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Distribution in the digital age
01.01.70 | Katie Allen
For book distributors, new technology brings both opportunities and threats. Systems in the supply chain have never been so precise—but the advance of the e-book and other digital forms of content casts a shadow over distributors' stock in trade: printed books.
At Macmillan Distribution, technology is being grasped to adapt and improve logistics. A state-of-the-art Swisslog system has made warehouse management much more meticulous, giving Macmillan tighter control of stock at every stage between the arrival and departure of books. M.d. David Smith says the company knows more accurately than ever before where every item of stock in its care is.
"Supply chain visibility has improved dramatically," he says. That makes life much easier for Macmillan, and brings benefits for its client publishers too, cutting the risk of books going astray or any other headaches, and speeding through orders. "It means they don't have to get involved at all if they don't want to. For publishers, the logistics of distribution should be completely silent."
Macmillan has benefited from more advanced and inter-operable computer systems to manage distribution. "It used to be difficult to put computer systems together, but it's so much easier now," says Smith. It has also built its own sales data warehouse—MIDAS Gold—that gives publishers the most in-depth data yet on sales figures, stock turns and other metrics. Shortlisted for last year's Supply Chain Innovation category at the Bookseller Industry Awards, it is another example of how systems have revolutionised intelligence in publishing. "We're not limited by technology any more—only by our imaginations," says Smith.
Much of the credit for distribution improvements must also go to pan-industry group BIC, which has fought to promote technical, bibliographical and returns standards, and to strip out time and cost by driving the industry towards e-commerce. It has recently launched the Supply Chain Excellence Awards, a new scheme that puts an official seal on the efforts of publishers, booksellers and distributors—like Macmillan—to become more efficient.
E-books—friend or foe?
But for all these companies, the flip side of the digital coin is the feasible negative impact of e-books on the business of print publishing. With e-book take-up steadily increasing—a recent survey by The Bookseller found that half of those in the industry expect digital sales to overtake print at some point—the outlook for those handling physical products might seem bleak. But, Smith thinks the potential for digital product is all too easily overblown, and insists the decision late last year to fold its Basingstoke warehouse operation into an expanded Swansea base has nothing to do with falling demand for printed books. "If e-books really were going to overtake printed ones, we'd have seen some sign of it by now."
Some in the industry might think that is overly optimistic—but it is an opinion echoed by others, including Publishers Association chief executive Richard Mollet, who writing recently about the digital supply chain for the Financial Times, explained: "In the same way that hardback and paperback publications co-exist, print and digital versions of books will too."
Even so, some distributors have been trying to grab a share of the emerging e-book market, developing add-on services like data storage, Digital Rights Management to consumers. Smith sees some opportunities there, but thinks digital distribution is usually best left to publishers, digital specialists, or well-resourced, tech-savvy intermediaries such as Amazon and Apple: "We ask ourselves how we could possibly create a brand for ourselves that would be more help to publishers than those people."
BIC executive director Peter Kilborn agrees traditional distributors might be better off out of digital sales and delivery. He says that standardising things like product information and sales reports is a much bigger challenge for digital content than for print, leaving the digital supply chain far messier than the physical one. "Because so many different publishers have found so many different ways of doing things, it's been allowed to develop into something of a shambles." BIC and others are striving to help iron out the many kinks, but there is a long way to go.
If distributors stick to what they do best, Smith argues they will remain an important stage in the supply chain: "Digital business is adding to print—not taking away from it."
Technological development: The 60-minute promise
New technology has sharpened logistics in the supply chain to the extent that distributors such as Macmillan will soon be able to offer individual customers a one-hour window for deliveries. The service is being launched by its parcel carrier DPD, which sends customers an email or text message to suggest a delivery slot for their order. If it is not convenient, the window can be changed.
Macmillan hopes it will make life easier for buyers, and increase the number of deliveries that can be completed first time. "We don't have a lot of orders that go direct to consumers—but [for those people] the days of hanging around all day waiting for a delivery are over," says Smith.