Managing logistics management consultants

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THE Lakeland Limited story goes back almost 40 years when Sam Raynor’s parents set up a mail order business from their home in Windermere, selling polythene bags to local farmers for packing poultry. As the business grew they developed into home freezer accessories and kitchen items, and Lakeland Plastics was founded.

Over the years the company started to sell a wide range of wooden, glass, ceramic and stainless steel kitchenware, plus specialist food items, and the company changed its name in 1997 to Lakeland Limited, reflecting the breadth of products on sale.

Today, Lakeland offers a range of more than 4,000 creative kitchen and innovatory houseware products distributed from its modern direct distribution centre (DCC) in Kendal. The company distributes catalogues to a million-plus households each year and its mail order business is managed from the Windermere Call Centre and head office. Lakeland has 25 retail outlets from Aberdeen to Truro and now offers customers the opportunity to purchase from a fully transactional website.

Effective monitoring

Keeping the characteristics of an established family business but now employing more than 1,000 people, the company retains all the traditional values upon which it was founded – quality, value for money, exceptional customer service and continued investment in its staff.

While Lakeland has remained a family business responsive to market demands and the changes in retailing, the company began to recognise

the value of outside expertise in key areas. Raynor says: “We recognised very early that delivering the right products, in perfect condition as quickly as possible and at minimum cost was a vital element to continuing success and asked Paul Jubb, now with Lucidea

Consulting, to provide some outside guidance and expertise on our logistics operation.

“However, before getting Jubb involved in the business we took time to decide what we wanted from a consultant and to look at the potential pitfalls. While we recognised that someone like Jubb could bring considerable experience of logistics to Lakeland it was clear that he could not be expected to understand our culture and strategy, so we committed to spend time to help him appreciate the values we have as a company and as a family. This also meant ensuring that he would not be overly swayed by conflicting views and pressures from those in the business.

“We also recognised that we needed to identify our objectives and make it clear to Jubb what we hoped to achieve. While the business had

grown we felt that we could benefit from an objective analysis and appraisal based on statistical measures, with identified areas for improvements in strategy and operations. Jubb put in place, and still manages, a number of performance measures to monitor our supply

chain process including customer satisfaction levels and benchmarking of key processes.” Jubb continues to carry out periodic business

“health checks”, auditing progress on a number of productivity and performance measures. Typical analyses include reviewing stock

management, handling and order fulfilment systems, service levels, staff productivity, skills and training, handling and storage equipment,

use of space, costs and potential improvements.

Forward planning

The results and recommendations that follow each audit provide valuable input for other parts of the business, helping to refine aspects

such as market research, purchasing and stock control, distribution planning and property strategy.

Raynor says that with Jubb’s continuing help the company moved to a new bulk warehouse in Kendal, “a decision made some while ago which he [Jubb] recommended and which enabled us to purchase a suitable site well in advance. This move gave us the opportunity to plan a modern direct despatch distribution centre (DDC) equipped to meet the needs of the business and with the capacity to cope with expansion. We progressively moved the storage and distribution function from Windermere and the space released is being converted into a new larger retail outlet. The Kendall facility now handles all our storage and order fulfilment activities.”

When planning the move to Kendal, the company kept an open mind on the range of possible solutions, assessing all the options available on the market. The most obvious answer was to create a warehouse large enough to hold sufficient stock to meet the target of 25,000 orders a day, in addition to coping with future growth projections.

With new picking, packing and parcels despatch areas, together with stock levels to meet the target throughput, Lakeland would have ended up with a floor area considerably larger than that eventually reached for the new DDC. Furthermore, it was reckoned that picking efficiency would fall over this expanded warehouse area. The number of SKUs was analysed against the 80:20 principle – ie, 80% of throughput volume being drawn from 20% of the SKUs – and the company assessed the different ways of accommodating this profile.

For example, drawing slow-moving lines for the bulk store and transferring them to the despatch area was dismissed because it would have introduced major inefficiencies into the bulk picking operation.

Complete solution

When goods arrive they are checked, data entered onto the computer and are stored in standard pallet racking. A Dispatcher LIS Warehouse Management System (WMS) provides real-time visibility and continuously monitors the expiry date of all perishable goods, automatically identifying those which need to be placed in quarantine as the date approaches. The mail order business is very seasonal and subject to considerable changes in demand and the WMS helps to manage stock in line with customer expectations.

Dispatcher organises replenishment order fulfilment stock using its ABC functionality to minimise movements in the warehouse and

provide the most labour-effective order picking. A class (fast-moving) products occupy around 40% of the locations and each product

generates its own code in the system and within its movement category. However, the demand for products in such a wide range offered by

Lakeland varies considerably and the WMS regularly reassesses product priority categories. Inventory will always be allocated to the most suitable location for rapid order picking which also helps ensure picking accuracy. Individual orders are downloaded from the host business system and the WMS automatically compiles replenishment orders.

The process starts when the radio data terminal (RDT) informs operatives that pick face stock is running low and needs replenishment.

Supervisors have a screen-based display to help prioritise tasks for maximum productivity. Speed and efficiency The total package for the despatch operation was supplied by Jungheinrich, a leading provider of materials handling solutions. Combining conventional picking routines with a state-of-the-art automated conveyor and mini load systems, Jungheinrich has supplied Lakeland Limited with a total package for its despatch operation. In addition to the mini load cranes, the contract also included shelving, conveyors, a live storage installation and tote boxes, all safety guards/interlocks and overall control systems.

Mini load systems have brought added meaning to the word ‘efficiency’ in the handling and distribution of small items held in tote bins, trays or cartons. The concept is based on the fully automated mini load crane that offers short cycle times with high-density storage over an exceptionally compact footprint. This minimum footprint releases valuable floor space for packing, consolidation and despatch areas that are essential to achieve time-critical delivery windows. With mini load systems, floor space can be reduced up to 30% over conventional storage layouts.

Speed is the main feature of the mini load crane, with travel speeds up to five metres/sec and the ability to transfer loads to the P&D station in just two seconds. The store itself can extend to a maximum height of 10.5m with aisle lengths of 80m and aisles as narrow as 920mm. There is also a degree of flexibility with the size and weight of loads in these mini systems: maximum load size is 1,500mm long by 400mm wide, and weight capacities range from 50 – 100kg. A major attraction to Lakeland would have been the system’s tailor-made suitability for mail order operations and dotcom business with this sector’s overriding requirement for the high-density storage of a large number of SKUs.

Apart from operational considerations, further benefits cited for mini load systems of particular appeal to Lakeland are their overall impact on the working environment and employee work stations. Moving goods to pick/pack stations (goods-to-operator principle), the system fully meets all manual handling guidelines/legislation and provides operatives with conditions which, compared to standard picking/replenishment routines, result in increased staff motivation and productivity, reduced absenteeism, fewer picking errors and less product damage.

Added value

In many ways the DDC remains an evolving system. Lakeland and Jungheinrich are currently exploring how more SKUs and pick faces can be opened up to move the DDC to optimum performance levels. However, there is little doubt that this showcase installation under its progressive management will achieve its ultimate objective which, in the final analysis, is for the DDC to continue offering the very highest standards of service to its customers up and down the land.

Raynor emphasises that the value of using a knowledgeable consultant is that he, or she, will have absorbed the culture of the business and can help implement operational activities which support corporate strategic planning. He adds: “The full value of using a consultant results from continuous and long-term involvement with the business, participating in regular and disciplined reviews of activities, helping management to maintain focus on constant improvement. Operational changes should at best improve and should never adversely affect customer service and there are times when a strong, objective voice who can speak without fear or favour can remind us of the core values we need to pursue.”

Raynor firmly believes that Lakeland is today a world-class business in the way in which it serves its customers and the value it offers. “But constant evaluation of the business model and steady improvement are essential to maintain our success and the intelligent use of an external consultancy has been a key factor in what we have achieved,” he concludes. n

Warehouse management systems supplier LIS and materials handling solutions provider Jungheinrich are just two of 100 plus market leading companies exhibiting at Logistics Link 2004 at Sandown Park, Surrey on 3 and 4 February and also at Logistics Link North being held at Doncaster Racecourse & Exhbition Centre on 22 and 23 September 2004. For further information about Logistics Link exhibitions please contact Richard Milbourn on 020 8661 1160. Fax 020 8643 3323 or visit

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