2017/09/08 Goldratt Conference Day 2

by Gene Kim on

#UtahGCCon

2017/09/08 Goldratt Conference Day 2

  • @johannrichard: RT @cyetain: If opportunity doesn't knock, build a door. -Milton Berle #Utahgccon
  • @cladingbowl: RT @1joecooper: Management attention must be focused on the few key factors which dictate the ability to achieve more of the goal. Rami Gol…
  • @cladingbowl: Every situation is simple (governed by a few leverage points). Management focus is all you need. And TOC!… https://t.co/tMfMo7IWMe
  • @APickett: RT @GoldrattBooks: .@RealGeneKim live-tweeted today's #UtahGCcon talk by Yoav Ziv, @Amdocs Head of Testing. Have a look https://t.co/5eVfr
  • @ellenokalinosky: This stuff works #UtahGCCon via Knowledge Jolt with Jack - "This stuff works!" from Retired Lt. ... https://t.co/hhPXL765Vs

Up: Annette Daniel-Akey, Random House; Larry Perlov, Goldratt Consulting: Prolicies, Processes, Systems and Poeple

  • Perlov: “for a book store, shelf space, and cash are the main constraints; we’ll take all books, we’ll return unsold books in 60 days”
  • Perlov: “Goldratt offers Random House 4 days at his house; CEO was just fired”
  • Perlov: “Problems: re-order freq was too inconsistent and long; weekly at best”
  • Perlov: “Shipping policy was ‘minimum quantities’; push policy from sales (pile em high, watch em fly”; small quantities at hand
  • Daniel-Akey: “consumption based replenishment: customers order more freq; ship daily”
  • Perlov: “12 book stores; 50 titles (45 currently on sale, 5 titles that would be new); replenish to stores in 36-48 hours”
  • Perlov: “Replenishment lead time reduced by 86%; initial state”
  • @RealGeneKim: #UtahGCCon Initial state of book replenishment times from Random House to bookstores: 14 days to 2 days https://t.co/XmzELIjz4C
  • Perlov: “Eli wanted to push for pilots on July 4th; we were staged for weekends; 80K SKUs;
  • Daniel-Akey: “we had to charter plane service to figure out how to get books staged
  • Daniel-Akey: “Test happened in 2008; sales were down 18% vs 22%, because of Great Recession
  • Daniel-Akey: “Had to implement tilt sorter; to handle smaller batch sizes in warehouses; CEO said, I believe you and this project; spending $7MM
  • Daniel-Akey: “2009: Borders went out of business, and ebooks sales were going up; and project got shelved
  • Larry asked “do you really need approval?” Maybe not!
  • Who is best partner? The person selling to all the independent bookstores? Boulder Bookstore wanted to do pilot
  • they had 5K of our titles; why would they order differently for you, since you’re only 10% of their biz?
  • July 2009: more bookstores became interested
  • had to convince customers, executives, sales, operations
  • if you’re in supply chain, partnering with sales were easy
  • customers didn’t believe that there would be an increase in sales
  • We had to change SAP: didn’t need a lot of consultants: read Supply Chain at Warp Speed
  • today: 60% of volume is daily orders; 80% on rapid, reliability replenishment
  • return rate was 21%; $30MM!
  • we implemented dynamic replenishment to our own warehouse for loose pickers for emergency replenishment
  • @RealGeneKim: #UtahGCCon When Random House merged with Penguin merged, they could compare return rates (lower), but cost/unit hig… https://t.co/dsVW1IgUy5
  • put Penguin 35K titles into Random House; 14 month buildout
  • @RealGeneKim: #UtahGCCon Wow, results of putting Penguin into Random House supply chain; $100M savings https://t.co/RXOnrv2xw2
  • 14 month buildout; took other publishers 4 years to copy us.
  • @RealGeneKim: #UtahGCCon took 4 years for other publishers to reproduce this capability https://t.co/aQcc5i4OXV
  • Daniel-Akey: “Ebook sales reduced volume, so we used our excess shipping capacity to offer this service to other publishers
  • Daniel-Akey: “Independent Book Stores: ‘you guys kept the independent book stores alive... without you we wouldn’t be able to survive