[SPONSOR MESSAGE]
[0:00:00] DC: This podcast conference is brought to you by GelatoConnect. Learn how to get control over your entire print operation and work more efficiently at gelato.com and through the links in the show notes.
[INTRODUCTION]
[0:00:15] DC: It takes the right skills and the right innovation to design and manage meaningful print marketing solutions. Welcome to Podcasts From the Printerverse, where we explore all facets of print and marketing that create stellar communications and sales opportunities for business success. I’m your host, Deborah Corn, the Intergalactic Ambassador to the Printerverse. Thanks for tuning in. Listen long and prosper.
[EPISODE]
[0:00:42] DC: Hey, everybody. Welcome to a special four-episode podcast conference, building a print business that will last, brought to you by Gelato. Over the next four episodes, we will explore key strategies, technologies, and partnerships that are shaping the future of print. We’ll discuss what it takes to build a resilient and profitable print business in today’s rapidly evolving market and how to keep it alive and thriving.
To kick off the conference, I’m honored to welcome Henrik Müller-Hansen, the visionary CEO and founder of Gelato. Henrik’s journey from leading a major telecommunications company to revolutionizing the print industry showcases his innovative spirit and dedication to securing a viable future for printing businesses. Under his leadership, Gelato has grown into the world’s largest global print-on-demand network, and their platform, GelatoConnect, can support print shops worldwide by streamlining operations, centralizing procurement, and enhancing profitability through automation. Henrik’s insights into sustainable localized production have positioned him as a transformative figure in the printing industry. Let’s dive in. Welcome, Henrik.
[0:02:07] HMH: Thank you so much. I’m looking forward to this.
[0:02:10] DC: What moment or experience made you realize that the world needed Gelato?
[0:02:15] HMH: So, just a bit brief background here. After my university studies, I started to work for a person named Jan Stenbeck, whom I’m sure you don’t know about. But he founded Vodafone. He founded Metro International, grew into world’s largest free newspaper, Tele2, which I worked at. So, he was a true disruptor. He was a Swedish person, moved to the US, started at Harvard, and then he became, at a very young age, a partner in Morgan Stanley. And then he moved back to Sweden with all the learnings from Wall Street in the 70s, 80s, and all the disruption in media and telecom.
He had a few things that he always spoke about. So, first thing, travel as the nomad people, light and fast. Point being, you don’t need to own fixed assets to create value. You can actually, if there is enough of fixed assets in an industry and you build a tool or a software that connects those free assets, the idle assets, to other customers, everyone is better off. So, the asset owner gets an incremental revenue with no marginal cost. The person in the other end, the consumer gets a better service, more selection, and we earn money on the software.
So, that’s really how Jan Stenbeck built the telco businesses that he founded. There is so much. In the telecommunications space, the network is filled completely 10 minutes per year, between 11:50 New Year’s Eve until New Year, those 10 minutes. Other than that, they’re echoing with idle capacity. The other thing that he said is always go after large global industries that you don’t have to create anew, right? After seven years in Tele2, which was the company I led in Norway, about a $400-plus-million-dollar business, and after seven years there, I kind of felt that it was too big, too bureaucratic, too slow, so I wanted to start my own company.
I went through everything that Jan told me, and I looked at a number of different industries and I came to printing. Everyone I spoke to said, “Printing is dying.” But actually, you have to divide printing into two blocks, like the offset, yes, it’s dying. I’m sorry. Everyone that’s listening and don’t like that, it is dying. Then you have digital, and when I founded the company, this was about $80 billion per year, and now it’s 200 – plus/minus $200 billion.
Just to give you a comparison to not just throw out that number, the global music industry is $40 billion. It so happens that this industry in digital alone have added three music industries during the last 15 years. That is astonishing. Everyone speaks about iTunes and Spotify and so forth. I think which you speak about the print industry. So, if you speak about the digital print industry, I was shocked when I realized that this is growing leaps and bounds. There is no software that connects all of these digital print tabs around the world, and the demand is global; everyone needs it and the demand is moving from being analog, static, into being personalized and highly dynamic.
That was kind of just the insight. I remember once I started to read about the digital print industry that I couldn’t believe the numbers. For me, if we could just build a software that connected to these digital print tabs around the world, that would be a very interesting proposition to go to the consumers or to the global companies and say, “Listen, you can sit in Stockholm or Berlin or New York and do all the materials for your company, and then you can ship those files out to all across the planet, and we will produce it locally on demand.” That was the vision that made me sell everything we had, the apartment, the cars, and go all in on this.
[0:06:44] DC: Can you explain print on demand in one sentence to someone unfamiliar with it, and what are some of the global factors driving the growth of print on demand?
[0:06:53] HMH: Yes, so first of all, I must say that I’m being a bit semantic now, but I don’t like the word print. Because when I say print to my sisters, or my wife, or my kids, again, they think print is dying. But if I say production on demand, everyone’s like, what do you mean with production? Well, I mean like everything, most of the things we have around us here can be produced actually with today’s technology on demand.
So, in one sentence, I would say you can produce whatever you want with your own design when you want it where you want it. And if you look at the growth of that, if you look at the driving force behind production on demand, as I say, or print on demand as you say, I’m always fascinated in this industry by how many times we end up speaking about the machines.
No one really cares about the machines.
If you think about like, what has driven the change in the world? What has driven new industries to disrupt themselves? It is always in the end, the fact that consumers have decided to make a choice. They have taken decisions. I mean, most famous example that I often use is Airbnb. If you go back and you read a bit of articles from Hilton hotels, what they thought about Airbnb, or what some investor said, no one will ever be interested in living in another person’s home.
[0:08:30] PF: Or Uber. I mean, I grew up like never getting in a stranger’s car, and that’s all I do now.
[0:08:36] HMH: Yes, that is so funny. First time I rode in an Uber was in San Francisco, and it started to rain, and there was a guy, and I was looking for a taxi, and one person said, “Just download the Uber app.” I was like, “Uber what?” And I downloaded it and it was a complete new world. So, I think in the end, consumers decide. The more and the faster we as an industry can inhale that, the more powerful this industry, the digital growth industry, will become.
Because I often take as an example, I have three children, and they are all kind of Gen Zs, right? So, when my oldest daughter, she’s now 20, when she moved into her own apartment, she didn’t go to Ikea to buy wall art. She went to Etsy. She picked up the coolest posters you could ever imagine. It just so happens, I had no involvement in that, that we were the ones producing it. Another example was when my son, who is 17, bought his best friend a t-shirt and he designed it with a German designer on his own, and it said “Drink beer, save water.”
Not the best design perhaps, but that is driving print on-demand. The fact that consumers have decided, “I don’t want to go to IKEA and buy a poster that at 1.5 million other households have on their walls. I want to create my own home, I want to design it for myself.” The interesting thing, I was just in Belgium or Netherlands here last week, and I held a presentation in front of about 150 PSPs, and I spoke about what is actually happening now and how the demand from consumers and the demand from multinationals are converging. Because in a multinational, you have many Gen Zs and Millennials now working, and they want to order their print or their products in the same way they do from Amazon now.
So, as an industry, we need to inhale the fact that production on demand, or print on demand, is driven by the customer, the consumer, the multinational, whether we like it or not. That’s the underlying excitement in this whole industry. We stand before never experienced growth potential in the digital print industry. I’m convinced about that.
[0:11:16] DC: You’re speaking a lot about consumers, but most printers are B2B printers. They don’t print for consumers unless you count somebody’s wedding invitations or a welcome home banner or something like that. So, I would say that –
[0:11:33] HMH: May I disagree here with you, Deborah?
[0:11:34] DC: Sure.
[0:11:35] HMH: I think this is –
[0:11:36] DC: If you dare.
[0:11:38] HMH: Yes. Well, that’s why I asked, may I? One thing that I reflect upon here, so I disagree with you that the distinguishment between B2C and B2B is as sharp as it was 5 years ago or 10 years ago. So, if you look at the creator economy, what is driving the growth on Amazon? What is driving the growth of Shopify, Etsy? These are e-commerce B2B companies that all of a sudden are moving into production on demand or print on demand. So, these borders are blurred in today’s world. The same goes, if you take a company like Honeywell or if you take a company like Microsoft, the people that are sitting there managing their brands, they are used to ordering on demand. They’re used to personalizing down to micro volumes more and or so today than one, two, three, four, five years ago.
So, that’s why I think this evolution, the transition from clear B2B, large 5,000 brochure orders into personalized 50 orders for an event that Microsoft has in downtown Seattle, this is coming our way, thank God. Because the average order value in the margins are also completely different. If you look at these small micro-personalized orders.
[SPONSOR MESSAGE]
[0:13:05] DC: Print Media Centr provides printspiration and resources to our vast network of global print and marketing professionals. Whether you are an industry supplier, print service provider, print customer, or consultant, we have you covered by providing resources and strategies that enable business marketing and creative success, reporting from global events, these podcasts, Project Peacock TV, and an array of community lifting initiatives. We also work with OEMs, suppliers, industry organizations, and event producers, helping you connect and engage with our vast audience and achieve success with your sales, marketing, and conference endeavors. Visit Print Media Centr and connect with the Printerverse. Links in the show notes. Print long and prosper.
[EPISODE CONTINUES]
[0:14:01] DC: I don’t disagree with what you said, but that wasn’t exactly the point I was trying to make. Yes, 50 small orders of 100 for somebody is probably disruptive to many printers because they’d rather print 1,000 at a time of the same thing, I get that. But what they’re not set up to do is one thing, but Shutterfly can do one thing or some of those other systems that are out there already that are set up for consumers. I get what you’re saying. And I do know, believe it or not, I know printers who use MOO for business cards. Can we all absorb that for a moment?
But they do, because they can’t make the thick ones themselves somehow. But yet I’ve seen it and I stand there with my mouth wide open and I’m like, “Oh, my God.” In my mind, I’m like, “I would never work with you. You don’t even have your – you’re not even printing your own promotional materials.” But I digress.
So, to me, it’s all about customer convenience because I was a print customer. So, being able to order something from a central system is, and get it anywhere you want and get information, I think is super important, as well as, if you remember, well, I don’t know if you remember, but in the United States, when VistaPrint first came out, that’s when printers should have started paying attention. Because the commercials they were using to convince consumers to use Vista was about how scary print is. What? You could only order print between nine and five? What about if you want to do it on the weekend? You don’t have to ask somebody a scary question. We have templates.
That has a lot to do with the reasons why people also are moving to these online platforms to order print. I don’t think that somebody who wants one hoodie is necessarily going to move the needle for these small and medium-sized print shops. But a customer that used to do two gigantic jobs for you a year and now wants that job segmented into 10 different customized things, if you’re not prepared to do that, they’re going to move on to somebody who is.
[0:16:25] HMH: Well, I think that if you think about the creator economy, let’s reflect upon this. So, you say, one consumer. Ten years ago, the creator economy did not exist. It did not exist. Now, Goldman Sachs estimates that in two years, in 2027, it will hit $500 billion. So, when you compound billions of consumers and you automate that whole flow of orders and you standardize the intake into a PSP, and that production can be viewed as 2,000 posters, but they’re still individualized. I mean, that is a very, very compelling proposition for this industry.
Another reflection I have when I heard you speak and refer to these examples. I remember I listened to a podcast about the iPod and when it came. The two people speaking on that podcast said the actual accelerator of the growth of the podcast was that they took an LP or a record, and they broke it down to individual songs. You no longer had to buy the whole record. And you remember when we bought the whole record, there were like two songs you really liked, and then there were nine you didn’t like. I think that is analog and offset, litho versus digital, on demand, and highly personalized. I think that it is bulky, the way we did stuff before, it is bulky. It is not what the millennials, the next generation, the Gen Zs are used to or want to.
So, I was at this conference in Rome a couple of months ago and one of the leading figures in social media in the world, she was there speaking. She said that in 2025, you will have around 60% of all decisions globally impacted in some shape or form by Gen Zs and Millennials in global companies. How do we relate to that? And as an industry, I would flip it. I would view that as an incredible opportunity for digital production, on-demand production, where everything can be highly customized, average order value can go up, you can charge more for the item.
So, there are so many interesting discussions we can have about the shift from not having to buy the whole record, but you can just buy the two songs you love. That to me is production on demand or print on demand.
[0:19:05] DC: I agree with you. And I also just want to reiterate that I think that’s where the challenge is for the smaller to middle-sized printers. Unless they have a system in place or find one, they’re not prepared to do all those individual orders all day long, versus it just coming through the online ordering system, going through production. I’ve been to places where the only time there’s a human touch as somebody taking the bin of photos, photobooks to the post office truck. That’s the only time a human touches anything in that place.
So, that is scary to some people, but to your most excellent point, this is the world we’re talking about, not just the printing industry, and that’s why I put it under customer convenience. Because, for example, my dry cleaner just became humanless, which sounds crazy. Well, there’s a person that sits in the back just in case you have a problem. But otherwise, you go in there, you use a little keypad, my bag is tagged to me with a barcode, I drop off my clothes, I get a text that it’s in there, I get a text when it’s ready, and I don’t have to concern myself about only being able to go during the week from nine to seven or whatever time they’re open. Now, I can go whenever I want. I could go three o ‘clock in the morning. The door is always open and I just use my passcode and I pick up my dry cleaning.
Why am I waiting three days for an estimate? Why do I not know where my print is in the print shop? I mean, there is – I know everything about my pizza, but I know nothing about my production. Sometimes the printers are like, “Well, we don’t want to tell everybody how the sausage is made.” And that’s fantastic. But you should know how the sausage is made, and you should know where everything is in your print shop. That is where the customer convenience comes in. I always know my packages, where they are, where they’re coming, there’s just, print is – the reason why I gravitate to Gelato and GelatoConnect is because to me, it’s the one PO to rule them all mentality. If I can get everything from one place and it’s convenient for me and it’s easy for the printers to be able to execute my jobs because they’re in a streamlined system, then everything is going to work fantastically. If it’s not working that way, I will tell you that the buyers will start looking for that convenience that they have in the rest of their lives for all of their vendors, no matter who that is.
I want to move on to the next question if that’s okay. How can printers use data-driven insights to create better, more relevant products?
[0:22:02] HMH: Yes. Well, first of all, you need to have access to the data. And one of the things that I come from the telecommunication industry and we did not build the base stations. We did not build the software to manage the network operation center. There were a bunch of companies that each was skilled in their own core competence. One of the things that I believe personally holds back this industry is that many PSPs want to build everything on their own. I think that it truly holds them back, because we are now several hundred people, engineers, product people building on our GelatoConnect software, and I’ll come to that later. That’s our core competence.
In a way, the industry today is accelerating a bunch of key players focusing on their core competence. When you combine them together, it becomes one plus one plus one becomes nine. So, I think that the industry has been burned before from many poor software suppliers that have over-promised and under-delivered. I think it’s actually an advantage that Gelato has no background or history in print. Our background and history is from billing companies, software companies, telecommunication companies, and so forth. That’s the first thing. We need to understand, what is each and every company’s core competence?
The other thing I would say is that this industry, so let’s look at the last 10 years. We got 10 years back in time. I visited hundreds and hundreds, even thousands of PSPs across the planet. Today we operate in 32 countries. We have about 200 PSPs connected to the network, and it’s growing all the time. So, what did I see 10 years ago? I saw average order values, AOVs, of anywhere between $700 and $1,000 per order. It could be 10,000, it could be 5,000 but the average. I saw most of the PSPs just doing paper. I saw per day 50 to 200 shipments leaving the PSP.
Let’s go to today. Today, many PSPs have expanded quite dramatically with multiple different machine vendors. We did a study together with McKinsey, we interviewed 97 PSPs across the world, and on average, they have 4.2 machine parks, not machines, machine parks. So, that could be HP Indigo, it could be Rico, Canon, and Kornit, for example. Then, on average, they have 3.8 software tools. But those software tools, they orient around one thing, and this is very interesting, the workflow.
But as I just mentioned about the average order value, today when we’re out visiting PSPs, the average order value could be $10, $20, $30 per order. Because now they’re producing a poster, now they’re producing a t-shirt, now they’re producing a book. So, all of a sudden, average order value has gone down dramatically by a factor of 20. Then you go to number of shipments per day. The biggest PSP we have in our network using GelatoConnect is shipping tens and thousands of orders every single day.
So, how do you manage that from a procurement and a logistics standpoint? The problem I would argue in this industry is that the industry has been oriented vertically based upon a machine park and a workflow. The consumer, the customer, the multinational, wants it horizontally. They want to be able to see before they place an order. Let’s say your Microsoft or let’s say your Uber. Uber operates today, I think in 11,000 cities, 10,500 cities. How do you manage your brand that way? You can’t have 5,000 PSPs. It’s just not going to be feasible. You want one interface, you want to be managing that effectively across the whole planet, and that’s really the power of software.
But in order to do that, you need to connect the warehouse to the production, to the logistics. So, every time a PSP, no matter where in the world, is scanning an order, Uber or Microsoft or Honeywell or whatever, they get the tracking code, they can refund, they can reprint, like that is what software can do to this industry. Now, what will that do? It will hasten the shift from offset to litho over to digital and production on demand or print on demand.
So, I think that software, if we just learn how to focus on our own core unique competence, can accelerate the shift from analog and offset into dynamic, personalized, and digital. From my perspective, GelatoConnect can help the industry to accelerate that shift and welcome the personalized demand that is coming from both consumers and multinationals. It’s hard to do on your own.
[SPONSOR MESSAGE]
[0:27:37] ANNOUNCER: The print shop of the future isn’t coming, it’s already here, and it runs on GelatoConnect. Built on 15 years of insights, GelatoConnect is the operating system for digital print production, connecting every machine, product, and process with real-time control and AI-powered automation. Printers using it are increasing packaging speed by up to 5x, reducing stockouts by 85%, and doubling profit margins without adding headcount. Unlock growth, increase efficiency, and take back control. Empower your print business with the operating system built for growth. Learn more at gelato.com/connect.
[EPISODE CONTINUES]
[0:28:17] DC: So, just to go back to this question for a moment and to get a different answer on it. Relevant print products. Is there a way to, for example, know that, hey, all of a sudden, everybody’s ordering umbrellas, personalized umbrellas? So, maybe you should offer personalized umbrellas too. Is there a collective consciousness of data that can go out to the network and say, “If you’re not offering these things, they’re growing, these segments are growing to offer in your business.”
[0:28:51] HMH: Yes. We have a very good understanding of what growth is happening in the US, in France, in the UK, or in China, because the creators are giving us the answers. So, we conglomerate, we accumulate orders from, I think last year we produced four creators living in 116 different countries. So, we see the different product categories. Once you become part of GelatoConnect, you can also easily see where do I go next. I think that this is kind of relationship and a very interesting dynamic, because again, I come back to this, which is my belief that the creator economy and the multinationals are coming together because it’s the same buyers in many ways.
So, when you see a demand at Amazon, it is triggering demand in the B2B or the multinational community as well. The short answer is that we have two businesses, GelatoCreate, which is connecting to the creator economy, and GelatoConnect, which is connecting to the PSPs. When you marry that, it is a roadmap for where I can go next. It is a roadmap for what machines I should invest in, or what products I should expect coming around the corner.
[0:30:14] DC: What is localization, and why is it a key strategy for scaling a print business in today’s economy? Now, we’ve touched upon this a little, but I just introduced something called print to table because people are speaking about sustainability in such eco terms that the consumers are just like get, and the buyers are like, I don’t even understand what any of you are talking about. But when you break it down to something as simple as do you know where your print came from and let people know that sustainability is also in airplanes flying things and trucks delivering them and sourcing as close as possible to your print business can really be a value proposition that a lot of people take up. So, go ahead. Take it from there.
[0:31:05] HMH: Yes. It’s a great question, and it can be a long discussion. We now live in 2025. Who would ever imagine that the world, at least during my lifetime, has rarely been more polarized? We are speaking about tariffs. We’re speaking about trade barriers. Sustainability is an aspect of this, but really what we’re looking at is a paradigm shift in terms of global supply chains, near sourcing, off-shoring, like on-shoring, insourcing, it’s a world where we as, in the print industry need to understand that just shipping paper between Canada and the US can be a major problem starting tomorrow.
So, I think that production on demand, print on demand, it is true that it has a sustainability angle to it. I’ll tell you what I feel is fascinating about production on demand or print on demand. We all have our favorite t-shirt. We all have that thing we bought somewhere. We still have it and we’ve used it for years. Well, it so turns out that fast fashion is used – and you can go on the Internet and do this search. How many times is fast fashion used before it’s thrown away? You will see 6 to 12 times. I would argue that the digital print industry and the creator economy and when you can produce on demand, also be it for the large global companies of the world, is a much more sustainable way because it has to do with the life cycle of the product.
But also, in the light of the world we’re living in, I don’t want to increase the volume on sustainability too much because it almost feels disconnected. Because right now, people are like, will my business survive next week? I speak to PSPs in Canada, US, and Mexico, that they don’t know how to navigate this world. This has come during the last four to six weeks. So, if I then come in that world under those conditions and say, “What about sustainability? What about producing more environmentally friendly?” I was like, “I don’t even know if I have business.”
So, having said all of that, I think there is only one path forward, and I think that path is that the megacities should produce what the megacities consume. I was at a lecture at my old university, the Stockholm School of Economics, and we have a professor there who speaks about the megacities. He’s like, if you think about, we have six, 700 megacities, stop speaking about countries. You have a megacity in India that is 15, 20 million. Tokyo is like almost 40 million. That’s like three times as many people living in the North East almost. So, if we let the production on demand, have that angle of megacities should produce what the megacities consumes, that is sustainability. That is going around global supply chains and the fragility of global trade, which, for various different reasons, have found itself in a very difficult situation in 2025.
There are many, I mean, I could go on and on, on this one, Deborah, but there are many different aspects of insourcing and domestic production and production on demand that I find fascinating for good and bad reasons right now.
[0:34:50] DC: What do you believe will be the biggest competitive advantage for print businesses in the next decade and how does Gelato and GelatoConnect enable it?
[0:35:01] HMH: Oh, that is a big question, but again, I come back to, I always start with the consumer demand. Where is the consumer demand going? That is our biggest, biggest opportunity in this industry. The consumers will decide. And remember, who is the consumer? So, when people in Gelato go traveling, how many people use Airbnb versus Hilton, right? That’s a B2B customer. But then they go traveling on their vacation, how many use Hilton versus Airbnb? The consumer demand is merging with the B2B, the multinational demand. And they all want personalized production. Like, they don’t want to buy a million red t-shirts. Those days are gone. And they don’t want to buy 20,000 brochures and then hope that 10,000 of them will be used and they throw away 10,000.
If they have an event in New York, they want to produce 220 for that event and then 130 in Chicago. So, every macro force, all the consumer demand, the B2B demand is moving in the direction of digital production, digital print, and that’s an incredible opportunity. However, in order to manage that, you need to stop thinking vertically, workflow, per machine, per product category, and start thinking horizontally from procurement, leading into the production, leading into the logistics, and all of that has to be automated. That is what we have spent 15 years building, and that’s also why companies such as Bennett Graphics and GSB in New York and Anstadt and Hudson and Quantum and DPI and so forth have chosen to go with GelatoConnect. And the same pattern you see in Europe.
This is actually, it’s interesting when I speak to some PSPs, they are saying it’s tough times now. I think it’s tough times because you’re not accessing the massive opportunity with production on demand of fully personalized products, both from the B2B as well as from the B2C business. That is really hard to do on your own. I would also argue that there is – I would actually challenge anyone listening to this, is there an industry where so many individual production hubs believe that they can build their own software, manage their own production, and then be world-class at both? I don’t think – I at least have not found any other industry. So, I repeat, if we work together with the industry, and Gelato, and the end consumer, and the end customer, one plus one plus one equals nine, and there is enormous value to be built and created here.
[0:38:04] DC: Can you expand a little further on the procurement aspect of it?
[0:38:09] HMH: Yes, good follow-up because it’s something I see a lot. So again, going back 10 years, and I just want to bring this into that perspective. When we visited a PSP 10 years ago, we typically sold two to 500 different paper types. That was the focus of many of the PSPs. You had one, perhaps two machine technologies.
[0:38:31] DC: I just have to ask, was that in America, where you saw all that paper, or is it in Europe?
[0:38:36] HMH: Both America and Europe. Is that surprising to you or?
[0:38:39] DC: Yes, because we use way more paper stocks here than they do in Europe, usually.
[0:38:44] HMH: Okay. But we also, to follow up on that, that’s a good break-in, Deborah. But I think also it has to do with us targeting the PSPs that we’re producing for B2C businesses many times. So, not the typical PSP at the time. But let’s say they had 200 different paper types, okay? Today, when we go out, we see up to 150,000 different SKUs and the PSP is producing t-shirts, hoodies, sweaters, books, water bottles, mugs, posters, canvases, and the list goes on and on and on. All of a sudden, the warehouse has become a myriad of complexities, and it’s really hard to manage the warehouse with Excel. Going out in the warehouse, carrying your laptop with you.
So, what we have realized is that having an AI engine managing a warehouse, linking it to your production and the orders you received 12 months ago, so that you can predict the demand and linking it to every time you scan, you automatically update what you have been scanning out from the warehouse, you can accurately decide when to order, how much to order, and when to receive it.
Again, we come to AI, we come to software, and we come to working together. For example, this is interesting because it’s so easy to build products when you’re sitting in an ivory tower. We force ourselves out there to go and live with the PSP. What we typically see is warehouses of 10,000 to 30,000 square feet around the world. And you go in there and it’s really hard to keep control of. You can ask them, how much do you have of that? Well, it’s hard, they don’t know. And then you wait for peak season, which happens in different times, depending on who you are. But then it’s even harder because you ship out so much every single day that it’s hard to keep track of everything. So, you end up over-ordering. You order too many things and you look up capital on the warehouse, which is part of dragging down the profitability of the industry.
So again, software together with PSP is where the future lies, and especially a future where production on demand, personalized design, and the merger between B2B and B2C is happening. That’s really hard to manage on your own with an Excel sheet or with a – you can also have a software to manage your warehouse, but does it speak to the scanning station, to the packaging station at the very end of your factory. And if it doesn’t, you will end up having the wrong amount of items stored in your warehouse.
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[0:42:25] DC: I was speaking to a printer who found out that they had three times the amount of supplies for their wide format area, because the wide format area wasn’t hooked up to the inventory system. So, when the operator ran out of the substrate, they just told someone, and they ordered more, and then they found a closet full of all the stuff that they kept reordering.
[0:42:51] HMH: It also has to do with labor cost, right? I’m sorry, I don’t want to be the one pushing PSPs to let go of people, but we live in a world, de facto, where it’s part of surviving and thriving. If other people, if other companies are finding ways of making what you did yesterday more efficient through software or AI, and you don’t follow suit, you will be outcompeted. What we’re seeing is that, typically, PSP is operating a GelatoConnect procurement, they can stop having people walking around in the warehouse trying to figure out what to order, when to order, and they can let AI and software do that job.
I know in the US, same in Europe, and now in four days, 4th of April, in the UK, I think that the government has decided that the UK employers will have to be taxed 40 billion pounds more to just pay for the deficit of the government, right? So, the employers in the UK, across all industries, are up for a really steep curve ahead. Wherever we look in the world, if you can make something more efficient, if you can reduce your labor cost, you have to move in that direction.
[0:44:18] DC: I don’t understand why it’s a scary thing to say. If printing is part of manufacturing, what segment of manufacturing isn’t trying to automate everything they possibly can? I mean, everything is. I always look at it as either printers are part of the world we live in or they’re not. When they’re not, it is almost like 1983. Like I have to call somebody and tell them what I want. And then I have to wait three days for an estimate. And then maybe there was a problem. So, I have to get it re-estimated and it takes me three days. And then they can’t get the paper I want. So, everything changes. Already, who wants to deal with that?
I know it’s a crazy thing to talk about, like what’s the big deal about it, but the world doesn’t function this way. When you are that outdated business, that’s another reason why a lot of people believe the printing industry is antiquated. It’s not the medium. The medium is as powerful as ever as a communication sales education device. But our processes are so antiquated, the fact that so many printers believe that they have to speak to the customers. And there are certain times they do, but I would say there’s more times they don’t, and they just want to get in there and talk to them, and it’s not going to work out for them as print customers are searching, find a printer near me, because they’re not educated of where to go.
And as they do that, if it’s not a simple system, if I can’t easily understand what you do, how you can help me, what you have to offer me, and make it simple for me to get it and get the price right then and there and get it when I need it, then I’m going to the next place that can help me. It is that simple. It’s the same way I look at carwashes or dentists or restaurants. I look at reviews. The world has moved there. And I believe that printers have to or should or could look at what they’re doing and try to do it better if they want to stay around. Look at all those bookstores, you know, oh, independent bookstores will never go. There’s always a place for them. Yes, there is a place for them and how many are left. So, you’re either part of the solution or you’re part of the problem is how I see it. Final words.
[0:46:56] HMH: Yes. I would just – final words for me. I have such belief in the growth opportunity of this industry. I’m like super excited. Sometimes I feel that we end up speaking about the glasses half full, or half empty, sorry. But I think that the glass is really, really full, full in this industry. But we need to just accept that each player has its unique core competence. If we work together, my biggest concern is actually, how do we facilitate? How do we produce all of the orders coming our way? It is like a crazy growth. The digital print industry during the coming decade has never ever been more potent, like fact-based.
You look at the creator economy, you look at the shift in multinationals and the B2B demand, and you look at who will take the decisions during the coming 10 years. This is the next generation. So, we better get ready as an industry and lean into all of these opportunities. If we work together, you can also – I mean, as I say, the target of this industry should be 10% free cash flow. If you don’t generate 10% free cash flow, you are not using the right software.
[0:48:15] DC: Thank you so much for your time. We are going to talk with Henrik again at the last podcast of this series to wrap everything up and get a glimpse into the print shops of the future. Everything you need to know to connect with Henrik and Gelato is in the show notes. Until next time, everybody, print long and prosper.
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[0:48:37] DC: Thanks for listening to Podcasts From the Printerverse. Please subscribe, click some stars, and leave us a review. Connect with us through printmediacentr.com. We’d love to hear your feedback on our shows and topics that are of interest for future broadcasts. Until next time, thanks for joining us. Print long and prosper.
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