The Future of the Supply Chain Is (Almost) Here
“I think there’s this mistaken assumption that because you’re talking about the movement of digital content, that somehow it’s going to happen automatically in a more standardized way, and of course that’s not true,” he says. “These standards have to be built for the digital supply chain just as they were built for the physical supply chain.”
On the physical level, standardization guidelines (and a BISG certification process) for shipping carton labels are already having a huge impact on the speed and accuracy of incoming materials processing, Healy says. The importance of these type of standards will only increase as the industry moves closer to adoption of RFID.
“Inevitably, people focus … on the magic of the chip,” Healy says of the radio technology. “But without the standards that enable it to be read and interpreted and acted upon, it’s just a dumb piece of silicone.”
A Critical Need
Building in efficiencies across the book supply chain takes a high level of coordination—and investment. The tipping point, Lichtenberg says, will occur when it becomes more expensive not to build in efficiencies than to hold out on making changes.
“The supply chain is too inefficient; it’s just too costly, especially given the efficiencies that everyone else has come to expect [in other industries],” he says. “The second problem is the question of the ‘long tail.’ People want to be able to search and find, so how do you manage that? The third thing is the competitive situation. As with [the rise of] Amazon.com, if the industry isn’t careful, it’s going to find itself in another pinch,” he says, referring to the ever-increasing percentage of books being sold outside of bookstores.
This, along with the growing use of RFID across the retail landscape, is just one example of the competitive pressure that will be brought to bear, Lichtenberg says. In the meantime, he adds, margins will continue to be squeezed as book sales move to the discount chains, making the general drive to efficiency even more important.