The correct choice is obvious. But, until now, the industry’s traditional approach to equipment ownership has tended to block printers from fully committing to it.
This changes with the introduction of Heidelberg’s Digital Subscription Business Model, a new way for printers to maximize productivity and profit without the burdens of equipment ownership.
Instead of selling, Heidelberg provides everything needed for peak performance – new Speedmaster press machinery, Prinect software, Saphira consumables, parts, consulting, and field support services – for a fee based on a cost-per-sheet charge (“Pay-per-Use”) that will be lower than what the shop is currently achieving. To keep production on target, performance is digitally benchmarked against operating data from Heidelberg’s worldwide network of more than 10,000 connected presses.
“By structuring the plan on a Pay-per-Use basis,” says Dr. Ulrich Hermann, Chief Digital Officer for Heidelberg and member of the management board, “we are selling productivity.” The print shop receives an “intrinsically optimized” system that lets it concentrate on increasing production efficiency without having to take ownership of anything except a determination to print more sheets and make more money.
Heidelberg’s research indicates that overall equipment effectiveness (OEE, a fundamental yardstick of manufacturing efficiency) stands at about 30% for the printing industry as a whole. Shops taking part in the Digital Subscription Business Model, says Hermann, have a path to 70% OEE – the hallmark of the best performing and most profitable users of Heidelberg equipment.
The first step is to arrive at a cost-per-sheet charge that reflects how much productivity the participating shop stands to gain. Heidelberg calculates this by working with the customer to analyze current operations and to project what can be expected once the suite of optimized components is in place. This establishes a goal for producing more sheets at a lower unit cost-per-sheet over the five-year life of the agreement.
Hermann says that the Digital Subscription Business Model arose from Heidelberg’s understanding of how its responsibilities to its customers have changed.
Once, it was enough for a manufacturer to sell a press without knowing exactly how the customer would use it or what impact it would have on the long-term health of the customer’s business. Now, however, the manufacturer must “orchestrate all products in a smart way” to improve customer outcomes on a sustaining basis.
The Digital Subscription Business Model, Hermann says, creates an arrangement in which the participating shop can rely on a “robust production system with a stable cost base” to maximize OEEs, margins, and customer satisfaction. The shop gets all the benefits of Heidelberg’s most advanced technologies without ever having to worry about obsolescence or financing new capital investments.
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