Tuesday 19th Mar 2019 - Logistics Manager Magazine

Managing costs

Morrisons has cut its case cost by 11 per cent over the past year, supply chain director Malcolm Basey told delegates. It has also focused on extending its depot network and improving importing methods. Plans are underway to open a depot in Swindon, to provide distribution to its southern stores.

Its online system, The Morrisons Supplier Database, is set to share more information on promotional forecasting and performance with its suppliers. Lead times are also shorter, with a third of its stores receiving same day delivery.

It has also reduced its trunking operations from the Midlands and invested in Euro 5 trucks and double-deck trailers.

As part of its three year optimisation plan, it has refreshed its corporate identity – repackaging 9,000 of its own label products, and introducing 3,000 updated products. Stores have also undergone major face lifts.

Booker, the UK’s largest wholesaler to small businesses, has undergone an intense recovery plan after suffering a major down turn. Supply chain director Ian Keilty, said one of its aims was to become the preferred route to market for suppliers. To achieve this it collaborated with a small basket of suppliers.

It concentrated on stock management to further streamline the organisation. This meant more efficient stock replenishment, shorter lead times, and improved availability. It took away more than £30 million worth of stock holding.

Somerfield streamlined its business by bringing everything under one fascia and saved £12 million in less than a year by contracting everything to a single service supplier – Wincanton. Distribution director Andy Monk said it has reduced the complexity of its supply chain by tightening its depot network to nine from 15, and reducing its ambient product range.

Promoting collaboration is all very well coming from the big boys in the industry. But it’s debatable whether the same measures will prove as effective for smaller companies. There is concern that once small companies open up and make themselves transparent, the bigger companies will take advantage.

Another of the potential obstacles to collaborating more, outlined at the summit, was the sharing of vehicles. This might give rise to marketing issues, with the names of each company displayed on the vehicle. But Peter Surtees said: “providing you’re not working with competitors it’s not a problem.”

Ian Keilty reckoned sharing vehicles needn’t be an issue, but that the industry needed to push the awareness that supply chains don’t need to be competitive. “If we don’t do it, it will be imposed,” he said.