Supply Chain for Brick & Mortar Book Retail Industry

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Describe how supply chain works in brick and mortar environment for book industry. If possible, a description on both brick and mortar (it's important this one is answered), virtual environment and a comparison between the two.

There is an inevitable tension between the creative processes in publishing and bookselling and the technical disciplines of supply chain management
There is little exploitation of opportunities for economies of scale in physical distribution and transaction processing
Trading relationships are complex, largely adversarial, with little partnership activity
There is little joint planning across the supply chain

The competition for retail exposure causes Publishers to push stock into the supply chain, accepting the risk of returns this creates. Partly this is due to:
Dependency on new titles
Shortcomings in the responsiveness and efficiency of the supply chain
Perceived limitation of retailers' re-ordering policies
Retailers not incentivised to resist because they carry little stock risk

There are a number of obstacles to change to be overcome for the industry to reap all the benefits available
These include mistrust of trading partners' motives, complacency, the difficulty of balancing requirements for individual versus industry-wide benefits, and short-termism

There is a pressing need for action, as financial returns are low, and there is major competition for consumer attention and spending

The current book industry supply chain structure is complex and costly, characterised by high fragmentation, few economies of scale, and many-to-many trading relationships

At root are fundamental issues about the nature of the publishing and bookselling process
These will have a material impact on the supply chain within one year

The industry needs to take co-coordinated action in five interrelated areas to move from high cost trading conditions to more effective and efficient trading relationships
Improvements in transaction processes
Partnership trading arrangements in list and demand management
Improved stock management and better use of printing and distribution capacity
Distribution efficiencies
Reduction in the level and cost of returns

It is important to have a number of priority and longer term projects that form a strategic change programme to unlock the benefits available

An industry pressure group of senior executives should be appointed to overcome existing obstacles, drive through the change programme, and co-ordinate industry action

The industry needs to establish formal liaison mechanisms between the Booksellers and the Publishers Associations to reflect their common supply chain publishers' logistics costs are 13% of sales, amongst the highest in industry (average costs to a typical consumer goods manufacturer are 6%)

Returns alone cost about £100 million per annum, each return typically costing a Publisher £1 and a Retailer 50p
Inventory management through the supply chain is uncoordinated. The result is more than 60 ...