No More Big Squeeze
But the emphasis is not exclusively on cost containment, cutting, and technology investment. Book publishers and manufacturers are coordinating their technological strides with their indispensable human assets.
Take R.R. Donnelley, which optimizes its operations using a process called 'continuous improvement'. The process started four years ago when Donnelley implemented its own 'Six Sigma' program, using trained statisticians to gain greater insight and control of its processes, to ultimately improve efficiency, says book group president Lane.
(Six Sigma is a serious analytical discipline, where any process can be made consistent and efficient through thorough statistical analysis. Think of it as throwing algebra at workflow problems.)
"We use [the statisticians] to identify and address the bottlenecks and big challenges across the [manufacturing] platform," he says. The performance of these 'process managers' keeps getting better year over year, Lane says, as their knowledge about the company and its processes grows.
Manufacturers are also looking beyond North American borders for lower labor costs and comparable production quality. R.R. Donnelley is increasingly assigning print jobs to company-owned plants in Mexico and China.
Book publishers with projects that can afford longer lead times can gain significant cost savings by going abroad, says Donnelley's Lane. U.S. plants can be reserved for spot printing extra books on demand, if sales of an offshore-produced title take off.
"If there is a long enough lead time, we can leverage China," Lane says, pointing out that Donnelley's book manufacturing plant in Shenzen is no different—with identical plant designs and equipment—than Donnelley plants in Roanoke, Va., or Willet, Ohio.
Then comes the recent $2.8 billion merger with Moore Wallace Inc., which capped a year of mergers, acquisitions, and consolidation throughout the book printing, manufacturing, and components sectors. The merger will take a year to close, and some consolidation will be seen, Lane says.
