +49 (0) 62 21 92 -50 [email protected]
http://www.heidelberg.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.heidelberg.com/

Heidelberg Services White Paper

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