Collaboration with your supply base can not only reduce costs but also help retailers become more sustainable, the World Retail Congress heard on Thursday afternoon.
In a session on the supply chain, UK based retailers Argos and DSGi described how measures to use their distribution fleets more efficiently led to major cost savings and reductions in CO2 usage by cutting down the miles covered by lorries.
Both companies have increased the use of multi-deck trailers to extend the amount of space occupied in the trucks. Rerouting runs and backhauling have also been employed.
DSGi director of logistics Sean Feeney described how the company’s new chief executive John Browett has transformed the logistics operation using its home delivery service as an example. Deliveries are now in timed slots and a charge for removing old appliances has been scrapped - instead these are taken away for recycling. But while the new set-up provides better service for customers and has slashed the number of complaints, its cost has been reduced 18 per cent, with fewer deliveries failing.
Argos head of supply operations Duncan Kendal described a process with one of its bed suppliers whereby air is removed from mattresses before transport, reducing them to one inch deep and consequently cutting the lorry space they occupy, and then the air is put back in prior to delivery to customers. He added that while this particular instance was supplier led, the impetus for a more sustainable approach to supply chains is generally coming from retailers.
Chairman Martin Christopher, professor of marketing and logistics at Cranfield University, suggested that a return to more “local for local” sourcing was vital for the good of the environment. However, Kendal said this was impractical given the dramatic reduction in the supply base in the UK.
Meanwhile Neil Kearney, chairman of the International Textile, Leather and Garment Workers Federation, said that bad factory conditions still need to be addressed. Areas such as human rights, factory safety and the length of the working week remain a huge issue in factories in the developing world, but he said there were also issues in industrialised countries, particularly with abuse of migrant workers.