Friday, February 08, 2008

Sorry, you're just too small

What’s this I hear about one of our chains outsourcing some of its buying to a third party? It seems they consider most local suppliers just too small and bothersome to deal with, so their books will now have to supplied through a middle man. Quite how inserting an extra step in the supply chain saves money is lost on me, but then I never claimed to be an economist.


Phantom Insider said...

The chain you speak of is trying to avoid small order surcharges from small distributors. Single-title customer orders have been the cause of many freight charges. I think the plan is to consolidate purchase orders for a number of stores, which are then shipped to the new middleman. The new middleman then takes individual books from several distributors and makes them one package for a particular store in the chain. 100 titles ordered from 10 distributors for 10 stores could be as many as 100 packages. Now the 10 distributors ship to the middleman (10 packages) who then breaks it up and ships it to 10 stores (another 10 packages). 20 packages instead of 100.

Bemused said...

Surely all this does is shift the small order surcharge to the middle man? Ands how does this get books into store quicker?

phantom insider said...

Shift it to the middleman? No, read my post again more carefully. The system reduces total freight so long as you have multiple titles coming from multiple distributors to multiple stores. Mind you, I've not seen a living example of the system working in this fashion. Ever.

Does it get the books there quicker? No. But when a title is delayed it adds an extra layer of 'customer service' to email through to acquire an answer.

All told, we can conclude this is an excellent system on paper. However, we must remember that a turkey cannot operate a Boeing 747. Despite the presence of an autopilot system.