new technologies in book distribution: the united states experience

UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION

THE FUTURE O F THE BOOK

PART III

New T e c h n o l o g i e s i n Book D i s t r i b u t i o n : t h e U n i t e d S t a t e s E x p e r i e n c e

A r e p o r t p r e p a r e d by SKP A s s o c i a t e s f o r t h e C e n t e r f o r t h e Book

L i b r a r y o f C o n g r e s s

( C l

UNESCO 1984

PREFACE

Books are among t h e o l d e s t media o f mass communication; t h e i r perma- nence as a r t i f a c t s t h a t can be manipulated over cen tu r ies and across f r o n t i e r s has assured them a p r i v i l e g e d p lace i n soc ie ty . Yet t h e book i s no longer unique i n t h i s sense. Modern technology i s cha l l eng ing b o t h t h e form and f u n c t i o n o f t h e book and i t s r o l e as t h e p r i n c i p a l ins t rument €or t r a n s m i t t i n g accumulated knowledge and new ideas.

Decid ing t h a t i t was o f v i t a l importance t o p lace these new circumstances i n t o perspec t ive , Unesco has i n i t i a t e d a comprehensive study t o exp lo re the charac ter o f these changes and t h e i r expected impact on t h e f u t u r e . As a f i r s t step, a number o f well-known experts from va r ious book p ro fess ions and reg ions o f t h e wor ld were gathered together t o adv ise on t h e na ture and scope o f t h e issues t h a t c a l l e d f o r f u r t h e r study.

The present document--the th i rd t o appear w i t h i n t h e framework o f t h i s s tudy-- t races t h e h i s t o r y o f t h e a p p l i c a t i o n o f computer-based technology t o t h e book d i s t r i b u t i o n process i n t h e Un i ted Sta tes and i n d i c a t e s those func- t i o n a l areas c u r r e n t l y showing t h e e f f e c t s o f t h e use o f t h i s technology, as w e l l as those t o which t h e new technology w i l l be app l i ed i n t h e near f u t u r e . I t inc ludes references t o t h e i n d i v i d u a l s and o rgan iza t i ons whose leadersh ip and a c t i v i t i e s were i ns t rumen ta l i n these techno log ica l a p p l i c a t i o n s . I t a l s o i n d i c a t e s t h e cond i t i ons which e x i s t e d when automation was in t roduced i n t h e 1960s and t h e p recond i t i ons f o r implementing t e c h n o l o g i c a l systems today. The study was prepared f o r t h e Center f o r t h e Book i n t h e L i b r a r y o f Congress, Washington, D.C., by Sandra K. Pau l and Susan Kranberg o f SKP Associates, a research team s p e c i a l i z i n g i n U.S. p u b l i s h i n g and book d i s t r i b u t i o n p r o j e c t s and hav ing considerable experience i n such groundbreaking e f f o r t s as t h e Assoc ia t ion o f American Pub l ishers Book D i s t r i b u t i o n Task Force and D i s t r i b u - t i o n P ro jec t , t h e Book I n d u s t r y Systems Advisory Committee, t h e Book I n d u s t r y Study Group and t h e N a t i o n a l I n f o r m a t i o n Standards Organizat ion.

The authors a re respons ib le f o r t h e choice and t h e p resen ta t i on o f t h e f a c t s conta ined i n t h i s t e x t , and f o r t h e op in ions expressed the re in , which are n o t necessa r i l y those o f Unesco and do n o t commit t h e Organizat ion.

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TABLE OF CONTENTS

Page

SECT I ON

I I n t r o d u c t i o n 5

The Use o f t h e Computer ..................... 6

Changes i n t h e D i s t r i b u t i o n Area .......... 7

Methodology o f t h e Report ................... 9

Context of t h e Report ........................ 8

II H i s t o r i c a l Achievements 11

Assoc ia t ion o f American Pub l ishers ........... 11

Book I n d u s t r y S t u d y Group ..................... 11

Book I n d u s t r y Systems Advisory Committee .... 1 2

N a t i o n a l Assoc ia t ion o f Col lege Stores ........ 1 5

1 4 American Booksel lers Assoc ia t ion ..............

American N a t i o n a l Standards I n s t i t u t e ......... 16

III The D i s t r i b u t i o n Process 1 7

1 7 The Purchasing Dec is ion ...................... P l a c i n g an Order ............................. 19

I n t e r n a l Order Processing a t Vendor

Locat ions 19 ............................... Pick ing , Packing and Shipping o f Books ...... 20

Rece iv ing and Processing Books ............. 22

Generat ing Claims 22

Returns Processing .......................... 22

............................

I n v o i c i n g and Payment ........................ 23

Warehousing Funct ions ........................ 23

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Page

SECTION

I V Precond i t ions f o r t h e I n t r o d u c t i o n o f New Technologies 25

25 The P a r t i c i p a n t s ............................ 2 6 The U.S. Government ......................... 26 Leadership .................................

H i s t o r i c a l Precond i t ions f o r Automation ....... 27

Precond i t ions f o r Tomorrow ................... 28

V Conclusion 3 1

APPENDIXES

A L i s t o f abbrev ia t ions ........................... B Organizat ions In te rv iewed €or t h i s Report ......... C Mergers & A c q u i s i t i o n s i n Book Pub l i sh ing 1962-1984 - -

33

34

35

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SECTION I--INTRODUCTION

Those a t t h e r e c e i v i n g end o f t h e book d i s t r i b u t i o n cha in have l o n g expressed t h e i r concern w i t h t h i s i n e f f i c i e n t , c o s t l y , and time-consuming a c t i v i t y . As e a r l y as 1929, O. H. Cheney was commissioned by t h e N a t i o n a l Assoc ia t ion o f Book Pub l ishers ( fo rerunner t o the Assoc ia t ion o f American Publ ishers) t o s tudy the book d i s t r i b u t i o n process. H i s 'Economic Survey o f the Book I n d u s t r y ' and a s p e c i a l 'Supplementary Report o f t h e Economic Survey o f t h e Book I n d u s t r y f o r Bookse l l i ng Execut ives, ' pub l i shed by t h e Na t iona l Assoc ia t ion i n 1931, descr ibed the p e r i o d f rom 1930 t o 1931 and analyzed the whole range o f book pub l i sh ing , from t h e necess i t y o f i nc reas ing book readership t o t h e d i f f i c u l t i e s faced by manufacturers, pub l i shers , whole- sa lers , r e t a i l e r s and l i b r a r i a n s . Cheney made a l a r g e number o f eva lua t ions and content ions. Those t h a t r e l a t e t o t h i s Report were:

'The d i s t r i b u t i o n system o f t h e i ndus t r y , as represented by i t s o u t l e t s , i s unsystematized, underdeveloped, i n e f f e c t i v e , u n p r o f i t a b l e and s t a t i c . ' (page 278).

'The major handicaps t o b e t t e r d i s t r i b u t i o n a re t h e backwardness o f reading; t h e present unsound methods o f i nc reas ing o u t l e t s ; t h e absence o f any methods f o r improv ing bookse l l ing ; and t h e absence o f methods f o r impro- ving d i s t r i b u t i o n t o t h e r e t a i l e r . ' (pages 278-279).

'The methods f o r reach ing t h e book t rade a re n o t f u l l y u t i l i z e d . ' (page 279).

'Real merchandis ing c o n t r o l by t h e p u b l i s h e r i s impossib le w i t h o u t merchandis ing c o n t r o l by t h e bookse l l e r . The p u b l i s h e r cannot know what o r when t o p u b l i s h o r r e p r i n t un less he knows what t h e bookse l l e r i s a c t u a l l y s e l l i n g - - n o t what he i s o r d e r i n g o r re -o rde r ing ... The minimum t h a t t h e booksel.ler must know inc ludes : a) The s tock ... b) The customers and t h e i r t as tes . c ) The sales, by t i t l e . . . I (supplementary Report, p . 2 1 ) .

Some s o l u t i o n s he suggested were:

'The i n s t a l l a t i o n o f reco rd systems i n every p u b l i s h i n g house, bookstore and manufacturing p l a n t which w i l l g i v e t o t h e management complete and acces- s i b l e i n f o r m a t i o n rega rd ing every t ransac t i on . ' (Supplementary Report, p .6) .

'The p repara t i on by each house, s t o r e o r p l a n t o f recorded i n s t r u c t i o n s cover ing every phase o f t h e work o f every employee.' (Supplementary Report, p . 7 ) .

'The development o f a p l a n o f l o c a l i z e d r e g i s t r a t i o n o f reader i n t e r e s t s . . . so t h a t t h e proper unbiased i n f o r m a t i o n on books on any sub jec t reaches every i n t e r e s t e d i n d i v i d u a l , no mat te r where loca ted . ' (Supplementary Report , p .7 ) .

'Stock codes cou ld be developed f o r t he whole i ndus t r y , each t i t l e r e c e i - ving a code number. Th is would s i m p l i f y records and orders and p rov ide f o r un i fo rm and easy c l a s s i f i c a t i o n o f t i t l e s by t h e bookse l l e r . . . I

Report, p.52). (Supplementary

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Unfor tunate ly , most o f t h e problems r e l a t e d t o book d i s t r i b u t i o n t h a t Cheney de l i nea ted more than 50 years ago s t i l l e x i s t today. Some improvements have been made by i n d i v i d u a l companies and organ iza t ions , but i t i s o n l y now, i n 1984, t h a t t h e new technology i s beg inn ing t o produce meaningful , indust ry-wide change.

Th is Report presents an overview o f some o f t h e e f f e c t s o f app ly ing the new e l e c t r o n i c and computer-based technologies t o t h e book d i s t r i b u t i o n process, and p r o j e c t s a l i k e l y scenar io f o r t he fu tu re . The Report concen- t r a t e s on a p p l i c a t i o n s i n t h e Un i ted States o f America, but w i l l no te r e l e - van t events i n o the r coun t r i es t h a t have a f f e c t e d o r may s i g n i f i c a n t l y a f f e c t t h e Un i ted States.

The Use o f Computer Technology

Why has so l i t t l e i n t h e book d i s t r i b u t i o n process changed between Cheney's 1931 r e p o r t and t h e year 1984? We b e l i e v e t h a t t he re are seve ra l reasons. H igh on the l i s t i s t he l a c k o f a t t e n t i o n t o t h i s area by book pub- l i s h e r s , who have t r a d i t - i o n a l l y concentrated more on the psycho log ica l rewards o f publ ish ing--such as search ing €or manuscripts, grooming e x c e l l e n t authors, and success fu l l y p u b l i s h i n g a work--than on the more mundane aspects o f t h e business. Th is i s n o t ha rd t o understand when you consider t h a t t he o f t e n p r e c a r i o u s l y low r e t u r n on investment i n book p u b l i s h i n g suggests t h a t most p u b l i s h e r s a re n o t i n t h e business f o r t he f i n a n c i a l rewards. For instance, a 1982 survey by t h e Assoc ia t ion o f American Pub l ishers i n d i c a t e d t h a t t h e average n e t income o f t h e responding book pub l ishers , be fo re taxes, was 2.4% f o r mass market paperback pub l i she rs and 4.1% f o r t rade pub l ishers - - less than one can achieve by s imply putting one's money i n a savings bank.

A second impor tan t reason r e l a t e s t o t h e l a c k o f c a p i t a l necessary t o f inance techno log ica l improvements. I n the l a t e 1960s many o the r types o f businesses had inves ted i n da ta process ing equipment and were, i n f a c t , making t h e t r a n s i t i o n f rom 'Automat ic Data Processing (ADP) ' and punch paper tape t o 'IBM Cards' and ' E l e c t r o n i c Data Processing (EDP).' By 1967 the number o f i n s t a l l e d computers had reached 40,000 i n the U.S.(as compared t o o n l y 10 o r 15 u n i t s i n 19501, w i t h an est imated va lue o f $13 b i l l i o n . O f every $1 m i l l i o n t h a t U.S. business spent f o r new plant and equipment i n 1967, a t o t a l o f $63,000 went f o r computing. ('Computers: The Booming S ta te o f t he A r t , ' Newsweek, August 19, 1968, p. 67-71).

Th i s use o f t h e then-new technology was no t i ceab ly absent from book pub- l i s h i n g houses; i t s imply cos t t o o much t o purchase and i n s t a l l equipment. I n 1966, t h e average l a r g e computer c o s t about $1 m i l l i o n i f purchased ou t - r ight, w h i l e a 'mid-sized' system cou ld cos t between $10,000-$30,000 per month i n r e n t a l fees. (Dun's Report, 1966, p.140). Large, experienced EDP s t a f f s were r e q u i r e d t o develop unique app l i ca t i ons sof tware and t o run and ma in ta in complex computer f a c i l i t i e s . Independent, pr ivate ly-owned book pub l i she rs f r e q u e n t l y lacked adequate c a p i t a l even t o buy t h e r i g h t s t o l i t e r a r y p r o p e r t i e s f rom authors; computer izat ion was beyond t h e f i n a n c i a l means o f most o f them.

Another r e l a t e d f a c t o r was--and s t i l l i s - - t he sma l l s i z e o f t he e n t i r e book i ndus t r y , which prec luded i n t e r e s t i n and development o f app l i ca t i ons sof tware f o r t h e i n d u s t r y by major computor vendors. I n 1972, f o r instance,

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t h e t o t a l gross revenue o f a l l U.S. book p u b l i s h e r s combined was $2,825.2 m i l l i o n (John P. Dessauer, Book I n d u s t r y Trends, 1977). T h i s i s l e s s than the gross revenue o f t h e Greyhound Bus Company, which was then number 3 1 on t h e Fortune 500 l i s t w i t h sa les o f $2,903.6 m i l l i o n . IBM, noted f o r i t s s t rong sof tware a p p l i c a t i o n support o f i t s computer hardware, cou ld n o t j us - t i f y i n v e s t i n g i n t h e research and development o f programmes f o r t h e book i ndus t r y , when the same investment i n a non-book r e l a t e d programme cou ld r e s u l t i n a p o t e n t i a l sa les base m i l l i o n s o f t imes grea ter .

Despi te these l i a b i l i t i e s and l i m i t a t i o n s , some pub l i she rs d id buy computers and s t a r t work ing w i t h them i n t h e e a r l y 1960s. Among t h e f i r s t were such companies as Random House, Pren t ice-Ha l l , and Houghton M i f f l i n . Each o f these pub l i she rs j u s t i f i e d t h e i r investment i n t h e new technology on t h e bas i s o f t he r i s i n g cos ts o f book d i s t r i b u t i o n . Unfor tunate ly , they were fo rced t o h i r e da ta p rocess ing p ro fess iona ls who had l i t t l e o r no under- s tanding o f book pub l i sh ing , s ince these p ioneers i n automat ion had no p o o l o f t r a i n e d techn ic ians w i t h knowledge o f t h e i n d u s t r y f rom which t o s e l e c t . These programmers and systems ana lys ts were charged w i t h t h e task of developing i n t e r n a l o rder processing, i nven to ry c o n t r o l , and book d i s t r i b u t i o n systems, but were g iven l i t t l e i n s i g h t i n t o t h e book-publ ish ing bus iness- - i t s goals, customers o r methods. The systems they developed were f r a u g h t w i t h problems. I n those days t h e common excuse f o r delayed shipment o r i n v o i c i n g was, 'We've j u s t i n s t a l l e d our new computer!'

Chancres i n t h e D i s t r i b u t i o n Area

The low l e v e l o f concern t o modernize book d i s t r i b u t i o n began t o change i n t h e 1970s and 1980s as t h e slumping U.S. economy fo rced book pub l ishers , a long w i t h o ther business people, t o seek c o s t reduc t i ons wherever poss ib le . They looked t o t h e new technologies t o reduce the c o s t o f labour and t o make t h e i r s t a f f s as e f f i c i e n t as poss ib le . Concurrent ly , t h e leadersh ip i n pub- l i s h i n g i n c r e a s i n g l y moved f rom t h e e d i t o r o r marke t ing exper t t o t h e business person, f r e q u e n t l y as a r e s u l t o f t h e a c q u i s i t i o n o f t h e p u b l i s h i n g house by a soph is t i ca ted e l e c t r o n i c s o r communication conglomerate. l i s h e r s acqui red by such organ iza t ions appears as Appendix C ) . Most l a r g e pub l ishers - - the t y p i c a l 20% o f t h e i n d u s t r y who account f o r 80% o f t h e sa les volume--had purchased computer equipment. Smal ler pub l i she rs sought computer i - zed serv ices f rom a t ime-shar ing company, se rv i ce bureau, o r turnkey (hardware programmed by a vendor t o per fo rm a s p e c i f i c f u n c t i o n a t ' t h e turn o f a key') computer system vendor.

(A l i s t o f t h e pub-

Impor tant book purchasers ( i . e . t h e l a r g e bookstore chains and major wholesalers) were a l s o automat ing t h e i r i nven to ry and sa les func t i ons during t h i s p e r i o d o f t ime, u s i n g computers t o determine which books should be ordered i n i t i a l l y o r re-ordered, and t o c rea te purchase orders f o r those t i t l e s . The n a t i o n a l book wholesalers (Ingram Book Company, Baker 8, Tay lor Company, and Brodar t , I nc . ) were t h e f i r s t t o p rov ide computer-generated purchase orders t o book pub l ishers . Pub l ishers then p a i d f o r l o n g hours o f employee t ime t o research these computer p r i n t o u t s and key them i n t o t h e i r i n t e r n a l o rder fu l - f i l m e n t systems.

The f a c t t h a t i n f o r m a t i o n ( t h e order ) was r e s i d e n t i n one computer and requ i red i n another ( a t t h e f u l f i l m e n t cent re ) , and t h a t enormous b locks o f

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t ime were spent and e r r o r s in t roduced by manual i n t e r v e n t i o n i n t h i s process, f r u s t r a t e d some o f t h e leaders i n t h e i ndus t r y . The r e s u l t has been t h e development o€ a s e r i e s o f computer-to-computer communications formats standard ized t o meet the needs o f o rder ing , i n v o i c i n g and in fo rma t ion t r a n s f e r w i t h i n t h e book community. Sec t ion II o f t h i s Report descr ibes the development o f these and o the r indus t ry -w ide systems; Sec t ion III h i g h l i g h t s t h e c u r r e n t s t a t u s o f t he use o f these formats i n t h e book i ndus t r y .

Context o f t h e Report --

Readers o f t h i s Report should be aware t h a t we have taken i t s t i t l e l i t e - r a l l y . We a re concerned w i t h t h e e f f e c t s o f t h e new technology on book d i s - t r i b u t i o n , and n o t w i t h e l e c t r o n i c t ransmiss ion o f i n f o r m a t i o n which may appear i n books. The t o p i c o f ' e l e c t r o n i c p u b l i s h i n g ' i s a v a s t one, rang ing from the p recond i t i ons €or implementat ion o f t he i n f o r m a t i o n d isseminat ion techno- l o g i e s through t h e more s u b t l e i m p l i c a t i o n s o f e l e c t r o n i c media, i n c l u d i n g (but c e r t a i n l y n o t l i m i t e d t o ) cons idera t ions o f ownership, copyr igh t , and t h e p o t e n t i a l o f c r e a t i n g in format ion-poor ghettos, generat ions and count r ies .

I f t h e f u t u r e o f t h e book i s t o be assured, we b e l i e v e t h a t t h e techniques used t o d i s t r i b u t e books must be analyzed thoroughly . The speed w i t h which e l e c t r o n i c technology can prov ide i n fo rma t ion t o the reader today, and i t s p o t e n t i a l impact i n t h e fu tu re , demand t h a t d i s t r i b u t i o n methods improve i f t h e book i s t o compete success fu l l y as a v i a b l e v e h i c l e f o r in fo rmat ion , educat ion and enter ta inment . We face t h e ser ious p o s s i b i l i t y t h a t many books as we know them today may have no f u t u r e i f they cannot compete w i t h e l e c t r o n i c d e l i v e r y o f comparable in fo rmat ion .

Th is Report i s but one o f t h e t i t l e s i n t h e Unesco se r ies Studies on books and reading. 'The Fu tu re o f t he Book: P a r t I--The Impact o f new technologies ' ( S t u d y No.8) reviewed t h e impact o f t he technology on t h e e d i t o r i a l p roduc t and commented on e l e c t r o n i c d e l i v e r y o f in fo rmat ion . 'The Future o f t h e Book: P a r t I I - -The changing r o l e o f read ing ' (Study No.9) explored t h e ways i n which techno- l o g i c a l i nnova t ion i s mod i f y ing t h e r o l e and f u n c t i o n o f read ing i n i n d u s t r i a l i - zed s o c i e t i e s . Studies Nos. 2, 4, 5, 10, 12, 13, 14, 16 and 17 analyzed t h e s t a t e o f book The present s tudy i s t h e f i r s t i n t h e s e r i e s t o concentrate on the Un i ted States.

p u b l i s h i n g i n s p e c i f i c p a r t s o f t h e wor1d. l

To descr ibe t h e c u r r e n t s t a t e o f book d i s t r i b u t i o n i t i s most appropr ia te t o l ook a t t he contex t o f t he Un i ted States experience. Cer ta in l y , t h e growth o f computer technology has been more r a p i d i n t h e Un i ted Sta tes than anywhere e l s e i n t h e world. The a p p l i c a t i o n o f computer and telecommunications technology t o book d i s t r i b u t i o n (and p a r t i c u l a r l y t o order process ing) began i n i n d i v i d u a l p u b l i s h i n g companies as e a r l y as t h e mid-1960s. Today i t pervades t h e f u l f i l - ment process w i t h i n i n d i v i d u a l o rgan iza t ions .

We q u i c k l y acknowledge, however, t h a t t he Un i ted Sta tes was n o t t h e f i r s t count ry t o apply a s ing le , soph is t i ca ted techno log ica l approach across seve ra l

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1. A complete l i s t o f t i t l e s i n t h i s se r ies i s t o be found on t h e i n s i d e f r o n t cover.

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o rgan iza t ions . Book d i s t r i b u t o r s i n t h e Federa l Republ ic o f Cermany were the f i r s t t o e s t a b l i s h a 's tandard ' e l e c t r o n i c connect ion w i t h many o f t h e i r customers. That development sparked t h e j o i n t Pub l ishers and Bookse l le rs Associa- t i o n p r o j e c t i n t h e Un i ted Kingdom t h a t r e s u l t e d i n the c u r r e n t B r i t i s h Tele- o rde r ing System. Observing the success o f t h i s system, Har ry Hoffman, then Pres ident o f t he Ingram Book Company, purchased t h e U.S. r i g h t s t o t h e system and brought i t t o t h i s country .

A f t e r d iscuss ion w i t h U.S. bookse l le rs , i t became obvious t h a t t he European- approach o f connect ing bookstores t o a c e n t r a l da ta base t o v e r i f y t i t l e i n f o r - mat ion and t o speed orders t o p u b l i s h e r s and wholesalers e l . e c t r o n i c a l l y d id n o t meet t h e needs o f U.S. bookse l le rs . Hoffman and h i s s t a f f were t o l d by t h e i r bookse l l e r customers t h a t what was needed i n s t e a d was a method o f p r o v i d i n g r e l i a b l e and up-to-date i n f o r m a t i o n on t h e i r own sa les and inven to ry . The l a r g e number o f books stocked and s o l d i n U.S. r e t a i l i n g operat ions, coupled w i t h t he s h o r t s h e l f l i f e o f most t i t l e s , made the r e t a i l e r s anxious f o r b e t t e r i n t e r n a l i n f o r m a t i o n on which t o base orders and re tu rns , r a t h e r than a method o f reach ing t h e i r vendor more q u i c k l y and accura te ly . I n f a c t , they were agreeing w i t h Cheney's 1931 recommendation t h a t bookse l l e rs must know what they a re s e l l i n g i n order t o g a i n merchandis ing c o n t r o l . Th i s Report, there fore , reviews b o t h t h e i n t e r n a l a p p l i c a t i o n s o f t h e computer by book pub l ishers , vendors and l i b r a r i a n s , -- and indust ry-wide e f f o r t s t o l ink these Un i ted States organ iza t ions .

I n t h e U.S., a n a t i o n a l adv isory committee has been formed and consu l tan ts appointed t o s tudy t h e r o l e o f t h e book i n t h e f u t u r e and t h e i n f l u e n c e t h a t computer and v ideo technologies may have upon books, read ing and t h e p r i n t e d word. The s tudy i s be ing c a r r i e d o u t under t h e auspices o f t h e L i b r a r y o f Congress' Center f o r t h e Book and w i l l be presented t o t h e U.S. Congress by December 1, 1984.

I n a d d i t i o n t o t h e 1931 Cheney study, t he re has been one o the r i n v e s t i g a - t i o n i n t o t h e book ,d i s t r i bu t i on area. I n 1981, The Book I n d u s t r y Study Group, Inc . , a U.S. n o t - f o r - p r o f i t research organ iza t ion , commissioned A r t h u r Andersen 8, Company t o i n v e s t i g a t e the d i s t r i b u t i o n process. The r e s u l t was 'Book D i s t r i - b u t i o n i n t h e Un i ted States: Issues and Percept ions ' , pub l i shed i n 1982. The r e p o r t presented many impor tan t f i n d i n g s , two o f which a r e o f p a r t i c u l a r r e l e - vance t o t h i s Report. One i s t h a t i f d i s t r i b u t i o n i s t o be improved, i t i s t h e pub l i she rs themselves who must take t h e lead. The second finding i s t h a t t e l e - communications technology ho lds t h e g r e a t e s t p o t e n t i a l f o r improved d i s t r i b u t i o n i n the s h o r t term, s ince e l e c t r o n i c d e l i v e r y o f i n f o r m a t i o n w i l l n o t p resent s i g n i f i c a n t compet i t ion un t i l 1990 o r t h e r e a f t e r .

I t i s i n t e r e s t i n g t o no te t h a t when the Book I n d u s t r y S t u d y Group was founded i n 1967, leaders i n t h e i r membership--book pub l ishers , bookse l le rs , wholesalers, l i b r a r i a n s and book manufacturers--were surveyed t o determine those areas i n t h e i n d u s t r y considered t o be most i n need o f research. Book d i s t r i b u t i o n was one o f t h e areas selected, y e t i t took s i x years be fo re such a s tudy was undertaken. I n Sect ion II o f t h i s Report we d iscuss the reason f o r t h e de lay i n conduct ing the Study Group inquiry and the s p e c i f i c f i n d i n g s o f t h a t s tudy which r e l a t e t o t h e new technologies.

Methodolouv o f t h e ReDort

Sec t ion II o f t h i s Report descr ibes t h e a c t i v i t i e s o f i n d i v i d u a l s , companies and organ iza t ions whose e f f o r t s have brought about techno log ica l change i n book

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d i s t r i b u t i o n i n t h e Un i ted States. Sec t ion III analyzes each o f t h e components o f t h e d i s t r i b u t i o n process, i n d i c a t i n g those which have been a f f e c t e d by techno log ica l change as o f t h i s w r i t i n g , and those f o r which changes can be p r e d i c t e d i n t h e near f u t u r e . Th is ana lys i s i s based p r i m a r i l y on i n f o r - mat ion gathered i n t h e course o f SKP Associates' a c t i v e p a r t i c i p a t i o n i n t h e fo rmal and vo lun tee r groups whose e f f o r t s brought about these changes.

The f o u r t h s e c t i o n o f t h e Report analyzes t h e p recond i t i ons r e q u i r e d be fo re t h e technology can be success fu l l y app l i ed t o t h e book d i s t r i b u t i o n process. To determine these precond i t ions , SKP Associates conducted in -depth i n t e r v i e w s w i t h i n d i v i d u a l s a t s i x p u b l i s h i n g companies, t h ree book wholesal ing organ iza t ions , one se rv i ce bureau suppor t ing t h e e l e c t r o n i c order f u l f i l m e n t opera t ions o f 3 0 book pub l i she rs , and one o rgan iza t i on o f f e r i n g a turnkey computer system €o r o rder process ing t o the book i n d u s t r y (see Appendix B ) .

Although t h e number o f o rgan iza t ions p o l l e d i s n o t intended t o be more than a sample o f U.S. book d i s t r i b u t i o n - r e l a t e d organ iza t ions , i t does inc lude those organ iza t ions a t t he f o r e f r o n t o f t h e a p p l i c a t i o n o f technology.

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SECTION II--HISTORICAL ACHIEVEMENTS

Th is Sec t ion descr ibes the var ious organ iza t ions t h a t began t o apply computer-based technology t o t h e d i s t r i b u t i o n process. They i n c l u d e t h e Assoc iá t ion o f American Pub l ishers (A?@), Book I n d u s t r y Systems Advisory Committee (BISAC) , t h e Book I n d u s t r y Study Group (BISG) , the American Booksel lers Assoc ia t ion (ABA), t he N a t i o n a l Assoc ia t ion o f Col lege Stores (NACS), and the American N a t i o n a l Standards I n s t i t u t e (ANSI). Th i s rough ly chrono log ica l rev iew shows the i n f l u e n c e o f each a c t i v i t y on subsequent ones.

Assoc ia t ion o f American Pub l ishers (AAP)

As noted e a r l i e r , i t was n o t un t i l 1981 t h a t t he Book I n d u s t r y S t u d y Group i n i t i a t e d i t s s tudy o f book d i s t r i b u t i o n . The reason f o r t h e de lay was t h a t BISG was awa i t i ng t h e r e s u l t s o f an inquiry i n t o book d i s t r i b u t i o n mounted e a r l i e r by the Assoc ia t ion o f American Pub l ishers .

The AAP formed a Book D i s t r i b u t i o n Task Force i n 1977. Th is group o f exper ts f rom book p u b l i s h i n g companies was es tab l i shed t o s tudy t h e a p p l i c a t i o n o f computer-based technology t o book d i s t r i b u t i o n f rom a p u b l i s h e r ' s perspec t ive . The i r i n i t i a l t ask was t o determine t h e f e a s i b i l i t y o f e s t a b l i s h i n g a da ta base o f i n fo rma t ion about books comparable t o t h a t used t o secure a i r l i n e seats; t h a t i s , a cen t ra l , e l e c t r o n i c a l l y access ib le source o f i n f o r m a t i o n t h a t would enable bookse l le rs and l i b r a r i a n s t o l o c a t e and secure any book as e a s i l y as i n d i v i d u a l s can c a l l any a i r l i n e from anywhere i n t h e U.S. and be assured a seat- -o f ten a s p e c i f i c one--on any f l i gh t .

A f t e r a two year rev iew o f e x i s t i n g c a p a b i l i t i e s w i t h i n t h e pub l i sh ing , wholesal ing, l i b r a r y and b o o k s e l l i n g communities t h e Task Force concluded t h a t the development o f such a da ta base was beyond the f i n a n c i a l and o p e r a t i o n a l c a p a b i l i t y o f t he AAP. Instead, they recommended t h a t the ApP a c t i v e l y suppor t t he work o f i n d i v i d u a l o rgan iza t ions a t tempt ing t o app ly the new technology t o d i s t r i b u t i o n . These e f f o r t s were a l ready underway w i t h i n and beyond t h e U.S. book w o r l d ; t he Task Force proposed t h a t t h e AAP prov ide channels f o r t he t i m e l y d isseminat ion o f i n f o r m a t i o n about these e f f o r t s t o i t s p u b l i s h e r members. The Task Force a l s o recommended t h a t t h e AAP become t h e vo i ce o f book pub l i she rs i n forums where such developments were underway, such as i n t h e Network Advisory Committee t o the L i b r a r y o f Congress, where n a t i o n a l b i b l i o g r a p h i c da ta (and now f u l l t e x t ) communication p o s s i b i l i t i e s and p o l i c i e s a re be ing exp lo red and formulated. These a c t i v i t i e s cont inue today under t h e name 'AAP Book D i s t r i b u - t i o n P ro jec t , ' which i s c u r r e n t l y a t tempt ing t o determine t h e s p e c i f i c o rde r , cyc le t ime elements and procedures t h a t m i g h t reduce t h a t t ime, i n t h e bookstore, pub l i she r and sh ipp ing components o f t he d i s t r i b u t i o n process.

Book I n d u s t r y S t u d y Group (BISG)

The AAP's dec i s ion t o p rov ide i n f o r m a t i o n a l suppor t t o t h e p u b l i s h i n g indus- t r y c lea red the way f o r t he Book I n d u s t r y Study Group t o proceed w i t h an e f f o r t t o research the complex book d i s t r i b u t i o n area. I t soon became obvious t o t h e BISG committee charged w i t h develop ing research parameters t h a t everyone i n v o l - ved i n t h e d i s t r i b u t i o n process considered i t genera l l y i n e f f i c i e n t , but few

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had concrete ideas about how t o improve it. A r t h u r Andersen & Company t h e r e f o r e proposed t h a t they research t h e area t o e s t a b l i s h an i ndus t r y - wide consensus o f t h e problems and p o t e n t i a l so lu t i ons . Andersen app l i ed t h e ' d e l p h i technique ' t o seek consensus w i t h i n t h e i n d u s t r y ' s d i s t i n c t groups--publishers, r e t a i l e r s , wholesalers, l i b r a r i a n s and book manufac- t u r e r s .

Two o f t he most impor tan t f i n d i n g s i n Andersen's r e p o r t , 'Book D i s t r i - b u t i o n i n t h e Un i ted S ta tes ' , have a l ready been ind ica ted . The f i r s t was t h a t i f d i s t r i b u t i o n i s t o improve i n t h e U.S., i t i s t h e pub l i she rs who w i l l cause i t t o do so. A t l e a s t 80% o f t he panels p o l l e d on t h i s ques t ion p lace the r e s p o n s i b i l i t y f o r f u t u r e improvement on b o t h t r a d e and mass market pub l i she rs (p. 3.6). However, t he chances o f t h e pub l i she rs a c t u a l l y do ing so was r a t e d o n l y poor t o f a i r by most o f t h e p a n e l i s t s (p.3.8). The second finding was t h a t e l e c t r o n i c d isseminat ion o f i n fo rma t ion w i l l n o t s e r i o u s l y a f f e c t d i s t r i - b u t i o n un t i l 1990 (p.5.37) .

A th i rd finding o f major s i g n i f i c a n c e t o t h i s Report i s t h a t standardiza- t i o n i s extremely impor tan t and t h a t i t s e f f e c t s w i l l be seen as e a r l y as 1985. The p o t e n t i a l b e n e f i c i a l impact o f s tandard i za t i on was r a t e d n e a r l y as high as t h a t a t t r i b u t a b l e t o telecommunications (p.3.14 and 3 . 1 0 ) . Pane l i s t s be l i eved t h a t w h i l e the I n t e r n a t i o n a l Standard Book Number (ISBN) w i l l be genera l l y accepted by 1985, o the r forms o f s tandard i za t i on (such as the standard i d e n t i f i - c a t i o n number f o r o rgan iza t ions i n t h e book i n d u s t r y ) w i l l n o t be w ide ly accep- t e d u n t i l 1990 (p. 4.47).

A BISG D i s t r i b u t i o n Committee cont inues t o explore methods o f e x t r a p o l a t i n g f rom these r e s u l t s t o produce a c t u a l changes i n d i s t r i b u t i o n p rac t i ces . They i n i t i a t e d and supported an i n v e s t i g a t i o n by Richard Hunt, New York U n i v e r s i t y ' s 1983 Oscar D y s t a l Fe l lowsh ip winner, i n t o two areas i n which pub l i she rs and bookse l l e rs had c o n f l i c t i n g op in ions i n the o r i g i n a l S t u d y . Booksel lers had suggested t h a t n e t p r i c i n g and se l f - remainder ing would reduce d i s t r i b u t i o n problems; pub l i she rs disagreed. However, when Hunt i n te rv iewed 36 pub l ishers , he found them ' b o t h eager f o r and recep t i ve t o any new idea t h a t m i g h t b e n e f i t and s t reaml ine t h e ( d i s t r i b u t i o n ) system which e x i s t s today. ' Pub l isher responses t o Hun t ' s quest ions were repo r ted i n the January 20, 1984 i ssue o f ___- Pub l ishers Weekly, p.42-44.

Another inquiry sparked by t h i s Study i s the AAP Book D i s t r i b u t i o n P r o j e c t ' s on-going research i n t o d i s t r i b u t i o n cyc le t ime (see Page 11 o f t h i s Repor t ) .

Book I n d u s t r y Systems Advisory Committee (BISAC)

I n September, 1974, DeWit t C. Baker, then newly appointed Pres ident o f t he Baker & Tay lo r Company, brought representa t ives f rom a l l p a r t s o f t he book indus- t r y together t o d iscuss t h e d i s t r i b u t i o n e f f i c i e n c i e s which m i g h t r e s u l t from increased use o f t h e I n t e r n a t i o n a l Standard Book Number (ISBN). That meet ing spawned two ad-hoc committees o f pub l i shers , wholesalers, l a r g e book r e t a i l i n g chains and OCLC ( then t h e Ohio Col lege L i b r a r y Center, now t h e Onl ine Computer L i b r a r y Center i n Dublin, Ohio), t h e da ta base s u p p l i e r o f book i n fo rma t ion t o l i b r a r i e s . The ISBN P u b l i c i t y Committee attempted t o p u b l i c i z e t h e b e n e f i t s o f t he proper use o f t h e ISBN i n book d i s t r i b u t i o n by a l l components o f t h e i ndus t r y . The ISBN Data Transmission Committee accepted the charge o f develop ing computer- to-computer formats and p r o t o c o l s f o r t h e t ransmiss ion o f orders and invo ices between purchasers and s e l l e r s o f books.

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We b e l i e v e t h a t t he w i l l i n g n e s s o f t he members o f t h e ISBN Data Trans- miss ion Committee t o accept t h i s goal , and t o donate t h e many years o f e f f o r t t h a t have subsequent ly been inves ted i n it, was b o t h a good business d e c i s i o n and a r e f l e c t i o n o f t he s i z e and na ture o f t h e book i n d u s t r y i t s e l f . Al though the re are many companies a c t i v e i n t h e f i e l d , most o f them are q u i t e smal l , so t h a t t h e l a r g e r companies do, i n f a c t , represent t h e m a j o r i t y o f t he business t ransac t i ons i n t h e i n d u s t r y . The Committee was comprised p r i m a r i l y o f indi- v i d u a l s f rom these l a r g e r o rgan iza t ions , t h e ones t h a t cou ld b e n e f i t most f rom t h e e l i m i n a t i o n o f manual input o f computer-generated documents f rom t h e i r supp l i e rs o r customers, and from t h e e l i m i n a t i o n o f e r r o r s such manual input created. Another impetus f o r t h e i r w i l l i n g n e s s came f rom t h e i r awareness t h a t r e t a i l e r s i n l a r g e r i n d u s t r i e s , such as Sears and J.C. Penney, were beg inn ing t o c rea te e l e c t r o n i c orders i n unique formats and r e q u i r i n g t h e i r supp l i e rs t o accept orders i n those formats. Rather than face t h e expense o f program- m i n g t h e i r computers t o accept m u l t i p l e company-specific formats, these l a r g e book pub l ishers , wholesalers and r e t a i l e r s decided t h a t i t made economic sense t o c rea te one format that everyone cou ld programme j u s t once t o communicate w i t h any o rgan iza t i on i n t h e i ndus t r y .

They a l s o r e a l i z e d t h a t t h e sma l l t o t a l d o l l a r volume o f t h e i n d u s t r y meant t h a t no weal thy n a t i o n a l o rgan iza t ion , such as t h e Transpor ta t ion Data Co-ord inat ing Committee, which developed such formats f o r i t s i ndus t r y , would be w i l l i n g t o commit l a r g e amounts o f research and development funding f o r t h e book i ndus t r y .

BISAC Computer Tape Formats. The ISBN Data Transmission Committee began i t s work by concent ra t ing on a s tandard ized format f o r computer tape orders. They b e l i e v e d that once orders were success fu l l y processed us ing t h i s format, telecommunication p r o t o c o l s and i n v o i c e formats cou ld be addressed. I n t h e f a l l o f 1975 t h e f i r s t o rder tape was sent f rom B. Da l ton Bookse l le r t o Random House. Since t h a t t ime, t h e tape order format has been co r rec ted and improved. It i s c u r r e n t l y i n i t s th i rd vers ion .

By 1977 t h e ISBN Pub l ic i t y .Commi t tee found i t had accomplished i t s imme- d i a t e ob jec t i ves : t h e ISBN was appear ing on many more orders, i n book rev iew columns, and on promot iona l m a t e r i a l s supp l i ed by pub l i she rs . Pub l isher prin- t i ng o f erroneous ISBNs and t h e re-use o f numbers p r e v i o u s l y assigned t o ou t - o f - p r i n t t i t l e s had a l l but disappeared. The P u b l i c i t y Committee found i t s e l f promot ing use o f t h e computer o rde r format developed by t h e Data Transmission Committee. Therefore, t h e two ad-hoc committees merged, t a k i n g t h e name Book I n d u s t r y Systems Advisory Committee, BISAC. I n 1980 BISAC became a s tand ing committee o f t he Book I n d u s t r y Study Group, i n order t o b e n e f i t f rom BISG's o f f i c e f a c i l i t i e s and l e g a l advice. Today t h e r e a r e 248 subscr ibers who pay t o rece ive copies of t h e b i -month ly BISAC meet ing minutes, o f whom 50 i n d i v i d u a l s a re a c t i v e l y i n v o l v e d i n BISAC's work.

I n a d d i t i o n t o t h e order format, BISAC has approved an i n v o i c e format ( c u r r e n t l y i n i t s second v e r s i o n ) , which i s produced by over 40 o f t h e 7û+ pub l i she rs who a re capable o f accept ing and process ing orders i n t h e BISAC f o r - mat. A th i rd BISAC format enables any pubisher t o e l e c t r o n i c a l l y adv ise a customer o f changes i n bas ic i n f o r m a t i o n about t i t l e s - - p r i c e changes, new t i t l e s , those dec lared ou t -o f -p r i n t , changes i n p u b l i c a t i o n dates, e t c . Th i s ' T i t l e S ta tus ' format i s produced by over 25 U.S. pub l i she rs .

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Telecommunication. BISAC's o r i g i n a l dec i s ion t o develop a computer tape format produced s u f f i c i e n t c o s t savings f o r those us ing it, so t h a t no incen- t i v e e x i s t e d f o r some t ime t o develop an indust ry-wide telecommunications format. However, t h e recen t development o f e l e c t r o n i c a c q u i s i t i o n .systems by OCLC, o ther network o rgan iza t ions , and tu rnkey system vendors t o the l i b r a r y community p ro- v ided t h a t i ncen t i ve . I n 1983 BISAC approved i t s t h i rd at tempt a t a telecommu- n i c a t i o n format f o r orders, which i s c u r r e n t l y be ing programmed by va r ious organ iza t ions i n t h e l i b r a r y community. Both c u r r e n t BISAC order formats (com- p u t e r tape and telecommunication) a re under development as a s i n g l e American N a t i o n a l Standard.

Machine-Readable Coding. I n t h e mid-l970s, BISAC was asked by t h e B r i t i s h Working P a r t y on Machine-Readable Coding (a committee o f bookse l le rs , pub l i shers , l i b r a r i a n s , and manufacturers) t o determine the coding method appropr ia te f o r U.S. books i n t h e U.S. marketplace. They did n o t want t o s e l e c t a coding tech- n ique f o r t h e U.K. t h a t would be i n c o n f l i c t w i t h t h a t which would come i n t o use i n the Un i ted States. A f t e r rev iew o f t h e two coding systems i n use i n t h e U.S. --bar codes and O p t i c a l Character Recogni t ion (OCR), f o n t A--BISAC recommended t h a t books c a r r y i n g t h e ISBN i n OCR-A would most l i k e l y meet the needs o f b o t h bookstores and department s tores. Today a l l mass market paperback pub l i she rs and many hardback pub l i she rs have Segun print ing such codes on the back covers and j a c k e t f l a p s o f t h e i r book2. However, t he p r e d i c t e d expansion i n t h e use o f t h i s technology by department s tores, which was expected t o reduce the c o s t o f hardware and improve t h i s technology, has n o t taken place.

Bar coding, and s p e c i f i c a l l y t h e Un ive rsa l Product Code (UPC), i s used on books i n t h e U.S. d i s t r i b u t e d t o n o n - t r a d i t i o n a l book o u t l e t s such as grocery, drug and convenience s tores. The independent d i s t r i b u t o r s o f magazines and mass market paperback books t o t h i s market p lace requested and rece ived approval f o r a ve rs ion o f t h e UPC which i n d i c a t e s on ly the cover p r i c e o f t he book w i t h i n t h e bas i c symbology. A d d i t i o n a l bars, n o t read by supermarkets, a re scanned by these d i s t r i b u t o r s t o determine t h e t i t l e - s p e c i f i c i n fo rma t ion they requ i re , but which i s changed t o o f r e q u e n t l y t o be o f va lue t o t h e i r supermarket customers, who n e i t h e r purchase nor reco rd t h e sa les o f books by t i t l e .

The B r i t i s h Working P a r t y developed a dua l coding system f o r t h e U.K., which has been adopted elsewhere i n Europe. It c a l l s f o r t h e printing o f t h e ISBN i n OCR-A o r OCR-BI a long w i t h t h e ISBN represented i n the UPC-equivalent, t he EAN ( fo rmer l y European, now I n t e r n a t i o n a l A r t i c l e Number). Because t h e EAN i s i n ten - ded t o be count ry -spec i f i c , s p e c i a l permiss ion was sought and granted f o r t h e assignment o f code 978 t o the ' coun t ry ' c a l l e d Bookland. Thus, t h e EAN o f 978 fo l l owed by an ISBN i s known as t h e 'Bookland EAN.' The B r i t i s h r e t a i l book t rade i s i n t h e process o f implementing EAN scanning a t p o i n t o f sa le ; t h e U.S. r e t a i l book t rade has put ve ry few scanners i n p lace.

The hchine-Readable Coding Subcommittee o f BISAC i s c u r r e n t l y rev iewing BISAC's o r i g i n a l coding symbology dec is ion, i n t h e hope o f finding a s o l u t i o n t h a t w i l l meet the needs o f U.S. and f o r e i g n pub l ishers , r e t a i l e r s and d i s t r i b u - t o r s .

American Bookse l le rs Associat icm (ABA)

As no ted i n t h e I n t r o d u c t i o n , t he at tempt by Har ry Hoffman t o impor t t he B r i t i s h Te leorder ing System was unacceptable t o t h e Un i ted States b o o k s e l l i n g community because o f t h e i r o the r needs. i n f o r c e d by bookse l l e rs and l i b r a r i a n s i n 1978, when the R.R. Bowker Company

The r e j e c t i o n o f t h i s concept was r e -

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developed and considered implement ing a t e l e o r d e r i n g system i n t h e U.S. c a l l e d Book A c q u i s i t i o n System (BAS). Bowker found t h a t s to res and l i b r a r i e s were u n w i l l i n g t o pay f o r a se rv i ce whose p r i n c i p a l advantage was t o increase t h e speed w i t h which t h e i r o rder would reach s u p p l i e r s ' i n e f f i c i e n t d i s t r i b u t i o n systems. The a l t e r n a t i v e o f funding t h e system by charg ing pub l i she rs f o r r e c e i p t o f t h e order was n o t cons idered v iab le , we understand, by many i n the i n d u s t r y and t h e concept was 'shelved. '

I n 1982, G. Roysce S m i t h , t hen Execut ive D i r e c t o r o f t h e American Book- s e l l e r s Associat ion, proposed a seemingly s i m i l a r concept, but one w i t h expanded c a p a b i l i t i e s and purpose. I n a d d i t i o n t o t r a n s m i t t i n g orders f rom bookse l le rs t o pub l i she rs and wholesalers e l e c t r o n i c a l l y , t h e system would combine the orders f rom individual bookse l le rs , thereby maximizing the d iscount achieved by each bookse l l e r w h i l e reduc ing t h e i r paperwork burden. I n add i t i on , t h e system would work i n con junc t i on w i t h a f r e i g h t conso l i da to r t o exped i te and reduce the cos t o f sh ipp ing.

This concept i s now known as t h e Bookse l le rs Order Serv ice (BOS). A t e s t o f t h e system began i n February, 1984, w i t h 25 bookse l l e rs o f d i f f e r e n t types, s izes, computer s o p h i s t i c a t i o n and geographica l l o c a t i o n p l a c i n g orders through BOS f o r t h e p u b l i c a t i o n s o f CBS/Holt, Macmillan, S t . M a r t i n ' s Press, Scho las t ic , and New American L i b r a r y . BOS r e q u i r e s t h a t bookse l le rs own a computer te rmina l , which i s s t i l l considered r e v o l u t i o n a r y by many o f them. Therefore, BOS i s o f f e r i n g p a r t i c i p a t i n g bookse l l e rs a computer, pre-programmed w i t h s i m p l i f i e d input p ro toco ls . Through t h e i r computer t e r m i n a l bookse l le rs send orders and requests f o r c r e d i t t o BOS' c e n t r a l i z e d computer and rece ive con f i rma t ion and in fo rma t ion on new t i t l e s , author appearances, books back i n s tock a f t e r r e - printing, and o the r da ta supp l ied by vendors. BOS' c e n t r a l i z e d computer d e l i v e r s e i t h e r e l e c t r o n i c orders i n the BISAC format o r paper orders t o p u b l i s h e r and wholesaler vendors. BOS i s b i l l e d ( in the BISAC format) f o r a l l purchases made through t h e system, then r e - b i l l s t h e p a r t i c i p a t i n g bookstores.

The p r o j e c t e d schedule c a l l s f o r f u l l a v a i l a b i l i t y o f t h e system t o a l l ABA members i n July, 1984, w i t h an a n t i c i p a t e d c o s t t o each bookse l l e r o f $150 p e r month, $80 o f which represents t h e twenty-s ix month lease/purchase o f t h e BOS computer termir ia l , modem and p r i n t e r . It i s expected t h a t 500 bookse l l e rs w i l l be p l a c i n g orders through BOS by 1985 and 1,000 w i l l do so i n 1986. The number o f vendors i s expected t o grow t o 25 upon implementat ion and t o 100 by 1986.

Future p lans f o r BOS c a l l f o r on - l i ne inquiry by bookse l le rs , t h e automat ic t r a n s f e r o f orders t o a second vendor when t h e vendor o f f i r s t choice i s o u t o f stock, t h e placement o f g i f t book orders i n one s t o r e f o r d e l i v e r y by a s t o r e c l o s e r t o t h e r e c i p i e n t (a s e r v i c e s i m i l a r t o the 'FTD' system f o r d e l i - very o f f l owers as a g i f t ) , t he use o f i n - s t o r e equipment t o s e l l microcomputer hardware and software, and o the r indus t ry -w ide programmes.

I n t h e meantime, Bowker r e v i v e d i t s o r i g i n a l BAS order- forward ing p r o j e c t i n con junc t i on w i t h t h e i r c u r r e n t o f f e r i n g o f on - l i ne access t o t h e i r ex tens ive Books i n P r i n t da ta base. BAS i s a l s o scheduled f o r implementat ion i n the summer o f 1984, charg ing bookse l l e rs and l i b r a r i a n s by t h e number o f t i t l e s ordered, and o f f e r i n g e l e c t r o n i c o rders t o vendors a t a fee. We b e l i e v e t h a t BAS w i l l n o t be competing w i t h BOS f o r bookstore order forward ing, but m i g h t be competing w i t h l i b r a r y networks and tu rnkey systems t h a t o f f e r comparable ser- v i ces and s i m i l a r p r i c i n g s t ruc tu res .

N a t i o n a l Assoc ia t ion o f Col lege Stores (NACS)

Another e l e c t r o n i c o r d e r i n g se rv i ce has been announced, a l though i t i s s t i l l i n t h e s p e c i f i c a t i o n stage. The N a t i o n a l Assoc ia t ion o f Col lege Stores i s p lann ing

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t o p rov ide on - l i ne o r d e r i n g c a p a b i l i t y t o i t s member stores. NACSNET, as t h e i r planned network i s ca l l ed , w i l l p rov ide communication between t h e stores, t h e NACS o f f i c e , NASCORP ( t h e i r who lesa l ing subs id ia ry ) , and each o ther . NACSNET o r d e r i n g c a p a b i l i t y may encompass t h e purchase o f new books and used textbooks, as w e l l as o t h e r non-book merchandise s o l d by these s to res . NACS i s hoping t o arrange a l ink t o t h e BOS system f o r hand l i ng orders f o r new books, w h i l e estab- l i s h i n g t h e i r own data base o f i n f o r m a t i o n about used textbooks a v a i l a b l e i n o r des i red by t h e i r member s to res . They may a l s o consider l inking t h e i r network t o vendors o f non-book merchandise f o r i n f o m a t i o n and/or o r d e r i n g purposes.

American N a t i o n a l Standards I n s t i t u t e (ANSI)

The ISBN i s an i n t e r n a t i o n a l and n a t i o n a l standard ( m S I 239.21) approved by ANSI i n 1973 and r e v i s e d and reapproved i n 1980. The Standard Address Number (SAN) (ANSI 239.43) was approved by ANSI i n 1980. Both o f t h e s e ' d i s t r i b u t i o n - re la ted--as w e l l as 38 other--standards were developed by t h e N a t i o n a l Informa- t i o n Standards Organ iza t ion (2391, which i s respons ib le f o r standards development i n t h e areas o f L i b r a r y and I n f o r m a t i o n Science and Related Pub l i sh ing Prac t ices . They are a l s o under tak ing t h e n a t i o n a l s tandard i za t i on o f t h e BISAC order formats

Another group f u n c t i o n i n g under t h e ANSI gu ide l i nes i s develop ing computer- to-computer p r o t o c o l s f o r t he d i s t r i b u t i o n process. American N a t i o n a l Standards Committee X12 (Business Data Interchange) has produced A N S I s tandard o rde r ing and i n v o i c i n g formats t h a t can be used by a l l types o f businesses and i s i n t h e process o f develop ing o the r a p p l i c a t i o n s r e l a t i n g t o t h e purchasing/distr ibution/ payment cyc le . Book i n d u s t r y i n t e r e s t s i n t h e i r a c t i v i t i e s have been and are be ing coord ina ted through t h e exper ts on BISAC. I t i s expected t h a t u t i l i z a t i o n o f t h e formats over t i m e by a growing number o f o rgan iza t ions w i l l lead, as was t r u e o f t h e BISAC formats, t o improvements i n t h e formats and g rea te r use o f them throughout t h e U.S. business community.

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SECTION III--THE DISTRIBUTION PROCESS

I n t h i s Sec t ion we analyze t h e var ious component steps i n t h e d i s t r i b u - t i o n cha in and t h e organ iza t ions i nvo l ved i n them. which have a l ready experienced change due t o techno log ica l advances and those where such changes can c o n f i d e n t l y be p r e d i c t e d t o occur i n t h e near f u t u r e .

H i g h l i g h t e d are those areas

The Purchasing Dec is ion

Although the re a re those w i t h i n t h e e d i t o r i a l and m a r k e t i n g departments o f book p u b l i s h i n g houses who would c l a i m t o s t a r t t he d i s t r i b u t i o n c y c l e by p rocu r ing and p u b l i c i z i n g produc ts t h a t a re appropr ia te t o t h e needs o f t h e market, we consider t h e d i s t r i b u t i o n c y c l e t o be separate from t h e p u b l i c a t i o n process i t s e l f . D i s t r i b u t i o n , we contend, begins w i t h t h e awareness by a p o t e n t i a l purchaser t h a t a book e x i s t s .

T r a d i t i o n a l l y , book p u b l i s h e r s use such techniques as d i r e c t ma i l , in- person s e l l i n g and at tempts t o achieve rev iew a t t e n t i o n t o make t h e i r wholesale, l i b r a r y and r e t a i l customers aware o f t h e i r new products, w h i l e p r o v i d i n g few reminders o f t h e ex is tence o f b a c k l i s t books. New books are normal ly 'presen- t e d ' on l y once, w h i l e b a c k l i s t t i t l e i n f o r m a t i o n must be searched f o r i n ca ta- logues and such re fe rence works as Books i n P r i n t . D i r e c t m a i l p u b l i c a t i o n s are promoted t o t h e u l t i m a t e consumer, but books s o l d t o i n te rmed ia r ies such as bookstores and l i b r a r i e s a re genera l l y n o t b r o u g h t t o t h e a t t e n t i o n o f t h e consumer by t h e pub l i she r ; t h i s i s l e € t t o t h e bookse l l e r and l i b r a r i a n . O n l y t he most popular t i t l e s a r e p u b l i c i z e d through such means as t h e i r appearance on ' bes t s e l l e r ' l i s t s and through t h e l i m i t e d , concurrent a d v e r t i s i n g pub l i she rs

c r e a t e f o r those same t i t l e s . Readers seeking t h e ' s e r i o u s ' books which do n o t appear on these l i s t s , normal ly r e l y on t h e i n f o r m a t i o n prov ided by a b s t r a c t i n g and index ing services, which i s i n c r e a s i n g l y a v a i l a b l e through on - l i ne te rm ina ls .

One o f t h e g rea tes t p o t e n t i a l impacts o f t h e new technology i s i t s a b i l i t y t o o f f e r pub l i shers , bookse l l e rs and l i b r a r i a n s t h e oppor tun i t y t o p rov ide i n f o r - mat ion about new and b a c k l i s t t i t l e s t o t h e genera l p u b l i c i n t h e i r homes and o f f i c e s . One example o f t h i s was t h e o f f e r i n g t o v i e w and purchase from a b e s t s e l l e r l i s t which B. Da l ton p rov ided i n t h e Viewtron v ideotex experiment i n Cora l Gables, F l o r i d a . The use o f v ideotex, t e l e t e x and 'narrow c a s t i n g ' programmes on cable t e l e v i s i o n should p rov ide t h e U.S. book readers-- and p o s s i b l y some who r a r e l y read today--wi th i n f o r m a t i o n about t h e ex is tence o f s p e c i f i c t i t l e s and c rea te a new demand f o r books.

F u l l b i b l i o g r a p h i c i n f o r m a t i o n about each new U.S. t i t l e has been encoded i n machine-readable form a t t h e L i b r a r y o f Congress s t a r t i n g w i t h a p i l o t p ro - j e c t i n 1966 and a c t u a l p roduc t i on i n March, 1969. Th is i n f o r m a t i o n i s d i s t r i - bu ted by L C on t h e i r Machine,Readable Cata loguing (MARC) tapes. Over 2,000 o f t h e 30,000 o r so public, academic, s p e c i a l and school l i b r a r i e s i n t h e U.S. have access t o t h e da ta bases o f t h i s i n f o r m a t i o n o f f e r e d by t h e th ree major U.S. b i b l i o g r a p h i c networks (OCLC, t h e Research L i b r a r y In fo rma t ion Network, and t h e Washington L i b r a r y Network), and Canada's U n i v e r s i t y o f Toronto L i b r a r y Auto- mat ion System. However, t h i s i n f o r m a t i o n i s used l e s s t o p rov ide awareness o f t h e ex is tence o f a work than t o suppor t t h e process ing o f books once t h e acqui- s i t i o n d e c i s i o n has been reached.

The growing use o f automated c i r c u l a t i o n systems may a l s o a f f e c t a c q u i s i t i o n decis ions. Books which have a high c i r c u l a t i o n l e v e l can be e a s i l y i d e n t i f i e d

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through these systems. Learn ing more about what t h e l i b r a r y ' s p u b l i c s a re borrowing cou ld i n f l u e n c e f u t u r e s e l e c t i o n dec is ions.

Once l i b r a r i a n s and bookse l l e rs a re aware o f t he ex is tence o f a t i t l e and decide t o purchase it, they a re o f f e r e d soph is t i ca ted searching techniques t o l o c a t e books i n t h e ever-growing number o f da ta bases i n the U.S. p rov ided on- l i n e and through 800 ( cos t f r e e ) telephone systems. Such da ta bases i nc lude those o f Bowker (Books i n P r i n t ) and the n a t i o n a l wholesalers. I n add i t i on , micro- f i c h e programmes a re sponsored by Ingram Book Company, Baker & Tay lor , NASCORP, t h e AAP, and o thers t o i d e n t i f y books a v a i l a b l e a t pub l i she r o r wholesaler warehouses. I t should be no ted t h a t BOS, Ingram and the AAP r e l y on the BISAC T i t l e S ta tus format f o r monthly updat ing i n fo rma t ion from book pub l ishers .

A f t e r bookse l l e rs have purchased a t i t l e once, dec is ions t o buy a d d i t i o n a l copies are based on t h e i r need t o augment t h e i r e x i s t i n g supply. Today, t he v a s t m a j o r i t y o f bookse l l e rs i n t h e U.S. have no computer-based in fo rma t ion about t h e i r sa les and inven to ry . They ' e y e b a l l ' var ious sec t ions o f t h e i r s to res regu- l a r l y - - p a r t i c u l a r l y t he f a s t moving ' bes t s e l l e r ' areas--to spot t i t l e s which are s e l l i n g we l l , but r e l y on p h y s i c a l i n v e n t o r i e s t o l e a r n whether they have l i t t l e o r no s tock o f a l e s s popu lar work. The computer i s an appropr ia te t o o l t o main- t a i n such records, and seve ra l r e l a t i v e l y expensive sa les and inven to ry systems a re now o f f e r e d t o bookse l le rs . pendent bookstores (a long w i t h t he 677 B. Da l ton and 827 Waldenbooks s to res) ou t o f t he est imated 15,000 bookstores i n t h e U.S. have purchased such systems. Cer- t a i n l y t h i s i s one area i n which the decreasing cos t o f t he technology w i l l make an impor tan t d i f f e r e n c e i n t h e d i s t r i b u t i o n process. According t o t h e Andersen study, t he a v a i l a b i l i t y o f b e t t e r sa les and i n v e n t o r y knowledge w i l l r e s u l t i n smal ler , more f requent o rders t o maximize d o l l a r investment w h i l e min imiz ing s tock outs .

However, o n l y s l i g h t l y more than 100 o f t h e inde-

We a l so expect t o see t h e use o f sa les da ta captured a t t h e p o i n t o f sale-- one hopes through t h e scanning o f machine-readable coding on books i n t o bookstore computer-based systems--providing b e t t e r i n fo rma t ion t o t h e e n t i r e book community. A t present , b e s t s e l l e r l i s t s a re based on r e p o r t s f rom a sample o f ' representa- t i v e ' s to res and d i s t r i b u t o r s . I f accurate sales da ta a t t he r e t a i l l e v e l cou ld be t ransmi t ted t o a c e n t r a l i z e d computer, r e g i o n a l and n a t i o n a l l i s t s o f books t h a t a re s e l l i n g w e l l cou ld p rov ide another method o f a l e r t i n g bookse l l e rs t o t h e sa les p o t e n t i a l o f g i ven t i t l e s .

O f equal importance, t i t l e - s p e c i f i c sa les r a t e s cou ld p rov ide pub l i she rs w i t h money-saving i n f o r m a t i o n on which t o base t h e i r r e p r i n t i n g q u a n t i t i e s , warehouse layou t , f i n a n c i a l p lanning, and o ther dec is ions on which accurate sa les i n fo rma t ion prov ided on a t i m e l y b a s i s i s c r i t i c a l . Today pub l i she rs base t h e i r dec i s ion on whether t o r e p r i n t a ' f a s t moving' t i t l e on bes t s e l l e r l i s t s , on d a i l y o r weekly r e p o r t s ?f t h e i r own sales, on records o f orders rece ived and n o t shipped, and, sometimes, on c a l l s t o se lec ted independent stores, chains and wholesalers. A c e n t r a l da ta base o f accurate, t i m e l y sa les i n fo rma t ion cou ld p rov ide pub l i she rs w i t h t he i n f o r m a t i o n Cheney noted t h a t they need t o make more v a l i d r e p r i n t dec i - s ions. However, i n t h e Andersen study, t h e var ious segments o f t h e i n d u s t r y were u n c e r t a i n as t o how such a p l a n cou ld be implemented. Most segments genera l l y b e l i e v e d t h a t pub l i she rs should c o n t r o l such a system, but a l a r g e percentage (66%) o f t h e bookse l le rs p o l l e d by Andersen f a i l e d t o respond t o t h i s quest ior i ; those who d id favoured an ou ts ide agency, r a t h e r than the pub l i she rs themselves. The A.C. N ie l sen o rgan iza t i on once considered us ing t h e i r po in t -o f - sa le p o l l i n g tech- n iques f o r t h i s purpose but p u l l e d back a f t e r a corporate reorgan iza t ion .

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P lac ing an Order

Once t h e d e c i s i o n t o buy has been made and the vendor se lected, t h e order must be placed. Th is i s t h e area i n which we have r e c e n t l y seen t h e g r e a t e s t e f f e c t o f t h e new technology. Smal l bookse l l e rs ' o rders can be p laced on - l i ne through BOS, BAS and, someday soon, NACSNET. Large book cha ins can use t h e BISAC tape order format t o reach over 7 0 pub l i she rs and a l l o f t h e major n a t i o n a l wholesalers. Many pub l i she rs have t o l l f r e e telephone numbers so bookstores can p lace t h e i r orders over the te lephone. L i b r a r i e s w i t h l i n k s t o t h e b i b l i o g r a p h i c networks o r w i t h i n t e r n a l automated a c q u i s i t i o n systems can c rea te orders which now reach vendors i n BISAC's computer tape format and s h o r t l y w i l l be t r a n s m i t t e d t o those accept ing such t ransmiss ions i n one o f t h e American N a t i o n a l s tandard communication formats.

The major change we can a n t i c i p a t e i n t h i s area i s an increased use o f t e l e - communications t o rep lace computer tape order ing . I f t h e divestment o f i t s subs id ia ry companies by American Telephone and Telegraph r e s u l t s i n t h e a n t i c i p a t e d o f f e r i n g o f new, compet i t ive, low-cost systems, communication cos ts cou ld be as low as sending tape through t h e m a i l s o r v i a p r i v a t e c a r r i e r s . As technology cont inues t o inc rease t h e process ing speed and f l e x i b i l i t y o f l a r g e r computers, on - l i ne access t o search f o r t i t l e s and reserve them f o r s p e c i f i c customer o rders should increase.

Developments a re a l ready be ing seen i n e l e c t r o n i c communication o f orders. For example, t h e Baker & Tay lo r Company, t h e l a r g e s t U.S. l i b r a r y wholesaler, i s communicating on - l i ne w i t h over 1,000 l i b r a r i e s across t h e count ry through a specially-programmed hand-held e l e c t r o n i c dev ice known as a 'Bataphone.' The l i b r a r y d i a l s Baker & Tay lo r through a l o c a l network, p lugs t h e Bataphone i n t o t h e telephone, and en ters q u a n t i t y and ISBN. Orders can be c rea ted f o r under $.O2 a t i t l e . Baker & Tay lo r i s c u r r e n t l y develop ing t h e sof tware t o handle bookstores orders, w i t h implementat ion a n t i c i p a t e d i n 1985. Some pub l i she rs a re a l s o con- s i d e r i n g p r o v i d i n g t h e i r sa les f o r c e w i t h hand-held p o r t a b l e te rm ina ls which can be plugged i n t o a te lephone t o t r a n s m i t orders from a bookstore, w h i l e p r o v i d i n g a p r i n t e d copy o f t h e order f o r t h e customer.

I n t e r n a l O r d e r Processing a t Vendor Locat ions

Th is i s the o the r major area i n which the new technology i s c u r r e n t l y employ- ed and enhancements can be p r e d i c t e d i n t h e near f u t u r e . As i n d i c a t e d i n t h e I n t r o d u c t i o n , most l a r g e p u b l i s h e r s and a l l o f t he n a t i o n a l wholesalers now use automated technology f o r t h e process ing o f orders, e i t h e r i n on -s i t e computer systems o r through se rv i ce bureaux. These systems u s u a l l y c o n t a i n a f i l e o f a l l customers w i t h whom they do business, i n c l u d i n g c r e d i t con t ro l s , sa les represen- t a t i v e s t o be c r e d i t e d f o r purchases by t h e customer, a l i nk between b i l l i n g and sh ipp ing addresses o f t he same o rgan iza t i on and o the r i n d i c a t i v e i n fo rma t ion . They a l so c o n t a i n a f i l e o f a l l t i t l e s publ ished, i n c l u d i n g i n v e n t o r y s ta tus , sa les h i s t o r y and o the r a d d i t i o n a l s p e c i f i c data. Order process ing c l e r k s i d e n t i f y t h e customer and the t i t l e s requested, input s p e c i f i c i n s t r u c t i o n s on the order which are n o t mainta ined by o r i n c o n f l i c t w i t h t h a t on t h e computer, and send the o rde r through f o r processing.

Computer systems au tomat i ca l l y reduce inven to ry o r h o l d orders f o r unava i l ab le t i t l e s f o r f u t u r e shipment, c rea te the p i c k i n g documents necessary t o l o c a t e t h e t i t l e s requested i n t h e warehouse, c rea te i nvo i ces f o r t h e customer, and add t h i s sa le t o o thers i n t h e vendor 's accounts rece ivab le and sa les f i l e s . Most compu- t e r i z e d f u l f i l m e n t systems i n t h e book i n d u s t r y a re ' p r e - b i l l i n g ' systems, crea- t ing a l l paperwork and records i n one t ransac t i on . A few pub l i she rs use 'pos t -

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b i l l i n g ' s y s t e m s , which deduct shipments f rom inven to ry i n the f i r s t pass through the computer, but add postage and c rea te rece ivab les and o the r records i n a second pass.

As was a l s o noted, many o f these order f u l f i l m e n t systems were c rea ted by i n d i v i d u a l s w i t h l e s s than f u l l understanding o f t h e book i n d u s t r y ' s d i s - t r i b u t i o n system, and a l s o t o op t im ize t h e c a p a b i l i t i e s o f computer hardware and sof tware t h a t a re considered archa ic i n l i g h t o f today 's technology. Large pub l i she rs and book wholesal ing organ iza t ions whose i n t e r n a l computer systems a re bound by these r e s t r i c t i o n s have begun upgrading o r completely revamping t h e i r systems. I n 1981, o f 65 pub l i she r responses t o a survey conducted by t h e AAP Book D i s t r i b u t i o n Task Force, 57% i n d i c a t e d t h a t they were changing t h e i r computer-based order f u l f i l m e n t system i n some way. More than h a l f (54%) o f those were p lann ing t o rep lace t h e i r e x i s t i n g computer w i t h an upgraded model. ' S m a l l e r o rgan iza t ions t h a t have never had computer systems can now a f f o r d t o purchase them, due t o t h e reduced c o s t and increased c a p a b i l i t y p rov ided by m i n i and microcomputers and t h e e n t r y o f severa l new organ iza t ions i n t o t h e tu rnkey and se rv i ce bureau f u l f i l m e n t systems marketplaces.

Another r e s u l t o f t h e technology w i l l be the increased u t i l i z a t i o n o f i n d u s t r y standards. Computers r e q u i r e unique i d e n t i f i e r s o f i n fo rma t ion sought. The s h o r t e r t h e i d e n t i f i e r , t h e more e f f i c i e n t t h e computer system. The t e n d i g i t ISBN has become t h e b a s i s f o r t h e BISAC formats because o f i t s a b i l i t y t o i d e n t i f y a s p e c i f i c binding o f a s p e c i f i c t i t l e . The seven d i g i t SAN i s inc rea- s i n g l y be ing used by members o f t he U.S. book community as they p r o f i t by the speed w i t h which i t un ique ly i d e n t i f i e s t h e address(es1 t o which t h e books ordered are t o be shipped and t h e r e l a t e d i n v o i c e sent.

As t h e number o f computers i n use grows, the a v a i l a b i l i t y o f t h e ISBN, SAN, and standard formats €or tape and on - l i ne communication o f orders, and t h e growing s o p h i s t i c a t i o n o f computer-based o rde r ing systems w i l l cont inue t o reduce speed and increase accuracy i n t h e process ing o f book orders.

P ick ing , Packing and Shipping Books

Automated technology has had the l e a s t impact on these labour - in tens ive processes. Some soph is t i ca ted computer systems enable supp l i e rs t o arrange t h e i r s torage areas by a c t u a l r a t e o f sa le , thus making the high demand t i t l e s e a s i l y access ib le t o warehouse employees. However, even today book vendors r e l y on t h e eyes of t h e i r employees t o f ind the c o r r e c t storage l o c a t i o n ; p u l l t h e book shown on a p i c k i n g l i s t from the s h e l f , b in o r car ton ; pack t h e books i n t o cardboard car tons; and s h i p these heavy, dense, car tons across t h e l a r g e expanse o f t he country , as w e l l as i n t e r n a t i o n a l l y .

Book p r i n t e r s and b i n d e r i e s a l s o p l a y a r o l e i n the p h y s i c a l d i s t r i b u t i o n o f books i n t h i s country . Located throughout the U.S. they u s u a l l y d i s t r i b u t e the f i r s t pr int ing o f mass market paperbacks, and f requen t l y per form d i s t r i b u - t i o n serv ices f o r pub l i she rs t o o sma l l t o warehouse t h e i r own books o r f o r those whose warehouses a re t o o f u l l t o handle y e t another new t i t l e .

The Andersen s tudy quest ioned the r o l e o f b i n d e r i e s as r e g i o n a l f u l f i l m e n t centres f o r t h e p u b l i s h i n g i n d u s t r y and found t h a t o n l y these organ iza t ions them- se lves saw t h i s as an appropr ia te r o l e . l i s h e r s s t r o n g l y opposed the idea, p r i m a r i l y because they f e l t t h a t f r o n t l i s t and

Both t r a d i t i o n a l and mass market pub-

- 2 1 - b a c k l i s t t i t l e s must be stocked i n the same l o c a t i o n , and because they doubted t h e b inder ies ' /manufac turers ' a b i l i t y t o handle a l l f u l f i l m e n t serv ices (p.5.28, 5.29).

W i t h t he l i m i t e d number o f r e g i o n a l warehouses now i n ex is tence i n t h e book t rade, much o f t h e delay, expense and damage i n p h y s i c a l d i s t r i b u t i o n i s in t roduced by t h e c a r r i e r s o f p roduc t f rom p o i n t t o p o i n t . The u n i t e d Sta tes Pos ta l Serv ice (USPS) has a poor r e p u t a t i o n f o r i t s care and hand l i ng of packages and books a re no except ion. Nor w i l l t h e USPS p rov ide p r o o f o f d e i i - very when purchasers do n o t rece ive what vendors c l a i m t o have shipped. However, i t does reach every l o c a t i o n i n t h i s geograph ica l l y d ispersed n a t i o n w i t h i n a reasonable p e r i o d o f t ime and a t reasonable costs.

The pr imary compet i tor t o the USPS has been t h e Un i ted P a r c e l Serv ice (UPS). The i r a b i l i t y t o supply p r o o f o f d e l i v e r y o f t e n o f f s e t s t h e i r h ighe r r a t e s , and makes them a pr ime conveyor o f books t o p o i n t s o f popu la t i on d e n s i t y which a re geograph ica l l y c lose t o t h e sh ipp ing l o c a t i o n . However, they normal ly h o l d dense car tons o f books as ide f o r t r u c k s n o t c a r r y i n g breakable i tems, so t h a t i t o f t e n takes them as l o n g as the p o s t a l se rv i ce t o reach o u t - l y i n g areas o f the country . I n 1983 a new o rgan iza t i on was founded t o so lve t h i s problem by sh ipp ing o n l y books. Ca l l ed ZIPSAN, i t e x i s t e d f o r about seven months, g a i n i n g the complete suppor t o f a few pub l ishers , but w i t h most sending through o n l y smal l , ' t e s t ' shipments. When ZIPSAN's l a c k o f c a p i t a l f o rced i t s c losu re a t t he end o f 1983, UPS remained the o n l y v i a b l e a l t e r n a t i v e f o r t h e shipment o f smal l orders f o r book d i s t r i b u t o r s w i t h o u t t h e i r own f l e e t o f t rucks .

One proposed a p p l i c a t i o n o f t h e new technology may s i g n i f i c a n t l y mod i fy t h i s highly i n e f f i c i e n t aspect o f t he book d i s t r i b u t i o n process. f o r a completely new form o f book d i s t r i b u t i o n cou ld be as fo l l ows :

The scenar io

1) Authors t ransmi t t h e i r manuscr ipts e l e c t r o n i c a l l y t o pub l i shers , where they a re e d i t e d and converted i n t o ' t y p e ' through computer composi t ion;

2) Those computerized words are s t o r e d inexpens ive ly on tape, d i sc , o r some o the r e l e c t r o n i c a l l y access ib le medium;

3 ) The a v a i l a b i l i t y o f the book i s communicated v i a rev iews and va r ious types o f b i b l i o g r a p h i c , abs t rac t i ng , and a d v e r t i s i n g i n f o r m a t i o n prov ided on da ta bases accessed i n the home, l i b r a r y , bookstore and business;

4) Book readers decide t o purchase o r borrow books from these in forma- t i o n a l sources, w i t h o u t seeing a~ p r i n t e d copy;

5) Stored t ype i s accessed and telecommunicated inexpens ive ly t o a print ing s i t e anywhere i n t h e wor ld t h a t i s c l o s e s t t o the book reader; and

6) H igh speed, low c o s t p r i n t e r s d u p l i c a t e the s to red type w i t h i n a reason- ab le amount o f t ime.

Thus, i n s t e a d o f printing, warehousing and sh ipp ing books, w i t h t h e i nhe ren t p o t e n t i a l l oss i n investment through damage, p i l f e r a g e , and/or l a c k o f market po ten t ia l - -as w e l l as the very high sh ipp ing cos ts between manufacturer and warehouse and then warehouse and purchaser--access t o s to red composi t ion which would then be p r i n t e d 'on demand' would p rov ide t h e purchaser w i t h a p r i n t e d book.

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The ques t ion o f q u i c k l y binding those p r i n t e d pages i n t o a 'book' as we know i t today i s n o t reso lved i n t h i s scenar io nor by today 's technology. Nor do we p r e s e n t l y have the a b i l i t y t o create, s t o r e and reproduce f i n e o r m u l t i c o l o u r graphics. However, these a re areas undergoing research and development by pub l ishers , book manufacturers and computer techno log is ts . We p r e d i c t t h a t t h e on-s i te , on demand print ing o f a t l e a s t c e r t a i n types o r p a r t s o f books may rep lace today 's warehousing and sh ipp ing i n t h e foreseeable fu tu re .

Receiv ing and Processing Books

To t h e ex ten t t h a t books a re purchased through automated o rde r ing systems, those computers c o n t a i n records o f books on order . Opening a carton, checking i n the books, determin ing i f those rece ived are, i n f a c t , t he books ordered, and dec id ing where they a r e t o be shelved o r sent i s g r e a t l y f a c i l i t a t e d by such computer-based systems. The p r o l i f e r a t i o n o f such systems w i l l extend the bene- f i t o f t h i s technology t o an ever- increas ing segment o f t h e book world.

Another improvement t h a t cou ld be prov ided by t h e new technology i s scanning o f machine-readable coding on car tons o r books themselves. Th is i s used t o some e x t e n t a t present, but t h e ongoing controversy about the appropr ia te symbology t o be used i n the book i n d u s t r y has l e d t o the u n d e r - u t i l i z a t i o n o f t h i s technology . We awai t more i n v e s t i g a t i o n o f coding technology by BISAC and t h e development o f a l i b r a r y i t e m standard by the Na t iona l I n fo rma t ion Standards Organiza- t i o n (239) be fo re t h i s technology can be f u l l y e x p l o i t e d i n bookstores, l i b r a - r i e s and a t t h e r e c e t v i n g docks o f pub l i she r and wholesaler warehouses.

The process ing o f books by l i b r a r i e s , however, has been g r e a t l y f a c i l i t a t e d by today 's technology. Through t h e p r o v i s i o n o f Cata loguing i n P u b l i c a t i o n (CIP) da ta on L i b r a r y o f Congress MARC tapes sent t o b i b l i o g r a p h i c networks, wholesalers and l a r g e l i b r a r i e s , catalogue cards can be ordered f o r a r r i v a l a t t h e same t ime as--or before-- the book i t s e l f . q u i r e d books s a t f o r months awa i t i ng the a v a i l a b i l i t y o f cata loguers t o make them shel f - ready and a v a i l a b l e f o r t h e pub l i c .

Gone a re t h e days when newly ac-

Generat ing Claims

Today's automated l i b r a r y a c q u i s i t i o n systems n o t i f y purchasers when books t h a t have been ordered a re n o t rece ived by the expected date. I n add i t i on , some o f these systems au tomat i ca l l y c rea te c l a i m forms which t h e l i b r a r y can send ( i n t h e m a i l today, but e l e c t r o n i c a l l y i n the f u t u r e ) t o the vendor reques- t ing in fo rma t ion on t h e s t a t u s o f t he t i t l e s ordered.

It i s our guess t h a t t he improved in fo rma t ion f l o w between buyer and s e l l e r i n h e r e k t i n i n t e r a c t i v e on - l i ne o rde r ing and con f i rma t ion systems may e l im ina te most o f t he c la im ing a c t i v i t y experienced i n l i b r a r y book o rde r ing today.

Returns Processing

The process ing o f r e t u r n s (and t h e i r eventual re-appearance i n t h e book t rade as ' remainders ' ) - - inc lud ing t h e sh ipp ing cos ts between bookse l l e r and pub l i she r , p u b l i s h e r and remainder dealer , and then remainder dea le r and book- s e l l e r - - r e f l e c t s a unique aspect o f book p u b l i s h i n g compared w i t h o the r bus i - nesses o f f e r i n g goods f o r sa le . Most pub l i she rs accept f u l l r e t u r n s on most t i t l e s they pub l ish , on t h e t a c i t assumption t h a t t h e l a c k o f sa le i s due t o t h e i r unreasonable expectat ions o f a t i t l e ' s p o t e n t i a l .

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As no ted e a r l i e r , computerized bookstore sa les and inven to ry systems n o t on l y highl ight what i s s e l l i n g , but p i n p o i n t i nven to ry t h a t should be r e t u r n e d t o the p u b l i s h e r f o r l a c k o f sa le . Since some U.S. pub l i she rs now l i m i t t he t ime during which unsold books can be returned, t h e most soph is t i ca ted book- s t o r e systems i n t e r f a c e t h e p u b l i s h e r ' s r e t u r n s p o l i c y l i m i t a t i o n s w i t h t h e sa les r a t e t o suggest t he r e t u r n o f merchandise be fo re t h a t p r i v i l e g e i s can- c e l l e d o r penal ized.

The process ing o f r e t u r n s i n p u b l i s h e r warehouses can be g r e a t l y expedi ted by scanning, which we a n t i c i p a t e w i l l become wide-spread once s tandard i za t i on has been completed. RCA Records r e c e n t l y announced t h a t they saved approx i - mate ly $500,000 p e r year through t h e i n t r o d u c t i o n o f scanning i n t h e i r r e t u r n s process ing area. However, t h e e l i m i n a t i o n o f t h i s p r a c t i c e through t h e s e l f - remainder ing o f books by U.S. bookse l l e rs would p rov ide even g rea te r c o s t reduc- t i o n s . The c r e a t i o n o f t h e BOS network connect ing bookse l l e rs i n t h e U.S. may be the f i r s t s tep i n t h i s process. But be fo re any s i g n i f i c a n t progress can be made, bookse l l e rs and t h e i r p u b l i s h e r vendors must agree t o the p o l i c i e s and procedures under which c r e d i t i s g i ven f o r books s o l d as ' remainders ' i n t h e s tores, w i thou t t h e i r go ing back t o t h e p u b l i s h i n g house a t a l l . The new technology i s c e r t a i n t o p l a y - a n impor tan t r o l e i n t h i s process. The Hunt r e p o r t i n Pub l ishers Weekly p rov ides US w i t h hope t h a t t h i s may come t o pass i n t h e foreseeable f u t u r e .

I n v o i c i n g and Payment Process ing

As was t r u e o f order c r e a t i o n and t r a n s m i t t a l , t h i s i s an area i n which we have seen g r e a t improvement through t h e use o f BISAC formats. It has been e s t i - mated by J.C. Penney t h a t they save between 5 and 6 cents p e r i n v o i c e by r e c e i - ving machine-readable tapes i n s t e a d o f paper copies. A n t i c i p a t i n g comparable savings, B. D a l t o n ' s rep resen ta t i ve t o BIS cha i red t h e sub-committee t h a t developed t h e f i r s t BISAC i n v o i c e format. He spearheaded i t s acceptance i n t h e book p u b l i s h i n g community by o f f e r i n g Da l ton orders i n t h e BISAC format immediately, i n r e t u r n f o r a promise o f BISAC format p u b l i s h e r i nvo i ces some t ime i n t h e fu tu re .

Once payment i 's rece ived a t t he vendor 's o f f i c e s , c l e r i c a l s t a f f app ly i t t o t h e open accounts rece ivab le balance f o r t he appropr ia te cust-omer. E r r o r s i n l o c a t i n g t h e c o r r e c t customer w i l l be e l im ina ted by t h e use o f SÁN once t h a t s tandard has been implemented. Most soph is t i ca ted computerized rece ivab les systems a l l ow t h e opera tor t o search f o r t h e c o r r e c t customer on- l ine. Since t h e book i n d u s t r y t r a d i t i o n a l l y f unc t i ons w i t h an 'open i tem, ' r a t h e r than a 'balance f o r - ward' method o f ma in ta in ing accounts rece ivab le , t h e computer i s va luab le i n d i s - p l a y i n g and c a l c u l a t i n g the va lue o f t h e v a r i e t y o f c r e d i t and d e b i t t ransac t i ons t h a t a re t o b e o f f s e t by t h e monies received. I n many computer systems, on - l i ne cash a p p l i c a t i o n has e l im ina ted t h e delays i nhe ren t i n t h e o lde r , d a i l y b a t c h process ing rou t i nes .

Today some U.S. banks o f f e r computer tape i n f o r m a t i o n t o t h e i r customers about checks rece ived i n l o c k boxes and t h e i nvo i ces t h a t a re p a i d by those checks. The nex t s tep i n t h i s process i n which we expect t o see b e n e f i c i a l e f f e c t s o f technology w i l l be t h e use o f e l e c t r o n i c funds t r a n s f e r . W i t h t h e development o f a s tandard ized e l e c t r o n i c funds t r a n s f e r format, monies, as w e l l as t h e i n f o r m a t i o n from customers, can be moved i n t o t h e vendor 's bank account and computerized accounts rece ivab le system.

Warehousing Funct ions

Al though n o t a p a r t o f t h e c y c l e represented e a r l i e r i n t h i s Sect ion, t h e func t i ons t h a t a re r e q u i r e d t o ma in ta in books i n warehouses a re a l s o impor tan t t o

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the d i s t r i b u t i o n process. On- l ine computer systems i n p lace i n a growing number o f l a r g e p u b l i s h i n g houses have had a g r e a t impact on warehousing operat ions. Computer te rm ina ls l o c a t e d a t r e c e i v i n g docks prov ide d i r e c t i o n f o r t he placement o f incoming s tock. Terminals i n o the r l o c a t i o n s prov ide s tock s ta tus i n f o r m a t i o n upon inquiry. W i t h da ta communications i n place, a company's warehouse l o c a t i o n s throughout t h e U.S. a re connected t o each other , i nven to ry l e v e l s can be de ter - mined instantaneously , and new s tock can be a l l o c a t e d t o t h e appropr ia te warehouse most e f f i c i e n t l y .

Another area t h a t has seen change i s i nven to ry tak ing . There i s no th ing more arduous, du l l and expensive than c l o s i n g down a warehouse i n order t o count t h e number o f copies o f each book on t h e shelves. i nven to ry systems have.been developed by some pub l i she rs t h a t a l l o w f o r t he count ing o f books i n s p e c i f i c sec t ions o f t h e warehouse and r e c o n c i l i a t i o n o f those counts through computer i nven to ry records w i thou t s topping t h e process ing o f o rders o r shipment o f books. We expect t o see more such systems i n t h e fu tu re . I n addi - t i o n , we a n t i c i p a t e t h e acceptance o f an indust ry-wide machine-readable coding standard t h a t w i l l r e s u l t i n the a b i l i t y t o c a r r y a smal l hand-held scanner through t h e warehouse and ' count ' t h e copies o r car tons i n a much more accurate and t i m e l y manner than i s c u r r e n t l y p o s s i b l e through eyes, hands, pens and pen- c i l s .

Complex computer-based c y c l i c a l

The o the r f u n c t i o n t h a t w i l l be i n f i uenced by technology i s t h e l o c a t i o n and p i c k i n g o f s tock. Today, automated l o c a t i o n systems can send computer c o n t r o l l e d t r u c k s t o t h e appropr ia te l o c a t i o n o f books t o be p u l l e d f rom t h e shelves. W i t h some s tandard i za t i on i n the s i z e o f books o r t he o rde r ing o f books i n ca r ton q u a n t i t i e s which i s be ing promoted by some pub l ishers , t h e type o f i n d u s t r i a l automat ion ( r o b o t i c s ) we now f ind i n f a c t o r y p roduc t ion l i n e s cou ld be app l i ed t o t h e p i c k i n g and pack ing o f books.

Th is i s an area t h a t requ i res research and development funding o f a s i z e and scope beyond t h e c a p a b i l i t y o f most book pub l ishers . However, a concerted indus- t ry -w ide e f f o r t supported by pub l ishers , book manufacturers, and those i n o the r i n d u s t r i e s w i t h a l a r g e number o f s h o r t - l i v e d products--such as t h e reco rd ing indust ry- -might r e s u l t i n t h e funding necessary t o develop such technology w i t h i n a reasonable t ime frame.

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SECTION IV--PRECONDITIONS FOR THE INTRODUCTION OF NEW TECHNOLOGY

To f u l l y apprec ia te t h e p recond i t i ons necessary f o r t he success fu l i n t r o - duc t i on o f new technology t o the d i s t r i b u t i o n process i n t h e Un i ted States, one must understand t h e var ious types o f o rgan iza t ions which p a r t i c i p a t e i n t h e process and the r o l e they have had i n app ly ing technology t o book d i s t r i b u t i o n . One must a l s o apprec ia te t h e f a c t t h a t automat ion was unacceptable t o many i n t h e i n d u s t r y f o r a l o n g p e r i o d o f t ime. Leadership by t h e few w i t h a v i s i o n f o r t h e f u t u r e has l a i d t h e appropr ia te foundat ion f o r t he i ndus t r y . Today's low-cost computer systems, combined w i t h t h e p o p u l a r i t y o f microcomputer technology i n t h e U.S., have b u i l t on t h a t foundat ion t o c rea te cond i t i ons which w i l l a l l o w much grea ter success fu l a p p l i c a t i o n o f t h e new technology i n t h e fu tu re .

The P a r t i c i p a n t s

L i b r a r i e s were t h e f i r s t component o f t h e d i s t r i b u t i o n cha in t o embrace and u t i l i z e t h e new technology. O r i g i n a l l y formed as a consort ium o f academic l i b - r a r i e s i n t h e s t a t e o f Ohio, OCLC grew from a dream t o a r e a l i t y w i t h over 2,000 l i b r a r i e s now u s i n g computer te rm ina ls t o telecommunicate w i t h t h e OCLC compu te rs i n D u b l i n , Ohio. However, o f a l l o f t h e func t i ons r e q u i r e d t o s u s t a i n and improve l i b r a r y serv ice , t he d i s t r i b u t i o n - r e l a t e d a c t i v i t y , a c q u i s i t i o n , was a low p r i o r i t y f o r automation. I t i s o n l y i n t h e p a s t few years t h a t we have begun t o see automated a c q u i s i t i o n systems and a l a r g e r number o f l i b r a r i e s beg inn ing t o experience the i n f l u e n c e o f t h i s automat ion on t h e i r d i s t r i b u t i o n systems.

It must a l s o be noted t h a t t he U.S. does n o t have one n a t i o n a l l i b r a r y . The N a t i o n a l L i b r a r y of Medicine, N a t i o n a l A g r i c u l t u r a l L i b r a r y and t h e L i b r a r y o f Congress have each had an impor tan t but d i f f e r e n t r o l e i n t h e implementat ion o f automation i n t h i s country . O f t h e three, t h e L i b r a r y o f Congress has had t h e most d i s t i n c t r o l e i n d i s t r i b u t i o n , through i t s Cata loguing i n P u b l i c a t i o n P ro jec t , i t s MARC tape d isseminat ion, t he c a t a l y t i c r o l e o f i t s Network Advisory Committee i n b r i n g i n g book vendors and l i b r a r i a n s together t o s tudy t h e new technologies, and i t s Centre f o r t h e Book, which has ,brought though t fu l , dedicated book people toge- t h e r t o share problems and progress and t o develop p r o j e c t s o f impor tan t t o t h e i n t r o d u c t i o n o f new technology, such as t h e s tudy o f t h e r o l e o f t h e book i n t h e fu tu re .

Book wholesalers and jobbers have a l s o p layed an impor tan t r o l e i n U.S. techno- l o g i c a l evo lu t i on . As entrepreneurs whose companies su rv i ve o r f a i l as a r e s u l t o f t h e i r d i s t r i b u t i o n c a p a b i l i t i e s , book wholesalers have t h e most t o g a i n through innova t ion i n book d i s t r i b u t i o n . I t was t h e Ingram Book Company which s t a r t e d t h e concept o f customers d i a l l i n g an 800 te lephone number and t a l k i n g w i t h someone who had on - l i ne access t o the s tock a v a i l a b i l i t y o f a l l o f t h e t i t l e s i n t h e i r warehouse. The telephone c l e r k s n o t o n l y advised customers o f a v a i l a b i l i t y , but cou ld ' reserve ' copies f o r a s p e c i f i c customer i f asked t o do so. Today these same serv ices are o f f e r e d by o the r wholesalers such as NASCORP and t h e Baker & Tay lo r Company, and by some pub l ishers . Ingram was a l s o t h e f i r s t company t o i n t roduce a monthly m ic ro f i che l i s t i n g o f t h e i r i n v e n t o r y t o make l o c a t i n g books and t h e i r supp l i e rs eas ie r f o r bookstores and l i b r a r i e s . Other wholesalers and bookstore chains have fo l l owed s u i t .

Pub l ishers were among t h e f i r s t components i n t h e d i s t r i b u t i o n cha in t o automate t h e i r o rder process ing func t ions , warehouses, and o the r f u l f i l m e n t areas. And w i thou t t h e support of i t s p u b l i s h i n g members, BISAC would have made l i t t l e prog- gress.

The U.S. Government

E a r l i e r Sect ions of t h i s Report omit , f o r t h e most p a r t , re fe rence t o t h e r o l e o f t h e government i n book d i s t r i b u t i o n i n t h i s country. omission. coun te rpa r t s who can c a l l on t h e i r n a t i o n a l government f o r suppor t o f a c e n t r a l i z e d 'Telebook Agency' t o bui ld data bases, produce and d i s t r i b u t e m ic ro f i che and i n v e s t i n t e l e o r d e r i n g systems- o r t h e Dutch and t h e B r i t i s h , where pub l i she rs and bookse l le rs can g e t together l e g a l l y and j o i n t l y i n v e s t energies and monies i n new p r o j e c t s meant t o improve d i s t r i b u t i o n f o r a l l .

Th is i s a va l id Some Americans m i g h t envy t h e i r Canadian

U.S. p o l i c y has c a l l e d f o r a complete separa t ion o f government from publi- sh ing as a c o n s t i t u t i o n a l p r o t e c t i o n o f f r e e speech. p o l i c y i s t h e a p r i o r i r e f u s a l of t h e government-supported Small Business Admini- s t r a t i o n t o p rov ide fundinq under i t s l oan programme t o smal l businesses which p u b l i s h books.

A n extreme example o f t h i s

The one area o f d i s t r i b u t i o n i n which government i n f l u e n c e has been more p o s i t i v e i s i n t h e Un i ted Sta tes P o s t a l Serv ice r a t e s t ruc tu re . Dur ing F r a n k l i n D. Roosevel t 's a d m i n i s t r a t i o n i t was determined t h a t books c a r r y impor tan t educa- t i o n a l ma t te r and should be sub jec t t o lower p o s t a l t a r i f f s t han those imposed on o the r w r i t t e n m a t e r i a l s i - That was t h e s t a r t o f t h e 'Spec ia l Rate Four th Class- Books,' which s t i l l e x i s t s , a l though the gap between t h i s ' s p e c i a l r a t e ' and normal p o s t a l r a t e s narrows a t each USPS r a t e rev iew. I n 1970 the USPS in t roduced a ' l i b r a r y r a t e ' and i n 1976 an 'educat iona l a n 6 n o n - p r o f i t i n s t i t u t i o n a l r a t e ' t o h e l p l i b r a r i e s and schools reduce the cos t o f m a t e r i a l s they purchase. t o o have become l e s s ' s p e c i a l ' over t ime.

Those r a t e s

Leadership

It i s our b e l i e f t h a t t he re a re many methods o f ga in ing an o b j e c t i v e such as the a p p l i c a t i o n o f t h e new technology t o t h e d i s t r i b u t i o n process. However, success demands leadersh ip f rom innova t i ve i n d i v i d u a l s w i t h i n o rgan iza t ions w i l l i n g t o in- v e s t i n t h e i r e f f o r t s .

One such leader i s DeWit t C. Baker, who must be c r e d i t e d €or c r e a t i n g what has become BISAC. The BISAC p a r t i c i p a n t s , through t h e i r a b i l i t y t o compromise and t o foresee a long term o b j e c t i v e o f s u f f i c i e n t b e n e f i t t o j u s t i f y hours o f unpaid labour , have p rov ided the U.S. book i n d u s t r y w i t h t he bas i c t o o l s t h a t g i v e smal l and l a r g e pub l i she rs and t h e i r customers t h e c a p a b i l i t y o f t a k i n g advantage o f today 's technology.

I n t h e b o o k s e l l i n g area we must acknowledge G. Roysce Smith 's v i s i o n and leader- s h i p i n e s t a b l i s h i n g t h e system known as BOS. I f t h a t experiment succeeds, book-

s e l l e r s w i l l n o t o n l y have p r e v i o u s l y unknown d i s t r i b u t i o n advantages, but a l s o fami- l i a r i t y w i t h computer-based technology t h a t w i l l , we be l i eve , encourage them t o s e l l computer sof tware, and, poss ib l y , computer hardware and access t o i n f o r m a t i o n on da ta bases. It w i l l c e r t a i n l y b e t t e r prepare them f o r t he ' pub l i sh ing on demand' scenar io descr ibed e a r l i e r i n t h i s Report.

Har ry Hoffman, now p res iden t o f Waldenbooks, and t h e cu r ren t management o€ t h e Ingram Book Company have in t roduced innova t i ve techno log ica l changes now found i n the systems o f i t s compet i tors and i n o ther o rgan iza t ions i n t h e U.S. and around t h e wor Id.

F i n a l l y , t h e Assoc ia t ion o f American Pub l ishers has been i n f l u e n t i a l i n brin- ging i n t e r n a t i o n a l innovat ions t o t h e U.S. book i n d u s t r y and American ideas t o t h e

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book i n d u s t r i e s o f o the r count r ies . I n 1978 t h e AAP's Book D i s t r i b u t i o n Task Force i n v i t e d i n d i v i d u a l s i n v o l v e d i n European d i s t r i b u t i o n technology t o a meet ing i n con junc t i on w i t h t h e F r a n k f u r t Book F a i r . These p a r t i c i p a n t s descr ibed t h e i r i n d i v i d u a l systems and es tab l i shed an endur ing r a p p o r t w i t h t h e i r American counterpar ts and w i t h each o ther . Th i s group has expanded t o become t r u l y i n t e r n a t i o n a l and c a l l s i t s e l f ' I n t e r n a t i o n a l D i s t r i b u t i o n S p e c i a l i s t s . ' S t i l l meet ing i n con junc t i on w i t h t h e F a i r , they p rov ide each o ther w i t h an annual update and prev iew o f new innovat ions i n t h e d i s t r i b u t i o n systems i n t h e U.S., U.K., Federa l Republ ic o f Germany, Hol land, F in land, Canada, Spain and o the r count r ies . Hans Jurgen Eh le rs o f E r n s t K l e t t , S t u t t g a r t (Federa l Republ ic o f Germany) and J u l i a n B lackwe l l o f t h e B lackwe l l Group (U.K.) were among the o r i g i n a l p lanners and a re s t i l l i n v o l v e d i n these annual meetings, w i t h year- to-year p lanning, i n v i t a t i o n s and r e p o r t i n g handled by the p u b l i s h e r s ' assoc ia t ions o f var ious count r ies .

H i s t o r i c a l Precond i t ions f o r Automation

I n t h e 1950s, t h e l a r g e s t U.S. p u b l i s h e r s were us ing ren ted IBM 'machine account ing equipment' f o r o rder p rocess ing and accounts rece ivab le . W i t h t he advent o f main frame computer technology i n t h e e a r l y 1960s, these companies saw a means o f r e d u c i n g t h e growing personnel expense i n c u r r e d because o f expanding sa les volume by i n s t a l l i n g t h e i r own computer systems. The a p p l i c a t i o n t h a t j u s - t i f i e d t h e purchase o f a l l p u b l i s h e r s ' f i r s t computers was order process ing; i t was c l e a r t h a t t h e computer cou ld process orders more e f f i c i e n t l y than an ever- i nc reas ing c l e r i c a l s t a f f .

Due t o IBM's dominance o f t h e marketplace a t t h a t t ime, most companies s t a r - t i n g t o automate purchased IBM equipment; t h i s cont inues today i n t h e p u b l i s h i n g i n d u s t r y . The f i r s t da ta process ing managers h i r e d came from ou ts ide t h e publi- sh ing i ndus t r y , i . e . f rom i n d u s t r i e s such as insurance, sh ipp ing, pharmaceut icals, and meat packing, where automat ion had taken h o l d more q u i c k l y .

Through t h e 1970s and 1980s, those companies which had i n s t a l l e d computers e a r l i e r cont inued t o upgrade t h e i r systems i n response t o expanding sales, changing business requirements, and new c a p a b i l i t i e s o f f e r e d by t h e technology. There are f a r more choices a v a i l a b l e t o a company automat ing today than ever before, rang ing f rom main frames and power fu l minicomputers t o microcomputers. No longer i s i t o n l y t h e company do ing sa les o f over $20 m i l l i o n that can c o s t - j u s t i f y a computer system, as p r i c e s range from $1.5 m i l l i o n f o r main frames down t o $5,000 f o r microcomputers. Whi le hardware cos ts have come down s i g n i f i c a n t l y , o f f - t h e - s h e l f sof tware designed p a r t i c u l a r l y f o r t h i s i n d u s t r y i s s t i l l n o t a v a i l a b l e . Costs f o r customized sof tware and i n t e r n a l systems development are s t i l l high and a re inc reas ing .

A t y p i c a l turnkey minicomputer system f o r book p u b l i s h i n g s e l l s f o r between $75,000 and $100,000 but can reach as high as $200,000, depending on hardware and storage c a p a b i l i t i e s . Such systems a re capable o f do ing the j o b a $1+ m i l l i o n main frame did t e n years ago. One tu rnkey vendor, recogn iz ing t h a t t h e r e a r e a number o f pub l i she rs s e l l i n g under a $1 m i l l i o n p e r year who want computers, w i l l soon be o f f e r i n g a microcomputer system f o r between $40-50,000 which can suppor t up t o f i v e te rm ina ls and ma in ta in a 15,000 customer database. Serv ice bureaux i n t h i s count ry o f f e r o n - l i n e order process ing and da ta communications c a p a b i l i t i e s f o r those companies who do n o t want t o i n c u r t h e cos ts o f ma in ta in ing a computer system i n t e r n a l l y . One se rv i ce bureau p lans t o o f f e r a ' d i s t r i b u t e d ' system a l l o w i n g pub l i she rs t o ma in ta in and manipulate t h e i r f i l e s i n t e r n a l l y and n o t be as dependent on use of telephone l i n e s .

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Whi le the technology has changed s i g n i f i c a n t l y s ince t h e f i r s t compa- n i e s automated i n t h e 1960s, t h e j u s t i f i c a t i o n f o r do ing so has no t - - tha t i s , t h e d e s i r e t o process more orders more q u i c k l y a t a lower cost . For example, i n 1958 each o rde r process ing c l e r k a t Random House was capable of proces- s i n g orders va lued a t $150,000 annual ly ; today each c l e r k can process orders va lued a t $2.5 m i l l i o n . McGraw-Hill Book Company, i n 1958, had a s t a f f o f 150 c l e r k s process ing orders va lued a t $40 m i l l i o n ; twenty - f i ve years l a t e r t h e i r s ta f f o f 205 people processes orders va lued a t $232 m i l l i o n . l oca t i ons , Houghton M i f f i n Company employs l e s s s t a f f t han they d id twenty years ago, though genera t ing s i g n i f i c a n t l y h igher volume.

I n one o f i t s

The requirements f o r a da ta process ing manager a l s o d i f f e r f rom what they were twenty years ago. Today pub l i she rs seek da ta process ing managers who a re up-to-date w i t h t h e s t a t e of t he technology and who have database and da ta communications experience. Whi le i t would be p r e f e r a b l e i f these p ro fess iona ls came from publ ish ing--and such i n d i v i d u a l s do e x i s t today--many say they would s t i l l l ook t o o the r i n d u s t r i e s such as banking, wholesal ing, o r insurance f o r da ta process ing exper ience and exper t i se .

T r a i n i n g o f personnel has become more fo rmal ized than i n t h e pas t . Most companies send t h e i r systems and programming s t a f f s t o s p e c i a l schools and seminars t o l ea rn , f o r instance, new programming languages o r system enhancements. And they p rov ide more o f t h e i r employees w i t h a bas i c understanding o f t h e book p u b l i s h i n g and d i s t r i b u t i o n process. Order process ing c l e r k s a re t r a i n e d by one o r a combinat ion o f t h e f o l l o w i n g : (1) a s p e c i a l i n t e r n a l t r a i n i n g s t a f f ; ( 2 ) superv isors o r experienced c le rks ; (3 ) se l f - t each ing programmes. Techniques va ry from mult i -media t r a i n i n g u s i n g videotapes, audio- casset tes and t e x t m a t e r i a l t o t h e very personal one-to-one t r a i n i n g on a te rm ina l . A l l t r a i n i n g prov ides c u r r e n t re fe rence manuals f o p w h a t p rev ious l y were undocumented systems.

Precond i t ions f o r Tomorrow

While p r i o r i t i e s f o r systems development d i f f e r among i n d u s t r y organiza- t i o n s , genera l t rends f o r change are emerging.

Data communications c a p a b i l i t i e s have been i n p lace f o r t e n years i n some companies. However, i n t h e past , communications l i n e s u s u a l l y connected the main frame computer a t one warehouse l o c a t i o n t o t h e main frame a t another. Today pub l i she rs and wholesalers a re beginning t o develop the p r o t o c o l s t o communicate on - l i ne w i t h any o f t h e i r customers, us ing a v a r i e t y o f computer hardware. Al though t h e r e i s some ques t ion as t o whether d i r e c t communication w i l l be economical ly f e a s i b l e €or o rders w i t h a l a r g e number o f l i n e i tems, some wholesalers a re exper iment ing w i t h on - l i ne r e c e i p t o f o rders telecommunicated by l a r g e customers. We expect t h i s t o become more p reva len t by 1985. A s men- t i o n e d e a r l i e r i n t h i s Report, some companies a re p lann ing t o p rov ide t h e i r sa les f o r c e w i t h hand-held te rm ina ls t h a t can be plugged i n t o a telephone f o r t r a n s m i t t i n g orders and mak ing i n q u i r i e s o f t h e company's c e n t r a l computer. BOS, BAS, and MACSNET a re f u r t h e r examples o f telecommunication s teps i n the i n d u s t r y ' s f u t u r e .

On- l ine systems a r e beginning t o rep lace t h e ba tch o r i e n t e d d i s t r i b u t i o n environment t h a t was p reva len t through the 1 9 7 0 ~ ~ when orders were keypunched during the day and processed a t night i n 'batches.' Today, c r e d i t can be checked and inven to ry ad jus ted on - l i ne a t t h e ve ry moment the order i s entered i n t o a computer t e r m i n a l by an operator . One pub l i she r i n te rv iewed i s t rans-

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m i t t i n g orders h o u r l y t o i t s warehouse l o c a t i o n where p i c k i n g documents a re created; o thers s t i l l ' ba tch ' t h e print ing o f p i c k i n g documents and c r e a t i o n o f i nvo i ces f o r one o r two d a i l y r u n ( s ) .

Data base management systems, which p rov ide the c a p a b i l i t y o f s to r i ng , accessing and man ipu la t ing da ta i n a v a r i e t y o f ways, a r e a l s o becoming more preva len t . Some pub l i she rs developed these systems i n t e r n a l l y a t g rea t cos t . Today, t e s t e d da ta base systems (such as IBM's In fo rma t ion Management System --IMS) a re ava i l ab le . A few pub l i she rs a r e purchasing these systems, a l though they c o s t more than most can a f f o r d . However, da ta base systems a re a l s o be ing developed f o r lower cos t m i n i and microcomputers, which may b e t t e r f i t t h e needs o f t h e l a r g e .number o f sma l l o rgan iza t ions i n t h e book i n d u s t r y .

Personal computers (PCs) began appear ing i n the i n d u s t r y over a year ago, and, as i s t r u e o f t h e marketplace i n general , t h e i r acceptance i s growing r a p i d l y . Some pub l i she rs have i n s t a l l e d PCs i n a c a r e f u l l y planned manner, a l l ow ing t h e s t a f f t o buy t h e produc ts o f o n l y one manufacturer and encouraging the shar ing o f i n f o r m a t i o n on sof tware e i t h e r purchased o r developed in-house; o thers have a l lowed t h e i r s t a f f t o purchase any model they wanted. I n some organ iza t ions where company p o l i c y p r o h i b i t e d the purchase o f PCs by o ther than the da ta process ing department, i n d i v i d u a l s have bought them w i t h t h e i r persona l funds. I n add i t i on , severa l book pub l i she rs a re a l s o purchasing PCs f o r use i n developing t h e i r own sof tware produc ts t o be s o l d a long w i t h t h e i r books. The use o f PCs has r e s u l t e d i n l e s s f e a r and g rea te r understanding o f t he c a p a b i l i t i e s o f the new technologies w i t h i n t h e book i n d u s t r y .

Off-the-shelf business a p p l i c a t i o n sof tware packages f o r PCs have been put t o use i n the book i ndus t r y . A Microcomputer Software Survey conducted and pub- l i s h e d by t h e Assoc ia t ion o f American Pub l ishers i n December, 1983, i n d i c a t e s t h a t packaged sof tware used by t h e 48 respondents, serves t h e f o l l o w i n g book p u b l i s h i n g func t i ons : E d i t o r i a l ( 2 6 % ) ; Produc t ion ( 2 0 % ) ; Market ing ( 2 1 % ) ; F i n a n c i a l (21%) ; and ßudget (12%) .

I n almost a l l cases, these computers a re stand alone work s t a t i o n s w i t h o u t access t o t h e i n fo rma t ion r e s i d i n g i n the company's main frame. Whi le t h e a p p l i - ca t i ons c i t e d above a re n o t d i r e c t l y book d i s t r i b u t i o n - r e l a t e d , PC users o f t e n u t i l i z e the t i t l e and/or sa les i n f o r m a t i o n conta ined i n t h e d i s t r i b u t i o n system res iden t on t h e main frame by rekey ing t h e i n fo rma t ion f rom p r i n t e d repo r t s . A few pub l i she rs a re c u r r e n t l y develop ing t h e PC/main frame i n t e r f a c e s t o p rov ide d i r e c t access t o t h e main frame f i l e s . We expect more t o do so i n t h e fu tu re .

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SECTION V--CONCLUSION

The new technologies have been implemented s lowly i n t o t h e U.S. book d i s t r i b u t i o n process, genera l l y w e l l a f t e r they have found successfu l a p p l i - c a t i o n i n o the r businesses. However, t h e smal l s i z e o f the book i n d u s t r y has a l lowed i t t o compromise on standard formats and techniques, thereby p r o v i - ding many w i t h t h e a b i l i t y t o take advantage o f t he new technologies as they evolve and become a f fo rdab le .

The book i n d u s t r y i s s t i l l a l o n g way f r o m s o l v i n g many o f t h e problems Cheney i t e r a t e d i n 1931, but we see many areas o f d i s t r i b u t i o n where t h e new technologies can c rea te s i g n i f i c a n t improvements. We are a l s o i n a p e r i o d o f dramat ic change. D i s t r i b u t i o n has sur faced as an impor tan t concern o f t he book p u b l i s h i n g i ndus t r y , and innova t i ve app l i ca t i ons o f t h e new technologies a re e n t e r i n g t r i a l pe r iods as t h i s i s w r i t t e n .

When we ask da ta process ing execut ives i n t h e i ndus t r y , 'What i s on the ho r i zon f o r t h e fu tu re , ' we rece ive many. d i f f e r e n t answers. However, one th read runs through t h e i r responses. I t i s t h a t systems development i n the area o f book d i s t r i b u t i o n i s an on-going process whose so le purpose i s t o p rov ide b e t t e r , more cu r ren t i n f o r m a t i o n f o r b e t t e r business management. Since the new techno log ies h e l p t o make t h a t happen, a l l sectors o f t h e i n d u s t r y should b e n e f i t f rom improved book d i s t r i b u t i o n systems c a p a b i l i t i e s .

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APPENDIX A

LIST OF ABBREVIATIONS

AAP

ABA

ANS I

BAS

BISAC

B I S G

BOS

ISBN

MARC

NACS

OCLC

SAN

USPS

Assoc ia t ion o f American Pub l ishers

American Bookse l le rs Assoc ia t ion

American N a t i o n a l Standards I n s t i t u t e

Book A c q u i s i t i o n System

Book I n d u s t r y Systems Advisory Committee

Book I n d u s t r y S t u d y Group

Bookse l le rs Order Serv ice

I n t e r n a t i o n a l Standard Book Number

Machine Readable Cata loguing

N a t i o n a l Assoc ia t ion o f Col lege Stores

On- l ine Computer L i b r a r y Center

Standard Address Number

ü i i i t e d Sta tes P o s t a l Serv ice

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APPENDIX B

ORGANIZATIONS INTERVIEWED FOR THIS REPORT

The Baker & Taylor Co.

B a n t a m B o o k s Inc.

Brodard, Inc.

H o i t , R i n e h a r t & Winston

H o u g h t o n M i f f l i n Co.

I n g r a m Book Co.

McGraw H i l l Book Co.

PCS D a t a P r o c e s s i n g , Inc.

P r e n t i c e - H a l l , Inc.

Random House, I n c .

STC Sys tems , I nc .

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APPENDIX C

COMPANY

MERGERS AND ACQUISITIONS I N BOOK PUBLISHING

1962-1984

Har ry N. Abrams

Ace Books

A r b o r House

Bantam Books

Berkeley Books

R.R. Bowker

C h i l t o n Book Co.

T.Y. Crowel l

Del l /Delacor te

D i a l

Dodd, Mead

E.P. Dut ton

Esqu i re

Fawcett

Grosset & Dunlap

Ho l t , R inehar t & Winston

Jove ( fo rmer l y Pyramid)

L i p p i n c o t t

ACQUIRED BY, DATE

Times M i r r o r , 1965

Filmways, 1976; Putnam's, 1982

Hearst, 1978

N a t i o n a l General, 1968; Bertelsman, 1977

(51%) , 1980 (100%)

Putnam's, 1965; MCA-Universa'l, 1976

Xerox, 1968

ABC, 1979

Harper & Row 1977

Doubleday, 1976

D e l l , 1963

Nelson 1982

E l s e v i e r , 1975; Dyson, 1981

Simon & Schuster, 1983

CBS, 1977; Random House, 1982

N a t i o n a l General, 1968; Filmways, 1974;

Putnam's, 1982

CBS, 1967

Berkeley, 1979

Harper & Row 1978

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COMPANY ACQUIRED BY, DATE

L i t t l e , Brown

W i l l i a m Morrow

New American L i b r a r y

Playboy Press

Pocket Books

Popular L i b r a r y

G.P. Putnam's Sons

Pyramid Books

Random House

Simon & Schuster

V i k i n g

Time, Inc. , 1968

ScottForesman, 1966; Hearst, 1981

Times-Mirror, 1963: p r i v a t e group, 1984

Putnam's, 1982

Simon & Schuster, 1966

CBS, 1971; Warner, 1982 (now disbanded)

MCA-Universal, 1976

Harcour t Brace Jovanovich, 1975

RCA, 1966; Newhouse, 1980

G u l f & Western, 1975

Penguin, 1975

new technologies in book distribution: the united states experience

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