BoLS logo Tabletop, RPGs & Pop Culture
Advertisement

Games Workshop and the Ugly Inventory

6 Minute Read
Jul 11 2015
Advertisement

Business-report-analysis-960x645

Where did Finecast go? No more rulebooks for Fantasy? What’s going on?

Hey guys, Dr. Bored here with a little editorial on a business term: Inventory.

Inventory, simply, is how much junk you got sitting around. If you took Inventory of your room, you’d probably find your computer (or other digital device you’re reading this on), your clothes, your most personal possessions, your bed, your night stand, your drink beside you, the dressers and shelves and books, and even the curtains hanging over the window. Your stuff, your Inventory, is, hopefully, right where you want it. You’ve got it clean and organized (and if you don’t, mum wont be too happy), and you’re satisfied that if you need something, you’ll know where to find it.

For all intents and purposes, your Inventory is pretty static. You won’t be trying to sell your bed or your dressers, or move your books or computer any time soon. Ideally, it’s going to stay where it is, in your comfort zone.

Blood-20Angels-20Chaplain-20with-20highlightsCan’t get up…Too Comfortable

Businesses don’t have comfort zones. For a company, Inventory means a lot of things. It’s the stickers they use on envelopes, the pens they buy in bulk because they keep disappearing, the paper, and the printers that they feed it to, and the ink those printers use. It’s also their product. If you’re a pizza company, your product would include boxes upon boxes of pepperoni, cheese, sauce, and dough. You’d have a large inventory of sausage, bacon, and things like peppers and mushrooms, and smaller inventories of things like pineapple, and one small shelf devoted to the ‘anchovies’ inventory. You’d want all of that product OUT of your Inventory, and INTO people’s stomachs, so that YOU can get MONEY. A pizza businesses’ inventory is going to be LIQUID, and by that I don’t mean literal liquid. Pepperoni doesn’t come in the form of a paste (yet), but I mean that it flows.

It moves fluidly and easily.

pour-2-lee-pic-internetI’m SOOO liquid

Advertisement

Now that you understand what Inventory is, hopefully you’ll understand that GW doesn’t have a fluid Inventory. Where they wish they could be regular and fluid, taking their fiber every morning to have a nice, reliable egestion into the shopping bags of their customers, their product, by its nature, makes their morning routine more that of a man who eats hamburgers for breakfast and likes their dinner steak cooked rare and with a side of deep fried chicken wings. It’s a painful, halting experience.

So it’s time to cut the fat. Instead of carrying around that big belly, full of Inventory every day, Games Workshop has been exercising. They’re reducing Inventory.

We’ve seen this for the past couple of years as metal models faded away, and Finecast came and went. The evolution from metal, to finecast, to plastic character clampacks helps Games Workshop reduce their material Inventory. That is, they now have less metal and finecast resin to worry about, and can streamline their production lines by using the same type of plastic across as many models as possible. There are actually a lot of benefits to this move, not just in reducing their Inventory, but in streamlining their business process.

Think about it from an office-person’s perspective. If you’re the guy in charge of ordering materials from other businesses, isn’t your job easier if you only have to order ONE material? That means you can take on responsibilities in other areas, which makes for more efficient staff. Having only one type of model material makes a cleaner factory too. Instead of having different lanes for different materials, your whole factory just runs on one input, and one output. It’s smoother, easier, with fewer mistakes and less clutter. Smoother business, less clutter… sounds like a dream scenario, doesn’t it? The fact of the matter is that it’s what every business strives for. Few get it. According to a friend, even the big soda companies have whole warehouses devoted to recycling messed up batches.

simple-vs-complexIt makes sense!

And then there’s this business with the Age of Sigmar. No big rulebook (yet)? No army books (that we’ve seen)? All the rules printed and put into the individual model boxes (or free online)? Holy smokes! What a move! New players might actually get into this!

But it’s not just a sales ploy. Games Workshop MUST have a heavy Inventory of unbought books. Let’s consider for a moment.

Advertisement

When a new hardback Codex has come out for 40k, how many times have you been to your Friendly Local Gaming Store and seen the older version of that Codex sitting on the shelf, dejected? How long has it sat there? Does your store’s manager try to sell it at a discount, or do they try to ship it back to GW? Not only do those old books sit in the store’s Inventory of games and boxes and books, but they also sit in Games Workshop’s Inventory. Boxes of old paperback Codices that don’t move, that CANT move because there’s no demand for them.

Sure, they can recycle the material, but the cost of MAKING them, of paying the distributor for the ink and paying the factory to print them and bind them, of paying the shipping companies to move those books all across the country, the world, only to come back to the distributor for recycling… all of that costs money. GW’s money. How do they get that money back? Well, by factoring that Loss into the prices of their product. If they can expect that X Thousand of books won’t be sold because of the new Codex coming out, they can calculate what they need to charge for the new Codex in order to make back that loss (which might be why the Adeptus Mechanicus books were so cheap compared to others: there was no Codex for them to replace, and therefore no Loss calculated into the price).

CodexCultMechCult Mechanicus, First of His Name

 

Though, in an ideal world, the loss wouldn’t be there in the first place.

So you have GW’s move to remove the army books from the equation all together.

With no fat army books, there’s no (future) unsold Inventory. There’s less shelf space that the product needs, less room in the warehouses, less staff to move things around. There’s less paper that needs to be bought, less ink, fewer types of materials, and less of the more common materials. Their Inventory becomes smaller. MUCH smaller. Games Workshop is also making rules for all previous models free, online. How good is that? It’s amazing for the customer, but even better for GW. You no longer have a reason NOT to buy that cool-looking model if you know what the rules are, and can get those rules FOR FREE. That keeps all those old models moving as new players find the models and rules that they like, and go and buy them.

Now, I’m not going to try to put a positive spin on this and make the outlandish claim that this means that GW’s savings will be transferred onto you in the form of lower prices. GW’s financials have wrapped up for this financial year, and they’re moving into a new, very critical year. If Fantasy becomes a flop, then their Inventory is going to swell again with unsold Fantasy models, and the recovery from that will not be pretty.

kenny-rogers-gamblerHold’em or Fold’em?! That IS the question!

Advertisement

My amateur prediction is that Games Workshop is going to do their darndest with Fantasy to move as many models as possible over the next fiscal year. Between formations, war scrolls, bundle deals, and who knows what else, it will be very important for Games Workshop to find ways of moving product that they already have, so that they can continue to make more of the new stuff, keeping their Inventory fluid.

I hope this was educational for you! How do you feel about this practice of removing the big expensive army books from the equation? What do you think will be coming down the pipe? Let us know in the comments!

Avatar
Author:
Advertisement
  • Editorial: Why I'm Excited for Age of Sigmar