Marks & Spencer moves to boost supply chain efficiency

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Marks & Spencer has been improving the efficiency of its supply chain to reduce the proportion of international products shipped via the UK, with over 30 per cent of stock now moving direct to its destination through four regional hubs in Sri Lanka, China, Istanbul and Singapore.

The move reflects the group’s strategy to become a major international multi-channel retailer.

In the UK, it said construction was under way at its new national distribution centre and e-commerce facility in the East Midlands which is on course to open in early 2013.

It has now completed the implementation of a new stock management system, which is providing more accurate real-time stock level information and contributing to improvement in food availability.

It has also completed the roll out of the new Point of Sale System, and is now in the final phase of the SAP roll-out which will go live from April 2012. This will include a new stock ledger, which will provide improved management information including product level profitability.

In its half year results, M&S reported a 2.4 per cent rise in sales to £4.7bn but underlying operating profit was down 9.8 per cent to £369m.

Chief executive Marc Bolland “In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices.
“Against a challenging consumer backdrop, we took decisive action to manage the business through the short term while continuing our focus on investing in creating a stronger platform for future growth.”

For the full year the group expects gross margin is expected to be broadly flat on last year due to ongoing input cost inflation and an increasingly promotional market.

Operating costs are expected to increase by about 3 per cent as a result of increased depreciation, space growth and inflation, as well as investment in growth initiatives, offset by underlying savings.

On Plan A, the eco and ethical programme, M&S said it had achieve 105 of the 180 commitments that it had set and a further 18 were on course to be completed by April.

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