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Made.com plans to halve lead times

Made.com is hoping to introduce lead times of three to four weeks by the end of the first half of 2022 halving those seen during the pandemic, the company revealed in its full-year results announcement today.

Lead times have been impacted by the global supply chain challenges faced by the industry with gross margin also impacted by global freight inflationary pressures. Freight costs across the global supply chain increased by £32 million compared to 2020 rates.

Historically an improvement of one week in lead times has resulted in around a 5% sales uplift, the company said. During the year Made.com placed stock orders to accelerate the first phase of its lead-time plan which will allow it to halve lead times from the 7 to 8 weeks seen during the pandemic.

Made has expanded warehousing and logistics capacity at its existing sites to support its growth and accelerate lead times. Logistics investments made in warehouse capacity mean that space has incrementally expanded from 700,000 sq ft to 1,115,000 sq ft, with further expansion planned this year.

The retailer said it has also deepened relationships with last-mile couriers to improve its small goods and large goods delivery proposition for consumers as well as adding new carrier partners in both Continental Europe and the UK to expand network coverage and increase resilience. The move has also reduced the average number of days taken to deliver a product from its warehouse to customers as well as improving first-time delivery success rates.

Made’s chair Susanne Given applauded the efforts of staff at dealing with the supply chain disruption. “I have been impressed and pleased in equal measure to see the extra efforts that our buying, logistics, supply chain and customer services teams have made to minimise the disruption to our customers and our business at large,” she said.

“The dramatic increase in freight costs has hurt our profitability, and the bottlenecks across our supply chain in the final quarter of the year negatively impacted our ability to dispatch products to customers. However, the agility of our business model and the deep relationships we have built with third parties throughout our supply chain has meant that we have been able to adapt more quickly than most.”

Although such disruptions are likely to persist into 2022 Given said the work already completed in relation to reducing lead time to customers and the further sophistication of its supply chain, means that Made has entered 2022 in a more resilient position than ever before.