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Using Information to Increase Efficiency and Profits Dominique Raccah Publisher and CEO Sourcebooks, Inc. February 2004. Optimizing Business Processes with Marketplace Information. Developing Advances Tailoring Time and Resource Allocations for Marketing Programs - PowerPoint PPT Presentation
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February 2004
Using Information to Increase Efficiency and Profits
Dominique Raccah
Publisher and CEOSourcebooks, Inc.
2Sourcebooks, Inc.
an independent vision
Optimizing Business Processes with Marketplace Information Developing Advances
Tailoring Time and Resource Allocations for Marketing Programs
Optimizing Inventory
Decreasing Returns
Focus on business processes that have
greatest potential for increasing profitability
3Sourcebooks, Inc.
an independent vision
Developing Advances
Author’s Previous Sales Gauge opportunity
Assumption that market is always there to be expanded
Category Sales Information/Share of Market Data Data now allows us to track and gauge sales results
Using data to help rationalize predictive process
4Sourcebooks, Inc.
an independent vision
Using Information to Optimize Inventory
Goal More accurately match supply with demand
Decrease unsold inventory
Focus on 2 kinds of inventory decisions Reprints
First Printings
5Sourcebooks, Inc.
an independent vision
Sourcebooks Reprints Results 2003
Only reporting about 70% of our list
104 new titles in this part of our list in 2003
111 reprints
1 every 2.3 working days
63 different titles
Of those 111 reprints—5 problematic (or less than 5%)
Significant improvement over 2002
6Sourcebooks, Inc.
an independent vision
What Data Can We Use to Better Manage Reprints? Where’s the demand coming from? (i.e., who specifically needs the reprint?)
Why do we need the reprint? (e.g.,Valentine’s Day)
What is current risk/inventory on hand in channel?
Review sell-in/sell-thru information (weekly sales results) for each account including:
Barnes & Noble Bookscan
Borders
Waldenbooks
AWBC/Books-A-Million
Amazon
Ingram ipage
Baker & Taylor TitleSource II
AMS
7Sourcebooks, Inc.
an independent vision
Other Information We Can Use to Better Manage Reprints
Reorder planning with accounts (both bookstore & non-bookstore)
Modeling different types of books Peak titles
Build titles
Seasonality
Gauging publicity/marketing effects
8Sourcebooks, Inc.
an independent vision
Summary: Reprints
Every printing provides more information that allows you to better model marketplace
Simplest assumption: stable marketplace
Usually not true for books Seasonality
Promotions
Other marketing effects
Saturation
Competitive product
Model marketplace during sales season Use sales model to forecast what reprints might be
9Sourcebooks, Inc.
an independent vision
Sourcebooks First Printing Results 2003 Again only reporting 70% of our list
Spring 2003—57 titles 10 of which were problematic (or about 17.5%)
Fall 2003—47 titles 3 of which were problematic (or about 6%)
10
Sourcebooks, Inc.an independent vision
Our Experience—First Printing Is Riskiest At every printing you have more information that
allows you to better model marketplace Axiom of risky decision-making that the point of maximum
risk is when information is minimal
Print less/plan for reprints Work with printers to decrease print cycles
Print smarter
11
Sourcebooks, Inc.an independent vision
Last Printing Is the Most Expensive Printing You don’t know it’s the last printing
Marketplace shifts unpredictably/model is no longer appropriate
12
Sourcebooks, Inc.an independent vision
Summary: Using Information to Optimize Inventory Print less
Benchmark appropriate level of inventory for trade book publisherMonths of Stock—Inventory on-hand/past 12 months sales
Inventory Days on hand—Inventory value/Accounts receivable
Inventory Turn—Inventory value/past 12 months inventory cost of goods
What are industry-wide “Best practices”?
What is your inventory target(s)?
Feed information into decision-making both first printings and reprints
Use marketplace information to turn off last printing
13
Sourcebooks, Inc.an independent vision
Using Marketplace Information to Decrease Returns Sourcebooks’ returns 2003 down 25%
Much of this decline can be attributed to the effects of marketplace input on inventory management
Can’t make these decisions in a vacuum Use the information in conjunction with your customers
14
Sourcebooks, Inc.an independent vision
Using Marketplace Information to Decrease Returns Analyzing/Managing Customers’ Inventory on
Ongoing Basis Ship less upfront
Assess sell-through and marketing
Ship more often Work closely with vendors to improve reprint cycles
Leads to more backlist-oriented program/more build-oriented strategy
15
Sourcebooks, Inc.an independent vision
Using Marketplace Information to Decrease Returns Working closely with our customers is KEY
They know a lot about their data and what is going on in their market
More accurately match supply with demandWhere you need it; effects of regionality
When you need it; effects of seasonality
Do the research before we approach the customer
16
Sourcebooks, Inc.an independent vision
Using Marketplace Information to Increase Efficiency and Profits Analyzing/Managing Customers’ Inventory on
Ongoing Basis Using information to work more closely with our customers
More accurately match supply with demand
Goal is to serve our customers and the marketplace better
17
Sourcebooks, Inc.an independent vision
Using Marketplace Information to Increase Efficiency and Profits Optimizing Business Processes with Marketplace
Information
Rationalize predictive process—impact advances
Optimize inventory both on hand and in channel
Implications for marketing, operations, production, sales
Decrease returns
Focus on Business Processes with Greatest Potential for Increasing Profitability