Special Report: Today’s Global Sourcing Market
The concept of offshoring—the practice of sourcing manufacturing or content management services overseas—is no stranger to the book publishing industry. Complex four-color work has long been sent to countries such as Italy and Japan, where the labor-intensive processes of producing art books (hand-stripping, contacting and working with film) were more cost-effective.
Today, the same advances in technology that have had such a profound effect on publishing in general over the last 20 years—digital prepress work, real-time tracking of projects through the supply chain and instantaneous sending of digital files, among others—have opened the door to a true global sourcing revolution.
“With Mac, Pagemaker, Quark and InDesign, much of the prepress is no longer a big deal,” says George C. Dick, president of Four Colour Imports Ltd., based in Louisville, Ky. “Printing machines are automated, and most books are printed using computer-to-plate technology.”
China has captured the bulk of this new automated printing business made possible by the ability to work directly from digital files, while most U.S. publishers have retained prepress services domestically, believing that more complex design and layout tasks are best kept close to the chest.
“The advantage to having the prepress handled over here in the U.S. is, if there are any problems encountered, they can be promptly worked out by the technician right here, rather than two or three days back and forth,” Dick points out.
But even this is changing. The most significant recent development in global sourcing is the sending of prepress and editorial services overseas, made possible by the near-seamless integration of domestic and offshore production work, to the extent that publishers can customize combinations of services based on the needs of a particular project for maximum speed, quality and profitability.
“In an era of FTP sites, video conferencing and increased data-transfer speeds, the transfer of information and the development of projects overseas becomes more viable every day,” notes Raoul Goff, president of San Rafael, Calif.-based printer Palace Press International. “Communicating with our English-speaking Hong Kong office is no more difficult than communicating with a print vendor down the street.”
This new environment opens up possibilities for a dizzying array of publishing services to be sent overseas, according to Ranjit Singh, CEO of Aptara (formerly Techbooks), a Falls Church, Va.-based provider of pre-manufacturing and content management solutions.
“The way we look at it now, everybody is a publisher,” Singh says of his company’s diverse client base. “Everybody publishes for different reasons, be it books to sell, journals or for regulatory reasons.”
Internal publishing represents a fixed cost, whereas outsourcing allows for variability based on the project, he says, which gets to the heart of where global sourcing is going as a tool for publishers.
“It’s the composition and other preparation work that publishers are increasingly wanting to outsource,” Singh says. All the prepress work is being evaluated for offshoring … [because] they now realize that they can move off more complicated things.”
Aptara offers publishing content management services from three facilities in India, in the cities of New Delhi, Pune and Dehradun.
“People come for cost reasons,” notes Singh, “and they stay for quality, scale, turnaround time and better applications that make it easier for them to get the work done. It’s really about customized service.”
According to Jerry Jenkins, CEO of the Jenkins Group—a Traverse City, Mich.-based independent custom-book-publishing services firm—current trends are pointing to increased editorial and interior layout work in India, and customer service and some manufacturing in the Philippines. While some inroads have been made by India, Korea and Singapore on the manufacturing front, no country has emerged to challenge China’s hegemony when it comes to printing.
“When I think of China, I think of printing,” notes Kimberly Schaefer, vice president of Aquent Offshore, a provider of content management services for publishers, headquartered in Boston. China will continue to dominate on that end, she says, because of low manufacturing and shipping costs compared to other countries.
Dick says projects that are not time-sensitive, such as some books, calendars and greeting cards, work best for manufacturing overseas, along with “anything with any kind of handiwork”—including complex boxes, die-cuts or paper engineering products.
If properly planned, he says, projects are shipped back by sea freight, which takes two weeks (not counting domestic delivery). Air freight is available, he notes, but expensive ($3 per pound); however, even that option can be cheaper in some cases if it’s a limited run and the publisher is short on time.
Dick adds that while most of the focus in sourcing overseas is on cost, high quality also is now a consideration.
Patty Collins, senior production manager at Random House Children’s Books, cites quality and proven capability, along with cost, as primary reasons for outsourcing manufacturing to China.
“Most U.S companies don’t have the manufacturing capabilities to produce board books, pop ups and books with other add-ons,” she says. “Novelty and licensed titles often have a lower price point, lower than most hardcover picture books and novels, and so we must print overseas in order to hold the retail price.”
Collins says 85 percent of the titles in her imprint are done in China through a core group of six vendors. She also works with one vendor in Singapore and one in Thailand.
“Flexibility is important,” she stresses. “We try never to load up on one printer, as every one has the same busy season.” Working with multiple vendors also allows the company to tailor its manufacturing to the needs of specific projects, as some facilities have proven expertise in assembling certain types of books.
Smaller publishers also continue to look to China. Stackpole Books, a Mechanicsburg, Pa.-based publisher of titles on crafting, nature and outdoor recreation, outsources printing and binding work for both quality and cost reasons.
“Most books that we print overseas are full-color books,” notes Cathy Craley, head of production. “It’s just more cost-effective to print them overseas … [and] China is still pretty much the place.”
There are signs that China’s hold on the manufacturing market may be loosening just slightly, however. Countries like Vietnam are said to be beginning to benefit from rising prices in China—for labor, paper and oil—and are getting a second look from some companies.
Must Haves: Personal Communication and Security Assurances
Manufacturing aside, India, with its well-educated, English-speaking workforce, has expanded as a site for outsourced content management services and seems to be the place best assured for continued rapid growth.
When it comes to production and content, “India has an advantage over China,” Singh says. “English became the language that unified the country. China will eventually catch up, but China has a manufacturing mindset that’s colossal.”
Aquent Offshore’s typesetting, indexing, proofreading, image editing and design services are all outsourced to India—Mumbai and, beginning this year, the high-tech hub of Bangalore (or Bengaluru).
Schaefer says that India has proven ideal for Aquent’s labor-intensive keyboarding and typesetting work, such as updating educational materials to include the mandated Department of Education Braille system, and rekeying long-out-of-print books for electronic formats. More recently, the company has moved into Flash animation, image editing, 3-D modeling and some graphic design and illustration work from its India offices.
Schaefer says the limits of outsourcing usually come with highly conceptual projects that require brainstorming and close collaboration between parties, such as those involving the establishment and execution of a brand.
“We wouldn’t have that over a conference call with someone [thousands of] miles away,” she says. “We’d need to be there in the office to understand the products, the colors and what the goals are.”
Once guidelines and standards for a project are set, “you can start to look at little tasks that need to be done and what can be sliced off to go offshore,” she says. “And those are tasks that are fairly repetitive, don’t really need a lot of direction, aren’t highly conceptual or leaving a lot of creative license to the other end.”
Yet, even these limits are being pushed as offshoring companies compete to be a single-source solution for clients. Schaefer says Aquent has sent people from other countries to a client’s site for training purposes. “This really creates a wonderful bridge in communication and execution. And when they get back, they can train their people. It makes for a more effective workflow process than just dealing with e-mails would have.”
Aptara encourages frequent visits by project managers from India and invites clients to visit production facilities.
“For critical projects, we will put managers on-site,” Singh says. “You’ve got to make it seamless so that people can do their work without thinking there’s a difference in between.”
Despite these innovations, the outsourcing of content management has not proven to be a viable option for all publishers, for reasons similar to those cited by Schaefer.
“We have full [composition] capabilities in-house and, considering the back and forth here in house, I just can’t see it working well overseas,” notes Craley, of Stackpole Books.
While Random House Children’s Books does not directly outsource any of its prepress work overseas, Collins knows that some of its U.S.- and Canadian-based compositors do.
“We haven’t found an overseas compositor with a workflow plan that works as well as what we’ve got here,” she says, “though [compositors we work with] are sub-sourcing some of this work offshore.”
There’s universal agreement among those who spoke to Book Business that companies offering offshore services and the vendors they work with should have a firm, permanent presence in the United States.
“It’s important for a company to work with a rep here in the U.S.A.,” Dick says. “It’s a big mistake to try to work ‘direct’ by e-mail with technicians in China. There’s a very high risk of communication errors. They should also have a U.S. sales office and customer service live from someone who understands printing.”
Craley says she ended up dropping a vendor because it did not have a representative in the United States. “An issue coming up might take two days to resolve,” she says, ”which is why you need someone in the States who has direct contact with facilities in China.”
“Communication sometimes winds up to be the deciding factor in choosing a vendor, all other things being equal,” agrees Collins. “We want to ensure a smooth ride—good customer service, a quick response and solutions to problems without dragging it out of them.”
Aquent Offshore is U.S.-owned and -based, while––as is required of all companies with operations in India––having Indian nationals on its board of directors. Being truly international allows these companies to provide a high level of responsiveness and customer service (Aquent offers 24-hour customer service and no time-zone hassles, thanks to its presence in 17 countries), important to publishers concerned about quality control and security.
“We’re very strict on nondisclosure agreements as part of our recruitment process,” Schaefer says. “We have tight security. We highly encourage our clients to come to India, to do studio tours, to physically see our IT infrastructure, to know what our disaster recovery plans are.”
Referencing dodgy e-mails she has received from individuals overseas who offer editing, production or translating services, Schaefer says she has wondered, “Who in the world would send them files?”
“Cheap is tempting,” she admits. “But do you know how long they keep the files, if they destroy the files later, how long do they back them up? It’s a big risk.”
Companies thinking of offshoring need to remember that intellectual property laws in countries such as China, India and Israel are not as strict as they are here, Singh says, “which means the people you work with have to create that security blanket, as it were, so that they take care of your content.”
Project Management From Afar
As to quality control and tracking projects, “certainly the world of telecommunications has made a tremendous difference,” he says. “If there’s a problem, we … get on a video conference call.”
When it comes to best practices, good business systems and strong project management are essential across the board, Goff says. “The way risks can be minimized is by working with good employees that have found ways of offsetting the proximity issues with good systems and people, wherever the product is being made.”
Publishers themselves need to be prepared for the logistics of global sourcing via what Singh calls the “maturity of internal processes.”
“My biggest struggle is getting them organized,” Schaefer says of her publishing clients. “They may have a good idea, but often no one is designated to keep track of the proposed project and get it to us.”
Craley acknowledges that moving into offshoring requires a significant adjustment. “[Publishers] need to know that they have to work with a much longer lead time”—five weeks for shipping time alone from China to the warehouse when shipping to the East Coast, she says. “A typical black-and-white book that’s printed in the States might take six weeks for the entire process—from sending it to the printer to having it in the warehouse. Publishers should plan on approximately three months from the time files are sent offshore until printed books are in their warehouses. Most color books go through at least a couple rounds of color-correction proofing before they even go on press, and that time needs to be factored in,” Craley explains. “Of course, like printing in the U.S., schedules can be crunched, but the shipping and delivery time is fairly static unless more expensive methods of expedited shipping are used.
“Unless you can really plan ahead, it’s just not going to work for you,” she says.
Still, when it comes to offshoring as an option for publishers, Singh is unambiguous in his belief that, as a business practice, it’s absolutely essential.
“We work with clients that are not comfortable or do not have the maturity, but the eventual goal, all of them realize, is that they have to go offshore not just for price reasons, but for quality and scale reasons.
“I don’t think it’s a choice anymore,” he says, when asked what criteria publishers should consider before trying to offshore. “I think that train left the station a few years ago.” BB
James Sturdivant is an award-winning freelance writer based in Philadelphia.
Stackpole Books publishes titles on crafting, nature and outdoor recreation. “Most books we print overseas are full-color books,” says Cathy Craley, head of production at Stackpole.