quick overview:
- Central distribution model drives efficiencies;
- increased volumes managed through improved capacity;
- efficiency savings offset by increased fuel costs; and
- import warehouse modernised.
2009 focus
capacity
Improve the capacity to manage the increasing volumes of imported product.
availability
Support profitable availability of all product.
support services: operations
A central distribution model supports Woolworths ongoing growth and simplifies distribution for suppliers and stores. The model and infrastructure support the movement of a wide range of products from increasingly different sources around the world and delivery to a variety of store formats. Strict quality control is applied from source to customer and maintains the integrity of the product and underpins the core values of the Woolworths brand.
Total distribution units have grown over the last four years and additional facilities such as the award-winning Midrand distribution centre have come on stream to accommodate additional volumes. The long-term sustainable benefits continue to be maximised (see the Good business journey report for further detail).
Cost-effective availability is at the core of the distribution model. Labour and transport productivity gains have been realised due mainly to the location and design of the Midrand distribution centre. These efficiencies have, however, been largely off-set by the recent increases in the cost of fuel.
Consistent with trends in the retail sector, we refined our sourcing strategy and we continue to import increasingly more clothing product through the import warehouse in Cape Town. While this provides opportunity to be price competitive, it does require additional infrastructure. Woolworths is increasing capacity and modernising systems to accommodate the increase in volumes.
| 2004 | 2005 | 2006 | 2007 | 2008 | ||
|
Food:
Total distribution units in food including franchise (millions) |
38.2 | 44.1 | 54.2 | 64.5 | 70.3 | |
|
Clothing and home:
Total distribution units in clothing and general merchandise including franchise (millions) |
4.2 | 4.7 | 5.4 | 6.0 | 6.3 | |
Woolworths supply chain volumes |
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