With Black Friday and the festive season just around the corner, large warehouses such as Shoprite’s Basson Distribution Centre (DC) in Brackenfell, Cape Town are gearing up already so that the shelves will be stocked.
Business Report was granted a tour of Shoprite’s Basson DC last week, the second largest DC for Africa’s largest grocery store group, and one that supplies all of the group’s 560 stores in the Western Cape, stretching from Port Nolloth in the north to deep along the Southern Cape coast.
Andrew Havinga, Shoprite chief supply chain officer said the DC has more than 129 000 square metres under roof.
The group’s biggest DC is in Centurion, close to the biggest markets, and that centre is over 165 000 square metres.
The third biggest was Shoprite’s recently expanded Canelands DC, with just over 90 000 square metres of warehousing. A new DC of about 85 000 square metres is expected to open in the Eastern Cape towards the end of next year.
In all, the group had more than 750 000 square metres of DC for groceries under roof currently, which is equivalent to the size of 76 rugby fields, he said.
In addition, a 101 000 square metre general merchandise DC in Cape Town supplied non-food items, such as small appliances and other general goods, to the group’s stores across the country.
Havinga said centralised distribution was key to their competitiveness and strategy, and it was essential in making “every rand fight for its life” so that the right product, at the lowest or best value price, could be delivered to the customer in the store.
Key to the centralised distribution strategy, and unlike many other retailers, Shoprite assumed full responsibility for the movement of their products the minute a supplier offloaded at the DC, right until the final offload at the store.
This included, for example, transporting the groceries with their own trucks and drivers, and at any given time Shoprite has over 1 000 trucks on the road. This fleet transported product over some 85 million kilometres a year between the DC’s and stores, he said.
The Brackenfell DC, for instance, moved more than 300 000 cases of product out of its doors every day, and these centres were effectively critical to food security in the country.
Havinga said the group also relied on state of the art technology. This involved dynamic forecasting – gathering information from sources such as point-of-sale data, weather data, actual events taking place near particular stores, stock levels and a whole host of other inputs – that was used to determine which grocery products were needed, when they were needed, and how many products should be loaded into each load for each store.
This ensured that each store had the right amount of the right stock, as too much stock would result in excess wastage, while too little would result in irate customers and affect sales, said Havinga.
These loads were individually packed inside the DC and then transported to the store.
Notwithstanding the technology framework, Havinga said the strategy was absolutely hands-on for all group employees to intervene, replace and readjust if unforeseen circumstances required.
For example, during the transport strike in the Western Cape in August, Havinga said he drove a forklift and picked products in the DC when their employees were unable to get to the centre.
He said they were already busy at the DC in Brackenfell gearing up to supply stores through the busy Black Friday and festive season – this was their busiest time of the year.