From Sarah Jane Abbott, an associate editor for Paula Wiseman Books and Beach Lane Books/Simon & Schuster, who spoke at Austin’s SCBWI conference:

Once a book is accepted

edits on the book go back and forth between the author and the editor,

then the manuscript is sent to the illustrator,

as the illustrator sends in ideas, the editor and art director will send notes back, until

the final art comes in,

after which the book is digitally created.