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ASOSmechanises picking to cut unit cost


ASOS has launched amechanised picking solution at its Barnsley warehouse, as part of a plan to reduce its labour cost per unit to 50p. Last year the retailer invested £32.1min its


global warehousing infrastructure. At Barnsley it has built two extensions, added additional storage and developedmechanised picking solution to provide capacity for sales of £1.5bn. Due to disruption during this period of


infrastructural improvement, labour cost per unit in Barnsley facility increased by 19 per cent to 75p (2013: 63p), “which we expect to reduce during the new financial year as we begin to realise the benefits of ourmechanised picking solution.We continue to target amedium-termlabour cost per unit of 50p in this warehouse”. Ultimately, it said the investment would provide


it with a global warehousing infrastructure with capacity for annual sales of £2.5bn across warehouses in the UK,China, the US and Europe. The investment inmechanised picking would


improve the per-person picking capability from some 65 units per hour to approximately 200 units per hour, delivering significant operational cost savings, it said in its annual results for the year to 31st August. ASOS also opened a new returns processing


facility in Selby,NorthYorkshire as well as an offsite storage facility at ListerHills near Bradford,which it will wind down during the first half of the new financial year. Operations at Barnsley were disrupted by a fire


in June. ASOS said it was able to recommence trading within two days.The warehouse is now


functioning as before the fire and to date it has received £11.5minsurance receipts covering costs plus a portion of business interruption losses, with further business interruption reimbursements expected. The retailer has also started operations at its


first European warehouse (‘Eurohub’) in Grossbeeren,Germany, and returns processing centre in Swiebodzin, Poland. It said the warehouse in the US now fulfilled


over 20 per cent of US orders and operation in China continues to develop. Group sales, at £975m, were up 27 per cent for


the year,while pre-tax profit was up 14 per cent at £47m. * The fire at the ASOS warehouse is a textbook


example in the importance of having an effective disaster recovery plan in place across your organisation’s supply chain, to ensure business continuity, according to Jonathan Gibson, head of logistics at supply chain consultancy firm Crimson & Co. “In ASOS’s case, its Barnsley distribution centre


housed 70 per cent of the firm’s entire stock; the fact that only 20 per cent was impacted demonstrates that an effective disaster recovery review had been undertaken. “A lot of organisations feel that business


continuity planning can be an unnecessary, costly exercise but in the face of disaster the cost of not having a plan in place could be devastating. It’s imperative that plans are regularly reviewed and practiced to ensure that they can be implemented effectively during a disaster,” he said.


IAGtargets trucking networks with EuroConnector


IAG Cargo has launched EuroConnector – a time-definite service that uses its short-haul network to ship freight into, around, and out of Europe. It is targeting businesses that


currently rely on truck networks when connecting globally to or from Europe with the offer of a “simply-priced” tariff. The service is available for


shipments of less that 300kg and connects to the 114 European destinations on IAG Cargo’s network. It will deliver cargo within


either 24 or 48 hours. The launch has been timed to


coincide with peak business demand in the run up to Christmas. Booking cut-off times range


from two to six hours depending on whether the cargo is loose or intact. EuroConnector 24 also offers a performance guarantee. All routings are via Heathrow, Gatwick,Madrid or Barcelona,


Supply Chain Standard December 2014 SteveGunning


and are serviced by some 6,000 weekly flights on the IAG Cargo European network. “Innovative services such as


EuroConnector will prove hugely important to our continued long-term success; improving capacity utilisation and helping us grow market


share,” said IAG Cargo chief Steve Gunning.  Cargo tonne kilometres at IAG Cargo are up 12 per cent year- on-year for the third quarter, with volumes of 1.3bn cargo tonne kilometres. The increase in volumes came alongside a 4.1 per cent increase in capacity. Overall yield for the quarter was down three per cent on last year’s figures. Gunning said: “While we have


seen a decrease in yield, this is primarily due to flying increased sector lengths.More generally, while trading is good, there are still fundamental issues with the market in terms of excess capacity.” Gunning added that overall,


the third quarter of 2014 had been a positive one for the carrier, with load factor improvements across markets despite an increase in available capacity. Commercial revenue was also up, 7.6 per cent year-on-year.


News 07


Agility European commercial chief


Agility has appointed Mohammed Esa as its new chief commercial officer for Europe. Esa joined Agility in 2004,


and bringsmore than 23 years’ experience in the transport and logistics industry to the role. Prior to accepting the


role, Esa was Agility CEO for the UAE, Oman and Bahrain, and also acted as the senior vice president of sales and marketing for the firm’s operations in the Middle East and Africa.


Bad delivery experience drives away consumers


Six out of ten consumers are unlikely to order froma retailer ever again if they have a bad delivery experience, according to a study byMetaPack. Worse still, 78 per cent are


likely to tell their friends about their bad experience, the study conducted by Research Now for MetaPack, suggests. But, as many as 95 per


cent of consumers say a positive delivery experience would encourage them to shop more with that retailer in the future. MetaPack’s Angela


O’Connell, said “Retailers are undermounting pressure to get the delivery experience just right, particularly as consumers get increasingly demanding formore flexibility, convenience and control. More andmore UK retailers are working with delivery carriers to innovate tomeet these evolving consumer demands – Click and Collect and Sunday service are prime examples of this. The challenge now will be for retailers to keep momentumand innovation high and to continue to look for ways to better serve online shoppers.”


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