As I listened intently to the guest speaker at a Leadership in Quality event sponsored by the University of Minnesota’s Carlson School of Management, a particular word was emphasized that captivated my attention.

The word was “sustainability” and its meaning has renewed impact as newspapers consider the new hybrid production choices now available.

As print circulation continues to weaken and newspapers anxiously look for additional sources of revenue, publishers are examining alternative forms of revenue that go beyond printing the core product.

But what are the implications of pursuing such a strategy?

Very seldom, if at all, is the concept of strategy and sustainability even mentioned, much less emphasized.

Yet the operational and financial impact of pursuing a hybrid production strategy is by no means insignificant.

Hastily chasing

Are newspapers strategically considering hybrid production or are they panicking and hastily chasing after opportunities without considering the lasting implications of such decisions?

Some newspapers are making the strategic choice to outsource certain production functions, while others are deciding to maintain production control and compete as hybrid printers. Those who choose the latter have to face the critical question of competing in a hybrid production environment without losing sight of their core product offerings.

I classify the newspaper industry as highly vertically integrated, due to the level of control that the traditional newspaper has over its supply chain — from gathering news to producing and distributing the final product.

As such, there are an abundance of specialized resources in the various functions of the newspaper that focus on producing and delivering the final product every single morning to homes, businesses, and other outlets.

In contrast, a hybrid production strategy requires a competence along additional competitive dimensions in order to produce a wider range of products, in a timely and quality-oriented manner, while minimizing the costs associated with production.

In addressing this issue, the industry has directed most of its focus to exploiting underutilized production capacity by increasing the flexibility of a newspaper’s production operation.

The result is a shift from the traditional mass production mentality to a new more flexible manufacturing strategy. Many see technology as the enabler of such a transition, and a number of vendors at this year’s Nexpo displayed products and services that support hybrid production, from job quoting systems to UV dryers and closed-loop ink control.

Yet the industry still has to determine how to transform those technologies into a competitive advantage.

Commercial printers, on the other hand, actively compete along multiple dimensions for every single job that is produced. Flexibility, high quality, and low cost are essential in order to remain competitive. Printing is their core business and those that are successful do it very well.

Hybrid production opportunities

Moreover, commercial printers are also exploiting hybrid production opportunities.

Transcontinental Inc., to name only one, has aggressively pursued newspapers. Its 15-year, $1 billion contract with Hearst to print the San Francisco Chronicle is just the first step in what could be a series of U.S. plants built and operated by the Canadian printer.

Transcontinental has successfully capitalized on its hybrid production competence and has translated it into a sustainable advantage. Are newspapers ready to compete, day after day, with highly experienced commercial printers like Transcon?

Simply having the technology to be more flexible does not necessarily translate to competitiveness — much less a sustainable advantage.

So how should newspapers approach a hybrid production strategy? It may come down to whether or not the strategic choices pursued are sustainable or not.

I’ll explore this topic in more depth in future Viewpoints. I’ll discuss the definition of a competitive dimension, the foundation of a sustainable competitive advantage, and how everything fits into a newspaper’s neatly packaged strategy.

David Zepeda has more than 10 years’ experience in the printing industry. He is in the Operations & Management Science doctoral program at the University of Minnesota and also provides consulting services to the industry. He can be reached at zepe0003@umn.edu.