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Our supply chain has several demanding characteristics which collectively make it unique:- The products are all ‘short shelf life’.
They all have a declining sale pattern through their life, selling more at the beginning of the ‘on sale’ period and progressively less as we go through the sale period.
Each ‘production’ run is of a new product. The publisher takes a view on potential and prints one run of product, which, with the best will in the world, can only be either too much or too little.
The product is also a vehicle to sell advertising, so publisher production and commerciality is influenced by that, unlike other goods like milk, fruit, confectionery etc.
Product is sold by the copy not the outer.
In essence, as each issue is a new product with different look, feel, pagination etc from the last issue, all issues behave like ‘promoted’ products, which are recognised as the hardest in any category to match production to availability and sales demand.
As a consequence of such uncertainty and last minute product content, newspapers, magazines are generally sold on a sale or return basis (SOR).
The positive from this is the notification of what comes off sale and when for return and credit. The negative is the activity required to identify these products and handle back through the chain, from crediting to recycling.
In essence products are counted out and counted back and so the sector is not just dependent on epos till data, important in a sector where this technology is still just evolving.
Product is allocated to retailer outlets, based on total supply, high level agreements and publisher instruction on where to place some copy with some retailers, and then wholesale data management ‘allocation’ systems to apportion the balance of copy across customers taking account of past sales, copy available and special constraints or local characteristics. Product available is unlikely ever to match precise quantities of what might be forecast for each outlet and when the volatile nature of weather, travel, timing, consumer motivation, advertising etc are all added then again, the reality is that any individual supply of any title issue to any retail outlet will either be too much or too little, but should be close overall to the optimal spread of meeting total sales and availability.
However, with so many dimensions, regardless of the technology deployed, this is an inexact science.
The Unsolds, or over supply, is a necessary lubricant to assure availability, however there is no doubt that in some cases there is too much or too little and overall the supply chain needs to be more responsible on high unsold volumes and more responsive to recognising where availability is threaded.
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