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 what we believe to be the world’s two largest, most sophisticated single-pick grocery stores: CFC Hatfield and CFC Dordon. At the end of 2016 we commenced operations in our latest CFC in Andover, Hampshire. This site houses the first implementation of our new, internally developed, integrated MHE and associated software. At maturity, the solution will be capable of driving significant productivity and fulfilment benefits in a highly modular and flexible fashion, and we expect it will increase our fulfilment capacity by around 65,000 orders per week, or approximately £350 million in sales value. All of our CFCs are 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 have been developing our largest and, what we believe to be, most capital efficient warehouse in Erith, South London since early 2015 and we expect first orders from this CFC to initiate in financial year 2018. Like Andover, this CFC will utilise both our proprietary software and physical solutions and we expect it will be capable of handling over 200,000 orders per week, equivalent to around £1.2 billion of sales when operating at full capacity.
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 which 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.