Managing in a roller-coaster economy is tricky business. Is it a good time to diversify or is it better to stick to core strengths? To invest in the future or make continuous improvements in the present? PW asked the leading printers to share a snapshot of their business right now, the technological and business changes they are making, and what they see for the future.

Quebecor World
At $580 million last year, Quebecor World's book services division is one of the giants. Its business derives from consumer trade (50%), education (16% and growing), religion (10%) and specialty (24%—25%), which includes books that need spiral bindings or specialty finishes.

Coming on the heels of 2000—"the best year in 30 years, where we were level-loaded for the first time," says Jerry Allee, president, Book Services Group, Quebecor World North America—2001 was a severe disappointment. "We had to cut a lot of costs and close two plants," Allee says. In that transition, Quebecor World reorganized its plants for better efficiency, designating certain plants for different areas of the market.

Responding to the increased need for speed to market and better supply-chain management, Quebecor World has done a great deal to boost productivity and correct any inefficiencies. A corrective action program—a software program that can develop a root cause analysis (RCA) for any problem—has been installed in 120 plants. Anyone in a plant can initiate an RCA, explains Allee, and in three years, they have processed several thousand. RCAs take out the waste and errors, he says, adding, "It also empowers people." The second program, created by Allee, is the Allstar training for customer service reps. Under Allstar, reps attend three-day sessions at Lake Forest College several times a year, with a curriculum that includes problem-solving, team-building and industry-related case studies. More than 100 reps in the Book Service Group have gone through Allstar training.

Technological improvements have come in two basic areas, says Allee: in the front end, with Postscript files being replaced by PDF files ("the current path and the path to the future," he says) and the advent of online proofing. The second is in the area of digital printing, a service Quebecor World has offered since 1996. It entered that business when McGraw-Hill launched its customized textbook business and asked Quebecor World to do the printing. Now the company does customized textbooks for 15 clients.

The newest digital venture for the company, designed for the trade sector, is its Digital Book Module. Designed to help publishers produce small print runs for softcover backlist titles economically, the module is also being used to turn out bound galleys, promotional copies and bound manuscripts. While the project is still in its early stages, the market has been receptive, says Allee. The average run length is 500 copies, and average page count is 320.

Established 100 years ago, Banta is now a $1.46-billion company, of which one-third of the revenue ($330 million) is generated by the Banta Book Group. Trade, education and B2B catalogues and related services are equal sectors, says Banta president and CEO Ron Musil.

The difference between Banta and some of its competitors lies in the area of "related services." Musil points with pride to Banta's 17 income-stream services, including packaging design and fulfillment, software, toll-free call-in services, project management, component business and display design. Five years ago, Banta offered only fulfillment and distribution, in addition to printing.

"We want to be a one-stop source for our customers and help them focus on their core competency," explains Musil. Educational publishers, for example, don't have time or money to build an infrastructure for a short-term project that lasts six months to two years. So Banta sources all the components for educational packages, puts the package together and provides an 800 number for the teachers or students to call.

Consolidation, particularly in the education area, has affected printers like Banta, and it's not just the impact on margins. Five years ago, the company had no long-term contracts. Now 40% of the business is under long-term contract, and that percentage is growing. Such arrangements, explains Musil, help publishers predict costs, and help printers manage their capital and anticipate their volume. There is a creative impact, too. "With consolidation comes a lot of sameness," said Musil. "How can our customers distinguish themselves, and how can we help them?"

Maple-Vail Book Manufacturing
Maple-Vail Book Manufacturing celebrated its 100th anniversary last year, and is a full-service book manufacturing company with electronic and conventional prepress, offset printing and binding. In addition to printing hard- and softcover books, it also distributes for some university presses and book clubs, a growing business that now accounts for 10%—15% of the company's $90 million in revenues. Its two distribution centers are located in York and Lebanon, Pa.

In the past few years, Maple-Vail has been on the same roller-coaster ride as its colleagues. With Harry Potter making capacity tight all over the industry, 2000 was extremely strong for the company, says Bill Long, v-p sales and marketing. Naturally, publishers printed more and sooner to be assured of press time, which created excess inventory for publishers and a weak year for Maple-Vail in 2001. This year, Long says, he is seeing some recovery, but not as strong as he'd like.

With run lengths down and orders up, Maple-Vail is focused on improving sequencing and reducing makeready times in all manufacturing areas to tighten up the production chain. While a new binding system has been added, most of the innovation is in the front end, says Long. More than 85% of the work comes in electronically, mostly PDFs, which Maple-Vail prefers, and all files undergo an extensive preflighting process, and post-RIP preview prior to electronic imaging. The company is computer-to-plate at both plants. The Web site now offers customers the ability to track all aspects of job status. Maple-Vail also offers softproofing, either by uploading PDFs to customers or having them pick up files from the company's FTP site.

Edwards Brothers
Edwards Brothers, based in Ann Arbor, Mich., turns 109 this year. With a main plant in Michigan and another in North Carolina, Edwards Brothers' business is geared toward elhi, mid-level trade, some reference and medical, and 20% of the business comes from university presses. Average print runs range from 2,500 to 20,000.

The potential of its Digital Book Center, which prints ultra-short runs (five to 300 copies), is what excites president and CEO John Edwards the most these days, and he is ready to convert anyone who will listen. "I don't know why my phone isn't ringing off the hook," says Edwards. "It's the hardest sell job I've ever had, but I'm really passionate about digital because it's a way for a publisher to enhance revenues without doing anything. Sure, this is the 20% of the inventory that generates 5% of the revenues, but in this economy, why walk away from that 5%?" Publishers can save money simply by ordering only what they need, he points out, and they can keep titles in print longer or even revive out- of-print titles. With today's technology, Edwards cautions, the model works best in an academic market that will support a higher price point. "You need a price point of at least $30," he advises.

Currently, the Digital Book Center is running two models for ultra-short-run publishing: print to order and print to a minimum. At the Roman & Littlefield warehouse, in Blue Ridge Summit, Pa., the model is print to order. Edwards Brothers has set up a mini-shop (Xerox DT 100, binding line, cover printer, laminator and cutter) that sits in a 1,500-square-foot space. Edwards employees run the press, and the publisher is billed monthly for products produced. In June, they produced 6,000 books on 700 orders; in July, they produced 10,000 books. More than 2,000 Roman & Littlefield titles are printed on these machines, producing more than 80,000 units a year.

Edwards Brothers has a similar arrangement at the University of Chicago warehouse, but the model is print to a minimum, currently at 25 to cover the conversion costs, and probably headed downward. If an order comes in for six copies of a title, and there are four copies on the shelf, 25 will be printed. Edwards said the company has just signed an agreement with a university press in the East, where the printing will be to order; the actual printing will take place at Edwards Brothers' Ann Arbor plant.

Selling this new concept is hard work, says Edwards, since the concept of printing reduced quantities isn't a natural instinct for production or sales people. "I'm telling people you're going to spend more money per unit and run your inventory tighter, but that it's a good thing." He approaches the problem by talking to customers about a new paradigm, a change of equation. He takes the traditional publishing model, and recasts it, urging publishers, "Don't think printing dollars divided by unit; think how many copies sold divided by what you pay." The financial people understand immediately, he says.

R.R. Donnelley
The company posted total revenues last year of about $5.3 billion. Its print solutions division, at $720 million, is the largest domestic printer; it also has a plant in Mexico that prints juvenile four-color work, and one in China, where Donnelley is approved to print domestically. Business consists of trade, educational, religion and juvenile.

To adjust to the challenging 2001, R.R. Donnelley print solutions focused on internal innovation and improvement. All six core plants are now ISO 9002 certified (an approved set of processes applied by ISO, a standards organization). Ed Lane, president of book solutions within the printsolutions group, has implemented several strategies for maximum flexibility and efficiency: niching the plants by business sector, for example, with another as backup. Further, the plants are now managed as one planning asset, not as individual units.

R.R. Donnelley announced this past summer that it will be installing an Inventory Management Service (IMS) in its Harrisonburg, Va., plant. Its integrated, digital, in-line printing and binding module is intended to provide shorter-run printing solutions for slow-selling paperback backlist titles. "We will help publishers identify costs across the chain, look at inventory and turn rate, and see how much money is tied up. For a publisher that rents out warehouse space, this can be a very important discussion," says Lane.

In the prepress area, Donnelley customers have been singing the praises of the company's Title Assessment Process (TAP). Donnelley now processes 25,000 PDFs a month, explains Kevin Spall, director of technology and TAP, accessible through a Web site that enables customers to test PDFs before sending them through. In the testing stage, the customer submits job files for a free evaluation; in the autoflight or preflight stage, a combination of automated and manual checks are performed; the final stage, printability, performs an in-depth analysis of the file elements.

According to Spall, Donnelley is now compiling a database for pages that pass muster, so it can provide publishers with reports on their "pass rate" and share any recurring problems. The overall pass rate is now about 50%, meaning the printer needs to stop for about half of its jobs to fix one error or another. Overall, trade publishing has a 70% pass rate, and education, with its image-heavy texts, is below 50%. Donnelley offers soft or remote proofing for content or text positioning; in the area of color proofs, it would like to move away from proofs altogether. "All of this is more of a culture process than a technological process," notes Spall. "It has to do with the approval and routing process within the publishers."

Malloy Lithograph was founded in 1960 by Jim Malloy, former production manager of Edwards Brothers, also in Ann Arbor, Mich. Forty-two years later, the company now boasts a 175,000-square-foot building, a staff of 350 and sales of about $40 million. Bill Upton, president and CEO, characterizes the company as a major niche printer in elhi and college books, university press and trade books. Business is divided almost equally between the education and trade sectors.

In the printing world, Malloy is recognized as a pioneer in electronic prepress and shorter-run printing. In 1982, it became the first company to install Timson web presses in the U.S. (The Timson, made in Britain, is the gold standard for the shorter-run print market, and so universally loved and used worldwide that, according to Printing World, "the sun never sets on a Timson press." ) Offering electronic prepress since 1991, Malloy was the first commercial book manufacturer to install a Krause LaserStar computer-to-plate system in 1994 and was instrumental in developing the RepKover lay-flat binding process. Upton is a strong believer in investing in new technology, since it pays off so quickly in productivity and increased speed. In the past year, Malloy has installed a Timson Press 48A, which is 50% faster than the original Timson and more productive, since it can produce a 48-page book section rather than a 36-page section. A new Muller Martini Corona binder has been installed that is more flexible, with quicker makereadies on short runs.

For Malloy, 2000 was a great year, boosted by strong educational sales and the Harry Potter effect. Then 2001 was a comedown, a year that Upton described as mediocre through October, followed by a dropoff. In 2002, business has picked up since early summer in both the trade and education sectors.

Regarding print on demand, Upton has done considerable research and he predicts that the price breakthrough is still more than a year away. Today's equipment—whether DocuTech or Oce—and cost structure are not quite there yet to support a broad market, he says, though "customers are definitely interested in keeping more titles in print without building up inventory. Malloy does have an ultra-short-run capability (25 copies), which works well in some markets with books that justify a higher price point.

Courier Corp.
With $230 million in revenue last year, Courier Corp. is the fifth largest book manufacturer. Business is evenly divided between education (elhi and college) and religious and specialty trade (3,000—5,000 reprints), explains Peter Tobin, executive vice-president. A few years ago, it acquired Dover Publications, and Tobin says Courier is always looking to expand the business and may acquire another manufacturer.

With banner years in the late '90s, thanks to the booming juvenile trade business and an elhi market growing at 7%—8%, Courier added $30 million in capacity over two years, new equipment and new technology to shorten cycles and meet demand. When demand faltered, Courier was forced to do some layoffs, but business is picking up now, bolstered by a strong religion market.

One sign of the publishing times is that Courier is doing more component manufacturing these days, from covers to assembly and shrinkwrapping. "Publishers have fewer people and want to do it all on one PO," explains Tobin. "We're customizing media or shrinkwrapping materials for the higher-ed market." Since 1995, Courier has had a division for custom-publishing coursepacks that does it all: clears copyright, puts together the contents, prints and packages. Tobin calls it a "robust niche market."

"Publishers increasingly are looking to us to get high quality in less time," says Tobin. "A lot of publishers, especially in the trade segment, are more sensitive to keeping inventory down and, as a result, print runs have dropped. We are working closely with them on forecasting." It's a competitive world, he adds—customers no longer allow six weeks for manufacturing, but now expect three to four weeks. One way the company has streamlined for speed is to designate certain plants for certain types of printing—four-color text and trade at its Kendallville, Ind., plant, for example, and Bibles on lightweight paper at its National Publishing plant in Philadelphia.

Electronic prepress provides other ways to save time and money, and Courier has been a pioneer in this area since 1991. The fifth edition of its guide to electronic prepress, Right from the Start, will be published this fall. It offers online proofing already, and this summer added online preflighting, so that PDFs can be checked for any errors before production begins.

Short run and print on demand? Courier is a leading short-run manufacturer in the East, because of the capacity of its Book-mart Press in New Jersey. The runs are 200—300 copies, and "it's very efficient," says Tobin. POD is a different matter. The company had a few networked DocuTech machines from 1992 to 2001, but demand fell off in the past few years and it discontinued the program. Recently, Courier is looking at installing some new short-run digital printing machines for customers who need print runs of less than 200.

Lightning Source
Lightning Source is the largest of the print on demand players, and now prints more than 300,000 books a month, with an average print run of 2.8 copies per title. It runs three shifts a day all year round, with the exception of Christmas morning, according to its new president and CEO, J. Kirby Best. In the past three months, the whole plant has been re-equipped; five new IBM 4100 printers have been added, as well as two new Indigo 1000s for cover printing, and a new Muller Martini binder will be installed this month.

For Best, who has a long background in traditional printing, Lightning's POD business is fascinating. "If you think about it," he says, "we're the Dell model—we don't print it until you've already sold it." In fact, he wants publishers to start thinking of POD as part of the natural cycle of any book and invest the $150 or so to set up the title at Lightning from the outset. Then, whenever the title begins its sales descent, the publisher can decide to switch to another model. This way, it shows commitment to the title whenever it's needed, Best says.

Lightning offers three business models to its customers, with business about evenly divided among them. In the distribution model, all orders are routed to Lightning, which prints and ships directly to the customer, whether it is a wholesaler, retailer, or consumer; Lightning then sends the publisher a check.

In the drop-ship model, Lightning prints and ships according to the publisher's instructions—for example, it could print 300 copies of a title and ship 100 to Baker & Taylor, 100 to Ingram, 50 to B&N and 50 to Amazon. The third is a short-run model, in which Lightning prints, say, 750 copies and ships the books to the publisher's warehouse.

Lightning's business is expanding globally. It now has a U.K. office and print facility for international clients like Cambridge and Oxford University Press who want books printed closer to their market. Earlier this month at the Frankfurt Book Fair, several Hong Kong publishers placed orders with Lightning to print more than 1,000 of their titles.

For the future, Best said, the company is looking to get closer to the ideal of printing and shipping in the same day; currently, the current time frame is two to five days.

Worzalla is a major printer of children's books, including Curious George titles for Houghton Mifflin, the Steven Kellogg books for Scholastic and Where the Wild Things Are for HarperCollins Children's Books.

Worzalla, which began business in 1892 as a weekly Polish-language newspaper for farmers in Central Wisconsin, switched over to book printing after the paper was sold in 1913. Family-owned until 1984, it is now an employee-owned company, explains president and CEO Charles W. Nason. Headquartered in Stevens Point, Wis., Worzalla is active in the community and was one of the major sponsors of the past summer's reading project, in which the entire town read The Summer of the Monkeys.

Now 80% of the company's business is in children's books. Worzalla prints high-quality, four-color juvenile books, including school and library bindings. It has large-format sheet-fed webs 40" and 55" for four- to six-color books and four-color webs for I Can Read books. Its other business includes directories and religion books. A few years ago, it increased its plant size by 50%, adding 100,000 square feet.

As a niche printer, Worzalla listens to its customers closely. So despite the "spectacular" business it enjoyed in 2000 with the boost Harry Potter gave to the category's sales, Worzalla started to contract its temporary work force almost immediately in 2001. Recalls Nason, "All our publishers were saying the same two things: 'we have too much inventory' and 'we're going to the Orient.' " Still, Worzalla has been profitable throughout the whole period, partly due to the added square footage. This year, Nason says, "it's still a lot slower than normal, and the competition is intense."

In the children's book business, print runs have come down as publishers have gone from two to three turns a year to four to five. Nason estimates this adds more makereadies for the printer. Almost 90% of the work now comes in digitally, and customers can make changes to text or placement via remote proofing. To help train its customers on digital prepress and work flow, Worzalla recently held a seminar at Penguin Putnam for its design and production staff.

Worzalla also does some distribution for its customers, primarily library mailings or mailings with 65 books to a pack. "We're in it, but not on a grand scale," says Nason. "Diversification cuts both ways— the advantage is you can level out your work flow, but the disadvantage is you can lose focus on your core business."

Arvavto consists of Offset Paperback Manufacturers, in Dallas, Pa., a printer of mass market paperbacks, and Berryville Graphics, the former in-house printer for Doubleday, which now prints hardcovers, softcovers and children's titles. Both were acquired by Bertelsmann in the 1980s and now are part of Bertelsmann Arvato AG.

Offset, which generated $85 million in revenues last year, prints more than 350 million mass market and digest books a year and offers full service to its customers, from preparation through to distribution, according to Michael J. Gallagher, who is president and CEO for both Offset and Berryville. Most of the business is through long-term contracts, with 60% of the customers accounting for 80% of the business, and the company boasts 150 customers in all. Berryville generated $85 million in revenue last year as well, printing 110 million books at its Berryville, Va., facility.

Both companies have invested substantially in new equipment and technology over the years. With print runs ever shorter and the demand for speed greater, Berryville has recently installed a zero-makeready book press, good for 6"×9" product.

Digital printing has interested the two companies for some time. Offset distributes for the University of Scranton Press and currently prints small quantities on a Xerox 6180 DocuTech. It prints lots of bound galleys digitally, too, usually with a range of 300—500 copies.

Inland Press
Inland Press, in Menomenee Falls, Wis., north of Milwaukee, started out as a commercial printer in 1951. When James Lacy bought the company in 1993, he shifted the business to book publishing, primarily multicolor trade books and high-end coffee-table books. Customers now include Harcourt, Nelson, Ideals and Miami Herald Publishing; last year's revenue topped $20 million.

Looking to the future, Lacy added 55,000 square feet to the plant and upgraded the equipment for quicker makereadies; as a result, Inland is now perfecting its niche, speed. From receipt of PO to books shipped out, Inland prides itself on an under-15-day turnaround, and Lacy says he is determined to get it down to 10 days in the next few years. He sees publishers switching to smaller runs, and thinks the fast turnover Inland provides will support the trend.

To Lacy, the quick turnaround is a big selling point with publishers considering printing their books offshore. "If I was a publisher who had put a lot of money up front into a book, I'd certainly think about how soon I can generate revenue and recoup some of my expenses," he says.

In prepress, 90% of the files are received electronically, either in Quark or PDF format, and 80% of the time, the work goes directly from computer to plate. The most improvements in the past year or so has come in the proofing area, says Lacy. Inland offers Kodak Approvals, followed by Imation proofs and Fiery proofs.

Fidlar Doubleday
While Fidlar Doubleday has been in the print-services business since the late 1800s, its major business recently has been providing digital print services for government products—specifically, optically scanned election ballots (not the ones with hanging chads). Using that expertise, Fidlar Doubleday entered the digital book printing business a few years ago, and now books represent 50% of its total volume and a smaller percent of revenue.

Typically, its customers are small publishers, explains Tom Burkhardt, general manager of the company. Many are members of SPAN or PMA. Fidlar Doubleday prints trade paperbacks with runs from 25 to 750; over 750 copies, says Burkhardt, the offset model starts to make sense. Books are printed digitally on cut-sheet (DocuTech) and web-fed (the Oce Demand Stream 8080) systems. In November, the company, located in Kalamazoo, Mich., will start to print hardcover case books.

Burkhardt expresses real satisfaction with the services his company offers to smaller publishers; they start with design and printing, and go on to some distribution and back-office services. "There's been a tremendous upset in the whole chain, from design to delivery," he says, "so we're trying to offer more help to the small publishers. We consider ourselves not just printers, but a clearinghouse of good ideas."