Page 65 - Linkline Yearbook 2017
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 Could you give us your thoughts on the changing retail landscape that Keelings is currently operating in?
The landscape has changed irreversibly over the past five years. Kantar World panel suggest that for the 12 weeks ending 11 September 2016, Dunnes Stores increased sales by 6.3%, matching Tesco’s performance. Both retailers now account for 21.6% each of the Irish grocery market, with an increase in sales of 3.7% year on year. Customers are spending more during each trip; with the average spend increasing by €2.50 to €37.20 in Q3, relative to the same period last year. Dunnes marketing strategy seems to be yielding dividends, with customers opting for more expensive products, increasing on average by over 12% during this period.
SuperValu rules the roost in market share, with a 22.4% share of the Irish market; an increase of over 3.1% in the last quarter. Tesco’s sales value has dropped by almost 2.3%,
and although sales volumes increased by almost 2%, the decrease in value might be attributed in part to a strategic alignment with the discounters and low-price offerings.
Lidl held its 11.7% market share, similar to last year, with sales increasing by 4.5%. This again highlights the linkages between sales, value, marketing strategy and product offering. The number of trips to the store by Lidl’s customers increased by over 10% in Q3, which may also herald an increase in consumer spending power, as the economy recovers. Aldi has also seen an increase in market share from 11.2% to 11.4%, with direct synergies and linkages to Lidl’s business strategy.
With competitor rivalry reaching unprecedented levels,
2017 will see many smaller suppliers fall by the wayside.
As the large multiples exert supply chain squeeze, fresh produce suppliers will feel the hurt through a reduction in net margin. The uplift in the economy will provide low-cost employees with ample opportunities to migrate to greener pastures, and as the market changes the retail sector will face challenges in terms of talent retention. Similarly, the fresh produce sector will incur higher labour costs in an attempt to retain staff within a pack house environment.
How important is a robust supply chain to ensure Keeling’s continues to grow and succeed?
The philosophies of supply chain management and lean systems create, enhance and sustain competitive advantage
within organisations. There are many synergies that have
the capability to take out costs and add value, along the supply chain as a whole. Research has shown that, regardless to the industry sector, organisations with intelligent and ‘leaned’ supply chains consistently grow profitably year on year. The Irish fresh produce industry is worth over €1.5bn and the past five years has seen the arrival of a number of new entrants into the sector. The market requires a quick- response supply chain design and this is perhaps the most difficult supply chain configuration, primarily because of the associated short customer lead-times, flexible supply and demand constraints, as well as the need to take out costs upstream through continuous improvement (CI), with lean as a primary driver.
Due to the fragile nature of the primary raw material (fresh produce) it is difficult to gauge quality upstream, making it almost impossible to plan capacity through the pack house. Soft fruits present a constant challenge and even modest handling at any point in the packing stage can dramatically reduce product quality and increase waste levels. In order to apply lean cost-cutting methodologies, a high level of standardisation is required throughout the value chain.
In the fresh produce industry, standardising standard- operating-procedures, processes and procedures upstream is difficult to achieve because of the instability of the product. Developing highly-flexible, quick-response supply chain throughout the entire value chain requires a deep understanding of supply chain management. Customers now have choice, across most products and services, and discerning customers perceive value through availability, innovation, quality, price and customer service. In general, customers don’t care about complex supply configurations upstream; they don’t need to be patient - they have choice.
Organisations within the fresh produce industry develop leagile supply chains through:
• Staff retention and development;
• Knowledge management – constant transfer of tacit
to explicit knowledge;
• The application of primary lean tools;
• Customer and supplier engagement;
• The application of supply chain management
fundamentals – managing the flows of information,
resources, finance, materials and relationships;
• Intelligent logistics management – from womb to
tomb;
• The provision of sustainable supply chains through
out the value chain;
• A deep understanding of internal and external
market forces;
• Fostering a learning and CI organisational culture.
Could you tell us about Keeling’s  eet?
We currently operate 13 articulated trucks and 26 trailers. These artics are new and the primary benefits include reliability and cost reduction. Significant cost savings have been delivered to date, due to lower running costs associated with new fuel-efficient engines and lower maintenance costs. The new trailers carry the exciting new brand logo. This significant investment was made
to further enhance customer service and to optimise transport costs by reducing overall CPC delivered. Close customer relationships and intelligent route management further enhance competitive advantage and add value through the logistics element of the supply chain.
 The CharTered InsTITuTe of LogIsTICs & TransporT 65
  MIKE KELLY
































































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