Mantra of a successful product — value > cost: Kai Buentemeyer

PW: Your takeaway from your India visit?
Kai Buentemeyer (KB): India is the largest consumer of books. And the consumption is spread over a multitude of languages. It is a wonderful experience to observe in the book factories and warehouses, how the publishers and printers - spread over different segments, trade, children’s books and education - are addressing these requirements.

PW: Any specific memories?
KB: I met a leading multinational publisher for whom the requirement is not just to meet the requirement just in time, but at the same time to do so while meeting their sustainability goals. Also, I met India’s largest test prep educational publishers who employ more than 600 people in their printing plant and also employ the entire gamut of technology - inkjet digital, sheetfed and web offset printing. And finally, I met a multi-faceted print house which has investments in books, converting and packaging. Despite the challenges of availability of space, the company has got one of the most organised book print factories that I have seen in the world.

PW: What is your view about the humble book, today?
KB: Books are complex products to pack and dispatch. A distributor or retailer may ask for a different set of books, all packed tightly into a box and delivered without damage. And the publisher wants to do this sustainably. I was amazed by the Penguin Random House warehousing facility and how its supply chain logistics. I am sure that the FMCG companies can learn a few lessons from them.

PW: The earlier phases of building scale in publishing arose from capital availability and density. That’s why some countries managed to build scale. Do you see any other levers emerge beyond capital to build a successful scale?
KB: To begin with, I think the historic development of scale is a bit more complicated than just capital and density. The window to scaling was opened with a steam-driven press that could print a single sheet very fast, a bit over a thousand sheets per hour, initially. This technology was best suited to a newspaper in a big city and, sure enough, the first such press was installed at The Times newspaper in London although made by a church bell manufacturer and a watchmaker in a German backwater.
 
PW: Huge leap in the past 200 years...
KB: We then went ahead and spent almost 200 years building all printing and publishing organisations around ever bigger and faster presses that print single sheets or sections very fast. In the process, we created huge pockets of, in some cases, grotesque inefficiency. Making matters worse, the habit very often prevents us from using the opportunities of digital printing correctly. This does indeed point to a very powerful lever for successfully building scale and productivity in future: re-integration of the entire value chain. You might, of course, turn this into a huge need for capital if you consider value chain integration contingent on vertical integration through mergers and acquisitions. If, however, you approach value chain integration through cooperation, there might be very considerable rewards that do not require significant amounts of capital.

PW: During the publisher meeting in Delhi there was a lot of conversation about standardisation. Please share your experience. Where do publishing value chains try to drive standardisation and the hurdles faced?
KB: I am afraid I have seen very few success stories as far as standardisation or facilitation is concerned.
 
PW: You are responsible for global business transformation. Why do you say so?
KB: The reason is that productivity was always maximised on the level of the individual unit operation and never for the entire value chain. The printing press was the most capital-intensive element in the chain, and it was ensured that it ran at full speed around the clock. This was made worse by the fact that publishers divested their printing operations, printers divested their typesetting and bookbinding operations and so on. About 20 years ago, I placed a successful bet on designing and building a half-size bookbinding line. It encouraged printers to re-integrate bookbinding and, being a much lesser capital burden to amortise, did not have to be desperately run around the clock and became a successful product for us. But it had never come up as a request by users and it never would have with the prevailing focus on individual operations.

PW: Hyper-automation was about man versus machine. I’m sure the publishing, printing and binding industries have crossed this in some form or the other. A country like India creating meaningful employment that’s critical for any venture is a good opportunity. Do you see the next round of automation weaving a story around the operator and the machine?
KB: This may surprise you, but I do not think that automation has gone extraordinarily far in the printing and binding field. Productivity gains, when achieved, were usually a result of a manufacturing system that was the same, only significantly faster. Only where man – or, quite frequently, woman – could not keep up with the speed of the machine were significant investments in automation undertaken.
 
PW: And that is exactly our challenge for the future?
KB: Yes. The generation of engineers that is now about to retire will have been the only generation ever to see the world’s population triple in their lifespan. The generation now getting ready to leave school will only see 30% more population growth, and most of that is behind us. Therefore, the new generation will have to get productivity gains very urgently, because many economies are facing shrinking workforces, but they cannot simply make the production lines faster. That is where true hyper-automation is going to enter our field.

PW: And finally, please share some innovations that you hold precious in your career. As a leader how did you nurture this?
KB: My favourite quotation, when it comes to innovation, is by Henry Ford, the pioneer of mass-market automobile manufacturing, who reportedly said “Had I asked my customers what to produce, they would have asked for more comfortable saddles for their horses.” Contrary to what gold-plated consulting companies will have you believe; you cannot simply poll your existing user base for worthwhile innovative ideas.
 
PW: So, what is the secret?
KB: The secret to a successful product is that the tangible or intangible value which it provides has to exceed its cost. A poll of users will invariably lead you to hypothetical requirements that will result in crippling cost overruns.
 
PW: How so?
KB: I remember when we were called upon to provide casemakers for the nascent photobook industry. My engineers visited the customers and came back with a specification sheet that would have confined us to the depths of our design department for a couple of years. I picked a customer whose competence and discreteness I could trust, and we took the machine out without changes. Together with the users, we proceeded to learn how to best operate the machine as it was and then we undertook such modifications as were good value for money. That took us to a sellable product within only one year.