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RETAIL SUPPLY CHAIN
?
Above left and right: Centralised distribution created huge efficiencies when it comes to store deliveries
Shoprite, reliance on direct store superstores, which focuses on lower- medium sizes in blue selling better than
delivery by individual manufacturers LSM shoppers. A fourth Pick n Pay DC expected, we can act fast to replenish
can lead to trucks queuing for up to is planned for Durban. stores with those sizes. We get a higher
six hours to offload at a store. It also stock clearance rate that way.”
requires a store to carry up to two “We have come a long way in nine
months’ worth of stock. years and now have all but the smallest The approach adopted by TFG
of our over 7 000 suppliers delivering demands a distribution solution
It was a problem that effectively capable of very fast reaction times.
prevented Pick n Pay from matching ? It has outsourced this responsibility
Shoprite’s rapid expansion of its Using a centralised to RTT, a national logistics company
national store footprint. In particular, distribution model that also handles distribution for TFG
expansion into the fast-growing smaller is vital to success competitors Truworths, Cape Union
format convenience store sector was Mart and Cotton On.
logistically out of the question for Pick n into our DCs,” says Barnard. “But we
Pay, says Kobus Barnard, the retailer’s are still far from being world class.” “If you can’t run full [delivery]
Supply Chain Divisional Director. truck loads all the time, I believe
CLOTHING RETAIL outsourcing this operation is the best
Pick n Pay woke up late, making its CHALLENGES option,” Tucker tells the IMM Journal
first move into centralised distribution Clothing retailers do not have to cope of Strategic Marketing.
with the opening of its Longmeadow DC with the huge heavy-lift volumes that
in Johannesburg in June 2007. It was a successful food retailing requires. But Nathaniel Ballakstein, Chief
move for which it was ill-prepared. “All they do face other very real challenges. Executive Officer at RTT, takes up the
Longmeadow had by way of senior staff story. “We operate something akin to
was a general manager and a financial For TFG, not least is putting the right a bus schedule, moving stock from
manager,” says Barnard. “Pick n Pay apparel products and sizes into each distribution centres to stores on a daily
also had very little expertise in the of its 1 880 clothing stores across 15 basis. We almost always have return
key area of demand planning. It was brands. “We are in a continual battle to loads,” he says.
a scary situation.” get sizes and colours right,” says Jan
Tucker TFG’s Head of Logistics. However, the rapid response times
A former Woolworths veteran of 22 needed in the clothing market require
years, Barnard joined Pick n Pay in 2007 One approach used by TFG is to flexibility and an acceptance that
and in 2008 was charged with putting its hold back 30% of stock destined for sometimes you may need to operate
central distribution strategy on a sound stores. “We react to sales volumes,” at less than 100% efficiency. “Optimal
footing. Since then, Pick n Pay DCs explains Tucker. “For instance, if we find route planning is not always possible,”
have been opened in Cape Town and observes Ballakstein. “Some deliveries
Port Elizabeth, plus a just-opened DC in take priority, which means we must
Durban for its 208-store Boxer chain of be prepared to handle a lot of smaller
orders of less than a truck load.” >>
10 strategicmarketing October 2016 – January 2017
