An Introduction to Retail Consolidation Centreswestlondonalliance.org/wlaextranet.nsf/0... ·...
Transcript of An Introduction to Retail Consolidation Centreswestlondonalliance.org/wlaextranet.nsf/0... ·...
10th January 2007
An Introduction to Retail Consolidation Centres
Contents
Executive Summary
How does the Consolidation Model work?
Background to the Heathrow Consolidation Centre (HCC)
HCC Operation
Key Elements of the Solution
Bristol City Centre Consolidation Centre
Benefits of Consolidation
Conclusion
Contact Details
Executive Summary
Multi-retailer environments, such as those seen in Airports and City Centres face a number of significant operational and environmental challenges
Different stakeholders (Landlords, Retailers, City Councils, Centre Operators) require specific agendas to be addressed and the consolidation solution set is designed for this purpose
The end to end solution spans management of the inbound supply chain, to product processing, scheduling and delivery control, through to final direct replenishment to shelf
Impact on the environment is measurable and significant
How does the Consolidation Model work?
Direct deliveries
Supp
lier w
areh
ouse
sM
ulti-retail environm
entParcel Carriers
RDC
Suppliers • Increased congestion around multi-retailer centres• Worsened turnaround times leading to additional costs into the supply-chain• Requirement to provide more reliable services to retailers
Retailers• Inefficient staff planning• Severe restrictions on stockholding ability• Lower productivity due to the performance of non core activities
Landlords• Service area congestion results in higher emissions and risk of accident• Irregular and ad-hoc supplier management difficult to control • Mismanagement of delivery media causing potential H&S and fire risks
Cha
lleng
es
Key logistics processes are performed by retailers and landlords who are distracted from their core business activities
How does the Consolidation Model work? (Cont’d)
DHL Exel Supply Chain addresses these challenges with solutions that outsourcekey logistics processes enabling stakeholders to focus on core business
activities
Parcel Carriers
Supp
lier w
areh
ouse
s
Multi-retail
environment
Direct deliveries
Supplier Management•Approved suppliers•Performance reporting•Supplier collections
Stock consolidation•Checking of goods•Offsite stockroom management/provision •Caging of stock for delivery
Delivery to store•To door/stockroom service•Agreed delivery windows•End to end carton tracking•Delivery of manageable quantities
Returns•Collection of inter-branch transfers and supplier returns •Disposal of cardboard•Collection of delivery equipment (cages, tote boxes)
Stock visibility and replenishment solutionEn
ab
lin
g
To
ols
Consolidation platformRDC
Consolidation centre media tracking system
Background to the Heathrow Consolidation Centre
Terminal 5 planning application required BAA to
– Reduce traffic congestion
– Reduce waste per passenger
– Reduce environmental impact e.g. vehicle emissions
– Against a background of increasing retail activity
Terminals 1 - 4 not designed for retail logistics
– Access restricted and insufficient loading bays
– Landside access shared with passengers and staff
– Limited or non existent stockrooms and back room storage for retail outlets
– Poorly controlled environment
Background to the Heathrow Consolidation Centre
The preferred solution was the set up of a Consolidation Centre, in order to:
– Streamline the supply of retail and catering outlets
– Provide a central point of receipt for all suppliers
– Provide timed delivery by outlet into the terminals
– Provide door to door deliveries in secure roll cages
– Provide retailers with a Great Service
The HCC Operation
The operation has been through two relocations in 6 years and has now relocated to a 54k sq ft purpose-built warehouse in West Drayton
Every month, the HCC:
– Receives 200K cases from 3,500 supplier vehicles
– Assembles and cross docks 14,000 roll cages
– Carries out 490 vehicle journeys and 4,600 deliveries to the terminals
– Delivers a 82% reduction in supplier vehicle movements
The HCC also accommodates multi-temperature warehousing (8,500 sq ft chiller and 2,500 sq ft freezer) and transport operations for caterers
The HCC Operation (Cont’d)
This new facility has been built for the future in mind:
– Terminal 5
– Heathrow East
By the end of 2007, all of T1 to T4 volumes for caterers and retailers will come through the Centre
Key Elements of the HCC Solution
Store Liaison
– Agreeing time windows by outlet by day
– Dedicated terminal resource that coordinates the delivery activity
– Ongoing customer satisfaction surveys to improve service
Supplier Management
– Agreeing time windows for each retailer
– Performance monitoring and ensuring compliance
– Performance reporting to retailers / caterers internally and externally
Key Elements of the HCC Solution (Cont’d)
Delivery Management
– Vehicles operate a continuous shuttle service between the HCC and the terminals
– “In-terminal teams” co-ordinate the off-loading of the vehicles and the delivery to the outlets
– All vehicles fitted with satellite tracking and driver communication system to ensure quick response and enhance security
Systems Solution
– All transactions are date and time stamped
– Full track and trace functionality
– Automatic production of on time and delivery accuracy reports
Bristol City Consolidation Centre
Scope / Aim
- 1st city centre consolidation operation in the UK
- Applies to the Broadmead Shopping Centre and the Galleries
- Aim: Reduce vehicle congestion into the City Centre and improve air quality
Operational Background
- Service started in April 2004
- 5,000 sq ft warehouse operating 6 days a week
- Deals with retail goods only
Bristol City Consolidation Centre (Cont’d)
Retailer Participation
- 57 retailers, 20 of which contribute to the cost of the service
Environmental Achievements (since April 04)
- 4,573 supplier journeys to the city centre have been removed
- c. 120,000kms saved equivalent to 14.6tonnes of Co2
- Over 8tonnes of recycled materials
The operation has recently been extended for another year with scope for a further year based on DHL meeting agreed KPIs
Bristol City Consolidation CentreService Capabilities
Retailer Challenges
- Maintaining stock availability
- Limited, if any, stockroom/storage space
- Waste disposal management
- Collections and returns
- Staffing for ad-hoc operations
Bristol ConsolidationCentre
BCC Solution
- Flexible replenishment
- Off-site storage and split deliveries
- Pre-retailing and waste recycling
- Transport solutions
- Manpower provision
Broadmead/GalleriesShopping Centre
Benefits of the Consolidation Model
Benefits for BAA
- Reduction of vehicle movements landsideand intra terminal movements of stock
- Improved security as all airside goods aresecurity screened
- Quick response contingency operationalcapabilities
- Reduced freight movements/emissions- Planned and controlled delivery operation
that benefits in-terminal operations and reduced abandoned equipment
- Consistently higher delivery performance- Increased recycling capability- Reduced design and building costs for T5
Benefits for Retailers
- More reliable supply chains with supports an increase in sales
- Improved staff planning and productivity- Better product availability through increaseddelivery frequency and offsite storage
- Increased security of stock- Deliveries can be split to requirement to accommodate
small stockrooms and staffing issues-Reduced Health & Safety risk and fire notice issued-Reduced staff turnover
Benefits for the Community
- Reduction in vehicle movements hence congestion and risk of accident- Improved air quality - Improved waste management and recycling
Benefits for Bristol City Council
- Reduced congestion, pollution and noise- Meeting of their electoral commitments- Increased recycling capability through
collections of cardboard and plastics ondelivery
- Less delivery equipment left unattended
Benefits for Suppliers
- Single point of delivery thathelps deliver a speedy turnaround
- No vehicle size restrictions- Out of hours deliveries accepted- Cost savings (no airside licenceand drivers training required)
Conclusion
Consolidation is aimed at reducing the impact of deliveries in a specific retail delivery environment but can also help stakeholders address other concerns such as security of delivery operations in densely populated areas.
In order to work, the consolidation model requires the commercial back up of those key stakeholders.
The model can be scaled down or up and therefore adapted to a variety of environments.
The consolidation model has been run successfully in Heathrow for over 6 years and Bristol for over 2 years.
Even the Local Press likes the idea of Consolidation!
Contact Details
Olivier Bastien
HCC Retail Development Manager
Direct Landline: 0208 606 3007
Mobile: 07810 057 434
Thank you for listening