Creative Cost-Cutting Strategies
With the rising costs of fuel and raw materials, it has become essential for most publishers to find ways to save money in book production and manufacturing—a task that can be quite challenging without sacrificing too much in terms of quality. However, with changing circumstances have come new strategies, some of which are riffs on past ideas, while others would have seemed unthinkable just a few years ago.
“Right now, it’s hard to realize really big savings on manufacturing costs because paper keeps going up,” notes Marie Butler-Knight, longtime publisher of Penguin’s “Complete Idiot’s Guide” series. “At the same time, stores are wanting to carry just-in-time inventory more and more. So they’re not wanting to take in large orders into their distribution centers, and that means that, with the exception of blockbuster hits, print runs are smaller—and when print runs are smaller, costs go up.”
So what’s a publisher to do? Shop around, of course, and find ways to trim materials, time or distance. All of the industry professionals who spoke to Book Business have found success with one or more of these approaches.
Production: Think Beyond the Printed Page
Cost-cutting needs to start before the presses start rolling. Good strategies on the production and prepress end can create savings throughout the entire process.
With the cost of paper so high, some publishers are finding creative ways to provide content beyond the printed page, while adding value for the reader. Butler-Knight has had success with packaging other media, such as CD-ROMs, audio CDs and DVDs, with the “Idiot’s” guides.
“The more pages you have in a book, the higher your unit cost is going to be,” she notes. “As long as we’re careful to make sure that [additional] content has real value, that it’s not just a bunch of Word files stuck on a CD, but actually has a benefit to the reader … we are able to recoup the added cost of having the media put into the book and, at the same time, it allows us to keep page counts from growing and growing, because that’s the only thing you really can control.”
Elsevier has also been reigning in page counts by judiciously putting reference materials onto CDs or ancillary Web sites. “It’s done with the idea that you don’t want to affect the functionality of the book,” says Lori Irvine, book local application manager in the publishing services division.
Recently, Elsevier worked with software developer Modality Inc. to offer educational materials for use with the iPod and iPhone, enabling students to bring reference materials into the classroom. “Sometimes you have to have it in front of you,” Irvine notes of such content, “but we don’t have to put it in the book.”
Putting graphical elements on a CD also allows for fewer four-color pages, Butler-Knight notes. In addition, the “Idiot’s Guide” will often use color inserts instead of full, four-color printing in editions that require some color.
While the cost advantages of paperless editing, layout and prepress work have long been recognized, Butler-Knight recommends not taking these elements for granted, as many small efficiencies can add up to major streamlining. Production work for the “Idiot’s Guide” is done in-house, with all employees using the same software. FTP sites facilitate the sharing of bigger files with outside photographers and editors. Publishers should think about how technology allows for multitasking, she adds, and take advantage of those opportunities where there is no risk of a loss in quality.
Because Butler-Knight works with a series format, the use of templates becomes another way to increase efficiency, she adds.
“We don’t have to reinvent the wheel every time we do a book,” she says. “We are modifying that template on every book, but it’s still easier to modify an existing template and an existing style sheet than to create a new one.”
Quality concerns lie behind Butler-Knight’s decision not to outsource production work. “We feel it is necessary to keep control in-house where we can instantly troubleshoot any problems and communicate in the same time zone,” she says.
Printing: Bringing Work In-House
Some publishers are finding that even printing can be brought in-house as a way to realize supply chain and inventory cost savings, reduce waste and minimize environmental impact. Harlequin purchased digital printing equipment to manufacture mass-market paperbacks as a way to supplement offset print runs.
“The objective was to produce a book using the same paper and files, and with the look and feel of offset, using a digital production line,” says Harlequin Publisher and CEO Donna Hayes. “We were convinced that digital book-printing technology offered an important opportunity to control distribution and reduce the number of books that were being overprinted.” (For an in-depth interview with Hayes, see page 54.)
The Harlequin system is fully automated, with plain paper going in one end and completed books coming out the other, which adds up to significant cost savings. A similar solution was implemented by HCI Printing and Publishing, which maintains a full-service, in-house book production division for its stable of self-help titles (including the “Chicken Soup” series) and outside printing projects.
By keeping printing in-house, HCI has no freight costs, controls its own inventories and is fully in charge of preventative maintenance schedules.
Production Manager Mike Briggs says a willingness to invest in new technologies and automated systems has paid off in increased efficiencies and decreased labor costs.
“We’re always making upgrades,” he says. “We kid around that we’re looking for more and more speed all the time.” The company has cut makeready times for its four-color presses by 30 minutes with upgrades such as automatic plate hangers.
A new plate processor that is being installed this year will save $13,000 annually in chemicals and be more efficient to operate, Briggs says.
“They’re little things, but those are things you’re doing all the time,” he says. “You’re always looking at trying to improve your efficiencies and not being afraid to take that step forward in technology.”
Briggs also recommends ensuring that printers have the best possible support from vendors in regard to price and quality of materials and supplies. Maintaining good communication with vendors to stay abreast of all available options, he adds, is key.
For certain types of standardized book printing, Lee Nordling of the-pack.biz, a graphic novel and comic book publishing services provider, says publishers should consider gang printing.
If editorial and design deadlines can be set far enough in advance to iron out production glitches, savings in paper, ink and press preparation can be significant, he says.
“Gang printing is the simplest way to cut costs on a per-unit basis, especially for titles with low and similar print runs,” Nordling says. “You can only gang titles that require the same stock and similar ink saturation, but for prose books, this shouldn’t be a deterrent.”
Elsevier has realized significant cost savings on the paper front by streamlining the number of trim sizes it supports, which allows the company to streamline the number of paper roll sizes it buys.
“We did a big paper inventory a couple of years back and found tons and tons of partial rolls strewn across the country at the different printers,” Irvine says. “By streamlining the number of … sizes, everything fits on a four-roll size. We’re usually able to accommodate everything with those limited roll sizes. You have less waste, because on the next job, they can finish off those partial rolls instead of stashing them, so there’s less paper inventory at the printers.”
Shipping: Jobs Returning to North America
For Elsevier, another adjustment on the printing side has actually realized cost savings on the shipping end. Many books that have always been printed on 50#, 60# or even 70# stock are now being produced on lighter paper.
“The question is always how much lighter paper we can put out books on,” Irvine says. “Lightening the weight of paper lightens the weight of shipment.”
While many of the publisher’s STM runs are too short to make a significant difference on this front, textbook savings can be substantial. Irvine gives as a example a nursing title where 30,000 to 40,000 copies of a 1.5-inch-thick, 10- to 12-pound book must be printed and shipped.
As is often the case, savings must always be balanced by quality concerns from the editorial side. “We’re coming at it from a cost-manufacturing standpoint, but of course the editors are concerned about what customers will think,” Irvine notes. “Some don’t want [to] compromise [on the quality front,] but others see it for what it is. They have margins to make as well, so they may not like it, but they have to listen.”
Perhaps the most telling recent development related to shipping is a direct response to the skyrocketing price of fuel: the bringing of manufacturing work back to North America from China.
Elsevier began funneling work to China six years ago, Irvine says, and even opened an office in Hong Kong to avoid the added expense of using a third-party broker. In response to longshoremen strikes in California and the rising cost of fuel, however, Elsevier began moving a lot of work back to Canada last year.
Because the company negotiated agreements with Canadian firms in U.S. dollars a couple of years ago, the falling U.S. dollar has not been a deterrent, Irvine says.
“We’re finding that it’s not much more expensive than China when you consider the costs of shipping, and obviously the big cost of shipping has been the fuel,” she says.
Another consideration is the delays associated with overseas shipping. A shortage of longshoremen on the West Coast, competing for space with major shippers like Wal-Mart, or even the effect of Midwest floods on rail lines (a very serious problem for freight carriers as of this writing, with numerous shipments being rerouted through Houston) all help to tip the balance toward using Canadian manufacturers, Irvine says.
All “Idiot’s Guides” are manufactured domestically for similar reasons, Butler-Knight says.
“Very few of our books are lavish four-color where real cost savings can be realized overseas,” she says. “If we went overseas to print a one-color book, what we might save in the printing would be completely eaten up by additional shipping costs, not to mention long lag times for ordering reprints. If we ever had to go back to China for an emergency reprint, we would not be able to get it.”
Such concerns factor into another cost-saving formula practiced by Butler-Knight: close monitoring of inventory, especially concerning reprints.
“What we do after the initial print run is … look six months out to see what we think we’re going to need in terms of additional inventory, and go to the same printer,” she says. “By closely monitoring inventory levels and planning out in advance for when we need to go back to press, we are able to juggle how much inventory we want to keep in our warehouse versus what the unit cost is to do a shorter print run compared to a longer print run.”
While inventory planning reaps monetary benefits, there is only so much that can be done with planning on the editorial side, even when publishing a series.
“I think we’re always more efficient when we are better prepared and looking farther down the road, but there’s only so far you can look ahead,” Butler-Knight says. Her editors plan about a year in advance, because after that, there are too many variables and unknowns.
“It’s like trying to make a luncheon date with someone three months out,” she says. “Something always comes up.”