The Faults in the Recent Project of Sainsbury :: Sainsbury Business Management Essays

The Faults in the Recent Project of Sainsbury In 2000, Sainsbury’s began its â€Å"business transformation programme†. The grand plan includes what is arguably the largest and most ambitious retail supply chain project in Europe. The main driver was the need to cut costs. However, internal research found that the company’s cost-per-case was significantly higher than its nearest rivals. Sainsbury‘s had been managing distribution in the same way for more than 40 years, which is mainframe-based warehouse management system, Its typical distribution center was almost as old. Compared to the age of the average Tesco depot—seven years—Sainsbury's depots were nearing the end of their useful life. The old system of depots was designed for the purposes, such as packing for meat and own-brand goods. However, it means that one store could be receiving goods from five or six different depots in any one day, which was highly inefficient. The old delivery system was also ill-suited to changes in customer tastes, habits and store locations. Supermarkets have to offer a wider range of products, in smaller volumes and at lower prices, than in the past, to people who shop when they need to rather than stocking up once a week. â€Å"Today, Sainsbury’s carries 2.5 million cases per week from around 2,000 suppliers. It also has to deliver them to 500 outlets every day, ranging from traditional large stores to smaller shops on previously untapped territories, such as railway terminals and Shell petrol stations. Given this diversity, daily â€Å"waves† of restocking are required from 5am onwards.† (http://www.supplymanagement.com/archiveitem.asp?id=8784, 4/4/2005) In order to service this need, Sainsbury revamped its supply chain and created a complete end to end supply management system. â€Å"The initial timeline for the project was seven years, as the struggling chain set about pruning a network of 25 distribution centres to just nine facilities in eight regions around the UK. Another part of the plan was to build four giant warehouses, two of them fully automated, for  £400 million each." (http://www.supplymanagement.com/archiveitem.asp?id=8784, 4/4/2005) Sainsbury did it in three years, to catch up with, in some cases, and some cases overtake its rivals. Sainsbury's uses a number of IT systems to manage its supply chain, mostly within the Accenture outsourcing deal. Distribution warehouse management systems are provided by Manhattan Associates. Eqos has built an alerts system to improve stock availability in store, based on Microsoft .net technology. And Retek has supplied software to forecast product demand in Sainsbury's stores. By implementing automation, Sainsbury was hoping also to avoid human errors so that errors were right at the first time Although, Sainsbury has been working hard to improve its supply chain, however, the operation of its four new automated depots