Reference no: EM131919277

Problem: Business Textbook Supply Chain

Dave Eisenhart, senior editor for Mountain Publishing, Inc., looked out his window as he considered the operational implications of the changes he had just heard discussed in the company's annual strategic planning meeting. The future looked to be both exciting and scary. As an editor for Mountain's business textbook division, Dave had recently witnessed major changes in his primary market. First, the body of knowledge in business school curricula had exploded over the past decade. It was getting harder and harder to cover all the content that any professor might want in a single textbook, while keeping the size of the book manageable. Second, Dave had noted that more and more schools were moving to modular course structures, including many shorter courses, sometimes as short as a week long. Third, a growing number of students preferred to buy their books from sources other than traditional bookstores, such as Amazon.com and other online sources. At the same time, new technologies were changing the way that textbook content could be produced and delivered. Print technologies were improving the speed and quality of printing, so that it was easy to envision a day when books could be printed one copy at a time, "on demand." Mountain and other companies had already started to offer custom published books for professors who wanted to combine chapters and cases from several different sources into a single readings packet for their students.

While the quality of these "books" (packets) did not match that of traditional hardbound texts, many professors and students valued the flexibility associated with this option. Finally, e-books were slowly making an entrance into the market. While the percentage of books purchased in electronic form was currently very small, the potential seemed to be very large, if and when a standardized reader technology ever became widely accepted in the marketplace. Dave began to think about the operational activities dispersed across Mountain's supply chain for traditional textbooks. On the upstream (input) side, Mountain worked with authors (usually professors), text editors, graphic artists, commercial printers, and other suppliers to edit, design, and produce books. After typically large print runs (up to three years of forecasted demand) were produced, transportation suppliers delivered the books to Mountain's distribution centers located around the country. Orders from bookstores and online retailers were filled from these distribution centers. For traditional textbooks, each of these players in the supply chain played a fairly clear role in creating value through the goods and services they provided. However, as Dave considered the market and technological changes currently under way, the operational value that each of these players provided became less clear.

1. Draw a diagram that illustrates the textbook supply chain from the publisher's point of view.

2. Who are the various customers for textbooks? What do these customers want in terms of goods and services related to textbooks? From the publisher's point of view, who is the critical customer?

3. Who are the major players in the supply chain? What operational roles do they play in terms of creating value for the critical customers?

4. Given the anticipated changes in the market and in product and process technologies, how do you envision each supply chain player's role changing in the future?

5. What advice would you give to Dave Eisenhart regarding long-term operational changes the firm should consider?