John Lewis head of operations John Munnelly said it makes “no financial sense” to invest in supply chain infrastructure for Black Friday.
The department store retailer’s head of operations said retailers should not take special measures in their fulfilment infrastructure to accommodate sales peaks relating to Black Friday.
“Volatility driven by events like Black Friday is exceptional,” said Munnelly at Retail Week’s supply chain summit today.
“As much as we want to maintain a level of service for our customers, it makes no financial sense to invest in fulfilment technology to serve that one day of the year.”
Munnelly, who has worked in John Lewis’s operations team for 10 years, oversees the retailer’s 2 million sq ft Magna Park distribution centre in Milton Keynes.
‘The new sexy’
He said he has had the “fortunate and sad experience” of seeing the rise of automation across John Lewis’s supply chain and said the retailer’s Magna Park fulfilment centre had undergone “quite major surgery to accommodate growth of online” in recent years.
“Flexibility is expensive but fundamental, if we hadn’t invested in our distribution and automation in the last few years we wouldn’t be where we are now,” said Munnelly.
Despite the “small fortune” that John Lewis has spent in keeping Magna Park fit for purpose, Munnelly said the rise of ecommerce meant that “logistics is the new sexy” in retail.
“The best thing that has ever happened to the retail supply chain is the rise of ecommerce distribution,” he said.
“A number of years ago, supply chain was seen as a necessary evil that got in the way for retailers, but that is certainly not the case now – shorter lead times, personalisation and convenience are fast becoming a business’s USP, and the supply chain is integral to delivering all of that.”