High street retailer Clarks started out as a manufacturer of shoes in the UK, and at one time had about 30 factories of its own dotted around the South-west and North-west of England…
Clarks is now very much a retail-focused organisation as opposed to being a manufacturer. This change in corporate strategy has resulted in the logistics operation having to be more dynamic.
The bulk of Clarks products are now sourced and shipped from China, Vietnam, India and Brazil. There is also a sourcing operation from Europe with the shoes coming overland, mainly from Italy and Romania. But, says Clarks logistics director Richard Forde, the emphasis is very much on the Far East.
He says: “That will continue to be the case in terms of sourcing and there is the opportunity to sell our shoes there as well. There are a lot of feet in China, and also in developing areas such as India and the Far East in general.”
This change from being a manufacturer to outsourcing production has taken place over the past ten years, and has had a profound effect on the company’s logistics operations. Forde explains: “We had one old distribution centre which was at the mercy of the outputs of 30 UK factories. Now, we have got to be more dynamic because we’re getting container loads of shoes in on an hourly basis from around the world .”
The containers predominantly arrive in Southampton, although Clarks does also use Bristol to a limited extent.
The company’s distribution operation is based at Street, Somerset where it currently has two distribution centres adjacent to each other. The old complex comprises four buildings – aged between 25 and 50 years – which were set and designed to receive regular drip feeds daily. Forde comments: “From a capacity point of view and supporting this change from a technology and infrastructure point of view, the facility wasn’t going to cope with the demands of the business going forward.”
Immediately next door, is Clarks’ new £50M pride and joy – Westway, a 28,000sq m facility which has the capacity to hold six million pairs of shoes and will be capable of despatching 200,000 pairs a day. Westway, built by construction company Pearce, is designed to be a “cartoning” operation and will be a 24 hours a day, five days a week operation.
Forde explains: “All the cartons that come out of the Far East will go into a high density storage area. Twenty-five fully automated cranes collect cartons, put them away, locate them, remember where they are and fetch them when they are needed. That is quite a big change.”
Knapp has been responsible for installing the materials handling equipment which, in addition to the stacker cranes, includes conveyors and a Beumer double-deck sorter.
The building is essentially split into two sections – the East side and the West side. The East side where the cartons arrive comprises highbay racking with 500,000 carton locations. These are dealt with by the crane stackers, saving employees’ shoe wear as they do not have to walk the 2.9km aisles! It takes less than 60 seconds to retrieve a carton from the furthest location.
Two mezzanine floors, supplied by the Mezzanine Floor Company, help interface the carton live storage, shelving and picking techniques. A large sorter features on the ground floor to sort shoes boxes into customer orders.
The West side is essentially the pick and sort area, featuring the two mezzanine floors at 6m and 9m. Below the floors, which contain 4.4km of picking bins, is the new sorter featuring 600 chutes in a continuous loop.
The warehouse management system in use was supplied by Manhattan. Clarks has used Stow Storage flow racking to aid replenishment. It also specially designed blue totes, produced by Strongs, which feature false floors to help with the shrink-wrapping process.
One major change being introduced at the new centre concerns picking. Unlike the old facility where picking is done using “pieces of paper”, Intermec radio frequency guns are the favoured picking method for Westway. “That Clarks at a glance
- It has 532 shops in the UK and 450 wholesale customers.
- The company’s international customers number 5,000.
- Its international growth projection is 15-20% a year.
- It is owned by the Clark family and employee shareholders.
- Group turnover is £955M a year.
- Volumes despatched from the UK total 29.5 million pairs for the UK and Europe.
- Clarks North America sells 10.8 million pairs.
Clarks also ships 1.5 million pairs direct ex-works to customers.maybe old hat for the industry, but it’s revolutionary here. With that will come some cultural and behavioural challenges for staff,” says Forde.
Clarks’ distribution operation has a very low turnover rate – the company is the largest employer in the Street area. “Clarks is Street and we’ve been here since about 1825.”
With a manufacturing facility in the North-west, some people may find it strange that Clarks has built a new distribution centre in the South-west rather than being in the Birmingham triangle. “Because of our level of industrial relations that we have here, and we’ve been able to modernise and stabilise that, there are certain advantages in the labour pool here as opposed to our perceived disadvantages of not being in the triangle up there,” responds Forde.
More than half of the company’s UK outbound distribution is handled by TNT. Another carrier, Target, handles deliveries to Scotland and Ireland.
The new centre will serve the UK, Europe, Middle East and other global locations excluding the US, where Clarks has a separate distribution operation. Forde says that sometime in the future the company will probably look at having a regional distribution facility in the Far East. This facility has already been dubbed “Eastway”, jokes Forde.
As Westway is in an urban setting, Clarks has spent more than £20M alone on the building’s shell to make it “aesthetically pleasing”. Once the facility is fully operational, the old site will be demolished to make way for local housing.
The change over, which is already happening, will not be complete before the end of this year – Forde and his team want to make sure all teething problems are ironed out first.
The initial strategy is for mens products to switch to Westway first. If all goes well, the kids division’s products will be added after September 2005 – that is when the seasonal demand for children’s footwear finishes. The women’s products will then be added later.
The last operation to transfer to Westway will be the Ravel products, which are distributed by a third-party logistics operator in London.
In addition to footwear, Westway will also cater for accessories, such as handbags.
The potential cost savings have yet to be realised but Forde says an initial major benefit between the old and the new is that the number of times a carton is handled has been halved to just six.