Morrisons develops supply chain for the future

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Morrisons: investing in supply chain for the future

Neal Austin, logistics director at Morrisons, told delegates at the IGD Supply Chain Summit 2010 how the retailer has invested in supply chain to extend its reach in the south of England following the acquisition of Safeway, improved transport planning and reduced cost per case.

The moves are also designed to help meet future business opportunities in both the online and convenience channels, said Austin.

Morrisons has opened a new depot in Sittingbourne to serve the south east and unlock capacity in the existing network in order to serve sites it has recently acquired from the Co-operative Group.

According to Austin, Sittingbourne has taken out 22m km from the Morrisons’ distribution network and introduced voice picking in ambient and frozen categories – previously DCs were picking product on paper.

The supermarket has also finalised plans for a distribution centre in Bridgwater, which will enable it to consolidate operations inherited from Safeway in the south west.

Austin reported Morrisons has achieved a 13% reduction in cost per case since 2006 and Sittingbourne was the blueprint DC for the future.

Employees at the site have been recruited for their values and are multi-skilled, the management team is clearly visible and Morrisons has a strong relationship with the trade union, USDAW, said Austin.

Austin said Sittingbourne scored extremely highly in colleague engagement surveys and its way of working will be rolled out across the rest of the network.

Morrisons is investing £310m in IT which, according to Austin, touches every part of the business and he highlighted the need for accurate data given the retailer’s vertically integrated structure.

“Seventy per cent of fresh foods we supply ourselves therefore we need to have accurate forecasting,” he said.

Austin said a warehouse management system in Corby had been successfully trialed and Morrisons was fully converted to voice picking, driving a 66% reduction in error rate and delivering 99.8% accuracy. Fresh foods will move to voice picking in summer 2011, said Austin.

Austin said Morrisons will be stepping up on supplier compliance, as they “have a part to play”, and for their flexibility in supporting new channels such as convenience.

“Morrisons is a little bit different and quirky,” he said. “There’s lot of changes in the business but we have invested well and will be fit for the future.”