Using Information to Improve Distributor Performance

Jean SrneczSr. Vice President, MerchandisingBaker & Taylor

Using Information to Improve Distributor Performance

Shorter Life Cycles

Higher Consumer Expectations

Technological Changes

Our World:

Using Information to Improve Distributor Performance

“Supply chain management is a set of approaches usedto efficiently integrate suppliers, manufacturers,warehouses and stores so that merchandise is producedand distributed in the right quantities, to the right locations,and at the right time in order to minimize system-widecosts while satisfying service level requirements.”1

1Managing the Supply Chain by David SimchiLevi, Paul Kaminsky, Edith SimchiLeviMcGraw Hill

Using Information to Improve Distributor Performance

Acquire what is saleable Research available BookscanTM POS iPageTM

Title SourceTM

For the Library Market Pub AlleyTM

Using Information to Improve Distributor Performance

Develop Forecast: A single version of the truthInputs

• Editorial• Marketing• Sales• ‘Supply Chain’ / ‘Inventory Management’ ‘The New

Gods’• Customers - all flavors

– Independent – Non-Traditional – Chain – Distributor– On-Line – Library – Price Club – Regional Chain

Supply Chain

Using Information to Improve Distributor Performance

Model Titles - Overall “Sister” Profiles Track record with intelligence

By Account

By Promotion

Using Information to Improve Distributor Performance

Time Dimensions

How Many / How Long

Work with Accounts on Time Series Forecast

Using Information to Improve Distributor Performance

New Titles Understand the forecast model

How developedHow long

Replenishment Understand how each of your partners drives

replenishmentSalesDemand

Promotional DemandAnticipationRamping down

Using Information to Improve Distributor Performance

Forecast (Demand)Order frequency (Order cycle)Lead timeCase packVendor minimum (Order policy)Service Level (Safety Stock)Seasonality

Replenishment Basics

Using Information to Improve Distributor Performance

Maximize SalesMinimize Returns

Lead time is the gunk that clouds the window on forecasts.

Lead time is what discourages the sales on deep catalog.

Lead Time

Using Information to Improve Distributor Performance

RETURN % INCREASES WITH LEADTIME INCREASE

10-12 13-15 16-19 20-23 24-27 28-31 32+

Using Information to Improve Distributor Performance

TURN DECREASES AS LEADTIME INCREASES

10-12 13-15 16-19 20-23 24-27 28-31 32+

Using Information to Improve Distributor Performance

Lead Time Release Order EDI Pick-up EDI To Warehouse Warehouse Schedule Shipping

Hold for pick-upHold for full truckLTL (Less than load)

Receipt Stow/Available for Sale

Using Information to Improve Distributor Performance

New ReleasesBacklistChildren’sSeasonalPictorial

Importance of Publisher Internal Lead Time

Using Information to Improve Distributor Performance

Double inventory on a title gets 99% of sales

Reduce inventory on a title by 40%, get 90% of sales

Invest inventory in other titles get that 90%

Inventory Managers Paradox

Using Information to Improve Distributor Performance

Get reprints done in 4 weeks!Standardize trim size if it improves turn-

aroundKeep back list alive, funding/purchasing

patterns are irregularReview grant of rights

Children’s/Picturebook

Using Information to Improve Distributor Performance

Promotional Most front list behaves as a ‘promotion’

Backlist Requires a good forecast:

Quantity and time dimension

Using Information to Improve Distributor Performance

Reverse distribution Rate of Sale Rate of Replenishment ‘Let Sell Down’ Re-Investment

Returns

Using Information to Improve Distributor Performance

What Drives Returns?

Returns as Marketing Expense?

Returns as Lost Profit?

Using Information to Improve Distributor Performance

The ‘Forgotten’ Part of the Supply Chain: POD

POD - Top 50 Vendor for B&T in 2003 Incorporate into Supply Chain

Responsibility

Using Information to Improve Distributor Performance

Share Information with Trading Partners Develop a single forecast Update and learn

Understand Trading Partners How they develop forecasts Operational procedures

Going Forward

Using Information to Improve Distributor PerformanceUsing Information to Improve Distributor Performance

Product Design and Packaging for Operational Efficiency

Invest in Information Technology Data Warehouse Analysis Tools Make Data Analysis - “The DNA of your

Organization”Investigate Collaboration Solutions

Going Forward