Waste management

While it’s the circulation figures that get the most attention, the regional press faces another important issue – wastage in the supply chain. For every ten copies sold, one is wasted – and that’s a conservative estimate.

Alan Brown, distribution director for the Manchester Evening News, points out that, "as circulations have reduced, so the percentage of unsold copies goes up." It’s now an increasing problem for many publishers – he believes most regionals have seen wastage increase over the last few years.

Russell Borthwick, managing director of consultancy Press Ahead, puts some numbers on this. "If you take a typical evening title," he says, "we’d be looking for something like 85% availability on 10% returns. On a regional morning paper, perhaps you might have 15% returns with 80% availability." That’s quite a significant number and represents cost that can't be recovered by the publisher (in most cases).

The mission, then, appears simple; reduce wastage, by whatever means necessary. But that’s not easy – because wastage rates have to be balanced against availability. If a retailer sells out of the paper, tight supply management could actually help to reduce sales – a real own goal in an industry that’s already having to manage with a long trend of declining circulation.

Alan Brown says, "It’s a balance between having availability at a reasonable level, and wastage – ideally you run out as the last one is sold, but of course that never actually happens." So striking the right balance is difficult.

Lynne Anderson of the Newspaper Society says that a couple of years ago, a number of publishers were interested in reducing returns, and announced programmes to cut waste. Northcliffe, for instance, started to roll out a waste management system at Stoke and Leicester, and Trinity Mirror announced a supply chain review for the regionals in its 2004 annual report, with a particular focus on improving circulation management and copy allocation.

Returns policies

Returns policies are one area where regional newspapers can tighten up. Philip Preston, director of marketing at Archant Norfolk, prefers returns allowances as a way of managing returns, rather than having a hundred percent sale or return policy.

"Each agent or retailer has a set allowance per week," he says. "The level we set depends on how volatile sales are for their particular outlet." For instance, a newsagent with a large percentage of home delivery will have a lower allowance than one where most of the sales are casual.

The big advantage of returns allowances is that risk is shared between the retailer and the publisher. That encourages retailers to manage their inventory more actively. And a recent survey by Archant Norfolk showed that retailers are happy with the way the system is working.

Russell Borthwick says, "There’s a mix of arrangements with retailers" among the regional press. Like Philip Preston, he believes returns allowances are a good way to manage supply, but he questions how much control retailers have over allocation. And, if the publisher is entirely responsible for managing copy allocation, how can the retailers be asked to share the risk?

And he also warns that with the returns allowance system, "you can end up with a bogus sale" when copies above the allocation go on the ABC certificate as sales.

Delivery times

Lynne Anderson says, "Regionals have been trying to hit earlier delivery times," bringing printing forward. In many cases, evening papers have also cut the number of editions.

Philip Preston explains that Archant’s research showed how "these days, people don't expect the evening paper to be a source of breaking news – it’s a source of local news." That was the reasoning behind the decision to move from two editions to a single edition of the Evening News. However, the five geographical editions remain – emphasising the paper’s local qualities. For breaking news, the Evening News now uses the website.

Philip Preston admits that Archant saw some disruption from the move to a new press, though "touch wood, it’s got much better". Tight operational control is a must – if the print run is late, distribution will suffer. "Time of delivery is absolutely crucial for an evening paper," he warns, "though on the morning papers you have a bit more time to play with."

The Evening News had already seen printing brought forward from 11.30 to 10.30 when the single edition was brought in eighteen months ago, cutting out the ‘final’ with its 2pm print run. Now, the company is moving another hour earlier to 9.30.

"We can then distribute to all our outlets in a single run," Philip Preston says, saving Archant money. "And, instead of the last drop being half past three, we’ll have it all done by half past one."

Cumbrian Newspapers also found the timing of distribution had to change. In depth research showed that different outlets needed different distribution – for instance, outlets near schools needed delivery not later than two in the afternoon to get the papers on sale in time to reach parents picking their children up. That meant the Friday paper had to go to press an hour earlier.

Alan Brown says morning papers are less crucial from the retailer’s point of view, as people have the choice of buying other national papers - but "in the afternoon, we’re the only game in town, so they don't want to sell out." Getting availability right is therefore crucial for evening papers.

"We’ve got a very, very limited shelf life," he says. "If you’re arriving at one o’clock in the afternoon you’ve only got a few hours to sell. You need to control your numbers, because if you get it wrong you have nowhere to go."

Russell Borthwick, however, warns that some newspapers which retain multiple editions may be working on inadequate information. "Availability measures are skewed by the average between editions in evening papers," he explains. For instance, if the first two editions sell out, but there are 20 returns of the final, aggregate figures would show the paper as being available all afternoon. "On many systems, that would show as availability, but in fact you had three hours of outage. Your systems may not allow you to gather the complexity of information that you actually need." That’s where cutting editions makes the job of distribution very much easier from a management point of view.

Delivery routes

While print times are important, the operational details of distribution are also critical. Alan Brown says that MEN changed all its route systems last September. "We were trying to identify where was the best place to go first, and the best place to go last." He says suburban retailers aren't time sensitive - "though you have to get there before schools come out" - but the city centre needs to have copies ready on the shelves for lunchtime.

He thinks MEN did a good job on the routes – but complains the work is never finished. Currently, repairs on the tram routes to Altrincham and Bury have disrupted the traffic system, so it’s all change again for MEN’s drivers.

Cumbrian also rearranged its routes to give priority to particular customers, including newsagents near schools, who were particularly time-sensitive. Others would be bypassed even if they were on the route – increasing van miles, but decreasing the time taken to get to the most critical outlets and those that are promoting the newspapers best.

A good relationship with key retailers will help the distribution chain run more smoothly. Alan Brown says, "You can't beat a good retailer; many are very clued up. But of course they don't know about particular stories, so we will send them extras and let them know what we’re doing."

Box-outs

Managing box-outs for retailers has usually been done on the basis of judgment, rather than using automated systems. Experienced staff should have a good feeling for how a particular story will translate into extra sales. Philip Preston says Archant has decided not to automate the system, but claims that, "we can allocate extra copies quite precisely. We can even just box out to a single retailer if a story is very local in appeal."

Russell Borthwick says there are now a number of systems on the market that will help to set box-out numbers. These can be quite sophisticated; "some publishers have classification systems showing the agents’ responsiveness to certain types of stories," he says. The aim is obviously to place the extra copies where they’re most likely to sell. But, despite what he calls "a large element of attempted science," he believes human judgment is still the critical factor in making the right decision.

Alan Brown points out that only the newspaper can micro-manage copy allocation on the basis of individual stories – it’s something a wholesaler can't do. "We’ll know what the lead stories are going to be for the overnight," he says; "You get a feel for how you think a particular story will be." Where software has a part to play, he believes, is in providing historical data for comparison.

For instance, at the start of the football season, MEN can drill down to shop level to see how football stories will do. While Manchester United has a wide appeal, Manchester City tends to have "little pockets within the city." And he says management can be fine tuned very closely - "You can allocate copies by postcode, delivery, retailer, even just to lottery outlets."

From Alan Brown’s point of view, the more you know about your retailers, the better. But, he says, just having that knowledge in your head isn't enough; that information needs to be fed into the system. For instance, the split between casual sales and home delivery needs to be kept up to date, so that box-out percentages are only based on the casual sales figure.

"You need as much information on your retailers as you can get," he says - "and even so, at the end of the day it’s always a judgment call." MEN uses Denham Nash / MGB Systems software to help in the process, but the final decision rests with the sales team – it’s not automated.

This emphasis on individual judgment may be one reason why many regionals steer clear of wholesalers’ copy allocation services, despite the large investment wholesalers have made in distribution management software.

Archant, for instance, distributes both its Norwich papers direct. MEN distributes direct in its core area, and uses wholesalers outside that area – but even when using wholesalers, manages its copy allocation in-house.

Philip Preston believes that just as local editions are crucial to maximising circulation, local knowledge is important in distributing the paper. "You still need the experts and their knowledge of the marketplace."

And Russell Borthwick notes that as well as lacking that very specific local knowledge, wholesalers have limited time to spend on an individual title. "Regardless of the kit, if the person operating it hasn't got the feel of the marketplace, and if they’re torn between 12 different titles, how much focus can you get?"

Is waste a priority?

There’s no doubt that regional newspapers are aware of the need to tighten up their distribution chain. But Russell Borthwick says that it’s gone a bit quiet. "Northcliffe, for instance, talked up the virtues of this new piece of software that they had, but it’s all gone a bit quiet now. I don't know whether it’s gone on the ‘too difficult’ pile or whether the focus has moved."

Lynne Anderson too wonders if the issues have been shelved. "All the local newspaper groups looked at it," she says, "but it hasn't been followed up. We did have a special meeting on this a couple of years ago, but people have gone their own way."

Was it all too difficult? Talking to circulation managers doesn't give that impression. Certainly, if Cumbrian, Archant and MEN are representative of a trend, it’s been a trend to fewer editions, revised routes, earlier print and distribution times, and tighter management all round. But it’s not been a revolution – it’s been a process of gradual, often quite small, changes.

But Russell Borthwick also suggests another reason why the war on waste might not be hitting the headlines; because the big battles are being fought elsewhere. He believes newspapers "may have found this whole copy allocation thing marginal" compared to trying to boost circulations. "There’s no point trying to move micro percentage around if your circulation’s going down by 5% percent a year," he says. And if tightening up on copies means lower availability, it’s never going to work.