The Co-operative, which turns over more than £9 billion and has 3,300 stores, is re-engineering its supply chain following a review.
The review showed that too many small depots were handling inbound and store deliveries. Three separate networks existed; one for ambient goods, another for temperature-controlled, and a third for frozen. Delivery zones overlapped, some distribution routes were illogical and many warehouses lacked sufficient space. The flows were complex and stores were receiving a high frequency of ambient deliveries but few of chilled goods.
Trevor Ashworth, director of food retail logistics, says: “When you are dealing with small stores, it’s a disaster if the product isn’t available. You don’t have the luxury of offering the customer a range of brands when you have limited shelf space – the product is either there or it’s not. We knew that we were notching up a lot of unnecessary mileage with our deliveries and we had to find a way of fixing this problem while ensuring that product availability improved at the same time.”
The Co-op’s first move was to build a new national distribution centre in Coventry, which instantly gave each of the regional distribution centres 25 per cent more capacity. Following an evaluation that spanned several competing systems, the Co-op decided to adopt Manhattan Associates’ WMS for Open Systems.
The South East region, which was experiencing the largest number of problems, was selected as the pilot for the new network. A regional distribution centre was built at Thurrock, Essex to serve 700 stores handling almost 50 million cases per year. The RDC would be run by Manhattan’s WMS, which integrated with Vocollect voice technology supplied by Zetes. A plan to streamline the local network of warehouses was also put into action.
“The implementation went largely according to plan,” says Ashworth. “The fact that we invested sufficient time to the planning stage removed many of the obstacles that might have been encountered if we had attempted to rush things.”
Since the Thurrock warehouse opened, on-shelf availability has improved dramatically. “We are very pleased that the whole model that we originally envisioned is now in place,” says Ashworth.
“One of the great things about the Manhattan WMS is that it has allowed us to apply the same functionality across multiple product groups with different characteristics. We can pick for any combination of products, taking into account the need for security, temperature control or location, and be confident that we are handling everything correctly.”
“We’re expecting a fairly fast pay-back on the project; probably less than three years,” he says. “The South East used to be our worst-performing region; now it is our best.”