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