“The global trends we were seeing have accelerated”, he says. “The shift from the traditional way of manufacturing in large batches and at centralised locations which has been necessary to achieve economies of scale.
“Moving from centralised mass production to localised personalised production is the inevitable journey. Ten years ago who would ever imagine a world where consolidation is breaking down supply chains and there is a move to higher trade barriers, such was the pace of globalisation. We can shut our eyes until the world changes around us or we can open our eyes and welcome that the world is changing. I think the industry should recognise the immense opportunity we are standing before.”
This is the idea of printing and distributing locally a product that is available globally.
The costs and inefficiencies of distribution from a central location to hundreds of countries, thousands of centres and billions of consumers are becoming too much to bear even before pandemic, war in Ukraine and Gaza, or the rise in the cost of energy. Hence, says Müller-Hansen “the shift from centralised analogue production to localised heavily personalised production. Then on top of that we know that the rise of the creator economy will accelerate the shift to personalised production”.
The creators are typical of the GenZ generation, now accounting for 30% of the global population, spending three to four hours every day on the smart phones and other mobile devices. “According to reports, two out of three GenZ are craving the personalised products which they prefer to have been designed by themselves or for themselves rather than choosing the usual suspect T-shirt or hoodie.”
Addressing this is the future for the printing industry he explains, and printers need to be aware of this and that the foundations of the world that they have built on are being washed away rapidly. This is being helped by rapid developments in digital printing technology capable of delivering personalised print. This he says is in full swing.
It is also inevitable to cope with the drive for net zero by 2050. Legislation is forcing a reset of the way that production is carried out. The only way to meet EU targets for carbon reduction, he says, is through localised production. He explains: “The EU wants to cut carbon emission by 55% by 2030 and the only way to do that is to break down mass production quantities and produce and deliver locally.”
Gelato has farmed print orders to its network of production hubs all using HP Indigo presses. All except one, because now he says a Landa has been added to the network. The change from three to five years ago is about the quality and accuracy of the technologies that are coming to market. This includes 3D printing as well as 2D printing.
Müller-Hansen explains that the same cohort of creators that come up with the Etsy and Shopify stores that drive print volume to the production hubs, are also coming up with architectural designs that can be printed on the latest generation of 3D printers. This taps into a huge army of designers that can connect through Gelato with buyers looking for that personalised print touch. This is the new world of print.
“I would say that the digital print industry is the most vibrant and exciting industry in the world of print right now.
“In effect there are two worlds of print. The traditional print industry that can shut its eyes until the (world) changes, or they can choose to open their eyes and welcome the change and realised that this industry has never been as well positioned to take part in the global macro trends that are driving commerce, creative entrepreneurship all across the world: namely the creator economy.
“Gelato can enable a single creator located outside London to give billions of possible buyers access to their creative ideas, to connect these consumers and creators all around the world with software to production hubs.”
It is a real threat to traditional ways of thinking he explains. The changes are happening fast and are accelerating. Lockdown did not start the process but it did turbo charge it and far from returning to a 2019 status quo, the speed of change is only increasing, even if many do not yet appreciate this.
The risk is that printers that do not realise their environment is changing become like the statues on Rapa Nui (Easter Island), erected by people and a culture that failed to realise they were destroying their own environment. In the case of print, and other industries for that matter, the large scale centralised factory generating massive waste and non personalised products is like the Easter Island head. “We see this happening everywhere. In the garment industry 50% of everything produced ends up in landfill or is incinerated – almost 100 million tonnes of textiles a year. How do we curb that, how do we bring that number down? Print can become part of the solution.”
There is a role for AI software in managing the inevitable production issues that a flow of thousands of jobs to the most suitable production hub in terms of capability (there is no point in directing orders for a book to a printer that cannot finish books for example) and location.
This is perhaps the secret sauce underlying Gelato. It does not own the websites that take the orders, nor the production hubs that fulfil them. It provides the software that makes this a seamless process. Now says Müller-Hansen, comes the time to make this available beyond the immediate Gelato network. “We have invested heavily over the last 12 months to open up the technology that is powering our production printers so that the whole industry can get access to the Gelato workflow,” he says.
As part of this process it commissioned research from McKinsey that looked at 92 print companies spending four days on a deep dive to understand exactly how these businesses operated, what was the workflow, what software was used, where were the bottlenecks and knowledge gaps, how many workflows, how production linked to logistics. In short, it looked at the end to end process for printers, a process that is coming under increasing pressure as production runs fall and job numbers increase. “They looked at how much production software linked to logistics, how it identified which courier to use,” Müller-Hansen says. Most printers coped with a variety of workflows for different products and machines, sometime held together, sometimes not. The need is there Gelato believes for software to take centre stage and to become the cornerstone to a print business, not its litho or digital press.
That has led to the release of Gelato Connect, hence why Gelato is on the show floor at Drupa this year.
“We have a workflow that is machine and product agnostic and that we have spent the last 15 years developing and refining. When we open this to the world and combine it with the production technologies that are coming and the creator economy wanting personalised products, we think that the future for the world of printing has never looked better,” says Müller-Hansen.
Even before then he says that the report from the consultants concluded that implementation of Gelato can improve a bottom line by 3-7% overnight, taking a business with a 5% margin to 8% or up to 12%.
The complexity is increasing. Not so long ago a printer might have two or three litho presses each supplied by the same company and producing one type of product. Today the typical printer might be producing 20 or 30 different product types and will have litho, digital and inkjet from different suppliers. Too many printers, says Müller-Hansen, sit in the former category and are operating in the same way as they did ten or 15 years ago.
Too many printers have also created their own workflow solutions, linking together different applications through Switch or something similar, and built by a consultant integrator or an in-house team. This can become problematic when the time comes to update the workflow and some of the people have left or one of the applications is no longer compatible with other applications in the chain.
Nobody these days would attempt to develop their own version of Microsoft Office, he says, so why does bespoke software persist in print? The long game is to put Gelato Connect in the hands of individual printers to solve the problems of delivering run on one to their existing customers and to meet the requirements of the Gen Z generation and once they are happy working on a self contained local scale to link them to the wider Gelato network, akin to taking the training wheels off when learning to ride a bicycle.
The logic for Müller-Hansen is elegant and impeccable. The world is changing and Gelato is in position for that change.
He says: “We are not claiming to have all the answers. The founders of Netflix were rebuffed when searching for funding for their streaming service. They wrote a book titled This Will Never Work to tell the story of their experiences.” Famously one of those that turned Netflix away was Blockbuster.
“When I started this business 15 years ago, I spoke to 50 printers and 45 of them no longer exist. You can choose to set your eyes to what is happening and wait for the world to change, or you can welcome that change.”
MORE FROM THE MAGAZINE
EXPLORE MORE ON GELATO
