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Game Cos. Look to Video for Supply Chain Tips

11 Feb, 2009 By: Chris Tribbey

BURBANK, Calif. — When it comes to streamlining their supply chain and cutting down on their carbon footprint, the video game companies already owe a lot to their movie studio cousins.

“We have the benefit of heavy lifting from the studios,” said Bo Andersen, president and CEO of the Entertainment Merchants Association (EMA), which co-produced a one-day video game supply chain conference Feb. 11 with the Media & Entertainment Services Alliance. “The more we involve EMA in supply side issues … the more I’m convinced this is the right thing, the right time, the right economy for this attention.”

Replicators, distributors and retailers gathered together to discuss ways those in the video game business can be more efficient producing and delivering their product. And, as with the movie industry, the “going green” desires of No. 1 retailer Wal-Mart is what’s driving those in video games to reduce waste and, hopefully, save money.

“Wal-Mart was a key driver for us: be green but don’t affect our sales,” said Larry Wilk, green ambassador for DEG: The Digital Entertainment Group. The DEG spearheaded a Wal-Mart-requested green initiative by the studios in 2008. “With the exception of price, we really shared all our information [among the studios]. There’s a lot of open and honest communication. We talk about mistakes we’ve made. We talk about what worked and what didn’t.

The studios reduced the amount of paper they used for DVD inserts and the amount of resin used for Amaray cases. The video game industry is being asked by Wal-Mart to do the same thing with their cases, bringing down the amount of materials used in the cases by May, and again in October, according to Kyle Tanger, president of Clear Carbon Consulting.

“If you’re serious about doing this, you have to have a cross-industry task force,” Wilk said. “The same opportunity we’re talking about with DVDs exists in the video game business.”

Tanger added that it’s better for those in the video game industry to start addresses its carbon footprint now. “You’re going to get mandates if you don’t get in front of them,” Tanger said.

Sony DADC deals with video games, DVDs, Blu-ray Discs, CDs and more. If the company can streamline its supply chain, mused Paul Scott, EVP of Sony DADC, then it could create savings

“There’s opportunity on the front end with aggregators and rights holders working together,” he said, suggesting home video and game shipments to retailers could be coordinated. Scott also said the video game industry could do a better job pinpointing the number of units it needs for any certain title. “It’s not healthy if 30% of that product is coming back,” he said.

Mike Davis, VP of purchasing for Ingram Entertainment, said better-coordinated, front-end inventory management is crucial. “It’s our goal on a weekly basis to ship one box with their reorders and their new titles,” he said.

Chuck Hoar, EVP of business development for Nexpak, showed off cases for DVDs, video games and Sony’s UMD format, that are 20% lighter than traditional cases. Saving materials saves money, he said.

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