Tesco has reduced ambient lead times with the launch of a day one for day two delivery service in partnership with Culina Logistics. The move is designed to shorten supply chains and increase on-shelf availability.
The new service is centred around the Culina Logistics’ facility in Wolverhampton and will manage deliveries for customers into Tesco’s national distribution centre network on a six-day, Monday to Saturday cycle. The operation will also provide Culina Logistics’ customers whose stock is not held at Wolverhampton with cross-docking facilities into the company’s ambient network so they achieve the same levels of service.
“Culina Logistics embraced our desire to reduce ambient lead times and they have worked collaboratively with us to achieve a cost-neutral position for our suppliers for deliveries into the Tesco ambient network,” said Gary Bentham, Tesco primary ambient manager.
“The implementation went extremely well and has been operating successfully.”
According to Culina, the ambient grocery market has historically operated with orders being placed on day one for delivery on day three across a Monday to Friday cycle. A number of major multiples have been driving demand for a day one for day two deliveries for ambient products to reduce working capital tied up in their supply chains and to improve on-shelf availability to enhance their customer service, it said.
According to Culina, this new operation commenced at the end of January 2012 and has been operating successfully since then, achieving these benefits for Tesco and its suppliers. The infrastructure and processes in place to support next day deliveries from Monday to Saturday mean the option to expand to full seven-day service is available if required by Tesco and its suppliers.
Culina Logistics said it is now actively working with other major multiples to achieve a similar cost-neutral solution for ambient suppliers. The company added it is looking to announce a successful implementation with a second retailer within the next few months.
“The lead time requirements of the ambient and chilled grocery markets are converging but the profile and sensitivities of the products together with the processes within many supplier and retailer distribution networks mean that the respective supply chains will remain largely independent,” said Steve Winwood, group commercial director at Culina Logistics.
“We have significant operations in both sectors and this allows us to identify opportunities to take advantage of synergies that lead to more efficient supply chains for customers wherever and whenever possible.”