Akademibokhandeln is the leading bookseller in Sweden with 107 stores across the country and one online store. The company operates in a very challenging industry with almost 20% of its revenue coming from the major book-buying period of the year – the three weeks before Christmas. In addition, booksellers must forecast demand for a constant stream of new titles with no sales history. These two challenges combined put huge pressure on the bookseller’s supply chain.
Before working with RELEX, Akademibokhandeln had started to implement another system but called a halt to the project after realizing that the system could not deliver the anticipated benefits. Nor was the previous system able to provide centralized replenishment, a top priority for Akademibokhandeln. Tracking stock and placing orders was a time- and labour-intensive task, taking several people in each store a significant proportion of their working week. This was something that needed to be improved.
Akademibokhandeln decided to look for a new system. On top of their list of requirements were full centralization of its replenishment and closer and more effective control of the Christmas sales peak.
Tackling the Biggest Challenge First – Christmas
Akademibokhandeln wanted to easily and efficiently manage its entire Christmas season as well as handle all new book releases without risking their margins or their commitment to great customer service.
The project began in the autumn of 2014 with a five-store pilot. Akademibokhandeln wanted to test the system during its most important sales period – Christmas, before it made the decision to continue with RELEX.
“That was when RELEX really proved its worth,” says Anton Hellström, Supply Chain Manager at Akademibokhandeln and its subsidiary bokus.com. “Because the RELEX system is so agile and user friendly, we can easily adapt it ourselves to situations as they occur. With traditional systems, everything has to be specified in advance so it’s hard to quickly react when circumstances change.”
As the implementation progressed the system was optimized to set minimum batch quantities for orders, rather than handling single books at a time. RELEX automatically ensures that supplier value restrictions are met – reducing manual work that can otherwise be very time consuming. Products with low sales are automatically phased out of the assortment focusing inventory and sales on the top sellers. Ramp-downs were also fine-tuned to ensure that stock of titles would reduce to zero by their discontinuance dates.
This, combined with the ability to forecast sales of new titles, e.g. by automatically applying seasonal profiles, made a big impact on the business during the Christmas pilot. Akademibokhandeln was very pleased and decided to move forward. Safety stock levels still needed some fine-tuning as there were some instances of overstocking, but this was easily corrected the following season. By then Akademibokhandeln had already rolled out RELEX to all its stores.
The implementation went smoothly. The book chain’s own IT and supply chain staff contributed significantly to the project’s progress. “Our colleagues at Akademibokhandeln were open minded, very keen to master the system and responded quickly to every new challenge,” says Johanna Småros, CMO and Co-Founder of RELEX Solutions.
RELEX delivered on all of Akademibokhandeln’s goals. During the Christmas period availability increased by over 2 percentage points (pp) and during other periods by 1.5 pp. Akademibokhandeln now has a fully centralized forecasting and replenishment process for its stores operated from the central organization. Moreover, the Christmas season can now be managed effectively with improved availability of both new book releases and the regular assortment.
“With 20% of our annual sales occurring during a three-week period, from a supply chain perspective we face an extremely challenging and intensive time,” says Hellström. “It was during those three weeks that RELEX really showed us what they could do as a team and that their system could handle it. With RELEX we can be sure that our processes run smoothly.”
Akademibokhandeln wanted to make sure input from store managers and staff was continued, even after the process was centralized. In the bookstore sector, local product knowledge and enthusiasm is often outstanding. So, while everything is managed centrally, local staff can still pick titles to highlight and promote. This heightens the sense of engagement and helps stores retain their individual character and forge links with the local reading public.
Akademibokhandeln’s commitment to outstanding customer service has been helped considerably by the reduction in time staff spend on reordering. It now takes two persons a few hours per week rather than several people several hours each. The time saved has been refocused on customer service.