Interview: What’s driving Co-op Food’s logistics team?

Co-op Food is closing in on the completion of a major warehouse management system (WMS) refresh that started in 2015 and is expected to be completed by the second quarter of 2018.

A convenience supermarket chain upgrading its core logistics system might not sound particularly revolutionary, but the scale and pace of the change is noteworthy, according to the retailer’s solutions specialist, Barry Morgan.

“I’ve not seen another company using the same supplier as us, being as aggressive as we are in terms of the roll-out plan,” he says.

For Co-op Food, which does not have an eCommerce arm, the back-end investment has been made to support its internal distribution network. The new platform currently being implemented across each of the company’s 12 depots is Manhattan Associates’ Platform 2015 solution.

Morgan says: “In 2014 Co-op was on the outdated Manhattan WMOS 2004 – it was out of support and we were running at risk.

“Losing one of your warehouses would have a massive impact on availability in stores, especially with the volume of stores Co-op has. The project was all about mitigating risk rather than providing new business benefits.”

To date, seven of the 12 depots have been upgraded, including five this year, while the remaining six should be completed by the half-way point of 2018. The depots serve around 4,000 stores and the upgrades need to take place in short time windows to ensure supply to shops is not affected.

Morgan says the new system has brought efficiency improvements, and the flexibility of the system is expected to support the business’s growth. Something that could not have been relied on prior to the refresh.

“With a 15-year-old WMS there are unplanned and planned outages to ensure system availability – the newer version has reduced those outages,” he adds.

“It runs more quickly and some of the internal processes such as allocating orders and creating tasks for the pickers have got a lot quicker which is of massive benefit to us.”

Such initiatives are not cheap nor straightforward, but there were other factors behind the delay in upgrading the system.

The integration of Somerfield, which Co-op acquired for £1.5 billion in 2008, took up much of the food division’s attention for years after the deal, and a major reorganisation of the food business’s distribution network also took precedence.

Morgan says: “I joined Co-op in 2010, and at the time we were mid project on re-platforming all our depots.

“There were 35 warehouses and we intended to reduce it down to 12. It meant building new depots from scratch. Somerfield kept us busy for a few years too but by 2014-15 we had an opportunity [to start the WMS upgrade].”

For other retailers wondering when to take the plunge and upgrade core systems, he advises: “Make sure you’re doing it for the right reasons.

“We probably held back because we were busy with other projects. We could have done it earlier but we might have done it for the wrong reason – the timing was right for Co-op and it gives us the ability to grow now.”

What’s in the technology toolkit?

As senior technical manager, Morgan was part of the team overseeing the WMS transformation. He’s still heavily involved but he changed role to solutions specialist in November to help Co-op Food select and implement new technologies.

Alongside the core platform switchover, there are a host of other technology providers helping Co-op’s logistical operation meet modern retail challenges.

He lists hardware provider Zebra Technologies, Honeywell-owned voice picking solutions company Vocollect, Paragon Software, and telematics specialist Microlise as key partners. Central to their successful deployment in the warehouse and distribution network, he adds, is their integration capability with the core WMS.

“All of our transport planning is done via Paragon and that is seamlessly integrated into Manhattan so we can enhance route planning.”

Future innovation, future challenges

The likes of Ocado and, to an extent, the mid-market grocers’ deployment of dark stores to serve eCommerce orders, have transformed retail logistics and warehousing in recent times. Ocado’s customer fulfilment centres are heavily automated and form a backbone to the online grocer’s Ocado Smart Platform solution which it sold to other supermarkets.

Morgan believes the logistics operation at Co-op Food stands out from its competitors for its complexity and scale, taking into account the business is delivering to approximately 4,000 stores around the UK on a regular basis.

“We’ve got a lot of ex-Tesco staff and when they go into our depots and learn that one depot can deliver to over 500 stores it’s a different world [to what they’ve experienced before].

“[It’s different to] an Asda world that delivers full pallets to big sheds. The majority of inventory that is picked and sent to stores goes out in cages and we do very little full pallet pulls which in itself is quite a large achievement.”

He adds: “We’re always looking to innovate – we have used voice picking technology since 2004/2005.

“We’re always looking to work with Manhattan and our other suppliers to see how we can leverage more from their software. We want to look at other solutions that we don’t currently use – that’s my role now within Co-op.”

One new solution trialled in the Co-op Food logistics department is the Manhattan mobile proposition, which is designed to bring flexibility to the warehouse floor and ensure better communication among staff.

Like in retail stores, where there is a shift to ensure sales associates use tablet devices to aid the selling process on the shop floor, the mobile evolution is alive and well behind the scenes too.

“We want to try and unlock our managers in the depot from sitting behind desks all the time and get them out on the warehouse floor so they can more proactively manage their teams,” explains Morgan.

The main development at Co-op, though, is the prospective acquisition of Nisa, the 3,000-store strong, member-owned retail/wholesale organisation. Earlier this month, Nisa shareholders approved Co-op’s £137 million takeover, but final approval rests with the Competition and Markets Authority (CMA).

If the Somerfield acquisition was one reason for the delayed start to the WMS upgrade earlier this decade, the impact of the Nisa takeover could bring further disruption to the Co-op supply chain. Inevitably it will involve some complex integration, but according to Morgan it’s too soon to tell the exact ramifications.

“I’m as interested as you are to see what happens with that and how it impacts [the logistics team],” he says.

“I’m assuming in the near future it will start to progress. That’s one important thing in terms of what’s going to happen at Co-op [in the year ahead].”

More details will emerge in due course, but for now Morgan is keeping himself occupied finding the technologies, systems and processes that he hopes will drive Co-op’s distribution network forward.