Transcript Slide 1

General Session:
“New Directions in Single Copy Supply Chain”
Manufacturing Plant
Truck Freight
Wholesaler
Air Freight
IDEAlliance Print Distribution 2007
Monday April 23, 2007
1:30 pm – 2:15 pm
Sheraton Sand Key Resort
Clearwater Beach, Florida
Retail
“New Directions in Single Copy Supply Chain”
Agenda:
I. Introduction of Panelists
II. Overview of Re-launch
Newsstand Operations & Technology Committee
III. State of the Business – Focus on Industry:
Developments
Trends
Business Analysis
“New Directions in Single Copy Supply Chain”
State of the Business – Focus on Industry:
Developments, Trends, Business Analysis
Moderator: Scott Bauer, Associate Director of Distribution,
Newsweek
Panelists:
Rose Cirrincione, Director of Traffic, Time Warner
Dave Davis, Director of Transportation, Nationwide Midwest
Keller Whalen, Executive Vice President, Distribution Services
Where have all the drivers gone?
• Driver shortage remains key issue for most
carriers
–Prevents business growth
–Results in higher expenses for recruiting and
retention (80% to 120% turnover rate)
–Aging driver force means many will retire and
the industry is not attracting younger drivers
Technology / Regulation
• ULSD – Mandate
• New Engine Spec.
• Hours of Service
Pre-Weekend
• Peaks too high, valleys too low
• Does not fit well with HOS
• Makes it harder to schedule freight other
than weekly titles (LTL)
• Everything between Wed 5:00 a.m. and
Thursday 5:00 a.m.
Statistics
• $13.5 billion in magazines shipped in 2006
– 4,000,000,000 units
• $4.8 billion magazines sold in 2006
– 1,427,784,000 units
• Reported shortages total about 0.2% of copies shipped
– 8,000,000 units
• Shortages cost the publishers $27,000,000
– what do they cost the rest of the supply chain?
Source: The New Single Copy
Opportunities
• Increasing number of drop ship locations
– Nighttime and key-drops
– Shortage claims not identified by drop location
• Tighter delivery windows (for pre-weekend deliveries)
– Penalties assessed
– Additional publisher costs to meet limited schedules
• One day per week dealer deliveries
– Late deliveries to retailers
Working together for solutions
• Increasing number of drop ship locations
– Publisher absorbs cost of delivering to additional locations
– Wholesalers consolidate – ProLogix, Source/Levy warehouses
• Tighter delivery windows (for pre-weekend deliveries)
– Publishers and shippers re-arrange delivery times
– Wholesalers guarantee pre-weekend for weeklies (72%!)
• One day per week dealer deliveries
– Publishers and shippers alter lead times
– Wholesalers accept flexible delivery windows
ProLogix
Background
– 2002: Jim Pattison Group Started ProLogix Distribution
Services and AccuLogix Distribution Services in Canada.
– 2006: The News Group and Anderson News formed a strategic
alliance under ProLogix East and ProLogix West.
Functions include: warehousing, order assembly, returns
processing, merchandising and delivery to retail customers
Goal: Streamline deliveries and reduce overhead costs
ProLogix East and ProLogix West
ProLogix – A National Distributor’s View
Pros
• Standardization of receiving hours for both TNG
and ANCO:
• Thurs 4am, Pre-weekend delivery.
• ProLogix allowed the break-up agents nighttime
access via lock box/key for drop-ship locations.
– ProLogix East is shifting to separate driver and
merchandiser as was done from the outset in ProLogix
West.
– Net impact positive or negative?
ProLogix – A National Distributor’s View
Cons
• OS&D issues
• Publishers incurred Incremental transportation costs
• Poor Communication - Prologix East had too many address changes in the
beginning...communication was better with Prologix West (example, News Group
Receiving Policy)
• Routing and merchandiser turnover
• Shifts in delivery patterns have led to a loss in copies delivered pre-weekend as
well as a shift in copies from Thursday to Friday delivery.
– Total net impact on sale unknown at this point, but will likely be significant
– Continuing to work through these issues with Pre-Weekend delivery to retail
• Bottom line – “the jury is still out”
Time Magazine Pre-Weekend
What’s Changed
Time Magazine Manufacturing changed
Sun to Thurs
Sun for 25+ years
Printing Plants moved
Torrance, CA to Merced, CA
Dallas, TX to Ok City, OK
Time Magazine Pre-Weekend
Delivery

Newsstand On Sale
 Work in-progress.
 Target 100% pre-weekend.
 Increased pre-weekend distribution in terminal and bookstore dealers

Subscriptions
 In-home 90%+ by Saturday
 Reader gets the product in a much more convenient time to read on the
weekend.
 USPS was extremely helpful working with Time Inc.

All of our (4) weeklies can now arrive to many readers@ retail and subs pre-w.
Time Magazine Pre-Weekend
Quality of Life Changes
 TIME EDIT has worked weekends for many, many years—now they get to
enjoy weekends as well.
 Our carriers and staff now enjoy the same Quality of Life change.
 Premise is readers have more leisure time to read on the weekend.
2006/2007 Changes:
Printing Plant Reconfigurations:
•Consolidated Oklahoma City, OK to the Rock, GA
•Consolidated Strasburg,VA to Saratoga, NY
Dates:
November 2006
April 2007
Closing Schedule:
•Six hour earlier close to the printers ( Saturday 6 pm )
Date:
January 2007
Questions ?
Thank You