Retail giant Morrisons reckons its new Bridgwater distribution centre will deliver savings of £20m a year from 2014/15.
The new RDC, representing a capital investment of £105m, was opened ahead of schedule and will be fully operational in the first quarter of 2012/3, the group said its results for the year to 29th January.
The opening also marks the end of the network optimisation initiative which was launched in 2007. This has focused on building capacity, reducing costs and increasing efficiency throughout the supply chain.
The retailer has also been rolling out its new electronic point of sale system and implementing a new trading product master file.
“In the coming year we will be building still further on this solid base and will be making changes to our core manufacturing, logistics, trading and retail systems, supported by improved management information.”
It is targeting savings of £100m from its indirect procurement programme by 2013/14. Examples of savings achieved include the renegotiation and re-specification of packaging across stores and manufacturing, the consolidation of waste contracts across stores and packhouses and a significant reduction in marketing print costs.
Morrisons reported underlying operating profit up eight per cent to £974m on sales up seven per cent to £17.7m.
Chief executive Dalton Philips said: “We know that 2012 will be tough, and we will be working hard to deliver even better value for our customers. At the same time, we have ambitious plans for the long term development of the business, through new supermarkets, convenience stores and the development of our multi-channel capabilities.”