Building an Intelligent Publishing Supply Chain
Leveraging technology and communications to improve supply chain
efficiency, reduce costs and increase profits
Michael Cairns
President, RR Bowker
February 4, 2004
Where We Are Today
 Past decade of information technology investment in
medium to large publishing companies:
 Focused on improving basic cost structures of their
organizations
 Investment in updating editorial systems, particularly in
educational and journal publishing
 Reengineering of publishing operational and financial
processes
 Investment justified as part of Y2K solution, return has in
many cases not met the promise of the investment
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Publishing Industry Key Business Issues
 The publishing supply chain is inefficient due to the
lack of visibility of day-to-day demand & stock
positions
 Average fill rates no higher than 85% are typical. 15%
of sales are missed, deliveries are incomplete,
inaccurate, etc.
 Excessive inventory levels result in excessive capital
costs, obsolescence, damage, shrinkage
 Some publishers hold over 300 days of stock
 Return rates of 40% are not uncommon in our industry
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An Efficient Supply Chain Will Be Publishers’ Goal
 Next area of operational improvement and cost
reduction is the supply chain
 Leverage investment made in operational systems
 Conform to new industry standards for identifying titles
(ISBN-13), transaction standards and related metadata
required for more efficient supply chain processes
 Integrate internal supply chain processes with those of
suppliers and customers, to gain efficiencies of sharing
information on supply and demand across the supply chain
 Only operational area where material expense savings can be
made
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Information is the Key Ingredient
 Many publishers have in place transaction data
warehouses
 New operational systems provide cleaner transaction
information for data warehousing and analysis
 Enables analytics by Customer, Author, Genre, Format, etc.
 Tools for projecting sales of new titles based on past
performance of similar titles
 During acquisition, expected revenue streams modeled to
determine advance and other contractual obligations
 For production planning: initial printing and subsequent
reprint planning
 These analytics have made publishing programs more
intelligent
 Printers, Distributors and Booksellers are also capturing
their operational performance data for analytics
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Visibility of Operational Data is Critical
 Real time visibility of POS data, multi-level stock
information and fill rates would help:
 Publishers




Adapt production to demand
Re-route stock rather than produce additional inventory
Anticipate and pre-empt stock-out situations
Spot and troubleshoot logistical problems
 Retailers
 Re-route stock rather than order new inventory
 Demand driven inventory
 All
 Reduce costs for returns management
 Industry more healthy; Productive use of capital
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Adding Intelligence to the Supply Chain
Management
Manufacturer
Old Environment
 Partially informed
 Push / pipeline model
 One-way info flow
Truckers
Distributors
Truckers
Retailers
Management
Manufacturer
Telephony
Infrastructure
Direct
Marketing
Customers
Transportation
Distributors
Web Infrastructure
Transportation
Overnight Delivery
Database and Data
Mining
Infomediary and
Outsourced Service
Providers
Retailers
Customers
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Adapted from “Information Architects,” Richard Saul Wurman, editor, 1994 and Price Waterhouse, 1999.
New Environment
 Fully informed
 Network model
 Bi-directional
information flow
through network
The Traditional Supply Chain for Publishing
Publisher
Product Flow
Distributor
Bookstore
Demand Patterns
Information Flow
Fragmented and Inefficient due
to poor flow of information
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The Intelligent Supply Chain for Publishing
Publisher
Distributor
Product Flow
Information Flow
•
•
•
•
•
•
POS Data Sharing
Inventory levels
Fill Rates
Forecasts
Promotional Activities
New Product Introduction
Bookstore
Consumer demand
drum-beat sets pace
for entire
Supply Chain
Information & Intelligence9 Sharing for Effectiveness
Why Collaboration in the Supply Chain?
• Shared visibility across supply chain - Sales (POS), Inventories
• Shared measurement of SC performance and identification of issues
• Improved understanding, forecasting and analysis of consumer demand
• Improved capability to respond and react to changes
• Improved stability, predictability and efficiency of supply chain operations
• Improved Fill Rates
• Reduced lead times • Smoother SC execution
• Improved on-shelf
• Reduced inventories • More efficient processes
availability
• Reduction of costs for
• More effective demand
handling returns
generation activities
Increased
Sales
Reduced
Inventories
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Reduced
Costs
Leveraging customer information for sales, marketing,
and operational purposes
Retail
Catalog - Mail
Internet, WWW,
Kiosks
Sales Force
DATAWAREHOUSE
Product Planning
& Development
Marketing
• Buying
&
replenishment
• Customer trends
• Return code
analysis
Merchandising
Suppliers
Distribution
• Targeted promotions
• Refined logistics
• Loyalty programs
• Supporting inventory
• Vendor co-op programs reduction
• Customer trends
• Assortment planning
• Category management
• Department adjacencies
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Operations
Customer Service
• Inventory planning
• Site selection
• Department adjacencies
• Category management
• Service - support
• Return minimization
• Buyer satisfaction
Culture: Era of ‘Gentleman Publisher’ is over
 Booksellers historically reluctant to share point-of-sale data
 They believe they alone own relationship with consumers/readers
 Reluctant to share this relationship with publishers and competitive
booksellers
 Return problem has long been considered a Publisher problem
 There are costs for returns for all industry participants
 Better information flow, collaborative forecasting through the supply
chain can greatly diminish severity of problem
 “If you’re not part of the solution, you’re part of the problem”
 The mystique of first printing size
 Print run intertwined in marketing of book as key indicator of success
 First printing size requirements will change as the supply chain
becomes more intelligent
 Short-run printing technologies can fill gaps in traditional production
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Can facilitation provide the answer?
 Need for an intelligent supply chain facilitator
 Bring to table experience of implementing experience with
intelligent supply chain integration in other industries
 Deep understanding of publishing industry culture and
perspectives
 Appreciation of both publisher and bookseller points of view
 Trusted partner of all industry participants
 Create aggregate information for shared industry use from the
detailed data of the various participants.
 Sharing of data across the supply chain requires trust




Aggregated data will be shared among participants
Visibility of detail for own transactions
Visibility at aggregate level only for transactions of others
Sharing of detail is only way to produce meaningful aggregate
data for all
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A common information framework for all participants
Printer A
Printer B
Printer C
Stores
Bookseller A
HQ
Publisher A
Stores
PUBlishing
NETwork
Bookseller B
HQ
Publisher B
Publisher C
• Common set of services
• Common data standards
Bookseller C
Distributor A
Distributor B
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Distributor C
Supply Network Information Visibility
• Available capacity calendar
• Printer-owned paper inventory
• Publisher-owned paper inventory
• Component inventory
• Finished book inventory
Printer
• Inventory in distribution center
• Demand forecast projections
• Aggregate sales data
• Production orders in process
• Customer orders to be filled
Publisher
Stores
PUBlishing
NETwork
Bookseller
HQ
• POS data
• Stock levels in stores
• Inventory in central warehouse
• New inventory in transit
• Inventory in internal-transit
• Available inventory
• Inventory on order
• Inventory in transit
• Orders to be filled
Distributor
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From Supply Network to Title Availability Marketplace
 Allows a bookseller needing to restock a title to post requirement to the
network and find quantity/price/delivery date from both the publisher
and all distributors who list it
 Bookseller systems or Publishing Network provided services could use
rules to determine most cost effective way to meet requirement
 Lowest cost source is not always most cost effective!
Stores
PUBlishing
NETwork
Publisher
Distributor A
Distributor B
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Bookseller
HQ
Distributor C
Conclusion
 Future significant cost savings and efficiency gains will
come only from industry wide supply chain initiatives
 Technology investments can and will be leveraged
further
 Publishing lags other industries
 There are many examples in other industries of
successful applications of supply chain strategy
 Industry groups must take up the challenge
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Bowker is working towards this vision
 Books In Print & Global Books In Print are the
industry’s authoritative title data sources.
Bowker data is incorporated in business
processes throughout the global publishing
supply chain.
 Over its 11 year history, Pubnet has helped
establish the data & EDI standards for the
publishing industry. Pubnet is the e-commerce
solution of choice for over 3,000 U.S. booksellers.
 The Bowker acquisition of PubEasy makes its
role in publishing industry e-commerce truly
global, providing 11,000 booksellers in 110
countries with 24/7 customer self-service to over
3000 publishers and imprints.
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Thank You!
For more information, please contact:
Michael Cairns
President
R.R. Bowker LLC
630 Central Avenue
New Providence, NJ 07974
USA
email: michael.cairns@bowker.com
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