The opening of Marks & Spencer’s huge new distribution centre at Bradford is the most tangible step in a major reconfiguration of the retailer’s supply chain. So it’s not surprising that group chairman Sir Stuart Rose described it as a “hugely important symbol of what the company is trying to achieve”.
The man leading the change is Darrell Stein, director of IT and logistics. If he is at all daunted by the scale of the challenge, then he shows no sign of it. And the scale is huge: the group’s total investment in supply chain and technology last year was £194m – up from £188m in 2008-9.
The 1.1m sq ft distribution centre is the first of four major sites that are planned to replace the existing network of more than 110 warehouses – some 21 sites have closed already.
At the same time, the group is overhauling its IT systems with the roll-out of SAP as its core business system, as well as an improved stock management system which will provide more accurate real-time stock level information.
The roll out of a new point of sale system to all stores is due to be completed in 2011.
Stein points out that his background is in IT having worked for a number of major corporations, including Vodafone, in the IT area. He joined Marks & Spencer as IT director four years ago. Then, he says: “A couple of years ago, I was asked to take on the logistics job.”
There have been one or two high profile disasters in the retail sector in recent years where companies have set out to make large scale supply chain changes – a fact not lost on Stein. “We had a good look at other retailers and what went wrong.”
He identifies two clear lessons from those failures. “People try to do it too fast, and they don’t get the right people in. I hired people who have done it before.
“You have got to take a balanced approach,” he says. “You have to make sensible plans and hit the targets.” And, critically, he says, service levels mustn’t be affected.
The approach is highlighted by the development of the distribution centre at ProLogis Park Bradford, where operations are currently being ramped up.
Bradford is an unusual location for a major distribution centre, but Stein points out that it has excellent transport links, a rich pool of talent and the local authority has provided strong support for the project.
“Bradford will deliver better service and better availability for our customers and it is a key part of our strategy to prepare our supply chain for the future.”
He points out that a key element in the plan has been to create a building that maintains a measure of flexibility.
About two thirds of the space in the building is currently in use. It holds furniture for the group’s growing homewares business, as well as store equipment such as racking. M&S changes its displays regularly so managing and warehousing store equipment is a bigger task than it might appear at first sight.
The plan is to move in ambient food next year. Beyond that it is planned to use the site for apparel as well. “The number employed at the site will rise to some 1,200 when we put clothing in here – that will also involve a level of automation,” says Stein.
Supply chain improvements are typically focused on reducing costs and improving customer service, but for M&S it has also been important to meet the targets of Plan A, its eco and ethical plan. The building is carbon neutral and has achieved “Excellent” status in the BREEAM environmental assessment system. M&S has also invested in a nature programme surrounding the site which has seen nearly 400 native trees planted, the creation of two ponds and new wetland areas.
When Plan A was launched in 2007, it set out 100 commitments, and included the development of the revolutionary teardrop trailer design. The plan has now been extended so that there are 180 commitments to meet by 2015. The aim is to make the UK and Ireland operations carbon neutral by 2012.
All too often, large distribution warehouses have been greeted with hostility from local authorities, but Stein has been able to count on the support of Bradford council. Councillor David Green, the council’s executive member for regeneration and economy, says: “This site will provide hundreds of jobs for residents, contribute millions of pounds to our economy over many years and act as a catalyst for further growth.
With Bradford coming on stream, the next step for Stein is a site in the Midlands. This will be a similar size to Bradford, and the plan, he says, is for it to combine a dedicated e-commerce facility with a national distribution centre. M&S is currently in the process of acquiring a site in the Midlands and the plan is to have it up and running by the summer of 2012.
After that, the south of the country could be an even bigger challenge for Stein. He points out that it is hard to find a site big enough for the whole of the south, so the search is on for two sites – one covering the South West and one for the South East.
Darrell Stein started his career at Marks & Spencer in 1990 developing his expertise in IT.
In 1994 he joined Mars as a project manager, working on data warehousing and financial systems.
Between 1996 and 2001 Stein worked at Ernst & Young leading a number of major IT and change programmes in the financial services, retail and utility sectors.
From 2001 to 2006 Stein worked at Vodafone, becoming IT director for Vodafone UK in January 2004.
Prior to that he was Vodafone’s UK network director and global IT strategy and architecture director.
Stein rejoined Marks & Spencer in July 2006 as IT director.
He added responsibility for logistics in March 2008, taking over from Simon Ratcliffe.