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Books provided for kids
in Canadian schools
A lot has changed in the retail book industry since 1997, when Indigo Books & Music Inc. opened its first superstore. To get the speed and flexibility needed to support its evolving strategy and product mix, Indigo kicked off a major supply chain redesign project, both in-store and online. With SAP EWM, Indigo’s supply chain can now handle double the sales volume at a much lower cost.
Indigo Books and Music Inc.
CAD 934 million (USD 909.7 million)
SAP Extended Warehouse Management (SAP EWM)
Headquartered in Toronto, Ontario, Indigo is Canada’s largest book, gift, and specialty toy retailer. Its more than 6,500 employees operate over 235 physical stores across the country, and its popular website offers millions of products including books, e-books, toys, stationery, home décor, gourmet confections, music CDs, DVDs, and more.
Indigo’s large retail stores average 24,000 square feet and are designed to be culture-seeking, inspiring destinations for browsing and community-building, while its smaller stores – conveniently situated in shopping centers, street-front stores, airports, and central business districts – provide a more targeted selection of goods.
As the world’s authors, publishers, book retailers, and electronics manufacturers jockey for space and attention in the digital world, Indigo remains focused on its core business.
By optimizing its core books business and diversifying its product set and stores, Indigo ensures a well-rounded strategy for the future.
Indigo’s supply chain was optimized for books, which made handling a new and diverse set of products difficult. Indigo also had data integrity issues and inventory wasn’t always accurate – serious problems for a business that promises next day shipping to customers.
Meeting the new growth challenges.
Indigo needed new warehouse management software that could handle its business requirements and fit well within its existing application architecture. After detailed business and technical requirements were ironed out, Indigo performed a careful evaluation of the top warehouse management systems for retail.
Committing to goals and creating carefully laid plans.
Due to the scale and complexity of the supply chain redesign, and unique needs of the company’s in-store and online channels, the project was divided into two phases.
First up was the online channel, supporting Indigo’s direct-to-consumer business. At go-live it included a completely new warehouse, running SAP EWM and basic material handling equipment.
The second phase supported Indigo’s physical “bricks and mortar” business. This channel required a more sophisticated material handling equipment solution – including put-to-light and conveyers, and special functionality for pick-to-store radio frequency screen flows, multiple-inners, and put-to-light integration.
Internal user testing and training was conducted by the SAP Services organization for greater self-sufficiency with post-implementation issue resolution and maintenance.
Indigo was pleased with the implementation support SAP Services provided over the lifespan of the project. SAP lived up to its commitment to be a long-term partner and put Indigo’s success first. Whenever Indigo encountered technical challenges or complexities, SAP was able to leverage its worldwide expertise to solve the issues.
With phase one completion, Indigo was able to up the stock keeping unit (SKU) count in its warehouse, reducing its reliance on wholesalers and improving margins. The company could also handle significantly higher daily pick volumes during peak periods allowing it to lean into marketing and discounts much more than it could before, to drive higher sales and grow the business.
Completion of phase two enabled Indigo to pick more units at a lower cost. In a time of transformation, driving those savings to the bottom line is key for the health of the business.
With SAP EWM in place for its online and in-store operations, Indigo feels its supply chain is now best-in-class and fully capable of supporting its business both effectively and efficiently. The upgrade to its warehouse systems and processes is not only saving the company time and money, but also delivering the speed and flexibility needed to handle an evolving merchandise mix.