08 Mangan Lalwani-p02-cs01 John Lewis Warehousing - Part...

This preview shows page 1 - 3 out of 5 pages.

John Lewis Partnership: Semi‐Automated National Distribution CentrePeter BakerCranfield School of ManagementBACKGROUNDJohn Lewis Partnership is one of the UK’s top 10 retail businesses and has a distinctive ownership structure, being the country’s largest employee cooperative. All 70,000 per-manent staff are partners in the business and own 28 John Lewis department stores, two John Lewis At Home stores, 234 Waitrose supermarkets and various other businesses. The partners share in the benefits and profits of the business.The John Lewis department stores sell high‐quality goods under a slogan of ‘never knowingly undersold’ – which the company has used for over 75 years. The stores typi-cally stock more than 350,000 product lines, ranging from fashion to furnishings and household goods.The company has had strong sales even through the recession of 2008/10 and plans to open more stores in the UK in the coming years. The John Lewis stores have been sup-plied from six distribution centres (DCs), each handling distinct groups of products, identified either by size (e.g. small and medium‐size item DCs) or by category (e.g. jewellery/garments, outdoor/lighting, white goods and furniture DCs). In addition, there is a central returns centre. The DCs deliver goods either directly to the stores or to ser-vice centres, which tend to act as stockrooms and home delivery points for individual stores or for groups of stores.Peter Baker (2011) John Lewis Partnership: Semi-Automated National Distribution Centre © Peter Baker. Reproduced by kind permission of Peter Baker, Cranfield School of Management.Part Two Case StudiesMangan-p02-cs01.indd 2393/22/2016 4:40:55 PM
240PART TWO LOGISTICS AND SUPPLY CHAIN OPERATIONSThe Partnership’s growth necessitated further warehousing capacity and it was decided that the best way to complement the existing distribution infrastructure was to introduce a new semi‐automated national distribution centre (SANDC) to handle small‐sized items, employing the latest technology so as to improve efficiency and accuracy. The SANDC is located at Magna Park in Milton Keynes, near the centre of the UK, and commenced operations in 2009.The SANDC is a £46 million capital investment. It is 60,393 square metres in floor area with a height of 15 metres. There are 33 receiving docks and 46 despatch docks. The SANDC is designed to operate two shifts per day after ramp‐up with potential to increase to three shifts per day at peak in future years. It is planned to hold 87,000 SKUs.The SANDC is designed to enable item‐level picking and thus reduce the need for back‐of‐store facilities. In addition, the SANDC can assemble goods in the planogram (i.e. layout sequence) of each individual store so that items can easily be placed on the store shelves. The business case is thus based on substantial store economies, as well as warehouse operational economies.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture