Supermarket chain Sainsbury’s has invested billions of pounds in the past two or three years to create a state-of-the-art automated distribution network. The only problem is that the network cannot cope with Sainsbury’s supply chain. Why? Barcodes.
According to newspaper reports, it appears that the network of food warehouses had been brought to a halt by incompatible barcodes. Justin King, chief executive officer at Sainsbury’s, in his first quarter trading statement confirms that the company has “significant issues with certain suppliers where our systems struggle to read their barcodes. We either need to change the nature of our barcode readers so they can cope, or we need to persuade those suppliers to put barcodes on their products, on the cases of their products, that our systems can cope with”.
King also admits to “teething problems with software and also with physical kit – conveyors, mechanical handling and so”.
These problems are no doubt costing the retailer in terms of making efficient deliveries to stores as well as in the time and effort having to be invested to resolve the problem. Then there is the added pressure being put on Sainsbury’s supply chain now that it has bought 13 Safeway supermarkets and the convenience store chain Jacksons Stores.
Teething troubles are one thing as most companies investing in modernising their distribution networks would expect to experience some initial problems with new equipment.
However, would it not have been a good idea for Sainsbury’s to consult with its suppliers over the barcode issue thereby ensuring that everybody had the best system in place right from the start?