Case study: JD Wetherspoon

Giving your suppliers visibility of your stock

Written by Joe Devo

“It needs to be seamless and quick, so point-of-order to point-of-delivery needs to be rapid, and it also needs to be as automated as it possibly can.”

This, says chief operating officer Paul Harbottle at JD Wetherspoon, is the recipe for the sort of supply chain his business needs.

To some extent, the company has ensured it delivers for itself, having invested heavily in a distribution facility in Daventry, opened in July 2004.

“We’ve seen a big benefit for JD Wetherspoon because the warehouse has allowed us to take a lot of costs out of the supply chain,” says Harbottle. “Where we used to use retailers, we now go direct to suppliers.”

The distribution centre means that the meal you eat in a JD Wetherspoon pub will have been produced from ingredients that arrived in the Daventry facility yesterday and shipped out overnight to one of the company’s 670 pubs around the UK.

The bottle of Californian Zinfandel to accompany your food has followed a different supply path, however, with the same facility offering sufficient storage capacity to hold a month’s worth of wine from overseas.

The distribution centre is underpinned by a warehouse management system from Chess Logistics and offers integration with a couple of the more select providers from the 250 that service the pub chain’s Daventry needs.

“We have one or two suppliers who have visibility of our systems, although we don’t have any visibility of theirs,” says Harbottle.

“Therefore, they can see the demand that’s come through from pubs and they can see our stock-holding at Daventry. We’ve taken some costs out of the supply chain by allowing them to just replenish the stockholding, which at Daventry is effectively theirs and only transfers on to our books when it goes out. We give them a portal which allows them to see our stocks via the web.”

Harbottle would like to see this broadened to two-way visibility, but recognises that while the supply chain was prioritised by the business three years ago, its moment back in the limelight appears some way off.

“I would like to see more progress, but we made such a big change and saw such a dramatic improvement in our supply chain three years ago when we put the centre in place, that other things in the business have taken priority now as they offer bigger wins,” he says. “The pub industry as a whole has much more pressing issues around things like non-smoking and licensing hours.”

Wetherspoon’s supply chain ambitions are further stymied by the distinctly low-tech nature of its electronic point of sale (Epos) systems, contrasting sharply with the Daventry operation.

“It is not linked to our Epos system, so we can’t see sales,” says Harbottle. “That should be and would be our next step if our pub system was sophisticated enough to be able to do it.

“We have a fairly obsolete Epos system at the pub level, which was built around just selling things over the bar and not placing things at the other end. So our demand forecasting is all done at Daventry, based on historical sales, known future events and a sales overlay that we put in on top of that.”

But with the company set to add a further 30 to 35 pubs in the coming year and turnover now topping £900m, it is perhaps entitled to prioritise ways of keeping the smoking community in the general vicinity of its premises.

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