Asda: Is our manufacturing base agile enough?
Speaking at the annual IGD supply chain summit in London on Friday, Asda supply chain director Gavin Chappell said Asda had moved its supply chain staff at head office onto new contracts so that they were able to provide “a true seven-day service”.
It was now keen to work with suppliers to “maximise inbound opportunities at the weekend. We want to move to a seven-day-a-week inbound.”
He added: “Are our suppliers as flexible as they could be?”
Order quantity review
Asda was also undertaking a comprehensive ‘economic order quantity review’ to assess whether it was ordering appropriate quantities of stock into its distribution centres on a line-by-line basis, he said.
To date, more than 23,000 stock keeping units had been reviewed, Chappell told FoodManufacture.co.uk.
The process had so far proved “quite neutral” for food manufacturers supplying Asda’s depots, he claimed, with “as many gainers as losers”.
Asda was also setting up meetings with suppliers to align strategic objectives and improve promotional planning.
Forecast accuracy is getting worse
But being able to respond more quickly to changing demand patterns was more important than trying to produce the perfect promotional forecast, he stressed.
“My contention is that forecast accuracy is getting worse and will continue to get worse.”
This was no reflection on Asda’s systems but simply due to the fact that forecasts were so reliant upon ‘known unknowns’ and ‘unknown unknowns’ that they were unable to deliver consistently, he said. And the challenges would only increase as a higher percentage of stock was sold on deal.
He went on to cite an example of how exactly the same promotion on the same product at different times of year delivered completely different sales uplifts, which were in turn miles off the forecast.
The only way to address such volatility was to equip your supply chain to cope with the unexpected, he said: “Are we working hard and aggressively enough to build agility into our supply chains?”
