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Creating a world-class Supply Chain for

Network Renewal

Supply CChhaaiinn blueprint

Our aim is to establish a Supply Chain teamwith three core values:

• passion • courage • integrity •

The new-look Supply Chain will be based on anintegrated, end-to-end approach, managing allaspects of transportation and distribution fromthe factory gate to the store back door.The overall goal is to create a Supply Chainbased on a number of key principles:

• paperless• stockless• accurate• simple• automated where appropriate

Strategy

Supply Chain Goal

Sainsbury's multi-million pound investment in itsSupply Chain will create one of the most advancedgrocery distribution operations in the world.

Over a three year period the Supply Chain will betransformed to provide improved on shelfavailability with a paperless, stockless, accurateand flexible service designed to meet the currentand future needs of the business.

The Supply Chain strategy, launched in theautumn of 2000, covers four key areas ofactivity:

• network renewal • systems and technology• processes and partnerships• people and culture

Modernising, upgrading andexpanding the distribution centrenetwork and transport operationsto provide improved availabilityand accuracy at lower cost

Systems &Technology

Replacement of all existingwarehouse management, transportand supply chain planning systemswith state-of-the-art technology

Processes &Partnerships

Creation of new processes whichlink all elements of the supplychain – fromsuppliers to theshelf – toprovide themost efficientservice at leastcost, as well ascreating a newlevel of co-operationthroughpartnershipswith colleagues, unions and suppliers

People + Culture

Introduction of new attitudes,skills and flatter managementstructures to achieve a flexible,responsive and committedworkforce

Improved performance will beachieved through reductions incost per case, improvedavailability, reduced stock loss,greater accuracy of deliveryand schedule adherence whileachieving required levels ofservice

Performance

Supply Chain Vision

“Excellent service at unbeatable cost, delivered by great people”

Leading transformation

Supply ChainSainsbury’s SupermarketsHolborn Business Centre

33 HolbornLONDON EC1N 2HT

Telephone: 020 7695 6000

November 2001

Stores

The heart of the Supply Chain

Programmes

StokeRye Park K-Lines - JJoohhnn RRooggeerrss

Fulfilment Fcts 1 - SStteepphheenn OOttttaawwaayy

Fulfilment Fcts 1 - PPeetteerr NNiillaanndd

Frozen Network

FGP/TO - RRiicchhaarrdd DDiicckkssoonn

Replatforming - MMiikkee AAddaammss

Picking Centre - PPaauull WWooooddss

Hams HallWalth’m Pnt

GreenhamPark

ElstreeStone

Park RoyalGorton

Strategy & Migration

Planning

JJoohhnn PPeerrmmaann

Opening andclosure timings

New Sites

Warehouseconcepts

InfrastuctureDelivery

IIaann PPaacckkeerr

Site design

Buildings

Automation

Systems & Core

Processes

MMiikkee AAddaammss

Phoenix

Firewing

SABRE/SCION

Replatforming

B2B

AssociatedSystems

Dependant/Processes

Capabilities

IIaann FFiiddlleerr

Supplierconformance

Store friendlyagreement

Operationstimescales

Single Units

Operations& TacticalPlanning

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Teams of people to runnew sites and

centralsystems

Short termchanges

(1-12 months)

Transport &Consolid-

ation

RRiicchhaarrddDDiicckkssoonn

TransportPlanning

Importationand GlobalLogistics

Strategy Management - Richard DicksonBusiness Requirements, Assumptions, Vision, Cohesion, Direction Setting

Programme Management - Mike AdamsOverall Resource Management, Reporting, Escalation, Comms,

Priorities, Risk Managment, Quality and Audit

Key Programme Contacts

The key principles in developing the new

Supply Chain network involve creation of an

holistic, end-to-end approach to distribution.

This will embrace fully electronic

collaboration and communication with

suppliers, allow for continuous replenishment

of products with minimum handling and

provide a more ‘store friendly’ service.

The new network currently being developed

consists of:

•• PPrriimmaarryy CCoonnssoolliiddaattiioonn CCeennttrreess ((PPCCCCss))– handling shipments from local suppliers, holding stock and replenishing fulfilmentfactories

•• FFuullffiillmmeenntt FFaaccttoorriieess ((FFFFss)) – store facing multi-temperature sites handlingaround 10,000 lines of high volumecommodities (excluding frozen products). Thefulfilment factories will handle waved deliveriesto stores on a round-the-clock basis, keepingstock levels to a minimum. The plan is for ninefulfilment factories, six automated and threemanual, in the new network.

•• KK LLiinnee ddeeppoottss– two specialist distribution centres usinghighly-automated sorting systems enablingthem to efficiently pick low volumes of a widerange of up to 16,000 slow moving and bulkyproducts

•• FFrroozzeenn ffoooodd ddeeppoottss– two dedicated frozen food warehousesdelivering products direct to stores

Each of the new fulfilment factories will bearound 650,000 sq ft in size, covering 40 acresand costing £70 million. The automatedhandling systems and other mechanicalhandling equipment accounts for well over athird of the overall cost.

Each fulfilment factory will have a range thatincludes ambient, chill and produce lines andwill serve over 70 supermarkets and up to 150smaller format stores.

Key Programme Milestones

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Hams Hall

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Waltham Point

Greenham Park

North London

South East London

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Stoke

Rye Park Phase 1

Phase 2

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PkMS (Phoenix) Launches

RETEK (Cygnet) 1

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Suppliers

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With a peak weekly capacity of up to 2.4million cases, each fulfilment factory willoperate on a 24/7 basis, with picking andsorting taking place on average 20 hours eachday.

Each of the new sites will act as a ‘mother’depot to more than 200 supermarkets andsmaller format stores, with nearly 2,000vehicle journeys each week.

The 700-strong workforce will have a varietyof shift patterns to cover ambient, chill andproduce picking. New skills and ways of

working will be involved in the highlyautomated environment.

Continuous throughput of products will mean avehicle leaving or arriving at the warehouse onaverage every two minutes around the clock.

Typical daily routines will involve chilledproducts arriving in waves from 5am onwards,being held in a 1,000 pallet capacity buffer,ready for pallet and case stripping onto theauto retrieval sortation system. Advance chilldeliveries will start leaving the site by midafternoon and continue as either dedicatedloads or combined with ambient productsright through into the late evening.

Ambient products will be received around theclock ready for sorting via a two-tier crossbelt sorter with more than 170 chutes and upto 4,000 pick slots.

Customer centred delivery focustaking account of the needs of thesupply chain, stores and customers

Collaboration with suppliers, sharing data,working jointly to deliver value to thecustomer within a 24/7 paperless system

● Current Sites

▲ Sites under construction

■ Potential Sites

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