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Book industry spend on the UK retail supply chain is £3/4 billion per annum

BISG/BEA Panel 2007 Toward a More Profitable Bottom Line Craig Bauer - Houghton Mifflin Riverdeep 05.31.2007 craig_bauer@hmco.com. Studies previously released on the US and UK Book Supply Chain revealed significant waste compared to other Consumer Products.

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Book industry spend on the UK retail supply chain is £3/4 billion per annum

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  1. BISG/BEA Panel 2007Toward a More Profitable Bottom LineCraig Bauer - Houghton Mifflin Riverdeep05.31.2007craig_bauer@hmco.com

  2. Studies previously released on the US and UK Book Supply Chain revealed significant waste compared to other Consumer Products $4B of waste in the US Book Publishing Supply Chain UK Publishers’ logistics costs are 13% of sales, amongst the highest in industry • Book industry spend on the UK retail supply chain is £3/4 billion per annum • The industry is more costly and wasteful than other consumer goods sectors • Returns alone cost about £100 million per annum, each return typically costing a Publisher £1 and a Retailer 50p • Poor Inventory management provides more than 60 weeks stock in the system. • There is substantial stock wastage which is inflated by inappropriate supply chain processes (up to 20% of total production) Source: Accenture and KPMG

  3. An area of addressable costs persists in product labeling failures among Publisher, Wholesale and Retail and Distribution points Of (2) Third Party Book Fulfillment tours, the cost of ineffective product scans ranges from $500k to several million dollars in annual expenses 1. No reads are diverted to QC where the label and orientation of the label is checked.2. Associate signs in, places the carton on a scale, hand scans or keys the the label and weighs the parcel3. If the order is picked correctly (correct items and quantities) and the weight is out of tolerance the individual items are weighed and the corrections are made.4. The associate needs to inform Inventory control of thediscrepancy (this is not automated) and weight of SKU 5. The associate “Marks” within the system the items are under picked and the carton is placed back on the conveyor to be diverted to the correct location(s) to complete the order for loose piece pick Over pick items are placed on a desk near the QC area, in loose pick, and returned to stock

  4. DEIG released revised Guidelines for Container Labeling http://www.bisg.org/documents/shipping.html -Shipping Label Specs-Label Placement-Label & Carton Markings-Zoned Product Information

  5. Guidelines were loosely adopted or modified beyond the standard One US Book Manufacturer had over 140 unique Label Templates Source: DEIG and BMI Conference Call

  6. Next Steps will implement a Product Label Certification Process and identify barriers between Manufacturers and Publishers 1. BISG has established and announced a Product Label Certification Program. This program will facilitate validation and implementation of the Carton Product Label and promote the use of the standard specification. 2. DEIG has formed a sub-committee to identify the barriers to adoption of the standard label specification guidelines across Manufacturing and Publisher Distribution

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