Talking About Supply Chain Management
Toolan: To me, the key word in this question is "equitably." There is no question in my mind that in the short run, in a perfect world with only one supply net, the big winners in this game are the Suppliers. I saw a study a couple of years ago from a large printer that 25-to-40 percent of the cost of producing books was wrapped up in administration, sales and customer support. E-commerce done correctly should significantly drop those costs. The main advantage to the customer is if the supplier is willing to use those savings to negotiate prices that are better than their competitors.
LaFauci: Short-term savings can be achieved by both buyer and seller in the area of administrative expenses. In abandoning the traditional manual, paper-bound process, both sides may enjoy savings commensurate to the level that they embrace change within their organization. Equity in savings is related to opportunity rather than sharing the first dollar saved. Buyers and sellers that leverage supply chain management to change processes, analyze the data gathered and integrate into internal systems will garner the most benefit.
BTM: What other significant gains should publishers and suppliers be seeking in terms of supply chain management initiatives?
Tenthoff: Reduced lead times and better planning. The more information exchanged, the more accurate the information will become and the more value will be realized.
Toolan: I think Tenthoff is right about planning. If publishers keep printers informed of publication schedules and commit work to a specific supplier earlier rather than later, then publishers will have a better chance of getting the books where they want them, when they want them. In addition to this, the other big opportunity I see is to radically streamline the financial aspects of the business. If P.O.'s are correct, then invoices should reflect what's on the P.O. If this comes to pass, printers could submit invoices monthly for a whole group of titles instead of for each P.O. generated. This is where great time and cost savings could be achieved on the customer side.