the full report of the event
Transcription
the full report of the event
Evolution vs Revolution Future Forum Presents: Port Deconsolidation – what are the benefits? Evolution vs Revolution Page 3 Introducing Clipper. Clipper is one of the country’s leading specialists in pan-European retail and high-value logistics – working with leading brands including John Lewis, Asda, George, Tesco, New Look, Bench, Morrisons, Liberty and Harvey Nichols. With a network of 27 distribution centre locations and over 5.5 million sq ft of warehousing space, Clipper offers its clients a comprehensive range of retail/multichannel solutions. Evolution vs Revolution The Future Forum. Towards the end of 2011, Clipper launched its Future Forum series with an event held at the Langham Hotel in London. Professionals from the world of retail and logistics attended the event, ‘Death of the High Street?’, which provided an afternoon of stimulating and insightful debate centred on the challenges, risks and opportunities presented by multichannel retailing. The second event in the series was held in Leeds in April 2012 and focused on the benefits of Port Deconsolidation. This document provides both an overview of the day and insights into how retailers can take costs out of their global supply chain. Page 5 Evolution vs Revolution The changing face of retail and logistics. Retail supply chains are in a state of flux. Factors such as failing to accurately forecast rising transportation costs, shipping product from Asia to UK distribution centres, and maintaining separate, dedicated in-store and direct-to-consumer channels are all having a direct impact on profit margins. Faced with intense competition, squeezed profits and pressure to cut expenses, savvy retailers are looking for new ways to reduce costs. Port Deconsolidation, in simple terms, provides upstream buffering via distribution facilities located in proximity to main import hubs; brings companies closer to the markets they serve; and reduces freight miles. Designed to save money and increase efficiency, Port Deconsolidation allows retailers to meet the substantial challenges posed by long supply chains and customer demand velocity. Page 7 Logistics evolved. Logistics practitioners have realised that in order to survive in today’s ever-changing and competitive world, a business cannot stand still or appear to be lacking in fresh thinking. Instead, it must challenge perceptions, make strategic and informed decisions and look beyond the core function to venture into new and innovative solutions. Quite simply, it’s about evolution. ‘The future of logistics is clear. It’s time for a new breed of logistics company. One with the size and ability to tackle any project, plus the speed and agility to strike quickly. One that appreciates the importance of logistics in the bigger picture, yet still keeps things simple.’ Evolution vs Revolution Clipper’s approach to retail logistics. At Clipper we have retail logistics at our core, with many clients operating across multiple channels. We pride ourselves on building long-term relationships founded on knowledge and trust, and we work hard to understand every aspect of our clients’ businesses. As a result, we have a wealth of specialist knowledge and experience in a range of sectors, and have supported numerous clients through their expansion into global sourcing and multichannel retailing, with some impressive results. Taking care of your brand and delivering on your customer promise is Clipper’s top priority, and that’s what sets us apart from our competitors. We don’t believe in a ‘one size fits all’ model, so we provide bespoke solutions that are tailored to meet our clients’ business requirements. Page 9 Clipper and Port Deconsolidation. We believe that Port Deconsolidation is a necessity in modern supply chain solutions. Our service has been designed strategically to offer even greater flexibility: it delivers a faster, slicker and more environmentallyconscious logistics solution, whilst saving your business money. Thanks to Port Deconsolidation, the port becomes your centralised distribution hub, reducing the need for inland distribution centres. From here, we can manage your stock as necessary, and can fulfil stock in and stock out requests around the clock, allowing you to work more efficiently and react quickly to ever-changing customer demands to stay at the forefront of your sector. Investment in Port Deconsolidation. We have such a strong belief in the enormous business benefits of Port Deconsolidation, and can see it playing such an integral part in the logistics solutions of the future, that we have invested in developing a purpose-built, shared-user cross-dock supercentre in the North East, servicing multichannel/online channels. Wynyard Park, opening September 2012, is a new 350,000 sq ft deconsolidation centre with easy access to Teesport. As well as being a cross-dock facility, it will also have an enhanced processing rework and refusals centre. It’s the culmination of our many years of experience managing retail supply chains, and we believe it’s the shape of things to come. Introducing Clipper’s Future Forum Speaker Tony Mannix. Managing Director, Clipper. Tony Mannix welcomed delegates with an introduction to Clipper’s credentials and a film highlighting the challenges facing retailers operating in global multichannel marketplaces. He talked about how important it is for retailers to be able to react quickly to markets, the increasing trend towards global sourcing and the need to manage end-to-end supply chains efficiently. Page 11 Introducing Clipper’s Future Forum: Evolution vs Revolution. ‘Port Deconsolidation – what are the benefits?’ The world is changing. The world is getting smaller. And business is global. The way retailers source products is changing. They look to balance the benefits of international sourcing, to provide the mass volume they need, with local sourcing, in order to add a point of difference, react quickly to change and meet environmental and ethical targets. 2011 saw developing markets changing the balance of power. These developing markets now drive the agenda in global arenas. Recession has accelerated the shift in global production and consumption from West to East, North to South. This has prompted many British retailers to make concerted efforts to increase the volume of direct global sourcing to benefit working capital, in order to create savings that are too large to ignore. The high street is changing. The high street is getting smaller. And retail is now multichannel. The retail landscape is changing in every way: from the way retailers sell to the way consumers buy. Retailers now face new challenges, navigating the changing world of commerce in a fragile economy, managing multiple touch points, latest crazes, more demanding consumer expectations, and the integration of multiple technologies – few of which were built for today’s evolved landscape. Multichannel organisations struggle to balance back-end challenges while racing to deliver engaging and consistent user experiences designed to capture more loyalty and share of wallet. ‘Port Deconsolidation represents a major opportunity for retail businesses of all sizes – including established players and those new to import and export.’ All of this demands a new way of working. Supply chains must undergo a complete transformation to enable more products to be delivered direct to homes, handle online ordering and in-store pickup and allow for more streamlined and free returns. They must also facilitate stock consolidation at warehouses rather than stores (as retailers seek to hold less stock), reduce working capital and increase efficiency and profitability. This demands a change in supply chain management. Today. To create a smarter, faster, leaner, more efficient supply chain. Retailers are looking for answers to questions: • How do I get products across the globe quickly and accurately? • How do I deliver my customer promise… 24/7? • How do I minimise costs and maximise efficiencies? Port Deconsolidation, the perfect supply chain solution for businesses who… • Source products globally. • Overseas consolidate. • Want rapid pre-retail solutions. • Seek to minimise cost but enhance service. • Operate in competitive multichannel marketplaces. • Are seeking online SKU expansion outside of store ranges. Introducing Clipper’s Future Forum Speaker Clyde Buntrock. Director of Business Solutions, Allport Supply Chain Solutions. Clyde Buntrock shared his expertise in international supply chain management, offering insights and advice on how retailers can use their international supply chains as a competitive advantage. He advocated a true end-to-end view of the supply chain and highlighted organisational design as the biggest barrier to its effective management. Allport, one of the UK’s largest privately owned international logistics companies, has been trading for almost 50 years. Its core activities are freight forwarding and supply chain management services. Allport is a global business turning over a billion dollars, with over 4,000 customers and operating through a worldwide network that encompasses the established and emerging key sourcing locations as well as destination retail markets. Page 13 Developing markets. As a global company, Allport operates through a worldwide network that encompasses the established and emerging key sourcing locations and has extensive facilities in Greater China – including Chongqing, which is the fastest growing urban area in the world. Local knowledge of fast-growing export regions is important for logistics providers who can’t afford to stand still in the current market. Retailers want to reach new global consumers – with many growing faster outside their domestic network – and must build effective supply chain networks to reach these customers and manage returns. Value chain basics. • Product is where the main point of difference regarding the offer is established; however the supply chain is the competitive advantage that generates most of the profit. • The inbound supply chain is key to achieving logistical efficiency in-store – ‘what you do in Shenzhen can impact a customer in Torquay’. • Multiple supply chains for different products are a must. One size does not fit all. • Never let product sleep. Challenges to success? • Supply built on push, not pull. • Silo margins with e2e ignored. • Transactional relationships. • Enabling true visibility. • Functionally organised with competing metrics. Inbound transformation. A world-class international supply chain relies on a true end-to-end view and integration across traditional silos. The four key streams are: Flow. • Inbound flow: product-specific route to market. • Import channel selection: based on velocity, volatility, weight and dimensions. • Pre-retail: festive events are mission-critical at factory – flow and cross-dock in shelfready format. • Dynamic routing: reacting to demand. Upstream. • Passive management: vendor orientation, training, scorecards and performance management. • Active management: vendor helpdesk, supply chain service centre. • Connectivity: data push, data pull. • Origin QC: faster speed to market through early identification of quality issues. Technology & market intelligence. • Business intelligence. • Decision-making support. • Integration. Transactional & commercial. • Operational excellence. • Operational efficiency. • Activity-based costing. • Performance-related management fees. Putting it all together. One example of totally-integrated supply chain management is the farmers in Japan’s SouthWest Shikoku, who came up with the inventive creation of a square watermelon – to enable the fruits to be stacked easily in boxes and supermarkets. How did they do this? Simply by growing the fruits in square-shaped receptacles so they assumed a cubic form when ripe. In summary, the lines are blurring between marketing, product development and logistics, which means a truly end-to-end supply chain management solution is the only option for retailers seeking to maximise the opportunities presented by the global marketplace. Introducing Clipper’s Future Forum Speaker This demands integrated planning at all levels: Strategic: Determine route to market, e2e cost analysis, hub placement. Tactical: Range review and logistics surgeries, PO placement, vendor helpdesk. Ingenious – an Allport and Clipper initiative. A unique partnership of two of the logistics industry’s biggest names. Trusted by UK retailers of all sizes – including John Lewis, Asda, George, New Look, Mint Velvet, Tesco and Harvey Nichols – to deliver over 500m garments every year. Clipper has the ability to tackle any size of project, with the agility to move quickly, and routinely delivers projects in weeks that take other logistics companies months. Operational: Shipment execution, dynamic routing execution, management information. In simple terms, end-to-end supply chain management is the development, management and maintenance of your entire supply chain network, from the point you place an order anywhere in the world, to the delivery of goods ordered online direct to your customers’ doorsteps; not just in the UK but across borders. One of the UK’s largest freight forwarders – transporting and optimising the flow of 5m kilos of freight every day, by land, sea and air, for over 3,000 customers including Asda, Sainsbury’s, Marks & Spencer and Next. A supply chain expert with a truly global reach. Ingenious – the complete, unique supply chain management process. Ingenious allows businesses to access awardwinning supply chain solutions that help them deliver their customer promise. The end-to-end solution integrates with an organisation’s order process and retail websites to seamlessly manage every aspect of their e-fulfilment offering, including the inbound supply chain, storage, order fulfilment, customer delivery and returns handling. Ingenious is ideally suited to new and growing brands within the multichannel sector: brands that are looking to improve the efficiency of their overseas sourcing process and to link it seamlessly to their customer deliveries around the world. It offers a completely scalable and bespoke logistics capability, normally only accessible to the biggest players in the market. From procurement and shipping to distribution and customer service, Ingenious will always be looking to develop existing logistics solutions in order to better meet retailers’ needs, working non-stop to maintain their resilience to future problems. Page 15 Introducing Clipper’s Future Forum Speaker Geoff Lippitt. Business Development Director, PD Ports. Geoff Lippitt highlighted how PD Ports operates as part of the supply chain, and not as a landlord, and described how portcentric logistics solutions are making a difference to businesses now. He revealed how the value created in the supply chain by Port Deconsolidation is delivered through efficiency, flexibility, environmental benefits and cost. PD Ports is a multi-award-winning ports and logistics business, based in the North of England. The company owns and operates Teesport, and owns or operates at ports on the Humber estuary, Rivers Trent and Ouse, at Medina Wharf, Isle of Wight, and operates a logistics business in support of its port operations. PD Ports’ deconsolidation has experienced sustained levels of growth and the pace of change is accelerating, which is why PD Ports’ owner has made significant investments to secure Teesport’s future role as a ‘hub’ in the supply chain. Page 17 “Portcentric isn’t a dream, it’s something we’re doing now.” Port Deconsolidation gives retailers the means to optimise their supply chain and take out waste. We see this as a growth centre in our market, and have invested £17m in our port infrastructure over the last 12 months to develop facilities and value-added processes, enabling us to become a ‘hub’ in the supply chain, rather than just a ‘node’. We offer our customers the benefit of portlocated importation and distribution centres across the UK. Asda, Tesco, Taylors of Harrogate and Huntsman are already reaping the benefits. Their port to end-user time is reduced and logistics costs minimised by: • Reducing the need for inland container movements and restitution. • Elimination of demurrage bills and quay rent for containers. • Reduction of inland movement by direct deliveries. • Providing cross-docking and warehousing. • Reducing inventory across supply chains. • Operating in custom bonded areas. • No ‘return to port’ issues for the containers in which goods are received. Size of our operation. We handled over 250,000 containers last year and have over 4m sq ft of warehousing already operational with portcentric activity. Our investment programme means we have capacity to handle 500,000 containers a year, and we have saved 40m road miles, and saved our customers over £20m. We’ve also reduced carbon emissions by 60,000 tonnes, and we were crowned Asda’s Outstanding Service Carrier 2012, Container Carrier 2011 and Carrier of the Year 2012. Imports. The underlying trend is that, following the demise of the traditional industries, the Short Sea volumes have been going backwards. Deep Sea volumes, fuelled by portcentric developments, have now overtaken Short Sea volumes and are serving a wider hinterland. As vessels get larger, only Teesport in the North has the capacity to service them. Creating a modal shift. As European volumes grow, there is increasing demand for using the port as a modal interchange. Integrating roll-on/roll-off: • Short Sea/feeder traffic. • Retailers, FMCG and Automotive. • HIGH CUBE – pallet wide expected to grow from 40% to 65-70% by 2023. • European market to UK hinterland. • M62 corridor to Liverpool. • North East and Scotland. Rail solutions at Teesport. Rail companies are becoming more adept with their networks, increasing access and efficiency. The new super low liner has opened up the East/ West divide (Pennines), 9’6” containers can now be moved across the network, and flexible wagon configuration has resulted in an increase in the number of containers per train service (20%). Measures have reduced congestion on the UK road network by 320 vehicles per week. Development of Teesport services. Currently we run routes to Widnes, Grangemouth and Workington. In the future we will add Barking and Daventry, with onward opportunities into South Wales and the South East. “Portcentric logistics is the new beating heart of efficient, green, lean, global end-to-end supply chain management.” • Collaboration is key. • Demand is created then built through excellent service. • The value created in the supply chain is delivered through efficiency, flexibility, environmental benefits and cost. • The pace of change in this market is accelerating. Introducing Clipper’s Future Forum Speaker Ian Stansfield. Distribution Director, Asda. With responsibility for operations in food, general merchandising, clothing, Asda Direct and reverse logistics, Ian Stansfield described how Port Deconsolidation is playing an important role in the development of Asda’s supply chain solution. Ian described how Asda’s operations grew to the point where they had too much stock, not enough capacity and warehouses all over the country. Now they flow clothing and general merchandise using a Port Deconsolidation solution. Faced once again with the prospect of running out of capacity, they sought a solution that would defer development of a costly fourth regional distribution centre – and add significant other benefits to the Asda/George clothing supply chain. The partnership with Clipper created a team focused on devising a flexible Port Deconsolidation which can meet Asda’s/ George’s expanding multichannel needs. Page 19 Asda Port Deconsolidation. With the clothing side of the business growing fast, we faced challenges in relation to stock levels and supplying our expanding store network, as well as a flourishing e-commerce operation. We were running out of capacity and faced a conundrum: planning forecasts were just not believable and we couldn’t predict what our sourcing strategy might be in five years. This meant a lot of uncertainty in a challenging economy. So we needed a flexible solution that would allow us to downsize or increase operations to meet demand. Clothing import points of entry. Products sourced from Sri Lanka, Bangladesh, China and Cambodia arrive in Southampton, with the rest coming into Teesport. From Southampton, products are transported via rail to the North East and then via road to deconsolidation centres in Darlington and Teesport. Goods arriving in Felixstowe are transferred to Teesport via feeder vessel, and via road to the deconsolidation centres. Clothing network flow. Port Deconsolidation plays an important role in how we flow clothing and general merchandise. Retail-ready imported products, bulk imports and goods sourced in the UK are prepared at the deconsolidation centres in Teesport and Darlington, and picked and delivered via our three regional clothing distribution centres at Brackmills, Lymedale and Washington, and also through our stores network. We also have cross-dock centres in Scotland and the South West. Boxed garments are sent to Teesport, and hanging garments to Darlington. In the UK market there are lots of hanging garments currently, unlike in the US where boxed is more popular. However, cost pressures are pushing us towards increasing the number of boxed products in our container flow, which meant we needed more pre-retail capability. But we were running out of capacity. We could see that investment in a fourth regional distribution centre was on the cards. But we wanted flexibility to be able to react quickly to future market challenges. Clipper’s Wynyard Park supercentre and Port Deconsolidation solution gives us just that. Benefits of Port Deconsolidation within Asda’s strategy: • Upstream UK capacity for holding stock. • RDCs/spokes focus on flow to customer. • Optimise network capacity. • Fast fashion/reaction becoming more critical. • Pre-RDC and pre-retail capability – unbox/ hang. • Significant reduction in road miles/carbon emissions. • Balances network stock to support regional sales. • Item flow methods can be adjusted based on volume/mix. Port Deconsolidation enables us to make the right decisions based on the characteristics of our products, and Wynyard Park gives us the capacity, ability and agility to use the most effective methods to distribute them. It’s a simple solution, and it works. Introducing Clipper’s Future Forum Speaker Tony Mannix. Managing Director, Clipper. Tony Mannix provided an overview of Clipper’s Wynyard Park development at Teesport, describing the benefits of the location and the opportunity coming later this year for other retailers to share in a Port Deconsolidation solution that is delivering added-value for Asda/George. This is Clipper’s latest development in support of its retail customer base. The partnership with Asda/George has made the project a viable reality, and now Clipper is able to offer ‘shared use’ solutions to other customers. The site can offer a whole range of solutions, from simple break bulk to full pre-retail services (including steaming/ pressing etc); and on to retail pick/pack and e-fulfilment operations. The strong relationships with PD Ports and Allport allow Clipper to offer integrated end-to-end global supply chain solutions. Page 21 Port Deconsolidation and Clipper Wynyard. Clipper is set to open a new 350,000 sq ft deconsolidation centre located near Teesport in September 2012. Half the building will be dedicated to Asda and George Clothing, and, by using a mezzanine floor, take their internal space footprint to over 600,000 sq ft on a 10-year contract. The new site has been strategically chosen for its proximity to the port, road infrastructure (A1/A19) and available skilled workforce which make it a prime location. Multi-modal connections. The port is fully rail connected, with additional routes being planned for 2012 and beyond. In May 2011, Clipper started collecting containers direct from port with a 99.7% service level. We have the necessary clearance and systems to go on port and handle container traffic. Retail global supplier base. We have been handling weekly peaks of up to 2m units for George at our Darlington deconsolidation centre since 2009. The current operation has inbound containers from up to 15 worldwide destinations. All products that arrive go through pre-agreed quality checks, and any supplier non-conformance is highlighted and rectified. As well as being a cross-dock facility, Wynyard Park will also have an enhanced processing rework and refusals centre capable of carrying out steaming, single-bagging, pressing, re-ticketing and threading, etc. This capability will allow us not only to rework what’s coming in, but also to deal with refusals and returns of other clients in the future. By having an Import Deconsolidation Centre close to port of entry you will get the following benefits: • Right stock, right place in supply chain. • Cost effective. • Initial port transport leg reduced. • Less demurrage incurred. • Improved container restitution. • Reduced carbon emissions. • Reduced road miles. • Inbound container fill maximised. Transport flow with deconsolidation. At the deconsolidation centre: • Unload. • Return container to port. • X-dock and storage capability. • Value-added: Processing and pick/pack capability. • Full loads despatched to RDC requirements. • Full trailers = 100% utilisation outbound. • Trailer then in network for: secondary distribution, backhaul, returns, etc. Wynyard Park ‘go-live’ layout. The current layout for Asda/George is a multilevel storage facility with all the cross-dock and reprocessing taking place on the ground floor: • Inventory control. • Warehousing. • Pick and pack. • Delivery promise fulfilment. • Returns management. Further benefits: • Upstream bulk feed to existing UK DCs. • Peak lopping. • Pre-DC/Pre-retail – the site has full processing capabilities – steaming, pressing, unbox/ hang, relabelling, etc. • Low cost solution for non-collate e-commerce product. • Customs warehousing solutions. • Shared use facilities – easy start-up, cost effective, flexible. If you would like to receive further information about Clipper’s full range of services or to register your interest for upcoming Future Forum events, please e-mail: Johanna Ogilvie – [email protected] or call 0113 204 2050. “Many thanks to all of the Clipper team for a very informative and thought-provoking conference yesterday afternoon. The conference met and raised my expectations, and the information on joint ventures/collaborations was excellent. I’d recommend the Future Forum to my colleagues and look forward to attending the next event.” Bruce Burchell, Business Project Manager, BMB Clothing. “Many thanks for an enjoyable session at your Future Forum – Clipper events never fail to be thought-provoking!” Bill Acres, Principal, Acres & Acres. Clipper Ltd Gelderd Road Leeds LS12 6LT Tel: 0113 204 2050 www.clippergroup.co.uk
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