factory gate ambitions Tesco believes its new factory gate pricing initiative will help it slash the £500m currently spent every year moving products from factories into its distribution centres. Group supply chain director David Wild said: "We are managing to spend £2.5bn on our supply chain. So it's no surprise that we are under continual pressure to get that figure down because that is how we can create value for our customers. "Of that £2.5bn, £500m is spent each year moving products from factories to our distribution centres. That's the amount of money we are targeting with our primary distribution initiative. By managing it better we will save a significant percentage of that." Wild said Tesco had in recent years transformed its secondary network ­ for taking product from depots to shelves ­ but was only now focusing on the route from factory to depot. "One of the things that frankly has surprised us is that many suppliers don't know what it costs. So that has given us the confidence that by working on this we can identify costs and get them down," Wild added. The multiple has piloted the initiative with its frozen food suppliers and now has 120 of them on board which means factory gate pricing accounts for 65% of its frozen food business. Wild promised that Tesco would now embark on a "pretty aggressive" roll out of factory gate pricing across the rest of its business over the next six to nine months. l Full details, see page 39. {{NEWS }}

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