the full report of the event

Evolution
vs Revolution
Future Forum Presents:
Port Deconsolidation – what are the benefits?
Evolution vs Revolution
Page 3
Introducing Clipper.
Clipper is one of the country’s leading specialists
in pan-European retail and high-value logistics –
working with leading brands including John Lewis,
Asda, George, Tesco, New Look, Bench, Morrisons,
Liberty and Harvey Nichols.
With a network of 27 distribution centre locations
and over 5.5 million sq ft of warehousing space,
Clipper offers its clients a comprehensive range
of retail/multichannel solutions.
Evolution vs Revolution
The Future Forum.
Towards the end of 2011, Clipper launched its Future
Forum series with an event held at the Langham
Hotel in London. Professionals from the world of retail
and logistics attended the event, ‘Death of the High
Street?’, which provided an afternoon of stimulating
and insightful debate centred on the challenges,
risks and opportunities presented by multichannel
retailing.
The second event in the series was held in Leeds
in April 2012 and focused on the benefits of Port
Deconsolidation. This document provides both an
overview of the day and insights into how retailers
can take costs out of their global supply chain.
Page 5
Evolution vs Revolution
The changing face of retail and logistics.
Retail supply chains are in a state of flux.
Factors such as failing to accurately forecast
rising transportation costs, shipping product
from Asia to UK distribution centres, and
maintaining separate, dedicated in-store
and direct-to-consumer channels are all
having a direct impact on profit margins.
Faced with intense competition, squeezed
profits and pressure to cut expenses, savvy
retailers are looking for new ways to
reduce costs.
Port Deconsolidation, in simple terms,
provides upstream buffering via distribution
facilities located in proximity to main
import hubs; brings companies closer
to the markets they serve; and reduces
freight miles. Designed to save money and
increase efficiency, Port Deconsolidation
allows retailers to meet the substantial
challenges posed by long supply chains
and customer demand velocity.
Page 7
Logistics evolved.
Logistics practitioners have realised
that in order to survive in today’s
ever-changing and competitive world,
a business cannot stand still or appear
to be lacking in fresh thinking.
Instead, it must challenge
perceptions, make strategic and
informed decisions and look beyond
the core function to venture into new
and innovative solutions.
Quite simply, it’s about evolution.
‘The future of logistics is clear. It’s time
for a new breed of logistics company.
One with the size and ability to tackle
any project, plus the speed and agility
to strike quickly. One that appreciates
the importance of logistics in the
bigger picture, yet still keeps things
simple.’
Evolution vs Revolution
Clipper’s approach to retail logistics.
At Clipper we have retail logistics at our
core, with many clients operating across
multiple channels. We pride ourselves on
building long-term relationships founded
on knowledge and trust, and we work hard
to understand every aspect of our clients’
businesses. As a result, we have a wealth
of specialist knowledge and experience in
a range of sectors, and have supported
numerous clients through their expansion
into global sourcing and multichannel
retailing, with some impressive results.
Taking care of your brand and delivering
on your customer promise is Clipper’s top
priority, and that’s what sets us apart from
our competitors. We don’t believe in a ‘one
size fits all’ model, so we provide bespoke
solutions that are tailored to meet our clients’
business requirements.
Page 9
Clipper and Port Deconsolidation.
We believe that Port Deconsolidation
is a necessity in modern supply
chain solutions. Our service has been
designed strategically to offer even
greater flexibility: it delivers a faster,
slicker and more environmentallyconscious logistics solution, whilst
saving your business money. Thanks
to Port Deconsolidation, the port
becomes your centralised distribution
hub, reducing the need for inland
distribution centres. From here, we can
manage your stock as necessary, and
can fulfil stock in and stock out requests
around the clock, allowing you to work
more efficiently and react quickly to
ever-changing customer demands to
stay at the forefront of your sector.
Investment in Port Deconsolidation.
We have such a strong belief in the
enormous business benefits of Port
Deconsolidation, and can see it
playing such an integral part in the
logistics solutions of the future, that
we have invested in developing a
purpose-built, shared-user cross-dock
supercentre in the North East, servicing
multichannel/online channels.
Wynyard Park, opening September
2012, is a new 350,000 sq ft
deconsolidation centre with easy
access to Teesport. As well as being
a cross-dock facility, it will also have
an enhanced processing rework and
refusals centre. It’s the culmination
of our many years of experience
managing retail supply chains,
and we believe it’s the shape of
things to come.
Introducing Clipper’s Future Forum Speaker
Tony Mannix.
Managing Director, Clipper.
Tony Mannix welcomed delegates with
an introduction to Clipper’s credentials
and a film highlighting the challenges
facing retailers operating in global
multichannel marketplaces. He talked
about how important it is for retailers
to be able to react quickly to markets,
the increasing trend towards global
sourcing and the need to manage
end-to-end supply chains efficiently.
Page 11
Introducing Clipper’s Future Forum:
Evolution vs Revolution.
‘Port Deconsolidation – what are the benefits?’
The world is changing. The world is getting
smaller. And business is global.
The way retailers source products is changing.
They look to balance the benefits of
international sourcing, to provide the mass
volume they need, with local sourcing, in
order to add a point of difference, react
quickly to change and meet environmental
and ethical targets.
2011 saw developing markets changing the
balance of power. These developing markets
now drive the agenda in global arenas.
Recession has accelerated the shift in global
production and consumption from West to East,
North to South. This has prompted many British
retailers to make concerted efforts to increase
the volume of direct global sourcing to benefit
working capital, in order to create savings that
are too large to ignore.
The high street is changing. The high street is
getting smaller. And retail is now multichannel.
The retail landscape is changing in every way:
from the way retailers sell to the way consumers
buy. Retailers now face new challenges,
navigating the changing world of commerce
in a fragile economy, managing multiple
touch points, latest crazes, more demanding
consumer expectations, and the integration of
multiple technologies – few of which were built
for today’s evolved landscape. Multichannel
organisations struggle to balance back-end
challenges while racing to deliver engaging
and consistent user experiences designed to
capture more loyalty and share of wallet.
‘Port Deconsolidation represents
a major opportunity for retail
businesses of all sizes – including
established players and those new
to import and export.’
All of this demands a new way of working.
Supply chains must undergo a complete
transformation to enable more products to
be delivered direct to homes, handle online
ordering and in-store pickup and allow for more
streamlined and free returns. They must also
facilitate stock consolidation at warehouses
rather than stores (as retailers seek to hold less
stock), reduce working capital and increase
efficiency and profitability.
This demands a change in supply chain
management. Today. To create a smarter, faster,
leaner, more efficient supply chain.
Retailers are looking for answers to questions:
• How do I get products across the globe
quickly and accurately?
• How do I deliver my customer
promise… 24/7?
• How do I minimise costs and maximise
efficiencies?
Port Deconsolidation, the perfect supply chain
solution for businesses who…
• Source products globally.
• Overseas consolidate.
• Want rapid pre-retail solutions.
• Seek to minimise cost but enhance service.
• Operate in competitive multichannel
marketplaces.
• Are seeking online SKU expansion outside of
store ranges.
Introducing Clipper’s Future Forum Speaker
Clyde Buntrock.
Director of Business Solutions, Allport Supply
Chain Solutions.
Clyde Buntrock shared his expertise in
international supply chain management,
offering insights and advice on how retailers
can use their international supply chains as
a competitive advantage. He advocated
a true end-to-end view of the supply chain
and highlighted organisational design as the
biggest barrier to its effective management.
Allport, one of the UK’s largest privately
owned international logistics companies, has
been trading for almost 50 years. Its core
activities are freight forwarding and supply
chain management services. Allport is a global
business turning over a billion dollars, with
over 4,000 customers and operating through
a worldwide network that encompasses
the established and emerging key sourcing
locations as well as destination retail markets.
Page 13
Developing markets.
As a global company, Allport operates through
a worldwide network that encompasses the
established and emerging key sourcing
locations and has extensive facilities in Greater
China – including Chongqing, which is the
fastest growing urban area in the world.
Local knowledge of fast-growing export
regions is important for logistics providers who
can’t afford to stand still in the current market.
Retailers want to reach new global consumers –
with many growing faster outside their domestic
network – and must build effective supply
chain networks to reach these customers and
manage returns.
Value chain basics.
• Product is where the main point of difference
regarding the offer is established; however
the supply chain is the competitive
advantage that generates most of the profit.
• The inbound supply chain is key to achieving
logistical efficiency in-store – ‘what you do in
Shenzhen can impact a customer in Torquay’.
• Multiple supply chains for different products
are a must. One size does not fit all.
• Never let product sleep.
Challenges to success?
• Supply built on push, not pull.
• Silo margins with e2e ignored.
• Transactional relationships.
• Enabling true visibility.
• Functionally organised with
competing metrics.
Inbound transformation.
A world-class international supply chain relies on
a true end-to-end view and integration across
traditional silos. The four key streams are:
Flow.
• Inbound flow: product-specific route to market.
• Import channel selection: based on velocity,
volatility, weight and dimensions.
• Pre-retail: festive events are mission-critical
at factory – flow and cross-dock in shelfready format.
• Dynamic routing: reacting to demand.
Upstream.
• Passive management: vendor orientation,
training, scorecards and performance
management.
• Active management: vendor helpdesk,
supply chain service centre.
• Connectivity: data push, data pull.
• Origin QC: faster speed to market through
early identification of quality issues.
Technology & market intelligence.
• Business intelligence.
• Decision-making support.
• Integration.
Transactional & commercial.
• Operational excellence.
• Operational efficiency.
• Activity-based costing.
• Performance-related management fees.
Putting it all together.
One example of totally-integrated supply chain
management is the farmers in Japan’s SouthWest Shikoku, who came up with the inventive
creation of a square watermelon – to enable
the fruits to be stacked easily in boxes and
supermarkets. How did they do this? Simply by
growing the fruits in square-shaped receptacles
so they assumed a cubic form when ripe.
In summary, the lines are blurring between
marketing, product development and logistics,
which means a truly end-to-end supply chain
management solution is the only option for
retailers seeking to maximise the opportunities
presented by the global marketplace.
Introducing Clipper’s Future Forum Speaker
This demands integrated planning at all levels:
Strategic:
Determine route to market, e2e cost analysis,
hub placement.
Tactical:
Range review and logistics surgeries, PO
placement, vendor helpdesk.
Ingenious – an Allport and Clipper initiative.
A unique partnership of two of the logistics
industry’s biggest names.
Trusted by UK retailers of all sizes – including
John Lewis, Asda, George, New Look, Mint
Velvet, Tesco and Harvey Nichols – to deliver
over 500m garments every year. Clipper has
the ability to tackle any size of project, with the
agility to move quickly, and routinely delivers
projects in weeks that take other logistics
companies months.
Operational:
Shipment execution, dynamic routing execution,
management information.
In simple terms, end-to-end supply
chain management is the development,
management and maintenance of your
entire supply chain network, from the point
you place an order anywhere in the world,
to the delivery of goods ordered online direct
to your customers’ doorsteps; not just in the
UK but across borders.
One of the UK’s largest freight forwarders –
transporting and optimising the flow of 5m
kilos of freight every day, by land, sea and
air, for over 3,000 customers including Asda,
Sainsbury’s, Marks & Spencer and Next.
A supply chain expert with a truly global reach.
Ingenious – the complete, unique supply chain
management process.
Ingenious allows businesses to access awardwinning supply chain solutions that help them
deliver their customer promise.
The end-to-end solution integrates with an
organisation’s order process and retail websites
to seamlessly manage every aspect of their
e-fulfilment offering, including the inbound
supply chain, storage, order fulfilment,
customer delivery and returns handling.
Ingenious is ideally suited to new and growing
brands within the multichannel sector: brands
that are looking to improve the efficiency of
their overseas sourcing process and to link it
seamlessly to their customer deliveries around
the world. It offers a completely scalable and
bespoke logistics capability, normally only
accessible to the biggest players in the market.
From procurement and shipping to distribution
and customer service, Ingenious will always
be looking to develop existing logistics solutions
in order to better meet retailers’ needs,
working non-stop to maintain their resilience
to future problems.
Page 15
Introducing Clipper’s Future Forum Speaker
Geoff Lippitt.
Business Development Director, PD Ports.
Geoff Lippitt highlighted how PD Ports operates
as part of the supply chain, and not as a
landlord, and described how portcentric
logistics solutions are making a difference
to businesses now. He revealed how the
value created in the supply chain by Port
Deconsolidation is delivered through efficiency,
flexibility, environmental benefits and cost.
PD Ports is a multi-award-winning ports
and logistics business, based in the North
of England.
The company owns and operates
Teesport, and owns or operates at ports on
the Humber estuary, Rivers Trent and Ouse,
at Medina Wharf, Isle of Wight, and operates
a logistics business in support of its port
operations.
PD Ports’ deconsolidation has
experienced sustained levels of growth and
the pace of change is accelerating, which
is why PD Ports’ owner has made significant
investments to secure Teesport’s future role as
a ‘hub’ in the supply chain.
Page 17
“Portcentric isn’t a dream, it’s something we’re
doing now.”
Port Deconsolidation gives retailers the means
to optimise their supply chain and take out
waste. We see this as a growth centre in our
market, and have invested £17m in our port
infrastructure over the last 12 months to
develop facilities and value-added processes,
enabling us to become a ‘hub’ in the supply
chain, rather than just a ‘node’.
We offer our customers the benefit of portlocated importation and distribution centres
across the UK. Asda, Tesco, Taylors of Harrogate
and Huntsman are already reaping the benefits.
Their port to end-user time is reduced and
logistics costs minimised by:
• Reducing the need for inland container movements and restitution.
• Elimination of demurrage bills and quay rent for containers.
• Reduction of inland movement by direct
deliveries.
• Providing cross-docking and warehousing.
• Reducing inventory across supply chains. • Operating in custom bonded areas.
• No ‘return to port’ issues for the containers in which goods are received.
Size of our operation.
We handled over 250,000 containers last
year and have over 4m sq ft of warehousing
already operational with portcentric activity.
Our investment programme means we have
capacity to handle 500,000 containers a year,
and we have saved 40m road miles, and saved
our customers over £20m. We’ve also reduced
carbon emissions by 60,000 tonnes, and we
were crowned Asda’s Outstanding Service
Carrier 2012, Container Carrier 2011 and
Carrier of the Year 2012.
Imports.
The underlying trend is that, following the
demise of the traditional industries, the Short
Sea volumes have been going backwards.
Deep Sea volumes, fuelled by portcentric
developments, have now overtaken Short Sea
volumes and are serving a wider hinterland.
As vessels get larger, only Teesport in the North
has the capacity to service them.
Creating a modal shift.
As European volumes grow, there is increasing
demand for using the port as a modal
interchange.
Integrating roll-on/roll-off:
• Short Sea/feeder traffic.
• Retailers, FMCG and Automotive.
• HIGH CUBE – pallet wide expected to grow
from 40% to 65-70% by 2023.
• European market to UK hinterland.
• M62 corridor to Liverpool.
• North East and Scotland.
Rail solutions at Teesport.
Rail companies are becoming more adept with
their networks, increasing access and efficiency.
The new super low liner has opened up the East/
West divide (Pennines), 9’6” containers can
now be moved across the network, and flexible
wagon configuration has resulted in an increase
in the number of containers per train service
(20%). Measures have reduced congestion on
the UK road network by 320 vehicles per week.
Development of Teesport services.
Currently we run routes to Widnes, Grangemouth
and Workington. In the future we will add
Barking and Daventry, with onward opportunities
into South Wales and the South East.
“Portcentric logistics is the new beating heart of
efficient, green, lean, global end-to-end supply
chain management.”
• Collaboration is key.
• Demand is created then built through excellent service.
• The value created in the supply chain is
delivered through efficiency, flexibility,
environmental benefits and cost.
• The pace of change in this market is accelerating.
Introducing Clipper’s Future Forum Speaker
Ian Stansfield.
Distribution Director, Asda.
With responsibility for operations in food,
general merchandising, clothing, Asda Direct
and reverse logistics, Ian Stansfield described
how Port Deconsolidation is playing an
important role in the development of Asda’s
supply chain solution.
Ian described how Asda’s
operations grew to the point where they had
too much stock, not enough capacity and
warehouses all over the country. Now they
flow clothing and general merchandise using
a Port Deconsolidation solution.
Faced once again with the
prospect of running out of capacity,
they sought a solution that would defer
development of a costly fourth regional
distribution centre – and add significant other
benefits to the Asda/George clothing supply
chain.
The partnership with Clipper created
a team focused on devising a flexible Port
Deconsolidation which can meet Asda’s/
George’s expanding multichannel needs.
Page 19
Asda Port Deconsolidation.
With the clothing side of the business growing fast,
we faced challenges in relation to stock levels and
supplying our expanding store network, as well
as a flourishing e-commerce operation. We were
running out of capacity and faced a conundrum:
planning forecasts were just not believable and we
couldn’t predict what our sourcing strategy might
be in five years. This meant a lot of uncertainty in
a challenging economy. So we needed a flexible
solution that would allow us to downsize or increase
operations to meet demand.
Clothing import points of entry.
Products sourced from Sri Lanka, Bangladesh,
China and Cambodia arrive in Southampton, with
the rest coming into Teesport. From Southampton,
products are transported via rail to the North East
and then via road to deconsolidation centres in
Darlington and Teesport.
Goods arriving in Felixstowe are transferred to
Teesport via feeder vessel, and via road to the
deconsolidation centres.
Clothing network flow.
Port Deconsolidation plays an important role in how
we flow clothing and general merchandise.
Retail-ready imported products, bulk imports
and goods sourced in the UK are prepared at
the deconsolidation centres in Teesport and
Darlington, and picked and delivered via our three
regional clothing distribution centres at Brackmills,
Lymedale and Washington, and also through our
stores network. We also have cross-dock centres in
Scotland and the South West.
Boxed garments are sent to Teesport, and
hanging garments to Darlington. In the UK market
there are lots of hanging garments currently,
unlike in the US where boxed is more popular.
However, cost pressures are pushing us towards
increasing the number of boxed products in our
container flow, which meant we needed more
pre-retail capability.
But we were running out of capacity. We could
see that investment in a fourth regional distribution
centre was on the cards. But we wanted
flexibility to be able to react quickly to future
market challenges.
Clipper’s Wynyard Park supercentre and Port
Deconsolidation solution gives us just that.
Benefits of Port Deconsolidation within Asda’s
strategy:
• Upstream UK capacity for holding stock.
• RDCs/spokes focus on flow to customer.
• Optimise network capacity.
• Fast fashion/reaction becoming more critical.
• Pre-RDC and pre-retail capability – unbox/ hang.
• Significant reduction in road miles/carbon emissions.
• Balances network stock to support regional sales.
• Item flow methods can be adjusted based on volume/mix.
Port Deconsolidation enables us to make the right
decisions based on the characteristics of our
products, and Wynyard Park gives us the capacity,
ability and agility to use the most effective methods
to distribute them. It’s a simple solution, and it works.
Introducing Clipper’s Future Forum Speaker
Tony Mannix.
Managing Director, Clipper.
Tony Mannix provided an overview of
Clipper’s Wynyard Park development at
Teesport, describing the benefits of the
location and the opportunity coming later
this year for other retailers to share in a Port
Deconsolidation solution that is delivering
added-value for Asda/George.
This is Clipper’s latest development
in support of its retail customer base. The
partnership with Asda/George has made the
project a viable reality, and now Clipper is
able to offer ‘shared use’ solutions to other
customers.
The site can offer a whole range
of solutions, from simple break bulk to full
pre-retail services (including steaming/
pressing etc); and on to retail pick/pack
and e-fulfilment operations. The strong
relationships with PD Ports and Allport allow
Clipper to offer integrated end-to-end global
supply chain solutions.
Page 21
Port Deconsolidation and Clipper Wynyard.
Clipper is set to open a new 350,000 sq ft
deconsolidation centre located near Teesport
in September 2012. Half the building will be
dedicated to Asda and George Clothing, and,
by using a mezzanine floor, take their internal
space footprint to over 600,000 sq ft on a
10-year contract.
The new site has been strategically chosen for its
proximity to the port, road infrastructure (A1/A19)
and available skilled workforce which make it a
prime location.
Multi-modal connections.
The port is fully rail connected, with additional
routes being planned for 2012 and beyond.
In May 2011, Clipper started collecting
containers direct from port with a 99.7%
service level. We have the necessary
clearance and systems to go on port and
handle container traffic.
Retail global supplier base.
We have been handling weekly peaks of
up to 2m units for George at our Darlington
deconsolidation centre since 2009. The current
operation has inbound containers from up to
15 worldwide destinations.
All products that arrive go through pre-agreed
quality checks, and any supplier
non-conformance is highlighted and rectified.
As well as being a cross-dock facility, Wynyard
Park will also have an enhanced processing
rework and refusals centre capable of carrying
out steaming, single-bagging, pressing,
re-ticketing and threading, etc. This capability
will allow us not only to rework what’s coming in,
but also to deal with refusals and returns of other
clients in the future.
By having an Import Deconsolidation Centre
close to port of entry you will get the following
benefits:
• Right stock, right place in supply chain.
• Cost effective.
• Initial port transport leg reduced.
• Less demurrage incurred.
• Improved container restitution.
• Reduced carbon emissions.
• Reduced road miles.
• Inbound container fill maximised.
Transport flow with deconsolidation.
At the deconsolidation centre:
• Unload.
• Return container to port.
• X-dock and storage capability.
• Value-added: Processing and pick/pack
capability.
• Full loads despatched to RDC requirements.
• Full trailers = 100% utilisation outbound.
• Trailer then in network for: secondary
distribution, backhaul, returns, etc.
Wynyard Park ‘go-live’ layout.
The current layout for Asda/George is a multilevel storage facility with all the cross-dock and
reprocessing taking place on the ground floor:
• Inventory control.
• Warehousing.
• Pick and pack.
• Delivery promise fulfilment.
• Returns management.
Further benefits:
• Upstream bulk feed to existing UK DCs.
• Peak lopping.
• Pre-DC/Pre-retail – the site has full processing capabilities – steaming, pressing, unbox/
hang, relabelling, etc.
• Low cost solution for non-collate e-commerce product.
• Customs warehousing solutions.
• Shared use facilities – easy start-up,
cost effective, flexible.
If you would like to receive further information about
Clipper’s full range of services or to register your
interest for upcoming Future Forum events,
please e-mail:
Johanna Ogilvie –
jogilvie2@clippergroup.co.uk
or call 0113 204 2050.
“Many thanks to all of the Clipper team for a very informative
and thought-provoking conference yesterday afternoon.
The conference met and raised my expectations, and the
information on joint ventures/collaborations was excellent.
I’d recommend the Future Forum to my colleagues and
look forward to attending the next event.”
Bruce Burchell, Business Project Manager,
BMB Clothing.
“Many thanks for an enjoyable session
at your Future Forum – Clipper events
never fail to be thought-provoking!”
Bill Acres, Principal,
Acres & Acres.
Clipper Ltd
Gelderd Road
Leeds
LS12 6LT
Tel: 0113 204 2050
www.clippergroup.co.uk