With the publishing industry headed for what looks like another year of sluggish growth, each segment within the supply chain is pressuring its vendors, suppliers and partners for better terms. Nowhere is this pressure more keenly felt than at printing and manufacturing companies.

For publishers, it's a buyer's world out there, and the printers know it. "They [publishers] want you to be faster, more efficient, and they want it right the first time around," says Ronald LaVerde, president of Jaguar Advanced Graphics. "No question—the customers need you to be better on service, time and pricing," says Joe Makarewicz, executive v-p for Arvato.

"Publishers are trying to shorten their lead time," notes Peter Tobin, executive v-p at Courier Corp., which does a lot of business in higher ed. "We see many publishers interested in saving time by using one purchase order to do the CD and the book plus the cover and the paper and the package, and, of course, we like that." To satisfy publishers' need for speed, many printers, like Courier, are investing in new equipment, especially zero make-ready presses.

Publishers are also pressing for better color management tools, so that the publisher and marketing director don't fall in love with a laser proof only to find out it's a different color in the file and the printer can't print it. To address this need, several companies are introducing new colorproofing tools.

Printers are continuing to upgrade their services, even though business is generally slow. On the education side, federal and state cutbacks have resulted in state and municipalities not buying with alacrity, says Stephen Snyder of the Book Manufacturing Institute. The trade side was soft all year until Harry Potter came along. "God bless Harry Potter!" says Dominic (Doc) Maiorino, v-p sales, for Domtar publication papers. "It came out at a good time, and was a positive phenomenon on so many levels. It brought so much extra traffic and sales into the stores." Similar cheers were heard for the Oprah classics book club selection and other summer blockbusters. "We've all benefited from East of Eden," says Courier's Tobin. "Anything that gets people thinking about backlist is good."

Within the dips and rolls of this economy, there have been management changes at Quebecor World and R.R. Donnelley; the announced acquisition of Lehigh Press by Von Hoffman; and downsizing and refocusing at Worzalla. Many printers were shaken by the layoffs at Scholastic, even at a time when it had the number-one bestselling book. "We are all faced with new realities—the publishers, too," says Charles W. Nason, president and CEO of Worzalla.

What's really needed is a big shot in the arm. "We need the economy to start heating up again, so people can start buying books again in the way they historically have," says Jerry Allee, executive v-p book services, president international sales, for Quebecor World. "On the education side, the state and government agencies have got to start releasing money for textbooks." For the year to turn out well, consumer sales must improve this fall.

Some printers are seeing a ray of hope. "Our publishers feel confident about their fall lists," says Ron Weir, senior v-p, book solutions group, R.R. Donnelley, "and we were encouraged by the recent news that comp-store sales were up at Barnes & Noble."

Still, in today's economic environment, "It's all about survival," Domtar's Maiorino says." These days, it's not uncommon for Domtar to get a call on Monday for paper needed Thursday because the book is printing on Friday. "That's just the pace of business today," he says. "You may know the order is coming, but sometimes you don't know the exact number or the exact paper count until the last minute." Shorter press runs and aggressive pricing "is just a reality we live in," Maiorino says.

One of the biggest consequences of compressed publishing cycles is that printers' work is now much less predictable. "Two or three years ago, we, could predict sales this month, could estimate next month well, but two months out was hazy. Now we can predict business this month, but next month is hazy, and two months out, forget it," says Bill Upton, president and CEO of Malloy. "We used to know the workload three to four months ahead; now we have visibility only for six weeks."

"The nimble will win," says John Bertuccini, president, book & directory publishing services, Quebecor World.

Even though publishers and book retailers all agree on the importance of supply chain, it's a pretty imperfect world, judging from all the talk about rushed printings. "We see shorter first printings, with more frequent and rushed reprints," says Coral Graphic's Dave Liess. "The publishers can't predict and we can't either." "We're all on-demand printers these days," says Quebecor World's Allee, "because publishers wait until the 11th hour to firm orders, and it's understandable that they do." "Everyone is being very conservative. The customers are waiting till closer to publication so the numbers are more accurate," adds Kelly Hartman, marketing manager for Phoenix Color. Bill Long, v-p sales and marketing for Maple-Vail Book Manufacturing, notes, "There is significant capacity in the industry, so publishers are under less pressure to preplan."

John Edwards of Edwards Brothers sees a big upside here for his company. The printer has positioned itself to be able to use one file to do first printings and reprints in a wide range of run sizes. Quebecor World and R.R. Donnelley have introduced digital printing modules for shorter runs within the last year, with moderate success. Lightning Source, the biggest player in the print-on-demand world, continues to expand its reach.

What About Overseas Competition?

If you talk to any four-color book printer about business today, trying to avoid the mention of overseas competition is like trying to ignore the elephant in the room. This sector of the business has been adversely affected, and there appears to be some impact on the lightweight Bible business, too. But the resulting job losses are part of a larger picture that has fueled consumer news stories all summer and fall—the loss of manufacturing jobs offshore, one of the factors in the so-called "jobless recovery." In the past few months, the Bush administration has been pushing the Chinese and Japanese governments to let their currencies rise in value, rather than remain artificially pegged to the dollar. This would result in an increase in wages, making the disparity between the average Chinese worker and the average American worker less pronounced. "We in the book printing business cannot compete with average 65-cents-an-hour job in China," says Worzalla's Nason, which specializes in four-color juvenile work. "I don't blame publishers—I'm unhappy with our government," he says.

Responses to the challenge vary. Some printers are refocusing their business to make up for lost dollars. Others are figuring out ways to keep the dollars in the company, even though the printing leaves the country. R.R. Donnelley, for example, has some longstanding global solutions for its customers, including a plant in Mexico, one in Brazil and two in China. Phoenix Color, through a recent partnership with an Asian printer, offers its customers the option of manufacturing a book overseas or domestically, on a printing-by-printing basis. Arvato, whose Berryville Graphics plant has lost business to overseas competitors, plans to announce a partnership with a sister plant in Colombia next month so it can offer a lower-unit-cost option to its customers in the same time zone. Others remain confident that if their costs are relatively competitive, the decided advantage in delivery time will keep the work on their machines, especially in a tough supply-chain environment.

"We are integrating these global solutions into our regular business, as our customers trade off cycle time versus price," says Ed Lane, president, Book Solutions, R.R. Donnelley, adding, "we don't want to cannibalize existing business, we want to serve more markets they [customers] haven't reached."

With little likelihood that the book publishing industry will enjoy a significant growth spurt any time soon, John R. DePaul, president of the publishing components business for Lehigh Press, advises, "The challenge for a printer today is to look for new opportunities to leverage the equipment they already have."