Tesco needed to fulfil the promise of a new internet retailing arm Tesco Direct, and this required the rapid transformation of a traditional warehouse operation to cater for the very different demands of multi-channel retailing. They appointed The Logistics Business to undertake the work.
Initially the key tasks included deciding upon the operating processes and the size and scope of the fulfilment centre operation. From these, the detailed design of a workable solution was developed. ‘We needed flexibility of approach in the final solution as the project was a very fluid thing at the early stages’, comments Neil Ashworth, Supply Chain Director for Tesco Dotcom. ‘The product range was taking shape as we were developing the solution and the final inventory was not known in detail until very close to launch’.
The process began with defining the operating processes that would be required and then specifying and selecting the key warehouse management system to run the operation efficiently and accurately. Then followed the redevelopment of a 23,000 square metre (250,000 sq ft) distribution centre in the Midlands into the first national fulfilment centre supporting the Tesco Direct website. This new operation supports over 8,000 product lines, from toys to equestrian products, digital cameras to household goods. The service also handles orders for the Tesco Direct catalogue and a growing number of stores.
‘One of the most important aspects was the pragmatism of The Logistics Business’, comments Ashworth. ‘As the range evolved, they had the abilities to establish a flexible template and continually re-engineer a solution. This was of huge importance and they were integral to the timelines of the successful launch of Tesco Direct. Without The Logistics Business we wouldn’t have got it off the ground’.
The initial launch of Tesco Direct was a resounding success, with over 1 million hits on the website in the first three weeks alone, and orders through the new distribution operation have continued to grow. This is an example of how, within a relatively short time span, a challenging supply chain fulfilment project can successfully support business development and marketing strategies.