Morrisons to open third primary consolidation centre
Morrisons will open a third primary consolidation centre in Q2 2014 in partnership with Bibby Distribution.
The new centre, in Kent, will expand the Bibby Distribution-Morrisons PCC network as the 3PL provider bids to help the supermarket chain boost its inventory efficiency.
The 10,000-pallet capacity PCC will draw in regular deliveries from a variety of suppliers based in the South East. Once consolidated at the centre, a software system developed by Bibby Distribution for Morrisons creates full multi-sku, multi-vendor loads, which can be taken to regional distribution centres across the country.
The aim is that supermarkets will benefit from ‘little and often’ deliveries, in keeping with customer buying habits, and Morrisons can optimise its delivery centre use, slashing operating costs.
Kevin Yapp, General Manager for Primary Distribution at Morrisons said: “The PCC model that has been developed specifically for us by Bibby Distribution has already delivered substantial benefits at the first two PCCs, which have been in operation since April 2013. The time is now right to expand out to a new region. Once all five planned PCCs are open by mid-2015, we expect to have taken out £20m of inventory whilst improving on-shelf availability.”
The partnership also allows Morrisons to drive its InMotion programme, which increases backhaul revenue for the retailer. The use of PCCs means Morrisons can use its own vehicles returning to distribution centres to collect loads from suppliers at backhaul rates rather than factory-gate pricing, driving down costs while boosting fleet utilisation. That in turn slashes food miles and carbon emissions per tonne moved, reducing Morrisons’ environmental impact at no extra financial cost.
Bibby Distribution then supports Morrisons by providing additional trucks as and when required. Costs are further cut because the PCCs are located as close as possible to suppliers.
Ian Firth, Bibby Distribution Divisional Development Director, said: “We’ve worked extremely closely with Morrisons to ensure they have the right solution. We’ve created their PCC model from scratch, helping support the deployment of their other programmes. We’re delighted to have developed the physical solution that makes the most of Morrisons’ existing and developing technology, and to have given them the security and peace of mind to benefit from future delivery network investment.”
Bibby Distribution currently operates two PCCs for Morrisons in Corby and Yeadon, covering the Midlands and North of England respectively. By the middle of 2015, the entire country will be covered by a PCC network, giving the £18bn-turnover retailer absolute certainty around supply as Bibby manages deliveries from suppliers to the centres.
