DEG Research Finds Opportunities To Improve Supply Chain Efficincies

Industry-Wide Study First Ever to Include All Studios and Retailers [The following is a release from the Digital Entertainment Group]

March 18, 2008

DEG: The Digital Entertainment Group released findings from its industry-wide assessment of the entertainment supply chain study analyzing the last 100 feet of retail execution. The research study, the first of its kind bringing together the entire home entertainment industry, included participation from all major home entertainment studios and key retailers and merchandisers in an effort to reduce supply chain inefficiencies. Capgemini global consulting and Teradata worked together with the DEG Operations Committee and completed the proprietary study in November 2007. Studios that participated in the study include Image Entertainment, Lionsgate, Paramount Home Entertainment, Sony Pictures Home Entertainment, Twentieth Century Fox Home Entertainment, Universal Studios Home Entertainment, Walt Disney Studios Home Entertainment, Warner Home Video. Additional input was received from key retailers and merchandisers. The study, which focused on data synchronization and retail execution, revealed several opportunities for improving the DVD supply chain. Results showed numerous opportunities to improve the relationship between retailers and the studios, as well as enhance the purchasing experience of consumers. “This study reveals a rich and candid assessment of the home entertainment supply chain,” said Bill Segil, Vice Chair DEG Operations Committee and Senior Vice President, Worldwide Operations, Walt Disney Studios Home Entertainment. “We are proud that the home entertainment industry worked together to study this critical component of our supply chain. The study showed that optimizing the supply chain provides for an industry-wide benefit.” The study consisted of in-depth interviews across the senior management of the studios’ home entertainment divisions. The DEG Operations Committee was specifically asked questions regarding the strengths and weaknesses of their individual supply chain, their working relationship with the various retailers and merchandisers in scope, and their perspective on industry trends and concerns. Capgemini then conducted operational interviews within the studios to uncover details around the studios’ challenges with the DVD supply chain. Following the interviews, Capgemini spoke with key retailers and merchandisers on a variety of topics and critical issues related to retail execution and data synchronization. Solutions to these issues include encouraging 100 percent usage of Advanced Shipment Notices (ASNs) by retailers to improve on-hand inventory accuracy and upgrade forecasting. The most critical finding delved into solving problems at the last 100 feet of retail execution, which will be further explored in the near future. “It is crucial to the success of the entertainment supply chain to promote open dialogue between studios and retailers,” said John Quinn, Chair DEG Operations Committee and Executive Vice President, Worldwide Operations, Warner Bros. Interactive Entertainment Group. “This study was the first step in identifying problem areas and working together to solve them. We are grateful to our retail partners for their open participation in this important study which we believe will lead to improvements in supply chain efficiency.” Next, the DEG Operations Committee is engaging further review of the study to uncover additional means for improving the entertainment supply chain. For more information on the study, please contact the DEG. “The substantial level of support received from the studios, merchandisers and retailers underscored the significant value in conducting the industry-wide study,” said Theodore X. Garcia, Strategy and Transformation Lead, Media and Entertainment, Capgemini. “We were delighted to be part of such a groundbreaking initiative that brought forthright perspective on the issues impacting the DVD supply chain.”

Read More: