Page 3: Suppliers
Between 1992 and 1996, the number of suppliers for Multiples was reduced by half to just under 700. At Debenhams there was a reduction of 20%. In the Multiples, the top 20 suppliers handle 75% of the goods and in Debenhams the top 20 have 64%. The aim has been to develop stronger relationships with quality suppliers.
A standard Group Supplier Handbook, in both print and CD-ROM format, replaced around 15 former handbooks and listed best practices in order to ensure the highest quality standards. The suppliers agreed to be bound by the Group’s Supplier Handbook which sets out the working conditions, practices and standards which suppliers must follow if they wish to supply goods to the Burton Group. Members of the Group’s buying teams and senior managers make hundreds of supplier visits each year. The partnership between the Burton Group and its suppliers is a mutually beneficial process. The Group benefits from:
- faster response times
- greater reliability
- more flexibility
- higher quality assurance
- improved profitability.
These benefits lead to higher sales and lower mark-downs on goods that fail to sell at the original selling price. Suppliers benefit from an improved information flow coupled with more senior management attention from the Group. Successful suppliers get a long term commitment from the Burton Group and a higher stock-turn - i.e. more of the Group’s business. Suppliers also benefit from faster payment of their invoices.
Right place right time
The new distribution centres enable the fast flow of goods between the factories and the stores. Development of the Distribution Centres (DCs) has been carried out to improve flow of stock, accuracy and service levels. The Group’s ‘put to light system’ has significantly improved accuracy. This system indicates to packers the exact number of items which should be placed in each crate to replenish stock levels in each store. For example, eight red lights over a crate with a certain product code for the Norwich branch of Debenhams, means eight of that product should be placed into the crate destined for that store.
Meanwhile, the Ipswich crate next to it may only need three of the same item so there will be three lights on. The packers place the correct number of items into the crates, switch off the lights and move on to the next product code. The process is simple and accurate. Delivering stock in-store that is ‘shop ready’ is also a feature of the new approach. Garments are now delivered into store in specially-designed plastic crates or ‘totes’ and metal cages on wheels. The cages and totes protect the product, rendering the old system of wrapping it in cardboard unnecessary. It means retail staff spend less time moving stock onto the shop floor and it brings environmental benefits by eliminating packaging waste.
To sum up, the benefits include:
- elimination of delays getting stock to the sales floor
- reduction in delivery processing time
- standardisation of the pre-retailing specifications (via a presentation handbook). This part of the process also has an environmental benefit. The more packaging that can be removed and recycled, the better. European Union directives have set targets for 40% of packaging waste to be sent for recycling by 1998 and 50% by 2001.