select... Topics Organization People Activities Issues

Vol 31 - No 03 - May 2005 Branch news: Midlands Branch/Retail SIG - Visit to Boots A group of members from the Midlands Branch and the Retail Special Interest Group visited the Boots warehouse facilities managed by Unipart Logistics on the Beeston site in Nottingham for a learning workshop about ‘Store Friendly Logistics’. Boots is the leading health and beauty products retailer in the UK with some 1400 stores. In 2002, Boots chose Unipart Logistics as their strategic partner to help them transform their supply chain, reducing costs, making it more efficient and simplifying the way products are delivered to stores. Two big issues facing many retailers are how to improve on shelf availability (recent surveys suggest that lack of on shelf availability costs retailers around £2.6 billion a year) and how to reduce in store logistics costs (it is estimated that 50% of the logistics costs in a retail supply chain are incurred in the Last 50 Metres, ie. moving stock from the receiving point in store to the shelf). Attendees were able to understand how Boots are embarking upon a major supply chain transformation programme in order to: deliver zero gaps on shelf with substantial cost savings significantly lower inventory deliver a customer driven, store friendly supply chain eliminate multiple handling and unnecessary operational complexity ensure that product sold today would be replenished and back on the shelf tomorrow morning The proposed supply chain: is end-to-end in coverage starts with the customer and goes right through to Boots Manufacturing is customer demand driven with the replenishment processes pulling product through the supply chain direct to the store shelf leads to short cycle manufacturing, lower inventories and reduced operating costs. Boots are now well down the road of implementing this transformation programme that has included major changes within their central warehousing operations on the Beeston site to support this ‘Store Friendly Logistics’ vision. After an overview of the programme, we were able to tour one of the main warehouses on the Nottingham site which is now managed by Unipart Logistics to understand the scale of changes that have been made and the results that are being achieved. Some of the many changes that have been implemented in the last 18 months include the: move of transhipment to a new facility to create the capacity for the changes to be implemented re-deployment of over 3000 lines between and within the units introduction of a completely new, volume process (singles) into the warehouse to allow the stores to receive exactly what they require to put away direct to shelf implementation of everyday delivery and Beeston site distribution improvements planning and working around massive infrastructure changes in and around the operation and integration of the outputs from the 2 warehouses into one recruitment of over 500 new employees since April 2004 consultation on and move to 6-day working, with new shifts and rotas introduced. We were all impressed by the scale of changes that had been made and how all these projects have been managed effectively using Unipart’s Project Delivery System. It was also really powerful to see on the shop floor how a number of lean tools and techniques taken from the manufacturing environment have been adapted and successfully applied in a logistics environment to improve service and eliminate waste. In particular, we were able to see: how process mapping and the introduction of standard work, incorporating Takt time, work layout, work sequence and standard operating procedures, were being used to improve performance significantly in the receiving process; how visual management, including tools such as workload planning boards and communication cells, were being used to manage the operation and provide the basis for continuous improvement; and how the concepts of Andon and off-line support can be used to support standard work. However, it was evident from the tour that the tools and techniques are only one part of the jigsaw and that it is the people that are really the key to delivering and sustaining business improvements. The quality and enthusiasm of all the people we met and their commitment to continuous improvement and focus on the end customer shone through. Our thanks go to Boots and USP for this very informative and enjoyable visit, which ended with an open debate over coffee and sandwiches on a wide range of topics impacting upon retail supply chains, including the differences between lean and agile, RFID technology, and the need to optimise the end-to-end supply chain rather than individual elements. Mike Varnom Page number: 8 Word count: 750 Related Topics: Inventory management