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Leveraging Data for Profitable Business Processes

Learn how to optimize inventory, manage reprints, decrease returns, and increase profits using marketplace information. Discover insightful strategies and best practices to boost efficiency and drive profitability.

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Leveraging Data for Profitable Business Processes

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  1. Using Information to Increase Efficiency and Profits Dominique Raccah Publisher and CEO Sourcebooks, Inc. February 2004

  2. Optimizing Business Processes with Marketplace Information • Developing Advances • Tailoring Time and Resource Allocations for Marketing Programs • Optimizing Inventory • Decreasing Returns Focus on business processes that have greatest potential for increasing profitability

  3. Developing Advances • Author’s Previous Sales • Gauge opportunity • Assumption that market is always there to be expanded • Category Sales Information/Share of Market Data • Data now allows us to track and gauge sales results Using data to help rationalize predictive process

  4. Using Information to Optimize Inventory • Goal • More accurately match supply with demand • Decrease unsold inventory • Focus on 2 kinds of inventory decisions • Reprints • First Printings

  5. Sourcebooks Reprints Results 2003 • Only reporting about 70% of our list • 104 new titles in this part of our list in 2003 • 111 reprints • 1 every 2.3 working days • 63 different titles • Of those 111 reprints—5 problematic (or less than 5%) • Significant improvement over 2002

  6. What Data Can We Use to Better Manage Reprints? • Where’s the demand coming from? (i.e., who specifically needs the reprint?) • Why do we need the reprint? (e.g.,Valentine’s Day) • What is current risk/inventory on hand in channel? • Review sell-in/sell-thru information (weekly sales results) for each account including: • Barnes & Noble Bookscan • Borders • Waldenbooks • AWBC/Books-A-Million • Amazon • Ingram ipage • Baker & Taylor TitleSource II • AMS

  7. Other Information We Can Use to Better Manage Reprints • Reorder planning with accounts (both bookstore & non-bookstore) • Modeling different types of books • Peak titles • Build titles • Seasonality • Gauging publicity/marketing effects

  8. Summary: Reprints • Every printing provides more information that allows you to better model marketplace • Simplest assumption: stable marketplace • Usually not true for books • Seasonality • Promotions • Other marketing effects • Saturation • Competitive product • Model marketplace during sales season • Use sales model to forecast what reprints might be

  9. Sourcebooks First Printing Results 2003 • Again only reporting 70% of our list • Spring 2003—57 titles • 10 of which were problematic (or about 17.5%) • Fall 2003—47 titles • 3 of which were problematic (or about 6%)

  10. Our Experience—First Printing Is Riskiest • At every printing you have more information that allows you to better model marketplace • Axiom of risky decision-making that the point of maximum risk is when information is minimal • Print less/plan for reprints • Work with printers to decrease print cycles • Print smarter

  11. Last Printing Is the Most Expensive Printing • You don’t know it’s the last printing • Marketplace shifts unpredictably/model is no longer appropriate

  12. Summary: Using Information to Optimize Inventory • Print less • Benchmark appropriate level of inventory for trade book publisher • Months of Stock—Inventory on-hand/past 12 months sales • Inventory Days on hand—Inventory value/Accounts receivable • Inventory Turn—Inventory value/past 12 months inventory cost of goods • What are industry-wide “Best practices”? • What is your inventory target(s)? • Feed information into decision-making both first printings and reprints • Use marketplace information to turn off last printing

  13. Using Marketplace Information to Decrease Returns • Sourcebooks’ returns 2003 down 25% • Much of this decline can be attributed to the effects of marketplace input on inventory management • Can’t make these decisions in a vacuum • Use the information in conjunction with your customers

  14. Using Marketplace Information to Decrease Returns • Analyzing/Managing Customers’ Inventory on Ongoing Basis • Ship less upfront • Assess sell-through and marketing • Ship more often • Work closely with vendors to improve reprint cycles • Leads to more backlist-oriented program/more build-oriented strategy

  15. Using Marketplace Information to Decrease Returns • Working closely with our customers is KEY • They know a lot about their data and what is going on in their market • More accurately match supply with demand • Where you need it; effects of regionality • When you need it; effects of seasonality • Do the research before we approach the customer

  16. Using Marketplace Information to Increase Efficiency and Profits • Analyzing/Managing Customers’ Inventory on Ongoing Basis • Using information to work more closely with our customers • More accurately match supply with demand • Goal is to serve our customers and the marketplace better

  17. Using Marketplace Information to Increase Efficiency and Profits • Optimizing Business Processes with Marketplace Information • Rationalize predictive process—impact advances • Optimize inventory both on hand and in channel • Implications for marketing, operations, production, sales • Decrease returns • Focus on Business Processes with Greatest Potential for Increasing Profitability

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