UTL A4 4pp Case Study-v7

1. A Unipart Group Company
The challenge
The challenge was to configure a supply chain that enabled
Waterstones to not only survive the recession, but through
establishing a resilient, scalable and dynamic solution,
support growth beyond it; and this meant improving service
to customers across all channels and reducing costs.
Previous state: Low accuracy in forecast resulted in a
reactive demand pull on the publishers, small and highly
frequent orders, high levels of small mixed inbound loads,
high operational handling and processing, long customer
fulfilment timeline, poor customer experience, reduced
sales opportunities.
Through effective engagement, communication and
leadership, a clear future vision was created which
would ensure that Waterstones could continue to
service their millions of customers, against a landscape
of increasing competition, economic decline and
changing consumer behaviour.
utl.co.uk
Supply chain
transformation delivers
market leading, award
winning performance
for Waterstones
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2. UTL has worked in partnership
with Waterstones since 2007,
and today handles in excess of
30m books and 10m related
products per annum for the
high street and online retailer.
While a resurgence in sales of
physical books in recent years
has been a major factor in
Waterstones’ renaissance, its
partnership with UTL, whose
shared vision is ‘You Succeed,
We Succeed’, has been a major
part of the turnaround; as
recognised at the 2015 European
Supply Chain Excellence Awards.
In 2013, while evaluating
the impact of an ongoing
global recession, increase in
competition and changes to
the way in which people were
consuming books, UTL and
Waterstones launched a full
supply chain review touching
suppliers, the Burton Hub,
shops and back office functions.
The vision
The vision was to develop the customer and in-shop experience in Waterstones 300
shops. This meant reducing the overall stock held in shops, but increasing the range
of titles to create the space for shops to present books in a more customer friendly,
visually appealing way, as well as; increasing space for ‘Related Product’, launching ‘Café
W’, reducing lead time to shops and extending next day delivery order cut off.
What followed throughout 2014 was a major supply chain transformation, with a joint
team challenging how both organisations worked up and down the supply chain. The
transformation was a key enabler to a permanent step change in the service offering.
The transformation included changes to the automation, IT-systems, operational
processes, and the facility.
The supply chain partnering of UTL and Waterstones has been built on the
foundation of a long relationship, with a culture of openness and collaboration in
delivering wide reaching joint business transformation initiatives.
The solution
The solution needed to review and refine operational, IT and shop infrastructure, IT and
processes, advance the S&OP process and change the supplier relationship to increase
order multiples and reduce mixed pallets.
The UTL and Waterstones team set about reviewing and making changes to the
operational and IT processes within the hub facility. At the same time, Waterstones
were developing their own infrastructure and way of working, including refinement
of the shop ordering system and its integration into the UTL processes. This, in
conjunction with a facility relay, accommodated the increase in range holding and
delivery requirements.
The joint team focused upon the 3 key elements of; Organisational Design,
Cost-to-Serve, and Flow.
utl.co.uk
A Unipart Group Company
Increased range of titles available in
shops with increased flexibility to tailor
shops to their local market.
Reduction in operating costs by 11%.
11%
Changes to the S&OP process has improved forecast Vs. actual accuracy to 98% and driven improvements in supplier ordering reducing cost of supply and inventory.
98%
Reduced distribution costs by £250,000 with zero impact to service.
250,000
OUTSTANDING RESULTS
UTL handles in excess
of 30m books and 10m
related products per
annum for Waterstones

3. 01. Organisational design
The Waterstones stock flow and supplier
management teams are based with
the UTL operational team in the hub to
increase two-way daily communication.
This is supplemented by the S&OP/
Supply team splitting their time between
Waterstones Head Office and the hub
operated by UTL. Operational reviews,
project boards and account/financial
reviews are completed in conjunction with
the S&OP/Supply team being in the Hub.
As part of the partnering the UTL team
across the different functional areas
base themselves from the Waterstones
head office. The two teams spending
time between the sites enables greater
collaboration and the sharing of
information and ideas.
Case study / Waterstones
The joint team focused
upon the 3 key elements
of; Organisational Design,
Cost-to-Serve and Supply
Chain Flow.
Reduced lead time from 7-9 days to 16 hours.
16
Increased Employee Engagement; Unauthorised absence reduced from 13% in 2013 to 3.15% in 2015, overtime reduced by 24,000 hours per annum.
Reduced shop inventory levels by over £5m
02. Cost to serve
The two organisations focused upon how
to reduce the cost to serve to the shops
and the internet customers and developed
specifically selected initiatives that would
reduce cost. A key element of this was
the UTL Operational Excellence model,
the purpose of the model is to create - ‘a
system of Repeatable, Reliable, Capable,
Environmentally sound and safe processes
which add value to the customer, under
control and continuous improvement’.
A part of the OpEx delivery plan was a
number of ‘overdrive’ improvement events,
model line introduction and Standard work
projects, which removed waste from the
process within the Hub and wider supply
chain. The aim was to seek opportunities
to enhance the service offering.
Benefits tracking was implemented with
key monitors throughout the supply chain
to measure the real benefits these had on
the cost-to-serve and customer impact.
03. Supply Chain Flow
The team completed a supply chain flow review (see simplified image), to deeply understand the current ‘as is state’ looking to design the ‘to be state’, with the aim to build a customer centric supply chain that challenges the competition and increases customer satisfaction,
shop foot-fall and online traffic to generate increased sales.
Changes to the S&OP process improved forecasting accuracy to 98%, this enabled the team
to improve the relationship with suppliers to drive cost down, improve service levels and
increase centralised inventory holding. The Hub operational team commenced changes to
the physical infrastructure of the site, operational and IT processes, increasing flexibility of
the workforce through simplified processes, introduction of banked hours and up-skilling
through the dedicated learning centre (faculty on the floor) and a programme called the
‘Build Program’.
These key enablers ensured that an 8am next day service could be implemented for
shops ordering by 4pm the previous day from a centralised stock holding of 65,000 titles,
increasing the availability of key titles and perennial selling titles across the 300 shop estate.
The changes implemented reduced the network-wide inventory holding, releasing
cash back to the business, the ability to order for next day delivery increased on
shelf availability subsequent increase in sales, other benefits included a reduction
in damages to stock in shops with the shops having more space to hold and display
books, reducing the return activity and the associated costs with returns and
disposition by >28%.
Reduced cost to serve from 5% to 3.5%.
3.5%
DISTRIBUTION CENTRES
DISTRIBUTION CENTRES
SITE DISTRIBUTION CENTRES
Production Suppliers
Production SuppliersDISTRIBUTION CENTRES
CUSTOMERS
CUSTOMERS
wider business
• Purchasing/buying • forecasting/scheduling
• sales and marketing • finance
Wider Supply Chain Network
OUTSTANDING RESULTS
Find out more about utl services:
utl.co.uk/services
[phone]

4. UTL Head Office
Unit 12 Hamilton Way
Bermuda Park
Nuneaton
Warwickshire CV10 7RL
utl-part-of-unipart-group
utl_live
UTLpartofUnipartGroup
E. [email protected]
T. [phone]
W. www.utl.co.uk
European Supply Chain Excellence
Awards 2015
The UTL Waterstones partnership swept the board at the
2015 European Supply Chain Excellence Awards, winning three
awards as a result of the supply chain transformation work, a
fourth for UTL who were awarded Best 3PL.
These awards are recognised as the most trusted measure of
outstanding best supply chain practice by supply chain leaders
across Europe operating in all market sectors.
Naturally UTL is delighted with the recognition, which further
enhances its reputation for increasing productivity through
transformation.
Waterstones Managing Director James Daunt said:
“These awards are a fantastic recognition of the work
and intelligence that has been applied in UTL’s steady
transformation of operations at the Burton Hub. It
has been grounded in a close and productive working
relationship between UTL and Waterstones. We are
delighted and proud to be associated with these honours,
and are especially grateful for the dramatic improvement
in service now experienced by our shops thanks to UTL’s
continuing, and relentless pursuit of productivity gains
and performance efficiencies that ultimately benefit our
customers.”
It’s clear to me that great leadership has enabled real
engagement on-site, which in turn has lead to significant
benefits for our customers and shops.
Congratulations and thank you to
everyone involved - it’s great to know
you’re part of the Waterstones team!”
A Unipart Group Company
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