Travis Perkins plc has seen strong and continued growth over recent years, with £5.6 billion of revenue generated in 2014 alone. The Group has almost doubled turnover in the past five years and is forecasting a similar increase in revenue over the course of the next decade. 2015 will see Travis Perkins plc concentrate on its appeal to customers, along with expanding its branch and service network.
Built up of builders’ merchants and retail businesses, a pivotal component of the Group’s rolling three and five year targets revolves around the supply chain, and Steve Smart, the Director of Distribution Development, is adamant that this strategy will continue to reap rewards moving forward.
“My role is to look at what we do today and determine how to do it more efficiently along with predicting what the business will require of us in three and five years’ time and deciding what we need to put in place now to make sure we are in a position to be able to deliver that,” he said.
“In the future, I would like to report that the things we’ve mapped out on our current five year plan have been delivered and were the appropriate actions to support the needs of both our customers and our businesses.”
Easy Supply of Product
Travis Perkins plc’s supply chain strategy is focused around the motto ‘Easy Supply of Product’ (ESP) and designed to improve both customer experience and the Group’s branch and service network. The Group is keenly aware of how important it is for tradesmen to get the products they want, when they want them, but recognises that this can be difficult to achieve across its fragmented market and multiple businesses. Travis Perkins plc showcases some of the most renowned players in the UK’s building merchant and retail industry, including the likes of City Plumbing Supplies (CPS), Plumbing Trade Supplies (PTS), Keyline Building Materials, CCF, Solfex and Travis Perkins itself in the former sector, and Wickes, Toolstation and Tile Giant in the latter, and the ESP supply chain offers support to all of its businesses.
Smart explained: “Travis Perkins plc’s future plans are focused on the self-improvement of our business; aiming to encourage branch network growth, improve in-branch ranges and implement a multi-channel ordering system. Our ESP supply chain is an essential component in improving the Travis Perkins plc experience for both staff and customers, providing quick and easily access to stock for all branches”
“Updates to our physical distribution sites are a key factor in the creation of our ESP supply chain and our self-improvement of the business as a whole,” Smart continued. “We have a number of new sites that we are incorporating into our physical supply chain, which will improve all branch services in place today, as well as allowing space for future network and service growth, such as the implementation of a multichannel ordering system.”
Hub of activity
Travis Perkins plc’s primary distribution hub, comprising four distribution centres, on Brackmills Industrial Estate in Northamptonshire covers a multitude of its businesses, and the introduction of a replica in Warrington – known as the Omega Centre and a hub for light side stock - along with additional Range Centres around the country to supply heavy side stock, is part of the ESP ethos, enhancing the flexibility and time-to-market of the supply chain significantly.
The new Warrington Omega Centre is a focal point of Travis Perkins plc’s current five year plan. Dedicated to CPS, Travis Perkins, PTS, Keyline, CCF and Benchmarx, Omega serves 450 branches, and stocks 19,000 SKUs. Smart explained the process behind opening Omega: “In 2010, we took a look at the business as it stood and how we could improve – with a particular focus on the ‘Easy Supply of Product’. We were still in a recessionary minded environment so to go and ask the business to invest tens of millions into the physical supply chain structure was an ask, but it was about aligning the physical supply chain with the Group’s aim to implement ESP across all businesses and provide mulitichannel ordering options for customers. .”
In addition to Omega, Travis Perkins plc is opening four ‘Range Centres’ across the country, to ensure every branch of each of its businesses can offer a wider range of stock, along with next day delivery on all items. The Cardiff Range Centre opened in December 2014 – it covers 80,000 square feet and supplies branches across the Southwest, joining the Warrington Range Centre which opened early 2014 . Two new Range Centres are also set to open in Tilbury and Coventry, in July 2015 and Coventry 2016 respectively.
These supply chain developments will allow all Travis Perkins plc businesses to offer a wider selection of stock and next day delivery on all items – all part of the ESP ethos. Smart explains: “Omega and the new Range Centres are designed to be able to allow us to support our branches better and ensure our customers can get the products they need easily, while they will also massively reduce our carbon footprint.”
The ongoing rolling five year plan of Travis Perkins plc not only aligns with strategies and resources at hand today but, more importantly, lines with predictions of what the Group’s strategies and resources will be in the intervening years.
“One aspect of our plans for the ESP supply chain involves developing a multichannel ordering system for our customers, utilising initiatives like ‘Click and Collect’” Smart explained. “We have to manage the relationships with the builders we have supplied for many years, whilst ensuring that we’re in a position to deliver to the builder who is new to the trade and may have a different view on what his or her requirements are. Our ESP supply chain is paramount to this, ensuring all of customers can access the products they want quickly and easily. ”
To emphasise the company’s commitment to continuous self-improvement, Travis Perkins plc has also invested in updating its IT, introducing agile involvement methodology, as well as becoming a Google-based business and investing with JDA on a group planning and replenishment system to update its inventory systems.
Smart added: “We have a solid plan on how we will enable the requirements of the business moving forward by investing and working closely with our internal and external IT providers. Agile involvement means we are able to deliver benefits far quicker and far more aligned to the business needs than we’ve ever been able to before.”
For example, Arrow, one of Travis Perkins plc’s external providers, specialises in providing bespoke IT and telephony services for businesses in the UK, helping organisations to shape their telecom strategies as they transition to newer technology platforms. Arrow’s relationship with Travis Perkins plc spans 11 years and has developed into a close working partnership. Arrow not only supports Travis Perkins plc’s telephony infrastructure across all of their sites, but are currently rolling out a unique in-store headset solution which will enhance overall customer experience as well as deliver productivity savings of 13 – 14 man days in store per week.
Smart concludes that a successful supply chain strategy depends on “the ‘Easy Supply of Product’ and planning ahead to ensure this can be offered by all individual business units.” He continued, “We have a general merchants division, which is different to the retail division, which is different to the plumbing and heating division for example. But ultimately, we need to ensure they all have quick and easy access to products through our supply chain and can pass the time and cost savings onto their customers. It comes down to understanding and working with the different business units, listening to what they and their customers are asking for, having an interpretation of what that might look like in five years’ time and evaluating the investment required to enable us to deliver that.”