£33.7 million multi-channel deal for House of Fraser

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House of Fraser has chosen DHL Supply Chain for a £33.7 million multi-channel contract that extends an existing relationship with the addition of the retailer’s e-commerce business and recently launched wedding list service, both of which were awarded to DHL’s specialist fashion unit in March 2009. The new contract runs to 2012.

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DHL has worked for House of Fraser for six years providing a platform to support a multi-channel strategy. The companies worked together to create an e-commerce solution that was incorporated into House of Fraser’s supply chain operations for its 63 UK and Irish stores. Target service levels were achieved immediately from the on-line go-live date of 2 March 2009, plus 99.8 per cent of first time consumer deliveries.

House of Fraser’s supply chain director Mark Holland said, “DHL’s existing knowledge and understanding of our business enabled them to deliver a strong multi-channel solution to a demanding deadline with no disruption to this key part of our business.”

The integrated solution used existing warehouse and labour resources at the retailer’s 16,723 sq m national distribution centre in Milton Keynes, cutting an average of three days out of the supply chain to support House of Fraser’s requirement for increased speed to market. The multi-channel operation was set up within a three-month deadline, which involved the transfer and integration of the on-line business from a previous supplier.

DHL now manages over 30 million units annually from the Milton Keynes site which spans House of Fraser’s renowned range of products across several market segments and brand names, including fashion, beauty, homewares, perfume, linen and jewellery.

* The online operation is now being run on Manhattan Associates’ warehouse management software, which already handles the supply of goods to House of Fraser’s 62 stores.

“Manhattan Associates was chosen for both the e-commerce and store-based sides of the business following a detailed review process,” said Mark Holland, supply chain director at House of Fraser.  “It was essential that we had a single system that could cope with a future transition to a common stock platform – even though for now at least we still store the online goods in a separate part of the warehouse.”

Goods are now made available online at exactly the same time they appear in the stores and managers have real-time visibility into inventory across both parts of the business.

“We had experienced quite a few challenges in previous IT implementations, so we approached this one with extreme caution.  It all went smoothly, however, and took less than three months from the end of the planning phase for the system to be up and running,” said Holland.

The next step for House of Fraser will be to improve efficiency further by combining the storage of stock for stores with that destined for home delivery.

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