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M&S working to improve supply chain efficiency as ‘significant’ costs loom

M&S is seeing improved performance but admits that some of the headwinds from the pandemic, supply chain issues and Brexit will continue into next year, the business reported in its half-year results this week.

The company is working on a multi-year supply chain efficiency programme  which includes the development of comprehensive new forecasting, ordering, allocation and space planning systems which will begin roll out towards year-end. M&S is also working with its distribution partners on plans to create a streamlined, modern, automated network.

Like many retailers, M&S admitted it was being impacted by the growing issues of driver, warehouse and supplier labour shortages creating additional pressures. However it said the company is working hard on these.

“We have a number of recruitment initiatives which include targeted incentives for drivers. We are also increasing truck, cage and tray-fill, and resetting delivery schedules and depot picking processes to help manage the pressures,” the company said. This will mean significant supply chain cost increases in the second half of the year with further on-costs next financial year.

Going forward M&S said its objective is to match the speed and flexibility of pure play competitors with the advantages of an omni-channel fulfilment strategy using the store base for click and collect, returns, and rapid fulfilment. Systems changes have enabled rapid growth of low-cost store-based online fulfilment and in the first half, store-based fulfilment was 57% up on 2019/20 and accounted for 9% of click and collect sales.

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