12 November 2010 |
Retail giant Marks & Spencer is set
to save an additional £25
million-a-year from its logistics budget by transforming the way it operates
its supply chain.
retailer’s half-year results report, released this week, said it will
accelerate its 2020 plan to make its supply chain more efficient. Instead of
its initial aim, announced in October 2009, to save £150 million-a-year from
logistics by 2020, the company now plans to save £175 million-a-year by
said the extra savings will come, in part, from moving
from 110 small warehouses to a small number of super distribution centres. It described the first phase of its
“warehouse consolidation programme” as a success. A one-million-square-foot
“super” warehouse opened in Bradford in May 2010. A total of 30 smaller facilities
have been closed over the past year.
M&S said it will also: “continue
to reduce our dependency on our full service vendor suppliers, giving us
greater control of our supply chain,” for its clothing and home businesses.
vendors (FSVs) transport, store and deliver goods for M&S, while M&S
transports, stores and delivers the goods for direct vendors. FSVs currently
account for 43 per cent of the retailer’s clothing and home supply base, while
direct vendors make up the remaining 57 per cent. By
2015, M&S aims to have a supply base comprising 35 per cent FSV suppliers
and 65 per cent direct vendors.
being brought about by the 2020 plan would lead to a nine per cent improvement
in the availability of clothing and home items by 2015, M&S said. Another
part of the plan would deliver a five per cent improvement in food availability
spokesman for M&S said: “The supply chain transformation
element of 2020 will make us more efficient and deliver ongoing savings of £175
million, improved availability and provide an efficient platform for growth.
2020 plan] is not about reducing the number of suppliers, it is about creating
a more efficient supply chain and preparing the company for future growth.”