Marks and Spencer 2010 Annual Report Download - page 38

Marks and Spencer Group plc Annual report and financial statements 2010 Directors’ report 34
Efficient delivery
IT, Logistics & Supply Chain
Over the last 12 months we have focused
on our immediate priorities – restructuring
our supply chain, implementing new
information systems and improving
operational execution. These investments
will lay down the foundations for future
growth, especially in Multi-channel and
International, as well as delivering tangible
customer benefits, such as better availability
and more flexible delivery options.
Supply chain
Our business operations have changed
dramatically in the last decade – there are
faster lead times, a wider range of products
and extensive growth in both our
International and e-commerce businesses.
This year, we set out plans to restructure our
supply chain to better support these
changes. Our aim is to build a simpler supply
chain that will improve customer availability
and create a more efficient platform for
growth. In addition these changes will deliver
annual savings of £150m.
We have made good progress in 2009/10
and have saved £35m by consolidating some
of our warehouses and implementing a
number of efficiency projects.
Consolidation of warehouses
One of our biggest projects is the
consolidation of our GM warehouse
network, moving from 110 smaller
warehouses to a small number of ‘super’
warehouses, based in prime central
locations and a dedicated e-commerce
distribution centre in the Midlands.
This is a long-term project but the first
phase is well underway and we have begun
the closure of 21 sites. Work has progressed
quickly and the first of the new ‘super’
warehouses, a 1 million sq ft site in Bradford,
is due to open in summer 2010. Our
e-commerce site in the Midlands has been
identified and we plan to start construction
this year. All of our new warehouses will
have a state of the art design, with the aim
of achieving an excellent rating under
BREEAM, a voluntary measurement rating
for ‘green’ buildings.
Simplification
In addition to our consolidation programme,
we have simplified operating processes in
our warehouses to enable us to move
products through our supply chain more
quickly. We have done this in two
ways, firstly by streamlining
day-to-day processes –
In October – under Project 2020 – we set out a clear plan to deliver long-term
sustainable growth through creating a more efficient IT and supply chain
infrastructure. In recent years we have invested in upgrading the inefficient,
20 year old systems that supported the business. This year we have begun
to accelerate the pace of activity to fundamentally transform the way M&S
does business.
QUALITY & TRUST
Below: The Cape flora bouquet is arranged
from seasonal flowers sustainably harvested from
the Agulhas region of South Africa. The Cape floral
kingdom is the smallest plant kingdom in the world
but contains the highest known concentration of
plant species – more than 9,000 plant species
make up the region, 6,000 of which are found
nowhere else on Earth.
The fuel used in logistics transport accounts for
around 8% of our operational carbon emissions.
We’ve already achieved our 2012 Plan A target
– a 20% improvement in delivery fuel efficiency
to our stores – and this year extended it to a
35% improvement by 2015. We’ve introduced
a number of initiatives to help as achieve this
such as a dual fuel trial for our Tear drop trucks.
We’ve also adopted ‘loose loading’, enabling
us to increase the stock carried on each truck by
50%, reducing the number of journeys required.
PLAN A – TEAR DROP TRUCKS
For more information about Plan A see
p36 or visit marksandspencer.com/plana