The Art of Inventory
7. Re-evaluate hurt books.
Spend some time with your colleagues in the returns processing department and take the time to sort through a bin or two of books discarded as hurts. You might be surprised to find a fair amount of inventory that is, in fact, quite salable. It would be especially helpful if you documented your standards for declaring a return as a hurt book, including pictures of what the organization deems as salable and unsalable.
8. Don't forget paper.
Managing inventory means more than just keeping an eye on your finished goods position. Paper inventory levels should be reviewed regularly, and prudence suggests that you may want to think twice before making a defensive paper buy (i.e., bringing in extra inventory to avoid anticipated price increases). While a reasonable amount of defensive buying may be appropriate—remember that the carrying cost for holding paper inventory can be significant—printers' storage fees, obsolescence risk, and insurance and interest costs mount quickly, and the anticipated savings can quickly morph into an unanticipated expense.
If you must inventory paper, minimize the number of grades and sheet/roll sizes brought in. Many publishers print on a slightly oversized roll or sheet to keep inventory investment in check. The incremental cost of printing on an oversize roll/sheet will be more than offset by the lower storage charges, reduced inventory obsolescence, lower safety-stock requirements, and potential incremental discounts earned by purchasing larger lots. Other options for managing paper inventories include:
Floor programs: Many mills/merchants will stock popular grades and roll sizes on the floor at printers (effectively a consignment program), allowing publishers to acquire inventory on the fly, with many of the same benefits as cited previously.
Printer-supplied inventory: While printer-supplied paper can often be slightly more expensive than publisher-supplied stock, the economics warrant closer examination. The printer will likely charge a mark-up over the publisher's direct price, but the cash-conservation opportunities can be compelling and should be carefully considered.
