About our Company » Supply Chain Management

The Group has created and continues to increase its strategic lead in the supply chain, through its ongoing investment and recognition of the supply chain’s strategic importance.

Today, a highly sophisticated supply line services 1 166 Group outlets in 16 countries where the Group trades. Improved levels of product availability contributed to market share gains while the drive to reduce inventory levels, despite the growth in both sales and the number of outlets, is paying dividend. In its most basic form the supply chain consists of strategically placed distribution centres linking the flow of product from vendors to stores at which customer demand ultimately drives the movement of product.

Information technology and a fleet of refrigerated and ambient trucks enable the movement of product and the flow of information. The Group prides itself in running a state-of-the-art distribution operation and becoming the first South African retailer to receive the much acclaimed ISO 9002 accreditation for import and export handling.

Centralised distribution is now regarded as a competitive advantage for the Group enabling it to stabilise supply lines in times when supplier service levels drop. By controlling its supply line, merchandise can be buffered, countering vendor out-of-stocks and volatile trading patterns, while offering an opportunity to buy in against price increases. The desired result is inevitably, to consistently allow customers to find the items on their shopping list – thereby keeping their custom and their loyalty. Controlling the whole supply chain has also made it possible to introduce a great many cost-saving efficiencies, thus providing the mechanism to drive prices down daily.

The Group’s supply chain now presents the opportunity to re-engineer its retail stores and improve its utilization of space by dedicating the minimum area to storage and the maximum area to trading space.

Merchandise is delivered to stores by a combination of almost 850 trucks and trailers based at distribution centres throughout the country. The fleet is owned by the Group and operates 24 hours a day, seven days a week. A highly sophisticated transport route planning and scheduling system, optimises store deliveries and integrates the operations of the distribution centre and the transport division. This channel to market is not only environmentally friendly by reducing the number of trucks on the road, but it empowers small to medium sized suppliers, who can now deliver to one point and avoid the need to heavily invest in either warehousing or vehicles.

A substantial portion of the investment in information technology and logistics infrastructure earmarked over the next four years will be applied to the upgrading and extension of the Group’s distribution centres in Centurion, Gauteng as well as Cape Town and Durban. Of these the largest is located in Centurion, between Johannesburg and Pretoria, where distribution facilities have virtually doubled from 80 000 m² to 145 000 m². The main building of 114 000 m² will be the largest distribution centre under one roof on the continent.  On completion at the end of the 2010 calendar year the facility will serve as the distribution point for about 90% of ambient products delivered to approximately 380 stores in the Gauteng area and beyond. More than 1,100 suppliers will be delivering their products to the centre where they are stored, collated, and then distributed to retail stores on a high-frequency basis. The new Centurion distribution centre was developed in a responsible manner using environment-friendly approaches to construction. This was followed through with further investment in environment-friendly design that includes treatment of waste water and an ability to recycle waste. Central reclamation forms part of the Group’s safety and recycling programme, for the removal of damaged stock at the earliest opportunity, to avoid possible contamination of other products and control waste.

In Cape Town approximately 45 000m² of new space is being added, allowing the consolidation of three existing leased centres, reducing costs and inefficiencies.

Construction on the Durban site will start during the new financial year while the Group continues to operate from rented facilities. The Group’s customers will continue to enjoy the benefits and rewards of this strategic initiative. Our trading partners are critical to this collaborative platform and equally benefit in the efficiencies and savings.