Waitrose Case Study

Topics: Supply chain management, Convenience store, Convenience Pages: 10 (3578 words) Published: November 29, 2012
As the fastest growing supermarket chain in the past three years with an 8.7% growth rate between 2011 and 2012 & gross sales of £2.8 billion (JLP Interim Report 2012) Waitrose’s current strategy for rapid growth and store expansion has meant that the distribution network will require re-aligning to future capacities. Enhanced Logistical capabilities and efficiencies are required to manage the increased volume of stores across the UK network. Evaluation of Current Distribution Network

Waitrose’s core operations are situated at four RDC’s located in Bracknell, Aylesford, Brinklow and Bardon, with a fifth in Leyland due to open in mid 2013 (figure 1), “47% of the distribution is through 3rd party DC’s” (Jon, 2012). Waitrose also have two consolidation centres utilised for secondary distribution and a dark store in Acton used for home delivery.

As the core DC, Bracknell has seen five expansions, leaving a layout of multiple warehouses, with differing capabilities. At 600,000sq ft and an average volume per week of 1.94 million, it’s Waitrose’s largest DC. This is inefficient due to the extra handling of goods required, and from a labour perspective costs are higher as it is not consolidated. Brinklow

Brinklow prioritises fresh produce with an average weekly volume of 1.39 million. Recently an acquisition of a DC in Milton Keynes expanded Brinklow’s capacity. “This means that our supply chain is well placed to cope with rapid expansion over the next few years” (David Jones, 2012). Owned by Celestia, it holds ambient and homeware goods on behalf of Brinklow whilst the original warehouse capacitates all other goods. Aylesford

Located 20 miles from M25, Aylesford accounts for all seasonal stock and specialises in seasonal trending SKU’s. This site is not consolidated under one roof, leading to inefficiencies related to staff and product movement. Furthermore, structural issues are apparent as it is 45 years old. Bardon

Bardon is the most Northern DC. It operates at 100% capacity with 5.5 million cases throughput each week. Certain stock is cross-docked from Bracknell to Bardon before it is redistributed onto stores in the Midlands and North. (Lauren – facts from trip?) Leyland

The integration of Leyland in 2013 will enable “100 new store openings and creation of 10,000 jobs” (Mark Price, 2012). It’s capacitated to serve 80 stores. A percentage of Bardon’s store distribution will be passed to Leyland to ease capacity. The DC is consolidated under one roof to maximise efficiency and minimise costs. It will have a flow layout to maximise space utilisation and throughput speed of good and exploit a new Warehouse Management System (WMS). In the instance of new store openings, store re-allocation is possible across all RDC’s in the network. “It’s very easy to do, suppliers just deal with quantity. It is purely a systems based changed, which is easily dealt with by the DC”. (Carl Ward, 2012) The Store Portfolio

Waitrose have a varied DC format, as outlined in figure 2. Appendix 1 illustrates the current presence across the UK network with regards to specific RDC distribution.

“Future growth is focused on the development of the convenience store formats with a growth target of 300 by 2020” (Davies, 2012). We found “UK convenience channel outperforms the wider grocery market remaining focus of investment from retailers and suppliers” (IGD Retail Analysis, 2012) and “shoppers favour a ‘little and often’ approach to food shopping” (IGD, 2012). In store the ‘Good to go’ brand released in 2011 emphasises the focus on convenience from a customer perspective and supports the expansion strategy to double share in the convenience market. With the emphasis on 30% of new growth to be in the North (Davies, 2012), the integration of Leyland is key to providing effective distribution to these new stores. Through the growth development of new formats and channels, the current store portfolio and...
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