HORIZON INTERNATIONAL CASE STUDY
A major non-fiction book publisher

Our client, a major non-fiction book publisher, related to museum exhibitions, source from multiple printers located primarily in Hong Kong, Singapore and Italy. Books are required to support specific museum exhibitions and therefore timing is critical.

Customer Challenge:

Orders are placed to ensure that completion dates coincide. The orders are delivered to two US and one UK location. Deliveries must take place prior to the opening day of the exhibitions and need to be fulfilled using ocean freight transportation in order to minimise cost.

The challenge was made more complicated due to each printer using their own chosen freight carriers, leaving the Publisher with little or no visibility regarding shipment schedules, estimated arrival dates – and which freight forwarders were involved. This meant that they were unable to “chase” order information through the freight forwarder and simply had to “hope” that orders were on time.

Orders would often arrive damaged and given that the Incoterms were CIF, there would often be a disagreement about where the damage took place and who was liable.  The freight forwarders involved had no relationship with the client directly, therefore gave little support in resolving the damage issue. Their priority was to simply maximise yield in their containers – and pack as much freight as possible – regardless of risk of damage.

In addition, due to the CIF terms, often the chosen freight forwarders would apply high charges at destination over which the client had no control, which were payable before goods would be released.

 

‘Due to the high percentage of damage (66%), there were many occasions when replacement orders were sent by airfreight at great additional cost.’ 

Our Solution:

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  • It became clear very quickly during this consultation process that the primary root cause lay with the incoterms. CIF terms meant that the individual printers were able to nominate their own freight forwarders from origin. Horizon immediately recommended that the incoterms were changed to either FOB or Ex-Works; giving the client control of the freight forwarder nominations. This was the key to the solution.
  • Horizon’s supply chain experts produced a four-page shipping instruction, which the client sent to each printer when placing purchase orders. This guide included critical instructions that the printers had to follow when fulfilling orders, including –  Expected ship date, carton sizes, unit count per carton, types of pallets to be used, full local contact information for Horizon’s origin office and the maximum height and weight per pallet.
  • When purchase orders are placed with suppliers an electronic version (at ISBN/Quantity level) is imported into Horizon’s system, hiCloud – triggering our local office at origin to commence liaison with the respective printers and thereby keep the client abreast of production schedules / goods ready dates and any issues – enabling the client to identify potential problems and manage by exception.
  • With greater visibility and control over the orders, through hiCloud, the publisher was able to combine multiple orders from multiple printers and ship as a single consignment, further reducing costs.
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Customer Benefit: 

  • The client is now in full control of the freight terms and costs allowing them to reduce direct freight spend by 28%.
  • Insurance was arranged by the client directly for large value consignments and through Horizon for general low value orders. This served to simplify the claims process and avoid disputes with printers. With Horizon managing the freight forwarding elements from printer door to final mile delivery, damage was reduced significantly, with 98% of orders arriving in perfect condition compared with 66% previously.
  • The requirement to air freight orders at significant costs has reduced to almost zero, with the exception of advanced proof copies. 100% of bulk orders now move by ocean.

The communication challenges that the client experienced through trying to manage orders through multiple freight forwarders has disappeared. Horizon International assigned a dedicated customer service manager who is responsible for coordinating all orders and communicating with the client. This has served to significantly reduce the time, effort and stress required to manage their supply chain.

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