Heroes of Procurement


We’re Using Smart Supply Management to Feed the Nation

CIPS 13 May 2020

Supplying fresh foods and groceries during a pandemic has become a balancing act of keeping shelves stocked while protecting staff and customers. Senior procurement leaders at J Sainsbury discuss how the retailer quickly adapted to supply chain pressures and social distancing. 

J Sainsbury has been delivering groceries to customers for 25 years, making an average of 340,000 online sales per week via home drop-offs and its click and collect service.

This all changed when the coronavirus reached the UK, along with a spate of panic buying, and the government imposed a national lockdown to control the spread of the virus.

Subsequently, the retailer’s demand for home delivery services almost doubled, prompting it to seek new supply solutions, fast.

 Contents

  1. Key stats
  2. Responding to changing demands
  3. New procurement strategy
  4. New ways of working and shopping
  5. Reaching all corners of the country
  6. Delivering the goods
  7. Hyperlocal on-demand
  8. Living up to the standard
Sainsbury delivery

Image: © J Sainsbury

 Key Stats

48%

sales growth peak in groceries in the week to March 21

50%

increase in number of weekly delivery slots, with volumes doubled

£500m

estimated profit impact from emergency measures and reduced sales in fuel, GM and clothing

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 Responding to changing demands
Prior to the UK lockdown, customers were reported as stockpiling long-life goods, including toilet roll and store cupboard foods.

To manage this sudden switch in demand, Sainsbury’s enforced strict purchasing limits on high-demand goods, while it focused on increasing volumes of critical lines and reducing supplies of products deemed less urgent.

The company also closed non-essential functions; shutting down in-store cafes, delis, butchers, fishmongers, and cheese, salad and pizza counters, which helped free up warehouse space for other products, while releasing the staff resources.

Sainsbury’s adapted its business in what Patrick Dunne – director of property, procurement and cost transformation – calls a remarkable show of resilience, innovation and teamwork.

“We have made substantial investments and changes throughout our business, and particularly across our estate, to support our customers and colleagues. None of these efforts would have been possible without the amazing support from our teams and those throughout our supply chain,” he says.

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 New procurement strategy

The firm’s new procurement strategy involved working in collaboration with suppliers to support vital cash flow and help businesses increase volumes quickly.

“Sainsbury’s has also committed to paying all small suppliers immediately, ensuring nearly 1,500 small businesses who have less than £100,000 annual turnover with us benefit. It is crucial that we all work together and help where we can during this challenging time,” says Dunne.

Through direct action to support suppliers, and management of customer purchasing, stock levels improved across many lines, to the point where after only a few weeks, chief executive Mike Coupe was able to lift restrictions on most goods - with the exception of UHT milk, dried pasta and tinned tomatoes.

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Image: © J Sainsbury

Sainsbury's shelf stacking - (c) J Sainsbury

 New ways of working and shopping
To protect staff and customers in-store, Sainsbury’s sourced personal protection equipment and social distancing tools, according to government guidelines.

“The business made a decision to ensure that the right PPE was made available as soon as possible to all of our store colleagues who wanted it. This task, for example, was a truly joint effort across our procurement function – one team sourced the stock, another secured the international freight and another was responsible for the distribution, all as part of one cohesive effort,” says Matt Stallard, head of group procurement.

“We needed to implement social distancing in our stores and we have had people mapping that out from car park through to store entrance, aisle, checkout and trolley return.

"We have calculated the number of customers we can have in our stores at any one time and issued guidance on queuing systems. We have delivered crowd barriers, signage and also added additional car park marshals in over 150 stores,” says Dunne. 

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 Reaching all corners of the country
“I’m particularly proud of the efforts of the Sainsbury’s team and our suppliers to roll out 17,500 safety screens to all our store checkouts, kiosks and service desks right across our estate.

"In less than two weeks we worked night and day to design, source and install the screens in record time to ensure the protection of our customers and colleagues. We worked with multiple suppliers; used our extensive network to mobilise the designs, source the materials and utilised over 100 install teams across the country,” he adds.

Successful implementation of this investment required the retailer to redeploy thousands of members of its workforce, including from its Argos brand, and to recruit new staff.

“The scale and speed we have had to work at has been intense but equally the problems we’re solving and investments we’re making are being seen in all corners of the country and at record pace,” says Stallard. “It’s been very rewarding.”

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 Delivering the goods
With the public recommended to stay home and use delivery services, Sainsbury’s quickly modified its logistics models to keep groceries moving and prioritise services to the elderly and any person shielding.

Using the government’s vulnerable persons list to identify customers in the greatest need, the company contacted 270,000 individuals across England, Wales and Northern Ireland to offer support through Delivery Pass (for customers buying directly) and Volunteer Shopping Cards (if buying on behalf of a vulnerable person).  

“We are working to increase capacity to 600,000 slots per week across home delivery and click and collect.

"To date, we’ve boosted our Goods On Line business by over 75% and that has required mobilising trucks and vans plus locating refrigerated depots across our network,” says Stallard.

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 Hyperlocal on-demand

To reach more customers, Sainsbury’s also refined its hyperlocal on-demand bicycle delivery programme, ChopChop, which now serves London zones 1 and 2.

ChopChop allows customers to choose up to 20 of 400 grocery and essential items for home delivery within an hour. The programme turned convenience branches with low footfall into ‘dark stores’ - mini warehouses closed to the public, where delivery cyclists can collect groceries for customers within a 3km radius.

ChopChop was suspended during the period of extreme demand, for the firm to focus on amending supplier arrangements and expanding its online channel, but it has successfully resumed, and the company is exploring how to roll this out to more places across the country.

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Image: © J Sainsbury

Chop Chop Bike Riders - (c) J Sainsbury

 Living up to the standard
As winner of the CIPS Procurement Team of the Year 2019, the Sainsbury’s team is living up to this standard.

“Not only are we pulling together and doing our best work to feed the nation, while learning to all work remotely, but we’re making sure every team member feels supported,” says Stallard.

“It’s been quite the experience navigating the ‘new normal’ together.”

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