Contract distribution J
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A Gilt-edged asset?
With its modern Hinckley warehouse, Giltspur Bullens took a lot of the hard work out of Beekay Bauknecht's distribution operation, and the whole concept merits careful consideration especially these days when time and cashflow are at a premium
NUFACTURERS and distribus serving the UK market tread expensive path if they un-take the whole operation !mselves.
/ehicle fleet operation be-nes ever more costly and the ministrative control aspects
be a worry even if a profeslial transport manager is em)yed.
Ceeping your vehicles welliintained and ensuring that ) host of traffic regulations is mplied with inevitably takes much valuable management -le and energy.
On alternative for national corage is contract distribution tereby a specialist contractor lo has the premises, equipant, traffic expertise and manerial know-how takes over full 3ponsibility.
This new approach can be as levant to the small manufacrer or distributor, with a nited volume of goods selling 'or a wide area, as to the large impany.
The name of the game for ansport economy, as with manufacturing, is volume — with modest production runs there is no economic way to distribute nationally using your own vehicle.
To contain distribution costs, the realistic option for the medium-sized manufacturer is to confine the selling area to within a 50-mile radius of the factory.
But company strategy may dictate national distribution. Volume is crucial to economy and this can readily be achieved by aggregating the products of several customers whose products are compatible and who are serving the same geographical areas.
While it may still be economic for a very large volume producer or distributor to distribute products nationally with his own fleet, the retailers' need for regular and predictable deliveries will not easily be satisfied.
Giltspur Bullens Distribution at Hinckley has considerable experience in the field of contract distribution.
Devising a system capable of delivering to individual households anywhere in Britain was an exacting task — vast amounts of documentation had to be controlled accurately. GBD established a network of strategically placed and well-equipped warehouses for fast motorway distribution.
An example of its approach is typified by a recent contract negotiated with Beekay Bauknecht Limited, of Skelmersdale.
GBD took over the Beekay vehicle fleet and the whole operation has been neatly dovetailed into other GBD distribution contracts, currently using an 80-vehicle fleet, including 20 supercube trailers.
The contract requires GBD to distribute all Bauknecht domestic equipment to its 400 retailers in the UK, and products include electrical goods and units for fitted kitchens.
Bulk shipments of products from the Bauknecht German factory use large-capacity ferry wagons, a popular and costeffective method. GBD collects the merchandise from the railhead delivering to its modern warehouse complex at Hinckley, where an area of 30,000sqft i reserved for the client co pany's products.
Each product line is identifi by code and allocated war house space by batch quantity.
Beekay delivery notes are computer produced and fc4 warded daily to GBD by Securi cor in time for each consignmeil to be allocated to a vehicle rout and GBD's traffic operators pa special attention to deliver access problems, early closin days and so on.
Since GBD sees good servic to retailers as crucial to busines relationships, as a routine part o the contract service Beekay customers are phoned by GB operators to ensure that the merchandise can be delivered as scheduled. The customer is given the date and the estimated time of delivery.
Inevitably, there are times when goods are refused by retailers, and every transport operator knows of the embarrassment that this can cause. But 'contract distribution is flexible, and there need be no special problem in providing a reserved area for returned goods to be sorted, pending inspection by the client company, or even for a repair team to be accommodated in the warehouse.
Similar routines govern the handling and marshalling of Beekay's fitted kitchens which arrive at Hinckley by road container. The two main product lines are distributed to some 400 retailers in Britain, and deliveries nationally are within seven to ten days from receipt of the order. With contract distribution, full load movements can usually be accommodated with next-day delivery, and GBD's fleet can cope with special consignments that could well extend even an own-account fleet.
Regularity and reliability of service at a reasonable cost are probably the main criteria of road transport today. Speed can be important, but GBD's experience is that many manufacturers are satisfied with collections between two and three days of the request and deliveries to retail outlets within a week or ten days.
Customers' own documentation may often be used on contract distribution. In effect, with this novel system, the contractor becomes the customer's transport or distribution department.
Sometimes, in addition to taking over the customer's vehicle fleet, the driving and warehouse staff are also transferred.
The aim of the contractor is to use the client's operating systems and documentation as much as possible. There are no problems with vehicle livery which can continue to foster a marketing image regardless of vehicle ownership.
GBD's large areas of warehousing are deployed in part for mail order customers whose consigned stocks are despatched within seven days of arriving at the warehouse; but GBD also houses stock for other customers who call off from store as and when required.
The well-equipped warehouse is a crucial part of the distribution machinery turning finished goods into cash with the greatest possible speed. The concept contrasts with the costly storage of valuable goods over a prolonged period, with high interest payments on stock as well as the warehouse charges.
One of the problems with contract distribution is the maintenance of agreed service standards. GBD's customers are varied in their size and requirements, so it has become experienced in all types of service needs.
Assessing the benefits of contract distribution involves more than just a simple comparison of present costs of going it alone and contracting out, and GBD also has a role to play in distribution consultancy.
Premises freed from the transport/distribution function, for example, can often be deployed for manufacturing.
Staff savings can often result, too.
In essence, contract distribution can relieve a manufacturer or large distributor of the direct and indirect costs of the distribution function. It can provide tailor-made alternatives which are cost-effective.
It is not a cheap alternative. It demands careful consideration and taking into account the many factors involved.