Strategy

Sainsbury's multi-million pound investment in its Supply Chain will create one of the most advanced grocery distribution operations in the world. Over a three year period the Supply Chain will be transformed to provide improved on shelf availability with a paperless, stockless, accurate and flexible service designed to meet the current and future needs of the business. The Supply Chain strategy, launched in the autumn of 2000, covers four key areas of activity: network renewal systems and technology processes and partnerships people and culture

Network Renewal
Modernising, upgrading and expanding the distribution centre network and transport operations to provide improved availability and accuracy at lower cost

Supply Chain Goal Supply Chain Vision

Excellent service at unbeatable cost, delivered by great people

People + Culture

Leading transformation
Our aim is to establish a Supply Chain team with three core values: passion courage integrity The new-look Supply Chain will be based on an integrated, end-to-end approach, managing all aspects of transportation and distribution from the factory gate to the store back door. The overall goal is to create a Supply Chain based on a number of key principles: paperless stockless accurate simple automated where appropriate

Introduction of new attitudes, skills and flatter management structures to achieve a flexible, responsive and committed workforce

Creating a world-class Supply Chain for

Systems & Technology

Processes & Partnerships

Creation of new processes which link all elements of the supply chain from suppliers to the shelf to provide the most efficient service at least cost, as well as creating a new level of co-operation through partnerships with colleagues, unions and suppliers

Replacement of all existing warehouse management, transport and supply chain planning systems with state-of-the-art technology

Performance
Improved performance will be achieved through reductions in cost per case, improved availability, reduced stock loss, greater accuracy of delivery and schedule adherence while achieving required levels of service

...faster, simpler, together

Supply Chain

Supply Chain blueprint

Sainsburys Supermarkets Holborn Business Centre 33 Holborn LONDON EC1N 2HT Telephone: 020 7695 6000

November 2001

The heart of the Supply Chain

St or es
The key principles in developing the new Supply Chain network involve creation of an holistic, end-to-end approach to distribution. This will embrace fully electronic collaboration and communication with suppliers, allow for continuous replenishment of products with minimum handling and provide a more store friendly service. The new network currently being developed consists of:
Primary Consolidation Centres (PCCs) handling shipments from local suppliers, holding stock and replenishing fulfilment factories Fulfilment Factories (FFs) store facing multi-temperature sites handling around 10,000 lines of high volume commodities (excluding frozen products). The fulfilment factories will handle waved deliveries to stores on a round-the-clock basis, keeping stock levels to a minimum. The plan is for nine fulfilment factories, six automated and three manual, in the new network. K Line depots two specialist distribution centres using highly-automated sorting systems enabling them to efficiently pick low volumes of a wide range of up to 16,000 slow moving and bulky products Each fulfilment factory will have a range that includes ambient, chill and produce lines and will serve over 70 supermarkets and up to 150 smaller format stores. Each of the new fulfilment factories will be around 650,000 sq ft in size, covering 40 acres and costing 70 million. The automated handling systems and other mechanical handling equipment accounts for well over a third of the overall cost. Frozen food depots two dedicated frozen food warehouses delivering products direct to stores

Customer centred delivery focus taking account of the needs of the supply chain, stores and customers

working will be involved in the highly automated environment. Continuous throughput of products will mean a vehicle leaving or arriving at the warehouse on average every two minutes around the clock. Typical daily routines will involve chilled products arriving in waves from 5am onwards, being held in a 1,000 pallet capacity buffer, ready for pallet and case stripping onto the auto retrieval sortation system. Advance chill deliveries will start leaving the site by mid afternoon and continue as either dedicated loads or combined with ambient products right through into the late evening. Ambient products will be received around the clock ready for sorting via a two-tier cross belt sorter with more than 170 chutes and up to 4,000 pick slots.

DAY IN THE LIFE....

With a peak weekly capacity of up to 2.4 million cases, each fulfilment factory will operate on a 24/7 basis, with picking and sorting taking place on average 20 hours each day. Each of the new sites will act as a mother depot to more than 200 supermarkets and smaller format stores, with nearly 2,000 vehicle journeys each week.

Su pp lie rs

The 700-strong workforce will have a variety of shift patterns to cover ambient, chill and produce picking. New skills and ways of

Current Sites Sites under construction Potential Sites

Collaboration with suppliers, sharing data, working jointly to deliver value to the customer within a 24/7 paperless system

Key Programme Contacts

Strategy Management - Richard Dickson
Business Requirements, Assumptions, Vision, Cohesion, Direction Setting

Key Programme Milestones

KEY
Site Acquisition

Programmes

Programme Management - Mike Adams

Overall Resource Management, Reporting, Escalation, Comms, Priorities, Risk Managment, Quality and Audit

Project
Hams Hall Waltham Point FULLFILMENT Greenham Park FACTORIES North London South East London Stoke K LINE FACTORIES Rye Park Phase 1 Phase 2 PkMS (Phoenix) Launches TECHNOLOGY RETEK (Cygnet) 1

2001

2002

2003

2004

2005
Strategy & Migration Planning Infrastucture Delivery
Ian Packer

Systems & Core Processes

Mike Adams

Dependant/ Processes Capabilities

Ian Fidler

Operations & Tactical Planning

Nigel Basey Andy Sanderson Andy Strudwick

Transport & Consolidation

Richard Dickson

Stoke Rye Park Hams Hall Walthm Pnt Greenham Park Elstree Stone

K-Lines - John Rogers

MHE
Installation Starts

John Perman

Fulfilment Fcts 1 - Stephen Ottaway

MHE Testing Site Handover

Opening and closure timings New Sites

Site design Buildings Automation

Phoenix Firewing SABRE/ SCION Replatforming B2B

Supplier conformance Store friendly agreement Operations timescales Single Units

Teams of people to run new sites and central systems Short term changes (1-12 months)

Transport Planning Importation and Global Logistics

Fulfilment Fcts 1 - Peter Niland

Frozen Network

Site Fully Operational

Haydock Rotherham Charlton Emerald Park

Warehouse concepts

Primary Consolidation Centres

FGP/TO - Richard Dickson

Forecasting
Langlands Park Hoddesdon Emerald Park Charlton Buntingford Basingstoke Elstree Rugby

Replenishment Planning

Associated Systems
Park Royal Gorton

Replatforming - Mike Adams

TRANSPORT

NTSC launched

Haydock Stone

Rotherham Shire Park

Picking Centre - Paul Woods