System Report: Random House cuts turnaround in half
Associates are directed by voice in the piece picking area. Once all the items have been picked, a tote is conveyed to an induction point for the tilt-tray sortation system.
Big-box retailers, the Internet and e-books have upended the way books are purchased by consumers. Many of those same dynamics are altering the way books are distributed as well.
Not so long ago, Random House Inc.—the world’s largest English-language trade book publisher—distributed only its own newly published and backlist hardcovers, trade and mass-market paperbacks, and audio books issued by its nearly 100 imprints in North America. What’s more, a significant portion of those books were likely to be shipped as full-pallet orders.
Today, Random House still distributes its own titles. But, it also has a growing third-party distribution business, shipping titles for 30 other publishers to thousands of brick and mortar retailers, distributors, wholesalers and libraries, as well as direct-to-consumer Web orders. In addition to warehousing and shipping, Random House also handles customer service and back-office support functions for its third-party customers.
The profile of those orders has also changed. According to Annette Danek, vice president of fulfillment, who runs the company’s distribution and fulfillment centers, “As people are buying more electronic books, you don’t need as many physical books in the supply chain.” As a result, full pallets comprise fewer than 10% of the units shipped from Random House’s 1.3-million-square-foot distribution center in Westminster, Md. About 60% of the units are full cartons and 30% are loose picks—individual titles picked to a mixed carton.
To address those changes and to support its growing third-party logistics (3PL) business, Random House added a single-tray tilt-tray sorter (Intelligrated) to the Westminster facility in the fall of 2009.
The 712-foot-long sorter features:
• Two induction locations with six stations each and four induction belts per station, for a total of 12 high-capacity singulated automatic inductions.
• Overhead scanning after each array of induction stations. The scanners read a UPC bar code on the exterior of each item on the sorter.
• And, 250 double-level chutes for a total of 500 potential sort/pack-out destinations. Packers are responsible for more than one-sort destination.
The sorter allows Random House to efficiently handle the mixed-case and direct-to-consumer orders that now comprise a larger share of its business. Order turnaround time has been improved by 50% since the sorter went live even as the company increased its overall title volume with its non-Random House clientele.
The change was a calculated strategic decision made together by company CEO Markus Dohle; Madeline McIntosh, the president of sales, operations and digital; and the senior distribution leadership that has paid off despite an economic slowdown. “We decided to invest in our physical infrastructure at a time when most publishers have put on the brakes with theirs,” says Danek. “We’re now able to get our books delivered faster than our competition, and we have become a more effective and profitable partner for our booksellers with our advanced supply chain productivity and efficiency.”
The payoff: Random House has reduced lead times and increased throughput since the sorter went live, adding 10 new outside publishers as Random House Publisher Services clients. And, there is room to grow. “We could double or triple our SKUs and keep the same turnaround times because of the sorter,” Danek says.