Lightning Source Inc., a subsidiary of Ingram Industries Inc., offers a package of digital fulfillment and printing services to the book industry. The company recently announced an upgrade of its manufacturing lines to include the new IBM Infoprint 4100 high-speed black & white digital printers, just one month after appointing a new Chairman and Chief Executive Officer, J. Kirby Best. The company has printed over five million books from its plant located in Tennessee.

WhatTheyThink spoke with Best to see how he was settling in to his new role, and to get a pulse on the latest from Lightning Source.

Topics in part one:
- Computer integrated manufacturing in book publishing
- 5 million books, working on 10 million
- The role of suppliers like HP Indigo, IBM & Muller Martini
- How Lightning connects with a publisher's workflow

Topics in part two: See Part Two
- Why publishers print on-demand
- The “book life cycle”
- Allowing the backlist to live in perpetuity
- Outlook for Lightning & the book industry

WTT: Kirby, in your previous tenure with Publishing Solutions, Inc., of White Plains, now called ColdLogic LLC, you focused on helping publishers deal with the huge inventory and distribution issues facing the book industry. Tell us a little about what you accomplished there in terms of improving supply chain management in this complex industry, and your extensive background prior to that time.

JKB: At PSI/ColdLogic, we created a system that collected point-of-sale and on-hand inventory information for publishers. We analyzed the information; web based it, and gave back publishers "real-time" sales information in a format that facilitated decision-making. This was the first time publishers were able to actually see real-time sales information. I define a sale as when a book gets to the final consumer and there’s a 99% chance it’s not coming back. Our industry tends to move inventory many times before the end user actually buys it.

Publishing Solutions created a system that gave publishers a clear view of what books were really selling and how the inventories were moving. The intent of our system was to allow publishers to make strategic inventory and print decisions that would reduce returns but not upset sales. Wharton Business School has defined "returns" as the single largest issue in trade publishing, and claims that returns represent $1.1 billion in recoverable waste. Any tool that can assist publishers with return management is a valuable one that should be exploited.

PSI/ColdLogic provided publishers a solution to reform certain aspects of the supply chain. Unfortunately, the industry just isn’t ready for it yet. Until some behavioral modifications take hold in the supply chain, point-of-sale and inventory tools are just not useable – not yet. So, it’s a chicken and egg situation. Bottom line, we gave publishers some fabulous tools to work with but it is just too early for them to use them on a broad scale.

This point-of-sale and inventory tool might tie in well with what we’re doing at Lightning Source at some time in the future. The most important development at PSI/Coldlogic was the development of the algorithms that will allow publishers to re-supply their inventory in a much more practical and economical way. You tie that in with what Lightning does with POD, and it makes sense that computers will provide publishers the logical way to setup their inventory systems to reduce returns to approximately 11-12% without adversely affecting sales.


WTT: The Lightning Source leading edge books-on-demand publishing solution puts a whole new spin on computer integrated manufacturing for the book industry. What prompted you to accept the challenge at Lightning?

JKB: Lightning is such a solid and dynamic company. Lightning is going to drive the industry for a long time – both in terms of the tools we provide to the publishing community and the manner in which we do it. We have so much untapped potential, and it was an opportunity I just couldn’t turn down.

On a personal note, I have enjoyed getting to know the Ingram family, particularly John and Orrin, and I just thought, "What a great family to work for!" When they introduced me to their senior management team, I was impressed with both the company and its people. To have access to all of the intellectual capital and resources in this firm is a wonderful, wonderful opportunity. I just couldn’t turn it down.


WTT: Lightning recently announced the publication of its five millionth book. Quite a landmark! And we understand you are associated with over 1,600 publishers. Where do you plan to take Lightning near-term, and what are some of the key strategic initiatives you plan to launch moving forward?

JKB: It is an amazing feat to print our five millionth POD book – a landmark event in book publishing. We will reach our ten-millionth-book milestone in a quarter of the time. I think that people have dabbled in one-book-at-a-time print and fulfillment to see whether it would work. There is no question that it does work, and it will work better and better.

As for our strategic initiatives, I would like us to expand our printing bandwidth and enter into some key partnerships to leverage some of our unique capabilities.


WTT: Lightning Source has just updated its manufacturing lines. What are some of the changes you made and why?

JKB: We have recently completed an upgrade to IBM Infoprint 4100 equipment. These presses produce halftones that would please a traditional printer. Further upgrades to the 4100’s are coming in the next few weeks in terms of speed and quantity.

On another exciting note, we have just installed two new HP Indigo print lines for color cover and jacket production that are showing phenomenal quality improvements. Without a loupe, I challenge anyone to tell the difference between a litho cover and what comes off our new presses. The Indigo equipment is producing a fantastic cover product.

On the bindery side, we have selected the AmigoDigital Perfect Binder from Muller Martini. One new binder has been installed since my arrival, and we have another three binders on order to be installed in the next few weeks.

At Lightning, we’re moving to implement as much hands off manufacturing as we can. We are working to automate some of our processes because we know it’s getting increasingly competitive out there. We know we’ll have to strategically lower our prices while we continue to build upon our quality, and improve upon our processes. Lightning is currently in the execution phase of a strategic initiative where virtually the entire print and bind facility will be doubled in capacity in the next 30 days.


WTT: What’s the process when you take on a new publisher? How does content get into your system, and what is the usual order process you put in place with the publishers?

JKB: Our systems are very automated. Prospective publishers apply for an account with Lightning Source via our website. Publisher content is submitted to us on our website, and/or in the mail if hardcopy materials need to be sent. We accept digital and hardcopy books for submission.

Lightning Source formats publishers’ digital files or hard copy books into on-demand formats, and stores those book files in our digital library as "print ready." Lightning Source does have certain title submission criteria, and there are criteria in place to assist our publishers in providing files to us that are of the highest quality, to print exceptional books. Publishers may order books off our website directly, or have their books distributed through our distribution channel, which has unprecedented reach. Our distribution channel strength is the only one of its kind in the one-book-at-a-time circle.


See Part Two