Availability of stock in time is a challenge
As Elsevier positions itself as an information analytics company, Sunil Kumar, operations head, Elsevier, explains the new approaches to printing and delivery to Subhasis Ganguli
21 Mar 2018 | By Subhasis Ganguli
Availability of stock in time is a challenge
Congratulations on your new responsibilities as the operations head of Elsevier…
Elsevier is no longer a publishing company, but an information analytics company. So, my role has changed from print buyer towards analytics and information management. Now, I am responsible for the delivery of content in all forms.
As you are also responsible for stock? Does that affect your print decisions, especially for print runs?
Of course. We calculate the cost of unsold stock/ carrying the cost in 3D P&L. Hence, we could do optimisation of cost. For example, previously, we used to take a print run to serve for 18 months. Now, we have split the run in 40:40:20 ratio for a backlist. We print 40% of the total requirements at the beginning of the session and keep on reviewing it on monthly basis. Another print run of almost equal quantity comes up after a couple of months and near the end of the session, we print the balance quantity. It gives us the freedom to print nearer to the time of actual sales and to keep the stock under control.
There is a hit in PPB (Production Possibility Boundary) due to the reduced print run, but there are savings on total operational cost. Moreover, it is easy to carry out corrections and amendments if required easily without affecting much stock.
For the frontlist, the print breakdown is different. We try to follow the 20:30:50 pattern so that we could test the market with fewer copies, supply required quantity to the market in time and print the bulk once the book is established.
This brings huge efficiency in our system and we are trying to streamline the process accordingly.
Holding cost works out approximately to 7% of the cost of the product. If increased print run could give us a savings of less than 7%, we could go for bigger runs, which sometimes happened in the case of thick colour books.
As operations head, you are now responsible for the whole value chain. What are you doing to improve efficacy?
Availability of stock in time is a huge challenge. We are yet to reach the stage where we could say we deliver just-in-time. We ensure that there is no loss of sale due to unavailability of stock.
We have a hybrid solution to address this issue. Sometimes printed books get backed up with eBooks and printed books are delivered later on when it gets ready. In tier-two and three cities, eBooks sell first and then it gets backed up with printed books.
Elsevier
Elsevier is an information analytics company in the field of science and health, providing information solutions at point of need/care. Elsevier is a world-leading provider of information solutions that enhance the performance of health professionals, science and technology researchers, empowering them to make better decisions, deliver better care, and sometimes make groundbreaking discoveries that advance the boundaries of knowledge and human progress. Elsevier provides web-based, digital solutions — among them ScienceDirect, Scopus, Elsevier Research Intelligence and ClinicalKey — and publishes over 2,500 journals, including The Lancet and Cell, and more than 33,000 book titles, including a number of iconic reference works such as Gray’s Anatomy, Robbins and Cotran’s Pathology and Cambell’s Urology.
What about stocks?
We put a huge emphasis on the effort to make the stock available in the market in time. Re-order level (ROL) gets reviewed regularly which triggers re-ordering quantity (ROQ). It is checked fortnightly by keeping in mind that average TAT will be three weeks (for average 600 pages title for 4,000 copies print-run). Generally, ROQ is determined for 12 rolling months. We had gone through an exercise of standardisation, which pays a huge dividend to improve efficiency.
You now head the operations for South East Asia. Where do you place Indian printers vis-à-vis printers in China, Hong Kong, Malaysia and Singapore?
Printers in China are more effective and very aggressive when it comes to cost. However, I will rate Indian printers as good as the Chinese printers for the Indian market. There are two basic differences between the two. One, Indian printers tend to over-commit and do not know how to say ‘no’. Two, Chinese printers have better MIS and they are better in their commitment to schedule.
What according to you Indian printers should do if they want to capture the global market?
To capture the overseas market and to sustain in that competitive environment, Indian printers need to be more transparent in their dealings. We are pushing Indian printers for our Middle East market and for Africa, and it is working seamlessly. Negotiations are on with Australia and Brazil as well. We count this as our achievement.
India could be a one-stop print centre, as most of the publishing houses use pre-press facility of India. So, if we could push Indian manufacturing successfully, it could become a one-stop solution for procurements for any publishing house. We are promoting ‘Make in India’ brand from our end.
Elsevier in India
Elsevier in India is two decades old, supporting education and research needs in science and health. Elsevier produces more than 300 world class titles every year for medical education and about 150 titles in science and technology. It produces more than 1.6 million units (books) per year consuming more than 2,000 tonnes of paper. The company is transforming most of the titles into PoD-ready format for zero inventory/ just-in-time production of books/ journals. Elsevier Operations has always been very early adopters of new technology, presently working on integration of AI/ RFID technology with printed books.
Vietnam is promoting itself as a print destination in the International market. Have you experienced the same?
We, in Elsevier, are not allowed to operate individually. We have our norms for empanelment and strictly follow the process and workflow. In Vietnam, we are operating through a local partner. That local partner handles all print requirements. We are yet to explore further in that market.
In your opinion, what does India lack in order to become a preferred print destination for international publishers?
There are several shortcomings, including the commitment level, transparency, paper sourcing and MIS (online status updates). Plus, shipping time is not good enough. There is no effective and efficient print hub near a seaport.
With your new position, how can you help Indian printers to go global? What is your expectation from them?
I already have touched this question before. We are pushing ‘Make in India’ internally, which has shown result in UAE and Africa. Some other negotiations are in pipeline. But Indian printers need to come up to accept the challenges. This could be just the beginning and it is a good time to get prepared for the big league.
What is your take on GST?
When a law comes to a country, we all have to follow the same. But we expect our printers to be more transparent with us.
In general, the feel is that cost is going up for GST?
We have considered an increase of cost after considering GST. But if our printers do not act in a transparent manner, publishers may consider getting books printed in South East Asia and bring it back with zero duty or get the job work done with the local printers. A good amount of consideration is taking place due to GST and it will bring new opportunity to the printers. Now, printers need to look long-term and exploit the situation.
What is your experience while working on GST with the printers? Do you think the process got adequate transparency as desired with the introduction of GST or the matter got complicated?
Initially, it seems complicated because of different interpretations. But with time, more clarity came in. Now we all understand the implications and impacts.
It is expected that changes will be challenging post-GST…
We have planned well for GST implementation and appointed PWC as our consultant. We were in touch with veterans in the print publishing and other publishers during the process. But, the final input of cost needs to come from the printers themselves.
As head of operations, you are now responsible for stock holding as well as cashflow. So, you need to print the stock just-in-time at the same time keep a control on print quantity to reduce wastage and pulping. What is your plan to mitigate these challenges?
The just-in-time concept is not much effective in publishing. The books need to be on shelves and display to get sold.
Do you think digital print could help overcome these challenges?
Yes, digital printing is a solution provided we get a commercially viable solution. Only then we can think of just-in-time stock. We are trying to do just-in-time stock in for monochrome books with inkjet and toner-based technology. But in colour, we are yet to get any solution. We need to have a network of printers for POD. It is good if we could print books nearer to our distribution points, but could place the order centrally.
There is no colour inkjet print engine in India. Do you think there is a market for the same? Is it the right time to invest in that technology?
There is a need for market sampling and penetration test. I believe there are enough colour jobs in the market to sustain the investment for colour inkjet engines. For example, we only have a long tail of more than 200 titles with an average page extent of 600. So, there could be a demand of 200,000 A4 pages per month. This is just a back of the envelope calculation and the tip of the iceberg. A detailed study is long overdue. I strongly believe this is the right time to look into this and invest. We may not be able to commit upfront, but once the facility is available we all are eager to use them.
Do you feel a need of a common forum where you could meet periodically, share your knowledge and discuss challenges in a less formal environment? Will an increase in people connect programme be helpful?
We look forward to it. We need to have these kinds of contact programmes, where we meet in a relaxed environment and exchange our views and ideas with our peers, experts and market leaders.
If so, will you be ready to attend this forum organised by a third party? What is your take on this?
We will be willing to participate in such programmes to share best practices and also ensure my team gains from these programmes. In China, printers take part in such programmes organised by third party.
You are one of the market leaders who are using PUR binding on a regular basis, especially for your thick books. What is your experience with PUR?
It’s really good. It releases the sewing bottlenecks, and also improves TAT. It has now become important to understand the requirements so that we can avoid over-engineered products or low-quality products. It is important to understand required page pull strength and ensure that you get the same from your printers.
Today, no publishing house has a laboratory to test the end product. With the change in the market and as awareness and expectation of the end-customer is growing, isn’t it important to have a lab to test the quality before the stock hit the market?
We control raw materials by standardising the same and get it checked periodically. I am not sure whether I would like to have a lab in-house. But, if such a facility is available, I would love to use it. I believe all printers should have a lab to test the finished goods along with raw materials before delivery.
Though the onus is on the printer to deliver the right quality, it is important to specify your requirements correctly. With grain direction, gsm, the bulk of a paper, it is also important to mention the pull strength of the pages as well and to check it periodically. It does not cost much to set up a small lab in-house. Your take?
I agree. As I mentioned earlier, we prefer to mention the standard requirements, be it gsm and bulk for paper or page pull strength for binding. The onus should be on the printers to deliver the same as per our required specification and also to certify the same.
About Sunil Kumar
A professional with 19 years of experience in the areas of print sourcing, procurement of eServices and vendor management, Sunil Kumar is presently associated with Elsevier, a division of RELX India, as senior operations manager (content delivery) for South Asia and South East Asia. Kumar started his career as a graduate engineering trainee at Thomson Press in 1998 and then worked at Ballarpur Industries in the after-sales support team providing technical support to paper purchasers, mostly printers. Experience in both the printing and paper industries has proved to be a successful combination for his present publishing and print buying profile.
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