April 7, 2005

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April 7, 2005
Making Information Pay 2005 The Supply-Chain
Story
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Susan Harwood

• Vice President of I.T.
• Books A Million, Inc.

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What Matters?

• MOST IMPORTANT Item Code
• ISBN / EAN
• UPC
• This is THE key to orders, sales, and all
  inventory handling activities
• Scannable and Human-Readable forms are necessary,
  and need to represent the same item code.

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SO WHAT CAN GO WRONG?
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Mystery Items

• Item Code not imprinted on product, but only on
  packaging on box, shrink-wrap, or decorative
  covering
• Particularly an issue with bibles and non-book
  product, but occasionally seen with books.
• Once an item loses its identity, we have no
  reliable way to record sales, update inventory,
  or know if reorder is needed.

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Trial and Error?

• Multiple item codes on product, but only one code
  provided for item setup.
• ? Will shipment be received against known
  (ordered) identifier, or rejected ... Or will
  another item be set up with the unexpected
  code?
• ? Will cashiers try again, if first code isnt
  recognized, or process sale as unknown item?
  If the latter ... System sales and inventory
  totals are wrong.

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ISBN ... Or isnt it?

• UPC barcode with ISBN only in human-readable
  form printed above it. (Scans as one number, but
  looks like something else.)

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Worst Case

• Improper scanning of barcode results in match
  to wrong title at POS.
• Same result if only part of 17-digit UPC is
  provided in catalog
• This corrupts sales and on-hand inventory data
  for TWO titles!

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Progress

• Sunrise 2005
• should eliminate the worst of these problems

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RISK

• EAN-13
• Questions already coming
• Vital to follow guidance of BISG, to manage this
  change
• Item identifier codes are not just important to
  your I.T. people! Everyone should understand the
  role they play, so internal business process
  change doesnt create problems elsewhere in
  supply chain.

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What Else?

• Item Substitutions problems similar to multiple
  item codes, in that orders will exist for one
  item that need to be filled with another.
• Price Changes
• Pub Changes titles moving from one publisher to
  another, or from one distributor to another
• Author, Title

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IMPACT

• PRODUCTIVITY
• AWBC buyers spend 40 of their time, and
  assistant buyers spend 70 of their time, on DATA
  MAINTENANCE.

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IMPACT

• For example, assuming a staff of 12 buyers at
  70K, and 8 assistants at 40K, that percentage of
  time on data maintenance results in approximately
  500,000 of Buyer salaries are devoted to
  NON-BUYING activities.

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IMPACT

• LOST SALES OPPORTUNITY
• Item Data update required at AWBC receiving dock
  delays availability to pick by 1-4 days.
• ?EACH days delay in picking delays availability
  to sell at 40-50 BAM stores by 1 week!

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IMPACT

• COST to Ship
• Special shipping for Hot titles that would
  otherwise be delayed in delivery to stores, due
  to data maintenance, costs AWBC over 100,000
  each year.

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IMPACT

• COST to Receive
• Cost per Unit to receive an item that requires
  data maintenance is DOUBLE the cost to receive
  items that do not require this step.

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IMPACT

• Cost in Returns
• Item data errors, particularly in Final Return
  Date and Publisher / Distributor fields, result
  in problem returns. Problem returns cost 7
  TIMES as much to process as regular returns.
• Returns to wrong publisher, or returns refused
  because past final return date, cost both
  parties.

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IMPACT

• SALES TRACKING and INVENTORY
• Item code inaccuracies or conflicts result in
  miscellaneous sales, which decreases accuracy
  of sales reporting and on-hand inventory
• This in turn depresses reorders because systems
  dont know product has sold and needs to be
  replenished.

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IMPACT

• Excess Ordering/Returns
• If Item code conflicts result in orders under
  one identifier and inventory on-hand under
  another, units of the first will continue to be
  ordered until received as that item, and units of
  the other will be returned due to lack of demand.
  
• ?Lost sales, excess inventory, unnecessary
  shipping, excess returns...

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CONCLUSION

• BISG standards provide the framework for trading
  partners to share timely and accurate item data.
• Idiosyncratic definition of what values to place
  within fields in standardized formats cause the
  majority of confusion, and/or editing upon
  import.
• BISG sub-committee is working to define
  critical fields, and expected format/usage to
  help standardize data values in these fields.
• BISG guidance will be a critical success factor
  for the industry, in moving to ISBN-13.