M&S invests to improve supply chain efficiency

9 November 2011

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9 November 2011 | Adam Leach

Food and clothing retailer Marks & Spencer (M&S) has increased investment in its supply chain to improve efficiency and tighten stock control.

The company’s half-year results, published yesterday, revealed that it increased spending on the supply chain and technology by £4.1 million to £69 million to improve the management of inventory and distribution.

The report showed that the company has reduced shipping within its international products category by increasing the use of its regional hubs in Sri Lanka, China, Istanbul and Singapore. Meanwhile, a new stock management system provides accurate, up-to-date stock-level information that enables it to manage supplies more efficiently.

M&S chief executive Marc Bolland said: “In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices.”

The push to improve data quality will be further strengthened in April 2012, when M&S completes the roll out of a SAP cost management system. The move by the company to tighten stock control fits with the findings of a survey just released by the Institute of Grocery Distribution (IGD). This reported that six out of 10 retailers expect lead times to reduce by up to one day over the next five years.

Tarun Patel, head of supply chain at IGD, said: “Manufacturers and retailers are more focused on responding to customer and shopper needs. They are investing in operating processes and systems that enable supply chains to be more responsive and flexible.”

Overall, M&S reported profit of £315 million for the first six months of the year, down from £349 million in 2010.

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