In a belated effort to streamline its supply chain and catch up with its competitors, Pick ‘˜n Pay Stores will invest R2-billion over the next three years to establish four new distribution centres (DC) in Gauteng, KwaZulu-Natal, Western and Eastern Cape and extend its existing DC in Longmeadow Gauteng.
Speaking at the 2010 Sapics conference, CEO Nick Badminton said: “Changes in South Africa’s retail landscape have seen us fall behind our competitors, who were investing significantly in supply chains and improved services to their stores through centralised distribution systems.’ Badminton adds that Pick ‘˜n Pay was the last of SA’s major supermarket groups to commit to investing in CDs resulting in compromised supply efficiencies.
He said successful retail groups are those who moved away from direct-to-store delivery distribution resulting in significant decreases in total distribution costs. “Our distribution operations were runningover capacity and had become inefficient, resulting in stores being overstocked and a deterioration in customer service levels,’ says Badminton.
Besides the Longmeadow distribution centre , which is operated by logistics company Unitrans through a partnership agreement – Pick ‘˜n Pay currently operates several warehouse centres throughout the country. The group has 99 000m2 of distribution capacity and plans to increase that to 280 000m2 over the next five years. After the extension to the Longmeadow DC, the centre, which currently services 284 stores, will up its capacity from 20% to 40% of grocery distribution to the group’s inland region. That’s got to be good news for trucking.
