Changing trends in newspaper supply chain
"Supply chain management accounts for almost 80% of the manufacturing cost of an organisation. V Siva Raja tries to analyse this important facet of the newspaper industry and open new paradigms for transformation."
Print newspapers are one of oldest formal modes of news and information dissemination. Newspapers reach the remotest parts of the country and probably use the most diverse logistic models and still deliver within the stipulated timelines. A supply chain could briefly be described as a system of people, processes, activities, information and resources involved in moving a product or service from many input suppliers to varied customers.
In the case of newspapers, this includes transfer of physical goods as well as data across various channels. In the last few years, we have all seen the virtual disappearance of physical photographs and advt. materials which was earlier the standard for the industry. E-papers today occupy an important place in the newspaper readership numbers as well.
While the overall circulation numbers for the Indian newspapers are growing at a steady pace, there is a visible shift of advt. revenues to other emerging media. India has a very large number of newspapers with very negligible circulation figures and are insulated from the economic trends. However, the large circulation dailies which survive on the advt. revenues will have new break even points with increasing costs of inputs and reducing revenues.
The processes involved in the production of a print newspaper can be described as hybrid in that it involves different types of processes at different stages to produce the final product. During the production of a daily newspaper a very large and diverse gamut of people, processes, content and technologies are used. Any change in the technology, trends, styles and developments directly affect the newspaper industry.
It is important to identify the future trends in supply chain of newspapers which are now passing through a lot of transformation due to the developments in other Media. The changes in the supply chain of the newspaper industry and its impact on the value chains will affect a host of industries and the way the traditional business structure of this industry functions and delivers goods and services. There is a strong need for technological innovation in few critical parts of the production value chain and post production processes that encompass printing and distribution of printed newspapers. The supply chain models could reduce the time to market and compete with industry trends in emerging media like the internet, etc. which delivers information instantaneously. The idea is to reduce the timelines and distribution costs while innovating on products and processes.
Newspaper publishers in India have recognised the need to transform and invest into other media and businesses, including commercial printing, packaging and e-commerce. Almost every large newspaper has an effective e-paper and is available on the web. It will be interesting to observe the supply chain dynamics to serve the changing needs of the industry.
The critical success factors which will ensure a sustainable growth for the newspapers would essentially evolve from the content focused to consumer needs, right pricing for the product to enable sustenance, and technology to support the innovation.
As newspapers serve the purpose of information dissemination, they are under a tremendous influence of various factors. A dynamic newspaper would constantly look at the following factors which affect the readership trends as also the newspapers:
General state of economy The economies of Europe, America and other industrial countries are in recessionary mode or at zero growth. This seriously affects the revenue models of advertising for media. The survival of the newspapers is directly related with the growth of revenues across the industry.
Increasing literacy in the developing world India, China and other developing countries are experiencing exponential growth in the literacy and these economies have not yet reached saturation levels of readership. However, with the free distribution of tablets, computers and other devices by the governments, the emerging media will have a tremendous advantage compared to traditional newspapers to capture the new and young readers.
The very nature of the industry which is about news and information is transient and subjective. The newspapers and other traditional media generally are one to many pathways. This does not allow active interaction between the reader and the news media. The emerging media like the internet mobile are two way devices with active communication. This will have major impact on the supply chains of all the news media.
Price sensitive and highly competitive nature for advertisements as well as sales. While newspapers traditionally were essential commodities a few years back. The situation is rapidly changing and this is seriously affecting the supply chains and strategies.
Rapid change in technology in all the industries affects the printing industry as a whole. Newspapers employ the latest technologies in computers, graphics, communications and engineering. The development in these industries affect the newspapers.
Revolution in media industry and digitisation of data. The information collection, aggregation, analysis, dissemination and storage have undergone a revolutionary transformation. This calls for completely new processes and tools to manage information.
New vehicles of information dissemination like the tablets, smartphones, interactive television and other mobile technologies bring information very rapidly and without intermediaries on a 24x7 basis. This puts tremendous pressure on traditional systems and bring in new paradigms in management of resources.
Subsidisation of sales creating pressure on revenues. The depleting revenues and readerships bring in cut throat competition which further erodes the traditional structures.
Advances in the tele-communication technologies. The NEWS dissemination is solely dependent on various technologies and with the rapid advancement in hardware, software and pathways, the transfer of information is increasingly becoming faster and better. This further increases cost of development for the newspapers to create the content to suit the new technologies.
Sustainability of the machine manufacturing industry: With the reduced investment by the newspapers in Europe and US markets, there is a serious setback to R&D investments. Major manufacturers are going through a crisis situation due to dwindling requirements. This is highly counter-productive for the growing markets like India and China in the long run where the readership is growing at on a year to year basis.
The newspaper industry is passing through a decline stage in its life cycle and the transformation into a new economic model will have a major influence on the traditional supply models of this industry. Supply chain linked to newspapers segment can always look for alternate segments like packaging which is growing fast. Paper mills perhaps would be manufacturing different qualities of paper to serve the changing needs, so would other suppliers and manufacturers, who can transform their products to serve a new set of customers.
Transformation and change are permanent and inevitable features of any industry, it is for us to look at new opportunities and avenues of growth and prosperity.
V Siva Raja works for HT Media Ltd. He has been working for
the last 34 years in the areas of innovation, projects, training and
development. He has worked in various organisations like The Printers
House, The Times of India, Indian Express and Dainik Bhaskar.
