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Cengage Learning: Shifting to Digital to Reduce Capital and Stay Relevant

Cengage Learning (Stamford, CT) is a provider of teaching, learning, and research solutions for the academic, professional, and library markets. With annual revenues of approximately $2 billion, this fast-growing, internationally-oriented company has 5,500 staff members in more than 20 countries around the world. Cengage Learning’s brands include Brooks/Cole, Course Technology, Delmar, Gale, Heinle, National Geographic Learning, South-Western, and Wadsworth.

Leading the transition from print to value-added digital and custom solutions, Cengage Learning’s mission is to develop a deep understanding of its customers’ needs, capitalize on synergies across its businesses, and deliver innovative products and services that cannot be matched by competitors. The company believes that finding the right combination of content, pedagogy, and technology will make it easier for educators to teach and students to learn. Its strategy is to provide the right solution for each instructor; to develop hybrid, customized, integrated teaching and learning systems that deepen student engagement and improve learning outcomes. In addition to changing the way that educators do their jobs, this strategy shifts how education dollars are being spent and how print production is occurring today and in the future.

Through its unique position within the library and academic markets, Cengage Learning provides integrated learning solutions that create a bridge from the library to the classroom, including books, digital resources, online courses, and custom solutions. The company has acknowledged that there is no “one size fits all” solution in learning, and this concept has shaken the traditional book publishing and printing market for educators worldwide. According to Steve Crile, Executive Director of Distribution and Digital Print Operations, “Ten years ago, the business model for textbooks was simple–textbooks were printed and sold in the local bookstore whether new or used. Today’s students have many more options, including online sales or exchanges of used books, rental book companies, and e-books. As the marketplace has changed, the quantity of books that must be printed and warehoused has declined.”

“We print and ship books in orders from 1 to 1,000 on demand at a much lower cost per unit. Producing more volume on demand means a lower capital investment and less inventory obsolescence.” Steve Crile
Executive Director of Distribution and Digital Print Operations for Cengage Learning

Although Cengage Learning is still publishing new books, the business model is changing. Large quantities of new titles are offset-printed by external book printers and then warehoused and fulfilled by Cengage Learning, but publishers don’t want to produce second or third print runs and warehouse them. This has driven the need for digital production for Cengage customers. These reorders are now being digitally printed in-house on the company’s Océ ColorStream® 10000 Flex press and Canon imagePRESS® 6010. Cengage Learning converted much of its 786,000 square foot (73,000 square meters) distribution center from a warehouse full of inventory into a pressroom and production facility. Crile explains, “Owning the inventory of books is a big capital cost, and the 83 million books in our warehouse are quite an investment! Although we have some four-color work that requires some level of inventory, we print and ship books in orders from 1 to 1,000 on demand at a much lower cost per unit. Producing more volume on demand means a lower capital investment and less inventory obsolescence.”

Beyond print on demand for reprinting, Cengage Learning provides custom book publishing solutions as a primary application of its business. Custom Learning Materials enable professors and instructors to create custom-printed or digital course materials, textbooks, or reference supplements. The company provides online tools and academic experts to help instructors customize material to specific course needs. Crile elaborates, “Suppose a professor likes more than one textbook but doesn’t want to have students pay for both books. He/she can select just a few chapters from our various texts and maybe even add in lecture notes or published materials. The pages can be combined into one custom textbook that is printed in-house in a micro-batch for that professor’s classroom.”

In addition to print on demand and custom book printing solutions, Cengage Learning offers other digital solutions for learning. The digital market has been growing for some time, so the company has been dealing with electronic editions of its titles for quite a while now. Cengage Learning has also been investing in the next generation of learning management, including mobile and other interactive tools, to help instructors better manage their classrooms. Crile concludes, “The educational solutions market is changing all the time, and Cengage Learning is there every step of the way. We’re very excited about what the future holds for us!”