Perhaps the most widely anticipated announcement of the year came last month when Marks & Spencer revealed that it is building its new southern distribution centre at London Gateway, DP World’s port and logistics park at the mouth of the Thames.
It certainly attracted the attention of prime minister David Cameron who was on hand to give the deal his blessing.
M&S is investing £200m in the 900,000 sq ft facility – the third in its new network of general merchandise distribution centres.
But it is not just the scale of the project that makes it interesting, it is the thinking behind it. Other people have done portcentric logistics but not the way M&S is planning.
Most portcentric sites are there to warehouse goods coming into the nearby port from where they can be distributed. Asda’s site on Teesside is a classic example of this – and it is saving Asda an annual £12m in supply chain costs along with two million road miles.
And that function is certainly part of the M&S plan. But supply chain director Dirk Lembregts, who joined from General Motors Europe in January, has made it clear that a key part of the strategy is to sweat the assets.
So the London Gateway site will not only be a conventional portcentric site and an RDC for the south east, it will also handle exports for Marks & Spencer’s growing network of stores around the world.
The retailer currently has 420 stores and nine dedicated international web sites in more than 50 territories in Europe, the Middle East and Asia.
It’s an ambitious plan. But new logistics centres are expensive – the £200m being spent by M&S is in line with other recent developments – so there is real pressure to get the maximum value out of them. Ocado invested a similar sum in its new DC at Dordon in Warwickshire, but was able to recoup a substantial proportion of the cost through its deal with Morrisons.
Perhaps these are just straws in the wind, but it’s likely that we are going to see more innovation to maximise the potential of logistics facilities in the future.
Malory Davies FCILT,