Forward & Reverse Supply Chain of Book Publishing Industry

According to a KPMG report in 1998  on supply chain of book publishing industry in United Kingdom(KPMG PPT),  publishing is costly ang generates more waste than consumer goods sector. The logistics costs of publishing are about 13% while the logistics cost of consumer goods manufacturer is 6%.

Fig 1. Forward and Reverse Supply Chain Flowchart in Publishing Industry

(Ref. Reengineering the Book Publishing Supply Chain March 4, 2015 by Thad McIlroy)

Presently, we seem to have entered a new era in supply chain management and operations management in publishing industry due to 2 key reasons:

1)Digitalization:

Publishers presently treat the manufacturing, distribution and marketing of digital content as important or probably more important than the hard copy publishing content. Integration of print and digital offers the publishers a big advantage in terms of easing the pressure off on the supply chain of the print publishing content.

With consumers getting used to digital content, the supply chain problems for the publishing companies has dropped considerably.

2) Inventory Management Systems

This has facilitated the publishing companies to negotiate better and drive down the cost of managing and running a warehouse with distribution center. The publishers can now pass on the responsibility of managing the inventory levels to its immediate supply chain partners of suppliers, distributors and wholesalers. Hence, the token of efficiency has been taken off my publisher’s supply chain to specialized distribution vendors and wholesalers.

The result is reduced operating cost and lower risk points.

Two major problems in the supply chain of the ‘Printed’ books are:

1) Number of books to be printed and the cost associated with it.

2) Movement of the finished printed books to specific distribution points and consumers.

2 Key Reasons for new era supply chain: Digitization & Supply Chain Management

2 major problems in traditional publishing Industry: Number of Copies & Logistics Movement of Finished Product

Both the major problems in the supply chain of the publishing printed books is addressed aptly with the rise of digital publishing industry. Now the books to be printed and the quantity to be printed and delivered has reduced and hence low supply chain stress on the printed publishing industry. At the same time, they can focus majorly on meeting the needs of traditional readers and book collectors.

Another advantage is the storage of books once they are obsolete. The printed books need physical space and care to preserve limited editions. However, with digitization, the collection of archives is simplified to a whole new level, thereby reducing the fixed and variable costs associated with physical storage of the books.

Large publishers will still stuff a lot of inventory in to the supply chain but now this supply chain has a word ‘Reverse’ attached to it and hence is more efficient and well planned.