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Grocers Spend £300,000 To Reduce Prices

11th December 1959
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Page 58, 11th December 1959 — Grocers Spend £300,000 To Reduce Prices
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Which of the following most accurately describes the problem?

By Alan Smith, F.R.S.A.

A£300,000 grocery warehouse has been newly built at Cheshunt, Herts, by Tesco Stores, Ltd., for the fullest possible application of mechanical handling, and is probably the only establishment of its kind in the country of such a size-104,000 sq. ft.—dealing with several thousand different lines.

There are two aspects of its significance. One may be considered indicative of the enterprise of an organization which was begun shortly after the first world war by a demobilized airman with a gratuity one ten-thousandth the amount that the warehouse has cost. The other illustrates the current climate in the distribution of food, which is highly competitive and demands of the most efficient handling methods to minimize expense. . Such savings are passed on to the housewife, which is nothing new to Tesco, whose policy always has been— and eschewing mealy mouthed euphemisms—to cut prices. In some trades, price-cutting is considered immoral and it is possible for producers to act against sellers who show themselves willing to accept pared margins.

Rut not so in the food business, possibly because of the tremendous volume of goods involved and the multiplicity of retail outlets, not to mention the canniness of the buyers. The machinery for price maintenance could never work. In this trade the spectacle is not so much of any cut-price trader selling below others who adhere to producers' margins, but of cut-price retailers competing against each other.

Hence the imperative need by Tesco constantly to improve the means by which they link the producer. with the customer. Slicker warehousing in fact matches progressive methods of retailing, the serve-yourself system having been introduced at all but six of the company's 150 stores throughout London and the south of England.

The new warehouse replaces one at Edmonton. All goods arrive by road. Although the railway station is next door and the track borders the site, it is not expected that any traffic received will be railborne. Vehicles arriving with goods drive into the building under cover on one side. There is space in this bay. for about 10 vehicles at once, although there may rarely be stich a density of arrivals.

About 50-60 vehicles deliver at the depot each day, the consignments varying in size. The warehouse is stocked on the basis of a three-four week turnover, although seasonal fluctuations in certain lines complicate this plan. The normal daily throughput is 200 tons.

A slight change was made to original plans for the unloading of vehicles in the first few weeks of the warehoule's operation. Most goods arrive unpalleted and therefore must be stacked on pallets in the unloading bay. Appliances provided were eight Omie Paliton hydraulic stillagers, seven Ameise battery-electric fork-reach trucks and four Fourways portable electric conveyors.

Procedure followed at first was to take off goods from the vehicles on the conveyors to load pallets brought out by the Omics. When a sufficient platform area was cleared. an Ameise would place a pallet on the vehicle and take it off when it was loaded. In practice, it was found that the conveyors had only limited use, and they have been transferred to the loading bay. The first cartons to be unloaded from vehicles may quite quickly be dealt with manually. _ The Omics take laden pallets into a marshalling area, and from here the Ameise machines install them in the racking. Sometimes, however, pallet-loads may be taken directly in the racking from the unloading bay without passing through the marshalling area. The racks are laterally disposed down the centre of the building in double banks with aisieS 8 ft. wide between, and allow stacking three high. They provide space for the accommodation of 5,000 pallets, which are of Youngman manufacture and of the non-reversible double-entry timber type, size 4 ft. by 3 ft. 4 in. with 30-cwt. capacity.

Consignments are made up on pallets in the aisles, and the staff draw off cartons from the pallets at the bottom. When these are exhausted. an Ameise is .summoned by means of light signals and brings down a full pallet from above. The empty pallet may either be drawn out into the aisle to be loaded with orders, or taken to a section reserved for the purpose next to the marshalling area.

Appropriate Labels

Each vertical stack is reserved for an individual commodity, although for popular, bulky products, such as breakfast cereals, two or three adjacent stacking positions are allotted. The aisles are labelled appropriate to the goods held in the racks, " Cereals." 'Washing Powders" and so on.

From the aisles the pallets are taken into the loading bay, which is on the other side of the racking 'installation to the receiving area. A total of 125 Willmot Tuglift stillages is employed to facilitate this phase of the movement. Goods drawn from the racks are aggregated into vehicle-loads and there are 12 Fourways conveyors (including the four brought across from the unloading bay) for loading the vans.

Not all the goods which come into the loading area, however, pass through the racking in the way described. There is also a large bin installation for small cartoned goods which do not lend themselves to being palleted. An extensive cold stare occupies almost the entire width of one end of the building, together with a packaging department where dry goods bought in bulk are packed.

A further Ameise, with a 7-ft mast, has a free lift so that it can be driven through the doors into these rooms. A Yale Worksavcr stillage truck is employed to carry goods from the cold store to the loading bay, whilst goods drawn from the bins may be handled by the Tuglifts. Completion of the cycle of the warehouse economy is the return by fork truck of empty pallets from the loading area to their reserve.

Operations of Tesco's fleet of C-licensed vehicles enter the picture at this point, and, as may be expected, the advantages of shuttle working by articulated outfits are exploited. The company have 10 tractors and 20 B.T.C. semitrailers, as well as 11 four-wheeled rigid vans, based at Cheshunt. The tractors comprise six Thames P6 10-tonners. a Trader of similar capacity, two GuyMeadows 12-tonners and a Leyland Beaver 15-tonner.

The rigid vehicles consist of six Albion 6-ton petrol-engined models, two Bedford P6 5-tonners, two Thames 4D 3-tonners and an Austin P4 2-1-tonner. The reason for the variety is partly because the company have grown by the acquisition of other grocers and have thus gathered miscellaneous vehicles into their fold.

Impressive though the new warehouse is, it deals with a volume of goods representing less than half the turnover of the retail branches, the remainder of whose supplies is delivered direct by manufacturers and others. Shops' orders are received at the beginning of the week, and these are processed by Hollerith machines so that detailed directions for the making-up of orders can be given to warehouse staff.

The actual pattern of deliveries presents a complicated picture, but the broad principles are that main supplies are sent out on the first three days of the week, and these tonnages may be supplemented if necessary on Thursdays and Fridays. The larger branches are served first, although this is not a hard-and-fast rule, particularly as a big store may have substantial stocking room and can "hold out" longer than a small one.

The general aim is that at any one time a shop should have in stock a minimum of two weeks' requirements of canned and dry goods, and two-three days' needs of butter, cheese and eggs.

In view of all the many factors which are hardly conducive to time-tabled delivery services, another one of which is the effect of traffic regulations, it is surprising that the running done by the fleet one week may almost exactly compare with that done during another. Although the primary object is to operate flexibly so that changes in demand can be accommodated, which could not he the case if a strict schedule were laid 'down, in fact a high degree of regularity is achieved. This is appreciated by branch managers: they like to know when Cheshunt vehicles may be expected to arrive so that they, can plan their own routines.

Loading Semi-trailers

Semi-trailers are loaded during the day ready for the tractors when they return, whilst rigid vehicles may he loaded either in the evening or early morning. Signs with towns' names are stood by vehicles appropriately during the loading operations.

As may be expected, heavy goods are placed on the floor of the vehicles and the lighter at the top. A big semitrailer may contain deliveries for one or several shops. Vehicles each make one trip and altogether serve about 30 shone a day, the longest run being to Bristol. a twice-weekly delivery.

Each prime mover covers up to 275 miles a week, and typical fuel-consumption rates are as follows: Leyland, 8 m.p.g.; Thames P6. 9-10 m.p.g.; Bedford P6, 15 m.p.g.; Albion, 10-12 m.p.g.

Tags

Organisations: Yale
Locations: Edmonton, Bristol, London

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