Hachette – Tendering Exercise for Outsourced Distribution of Books

Hachette book group is a Client of The Logistics Business - Supply Chain SolutionsHachette UK, the largest and one of the most diversified book publishers in the UK, is owned by Hachette Livre, the global publishing group based in France. This is in turn a wholly owned subsidiary of Lagardère, a company that is active worldwide in the areas of books, communications and media.

Hachette Distribution is a division of Hachette UK and is responsible for book distribution via its two operating companies, Bookpoint and Littlehampton Book Services. Together these two companies despatch approximately 80 million units annually, with a sales turnover of circa £370 million.

Bookpoint has been supplying the book industry for more than 35 years, specialising in the academic market. It distributes on behalf of publishing divisions of the Hachette UK Group as well as a number of third party client publishers. The business delivers a comprehensive customer service including an export department and a direct service department handling orders straight to the end customer. The company employs approximately 300 staff, operating from a 7.3 acre site in Abingdon.  The warehouse on this site holds approximately 30 million books, 67,000 titles and despatches up to 200,000 books per day.

Littlehampton Book Services is one of the leading book distributors in the UK and includes all the major supermarket chains in its client portfolio. It also provides full service distribution service to many well-known publishers outside of the Hachette group.  The company’s distribution facility in Worthing handles and services orders throughout the UK and world-wide. It holds approximately 35 million books, 26,000 titles and despatches up to 200,000 books per day.

The two businesses had been acquired by Hachette UK at different times and each had continued with its own distribution arrangements. Consequently, over the years the two businesses developed their own transport contracts which were managed completely independently. This had led to a growth in the number of carriers, with many different contracts for handling pallets, parcels and small packets. Different carriers were also used for distribution in the UK, EU and other parts of the world. This had resulted in difficulty in managing service levels and an increase in transport costs. Hachette Distribution senior management was of the opinion that there were considerable savings to be made from consolidating the transport operations and decided to undertake a tendering exercise for the combined businesses. The Logistics Business was selected to manage the tendering process and to work with the Hachette management to select a small number of carriers to cover the total business, world-wide.

The first stage of this work was to develop a specification of requirements, based on comprehensive data collected from both Bookpoint and Littlehampton Book Services. This showed the expected volumes of distribution by size of consignment and by destination, covering small packets, parcels and pallets. The specification was then incorporated into an Invitation to Tender document which included the service level expectations and contractual requirements. The ITT specified five elements of distribution covering type of delivery and geographic destination and carriers were invited bid for any one or more of these. Whilst the ITT was being prepared The Logistics Business worked with Hachette to prepare a short list of carriers who were considered to be capable of delivering the required service. Following issue of the ITT The Logistics Business dealt with queries from the bidding companies and provided further information as and when it was requested to ensure that all bidders were treated fairly and equally.

Evaluation of the tender returns was undertaken jointly by The Logistics Business and Hachette, and a short list was prepared for each of the five elements of the distribution so that final negotiations could take place. When contracts were agreed and put in place, the result of this carefully managed process was that the number of carriers was reduced for UK pallets and there were significant savings in annual transport costs. The reduced number of carriers also made it much easier to monitor activity and hence deliver improved customer service in the UK.

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