Gene Therapy: The 3 Cardinal Rules for Optimizing Production Management

There are a host of practical tips for managing print production in the digital age—many are highlighted in this issue of Book Business. While working on a list of such tips—from effectively positioning outsource partners to support your supply chain goals to building content workflow around an XML-based strategy—I was diverted by a conversation with Howard Goldstein, vice president for strategic sourcing at Houghton Mifflin Harcourt (HMH). Goldstein was recently relocated from Boston to Orlando to help oversee HMH’s major transition to outsourced manufacturing management and offshore manufacturing.

While prepress will continue to be handled traditionally at HMH, as will paper purchasing, two different models of outsource management have been launched. One is an $875 million long-term contract with RR Donnelley to “provid[e] consultative services across the breadth of the print-related supply chain on a cost-effective basis,” according to Tony Lucki, HMH chairman and CEO. The other is a multiyear print-services agreement with global information solutions provider Williams Lea, which HMH announced will manage more than $1 billion in print procurement and related services on HMH’s behalf. As part of the effort, Williams Lea employs buyers placed in HMH offices.

Goldstein noted that these models can be utilized by firms of any size, prioritizing in any order a vendor’s value proposition of service, quality and price. Clearly, for a firm the size of HMH, benefits from economies of scale are a paramount goal, and price, service and quality become the ranking order—even while demanding top performance for all three.

For Goldstein, an industry veteran with 42 years of production and supply chain management experience, the function of the production department has always been to support authors and editors with timely delivery of book product. The support function of a production department is optimized, according to Goldstein, by following three best practices:

In fact, these three practices can form a simple mantra you can post on your desk or have appear from time to time on your screen-saver: Prioritize, Organize and Deliver … or P-O-D.

You may think you are fully engaged in earning your keep as you transform to “greener” business practices, add new demand-printing resources to your supply chain, consolidate or network your distribution centers, attend the major expos to keep in touch with new developments, and periodically check costs and prices to come in under budget. And it is with good reason that you should feel that way. But unless these activities are subordinate to your P-O-D strategy, they can be costly to the company, and to you.

A few obvious examples will make the point (“answers” below):

Situation #1: You are a small publisher with an unexpected runaway best-seller on your hands, and you are clean out of stock. Or, you are a major publisher with a 500,000-copy national lay-down of a highly anticipated new title that is pushing late for the holiday season. You are also committed to a policy of using at least 30-percent forest-certified papers in all of your production. The press capacity available and almost all the stock on the printer’s floor don’t comply with the standard. What do you do?

Situation #2: Over the years, you have carefully built strong and mutually beneficial relationships with several printers whose price and quality meet your requirements and who always deliver. You have a strong evergreen backlist in nonfiction and are an obvious “long tail” candidate for demand printing at the front and back end, and your publisher wants to fully commit to a demand-printing strategy. Your regular printers have seen the handwriting on the wall, and have elected to follow a strategy of outsource alliances with printers in nearby cities to handle “long tail” demand-printing fulfillment. You have been solicited for some time by printers who have invested in a complete in-house (under one roof) solution and offer equivalent price, service and quality for your conventional printing needs, as well as a digital asset management system thrown in that can handle electronic editions of your titles. What do you do?

Situation #3: Ninety-five percent of your company’s revenues and operating profits are generatedby 32-page, four-color picture books in the children’s market, printed abroad, whose paper, printing and binding cost is 30-percent below U.S. prices, and whose cost of maintaining inventory still generates cost of product below conventional U.S. printing costs. Management remains confident in its market and sees no reason to shorten time to market and risklosing their competitive cost advantage. Yet they also are concerned about transformations taking place in product customization and re-purposing emerging in the market, although the opportunities to generate revenue are still limited. Four-color digital, demand printers have been calling on you with on-demand solutions that include quick response repurposing and customization capabilities. What do you do?

Situation #4: From time to time, you wonder what your company’s strategic plan is in these transformative times. You would like to be ahead of the game and prepared for changes. What do you do?

Goldstein’s approach is to maintain an interest in the granular as well as the strategic in book manufacturing. When it comes to quality control, production managers today are relieved of agonizing over the lights and darks in press checks, for example. Computer-to-plate has “leveled the playing field,” Goldstein observed, and those issues are largely unheard of. At the same time, he can still look at a stack of hardbound trade books and tell you, without touching the book, which bindery they probably came from, simply by observing the shape and snugness in the making of the hinge.

The production and supply chain manager in the book business today delivers books in a rapidly transforming marketplace, and faces the “disruptive technologies” that are reshaping the manufacturing and distribution of books (e.g., the embryonic in-store print-on-demand Espresso Book Machine and the wireless delivery of content to the Kindle). If, under these circumstances, management is hanging on to vanishing strategies in the face of uncertainty, it is no surprise. But the production manager who is inspired by Goldstein’s mission as a service to “support the process” should find this an era of energizing creative challenge.

The Answers
Faced with the previously mentioned situations, here’s what you would do if you adhere to the cardinal rules of P-O-D:

Situation #1: Overlook the standard in favor of delivery.

Situation #2: Put some of your work with a new printer to test out the benefits of combined shipments going out one door.

Situation #3: Prepare some cost/benefit studies, discuss them with the boss and recommend that you experiment with a few titles, to be ready with solutions when they are needed.

Situation #4: Arrange to meet with the publisher in a relaxed environment, over lunch or for coffee, and ask him where he wants the company to be five years from now so that you can be sure that you have a supply chain waiting to support that goal.

Eugene G. Schwartz is a regular contributor to Book Business. He is a publishing industry analyst, writer and editor-at-large for Foreword Magazine. A former board member of PMA (now the Independent Book Publishers Association), he is president of Consortium House, a management and business consultancy to publishers. He previously was a manufacturing, production and operations executive.