Optimising current operations
Technology and automation
We focus on several key areas to drive efficiency in our fulfilment operation:
- Receiving, putting away and managing stock
- Picking and organising orders
- Loading delivery vehicles
- Efficiently routing and delivering customers’ orders
Amongst a range of benefits, these optimisations give us perfect stock control; high productivity; the lowest inventory and product waste levels in the industry, and a smaller van fleet than would be needed to serve a comparably-sized store or dark store.
We develop our software in-house so we can rapidly develop and implement solutions that improve efficiency.
NB. Naturally our proprietary technology cannot be bought ‘off the shelf’ on the open market. This protects our business and makes it very difficult to replicate.
We operate the world’s two largest, most sophisticated single-pick grocery stores: CFC Hatfield and CFC Dordon. The latter opened (on time and on budget) in February 2013, and is capable of handling over 180,000 orders per week (equivalent to c. £1 billion of sales). Both were designed and built to handle the unique challenges that exist in picking groceries with speed, accuracy and efficiency, including:
- Picking a basket of 50+ items
- Picking across three different temperature zones (ambient, chilled, frozen)
- Coordinating multiple orders to go onto a delivery vehicle in a short time window
Enhance efficiency of future capacity and drive scale benefits
Future Customer Fulfilment Centres (CFCs) – improving capital efficiency
We shall commit to further CFC capacity at the appropriate time. While the existing CFCs represent the most efficient warehouse operations of their kind, our focus is on improving capital efficiency with the objective of a more saleable and modular approach in the future. Such developments will underpin future expansion in the UK and international markets.
Non-food and spokes
We constantly plan for growth, and invest in appropriate fulfilment assets, such as our delivery spokes, and our dedicated non-food warehouse opened in January 2013.
As we grow, we can allocate administration and fixed costs more efficiently; our gross margins improve, as does the efficiency of our delivery operations.