Operated by P&O, Sainsbury's first distribution centre on French soil has proved a bonus all round. Nicola Gordon-Seymour reports on progress to date Sainsbury's decision to open its first European primary consolidation centre in Lille last autumn was a strategic move to increase order efficiency and reduce lead times from its European suppliers. The depot, which is operated by P&O TransEuropean, is 100,000 sq ft and processes 2,000 pallets of ambient products a week. It currently services Sainsbury's six existing French suppliers ­ all of which are located within reasonable distance to the depot ­ but will eventually service suppliers in Italy, Belgium and Spain. Around 80% of the products transported via Lille are Sainsbury's own label and 20% other brands. Mark Pitkin, primary consolidation development manager at Sainsbury, says the decision to develop the depot was mainly service led. "At the end of the day, most retailers have been putting pressure on manufacturers to deliver more frequently, reducing lead times. Hand in hand with that they have been asking for smaller drops as well. The PCC has helped us group together suppliers and commodities in the same geographical location and transport them together." An added advantage of a base at Lille is its proximity to Belgium ports ­ useful in the event of French blockades. Gordon Scott, general manager, contract logistics, at P&O says: "We thought we would have a problem with legislation, but the only constraint is that we can't transport on a Sunday." Orders are placed on a daily basis by Electronic Data Interchange. Products are consolidated into batches at the Lille depot and delivered to UK regional distribution centres by the following day. P&O collects 90% of the goods direct from suppliers up to three times a week, depending on volumes. It operates a backloading system so vehicles are full both on their outward and return journeys. Suppliers had been receiving orders between four or five times a week and were working on a four, five or six day lead time. But thanks to the depot, Sainsbury has been able to reduce this to seven day order placements, receiving seven days a week and working on a 48 hour lead time. Pitkin says: "Ultimately it will help facilitate lower stocks in our regional distribution centres. It is beneficial both for suppliers as a cost control mechanism and it gives Sainsbury more control over stock levels." Sainsbury has 12 PCCs altogether ­ the other 11 are in the UK ­ all built within the last five years. It is now taking an aggressive approach to developing more depots. Pitkin says: "PCCs are an enabler. It is so much more efficient to have one full vehicle turning up at a depot than half a dozen half empty vehicles." But despite the success of the PCC, Sainsbury is also looking into other methods of increasing transport efficiency overseas. While searching for more UK and European sites, the first of which could be operational within the year, it's encouraging suppliers to look at other transport options. As Pitkin explains: "We are trying to encourage suppliers to look for opportunities to consolidate with other local suppliers in their area or to use a third party company that offers those services. There are a lot out there that we could use." Mike Ridler md of Mislex UK, a subsidiary of Mislex France, which produces plastic products for Sainsbury, says: "Since our products have been stored at the Lille depot we have been able to make a six to eight week full production forecast. We also get stock reports twice a week from Sainsbury so that we know what we need to produce ­ we are in control of what we put into the PCC." {{FOCUS SPECIALS }}

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