Supply Chain Innovation – the game changer in sports retailing Austria
How the British retail giant SportsDirect realized its logistic concept in Austria.
Business cases – restructuring retail giant
Sports Direct is distinguished by its aggressive pricing strategy and a headstrong store model, resembling a discounter.
In 2013 SportsDirect took over the Austrian companies Sport Eybl and Sports Experts, thereby setting a distinctive footprint on the continent. The aim was to conquer the Austrian market in one fell swoop.
Austrian consumers have different needs, challenging the retail giant’s proven sales and pricing strategies. While a considerable challenge of Austrian consumers’ hunger for winter sports required serious restructuring from SportsDirect, the real issue was not tackled yet. Whether summer or winter sports, the backbone of the SportsDirect Businesses is its distribution networks logistics.
The distribution network must ensure that sportswear is available in the stores cost-effective, continuously and in the right quantity. The distribution logistics in Europe, which comprises 550 stores, is therefore organized centrally.
SportsDirect’s strategy entails minimal outsourcing to save costs and reduce the number of intersections along the supply chain. At the same time, this system can react flexibly to the needs of online trading.
Since the product range is changing fast with more than 4 seasons, the human factor and underlying processes rather than automation of distribution centres had to be the key factor to success in SportsDirect distribution network.
However, the system in Austria worked exactly the opposite: until the takeover of SportsDirect, the Eybl Group had replaced the existing manpower with technology.
aXialyze’s analyses quickly showed that the existing structures in the warehouses were not suitable to optimally support SportsDirect’s business model. Hence, a massive restructuring and optimization of the distribution network and the supply chain were necessary.
aXialyze´s expertise and experience in the supply chain sector formed a major part in the successful integration of the Eybl Group into the SportsDirect Group.
The conversion and optimization of the supply chain, including the restructuring of the warehouse, had to be carried out during ongoing operations. The warehouse renovation itself had to be completed before the winter season, so the project was also under great time pressure.
The product range of SportsDirect is designed for fast-moving items with a large number of variants. Therefore, higher throughput volumes had to be reached and sufficient order picking and storage capacities had to be created. For the latter, aXialyze collaborated with the Austrian specialist in shelving systems, Bito Lagertechnik. In order to meet the deadlines, excellent planning and coordination of all involved parties was a cornerstone to success.
The solution in the distribution centre in Wels entailed dismantling the technically complex goodfs-to-man system and implementing a classic man-to-goods structure. At the same time, efficiently emptying the warehouse created free space. To ensure the required capacities at the picking stations, a walk-way solution was planned together with Bto Lagertechnik. This means that the racking installation is now picked both on the floor and in height and the intermediate areas are used to store supplies.
The final outcome encompassed the creation of more than 20,000 order picking and 12,000 pallet locations. A new shelf system, managed with inductively guided storage and retrieval machines, made it possible to keep up with the rapidly changing product range. SportsDirect was able to create new jobs as well. Summarising, the high demands of the retail giant were met.