The Situation

He provided solution architecture services for the change programme to achieve a New Operating Model (NOM) for Dixons Stores Group International (DSGi). The assignment was integral to translating business requirements and strategies into functional solution requirements for supply chain improvements.

DSGi implemented significant changes to its supply chain and distribution network, aiming to enhance operational efficiency and reduce costs. A key strategy involved the consolidation of distribution centres (DCs) and the adoption of sale and leaseback arrangements.​

These measures were part of DSGi’s broader Renewal and Transformation plan, aiming to revamp stores and improve profitability amid a challenging retail environment.

DC Consolidation and Cost Savings situation:

DSGi announced plans to reduce its UK distribution network from 17 to just two regional distribution centres (RDCs) over two years. This initiative was part of a broader cost-reduction exercise, targeting savings of £30 million in the first year alone. The consolidation aimed to streamline operations and improve efficiency across the supply chain.

The Task

He was responsible for providing a critical link between business groups and IS delivery implementation partners (LogicaCMG and HCL) within the customer-facing IS team. This involved solution design and release management, lifecycle management, functional landscape architecture, integration specifications, and development specifications.

The environment comprised a complex mix of applications scope including:

  • Mainframe ERP systems,
  • Manugistics,
  • Catalyst WMS,
  • Siemens Dematic Warehouse Control Systems
  • Automated Material Handling Equipment MHE
  • e-commerce websites
  • Yantra order management
  • Metapack
  • EPOS
  • Descartes

The role also supported tactical cost-saving activities and IS systems related to supply chain enhancements.

 

The Action / Approach

His key actions included:

  • Functional Solution Architecture Development:
    • Completed the functional solution architecture to support the various work streams within the NOM programme.

 

  • Logistics Network Transformation:
    • Played a key role in the solution design and implementation for the closure and transition of 14 Local Distribution Centres (LDCs) to 2 new Regional Distribution Centres (RDCs) for store replenishment.

 

  • Home Delivery Network Innovation:
    • Contributed to the introduction of stockless local distribution cross-docks to optimize the home delivery network.

 

  • Outsourced Logistics Integration:
    • Led the transport planning and management solution design to integrate DHL Logistics as the outsourced 3PL provider.

 

  • Automated NDC Solution Design:
    • Conducted requirements analysis and solution design for the introduction of a new automated National Distribution Centre (NDC) for small products, serving both retail chain stores and e-commerce direct customers.

 

The Result

 

His results and achievement benefits included:

  • Completed Functional Solution Architecture:
    • Provided the necessary architectural blueprint to guide the programme’s technical implementation.

 

  • Streamlined Logistics Network:
    • Successfully contributed to the consolidation of the distribution network, reducing the number of LDCs from 14 to 2 RDCs, likely leading to cost efficiencies and improved replenishment.

 

  • Enhanced Home Delivery Efficiency:
    • The introduction of stockless cross-docks optimized the home delivery network, potentially improving speed and reducing handling.

 

  • Integrated Outsourced Logistics:
    • The transport planning and management solution design facilitated the seamless integration of DHL Logistics as the 3PL provider.

 

  • Future-Proofed Small Product Distribution:
    • The analysis and solution design for the new automated NDC laid the groundwork for a more efficient and scalable distribution system for small products across retail and e-commerce channels.

 

Financial Impact:

Despite these strategic moves, DSGi continued to faced financial challenges during this period.  While this initiative resulted in cost-reductions of approximately £30 million in the first year alone.

For the full financial year end after the completion of the NOM programme the company reported a loss of £140 million, this supported an immediate financial improvement from the £184 million loss the previous year.

 

Relevant Industries