Modern Materials Handling - October 2011

EDITORIAL OFFICES111 Speen Street, Suite 200Framingham, MA 01701-1496(800) 375-8015Michael LevansGROUP EDITORIAL DIRECTORmlevans@ehpub.comBob TrebilcockEXECUTIVE EDITORrobert.trebilcock@myfairpoint.netNoël P. BodenburgEXECUTIVE MANAGING EDITORnbodenburg@ehpub.comLorie King RogersASSOCIATE EDITORlrogers@ehpub.comSara Pearson SpecterEDITOR AT LARGEsara@moxiemarketingllc.comRoberto MichelEDITOR AT LARGErobertomichel@new.rr.comJeff BermanGROUP NEWS EDITORjberman@ehpub.comJosh BondCONTRIBUTING EDITORturbobond@gmail.comMike RoachCREATIVE DIRECTORmroach@ehpub.comWendy DelCampoART DIRECTORwdelcampo@ehpub.comDaniel GuideraILLUSTRATIONdaniel@danielguidera.comBrian CeraoloGROUP PUBLISHERbceraolo@ehpub.comPEERLESS MEDIA, LLCA DIVISION OF EH PUBLISHING, INC.Kenneth MoyesPRESIDENT AND CEOEH PUBLISHING, INC.Brian CeraoloPUBLISHER ANDEXECUTIVE VICE PRESIDENTPEERLESS MEDIA, LLCMAGAZINE SUBSCRIPTIONSStart, renew or update your FREEmagazine subscription atwww.mmh.com/subscribe.Contact customer service at:Web: www.mmh.com/subscribeEmail: mmhsubs@ehpub.comPhone: 1-800-305-0633Mail: Peerless MediaP.O. Box 1496Framingham, MA 01701ENEWSLETTER SUBSCRIPTIONSSign up or manage your FREEeNewsletter subscriptions atwww.mmh.com/enewsletters.®Random House turnsup the heatIf you admire companies that buck trendsand aren’t afraid to invest in their businesswhen their competition is on the ropes,you’re going to like reading about what thedistribution leadership team at RandomHouse has been up to over the past twoyears.For starters, the world’s largest Englishlanguagetrade book publisher has boldlyidentified distribution as one of its corecompetencies. In fact, it’s actually growing asuccessful third-party distribution businessat a time when most of its competitors arescrambling to figure outa new business model asthe popularity of electronicbooks continues to grow.Under its Random HousePublisher Services Group,the company is now shippingtitles for more than30 publishers to brick andmortar retailers, distributors,wholesalers, as wellas direct-to-consumer WebTHIS MONTH IN MODERNIn response to the newmarket realities, theRandom House team,with the blessing ofcompany CEO MarkusDohle, made a strategicinvestment in a 712-foot, single tray, tilt-traysorter.orders—not to mention handling customerservice and back office support functions aswell.As executive editor Bob Trebilcock detailsin this month’s System Report (page 16), thedistribution team was watching a major shiftin the profile of the orders shipped for thisnew customer base and quickly realized itneeded to respond and stay ahead.“As people are buying more electronicbooks, you don’t need as many physicalbooks in the supply chain,” Annette Danek,vice president of fulfillment, tells Trebilcock.Sounds simple enough; however, with thisdramatic shift, full pallets comprise fewerMICHAEL LEVANSGROUP EDITORIALDIRECTORthan 10% of the units shipped from RandomHouse’s 1.3-million-square-foot DC inWestminster, Md. Today, 60% of the unitsshipped are now full cartons while 30%are loose picks, or single titles picked to amixed carton.In response to the new market realities,the Random House team, with the blessingof company CEO Markus Dohle, madea strategic investment in a 712-foot, singletray, tilt-tray sorter. The advanced equipmentallowed the Westminster operationto handle the mixed-case and direct-toconsumerorders with littleproblem while improvingturnaround time by 50%.These results helped theServices Group land 10 moreclients since going live.“We decided to invest inour physical infrastructure ata time when most publishershave put on the breaks withtheirs,” says Danek. And, Ibelieve this is where the realinspiration of this story resides.Not only has this once-traditionalpublisher capitalized on one of its corecompetencies to grow a supplemental business,but it was able to make a calculatedinvestment and turn up the heat inside itsfour walls during a time when most materialshandling investment had cooled.“This is a great example of an industryleader using materials handling automationto grow its business and outpace thecompetition at a time when investment waswaning,” says Trebilcock. “It will be a positivesign for the industry if we see a few more storiesof this caliber over the next six months.”MemberMember ofWinnerJesse H. NealCertificates of Meritfor JournalisticExcellenceOfficial Publication ofmmh.com MODERN MATERIALS HANDLING / O C T O B E R 2 0 1 1 7