We need to work together with all our print partners

Subhasis Ganguli, vice president (production and content management), Pearson Education speaks to Ramu Ramanathan about the pain points in book supply chain and how printers can play a proactive role in addressing key issues, during the Henkel-Welbound Open House.

08 Oct 2013 | By Ramu Ramanathan

Subhasis Ganguli has worked for 26 years in publishing, equally divided over Oxford University Press and Penguin–Pearson Group. Prior to that he worked in sales, sourcing and supply-chain in different industries. Ganguli has a keen interest in systems, workflow and quality. His major strengths lie in vendor-relationship management, sourcing and planning.
Ramu Ramanathan (RR): You have compared the book publishing industry to what happened with the music industry. There could be a number of acquisitions and mergers; as in the case of Pearson. An increasing trend of mass market titles, and a sales challenge in the mid segment. With the uncertainty in the air, there may be a decline in numbers. What is your tip for the book printer?
Subhasis Ganguli (SG): We are passing through an interesting time. It is a challenging time, as well. Something similar to what happened in the music industry a couple of years ago, can be observed in the publishing industry today. Recently there has been a merger between two major players: Penguin and Random House. The new entity Penguin Random House is evolving. It has an opportunity to  capture approximately 22% of the trade publishing market.
 At the same time, Amazon is playing a significant role in terms of e-book as well as physical book sales. This is similar to the events in the music industry, where most of the music is being released online. It is difficult to think about buying digital books online without Amazon. New changes are taking place in the educational sector as well.
But, I personally think, books are here to stay. While the digital initiatives are increasing in the trade and education sectors, still, in India, we do not have enough infrastructural bandwidth to reach the last person in the village; this will prevent us from going fully digital/online just now. The scenario is changing fast and connectivity is increasing. Still, there is a long way to go.
There is growth in business, especially in the education sector, but the trend has changed somewhat. Previously, we used to publish a textbook written by an author and sell it to all universities. Today, different universities have different curricula. All of which might be covered in different chapters of that book or perhaps in a mix-and-match of a couple of books. But students expect to get the material in the books as per the curriculum of the university. So we need to come up with publishing spin-offs. Though the content remains unchanged, the packaging and treatment of the content changes. It becomes more customer focused and university specific. As a result, the print run of a particular book will come down steadily whereas the total numbers may go up. For example, a book we used to sell 80,000 copies of per year, now with the customised model, we might sell the content equivalent to 100,000 copies but  maybe in ten different derivatives. So, the one big print run of 80,000 copies, which used to run for a couple of days in the press, has been broken down to say, a run that lasts only a couple of  hours.

Hence, the cost of printing (per copy) goes up.  The risk of this business is that most of these books are not prescribed and the publishers have to sell them in the open market. All this makes projecting print runs even more difficult.
RR: What are the parameters that you look for in a book print firm?
SG: We have consolidated our supplier panel. Currently we have around 16 printers on our panel; we are still in the mode of consolidation. It is difficult to get the best efficiency from a printer unless we commit business to them in advance and block their capacity. That helps printers to improve throughput at the workplace and to bring down turnaround time and plan their inventory. We have not yet reached a position to command just-in-time stock-in, but working with a select list of partners has improved our efficacy. There are a few criteria we look at when choosing a printer. This includes their capacity, financial strength, efficiency, safety, their approach towards environmental issues, their terms, pricing and quality (not in any particular order).
We need to ensure we follow safety and environmental guidelines and we demand the same from our partners.
We are consolidating, we will have to consider whether our print partners have the capacity to serve our growing demands, the storage space and the competency to deliver just-in-time.  We have a pan-India procurement network and we strongly believe that the “world is flat”.   So, to print, we could go anyplace where we could justify the best efficacy. The major challenge that we are struggling with is the logistics in India.
We started digital printing in 2010. That year we printed 231 books digitally, approximately 0.2% of our print titles. Today, our digital output is more than 2%  of the total titles, available as print-on-demand (POD). On face value, digital printing is costlier than offset printing but then one needs to evaluate it carefully. In western countries, digitally printed books may enjoy a premium price, which is not happening in India.We need to evaluate the opportunities and all stakes carefully. It could be useful to look at a 3D P&L affecting stock holding, depreciation and cashflow rather than looking at individual project P&Ls for digital printing decisions. If my average print run is 5,000 copies, then of course digital printing is not viable for me – it works best with small print runs. So we need to strategically choose between processes and try to cut costs.
RR: How do you deal with the pressing issue of piracy?
SG: In both the education and trade sectors, the piracy rate is very high. We try to combat piracy legally, but it is very expensive and difficult. I am not very sure how to address this issue and how to stop piracy completely. But we could think of out-of-the-box solutions. In the education sector we could sell chapters from a book at a very reasonable rate. We are already doing that. In trade sectors, we have just launched e-singles, where a single story can be bought digitally as well as the whole book. But I do not want to pitch these as part of an anti-piracy effort. These are part of our sales strategy and due credit needs to go there.
RR: How does the sensitive price point for the Indian market affect publishing and, as a consequence, the quality of printing? What is the Pearson’s approach?
SG: It is very challenging today to have the right kind of price because for some reason the price of books is not going up in direct proportion to cost inflation.  We are trying to innovate ways to control the production costs. However, one cost which none of us can control is the paper cost and the forex rate.  In the last six months, the paper prices have gone up by 12¬16% and they are showing indications of going up further. So we are trying to change the substrate, the process, and trying to bring more efficiency in the system to bring down the costs. But today, the time has come for all of us to be realistic and acknowledge the fact of rising costs. 
 From the printer’s point of view, I am not sure whether we are doing the right costings and taking it forward to the print buyers. Are we sure that we know the impact of all input costs in our total costing? Are there ways to improve efficiency and remove the profit eaters? Could we give any value-added service to the print buyer?
 A couple of printers on our panel are considering these seriously. To be able to do this, you need to have a proper workflow in place, a system-driven ERP and the right approach to adopt the change. In today’s scenario, the only constant factor is ‘change’. It is required to address and adopt “Change Management” as efficiently as possible.
RR: Please highlight some of the best practices. 
SG: When we receive a book from the printer, we look at several aspects and details of the book viz. grain direction  of the paper and board, presence of bubbles in the glue layer , uniformity of the layer of glue, uniformity in printing, whether the book is cut at a right angle, lamination and other finishes etc. We have our specifications of binding for the education and trade sector and we follow them stringently. We are fine with perfect binding as we believe that the glue is strong enough to hold a specific number of pages of 60gsm paper if bound properly. However, spine-making plays a major role in this. If the spine-making is not proper then the pages will definitely come out. We expect other small things to be taken care of: such as pages being serially arranged and all pages being printed. These are basic requirements.
 Today every publisher uses different kinds of papers. In India, in the book publishing industry, different kinds of papers are being used, with different grammages and different sizes that are prevalent in the market. It becomes difficult for a printer to maintain the inventory of 100+ different grades  of paper in anticipation. As an industry there is a need of standardisation of substrates. At Pearson, we have consolidated to three basic sizes. In Penguin, we have two types of paper: one for paperbacks and one for hardbacks, and there are four sizes  of books. It is important to plan the print buying in coordination with the print partners to achieve maximum efficiency. 
 The other major issue is the wastage at every stage of production and wastage of end-product. Waste management is a huge challenge today and we have just started addressing this.
 In order to get the best, both printer and publisher must share a close relationship. Today, there is immense pressure on both sides and hence, both must understand the pain-points of each other and try to mitigate these. For instance, we worked with a couple of our print partners on the wastage area. We found that maximum time wastage is observed in make-readies and job changeovers. At one press, our jobs were printed for 8¬10 days per month. So we mutually decided to reserve a particular machine for 10 days a month in two slots ¬ five days each ¬ for doing our jobs. When an order arrives before the slot, it goes for that slot; if it arrives later, then it goes for the next slot. And again, we took care that the entire order is uniform by using the same grammage and size of paper. So the operator loads the paper only once and then simply 
goes on changing the plates and keeps printing. By doing this, the efficacy has gone up almost 20¬30%. We  will try to do this regularly to improve throughput for the printer and to get better and defined turnaround time for the publisher. But there is a lot of work that needs to be done to streamline the process, specially in the area of demand planning . We are working towards this. It is important for both publishers and printers to work as partners and be transparent with their data.
There are two types of checks to detect shortage or excess supply of books: one is at the worker’s end, who is packing and who refers to the packing slip, which has the number of books to be packed mentioned; secondly, as we know the weight of the book and the weight of the box used for packing, we can calculate the weight of the packed box and match it to the actual weight when the box runs through an inline weighing machine after packing. If there is just one book extra (or less) in a box and if it is a 96¬124 page book then it may not be possible for the  machine to detect it. But the system works well for thicker books. 
 There are printers who offer services such as warehousing, e-book conversion and systems to manage and sell e-books as a part of customer service. It may be the future of the industry to  provide value-added services to build a long-lasting relationship with the customers.
RR: Your advice for printers.
SG: We need to understand the impact of cost for each element. For example, if we consider that almost 10% of my unit cost is binding and of that 20¬25% is the glue cost, that means 2¬3% of my unit cost is glue cost. We also need to consider the performance of the glue and the mileage we could achieve instead of straight-forward calculation of rate per kilo. Here the raw material suppliers and the  machine manufacturers could play a major role to work closely with the printers as well as print buyers. It will help print buyers to understand the current scenario, evolving technology and right pricing.  
We also need to measure how much time we are spending in making ready the machine and what are the stoppage times. The efficiency of the machine will improve if it could have a continuous run. For that, the preparation time is important. We need to bring the awareness of the time taken at each stage into the process  and value the same. Now we need to put a value for time and need to see how we could improve the process and what could help us to do so. We also need to be clear in our minds about the time required to perform an operation at each stage. If we require eight hours to dry the glue, we cannot do so in two hours. This information must be recorded , should be a part of the workflow and shared with all stake holders. Secondly, the printer needs to stay firm on their commitments. It is a chain process and commitment of delivery date with right quality goes a long way. Thirdly, the preparation of spine needs to be taken care of. If spine preparation is proper, the binding will be perfect. In India we do not spend adequate time on spine preparation.
To get the best result, as I mentioned before, we need to work together with our print partners. For this, we need our print partners to share the data with us in terms of their pain-points, cost, wastage, time etc. We also need to work closely with raw material suppliers and machine manufacturers for a better understanding of process and seamless Once we get the data we can work on it and this could be the way forward. 

Pearson Education India

Pearson Education India specialises in the publication of academic and reference books in the fields of computer science, engineering, business & management, professional & trade, higher education and competitive examination preparation books. Pearson Education India is also India’s foremost publisher in the school segment (K-12), with book lists in English language teaching (ELT), the humanities, sciences and mathematics, from primary to senior secondary classes.
With editorial facilities in Delhi, Chennai and Chandigarh, Pearson Education India covers the entire subcontinent and has specific divisions with experienced editorial teams catering to all levels and fields of education. The teams create indigenous publishing programmes to meet local market needs, and undertake customised publishing for schools, universities and other institutions.