Jared L. Howland

Shelf-ready: A cost-benefit analysis

Rebecca Schroeder and Jared L. Howland

Citation Information: Schroeder, Rebecca, Howland, Jared L., (2011). Shelf-ready: A cost-benefit analysis. Library Collections, Acquisitions, and Technical Services. 35(4):129-134. (Full Text – requires subscription)

Abstract

Brigham Young University’s Harold B. Lee Library conducted a time-task cost study to compare the cost and processing time of shelf-ready books to non-shelf-ready books to determine if it could better use its human resources and if it should expand the use of shelf-ready to include its approval books. The results showed that shelf-ready was, on average, 5.7% cheaper, took 47% less processing time, and arrived on the shelves 33 sooner than books processed in-house. Based on the results of the study, the library moved its approval books to the shelf-ready program and was able to reallocate catalogers tasks.

Introduction

Following the corporate business trend to use outside contractors for some of their operations, libraries in the early 1990s began seriously discussing, and then implementing, the outsourcing of their technical services tasks to receive shelf-ready books. Outsourcing, as defined by the American Library Association’s Outsourcing Task Force “is the contracting to external companies or organizations, functions that would otherwise be performed by library employees”1 and shelf-ready became the label associated with outsourcing technical service processes from box to shelf. By the turn of the century, outsourcing technical services, with its potential to improve efficiencies, reduce costs, and increase customer satisfaction,2 became commonplace. A significant number of libraries created partnerships with vendors reporting varying degrees of success.3

Brigham Young University’s (BYU) Harold B. Lee Library (HBLL), an Association of Research Libraries (ARL) library with over 9,500,000 volumes serving 30,000 students, resisted the trend for many years but in 2009 contracted with YBP Library Services (YBP) to receive shelf-ready books for firm orders. Knowing that there are many potential benefits to shelf-ready, we conducted a cost-benefit analysis to determine our current costs of cataloging, property stamping, barcoding, tattle-taping and labeling books received from YBP, as well as the costs involved in outsourcing those tasks for firm orders. The purpose of this study was to 1) determine if we could better use our human resources in cataloging by switching to shelf-ready and 2) determine if we should move all approval books to be shelf-ready. We also wanted to see if outsourcing was the best use of our resources.

Literature Review

Although technical service costs were a concern during the late nineteenth century, librarians, at this time, did not carry out cost studies and the published literature was “limited to discussions of costs, the importance of collecting cost data, and how such data could prove a boon to the profession.”4 During the early twentieth century, as librarians attempted to collect data, they relied on the diary study technique which required measuring technical services tasks and the time required to complete them. Although librarians began using other methodologies in the 1960s, the better technical service cost analyses still relied on diary studies.5 These studies showed a high cost to perform technical service functions and led, in the early 1990s, to an explosion of publications, discussion and conference presentations about the divisive and controversial issue of outsourcing.6

In 2001, James H. Sweetland reviewed the literature on the outsourcing of library technical services for the previous decade. The case studies, surveys and research studies he referenced suggest that “contracting out library work is not a panacea”7 and that “arguments in favour of outsourcing are based on supposed cost and time savings while oppositions tends to emphasise quality issues.”8 Most of the data regarding materials processing costs in specific case studies he referenced showed a savings to libraries but failed to show the methodology used and cited numbers were only estimates. The data for a majority of the libraries also showed the time-saving benefit of shelf-ready books with these books going to the shelf in fewer days than books processed in-house. He noted the variations in costs reported in the different studies warranted caution and commented “that many libraries, while able to provide cost or time figures after outsourcing, cannot provide comparative figures for in-house work.”9

The University of Oregon’s 1997 benchmark study to determine the time and costs for monograph purchasing, cataloging and processing found that these processes were more cost effective done in-house than by outsourcing.10 They measured the time staff took to complete various activities during a random sampling of days and calculated the acquisitions and cataloging overall cost was $36.92 per item. The University of Oregon concluded that cost alone did not support the decision to move to shelf-ready.11 Five years later, a follow-up study concluded that outsourcing cataloging and physical processing was still not justified based on the comparative cost analysis.12

To assign cost to various processes, and to make comparing in-house processing costs possible, time spent on in-house processes needs to be measured. One such time-and-path study was conducted by Patricia Dragon and Lisa Barricella in 2004. They measured how long it took for firm orders, non-serial standing orders and approval plan books to move through technical services. They did not measure the time it took to process an individual item but rather calculated both the processing time plus the time books spent waiting for tasks to be completed. The average time firm orders took from box to shelf was 45 days with physical processing and labeling taking 35% of the time and cataloging taking 49% of the time. The approval books, including time on the review shelf, took 38 days to process with 33% of the time spent editing the record and 15% of the time physical processing.13

Carnegie Mellon University Libraries used a survey sheet to track materials from receipt in acquisitions to when materials were sent to the shelves. The in-house survey recorded detailed information including the date an item was cataloged and the time spent cataloging. The data from the survey showed that 27% of the monographs were cataloged within five days of receipt and 72% of the monographs were cataloged within seven weeks. To measure the time spent on cataloging tasks, catalogers marked the approximate time they spent completing the task: “under 15 minutes, 15 to 30 minutes, 30 to 60 minutes or over 60 minutes.”14 The results showed that 83% of monographs took less than 15 minutes to catalog, 15% of monographs took 15–30 minutes to catalog, and 2% of monographs took 30–60 minutes to catalog.

The University of Vermont, in reporting on one of the early experiences of receiving shelf-ready materials, estimated that the price for shelf-ready books coming from a vendor would be $3.00 to $4.00 per book while library in-house copy cataloging would range between $6.22 and $9.02 per book.15

A great deal of outsourcing literature is more general and includes guides and how-to manuals that describe different methodologies of performing a cost benefit analysis and offer various ways to evaluate costs. These guides describe the benefits and the accuracies of both the time-task analysis and total output measures. In their book, Claire-Lise Benaud and Sever Bordeianu give a good overview of outsourcing and address the issues and outcomes of outsourcing for different departments in the library.16 Arnold Hirshon and Barbara Winters wrote an outsourcing manual for librarians that includes an extensive bibliography. In their manual, they give practical advice and detail the steps of “process reengineering, outsourcing and the procurement of outside services.”17 Frances C. Wilkinson and Linda K. Lewis in their book discuss the positive and negative aspects of outsourcing, the controversies surrounding the practice, and how to analyze its costs. They describe the two primary methods of analyzing a libraries’ costs but state that “[m]ost figures used in analyzing costs are estimates: they are useful for comparison purposes, but they are not absolute figures that can be used for budgeting the precise expenses of outsourcing.”18

Other literature describes the implementation, workflow and benefits of outsourcing without citing cost studies. In detailing the University of Nevada, Las Vegas’s (UNLV) experience with outsourcing their cataloging, Kenneth J. Bierman and Judith A. Carter provided an overview of the process of incorporating shelf-ready materials and the lessons they learned. They also address the one-time implementations costs and the on-going operational costs.19 The benefits of outsourcing are outlined by Adelphi University Libraries20 and the University of Florida’s Smathers Library.21 Both libraries found that outsourcing increased the speed and efficiency of getting their books to the shelf and it also saved valuable staff time which gave them time to diversify their functions.

Methodology

Many studies evaluating cataloging and processing costs use a total output cost methodology where costs are calculated by taking the dollar amount spent on annual cataloging salaries and supplies divided by the number of books cataloged in a year. If we use this methodology, the cost to the HBLL for each book cataloged is $47.64. This methodology provides libraries with a rough estimate of costs, but by not taking into account both the direct and the indirect costs, libraries cannot calculate all the costs they incur in processing books. Even when calculating direct and indirect costs, the total output cost methodology fails to account for costs for which the market has not assigned a value. Examples include what it costs the library for the time books spend on a shelf waiting to be processed and therefore not available to patrons and the cost of the space it takes to store those books. Total output cost studies also fail to account for the fact that catalogers do not typically spend 100% of their time cataloging books. Catalogers attend meetings and carry out other library assignments, where presumably the cost of their salary is offset by the benefit they yield by participating in the meeting and working on other assignments. In other words, this method of measuring costs of an in-house cataloging program becomes an estimate and typically fails to account for the offsetting benefits.

It is critical for any cost-benefit analysis to closely examine all aspects of a process. Despite the name “shelf-ready,” books on a shelf-ready program need some handling before they are put on the shelf. This includes taking the books out of the shipping boxes, checking them in on the Integrated Library System for inventory control, and physically taking them to the shelf. Measuring the time spent doing these tasks is critical for any cost-benefit analysis as it adds to the cost of a shelf-ready program.

Because of the imprecise estimations of a total output cost study, and the need to include additional handling of shelf-ready books, we decided to approach the calculation of the various costs and benefits in a more comprehensive manner with a time-task cost study. We sought to improve upon previous studies by using a more fine-grained instrument to collect time and cost data similar in nature to the one used in the Carnegie Mellon University Libraries study. Wanting to determine the cost of cataloging and physically processing print books at the item-level, we examined the cost of the materials and staff time spent cataloging individual books. To calculate the costs we tracked all the books we received from our primary United States vendor, YBP, for a four month period in 2009. We tracked both our approval books, which are not received shelf-ready, and our firm orders, some of which are received shelf-ready and some of which are received partially shelf-ready. For each book received, we inserted a slip that stayed in the book until it was placed on the shelf for patron use. Employees recorded the amount of time they spent working on individual books by noting both the day and time they received the book and the day and time they sent it on for the next processing step (see Figure 1). This slip let us track the costs for not only YBP shelf-ready and partially shelf-ready books, but also all the non-shelf-ready approval books. This allowed us to make a direct comparison of costs and benefits of shelf-ready books to books that are not shelf-ready.

Figure 1

Fig. 1 Paper slip inserted into all firm-order books received from Yankee.

The tasks we measured varied depending on the acquisition method and the amount of physical processing needed to get the book to the shelf for patron use. For our approval orders, our acquisitions staff did a duplicate holdings check, closed out the purchase order and tattle taped the book while our cataloging staff did the copy cataloging, barcoding and property stamp. For our firm orders, acquisition staff closed out the purchase order and the cataloging staff reviewed the record making changes as needed.

All participants in the study were blind to the purpose of the study and received training on how to fill out the slips to help make the collected data more consistent. After receiving a large enough sample size to make reliable statistical inferences, we compiled the data into a spreadsheet and analyzed it using a least squares mean. Additionally, we calculated the materials costs associated with processing materials. Finally, we tried to outline the benefits associated with both shelf-ready books and books that do not arrive shelf-ready.

Results

We conducted this study to find out how much shelf-ready books cost in comparison to books that are not shelf-ready, how quickly shelf-ready books were able to be placed on the shelf for patron use in comparison to books that are not shelf-ready and to find out how much processing time is required for shelf-ready books compared to books that are not shelf-ready. Answers to these questions would help us determine 1) if we could better use our human resources in cataloging by switching to shelf-ready and 2) if we should move all approval books to be shelf-ready.

Cost Comparison: Shelf-ready books were 5.7% cheaper to process than books that were not shelf-ready. Shelf-ready books, on average, cost $5.28 to process while approval books that are not shelf-ready cost us on average $5.60 to process (see Table 1). The cost differences between shelf-ready books and approval books was statistically significant.

TABLE 1: Cost comparison between the different ways books arrived from YBP
Account Total Average Cost Acquisitions Cost Cataloging Cost Sample Size
Partial Shelf-ready $5.60 $0.31 $1.86 14
Shelf-ready $5.28 $0.42 $0.83 186
Approval $5.60 $0.31 $2.09 1,214

Days to Shelf Comparison: Shelf-ready books, on average, landed on shelves for patron use 33 days sooner than approval books that were not shelf-ready. Our approval books spend a minimum of seven days on shelves for subject librarians to evaluate. At times, this period of time extends quite a bit beyond seven days (in fact, they sat on shelves for an average of just over 16 days). Moving to shelf-ready for approval books would eliminate the need for this evaluation because shelf-ready books cannot be returned to the vendor. Not counting the evaluation period, shelf-ready books still arrived on shelves almost 17 days sooner than non-shelf-ready approval books (see Table 2).

TABLE 2: Comparison of the number of days it took various books to arrive on the shelf for patron use
Account Average Days in Acquisitions Average Days in Cataloging Average Days in Lettering Average Days from Receiving to Circulation
Partial Shelf-ready 0.00 9.85 3.29 12.86
Shelf-ready 0.27 6.22 0.74 3.59
Approval 0.10 11.67 8.68 36.66

Processing Time Comparison: Shelf-ready books took 47% less processing time than non-shelf-ready books. Shelf-ready books took five minutes and six seconds to process while non-shelf-ready books took almost ten minutes. This means that if all materials were to be moved to shelf-ready, our cataloging staff would be able to spend 47% less time processing materials. This does not mean, however, that this would eliminate the need for 47% of our cataloging staff or that we could reallocate 47% of the staff to other activities. This would only be true if they spent 100% of their time cataloging. Many of our catalogers have other responsibilities that require them to attend meetings and to attend to other tasks. This does mean, however, 47% of the time they spend cataloging could be spent on other activities (see Table 3).

TABLE 3: Comparison of the time (in minutes) it took to physically process the various books
Account Average Processing Time in Acquisitions Average Processing Time in Cataloging Total Average
Partial Shelf-ready 2:09 4:40 6:50
Shelf-ready 3:24 4:53 5:06
Approval 2:15 7:42 9:59

Benefits Comparison: Assigning a monetary value on nebulous, and largely subjective, benefits is the most difficult part of a cost-benefit analysis. After evaluating the potential cost and time savings available through a shelf-ready program, we declined to attach a monetary value to benefits. However, we did evaluate them subjectively. Many of the benefits of a shelf-ready program are already outlined above. For us, the largest benefit is the ability to reallocate some staff and/or staff time to other activities that benefit the library more than time spent processing materials. There are many backlogs and projects that have been placed on hold at our institution that will begin to be moved along because of this reallocation.

Discussion

Most of the benefit of doing all processing in-house is that you have a guaranteed product and perhaps a more detailed and specialized record. Comparing the records we received from YBP to our records, it was clear that our records were more in line with our institutional standards. The YBP records were of very good quality, though, and are sufficient for our needs. For us, the benefits of a shelf-ready program far outweigh the benefits of processing materials in-house.

After completing this study, all of our approval books were moved to the shelf-ready program. We have not been doing this long enough to report on long-term benefits, but have been able to save significant cataloging time and effort in the short-term. We are still exploring what to focus our efforts on now that we have time freed up by moving to shelf-ready books.

Conclusion

Many libraries have performed a variety of cost studies to determine what the cost and time savings might be and the possible benefits for technical service outsourcing. This study used the time/task methodology to get a more accurate accounting for the costs and the time from box to shelf. Comparing our current cost of in-house cataloging and processing with the cost of outsourcing those functions for our YBP books, our study empirically showed that outsourcing is indeed a cost effective way to better use our limited capital resources. Utilizing YBP’s shelf-ready service increased productivity, allowed books to get to the shelves much faster than our non-shelf-ready books and, most importantly, allowed us to reallocate resources in a more effective manner.

References

  1. American Library Association, “Outsourcing and Privatization in Libraries,” (Chicago, IL: ALA, 2010) accessed June 23, 2010.
  2. Barry Baker, “Resource Sharing: Outsourcing and Technical Services,” Technical Services Quarterly 16, no. 2 (1998): 35–45.
  3. James H. Sweetland, “Outsourcing Library Technical Services – What We Think We Know, and Don’t Know,” The Bottom Line: Managing Library Finances 14, no.3 (2001 ): 164–176.
  4. Richard M. Dougherty and Lawrence E. Leonard, Management and Costs of Technical Processes: A Bibliographical Review, 1876–1969 (New Jersey: The Scarecrow Press, 1970): 16.
  5. Ibid., 29.
  6. Claire-Lise Benaud and Sever Bordeianu, Outsourcing Library Operations in Academic Libraries: An Overview of Issues and Outcomes (Colorado: Libraries Unlimited, 1998) xvii.
  7. Sweetland, “Outsourcing library technical services,” 164.
  8. Ibid., 170.
  9. Ibid., 168.
  10. Nancy Slight-Gibney, “How Far Have We Come? Benchmarking Time and Costs for Monograph Purchasing,” Library Collections, Acquisitions & Technical Services 23, no.1 (1999): 47–59.
  11. Slight-Gibney, “How Far have We Come?” 47.
  12. Nancy Slight-Gibney and Burce H. Tabb, “Unit Costs for Domestic Approval Books,” (2004) (accessed June 18, 2010).
  13. Patricia Dragon and Lisa Sheets Barricella, “Assessment of Technical Services Workflow in an Academic Library: A time-and-Path Study,” Technical Services Quarterly 23, no. 4 (2006): 1–16.
  14. Terry Hurlbert and Linda L. Dujmic, “Factors Affecting Cataloging Time: An In-house Survey,” Technical Services Quarterly 22, no. 2 (2004): 1–15.
  15. Albert Joy and Rick Lubb, “The Books Are Shelf-Ready: Are You?,” Library Acquisitions: Practice & Theory 22, no. 1 (Spring 1998): 71–89.
  16. Benaud, Outsourcing Library Operations in Academic Libraries”.
  17. Arnold Hirshon and Barbara Winters, Outsourcing Library Technical Services: A How-To-Do-It Manual for Librarians (New York: Neal-Schuman, 1996): x.
  18. Frances C. Wilkinson and Linda K. Lewis, The Complete Guide to Acquisitions Management, (Connecticut: Libraries Unlimited, 2003): 220.
  19. Kenneth J. Bierman and Judith A. Carter, “Outsourcing Monograph Cataloging at the UNLV Libraries,” Technical Services Quarterly 25, no.3 (2008): 49–65.
  20. Bonnie Horenstein, “Outsourcing Copy Cataloging at Adelphi University Libraries,” Cataloging & Classifications Quarterly 28, no. 4 (May 2000): 105–116.
  21. Michele Crump and Steven Carrico, “It’s Academic: Shelf-ready Standing Orders at the University of Florida’s Smathers Library,” Library Resources & Technical Services 45, no. 2 (2001): 104–109.