Ad Rem – Challenges and Opportunities for the Australian Book Industry
Creator-To-Consumer (C-2-C) Workshop
October 3rd, 2001
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Ad Rem
• Ad Rem was an EPICS funded project which achieved its objectives and outcomes through participation of more than 50 organisations in the Australian book industry
• The Ad Rem value chain analysis painted a quantitative picture of the Australian book industry and identified improvement opportunities estimated to be worth $155 million annually
• The Ad Rem participants and team developed four divergent and plausible scenarios for the Australian book industry and a range of possible strategies
• A final report and an industry forum will mark the end of the Ad Rem project and pass the ‘baton’ on to the industry
3©Accenture 2001 All Rights Reserved
Ad Rem – Objectives and Outcomes
Ad Rem was an EPICS funded project which achieved its objectives and outcomes through participation of more than 50 organisations in the Australian book industry
• To identify and evaluate the challenges and opportunities
• Provide insights as to how the industry and individual firms may achieve a sustainable strategic position in the future
Objectives:
• Short/medium term focus:Improvement opportunities worth $155m
• Long term focus:Industry scenarios and supporting strategies
Outcomes:
Participation:• 50 companies
• 120 executives
Funding:• Main funding under the EPICS scheme by
the Federal Government through its Department of Industry, Science and Resources
• ‘In kind’ contributions from McPherson’s Printing Group, Accenture and other participating organisations
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Value Chain Analysis – The Chain
The Ad Rem value chain analysis painted a quantitative picture of the Australian book industry
Bookseller Publisher Printer AustralianRoyalties
4%
O/S Printing
Local PrintingRoyalties 0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
1994 1996 1998 2000
11.1%
8.9%
7.4% 7.6%
- Value Chain - ($10 book retail value, 2000)
- Industry Profitability - (1994 - 2000)
Profitmargin =
3.1%
100%
Profitmargin =
7.9%
62%
Profitmargin =
1.3%
12%
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Value Chain Analysis – Opportunity Areas
The Ad Rem project estimated that greater collaboration and consolidation in the book industry offer opportunities worth approximately $155 million annually
Currentcost level(p.a.)
$101m
$825m
$39m
$116m
$83m
Improvementpotential(p.a.)
$47m (47%)
$39m (5%)
$9m (23%)
$50m (43%)
$10m (12%)
Key levers
Collaborative demand planning
Collaborative inventory planning
Book range management
Consolidation of volume
Aggregation at (near) industry level
Area
Returns
Inventory
Write-offs
Distribution
Paper sourcing
$155m
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Scenario Planning – Scenario Map
Nature of Demand
Nat
ure
of
Su
pp
ly
Increasing demand for reading material, available in mixed formats, with more niche content, available from multiple purchasing channels
Reduced demand for reading material, mainly in
paper-based format, containing content with mass appeal, available
mainly via shops
Some companies, diversified along the book industry value chain, emerge in a transaction
based marketplace
Existing businesses remain specialised and collaborate to maximise industry performanceShoulder to
Shoulder
Land of the Giants
Paradise Found
Dog Eat Dog
The Ad Rem participants and team developed four divergent and plausible scenarios for the Australian book industry and a range of possible strategies
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A final report and an industry forum will mark the end of the Ad Rem project and pass the ‘baton’ on to the industry
• Synthesises of highlights from the Scenario Planning and Value Chain Analysis deliverables
• Contains additional information about industry issues, including views based on interviews with CAL, authors, and others
• Time frame: mid October, 2001
Final Report:
• Accenture will host an industry wide forum to disseminate findings from Ad Rem and pass the ‘baton’ on to the industry
• Time frame: mid November, 2001
Industry Forum:
For more information about Ad Rem and access to thedetailed deliverables, please refer to the project web-site:
www.adrem-online.net
Next Steps