Speed of delivery is all important in the fast-moving world of fashion retailing and Matalan has to send products through its supply chain as quickly and cost-effectively as it can. If customers cannot find what they want on the sales displays they are liable to head for the door, which makes it vital to keep the stores supplied with the latest ranges and correct size/style/colour combinations. Matalan trades from more than 190 stores, most of them large out-of-town units, and uses Wincanton to run its national transport fleet. The company has two main distribution centres, one run in-house at its Skelmersdale headquarters serving the northern half of the country, and one in Corby run by Wincanton, serving the south. The network also includes an in-house facility in Knowsley which is used for over-sized items, many of them part of the company's non-clothing ranges - for example, luggage and storage baskets. There are also two outbases at Wincanton multi-user sites in Avonmouth, near Bristol, and Mossend, in Scotland.
Doug Cook, Wincanton's business unit director for the contract, says the operation can never afford to stand still. "The pace of change in clothing retailing is accelerating. We are constantly reviewing our operations to find more cost-effective ways to do things," he says. One of the main challenges the supply chain has to face is a product range that is frequently refreshed to keep it interesting for customers. As well as Spring and Summer collections, Matalan produces a mailer ten times a year which is sent to its customers with news about special offers and new products. "Making sure the stock is available when the mailer is sent out is a major issue for us," Cook says. When Wincanton started working on the contract it initially provided transport only with movements centred around the Skelmersdale depot. However, Matalan's expansion meant that a second major depot was needed and the current warehouse, which has a footprint of 35,000sq m but with extra mezzanine floors, was taken on in August 2004.
The building needed to be adapted to Matalan's needs. This took place over the next six months and the first products were handled in March 2005. Volume then built up, with the warehouse becoming fully operational by February 2006 - throughput is more than 200,000 units a week. It now handles 40% of Matalan's volume, with Skelmersdale handling 40% and Knowsley 20%. A specialist Wincanton unit project-managed the start-up phase of the project before handing it over to operational staff. The unit worked closely with Matalan and SDI Greenstone, which was responsible for the automated element of the warehouse. Matalan was responsible for installing the IT systems in the warehouse in conjunction with CAP Gemini. Products come into the warehouse either in hanging or boxed form from a variety of sources including the Far East, Europe and Turkey. Wincanton agrees a schedule of deliveries with Matalan, which then liaises with the suppliers. Usually products are taken in during the morning or afternoon between 6am and 10pm but during peak periods this can be extended to night-time as well.
Hanging garments are already divided into 'sets', which contain different sizes of the same garment, as do the boxes. The products are either prepared in their country of origin or have already been through a pre-retail centre within the UK. As a result they already have the correct labelling so they are ready to be put out onto the floor as soon as they reach the store. Cook says that this approach allows the depot to maintain a fast flow of product. "Basically, everything arrives here already in a sellable form," he explains. Product entering the warehouse is checked by a quality control team from Matalan, based on-site, which examines features such as product consistency and appearance. The products are then put onto automated hanging or boxed conveyor systems which either take them to a marshalling point for immediate despatch or into storage. Over-sized product comes into the warehouse each day from the Knowsley distribution centre, ready for cross-docking and consolidation with the other products.
Hanging garments are stored on a mezzanine floor within the warehouse. Boxed product is either placed in a 16,000 pallet automated high-bay area, where pallets are put away and retrieved using three cranes covering six aisles, or in a conventional racking area accessed by forklift trucks. The reason for the mixed approach for boxed items is that while the automated area is cheaper to access, the manual area can provide a faster throughput. "We manage the balance between the two carefully to achieve the right flexibility and cost. We have a team which works closely with Matalan to attain that," Cook says. Once product reaches the despatch area it is carefully loaded to achieve the maximum fill on the trailers. Boxed items are arranged in cages on the floor of the vehicle, leaving room for hanging garments to be placed on rails in the roof. Around 70% of the volume is in boxed form and 30% in hanging. Items that are included in the offers in the latest mailer are identified with a sticker so that store staff will be able to get them out onto the sales floor as quickly as possible.
The Corby warehouse delivers to around 70 of the stores each day. Some outlets in shopping centres take in deliveries on a timed basis before 7am. Others have a regular morning or afternoon delivery. There are 240 warehouse operatives based at the depot, along with 40 managers and 25 administrative staff. The workforce, around a fifth of which is Eastern European, is currently all full-time although the possibility of taking on some part-timers is being considered. In order to run efficiently, close contact is required between Wincanton and Matalan and there are weekly, monthly and quarterly meetings to ensure the operation is acting in line with what is currently happening in the market. "Our challenge is to try to provide continuing improvements in cost performance and service as the business develops and to seek ways of getting more out of the same resources," Cook says.
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