Success Hides Mistakes: It Is Time to Get Back to Basics
It is Christmas and the supply chain for books at Christmas gets f’d up without fail. I realize that is bound to happen. It is the pig-in-the-python problem. The volume of business is say 40x what it is the rest of the year. A screw up here and there is no big deal. The thing that bugs me is that there doesn’t seem to be any improvement year over year. I blame every sales director at every publishing house. Let me explain why…
Warehouse in The US — Someone is Asleep at The Switch
First, take as evidence How to Break a Terrorist by Matthew Alexander. This is a Simon & Schuster book. It was published December 2. Admittedly that is late, but Alexander had to sue the state department to publish the thing, so at least they were able to get it out before the holiday. Admittedly it is not a tier-A kind of book to begin with and the topic is prisoner interrogation — so I totally understand why it is not in piles at the front of my neighbourhood Chapters, but the sad thing is it is not there at all. I heard Alexander on NPR, then I saw him on the Daily Show and I wanted to buy his book yesterday. Nada. It is not at any Chapters, Indigo or Coles. It is not at my local independent. So FAIL to the buyers for not buying it. FAIL to Simon and Schuster Canada for not doing any followup. And FAIL to Chapters.Indigo.ca for offering it at a loss. Yes, you heard that right. Chapters.Indigo.ca is offering a book for sale that Indigo doesn’t carry in it’s stores. That means the economies of scale go out the window. That means they are ordering it overnight from the USA, and that means they are paying the US exchange and US freight. LOSS.
Warehouse in Canada — Someone is Overeager
As a second example, there is the Wiley biography of, the recently passed, Ted Rogers. It is everywhere. It is in stacks in all the bookstores I have been in recently. The problem is there is an unconscionable 3-5 week wait for it at Chapters.indigo.ca. Can you imagine that? The man has just died. The book has recently come out in paperback. But you have to wait for over a month to get it delivered. High demand you say. I say nonsense. FAIL to whoever executed the last inventory push. FAIL for inventory manager and sales rep. And FAIL again to chapters.indigo.ca. They are, again, caught downstream of bad decision making, but this time they have no out. This is a Canadian book. There is no inventory in the USA. They simply have to look stupid in front of their customers.
Just in Time Delivery, TQM, ERP — Call it What You Want Just Improve It, Together.
Now, you are asking, what’s my point ragging on two obscure books amongst thousands? Well, that is it exactly. Publishing as an industry could afford to screw up a couple of books for every thousand. We could afford to frustrate and disappoint the occasional customer. We can’t afford to anymore. We need to up our standards for customer service and efficiency. We need to be the Toyota to the music business’ Ford. We need to be ISO 9500++ compliant. And we are not. We are not anywhere close.
Off the top, I blamed sales directors for this. Is that fair? Probably not, but here is my thinking — it took the big box retailers about ten years to figure out how to run their own supply chain effectively (Borders was late to the party and look where that got them). Once things became relatively stable they started pushing back on their suppliers. They had too many skus to manage and they knew it. They realized it was too complicated so they did the simple thing and asked for more margin from publishers. No need to fix the backend when you can ask for more money upfront. Thus began the epic push and pull battle for more margin, more coop, and ugly ugly cash incentives.
Fast forward to around 2004/05. One thing was clear, the book supply chain had to become more like Walmart’s to survive. It had to become leaner. It had to lessen returns. And ultimately the suppliers needed to pitch-in and shoulder a huge portion of the responsibility for inventory — like at Walmart. Anyone from a multi-sku retailer knew it. But no one told the sales directors. They kept giving their reps a spoon before sending them into a knife fight. Marked catalogs didn’t cut it anymore. That slowly became obvious. But the number of people needed and the integration of those people with each other and with retailers is still a mystery to most publishers. Only HarperCollins has a supply chain division in Canada. Why, getting close to 2010, is that the case? Sales reps know how to sell. They don’t know how to calculate a moving average forecast with seasonality.
The saying goes good times hide a lot sins. The goodtimes are over. Publishers need to get serious about end-to-end supply chain management or they are dead. A mismanaged title here and mismanaged title there will bleed you to death. It is not a knife to the heart, but the result is the same.
One small PS for chapters.indigo.ca –> bring the retail buyers on board or get your own.
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