Page 1: Introduction
When Michael Marks and Tom Spencer became partners in 1894, they could not have imagined what they were creating. Their energy, drive and enthusiasm laid the foundations for the development of a business, which has now become one of the UK’s leading retail chains with a unique market position. Millions of people shop in Marks & Spencer every day and to these millions, Marks & Spencer represents a range of thousands of exciting products of the highest quality and outstanding value. In the UK, Marks & Spencer’s operate 285 stores of differing types:
Departmental Stores 39
Town Centre 206
Edge-of-Town or Neighbourhood 40
Additionally, on a worldwide basis, there are a further 88 stores as well as 78 franchise shops. Marks & Spencer also owns Brooks Brothers which has 157 shops in the USA and Japan, and Kings Super Markets with 20 stores in the USA. Any business that becomes a household name, creates customer expectations and customers are now far more knowledgeable, sophisticated and demanding. In a changing world, a retail organisation’s ability to meet these expectations is not only a function of the products it offers but also depends on how it approaches and provides the needs of its customers.
In order to satisfy these requirements the company needs to respond flexibly. This necessitates some stores opening between 7.00am and 10.00pm so that when a customer enters a store, he or she can expect to find a full range and choice of products, from baked beans to fresh produce ranges, recipe dishes and exotic foods. This variety has to be available seven days a week, in all locations, at all times of the day and night. As an example, on a typical day the company’s flagship store at Marble Arch, London, attracts more than 50,000 customers and therefore meeting the expectations of every customer is an important part of Mark & Spencer’s founding principles of quality, value and service.
Marks & Spencer brand products are sold in their stores under the St Michael name. The stores are designed to provide an attractive and well laid-out shopping environment, which provides the highest level of customer care. Each day more than 200,000 trays of stock are scheduled to arrive at the correct location, in the right quantities required having been distributed through Marks & Spencer’s distribution network, in order to satisfy customer needs. It is not difficult to imagine the complex nature of this network and some of the decisions which have to be taken.
Behind the Scenes
This case study focuses upon one aspect of the physical distribution activities ‘behind the scenes’ at Marks & Spencer. Physical distribution involves all the essential activities required to make products available for customers and is a fundamental dimension of customer service. It is a formidable challenge for management when one considers the number of items on display on the sales floor and if these were to be multiplied across all stores, it becomes clear that the successful stocking of a sales floor is logistically complex.
Efficient stock management enables Marks and Spencer to provide customers with the service they expect by maximising the availability of the products they require. The key to developing an efficient system of stock management is that of stock accuracy. This case study looks at Food Stock Management, a computerised system introduced by Marks & Spencer, which enhances key information enabling them to respond swiftly and flexibly to supply issues in order to meet customer needs.