Lessons from History: Inventory Management and Facility Location in the Early Days of Print Revolution
Subh Ganguly describes how two aspects of supply chain may explain one of the most important innovations in history.
Inventory Management
It is common knowledge that Gutenberg’s printing press was a remarkable innovation that ushered in the print revolution in Europe, which in turn was a crucial catalyst that sped up the European renaissance. What is less widely known is that like several other major human inventions of antiquity, the earliest printing presses were developed in China, from where the technology travelled to Europe.
Technologically speaking, Gutenberg’s press (1450s) was merely an improvement over movable type presses that were prevalent in China. A question naturally arises – why did the print revolution take off in Europe and not in China, where the technology already existed? I am sure there are many historical reasons which are beyond my expertise, but from an operational point-of-view, here’s a theory I posit.
When working with movable types, a printing house needed to maintain sufficient inventory of every character. For most European languages, that would be the Roman alphabet, both lower-case and upper-case, the ten numerals, and a handful of punctuation marks. In all, that means fewer than a hundred unique characters (stock-keeping-units, or SKUs in inventory management parlance). In contrast, Chinese characters number in several thousands, making it a far more complex inventory-management problem. Characters needed maintenance and replacement as they aged. As any manager involved in a SKU-rationalisation exercise would know, when it comes to managing inventory, it is always more efficient to manage fewer SKUs. The larger the set of SKUs to manage, the more likely it is that you would stock-out on a few units which will adversely impact your operations. The smaller character-set in the Roman alphabet must have helped the flourishing of the print revolution in Europe.
Facility Location
Despite the remarkable achievement of mass printing (over 150 copies!) of the Latin Bible, Gutenberg struggled to sell copies fast enough, lost a lawsuit that his financier had brought against him, and died in relative poverty. While he was ahead of his time and his market might not have been ready (literacy levels were very low back then), in retrospect, one of the limitations of his venture was the location of his facility. He set up his printing press in Mainz, an inland city near Frankfurt. There were possibly not enough people literate in Latin in that town who would be his customer, and even though the town is by the river Rhine, it was not well-positioned to distribute the product to potential customers in other geographies.
Subsequently, the printing industry moved to the well-connected port-city of Venice, from where it was easy to ship printed books to other parts of Europe and the rest of the world. It is from Venice that the first-ever printed book to introduce the double-entry bookkeeping system was published, less than thirty years after Gutenberg’s death. ("Summa de Arithmetica, Geometria, Proportioni et Proportionalità" authored in vernacular Italian by Luca Pacioli was first published in 1494).