Publisher turns over new leaf in book distribution technology

Europe’s most advanced book distribution centre has opened in Didcot following a multi-million-pound investment from one of the UK’s biggest book publishers. We meet the team that pulled it off

Not everything is going digital. Printed books are enjoying something of a renaissance. Research by Kantar Worldwide reveals that nearly 40 per cent of the UK population bought a printed book in the last year. Just 10 per cent purchased an eBook.

Could the traditional book be winning out as the best technology for delivering the printed word? It’s robust, doesn’t need charging up and it’s not the end of the world if you drop it in the bath (you mean you don’t read in the tub?).

But while eBooks do not sell as many as they once did, there is no denying that volumes of printed books are down around 30-40 per cent over the last decade, thanks to the development of online retailing and just-in-time supply.

Matt Wright, Chief Executive at Hachette UK Distribution, part of one of the UK’s biggest publishers Hachette UK, says that bulk supplies are increasingly going direct from printers to bookstores, cutting the distributor out of the supply chain.

So why has Hachette UK spent tens of millions of pounds building a new distribution centre at Didcot?

There are opportunities. Books are now sold in more retailers than before, from supermarkets to fashion stores, albeit in smaller quantities.

Retailers such as ASOS and Urban Outfitters take titles relevant to their market rather than dedicating retail space to a book section, often promoting them as gifts.

But most distributors are hampered by old computer systems, with out-of-date warehousing which doesn’t meet the demand for smaller orders going out to more customers.

All the big publishers have distribution arms, said Matt. “Our view is that not all of them will be committed long-term because the volume has been taken out of the market and they don’t see distribution as core to their business, which we do.”

“It’s about getting our books to market. We have more than 100,000 unique titles and distribute books published by our parent company, Hachette UK, and also for our growing stable of other publishers”

Jo Westbrook, Chief Operating Officer at Hachette UK Distribution, added: “It’s about getting our books to market. We have more than 100,000 unique titles and distribute books published by our parent company, Hachette UK. We also distribute for a growing stable of other publishers.

“We needed to invest big or not at all and investing small didn’t stack up as a business case. We couldn’t continue as we were, because staying the same wasn’t a cost neutral option.”

Hachette UK Distribution provides comprehensive distribution services to more than 25 publishers, many of which are outside the Hachette UK group, and its amazing new distribution centre sits in the shadow of Didcot Power Station’s remaining cooling towers.

The new centre (think Heathrow Terminal 5 in size – and the centre’s main distribution system doesn’t look unlike an airport’s luggage conveyor system), can distribute 65 million books a year. The company currently supplies one in four of all books sold in the UK and its ambition is to deliver one in two.

The huge 30-aisle centre has a bulk packing area for 28 million books, two miles of conveyors and shuttles, and the shuttle system can handle four million books. State-of-the-art is a widely overused phrase, but in this case the description is bang on the money.

Sophisticated technology drives seamless delivery

Watching the book crates whizz around on shuttles carrying individual orders, I admire the sophisticated technology which oils the system’s wheels.

Hachette UK Distribution runs on SAP enterprise resource planning software, from book ordering, sorting and delivery right through to paying royalties to authors when their books have been sold.

Implementing the IT system wasn’t easy, admitted Matt. “We could see the warehouse being built and the automation going in. We could test the results. Developing bespoke IT systems was a real challenge.

“However, our key project managers had 100 years of cumulative experience in the book distribution sector. They understood what our systems couldn’t do, what we needed them to do and worked with our consultants to build and rigorously test the technology.”

Having nursed the entire project from the beginning, Matt and Jo watched nervously when the system launched – Jo especially as she is responsible for Didcot’s warehouse operations, client and customer services.

“The first day we processed 3,000 books. Today we will process around 160,000,” she said.

Hachette UK Distribution currently has around 10,000 customers, of which Amazon is the largest.

The company employs 350 people at Didcot. Half of them work in the offices, processing and undertaking credit control. That includes non-physical distribution too. Sales of eBooks still have to be processed and their authors paid, and Hachette UK Distribution does this on behalf of all its publishers.

This is the largest capital project in which its parent company, Hachette Livre, has ever invested – outside of acquisition. The French-headquartered publishing behemoth, established in 1826, is the world’s second largest trade and educational publisher, with interests across the world. Hachette UK owns a number of publishing companies including Headline, Hodder & Stoughton, John Murray Press, Quercus, Little, Brown Book Group, Orion and Hachette Children’s Group.

The future of book sales

Book sales are not likely to rise significantly overall, but sales in niche sectors are rising. There is an increase in children’s book sales and more people are buying books as gifts – and are willing to pay a premium.

Hachette also exports across the world as the appetite for English language books grows. Inspirational books, such as the Steve Jobs biography, and those of international sports stars, sell very well.

Some books don’t even need an author, just a creative idea and good designers to bring them to fruition.

Hachette UK’s forklift drivers need a head for heights

The 25-metre-high distribution centre covers 242,000 square feet – the size of six football pitches. It has 35,000 bulk locations and can despatch 65 million books. The 150,000 titles in stock are distributed via two miles of conveyors and 118 shuttles.

The distribution centre is light and airy – a lovely environment. That’s been done on purpose, said Jo. Attracting employees is a challenge and having an attractive working environment is really important.

“In the old days people would have walked to collect individual books,” she explained. “Everything here is systemised apart from checking the books in and packing individual orders. The books come to the packer by a conveyor belt.”

Books come in from all over the world (Most highly coloured printed books come from China, and a few from Italy. Only black and white books are printed in the UK). The Hachette team check, weigh and take a photograph of them to use in the picking process. They are also measured for carton calculations.

The books are stored in the centre’s rather epic 13-storey high bulk storage system – the highest racking accessible by a forklift. truck. And the forklift drivers have to have a head for heights as they lean out of their forklift to pick individual books.

Imagine being 13 storeys high to pick a Mary Berry cookbook? Obviously, it’s safe, and the drivers get used to it.

Elsewhere, systemised shuttle cars lit up with red LED lights whizz around like a computer game, picking from totes full of books and offloading them carefully on to conveyors.

This is book distribution for the 21st century and beyond.