Association of Canadian Publishers Vendor Update Meeting

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Association of Canadian PublishersVendor Update
Meeting

• June 28, 2005
• Victor DiRisio

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Objective of Todays Meeting

• Provide our trading partners an SAP status update
  1 year after go-live
• Thank you for your hard work and support during
  the complex transition to SAP
• Review Indigos Supply Chain Initiatives for this
  year and how they will affect you our trading
  partners
• Communicate a few policy changes
• Provide our key trading partners some perspective
  on Indigos longer term plans
• Answer your questions

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Agenda for Today

• SAP update 1 year after go-live
• EDI Program Update
• Bibliographic Data Requirements
• BookNet Sales Data Analysis Service
• Policy Updates
• Returns Policy
• Over-shipment Policy (Rejections)
• Price Protection Policy
• Indigo Website for Vendors
• ISBN-13 / GTIN-14
• Indigo Capital Projects
• Perspective on Longer Term Plans

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SAP Update 1 Year After Go-Live

• SAP Project Scope
• Replaced 50-60 of our company IT infrastructure
• Reengineered 80 of all company work processes
• SAP system go-live on May 2, 2004
• Things that are working well
• System stabilized in approximately 6 months
• Centralized replenishment (distribution of
  inventory, seasonality)
• Best Inventory position for Holiday Ever
  according to our stores
• Store clusters
• Returns were lowered by 5 (vs previous year)
• Support we got from you the vendor community
  (inventory build, etc..)

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SAP Update 1 Year After Go-Live

• Areas that still need some work
• Returns documents (physical shipment financial
  details)
• Invoice matching payment
• Store receiving
• Coles stores over inventoried
• Learnings
• Inaccurate on-sale dates
• Product substitutions (alternate/substitute
  ISBNs)
• Inaccurate pricing

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EDI Program Update

• A lot has been accomplished during the last year
• March 2004 BookNet launched PubNet EDI service
  reducing EDI VAN costs
• May 2004 Adoption of the new BookNet EDI
  documents (PO, POA, ASN, and Invoice)
• Sept 2004 BookNet launched the PubNet web-based
  EDI solution for small vendors
• June 2005 Follow-up Purchase Order
  Acknowledgements (POAs) enabling vendors to
  update pricing
• June 2005 New Cross-Dock EDI files no longer
  requiring SDQ tables
• Indigo now receives Advanced Shipment
  Notifications for over 90 of total shipments
  received resulting in faster time to shelf in
  stores

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EDI Program Update

• New EDI documents for this year
• Purchase Order cancellation EDI documents to be
  used by Retailers Publishers
• Publishers will utilize the Follow-up Purchase
  Order Acknowledgement document
• Retailers communicate cancellations via a
  Cancellation Notification document. Publishers
  review and send back a Cancellation Confirmation.
• Should eliminate the current effort to manually
  cancel orders
• BookNet to finalize new EDI documents by July 30,
  2005
• Indigo Purchase Order cancellation documents in
  use October 1, 2005

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EDI Program Update

• New EDI documents for this year
• 3 new return EDI documents
• Returns Advisory document issued by Retailers
  identifying the titles to be returned. Publishers
  review and send back a returns confirmation
  (identifying any issues or opportunities such as
  not our product, remainder in place, etc..)
• Returns Advance Shipment Notification (ASN) is
  sent by Retailers identifying the contents of
  return shipments
• Retailers issue a Debit Note with return
  financial details
• Should reduce the current manual effort to review
  Indigo email based returns financial
  reconciliation
• Indigo will not accept rejected returns that have
  valid return confirmations
• BookNet to finalize EDI documents by September
  30, 2005
• New return EDI documents in use January 1, 2006

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EDI Program Update

• EDI Non-Compliance Penalties
• Not Using EDI documents - Currently if vendors do
  not utilize the PO, POA, ASN, and Invoice
  documents they are fined 1 of the next months
  invoices paid
• Poor Quality EDI documents - Effective September
  1, 2005 vendors will be fined 1 of the next
  months invoices paid if any of the following
  quality measures are not met (measured monthly)
• POA documents without error gt 98
• ASN documents without error gt 98
• Invoice documents without error gt 98
• To a maximum EDI Non-Compliance penalty of 1 of
  the next months invoices paid
• For Indigos Top 30 Vendors - Non-Compliance
  penalties for Poor Quality EDI documents will
  begin September 1, 2005

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Bibliographic Data

• Accomplishments from the past year
• May 2004 Adoption of the new BookNet
  Bibliographic standards template
• April 2005 Indigo accepts Enhanced Content Data
  (cover scans, author bios, etc..) via ONIX
• Indigo now accepts bibliographic data via the
  BookNet Bibliographic template, ONIX 2.0, and
  2.1. Preparing to accept ONIX 3.0.

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Bibliographic Data

• New requirements for Bibliographic Data this
  year
• Require all vendors to have bibliographic data
  (ONIX or BookNet templates) BookNet Canada
  certified by Jan 1, 2006
• Strict-on-Sale dates will be followed only if
  they are communicated correctly via ONIX, BookNet
  Canada bibliographic template, or SYME
• Indigo will return titles until 90 days after the
  Out of Print date (or 90 days after Indigo
  receives the communication which ever is later).
  Out of Print dates must be communicated via
  bibliographic data updates. If you didnt
  communicate it to us it isnt Out of Print yet
• Vendor Bibliographic Data needs to be certified
  by BookNet by Jan 1, 2006

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Bibliographic Data

• Bibliographic Non-Compliance Penalties
• Poor Quality Bibliographic Data - Effective
  September 1, 2005 vendors will be fined 1 of the
  next months invoices paid if any of the
  following quality measures are not met (measured
  monthly)
• titles provided without errors gt 98
• titles with carton quantities gt 95
• titles with weights measures gt 95 (after the
  pub date)
• Incorrect Binding Code Classification Effective
  September 1, 2005 vendors will be fined 100 per
  title for the following
• Incorrect binding code which would cause
  incorrect tax to be collected paid
• For Indigo Top 30 Vendors - Non-Compliance
  penalties for Poor Quality Bibliographic Data
  Incorrect Binding Code Classification will begin
  September 1, 2005

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BookNet Sales Data Analysis

• BookNet Sales Data Analysis service expected to
  launch in the fall
• Yes Indigo is participating !!!
• Indigo will no longer provide POS data via our
  preferred vendor program once the BookNet service
  is live
• All publishers who subscribe to BookNets SDA
  service will have access to Basic Anonymous Data
  (aggregated view of sales, on hand inventory, and
  on orders for all Retailers)
• Indigo will also provide more detailed
  Peer-to-Peer Data to publishers who qualify

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BookNet Sales Data Analysis

• BookNet Sales Data Analysis service expected to
  launch in the fall
• Indigo will also pilot an expanded Peer-to-Peer
  data set with Replenishment Type, Target Stock
  Level, Weeks of Supply, etc..

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BookNet Sales Data Analysis

• In order to qualify for Indigo Peer-to-Peer data
  a vendor must meet the following criteria
• Provide bibliographic data using BookNet Canada
  certified ONIX
• EDI capable including ASNs and Cross Dock
  documents (can use PubNet web-based EDI)
• Contract of terms conditions with Indigo
  (updated annually)

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Returns Policy

• In addition to the introduction of 3 new Returns
  EDI documents the following changes are also
  taking place
• For Rights Changes Indigo requires that the
  vendor we purchase from and the vendor we return
  to be the same (purchasing returns rights move
  together)
• Vendor blended return rates will be updated by
  July 1, 2005
• Effective September 1, 2005 Indigo will no longer
  accept Rejected Returns that are more than 90
  days old (based on the return shipment date)
• Indigo will no longer accept Rejected Returns
  that are more than 90 days old beginning
  September 1, 2005
• Vendor blended return rates will be updated by
  July 1, 2005

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Over-Shipment Policy (Rejections)

• New Store DC process to handle over-shipments
  by vendors
• Causes of Over-shipments
• Indigo has cancelled PO or item and vendor still
  ships
• Vendor has cancelled the PO or item and still
  ships
• Vendor sends a duplicate shipment
• Vendor ships an alternate/substitute ISBN
• Vendor picking error
• Different processes for handling Over-shipments
  of greater than 25 _at_ Retail and Less than 25_at_
  Retail

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Over-Shipments Policy (Rejections)

• New Store DC process to handle over-shipments
  by vendors
• Over-Shipments of Greater than 25 _at_ Retail
• Stores will quarantine the product in their back
  rooms
• Vendors will be contacted and given 1 week to
  communicate desired disposition (pickup
  over-shipment or request disposal)
• Vendors will have 1 additional week to have your
  carriers pickup over-shipments
• After 2 weeks all over-shipment quarantine will
  be disposed of by Indigo
• Over-Shipments of Less than (or equal to) 25 _at_
  Retail
• Indigo will dispose of product stores choice
  to destroy, give to staff, etc..
• New process for handling over-shipments by
  vendors in effect July 1, 2005

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Price Protection Policy

• New Price Protection Policy for price decreases
• Effective April 1, 2005 (communicated in January)
  when a vendor communicates a price decrease for a
  title (including alternate/substitute ISBNs) via
  a Bibliographic update Indigo will determine
  total on hand inventory and charge back the
  cost impact of the price decrease to the vendor
• Indigo POS systems can only hold one price per
  ISBN (the lower price)
• Price Protection policy for price increases
  effectively immediately.

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Website for Vendors

• New Indigo website for vendors to be launched
  October 1, 2005
• www.vendors.indigo.ca
• Website to include specifications, policies,
  QAs, recent communications, contact information,
  etc.. for
• EDI documents usage
• Bibliographic Data requirements
• Physical Shipment Guidelines
• Non-Compliance Penalties
• Vendor performance metrics will also eventually
  be available online (secure access only)
• How to sell to Indigo
• Indigo Vendor website to be launched in October
  1, 2005

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ISBN-13 / GTIN-14

• Product Data Efficient Supply Chain building
  blocks

RFID
GDSN
GTIN-14
ISBN-13

• ISBN-13 brings industry to the global EAN standard

• GTIN-14 identifies title, case pack, and pallet
  quantities

• GDSN single master bibliographic data aggregator

• RFID reduces logistics costs, increases speed to
  shelf, reduces shrink (not if but when)

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ISBN-13 / GTIN-14

• Indigo systems affected by move to
  ISBN-13/GTIN-14 include
• Product Catalogue Database (Bibliographic Data)
• EDI documents
• Inventory Position Files
• SAP (order management system)
• DC (warehouse management system)
• Point-of-Sale systems
• Reporting
• Website

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ISBN-13 / GTIN-14

• Key dates for move to ISBN-13 / GTIN-14

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Indigo Capital Projects

• Sept 2005 New Point of Sale systems in all
  Indigo, Chapters, and Coles stores
• Feb 2006 New Warehouse Management System for the
  Indigo DC
• TBD New Product Catalogue Database (TBD)

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Longer Term Plans

• Utilize BookNet SDA as the foundation for CPFR
• Higher percentage of Indigo volume shipping via
  our DC
• Lowest cost distribution
• More frequent store deliveries
• Higher cross dock volume
• Including mass market titles
• Faster time to shelf in stores
• New warehouse management system will lower costs
  even further
• Consignment Inventory service to improve lead
  time for Online customers
• Appointment scheduling software for Indigo DC
  (more data from vendors)
• Security Tags - having publishers insert
  security tags in all books (in preparation for
  inserting RFID tags)

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Questions