JIG ANNUAL REPORT

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Chairman's Introduction
Background
JIG Board 2007/08
JIG Structure
Sub–Committee Progress Reports
Contact Details

INTRODUCTION FROM THE CHAIRMAN

As I complete my year as Chairman of the Joint Industry Group (JIG) and reflect back on it, I do so with mixed feelings of pleasure and frustration. The pleasure comes from the positive progress that has been made over the past year to improve standards and efficiency across a number of supply chain initiatives. The frustration, of course, stems from those JIG initiatives where progress has been less obvious, or, in truth, none at all.

As the JIG’s impartial Chairman it is not my position to imply blame to any party for the lack of progress in some areas, but, for certain, the continued delay by the Office of Fair Trading (OFT) in making announcements on its various news industry reviews, has been a significant negative factor that has not helped.

Self–evidently, whilst important decisions affecting the future of the news industry remain unanswered; decisions that could have critical commercial ramifications for all sides of the industry; it is not surprising that members of the JIG have had varying degrees of difficulty committing themselves to initiatives in the face of an uncertain future.

Hopefully, by the late summer, the OFT will have made its pronouncements and it is to be hoped that these will bring greater clarity and certainty to the future of our industry.

In launching the Unsolds Challenge, the JIG members have made a significant commitment to reducing the amount of unsold copies in the supply chain. This worthy initiative is an extremely important one, not just to address the wastage from a commercial and efficiency aspect, but also as a first step for the news industry in recognising and acting on its responsibility to reduce carbon emissions.

Work on this, as well as a whole raft of other positive JIG initiatives, detailed more fully in this Annual Report, falls on the shoulders of a relatively few number of highly skilled and highly dedicated individuals. Without their commitment, together with the backing and support of their Managing Directors and Chief Executives, the JIG would be merely a pointless “talking shop”. My year as Chairman has taught me otherwise.

To all those who have devoted their time, their energy and their tremendous enthusiasm to making successful progress within the JIG during my year as Chairman, 2007–2008, I offer them my heartfelt thanks on behalf of everyone involved within the news industry.

Paul Wagg
JIG Chairman (NFRN)
April 2007 – March 2008

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The Joint Industry Group comprises the Association of Newspaper and Magazine Wholesalers (ANMW), the Newspaper Publishers Association (NPA), the Periodical Publishers Association (PPA), the Association of News Retailing (ANR), the British Retail Consortium (BRC) and the National Federation of Retail Newsagents (NFRN).

JIG was launched on 30th April 1998 following the Director General of Fair Trading’s decision not to refer the newspaper industry to the Monopolies and Mergers Commission. The newspaper publishers received a mandate from the Office of Fair Trading tasking them to address issues identified in the MMC’s report, in particular, measures to monitor wholesaler service.

JIG was created for that purpose with a mission to address the industry’s own problems via self–regulation rather than regulatory intervention.

JIG has been responsible for generating industry initiatives through the creation of working groups providing direction and monitoring the progress of the projects it creates, all of which are addressed by a consensual approach through the unanimous decision of its members.

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The Joint Industry Group Board 2007/08 comprised the following members:

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Reports from the Chair of each JIG sub–committee have been prepared summarising the objectives of the group and distinguishing those participating in the activities, highlighting progress made during the year and identifying known future objectives.

Committee Progress Contents Menu
FODI (Focus on Distribution Initiative)
ISS
Unsolds Challenge
Vouchers

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Focus on Distribution Initiative (FODI)
Chair: Bob Steadman

OBJECTIVES

• Meet the delivery time needs of consumers and retailers to support both home delivered and casual sales
• Optimise the efficiency and flexibility of the supply chain
• Remove unnecessary costs and to make the most of resources
• Standardise procedures and communication

PROGRESS REPORT

The year has been another difficult one for the FODI group. Newspaper sales have not been buoyant and our efforts to bring together all parts of the supply chain to seek efficiencies and improvements have been hard work.

After some progress with regard to updating Scheduled Arrival Times (SATs) from publisher to wholesale, progress was halted when two publishers, having changed their printing arrangements, were unable to agree new times with their wholesaler at several depots. To address this issue, and in an attempt to find a solution, a meeting was scheduled for June 2008 to discuss and agree new 'terms of reference' for the SATs review.

In the meantime, we had some success in refining and improving our national review of Required Delivery Times (RDTs) to retail. After lengthy consultation, an RDT review process was agreed and a trial undertaken at Newcastle, Ipswich and Swindon wholesaler depots. The information took a good deal of time to collect and even after follow–up letters and telephone calls to retailers we still did not generate a 100% response rate. However, some good information was gleaned and we were able to analyse what was possible and what retailers were telling us.

However, it became apparent that there were some anomalies in the data – retailers had widely ranging requirements in terms of the time required to perform HND or preparation duties for example. For this reason, a consultancy, Strategic Analytics was appointed to a) validate the work we had done to date and b) give us some statistically sound principles on which to base further work. SA did a very good job in helping us to refine our questions and also in helping us to make decisions on how we use the data in a statistically sound manner.

Although this was successfully achieved, at around the same time the NPA offered to fund a trial of a telephone based RDT review in the expectation that 'pushing back' on retailers' answers may result in the release of further time back into the supply chain. So, for the sake of a few weeks, I have agreed to the NPA's offer and currently await the results. When I get them I expect to be able to compare the two methodologies and the FODI group can choose their preferred option.

Once these pieces of work have been completed, I am hopeful that we can press on with a national review of both SATS and RDT/SDTs.

GROUP MEMBERS

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Introduction

Part of the JIG process has been to gain consensus on key projects that JIG members work jointly upon to bring improvements to the overall supply chain to the mutual benefit of those participating. This is a key part of the JIG self regulatory process.

During the 2006/7 JIG year under the Chairmanship of Paul Naismith (NPA) a thorough process of identifying key issues and projects by all participating Associations was undertaken, and the one area where the majority believed focus was needed was the increasing volume of unsolds of newspapers and magazines handled by the supply chain.

Objective

To gather information that illuminates the dynamics of the UK news trade supply chain.  The intent is to reduce the volumes of unsolds without detriment to sale and availability, whilst acknowledging the need to protect the commercial interests of each party. The initial focus to be on the magazine supply chain.

Progress Report

Following the workshop in October the JIG Board asked Adrian Smith to Chair a Steering Group. Over the following six months the steering group has met monthly and identified 5 key work streams to pursue to address the project purpose.

• Work Stream 1 – Fact finding market specific data
• Work Stream 2 – Model further practical SBR and fulfilment potential
• Work Stream 3 – Deeper understanding of retail issues
• Work Stream 4 – Relevant background research
• Work Stream 5 – Communications, Modelling and Efficiency

Recommendations surrounding these 5 work streams have been accepted by the JIG Board and include:

Work Stream 1 – Fact finding market specific data

Magazine data set on levels of supply and unsolds at national level to show three year trend to be updated quarterly together with magazine and retail segment data. The SG have shared significant and illuminating data and are working to agree the timing and best formats for this information to be posted to the JIG website or other sharing opportunities and the context of the data to ensure the on line recipient gains some value and it helps towards the project purpose.

It is the SG’s view that sharing this data and ensuring a common level of understanding will assist participants in the supply chain to take a more informed and responsible approach.

In monitoring the top level figures both the actual and % unsolds have improved over the previous year, and monitoring this by the group on a regular basis is a positive development.

The next stage is to share data for the newspaper side of the market and again share this in a similar way to magazines.

Work Stream 2 – Model further practical SBR and fulfilment potential

A working group comprising members from the PPA & ANMW have been working for over three years on exploiting opportunities on SBR and fulfilment. This group, Chaired by Stephen Cripwell (PPA) has effectively been incorporated within this project as this work stream.  The SG has been brought up to date on SBR and related activities thus far and has indicated further areas for focus by the working group.

There has been substantial progress and the January 2008 update confirms that on SBR:

1. 300 to 350 monthly titles: 30 to 40 weekly titles are covered by the three multiple wholesalers
2. 3123 multiple retailers are receiving the benefits of reductions to initial supply allocations and replenishment by EPOS.
3. 4013 retailers are receiving the benefit of replenishment driven by EPOS

The working group believe an additional 1.7million monthlies and 870k weekly extra sales have been achieved in the 12 months to November 2007.

The group have many new initiatives including a new ‘model’ to explore the potential for SBR and fulfilment on a wider number of titles and retailers and to assess the overall economic cost and service trade-offs.  This will help to establish next steps and inform on likely extent of value adding next stages of potential SBR and fulfilment without reaching uneconomic diminishing returns from investment in the process.

There are also tests being conducted on holding overstock at various points.  Against such growing testing and modelling, the biggest challenge this group has going forward is using the data produced to influence publishers to print less of what the market cannot sustainably absorb.

Work Stream 3 – Deeper understanding of retail issues

The retail associations are compiling core issues from surveys of their members and it is hoped that case studies on how the category can be better managed through agreed changes in communication and processes can lead to a reduction in unwanted copy at retailers.  Output from various trials and initiatives will be considered, and reference material on retail availability issues and approaches in other categories has been obtained for comparison.

Work Stream 4 – Relevant background research

A plethora of papers from other supply chains and other countries on how supply and availability issues are being managed or improved has been gathered for review. A summary of relevant ideas that could assist the Group will be collated. Also work on the ‘carbon footprint’ of unsolds, commissioned by the ANMW has been shared with the steering group and will be presented to the April JIG board and highlights the carbon cost of unsolds as a key and growing factor.

Work Stream 5 – Communication, Modelling and Efficiency

How we communicate progress on this project is still under review in the SG. It is intended that an edited version of this report is issued as a press release following the April JIG Board and the SG will consider ongoing PR with trade press and more tangible output as achievements have been made.

Next steps

One of the challenges for the steering group is to understand the scope and what realistically can be achieved in the JIG arena taking into account varying commercial and differing priorities from each Association and its members.

At the last steering group meeting each Association re-affirmed what their ‘final destination’ or outcome of the project should look like, remaining broadly in line with original views:

1. BRC
1. Consistent/standardised data for the industry
2. Education process with retailers on issues behind unsolds/understanding the rationale and what can be done
3. Visibility and understanding of what the Group can achieve and what are commercial issues

1. ANR
1. Solutions to address the impact of the volume received by stores
2. Information/data on unsolds and supply allocation
3. Solutions for retailers where SBR will have limited or no impact

1. NFRN
1. Want to deliver on the objectives coming from the original Coverdale work
2. Clearly understand the real issues behind unsolds and waste
3. What can be done to get real results and success in reducing unsolds

1. ANMW
1. Support the series of actions that came from the work with Coverdale
2. Should refer beck to these original actions to assess what we have achieved at various points in the project

1. PPA
1. Clear/visible information through the supply chain
2. Publishers want to reduce waste, but not at the cost of availability and sales
3. Drive solutions, such as SBR, that can take out unsolds without impacting on sale
4. Agree a data set that can be shared and support an educational process on unsolds through the supply chain.

Over the forthcoming months the SG will attempt to articulate where consensus can be achieved and how the work streams can be developed to give more detailed goals within the framework of the project purpose.

Members of the group

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Objectives

To ensure we have an efficient voucher process within the news industry.

Progress Report

A successful year with significant improvements in key areas.

The JIG Voucher Best Practice document was updated in January 2008 and distributed again to the current key players in the voucher industry.

The annual practice of republishing the guidelines is working well as twelve additional people were identified as new to the voucher roles at publishers.

The PPA published a double-sided document titled “Smart Publishers Guide to Voucher Schemes” specifically targeting magazine publishers.

Both documents are published on the website below.

Retail Shrink 2005 to 2007

The KPI for shrinkage due to late returns from retailers has again reduced in 2007/8 from a starting point of just under 3% for Magazines in 2005 to just over 1% in 2007.

Newspapers shrink over the same period has reduced from 0.14% in 2005 to 0.10% in 2007.

Members of the Group

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