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

The Faults in the Recent Project of SainsburyIn 2000, Sainsburys began its business transformation programme.The grand plan includes what is arguably the oversizedst and most driven retail supply chain project in Europe. The main driver wasthe need to cut costs. However, internal research found that thecompanys cost-per-case was importantly higher than its nearestrivals.Sainsburys had been managing distribution in the same way for morethan 40 years, which is mainframe-based warehouse management governing body, Its typical distribution center was closely as old. Compared to the ageof the average Tesco depotseven yearsSainsburys depots were nearingthe end of their useful life. The old system of depots was designedfor the purposes, such as packing for nerve centre and own-brand goods.However, it means that one store could be receiving goods from five orsix different depots in any one day, which was highly inefficient.The old delivery system was in any case ill-suited to changes in customertastes, habits and store locations. Supermarkets have to offer a widerrange of products, in smaller volumes and at lower prices, than in thepast, to people who keep going when they need to rather than stocking uponce a week.Today, Sainsburys carries 2.5 million cases per week from around2,000 suppliers. It also has to deliver them to 500 outlets every day,ranging from traditional large stores to smaller shops on previouslyuntapped territories, such as railway terminals and Shell petrolstations. Given this diversity, daily waves of restocking arerequired 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 andcreated a complete end to end supply management system.The initial timeline for the project was seven years, as thestruggling chain set about pruning a network of 25 distributioncentres to just nine facilities in eight regions around the UK. some other part of the plan was t o build four giant warehouses, two ofthem fully machine-driven, 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, andsome cases overtake its rivals. Sainsburys uses a number of ITsystems to manage its supply chain, mostly within the Accentureoutsourcing deal. Distribution warehouse management systems areprovided by Manhattan Associates. Eqos has built an alerts system toimprove stock availability in store, based on Microsoft .nettechnology. And Retek has supplied software to forecast product demandin Sainsburys stores. By implementing automation, Sainsbury washoping also to avoid human errors so that errors were right at thefirst time Although, Sainsbury has been working hard to improve itssupply chain, however, the operation of its four new automated depots