WH Smith reduces shrinkage from £7m to £700k

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WH Smith has reduced it’s shrinkage from £7m a year to £700,000 a year, by making changes to its IT infrastructure.

Speaking at a recent SAP conference, Chris Gibbons, general manager of newsworks, WH Smith News Distribution, said: “In 1996, we were the largest wholesaler in the UK but we were also the worst performing.” He said that the company which holds a market share of around 40 per cent, had been “quite arrogant” in its approach.

WH Smith began implementing SAP software in 1997 and completed the roll-out in 2001.

Gibbons said that WHSmith pumped a year’s profit into the company’s IT infrastructure and had achieved a decreased shrinkage from £7m per year to less than £700,000 per year.

“We currently have about 50 warehouses around the country and distribute around 2,500 different magazine titles to about 22,000 retailers everyday of the week. We handle about 56 million items a week.”

When asked if he thought that IT was high on the boardroom agenda in the supply chain industry, he said: “Absolutely. The amount of money we spent on SAP, even though it was a large amount to ask, has paid for itself in less than four years. It is all about cross-control and product visibility in the supply chain.”

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