Top Book Manufacturers: Printers Adapt by Following the Market
Tweaking the Bottom Line
In those facets of the business where increasing revenue is proving difficult, printers are focusing on pursuing savings through workflow adjustment or, in some cases, consolidation.
"If you are printing shorter runs … you will see the top line fall a little," Jensen says. "You can see it in the case of Transcontinental. When the market changed, back a year and half ago, we were pretty quick to correct our businesses and match capacity to the demand of the industry. One of the things we've been able to do is, although our top line is down, our bottom line is continuing to improve quarter after quarter. So we've been able to adjust some of our capacity, closing plants and consolidating plants to really match that [demand], and we are definitely seeing the results in our bottom line."
"We are constantly reviewing our cost structure, including procurement, internal processes, etc., to streamline workflow," Wurster says. "Often this does not yield as much savings as new technology; however, the capital investment required for both solutions is quite different. Handling cost is a daily function, and new technology enters the picture when appropriate."
CJK is investing in streamlining workflows, lowering administrative costs and automating workflow. Few companies are currently investing in new equipment, Krehbiel says, with the trend being in the direction of consolidation.
The impending Quad/Graphics-Worldcolor merger could have a stabilizing effect on the market, Spall says, because there is little duplication between the companies in terms of book production. "Quad is privately run and will have a different approach to how they price on the book market [than Worldcolor]," he notes.
"We mostly run into [Quad/Graphics] with catalogs," says Krehbiel. "With Quad running the show, it could change how they approach the book market."