Winner: Marks & Spencer – Gist

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The Supply Chain Excellence Award for Innovation is itself an innovation this year. The judges had in mind both true innovation – processes, methods or technologies that have never been seen before – but also innovation in the sense of introducing a technique that may be established elsewhere, but is novel in the particular industry sector. Novelty of concept was also preferred over quality of implementation, given that many entries would necessarily still be in pilot stages.

Unsurprisingly, this approach generated a substantial crop of nominations – Rexam, NHS Logistics, Lafarge Nida, Swisscom Mobile, ModusLink, Coca- Cola Enterprises, and Marks & Spencer/Gist were all put forward either by site assessors or the judges.

On closer examination, several of the nominations were seen to fall into the category of ‘stuff that’s already known about, but they are doing it very well’, but several of the entries attracted more detailed consideration from the judges.

Swisscom Mobile’s approach to the repairs cycle, RepairNet, was one. The judges described this as ‘a very clever application of a robust logistics and stock control system’, coupled with a strong relationship with their service partner NES. Besides enhancing the company’s reputation for excellence in customer service, RepairNet may have wider ramifications – Vodaphone, a shareholder in Swisscom, is said to be ‘keenly interested’ in adopting the same system which it sees as unique in this industry, and a major supplier, Nokia, is using statistics and reports generated on the performance of its equipment as it has no comparable tool itself. On the other hand, the judges did point out that, although this is an innovation in this particular industry, the general approach has been used in other areas.

Also interesting the judges was Coca Cola Enterprises with their deployment of wheeled ‘Merchandising Units’ (MUs) that can be rolled out direct to the retail shop floor without the need to remove product from pallets or roll cages. MUs are effectively pallets with recessed wheels, so they can be moved through the supply chain like a conventional pallet, yet easily manoeuvred in store display areas. A further advantage is that, unlike roll cages, the MUs can be stacked in a truck to maximise vehicle utilisation.

Although this increases supplier costs somewhat, retailers benefit from lower replenishment costs and improved availability (basically, replenishment is just that much easier) and analysis suggests a retail supply chain saving of 15p per case which, given the high volumes, is clearly a supply chain differentiator for early adopters, which include Asda, Tesco and soon, J Sainsbury.

However, the judges did note that the MUs were in fact developed, and the pool operation run, by GE Polymer Logistics.

Lafarge Nida Gips also interested the judges, not for anything outstandingly novel in itself, but for the rate at which they have been able to adopt and absorb techniques and practices that are still quite unusual in the former communist states. As one judge noted ‘you can’t take for granted the things that we are used to doing in the West – it may be that Eastern Europe is actually more open to innovation at the moment’.

NHS Logistics was also under the microscope in this category, for its use of appropriate and effective technology at so many points in the supply chain, challenging current processes yet retaining and enhancing the end-to-end capability. Simply to summarise, the ‘Logistics On Line’ e-commerce suite provides users with e-catalogues, e-ordering, including online financial coding and access to materials management information, e-information and e-billing. Their supplier portal supports supplier relationship programmes, enables two-way feedback on the performance of suppliers and the Authority, consolidates the various e-trading ‘touchpoints’ creating a process and relationship which is both simpler and more credible, and proffers visibility and collaboration around stock and demand. The physical supply chain has not been neglected, with introductions such as voice activated radio frequency warehouse picking to improve productivity, and e-techniques are also in use in a supply chain knowledge centre to support leading practice especially among the Authority’s customers, the NHS Trusts.

All this has driven significant benefits, and it is rare to see so much done so well – but the judges did just feel that this was largely ‘the application of things that are relatively well established in other sectors’.

So the winner of the Innovation Award, by the narrowest of margins, was the joint entry from Marks & Spencer and Gist, specifically for their pilot schemes in Radio Frequency ID, on which Intellident was the technology partner. Despite the delays caused by external factors ‘this is a well structured project with defined streams of work, project managers and an executive steering group’, a conscious change from the directional style used when bar coding was introduced by M&S. The opportunity presented by a move from Imperial to metric sizes for product trays caused all 3.5 million of the new trays to be radio tagged and although roll-out has so far been limited, real benefits both for M&S and its suppliers are already apparent in fulfilment, stock visibility and lead-time reduction – all vital in the high velocity, low shelf life food retailing sector – as well as reducing the in-store manpower requirement.

Although it seems sometimes as though everyone is dabbling in RFID, the judges had to acknowledge that, within this sector itself, the M&S project is seen, by partners and competitors alike, as being very innovative.

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