It was very interesting to read Bain & Company’s research in the Financial Times, The article is exactly on message but some context around the Bain numbers is needed.
- The vast majority of centralised distribution by Ocado, Tesco etc) is concentrated around London where it is most efficient.
- The vast majority of store pick is outside London. It’s less efficient than centralised in absolute terms, but more efficient in the locations where it’s used. It optimises drive time but compromises pick productivity
- Micro-fulfilment is best. It goes into the stores that are currently doing store pick and gives you the best of both worlds and can potentially, “reduce picking costs by up to 80%.” Tesco is at the forefront of micro fulfilment, rolling out Takeoff Technologies, Inc. into 25 of its stores. It’s first centre in West Bromwich is due to be operational later in the year.
That’s why Dave Lewis talks about owning the last mile.
We are also big believers in micro fulfilment centres in stores which can improve picking efficiency even further and can potentially, “reduce picking costs by up to 80%.” Tesco is at the forefront of this, rolling out Takeoff Technologies solution into 25 of its stores. It’s first centre in West Bromwich is due to be operational later in the year.
Read more here
