All Asda's eggs in one basket

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Related tags: Strike action

All Asda's eggs in one basket
Until it was called off, Asda stores across the country were threatened with empty shelves following a vote in favour of strike action by staff at 20...

Until it was called off, Asda stores across the country were threatened with empty shelves following a vote in favour of strike action by staff at 20 of the supermarket group's distribution centres. I am old enough to remember the 1980s when Sainsbury's in-house depots were on strike twice a year almost as a matter of rote. Safeway's distribution director in those days was a young Lawrence Christensen and he, too, faced regular disruption to continuous supply for the same reason as Sainsbury. He developed a strategy to beat the strikes that was subsequently copied throughout the industry.

Before Margaret Thatcher took on the unions, the retailers worked out how to beat industrial action by deliberately outsourcing enough of their regional distribution centres (RDCs) to the big third-party logistics providers (3PLs) such that, come the next strike at an in-house depot, there was enough capacity in the rest of the supply chain to meet the needs of all the stores. The 3PL RDCs, of course, could never allow a strike since their contract would be terminated summarily and the staff would be out of work and with no legal come-back. Wildcat strikes soon became a rarity.

When Asda was taken over by Wal-Mart, the old principles of 'divide and rule' across the RDC estate were ruled irrelevant and Asda took back all RDC operations in-house. It is alleged that each Asda RDC has its own unique pay structure; no doubt brought about by the application of Transfer of Undertakings Protection of Employment regulations at the time of Asda taking the RDCs back in-house.

The GMB union clearly saw an opportunity to tackle an employer that was famous for 'not needing' to recognise unions. The current dilemma must be laid squarely at the door of Asda's top management for underestimating the powers of the unions and forgetting that the 'Christensen principle' was not just a tactic but a strategy supported by well considered logic.

I guess a few older members of the 3PL hierarchy might be tempted to say: 'Told you so!'

Tim Knowles​ is partner at supply chain consultancy TKA

Related topics: Supply Chain, Services, IT

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