Winner: Argos

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Four finalists made it through in this category (a fifth, sadly, having to withdraw for internal reasons). As occurred surprisingly often this year, the entrants divided neatly into two groups, with Dentsply International and IDIS both serving specialised healthcare markets, while Argos and the joint entry from Marks & Spencer with logistics partner Gist supply the general public.

IDIS, based in Surbiton, is a niche distributor of unlicensed medicines with a company policy to ‘Save lives worldwide’. IDIS specialise in the global sourcing of difficult to find drugs, shipping over 125,000 orders a year to 68 countries. The physical supply chain, whilst tightly prescribed by regulatory authorities, is unsophisticated, providing the flexibility needed to deliver IDIS’ mass customised solutions. The supply chain complexity derives from the legislative requirements where IDIS’ knowledge of where to source and how to move unlicensed products, whilst adhering to multiple and conflicting regulatory regimes, is quite remarkable. In a supply chain where cost is not the primary focus, it is truly the drive to save a life that causes the ‘strive for excellence’.

The assessors noted that the warehousing and transport solutions enjoy exemplary control over product security, temperature control and the tracking and management of product data. A supply chain improvement programme started a year ago has significantly moved IDIS forward and if this continues there are the makings of true excellence.

Dentsply International is a much larger, global, business, although facing very similar regulatory and procedural challenges to those faced by IDIS. The company has over 50 per cent of global market share for dental materials, equipment and supplies, but the ESCE submission centred on the new European Logistics Centre at Radolfzell in south Germany. This has coincided with an insourcing of pick and pack operations from a third party provider.

The assessors were intrigued by the decision to insource, which goes against the conventional wisdom but has clearly been effective (it also chimes with Dentsply’s general philosophy – they manufacture the vast bulk of their product on their own account). Functional excellence was discernible in many aspects of the supply chain, but the assessors were concerned that these were not necessarily very well ‘joined up’ – the company couldn’t demonstrate a really smooth flow of information through the supply chain, and there was a lack of verifiable KPI information.

As against this, the flexibility of the supply chain workforce was remarkable, and shows what can be achieved even under German labour laws. Overall, and given that the ELC only opened this Spring, the performance and procedures are not there yet and Dentsply had to be regarded as a ‘work in progress’.

Food retailing and distribution was represented this year by a joint entry from Marks & Spencer and logistics partner Gist, centring on the supply chain for chilled and ambient foods. With many supplier factories dedicated to M&S production, and Gist (which under various names has worked with M&S for over 30 years) operating six dedicated DCs and a primary distribution operation, the whole chain is clearly well aligned to the M&S brand.

What undermined a potentially winning entry was an external factor – the recent, well publicised and ultimately abortive take-over bid for M&S which has seriously delayed roll out of an interesting RFID implementation. The three-phase project (suppliers to depots, depots to stores, and then RFID enablement of stores themselves), in partnership with Linpac and Intellident as well as Gist, has already deployed five million RFID tags (one of the largest implementations world-wide so far). In pilots, this has improved product availability, stock file accuracy and reduced the need for back-store staff, involving close partnership and collaboration, and a pragmatic approach which minimised IT changes and maximised benefits. Unfortunately the metrics illustrating this were weak.

Not at all weak was the winning entry in this category, from Argos. The multi-channel (catalogues, phone and Internet as well as physical stores) retailer features, according to supply chain director Steve Melton, ‘issues of scale, responsiveness and complexity to daunt most supply chain practitioners. In Argos’ case you can add to the mix stores with minimal display stock to buffer demand, a catalogue which is a season-long promise of availability on all lines, a fast-growing multi-channel offer, the move to longer supply lines through direct importing, and a hugely diverse and growing product range’.

The judges were highly impressed. They found ‘a supply chain very much wedded to the business strategy of choice, low prices through managing cost out of the business, and convenience through additional channels. They have deliberately added significant complexity but have handled it very well. The common-sense things are executed extremely well, and the supply chain is very tightly integrated across the business’.

Since 2001, Argos has been on, according to Melton, ‘a three year programme that has become a journey’ which has helped the business grow sales by 65 per cent.

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