Somerfield shares weekly data with top 50 suppliers

Somerfield has joined the ranks of UK and overseas retailers working more closely with top suppliers to improve on-shelf availability and reduce supply chain costs.

Speaking at a supply chain summit organised by grocery think tank IGD, Somerfield’s supply chain director Adrian Bates and distribution director Andy Monk outlined radical change to the retailer’s supply chain.

The move ensured that the 500 products that generate 20% of Somerfield’s sales were stocked and continuously available in all of its stores, they said.

The supermarket is collaborating with 50 suppliers, sharing data on a weekly basis, said Bates. It had started joint promotional forecasting to ensure full availability and had face-to-face meetings planned, he added.

Somerfield’s strategy had involved the rationalisation of its supply chain network and taking out £50M of unnecessary stock, said Monk.

It had also moved to a single service logistics provider in the form of Wincanton, which had been “tremendously successful”, he added. It had saved £12M in the first year alone while reducing warehouse errors, thus raising availability and on-time in-full deliveries.

In the process the initiative had reduced complexity in the supply chain. It had cut Somerfield’s ambient product range from 12,000 to 7,000, its systems from five to two, depots from 15 to nine and logistics providers from three to one.

According to Monk, store availability had risen by 3%, depot availability by 5%, delivery timelines by 3% and stock reduced from 29.4 to 20.2 days cover.

What that had all meant to the business was a 40% head count reduction and £60M in reduced costs, he added.