MANAGING A PURCHASING SYNERGY

Managing A Purchasing Synergy Project With International Subsidiaries

Managing A Purchasing Synergy Project With International Subsidiaries

Introduction

It is widely recognised that the supply chains of most companies represent areas of high potential value, and that they are often underutilised. In the face of global economic turmoil and swiftly evolving market demands, publishing companies are increasingly focussed on gearing their supply chains to reduce operating costs and improve process efficiencies, moving from fixed to variable cost models and outsourcing non-core competencies. Traditionally, the publishing industry has been characterised by large, vertically integrated organisations that rarely shared information or resources to their common benefit. This tendency severely limited the availability and accuracy of sell-through and channel data, which in turn often led to badly informed and expensive decisions resulting in high inventory levels, unsustainable promotions and uneven product distribution (Ekstedt, 2007, 25).

Answer 1)

Basically, the supply chain of book industry includes the publishing house, the middisk (wholesaler) and bookstore. Combining the limited data and domestic market, publishing houses choose the topics and publish based on previous experience of publishing and sales. Wholesalers buy books from publishing houses and sell them to bookstores. The ultimate goal of business is to best meet customers' demand, then gets profit.

The feature of traditional publishing industry supply chain

The supply chain of traditional publishing industry is a function structure chain, which provides publications to consumers. It is made up of content, communication carriers' supply, editing, distribution, storage and transportation etc. Compared to the other industry supply chains, traditional publishing industry supply chain has the following three features:

With the deepening of publishing industry reform, the structure of publishing industry supply chain is no longer the traditional linear one. The three links enterprises of supply chain, which are publishing house, the mid-disk (wholesaler) and bookstore, begin to expand to the other side of the business domain and their functions become to infiltrates with each other. The supply chain of publishing industry becomes the complex structure of 'net-link'.

Publishing industry supply chain is the hybrid supply chain which combines pull with push. - It must maximize social benefits while maximize economic benefits. It must realize the effective combination of both social and economic benefits.

Publishing industry supply chain management started late. So there are a lot of problems, mainly in:

Huge cost

First, there is no long-term relationship among the members of supply chain [5]. The members only care about their short-term profit but do not care the strategy partnership. As the independent market entities, printing plant, publishing house, issuers and logistics companies have their different interest orientation.

Disconnection of supply and demand

Supply and demand of book industry has been so prominent because of the low market-oriented. The topics demonstration is not proved strictly. As the information communicated of supply chain is not enough and timely, most publishing houses can not know the demand of consumers in time. Publishing houses only can take the wholesales' orders as basis to choose topics. Demand and supply channel is unreasonable and communication ...