Launching Tesco Direct required rapid transformation of a traditional warehouse operation to cater for multi-channel retailing.
With Tesco Direct retailing more than 8,000 products at launch, key tasks included deciding upon the operating processes and the size and scope of the fulfilment centre operation which would be required, based on predicted demand levels. From these, the design of a solution would be developed.
Neil Ashworth, supply chain director for Tesco.com says: “We needed flexibility of approach in the final solution as the project was a very fluid thing at the early stages,” says Ashworth. “The product range was taking shape as we were developing the solution and the final inventory was not known in detail until very close to launch.”
To supplement Tesco’s in-house resources Ashworth brought in The Logistics Business team headed by consultants Graham Mawdsley and Keith Rogers. The process began with defining the operating processes that would be required and then specifying and selecting the key warehouse management system to run the operation efficiently and accurately. Then followed the redevelopment of a 250,000 sq ft distribution centre on the edge of Daventry into the first national fulfilment centre supporting the web site.
“We decided to adopt the existing macro racking layout,” says Ashworth. “The Logistics Business looked at the detailed design of the new operation including the design of the pick faces and the vital packing and despatch areas.”
This new operation was to support more than 8,000 product lines from toys to equestrian products, digital cameras to household goods. Initially ready for the online launch, the service also handles orders for the new Tesco Direct catalogue which is competing with long established players such as Argos. The logistics operation also supports orders and deliveries through a growing number of Tesco stores nationwide.
Tesco Direct had more than a million hits on the web site in the first three weeks. Orders through the distribution operation have continued to grow. Ashworth says: “We are happy with the way things have gone. We put the brand on television after just 10 weeks and the operation has been holding up really well with a steep increase in orders.”
