Hornby supply chain review and implementation
Challenge
Warehouse move with 6000 pallets and £1.2 million of e-commerce stock
Journey
Consolidating 4 European warehouses into 1 United Kingdom based distribution centre
Key facts
- Over 6,000 pallets moved plus 1.2 million units of stock
- 8 trailers per day over a 10 day move
- 7 weeks planning & move with operations running as normal throughout
- Half year targets were met plus an overall dispatch value increase of £1.5 million
Challenge
Hornby’s main UK warehouse was located in Margate, Kent, UK. Built in 1954 with the sole purpose of being the Hornby manufacturing plant and further expanded in 1978 to keep up with the growing business, the site was never intended to be the UK warehouse.
Hornby made the decision to move their manufacturing to China and to reuse the Margate site as the UK warehouse and distribution centre. Allseas Global Logistics were appointed to carry out a full end-to-end review of the Hornby supply chain with a focus on how to resolve the current warehouse performance in Margate along with Hornby’s 4 warehouses operating in Europe under the management of Hornby subsidiaries in Spain, Italy, France and Germany.
Findings
The UK warehouse had a number of key issues that whilst could be fixed in the short term did not fit into Hornby’s long term business vision.
- Limited opportunity to improve productivity and accommodate growth with an already full warehouse and a site that did not allow for any extra building.
- Inefficient layout with pick and pack areas in a separate building to the main warehouse.
- Consistent late deliveries causing reduced customer confidence and sales.
- Any redesign and building work would require the asbestos roof to be replaced at a projected cost of circa £1.8 million.
- Warehouse running at a high cost, no economy of scale, duplication of stock picking and no productivity measurements possible.
- WMS system over 30 years old and originally build as a manufacturing IT system. Based on our review it was clear that the current warehouse was not sustainable for the long-term vision.
The Warehouse Move – Planning
It was a project mission to minimise disruption during the preparation and physical move of the warehouse from Margate to Hersden with a target to continue operations with no warehouse closures.
This entailed a total review of all procedures and processes across all business functions within Hornby and implementing a number of strategic business process changes to simplify the stock allocation and order process internally and externally for customers. During this first stage of defining and agreeing changes to existing workflows, we uncovered some immediate concerns around the planned IT interface capabilities between Red Prairie and MAX, the Hornby ERP system.
The Warehouse Move – Staff
The Hornby warehouse staff were all successfully TUPE across based on our recommendation that after all the years of being Hornby employed there would be significant benefits if for a period of 4-6 weeks the staff remained on site at Hornby under new employment to lessen the cultural shock of change of employer and warehouse at the same time.
This proved to be a great success, allowing the opportunity to engage staff in the new warehouse design, new ways of working, running 5S workshops and providing staff with the empowerment to be part of the new world.
The Physical Move
The physical process of moving stock started with slow selling lines moving first and running a skeleton staff in the Hersden warehouse. A shuttle trailer was kept on standby at the new warehouse, for any orders where stock had been moved replenishment was carried out overnight to return any orders back to the Margate warehouse for dispatch the following day.
- Over 6,000 pallets had to be moved along with 1.2 million units of stock.
- Over the 10 days physical move 8 trailers per day.
- In the 7 weeks leading up to go live, Hornby achieved 7 consecutive weeks of £1 million + dispatch per week.
- Whilst the Hersden warehouse was being configured, the Margate warehouse operated as normal.
- The processes implemented in Margate were easily transferable to the new Hersden warehouse and all staff were fully trained.
- Half year targets were met and there was an overall dispatch value increase of £1.5 million during the period of September – October.
