Original article published on June 27, 2014 by Cary Sherburne for whattheythink.com
Our recent visit to Canon's Customer Experience Center in Poing, Germany, provided a look at the state of Canon Solutions America's business 18 months after it was launched, a great opportunity to visit with customers, and a look at the InfiniStream folding carton press in action. During the event, Canon announced a new product, the Océ ImageStream 3500, its first full-color press from its inkjet product range that can print on offset coated paper stocks without the use of primers or bonding agents. We were also treated to a visit to BMW World, quite an experience even if you aren't a car buff.
In addition, we were able to capture some great video interviews with Canon executives and customers, so watch for those.
The theme of the event was Drive Change, building on the tagline the group embraced at its launch: Ready for the future, here today.
Toyo Kuwamura, President and CEO of Canon Solutions America, in a separate conversation said, "What separates Canon Solutions America from its competitors lies in our corporate DNA: an emphasis on technology, customer support, solutions, and sustainability. This, along with an innovative apporach to the marketplace, helps keep Canon Solutions America at the forefront of the industry."
"Furthermore, what is most important to Canon Solutions America is maintaining superior support of our customers which in turn allows them to drive change in their businesses. To do this, we partner with customers and third party vendors alike. Through this process, we embrace our corporate philosophy of Kyosei, the act of living and harmoniously working together into the future. This has become a distinguishing feature of our company."
Change clearly came out as a theme in Poing, with the first look for attendees at the ImageStream 3500 prior to its official launch, and for many, a first look at the InfiniStream in operation. There were also educational sessions around a broad range of inkjet topics including the business case for inket (presented by Elizabeth Gooding of Insight Forums), The Demystification of Inkjet Media (John Crumbaugh of Canon Solutions America), Security Features for Inkjet Production Printing (Monika Olbricht, Canon), and an informative session on new approaches for revenue growth for customer programs in print, mail and statements (Joe Manos, Mindfire, Inc.). There was also plenty of time for networking and even a little left over to enjoy the sights in Munich.
Of course, we also were provided with an update on the state of Canon’s business by Mal Baboyian, Executive Vice President, LFS/PPS. Highlights included Canon’s position as Number 3 in the number of U.S. patents issued in 2013, behind IBM and Samsung, quite an achievement. Canon has been one of the top five corporate recipients of U.S. patents for more than 20 consecutive years. In 2013, Canon had net sales of US$11 billion in the Americas, generated by its nearly 20,000 employees in that region, representing nearly a third of overall Canon corporate revenues for the year.
Baboyian also pointed out that Canon Solutions America customers printed 69 billion pages in 2013, representing 23% of all U.S. digital pages. To help spur continued growth and as a customer education tool, attendees were provided with Canon Solutions America’s Inkjet Media Catalog, developed at its Media and Solutions Lab in Boca Raton, Florida. It contains 53 different media samples from 10 mills, and a Design for Inkjet Guide.
Kuwamura also stated, “Canon Solutions America works closely with R&D groups at Canon Inc. and Océ to ensure that the future needs of our customers are always a top priority. We can take advantage of several R&D centers located across the globe in the U.S., Europe, and Japan. In fact, Canon reinvested 8.2% of its net sales for 2013 back into research and development.”
During the event, we sat down with Francis McMahon, Canon Solutions America’s Vice President of Marketing, Production Print Solutions, and Eric Hawkinson, Director, Go To Market, to talk about some of the other initiatives referenced by Mr. Kuwamura.
WTT: Francis, I wanted to start with an observation that we seem to be seeing a significant cultural change in several of the Japanese companies in our industry, perhaps a little more open than they might have been historically. You’ve been with the company four years now. I wondered if you could comment on this observation.
FM: In the four years I have been with the company, Canon USA’s CEO, Joe Adachi, has been very open with press, analysts and customers. He makes himself very visible in the office and in the marketplace. He is very broad-minded and a big proponent of us looking way outside the industry. As I have mentioned before, he encourages us, for example, to attend shows like CES and automotive shows to stay current with innovation. During my entire four years, it has been all about openness, from the second you walk into the Melville facility to the way people greet you there. And it is not at all unusual for Toyo to make himself available to various stakeholders. In his first year in the role of President, he went to all of our events across Canon Solutions America, met with all the analysts and press, employees and many customers. They are both true leaders in every meaning of the word.
WTT: I understand that you have launched a number of customer advisory councils. Tell us a little about that.
EH:We have three distinct customer advisory councils. The original council is TPAC, the Transactional Printing Advisory Council, which consists of 13 customers from some of the biggest transactional printers in the world. Over time, they have provided significant feedback that enabled updates for our printer portfolio, including Jetstream and Niagara. We believe this leads to more relevant products, better customer relationships and helps both of us grow our businesses.
The second group, which I am leading, is the Digital Printing Advisory Council, or DPAC. This goes beyond transactional printing and covers things like direct marketing as well. It consists of 12 members and the first meeting was held in mid-March this year. There will be a total of six meetings over two years, and we will use their input as part of our roadmap for product development. Each participant brings something different to the table.
The third one is the Graphic Arts Summit consisting of 12 customers from the graphic arts space.
WTT: Not surprisingly, I understand you have also formed a steering committee whose objective it is to define and launch a Canon Solutions America user group.
FM: That’s right. It consists of seven customers who met for the first time in April of this year. One thing that was clear from the group was the desire to make this broader than just an event. If we do an event, it will be a much different course curriculum than you have seen at other events. We are learning from other events, but will create our own magic along the way. 2014 is a planning year, with a formal launch planned in 2015. We will engage our three advisory councils in the process as well.
WTT: In line with the Drive Change theme of the event we are attending, it appears that all of this represents significant change and openness to change on the part of your organization.
FM: And that’s just scratching the surface. We literally have changed the entire way we educate our people, and we are bringing in new people because of all of this change. Who would have thought that we would have hired a chemist to work in Boca, or added R&D engineers there. We are building an infrastructure in Boca that works with the rest of the global Canon network. It is this type of collective sharing that allows us to innovate and have the patent position we have. It helps ensure that products come to market rapidly, that we have industry-best support practices. These are fundamental changes to our company in Production Print Solutions in the U.S.
WTT: Just a couple comments about the InfiniStream before we close. This was the first time I have seen it running, and it is quite impressive. It really drew a crowd in the Customer Experience Center, with the two different groups that were visiting that day.
FM: Yes, we think it will be a game-changer for digital folding carton work. It is 7-color (CMYK/OVG) and can produce 14,400 B2 sheets per hour. Considering that there is virtually no makeready, it easily compares with offset presses in terms of throughput, especially for shorter runs. We expect commercial availability in the first quarter of 2016. We want to make sure the product is rock solid before we—as one Canon executive stated, sort of tongue in cheek—flood the world with InfiniStreams.
EH: For more of the technical detail, this web-fed press uses the same type of heatset fusing used in web offset, can handle up to 24 point board in a 28” width, has integrated coating and cutting, and features energy efficient LED imaging at 170 to 200 lpi. It is a liquid toner device with toner particle sizes of less than two microns in a synthetic oil carrier, and the drying process is such that the paper surface doesn’t exceed about 200?F. The target breakeven point with offset is 3,000 to 4,000 B1 sheets. We are quite excited to see it enter customer field test to truly validate our assumptions. Smithers Pira indicates that the digital share for folding carton is only 2% at this time, but they project a 15% CAGR, so there is lots of growth opportunity.