Offshoring and the Global Marketplace

Some in the United States may be cringing at the thought of turning more work overseas, but according to Coburn, the road leads both ways. "The United States is both the sender and recipient of work from other countries. This is bound to increase in both directions. We already do substantial work for Mexico, and some for Japan, the Carribean islands and Venezuela," he says. "[Resistance from American printers] is a major deterrent to our not benefiting in this international trend. [They] are looking [at] offshore as a problem rather than an opportunity."

According to market research firm NelsonHall, the value of global outsourcing contracts for services and goods is expected to more than triple from $200 million currently to $640 million by 2008.

Many seem to share Coburn's opportunistic view. Four out of five executives reported that they believe global sourcing is good for the global economy, and 58 percent said global sourcing was either very positive or somewhat positive for their companies, according to a survey of 7,300 executives from companies worldwide, by business consultancy McKinsey & Company, as reported in The New York Times.

Some major printing companies in the United States also share Coburn's view and have set up or expanded offshore facilities to serve a growing demand from book publishers. "We have seen an increasing interest in our customers exploring the Far East as a source of supply, particularly for complex, short-run, four-color sheetfed book product, as well as specialty items for use in educational kits, calendars and book-plus product for trade publishing," says Dave Mead, senior vice president of sales and marketing for Banta Book Group, which operates 40 print-service facilities in North America, Europe and Asia.

Benefits to Publishers

Banta is an example of an American company that sources work globally to provide cost-saving advantages to its U.S. clients. It set up an office in Hong Kong five years ago, which provides logistics coordination, pricing and on-site quality control. The advantage of this type of arrangement, says Mead, is that "our existing infrastructure and project management capabilities for foreign sourcing appeals to most publishers who do not have an established relationship in the Far East, do not have resources to monitor the work in progress, or do not have expertise in the logistics of shipping, customs, order-handling or specifications for manufacturing in the Far East."