Distribution
Over the past four years, the Company has invested significant capital
in its systems and technology, by building new platforms, implementing new
software applications and opening a new distribution center. During September
1996 the Company opened a new state-of-the-art 344,000 square foot distribution
facility in South Brunswick, New Jersey. Historically, the Company replenished
through its distribution network some of its fast-moving frontlist titles and
bargain and self-published books and had the remaining inventory drop-shipped
directly to the stores from wholesalers and publishers. Significantly more
inventory is now sourced through the Company's new distribution center
increasing direct buying from publishers rather than wholesalers. Improved
just-in-time deliveries to stores and increased inventory turnover provide added
benefits.
In addition, the Company's distribution network provides a significant
competitive advantage for barnesandnoble.com. By stocking nearly 750,000 titles,
the Company is currently in a position to provide overnight delivery service to
online customers at gross margins which allow barnesandnoble.com to offer very
deep discounts.
Management Information and Control Systems
The Company has focused a majority of its information resources on
strategically positioning and implementing systems to support store operations,
merchandising and finance. The Company determined that an open-architecture
distributed computing environment would provide the flexibility needed in the
future and as a result a migration to a client server platform was initiated.
Building on the Company's previous proprietary inventory management
system, during 1996 the Company introduced a new client server store system
(BookMaster). BookMaster is an inventory management system with integrated point
of sale features that utilizes a proprietary data-warehouse-based replenishment
system. It enhances communications and real-time access to our network of
stores, distribution center and wholesalers. In addition, implementation of
just-in-time replenishment has provided for more rapid replenishment of books to
all Barnes & Noble stores, resulting in higher in-stock positions and better
productivity at the store level through efficiencies in receiving, cashiering
and returns processing. During the 52 weeks ending January 29, 2000 (fiscal 99),
the Company expects to complete installation of the BookMaster system.
The Company continues to implement systems to improve efficiencies in
back office processing in the human resources, finance and merchandising areas.
An offsite business recovery capability has been developed and implemented to
assure uninterrupted systems support.
It appears Barnes and Noble is able to sell five times the revenue of Amazon.com with only a 344,000 square foot distribution
facility in South Brunswick, New Jersey. Something appears wrong since Amazon.com needs 4 milllion or more square feet of distribution center.
Glenn |
