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IN THE FIERCELY COMPETITIVE Woolworths, Mr Price, Pick n Pay today locally produced,” says Johann
world of South African retail, and Shoprite. Baard, Executive Director of Apparel
an effective supply chain is Manufacturers of South Africa, a body
imperative. Get it wrong and the penalty SPEED TO MARKET representing garment sector employers.
is dissatisfied customers, lost sales and But even having a slick procurement
sub-optimal trading margins. capability in China is not enough. At DISTRIBUTION STRATEGY
the fast-changing fashion end of the
“It is all about getting the right apparel sector, what counts most is Procurement is one leg of the supply
product in the right quantity to the right speed to market, as well as flexibility. chain. The other is distribution.
place, at the right time and at the right It is an approach pioneered by Spanish
price. “Our involvement in our supply group Inditex’s Zara business. Zara Retailers neglect the distribution leg
chain starts at the point of supply,” says is the world’s largest fashion retailer of the supply chain at their peril, as
Selwyn Eagle, Head of Merchandise and prides itself on rapid and fashion- supermarket giant Pick n Pay learnt
Management at The Foschini Group leading stock updates in its stores. at huge cost in lost market share and
(TFG). The group includes Due South, devastation of its profitability. The
@Home, Markham, Total Sports, Central to Zara’s speed-to-market cause of Pick n Pay’s near-downfall
Foschini and American Swiss among strategy is the manufacture of garments some years ago was its failure to adopt
its operating brands. close to its major markets, with a large centralised distribution.
proportion of its needs being met by the
That involvement starts immediately company’s own factories. “It would be a nightmare to try and
after products leave the factory, most function without central distribution,”
of which are located in China. “We have ? believes Spar Group’s Logistics
done a lot to enhance the efficiency of Foschini can receive Executive, Trevor Curry. “Central
our procurement [there],” notes Eagle. up to 20 containers distribution has always been a core
One of the first moves was to reduce the a day from China element of our business.”
number of Chinese ports through which
products are shipped – from 20 down It is a strategy that TFG is emulating. Woolworths was also an early starter
to five. Up to 20 containers a day are The group’s move into manufacturing and first moved into central distribution
shipped to TFG from these five harbours. came in February 2012 when it of perishables in the 1970s. Similarly,
acquired Prestige Clothing, which Shoprite CEO Whitey Basson grasped the
According to Eagle, much work has brought with it factories located in vital importance of central distribution
also been done to optimise container Cape Town and Caledon, 113km and moved the group in this direction
loads, which now often comprise mixed away. TFG has revamped both into following its acquisition of Checkers in
consignments. An example would be state-of-the-art women’s fashionwear 1991. It was a move that helped catapult
men’s clothing for Markham mixed production facilities. it from a distant sixth to being the
with lower-volume products such as second-largest food retailer in SA.
homeware for the group’s @Home stores. “We can now take garments from
concept to production in two to four Shoprite overtook Pick n Pay as
This approach has seen TFG halve its weeks,” observes Eagle. It puts TFG, market leader in 1998, an achievement
shipping costs. Reflecting the need for which produces about 7,5-million Basson attributes in large measure to
world class on-the-ground expertise in garments annually, in the same speed- centralised distribution. Today Shoprite
a market as complex as China, Eagle to-market league as Zara. operates vast distribution centres (DCs)
gives much of the credit to international of up to 180 000m2 in Cape Town,
logistics specialist All Port Cargo. “We Other fashion retailers including Johannesburg, Centurion, Durban and
put out a tender two years ago and it Woolworths, Truworths, Mr Price and Port Elizabeth.
was won by All Port Cargo,” Eagle tells Edcon have also upped their local
the IMM Journal of Strategic Marketing. procurement markedly. “Higher up the It has enabled Shoprite to centralise
“They know everything we do in our value chain, where-speed-to-market distribution of some 85% of products
business. They are not the cheapest, counts, upwards of 80% of clothing is going into its stores. “It (85%) is the
but they are the best.” magic number and about as far as
any food retailer can go,” says Sasfin
It is a view shared by other South Securities analyst Alec Abraham.
African retailers who have partnered
with the logistics firm. They include The huge advantage of central
distribution lies in efficiency of
deliveries to stores. According to >>
October 2016 – January 2017 strategicmarketing 9
