©April 2005 Barnes & Noble, Inc. BMI Management Conference May 2005 Joe Gonnella VP, Inventory...

©April 2005 Barnes & Noble, Inc.

BMI Management ConferenceMay 2005

Joe Gonnella

VP, Inventory Management & Vendor Relations

2


Barnes & Noble Ranks #1 in Quality Among Retail Brands in America for 3

Straight Years

3


Barnes & Noble.com Ranks #1 in Quality

Among Online Booksellers

4


Barnes & Noble Today

• Fortune 500 Company

• Retail Sales: $4.4 Billion

• 820 Stores in 50 States

• E-Commerce Sales: $419.8 Million

5


A Vertically Integrated Multi-Channel Retailer

Retail Stores E-Commerce Publishing

• #1 Brand and market leader

• #2 Specialty retail web site

• Exclusive product at higher margins

6


Multi-Channel StrategyMulti-Channel Retailers Find Their Groove*

• 24% of offline sales influenced by the Web

• 8% of online orders are returned to the store, and of those customers, 25% make an in-store purchase

• 16% of store customers also purchased online

• 15% of online customers began as store customers

*Source: Forrester Research, 2004

7


Supply Chain Infrastructure• Warehouses in NJ, TN and NV• 10,000 active vendors/40,000 publisher imprints• 200 million units shipped annually to stores• Just-in-time daily replenishment• Rapid logistics network• 10 million internet orders• Real-time inventory network

– Stores– Web site

8


1 Day

2 Days

3 Days

4 Days

5 Days

• Over 75% of store product delivers via ArgixDirect.

• Services the entire U.S.

• 80% of the deliveries to the stores are received within 3 days.

Barnes & Noble DistributionBarnes & Noble Distribution Transit Times for B&N-Jamesburg, Transit Times for B&N-Jamesburg,

NJNJ

9


Barnes & Noble DistributionBarnes & Noble DistributionTransit Times for B&N-Reno, NVTransit Times for B&N-Reno, NV

1 Day 1-2 Days 2-3 Days 3-4 Days

• Primarily services West Coast (over 200 stores).

• Over 95% of the deliveries to the stores are received within 3 days.

HAWAIIHAWAII2-3 2-3

DAYSDAYS

ALASKALASKAA

2-3 2-3 DAYSDAYS

10


There are 5 conceptual approaches to the

Distribution Process

11


Warehouse Distribution Process

Pull ShipStorePutawayReceive

Barnes & Noble Distribution Center

BARNES & NOBLE

ShelveReceive

ShipPullStore

Bindery Distribution Facility


Publisher Distribution Center

12


Flow Through Distribution Process



ShipRe LabelReceive

Barnes & Noble Distribution Center

BARNES & NOBLE

ShelveReceive

ShipPullStore


13


Publisher Drop Ship Process



BARNES & NOBLE

ShelveReceive

ShipPullStore


14


Bindery Drop Ship Process

ShipPullStore

Bindery Distribution Facility BARNES & NOBLE

ShelveReceive

15


Print On Demand

BARNES & NOBLE

ShelveReceiveShipPrint

Print on Demand Facility

Customer's HomeCustomer's Home

16


Print On Demand(Future State)

POD

PODPOD

POD

POD

POD

POD

POD

POD

POD

POD

POD

POD

POD

17


Warehouse Functions Performed:

• Backlist replenishment

• Demand wholesaling

• Book-in-Hand verification of bibliographic data

18


Participation in, and support of,

Book Industry Study Group

19


BISG Structure/Organization• BISG Committees:

Distribution Executives PublicationsManufacturer Executives Research New Technology EducationFinance MarketingPolicy MembershipBISAC

• BISAC Sub Committees:Machine Readable Coding IdentificationDigital Sales Reporting MetadataInternet Commerce RightsPub/Manufacturer EDI Subject Codes

20


Industry Standards Implemented:• ONIX – Metadata, Bibliographic data

• SAN – Standard Address Number

• EDI – Purchase Orders, POAs, Invoices, ASNs (all ASC X12)

• Shipping Labels based on UCC standards

• Product Labels based on industry standards

• ISBN – ISBN-13, Bookland EAN

21


Standard Carton Labels

Shipping Label

Product Label(Bindery Application)

22


Standard Labels; Standard Placement

1.25

1.25 1.25

1.25

ProductLabel

ShippingLabel

23


Measurements and Compliance

• Compliance is required for standards to be effective; regular performance reports are made to vendors

• Efficient Data Receipts Program (EDRP) measures and reports compliance with bibliographic data standards

• Efficient Receipts Program (ERP) measures and reports compliance with carton, product marking, and EDI standards

24


Inventory Management

25


Inventory Management

• Demand Planning

• Supply Planning

• Lead Time Measurement

26


Demand Planning

• Statistical forecasting using i2’s

• Forecasts done on point-of-sale data

• Monthly forecasts are generated for

Demand Planner product

Retail and Barnes & Noble.com for each subject, category and sub-category and ISBN

27


Demand Planning

Methodology using i2:

• Statistical Forecasting• Coding POS spikes• Smoothing POS data• Trend, Level and Seasonality• A miracle occurs !!!

28


29


30


Supply Planning

• Inventory planning using i2’s Supply

• Forecasts received from Demand

• Mathematical formulas used to

Chain Planner product

Planner

generate “optimal” purchases

31


Supply Planning

Methodology using i2:

• Safety Stock mathematically calculated using the following:• Customer Service Level• Forecast Error• Average Demand• ISBN Lead Time• Variability of Lead Time

• Economic Order Quantity and Frequency • Balance cost of acquiring versus cost of carrying

32


33


34


Lead Time

• Release Order EDI• Pick-up EDI• To warehouse• Warehouse schedule• Shipping

Hold for pick up Hold for full truck LTL (less than load)

• Receipt• Stow/available for sale

35


7.8 7.76.9

6.2 6.25.3

6.4

10-12 13-15 16-19 20-23 24-27 28-31 32+

Inve

ntor

y Tu

rn

Turn Decreases as Leadtime Increases

Days

36


5.8%7.2%

10.1% 10.5% 10.5%

13.2%

15.3%

10-12 13-15 16-19 20-23 24-27 28-31 32+

Ret

urn

s %

Return % Increases with Leadtime Increase

Days

37


Standards enable collaborative planning

forecasting and replenishment

38


The Industry:UCCnet, UCC, EAN, FMI, GMA, Transora, WWRE,

ECCC, GCI, Wal-Mart, Kraft, Colgate, Wegmans, P&G,

Ahold, Sterling Commerce, IBM, Microsoft, UDEX, etc…

2. GLOBALregistry

3. Data Synchronization

4. Collaborative Core Business Transactions - Order, Shipment, Payment.

5. Collaborative logistics management

6. Collaborative sales & promotion planning

7. Collaborative product development

1. Common data standards

e-Collaboration

Time / Degree of trust & complexity

Ben

efit

s

You

Source: A.T.Kearney for GMA - FMI

Standards Enable Collaborative CommerceVICS Enables Standards Adoption

39


VICS CPFR® Committee Work So Far.

1996

1997

1998

19992000

2001

1st “CFAR” pilotVICS subcommittee develops CPFR®

VICS CPFR® Guidelines published

First CPFR® rolloutRoadmap to CPFR® published, with pilot results

Leading CompaniesPilot CPFR®

Global CPFR® guidelines publishedB2B marketplaces offer CPFR® services

2002

2003

2004

What about your firm?

CTM Ver 1.0

40


The VICS Model for CPFR

41


CPFR.org

42


3 Year SalesSeries X

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sale

s

2004 Sales2005 Sales2006 Sales

43


2004 ReceiptsSeries X


Rec

eipt

s 2004Receipts

44


Print OptimizationSeries X


Pri

nt-R

un O

ptim

izat

ion

.

Print Run

45


Print Run & ReceiptsSeries X


Pri

nt R

un &

Rec

eipt

s

Print Run

2004 Receipts

46


Book Industry Study Group

is the key!

47


Thank you!

©April 2005 Barnes & Noble, Inc. BMI Management Conference May 2005 Joe Gonnella VP, Inventory...

Documents

Transcript of ©April 2005 Barnes & Noble, Inc. BMI Management Conference May 2005 Joe Gonnella VP, Inventory...