More Reprints, More Often Put Publishers In a Bind
Like many small and not-so-small publishing houses this year, Steerforth Press has done its share of begging. With printers, that is. Print capacity is so scarce, according to publisher Chip Fleischer, that trying to get books delivered on time is like contending with a creeping flight delay on a foggy night at JFK. “This is definitely the tightest we’ve seen it in seven years,” Fleischer says. “In a couple of cases this fall, we’ve had to pull film from a printer and move the job to another printer. Even then it still ended up being a couple weeks more than we had expected.” Other publishers are sharing the pain. “We are feeling the pinch of extended reprint periods,” says Laurie Brown, vp at FSG. “It’s not only that you get unacceptable dates to start, but then printers are failing to make even those promised dates. And of course, the reprint comes in, and the demand is long gone.” Even the bigger houses, it seems, are biting their nails. “I don’t think we’ve actually been out of stock,” says Tim McGuire, vp production for Simon & Schuster, “but we’ve had many more close calls and have worked much harder in forecasting. We’ve focused on our fast-selling frontlist, and we’ve struggled with our backlist reprints.”
It’s a litany that many ascribe to publishers’ efforts to get a handle on their out-of-control inventory. So-called just-in-time inventory management — lowering print quantities, keeping fewer books in stock, and reprinting more often — has undeniably saved publishers money. But those savings have come at a cost. Couple higher reprint frequency with booming educational and religious markets, factor in a labor shortage in a consolidating printing market, and throw a few million copies of Harry Potter into the works, and you’ve got a major production problem. Though the seasonal print crunch may ease up after the holidays, some observers are concerned that despite the best of intentions, just-in-time may turn out to be too late after all.
Riding the Logjam
“It doesn’t take too many titles to tie up a printer,” says one remainder dealer who’s been the indirect beneficiary of lagging delivery dates to publishers, “so you wonder what everyone was thinking when they invented these 3,500-copy reprints.” Indeed, for people like Fleischer, the print backup has certainly changed the way he does business. He reports that for the first time, printers have been fiddling with their promised delivery dates, and in one case, a printer called the day before a book was set to ship, to tell him it would actually ship the following week. He’s now learned to regale his account rep with complaints, which generally gets results. “You have to be a squeaky wheel more than you used to,” he says. “The printers were trying to fit in more important customers, and go back to press whenever they could.” Now, Fleischer has bumped up schedules for Steerforth’s winter and spring lists, the irony being that if the printers actually meet the current schedules, the books will arrive early.
Even a house like Hyperion has been caught between increasingly rapid production schedules and backed-up printers. “The logjam is easing up for Hyperion,” reports production director Linda Prather. But it hasn’t been easy. “Reprints used to have a two week schedule, and now you were looking at five, six, and eight weeks. And if you didn’t have a book scheduled, it was impossible to get print space. We have eight bestsellers on various lists, and a number of those went out and needed reprints immediately. I did a lot of begging.”
Of course, certain larger houses are the ones who are bumping the little guys off press. “We’ve consolidated our business to just a few vendors, so we have tremendous clout with the suppliers we’re doing business with,” says John Vitale, vp book production for HarperCollins. He explains that though printers are reluctant to add new equipment — having seen presses sit idle in years past — they’ve been able to increase productivity with their existing equipment. “One of our major vendors actually produced more books this past January than they did the year before,” Vitale says, “and they were full the year before.”
S&S’s McGuire doesn’t think squeezing more books out of the presses will have much effect, however. “It’ll be a permanent situation,” he says. “Publishers and book manufacturers will have to forecast their work better in the future, and very small publishers will have to find some alternative manufacturers they can partner with.” As for the present jam, McGuire cites slips in productivity at Quebecor and Donnelley, noting that plant production at certain vendors was off as much as 30%. “The closing of Quebecor’s Vermont plant in April at least temporarily took some capacity out of the industry,” he adds, noting that most of the equipment was moved to a new location, but did not come on line as quickly as Quebecor had hoped. (A Quebecor World spokesperson denied that the closure affected operations.) In the end, McGuire says, just-in-time management is crucial for publishers because their product is fully returnable. As corporations rush to cut returns across the board, though, it seems few actually gave the issue a title-by-title reality check — nor did they bother to tell the printers. And another attack on the persistent problem of returns has been nipped in the bud.
‘It’s Kind of a Crazy Business’
The presses may be rolling nonstop, but the printing market remains as competitive as ever. “We’ve been full or over the top for the last six months,” says John Edwards, president of Edwards Brothers. “Our problem is that we could make more books if we could get more skilled bodies. Unemployment in Ann Arbor is 1.2%.” Furthermore, with elementary and high-school enrollments “off the charts,” and as the baby boomlet moves through college, the educational demand will move right along with it. Edwards says printers and publishers must work to improve long-term planning and communications. “There’s a lot of horse trading going on as you get down to the wire,” he says. “It’s actually driving a better understanding of publishers’ needs.”
Peter Tobin, vp of Courier Corp., says that demand has been high for all of this year, and he’s one of the few printers actually investing in new equipment. “We spent $15 million in 2000, and we’ll do it again in 2001,” Tobin says, emphasizing that just-in-time is not bad for printers who have a structure that allows them to manufacture short runs or have digital presses. Unfortunately, the hope that digital technology might come to the rescue is a pipe dream for the immediate future, says Ron Weir, senior vp of portfolio management for Donnelley. “The technology is continuing to evolve in digital printing,” he says. “But the cost-effective point for those runs is still rather low. There was promise at the last DRUPA show, but for this fall it’s not a technology that’s solid or in place.”
Printers also cite the feverish pitch of the third- and fourth-quarter publishing cycle. “The big guys are very upset that their equipment doesn’t run at full capacity for six months of the year,” says Michelle Gluckow, executive vp at Book-mart Press. “The big cry was to even out the loads throughout the season. Publishers have tried to do it, but it just doesn’t work very well.” Now, everything comes at one time. “In March and April, we’ll all be looking for work. It’s kind of a crazy business, actually.”
The Remainder Game
Also crazy is the fact that despite just-in-time practices, the remainder business has never been better. “It’s an odd situation,” says Steven Sussman of Siegel/Sussman Associates. “On the one hand, you have publishers screaming that they can’t get print time, but on the other hand you have a CIROBE where they’re all talking about how great business is.” Sussman notes that a happy medium is hard to find. “If you run a one-out, one-in system, you’re in trouble if a book isn’t in the warehouse when the order comes in. To me, ‘just-in-time’ means losing sales.”
Remainder buyers, at least, report plenty of product coming down the pike. “If it is a tight printing market, it certainly hasn’t seemed to affect availability of remainders,” says Fred Eisenhart, director of remainder acquisitions for Barnes & Noble. Tamara Stock, co-owner of remainder dealer Daedalus Books, hasn’t seen a slow-down either. “From the big publishers that would use the just-in-time inventory, we’re seeing the same huge quantities that we always saw,” she says. Marshall Smith, CIROBE cofounder, thinks remainders are here to stay. “Even with just-in-time,” he says, “if you take the keenest publishers, nobody hits the mark with less than a 10% margin of error.” And now, if reprints are being delayed a month or so, it probably means more remainders, as books get funnelled into the system too late. Furthermore, as publishers bump up initial print runs to allow for delays — à la Walker’s George Gibson, who is hiking major runs by as much as 20% — this too may add to overstock.
If it’s any consolation, publishers aren’t alone in their struggles to perfect just-in-time inventory. As The New Yorker recently noted, product shortages have afflicted the electronics industry as well, partly because just-in-time simply shifts the inventory burden from manufacturers to suppliers: “Call it the conservation of uncertainty: you can pass it down the supply chain, but you can’t get rid of it.” Of course, wherever the uncertainty happens to land, some point out that a tight printing market is not exactly a bad thing for publishers. As Hyperion’s Prather says, “Most of us are happy to know that people are still buying books.”
