There will never be a day when the words on the pages of a book aren’t the most important part of a book publisher’s work. Yet due to the ubiquity of content and high competition for consumer attention, today more than ever publishers need to be savvy about how they get their books into the hands of consumers and the technology that supports these efforts.
To keep pace in an age of accelerated commerce, book publishers need to keep up with how new technology can alter their business, adopt a more complex but also more efficient supply chain, and be adept at making data-driven decisions using analytics.
The upside is that innovations in book manufacturing and systems that enable seamless supply chain management are helping publishers do this. In parallel with the transformation book publishers have undergone, LSC Communications, a global leader in print and digital media solutions, has transitioned from a manufacturer that prints and binds books to providing a number of publisher services.
LSC offers a slew of solutions to help publishers focus on their core concern: content. Those solutions include full supply chain management, specialized services, such as inventory management, warehousing, and product shipment, and back office (order-to-cash) solutions, like payments and customer service. “One of the dynamics that’s changed with our client base is that they’re looking for more ways to manage the costs of the administrative side of their businesses,” says David McCree, President of the Book Division at LSC Communications. “We like to think their time is best spent focusing on their customers, editorial, sales, and marketing. And as they spend more time on that, we’re able to help manage the other parts of their business.”
McCree says this type of partnership can help shift focus and drive significant financial benefits. “A traditional model has publishers managing warehouse locations, employing staffs to manage printers, and maintaining fixed cost organizations to bring their content to market. We can variabilize supply chain costs for publishers as their volume fluctuates so that they get billed just for the work that’s needed to be done. We can change our clients’ cost from fixed to variable, and reduce their overall cost at the same time.”
LSC believes that building solutions to consolidate costs for the book industry creates efficiencies and benefits for all stakeholders. “Utilizing technology and new capabilities, we work together with publishers to improve turns, reduce obsolescence and get product to market more quickly, while still maintaining quality output.”
Here are five ways book publishers can adopt a more nimble and efficient supply chain strategy.
5 Supply Chain Challenges Book Publishers Are Facing
1. Keep Up with Technology That’s Changing the Business
Keeping up with technology means constantly rethinking how the publishing house operates in light of new innovations, not just bolting on a new technology when it comes along. “To take advantage of the technology changes, you have to start thinking about your business differently,” says McCree.
Take digital printing as an example. With the continued expansion of capabilities for digital printing and inkjet technology, LSC is able to more efficiently manage the lower inventory levels at a very high-level of quality. “We can do high-speed, high-quality, low-count,” says McCree. “I would say the quality would be interchangeable with offset, and the unit cost is at a point where the technology is allowing us to manage inventory at a whole different level, reducing obsolescence and increasing fill rates when we work with our clients.”
To take full advantage of this technology, publishers need to move beyond the traditional supply model in which the most efficient approach was to print a lot of copies of a title in order to lower unit cost. Publishers should be thinking in a more agile fashion and considering the total cost of ownership (TCO). “Even if my cost to produce that unit is a little bit higher, I know I’m going to have less product in a warehouse, so my capital costs are going to be lower. And by having less inventory on hand and knowing that I can quickly replenish it, I’m going to have lower obsolescence at the end of the day.”
2. Predict Demand & Get Books to Market with Greater Speed
Getting books to market with speed and accuracy has always been important for publishers, but the rise of online commerce and social media has given way to customer expectations of instant gratification and feedback.
If the customer goes onto Amazon or they go into the bookstore and the book isn’t there then they make a different choice,” says McCree, “Either for a different book or to spend their disposable income somewhere else. So the ability to ensure that the ‘buy’ button won’t go down on Amazon because the inventory is not available is more important today than it was five years ago.
This means publishers need to efficiently manage and deliver their content and LSC’s Book Fulfillment Services are intended to meet today’s consumer expectations. LSC is putting in place assurances and solutions with publishers so they won’t run out of stock, while reducing ordering friction and turnaround times. For example, its “Build to Stock” auto-replenishment process allows publishers to balance their need to achieve high fill rates while reducing inventory levels.
Meanwhile, LSC is helping publishers predict demand of their books. The company is working with publishers to put in place algorithms and demand predictive tool to supplement publishers’ internal efforts to understand demand. LSC developed these analytics tools, which look at historical inventory patterns, through its ownership of Dover Publications. Owning the publishing house enabled it to understand the inner workings of the publishing business and provided real-life problems to work though.
“What differentiates the LSC solution is that our inventory management tools are linked with the largest manufacturing platform in the industry,” says McCree. “We have 90-plus presses, we have multiple facilities, and we have digital and offset capabilities, so that if the need arises for a quick reaction to a market demand, we can manufacture the product very quickly.”
Utilizing LSC’s supply chain services to manage the production of over 10,000 titles, Dover Publications has been able to reduce base inventory by 40% since 2011. This was largely accomplished through the use of digital printing in the lifecycle management of a title; for example, by printing a small “proof” quantity in the first run and then utilizing either digital or offset capabilities in subsequent runs allowed Dover to print only what they need. This has also helped Dover Publications reduce base excess and obsolete inventory expense by over 300%.
3. Make Content Discoverable in A Crowded Market
The plethora of social media and e-commerce sites and the explosion of self-publishing means there’s a tremendous amount of product choices available to consumers. Publishers need to ensure that their products are the ones that come to the top of the list for a consumer considering a purchase. “When someone is going out and trying to meet a need, you want to be the one that’s coming to the forefront,” says McCree.
Part of the discoverability challenge publishers face is the need to be available everywhere and anywhere consumers are shopping. But distributing, managing, and tracking data for ebook and print products throughout a large number of retail marketplaces is no small task.
HarvestTM, LSC’s digital asset management and distribution platform that provides a unified tool to store, manage, and distribute content. “We can work with publishers to structure their files in a format that looks right, feels right, and gets distributed correctly to any end distribution site,” says McCree.
To further help publishers reach more readers and increase sales, LSC launched the HarvestViewTM platform which provides the ability to monitor the market with robust sales analytics and marketing recommendations. A better understanding of where a publisher’s product is being sold and how it’s being sold will enable them to make decisions from the data and increase the bottom line.
LSC has also made a strategic equity investment in Authors, Inc., an Ausin, Texas-based developer of machine learning and artificial intelligence (AI) applications for publishers. The Authors, Inc. tools will use AI and machine learning to drive editorial predictive analytics and automated keyword enhancements to help make publishers’ titles more discoverable, as well as recalibrate metadata dynamically based on quarterly performance and assess content to help predict sales potential.
4. Defend Against Piracy & Establish D2C Link
Publishers have always had to take steps to protect their intellectual property and content assets, and higher education publishers have been particularly targeted by piracy. McCree thinks LSC’s newly-launched anti-piracy solution, IntercepTagSM, will help protect intellectual property and fight counterfeiting throughout the textbook supply chain. “The biggest place we see piracy take place is in the higher education space, so that’s our phase-one focus.”
The new platform allows publishers to apply an IntercepTagSM serialized mark, a unique anti-piracy identifier code, on each book at the time of production via a label or digitally printed cover. The IntercepTagSM can be registered, activated, and then authenticated throughout the supply chain to determine if the book is genuine or counterfeit.
Although IntercepTagSM originated as an anti-piracy tool, McCree thinks the applications will be much broader than this as LSC continues development and moves into phase two, particularly to establish valuable direct connections between publishers and their readers. Traditionally there has been a blind spot in publishers’ data about their readers caused by retailers acting as intermediaries. Future releases of IntercepTagSM can create a direct-to-consumer linkage that will enable publishers to engage with and gather data on their customers.
“There are lots of competitors out there trying to build a similar solution,” says McCree, “but what differentiates ours is that we actually manufacture the product so we’re the logical source to initiate authenticity, and in addition to creating a unique identifier to fight piracy, we’re also creating a data collection point with each step the book takes through the supply chain. That’s something we think is really exciting when we talk about data analytics. In the marketplace today, the end customer is the purview of the physical retailer or e-retailer. Many times the publisher doesn’t interact with their end customer directly and this capability could help develop that D2C linkage.”
5. Optimize Supply Chain To Reduce Costs
Decreasing costs associated with a “leaky” supply chain requires that publishers have a complete and thorough view of their supply chain. Publishers need to understand customer demand patterns in order to establish an optimized supply chain strategy. And publishers should also strive to balance the various cost components of supply, such as ordering costs, manufacturing costs, and holding costs. In short, working towards a seamless supply chain is a complex task with a lot of moving parts.
LSC’s transformation from manufacturer to services provider has taken the company deeper into discussions with publishers about their business objectives and the custom-designed workflows that can support them. Indicative of this shift is whom LSC is working with at publishing houses, says McCree. “We often start with the folks that we’ve traditionally dealt with in production departments, but many times the dialogue continues with folks that are in our clients’ C-suite, as they look more holistically at the business decisions and the supply chain.”
McCree says that these are not cookie-cutter discussions. They’re consultative and customized so publishers can choose to take a fully baked, holistic service plan or choose a la carte. “Every publisher’s long-term structure and unique value proposition they bring to the market is different.”
And McCree is excited by the more consultative and wide-ranging ways LSC can support publishers today. It’s certainly a new chapter in the company’s history. “Historically, our ability to help our clients was solely in lowering their costs. We could figure out a way to be efficient in the manufacturing process and help them get a high-quality book, with a quick turnaround, at a low price. So price, schedule, quality was what we did, it was helpful, and we were successful at it. What we’re doing now sitting down with a client and helping them with their business model. We can do things with technology and solutions now to help them reduce obsolescence. We can do things to help improve time to market. We can do things to help free up capital in their organizations so they can invest further into new titles or in their publishing lists. We can benefit their businesses in a much broader way.”