The Development of E-tail Logistics 267
as online growth gathers pace. They maintain that ‘click-and-collect’
will help but a more radical rethink is needed of how to improve
picking rates and increase delivery trips per day.
Distribution of online purchases of non-food
items
The distribution of these items normally exhibits the following
characteristics:
●● They are generally supplied directly to the home from the point of
production or a central DC. Each order comprises a small number
of items (often just one) and the order picking is centralized at a
national or regional level. A large proportion of the orders are
channelled through the ‘hub-and-spoke’ networks of large parcel
carriers or mail order companies.
●● Within these J4U delivery networks, each order must be indi-
vidually packaged at the central distribution point. This not only
increases the volume of packaging in the supply chain, it also
takes up more space on vehicles in both the forward and reverse
channels.
●● Withinhomeshoppingsystems,whethercatalogue-orinternet-based,
there is a large flow of returned product. Typically, around 30 per
cent of non-food products delivered to the home are returned to
e-tailers (in contrast to 6–10 per cent for bricks-and-mortar retail-
ers) (Nairn, 2003). This requires a major reverse logistics operation
comprising the retrieval, checking, repackaging and redistribution
of returned merchandise.
It is in the non-food sector, especially fashion, that high consumer
expectations have driven innovation in the supply chain. With the
millennial (Generation Y) consumers in particular driving the agenda
of instantaneous gratification, retailers have had to integrate their
channel networks in order for consumers to buy and return their
products throughout their logistics networks. It is now important
that retailers can take a single integrated view of stock availability
268 Logistics and Retail Management
across channels and this requires the reorganization of business
functions within companies. No longer is a separate multichannel
approach appropriate within this new omnichannel environment,
where all staff have to convey the same message of stock availability
across the retail chain.
Grant (2015) discusses omnichannel ordering and fulfilment in the
context of a generic online fashion supply chain (see Figure 9.2). The
oval shaped box in the heart of this diagram shows the information
flows from ordering on a digital device to the possible return of goods
to be checked, repackaged and redistributed through the logistics
network. Efficient reverse logistics is the key to gaining competitive
advantage in fashion retailing where 43 per cent of UK consumers
return items bought online (Retail Week, 2014). The value of this
returned product was estimated to be £1.2 billion in 2013 (Clipper
Logistics, 2015).
Figure 9.2 A generic online fashion supply chain
National distribution centre (NDC) or regional
distribution centre (RDC)
Website Online fulfilment centre
(OFC)
Device In-Store Online 3PL Remote
collection
Consumers all over the world
Omnichannel Primary product flows
fulfilment Primary product return flows
and returns Primary information flows
Omnichannel
ordering
SOURCE Grant, 2015
The Development of E-tail Logistics 269
Our case study company in Chapter 5, Schuh, now use their
old warehouse site, adjacent to their headquarters, for all returns
from their network. Here items are assessed on whether they can
be returned to the nearby Bathgate warehouse for redistribution or
auctioned on their website. Grant (2015) discusses Clipper Logistics’
‘boomerang’ service for returns for UK fashion online retailer Asos.
Boomerang handles, reprocesses and packages returns. It then iden-
tifies faults, rectifies them and reworks items. Clipper has a central
European returns warehouse in Germany that then ships European
customer returns back to Clippers’ Yorkshire warehouse for process-
ing. This warehouse is close to Asos’ global fulfilment centre in
Barnsley so that reworked items can then be redirected through Asos’
logistics network.
With increasing pressure on costs with free shipping, next-day
deliveries and high return rates, retailers are looking at how they can
minimize these return rates. Much attention has focused upon encour-
aging customers to use a range of digital mediating technologies to
enhance the online shopping experience. ‘Adopting a personalized
first approach based on an in depth understanding of customer
profiles and preference can transport the conversion from the shop
floor into the digital space’ (Fits Me, 2017: 6). By using body scan-
ners, virtual fitting rooms and three-dimensional models consumers
can evaluate products to ensure greater certainty of purchasing the
correct item, thereby minimizing returns.
The last mile problem
In making the final delivery to the home, companies must strike
an acceptable and profitable balance between customer conveni-
ence, distribution cost and security. Most customers would like
deliveries to be made urgently at a precise time with 100 per cent
reliability. This would minimize waiting time and the inconven-
ience of having to stay at home to receive the order. Few customers
would be willing to pay the high cost of time-definite delivery,
however.
270 Logistics and Retail Management
Burton (2016) claimed that cutting a time widow from four hours
to only one hour would increase costs by 85 per cent. Research
undertaken in Helsinki has indicated that transport cost savings of
40–60 per cent are possible where carriers can deliver at any time
during the 24-hour day (Punakivi and Tanskanen, 2002). Such flex-
ibility can usually only be achieved where a system of ‘unattended
delivery’ is available. Failed home deliveries and appointments are
costing retailers and third party contractors £5.3 billion a year
(Grant, 2015). A good deal of creative thinking has been applied to
this problem.
Figure 9.3 provides a classification of the main forms of unat-
tended delivery that have so far been developed (McKinnon and
Tallam, 2003). A fundamental distinction exists between unse-
cured and secured delivery. Unsecured delivery, sometimes called
‘doorstepping’ in the United Kingdom, involves simply leaving the
consignment outside the house, preferably in a concealed location.
This eliminates the need for a return journey and can be convenient
for customers, but obviously exposes the order to the risk of theft
or damage.
Figure 9.3 Classification of unattended delivery systems
Secured Unsecured delivery
delivery ‘Doorstepping’
Home access Reception Collection Drop-off / Delivery
system box point service
Home Communal Attended Unattended
Fixed Mobile Neighbour Commercial
outlet
Integral External Existing Purpose-built
premises facility
SOURCE McKinnon and Tallam, 2003
The Development of E-tail Logistics 271
When no-one is at home, the delivery can be secured in four ways:
●● giving the delivery driver internal access to the home or an
outbuilding;
●● placing the order at a home-based reception (or ‘drop’) box;
●● leaving it at a local collection point;
●● delivering the order to a local agency that stores it and delivers it
when the customer is at home.
To date, there has been limited investment in home access or recep-
tion boxes. Several trials have taken place but none have proven to
be commercially viable. On the other hand, local collection points for
either consumer pick-up or for agency delivery have been the most
popular options. In the latter case this represents an extension to the
collection point service, where the company not only receives the
order on the customer’s behalf but also delivers it to their home at a
convenient time. When the goods arrive, the customer is notified by
email, phone or mobile text message and asked to specify a narrow
time window within which the goods can be delivered.
The area of most growth in the 2010s has been the develop-
ment of collection and delivery points (CDP) especially the rise of
‘click-and-collect’ and ‘click-and-reserve’ options for omnichannel
retailers that are optimizing the use of their store assets. Home deliv-
eries are five times more expensive than ‘click-and-collect’ so it is not
surprising that retailers have been exploring CDP options at trans-
port terminals and retail outlets. With an increasingly mobile society
the ‘home’ is not necessarily the best delivery point for the millennial
shopper. This means that various transport locations between work
and home give the consumer greater choice on where to pick up or
return goods.
Weltevreden (2008) distinguishes between two types of CDP:
‘locker points’ where collection is unattended and ‘service points’
where staff are in attendance to retrieve the order. The most success-
ful of the locker point systems in Europe employs luggage locker
technology that has been extensively used in railway stations and
airports around the world. These locker banks have been adapted
to the role of order collection by establishing a communication link
272 Logistics and Retail Management
with a service centre, which issues pin codes to delivery drivers and
customers. Although originally used in B2B deliveries, retailers, most
notably Amazon and Waitrose, and service providers such as Inpost
and Vlocker, are offering secure lockers as a convenient way for
consumers to pick up and return goods.
Service points, on the other hand, are generally based in existing
outlets, such as small convenience stores, petrol stations, railway
stations or self-storage premises. Click-and-collect has proven to be
popular across all retail sectors. It provides a balance between the
conflicting demands of consumer convenience, delivery efficiency and
security. Tesco has over 320 locations for grocery pick-up and offers
a same day collection service. However there has been some disquiet
among customers as Tesco began charging as much as £4 for pick
up at busy periods in 2017. Most of Tesco’s collection points are
in the car parks of their larger stores. In France, lower population
densities make home delivery prohibitively expensive so ‘click-and-
collect’ is the favoured distribution channel. Grocery retailers there,
led by Leclerc and Auchan, operate over 3,000 drive-through stations
(Leroux, 2014; Hubner et al, 2016). Colla and Lapoule (2012) also
note that most drive-through stations are solitary collection points,
unlike those discussed in relation to Tesco earlier. They argue that this
is an aggressive marketing strategy to win customers from compet-
itors rather than cannibalizing their own in-store sales. They also
note that in the case of Leclerc the elimination of last mile expenses
allowed the company to make a profit on its investment in drive-
through outlets within two years.
In terms of non-grocery sales, retailers tend to have kiosks or
collection points within stores, but many companies, mainly fash-
ion retailers, use CDPs strategically located in or around transport
terminals, shopping centres, petrol stations and convenience stores.
Collect +, a joint venture between delivery company Yodel and
payments group PayPoint, was established in 2009. It utilizes a
network of more than 6,000 convenience stores and petrol stations
to which orders from retailers can be delivered, returned to and
tracked. This has proved popular with pure e-tailers, such as Asos
and multichannel retailers such as our case study company Schuh
(see Chapter 5).
The Development of E-tail Logistics 273
Another more recent entrant to the market is Doddle, which
was created in 2014 as a joint venture between Network Rail and
Travelex founder Lloyd Dorfman. The original concept was to place
Doddle ‘shops’ within railway stations or built to order facilities to
benefit from high footfall in areas such as King’s Cross or Waterloo
station. As the business has developed to around 60 shops across the
country by 2017 most of the shops are located within retail part-
ners’ stores notably Morrison’s supermarkets and Ryman stationary
stores or shopping centres. The concept has appealed mainly to fash-
ion retailers, possibly because some Doddle outlets offer changing
room facilities so customers can keep or return product at the point
of delivery/return.
The impact of new technology on last mile delivery
There has been much talk in recent years about drones being used
for parcel delivery. Online retailers such as Amazon, Alibaba and
JD, logistics providers such as DHL and DPD, new start-ups like
Matternet, as well as Google have been trialling drone delivery. A
study commissioned by the European Commission envisages around
70,000 drones delivering 200 million parcels in the European Union
by 2035 (SESAR, 2017). They are ‘not expected to be viable for
standard parcel delivery’, but will cater instead for premium, same-
day delivery of lightweight parcels. This will require relaxation of
current rules that drones are operated within line-of-sight and below
400 feet (122 metres), which prevent them from been operated
autonomously over longer distances. Parcel delivery drones typically
have a range of 12–15km and maximum payload of 2.5kg. While
this weight limit may seem low, around 80 per cent of Amazon’s
online orders are lighter than this. Several factors are, nevertheless,
likely to confine drone delivery to a niche sector of the online retail
market (McKinnon, 2016). First, a drone carrying a single parcel will
lack the scale economies of a conventional van capable of deliver-
ing 120 orders or more on an eight-hour shift. Second, only a small
fraction of the typical product range found in a large e-fulfilment
centre will be available for local distribution by drone on a same-day
basis. Third, many types of residential property will lack adequate
274 Logistics and Retail Management
reception facilities for drones. Finally, drone operation will be
constrained by weather conditions and security, environmental and
air-space regulations.
Surface delivery of online orders can be automated by using the
new generation of delivery robots (or ‘droid’). Many such droids have
now been developed and trialled in a parcel delivery role. The current
market leader in droid technology, Starship Technologies, has piloted
its six-wheel droid in 100 cities in 17 countries. This autonomous
vehicle has maximum payload of 12–15kg, a range of 3km and top
speed of 6km per hour. It caters mainly for fast food, small grocery
orders and parcel deliveries in inner urban locations. Testing on over
60,000km of deliveries has shown that it is robust, safe, secure and
cost-effective though, as it shares the pavement/sidewalk with pedes-
trians, it still needs to gain public acceptability to become a mass
means of order delivery.
In the longer term, not just last mile delivery but the whole retail
supply chain might be transformed by three-dimensional (3D) print-
ing. In November 2017, Aldi started selling 3D printers for home use
for £300, opening up the prospect of consumers 3D printing prod-
ucts rather than buying them through conventional or online retail
channels. They would still need to source the printing materials, but
the bulk delivery of these polymers would be much simpler, easier
and cheaper than current delivery of a broad variety of final prod-
ucts. On the other hand, home-based 3D printing machines with the
functionality to make all but a tiny proportion of household goods
are unlikely to be affordable in the foreseeable future. The unit cost
of making them at home by this means is likely to remain very high
relative to batch manufacturing in a factory (Janssen et al, 2014). As
McKinnon (2016) argues,
mass application of 3D printing at the consumer level… could
significantly reduce the amount of logistical activity in urban areas,
but the probability of this happening in the foreseeable future is very
low. Indeed, the economic and technical factors constraining the
diffusion of 3D printing at a domestic level are so fundamental, it
may never happen.
(McKinnon, 2016: 581)
The Development of E-tail Logistics 275
Conclusions
Despite the collapse of the dot-com bubble at the turn of the century,
online retailing has been enjoying steady growth throughout the
last 17 years and this is predicted to continue, especially in China
and emerging markets. Much of this growth can be attributed to
the improvements in online interactivity with the advent of Web 2.0,
social media and m-commerce. Consumers can now shop anywhere,
anyhow, anytime, but despite these advances in communications
problems in relation to the ‘last mile’ and unattended delivery
remain. Companies can now communicate better with customers
about time of delivery to the home and they provide more options
to collect and return goods, for example click-and-collect. The entry
to the market of specialists in the provision of locker technology and
parcel collect and return options provide the customer with a range
of choices. The future rate of growth, however, will partly depend
on the quality and efficiency of the supporting system of order fulfil-
ment. After a shaky start, many e-tailers have established effective
logistical systems and built up customer confidence in the delivery
operation. This has been most easily achieved in the non-food sector,
where well-developed home delivery systems already existed and, in
essence, only the ordering medium has changed. E-grocery logistics
has presented more formidable challenges. In retrospect, the initial
rush to build dedicated pick centres appears reckless. Store-based
fulfilment offers a surer path to market growth and profitability in
the early stages of development. As demand outgrows store fulfil-
ment in major urban centres, retailers eventually have to invest in
new facilities in the way that Tesco has built dark stores over the
last decade. It is in the grocery sector, however, that major changes
have occurred in tackling the last mile problem. Click-and-collect,
a popular distribution channel for e-grocery in France because of
prohibitive home delivery costs, has also become a key strategy for
UK retailers. The time-constrained consumer may prefer to pick up
goods from a collection point, whether that is a store car park or
transport terminal, rather than wait in at home. This is a win–win
situation in that retailers save on distribution costs and consumers
have more flexibility with regard to delivery options.
276 Logistics and Retail Management
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Improving the 279
environmental
performance of 10
retail logistics
ALAN MCKINNON
Introduction
Logistical activities are responsible for much of the environmen-
tal impact of modern retailing. Whether managed on an in-house
basis or outsourced, the transport, storage and materials handling
operations that retailers control have an extensive environmental
footprint. This footprint has been expanding back along the supply
chain as retail sourcing has globalized and downstream as retailers
have become more heavily involved in ‘last mile’ delivery to the home.
As the retail sector attaches ever-greater importance to sustainabil-
ity issues, the greening of retail logistics operations becomes a more
urgent priority. A recent review of the corporate social responsibility
(CSR) reports of 12 major retailers found the environmental aspects
of retail logistics regularly mentioned but often not discussed in suffi-
cient depth (Bjorklund et al, 2016). This is not to deny, however,
that significant progress has been made in reducing the externali-
ties associated with retail logistics operations. For example, between
2005 and 2015 twenty-two of the United Kingdom’s largest retailers
reduced the carbon intensity of their store deliveries by 40 per cent
and cut the amount of waste sent to landfill from 40 per cent to 4 per
cent (British Retail Consortium, 2015). Such improvements partly
280 Logistics and Retail Management
reflect increased corporate awareness of the gravity of environmen-
tal problems, particularly global warming. They are also a response
to consumer pressure to meet higher environmental standards and
thus seen as a way of gaining competitive advantage and securing
greater customer loyalty. Many environmental initiatives also save
money, particularly by cutting energy consumption and packaging
waste. Indeed, greening retail logistics operations is often just the
application of good business practice that could be justified solely on
economic grounds but also yields environmental co-benefits. This is
well illustrated by the case of Walmart, which doubled the efficiency
of its truck fleet between 2005 and 2015 through a combination of
improved ‘loading, routing and driving, as well as through collabora-
tion with equipment and system manufacturers on new technologies’
(Walmart, 2017: 63). On an annual basis this saved the company
approximately $1 billion on truck operating costs in 2015 and spared
the planet roughly 650,000 metric tons of CO2 emissions.
In this chapter we examine the adverse effects of retail logistics
operations on the environment and review a series of measures that
companies can take to minimize them.
The environmental effects of retail logistics
These effects can be divided into six broad categories:
1 Greenhouse gas emissions
Carbon dioxide, produced by the burning of fossil fuels in power
generation and vehicles, is by far the most important greenhouse
gas (GHG) emitted by retailers’ logistics operations, though heavy
users of temperature-control equipment also release refrigerant
gases, which can have a global warming potential thousands of times
greater than CO2.1 Some large retailers have measured their ‘carbon
footprints’ and disaggregated their CO2 emissions by activity. Marks
and Spencer, for example, was one of the first to do so and estimated
that its logistics operations accounted for roughly 11 per cent of its
total CO2 emissions (Hill, 2007).
Improving the Environmental Performance of Retail Logistics 281
2 Noxious gases
These pollutants, such as nitrogen oxide, sulphur dioxide and
particular matter (PM10), impair local air quality and are responsi-
ble for a range of negative effects on human health, vegetation and
buildings. Tightening controls on exhaust emissions over the past
20 years, mainly in developed countries, have drastically reduced the
release of these pollutants, though they remain a significant problem.
3 Noise
This emanates mainly from vehicles and distribution centres. As a
result of improvements in vehicle technology and the imposition of
tougher regulations on vehicle noise, new trucks today are much
quieter than those of 15–20 years ago. The electric delivery vans being
increasingly used in retail delivery operations have engines that are
barely audible. Noise abatement not only involves investing in newer
vehicles with quieter engines. The sound of refrigeration equipment,
the rattling of roll cages inside vehicles and even in-cab radios can
cause annoyance. The range of activities performed in and around a
retail distribution centre can also disturb local residents, particularly
as these premises typically operate on a 24-hour, seven-day cycle.
4 Accidents
The involvement of freight vehicles in traffic accidents is generally
considered to be an externality. The costs of personal injury/death, any
damage to property and related use of emergency services are borne
by the community at large and thus deemed to be environmental
costs. Accidents occurring within distribution premises, on the other
hand, are treated as an internal cost of the business.
5 Waste
Retailing generates large quantities of waste, mainly in the form
of packaging material, though products that are damaged or life-
expired while in the supply chain and have to be rejected can also
be considered a type of logistics-related waste. In 2009, retailing and
282 Logistics and Retail Management
wholesaling in the United Kingdom produced 9.2 million tonnes of
waste, roughly a fifth of all commercial and industrial waste (Jacobs,
2011). In the past, much of this waste went into landfill sites, occupy-
ing rural land and creating serious environmental problems (such as
the release of methane, a very potent greenhouse gas), or incineration
plants, which released air pollutants. Today, retailers must adhere to
strict controls on the recycling and re-use of packaging and other
waste. This has required the development of new logistics systems
and managerial approaches for the return flow of waste products
from retail outlets (Bernon et al, 2011).
6 Visual intrusion
Many citizens dislike the appearance of trucks and warehouses,
and believe that they reduce the quality of the local environment.
Large trucks are often considered out of place and even intimidat-
ing in sensitive urban and rural environments, while large warehouse
‘sheds’ are often criticized for dominating the landscape. It is very
difficult, however, to quantify and cost these subjective judgements
and so, for this reason, they tend to be excluded from formal envi-
ronmental assessments.
In this chapter we focus on ways of reducing the environmental
effects of transporting goods through the retail supply chain. Broadly
speaking, the options for reducing the environmental impact of retail
deliveries fall into five categories:
1 restructuring the retail logistics system;
2 shifting freight to more environmentally friendly transport modes;
3 improving vehicle utilization;
4 increasing the energy efficiency of logistics operations;
5 switching to cleaner, lower carbon energy sources.
The UK supermarket chain Asda incorporated all these categories
of option into a green logistics strategy defined simply as the pursuit
of ‘fewer and friendlier miles’. Categories 1 and 3 reduce the total
distance that vehicles must travel to distribute their products, while
categories 2, 4 and 5 cut emissions per mile travelled. A survey of
Improving the Environmental Performance of Retail Logistics 283
UK food retailers by IGD/ECR UK (2016) found that 70 per cent of
them had adopted ‘reducing road miles’ as one of the objectives of
their supply chain strategy. This is particular important for the decar-
bonisation of retail logistics, because modelling suggests that only
reducing emissions per vehicle-km will not deliver the deep reduc-
tions in CO2 emissions that will be required by 2030 and beyond
(Greening et al, 2015).
The next few sections examine each category of option in sequence.
For a more detailed discussion of these options readers should consult
McKinnon (2018).
Restructuring the retail logistics system
The structure of modern retail logistics systems has been criticized
by some environmental organizations and other commentators for
being fundamentally unsustainable (eg Sustainable Development
Commission, 2008). They object in particular to products being
widely sourced, channelled through highly centralized distribution
centres (DCs) and replenished on a just-in-time/quick-response basis.
Some critics argue that long-term sustainability, particularly in a low
carbon world, will only be achieved by a return to local subsistence
economies, with consumption largely limited to what can be produced
locally. This would require a reversal of long-term retail trends and
a return to the distribution systems of the early 20th century. Such a
draconian transformation may ultimately be necessary if the gloomi-
est climate change scenarios were to materialize. We will confine our
discussion here, however, to more modest changes to the structure of
retail logistics systems, some of which are already underway and can
still yield significant environmental benefits.
The consolidation of inbound supplies at retailer-controlled DCs
improves the efficiency of shop deliveries and reduces their environ-
mental impact. The alternative distribution model, which predated
the development of retailers’ logistics system and involved a multi-
tude of suppliers delivering small quantities directly to each shop
in the chain, was more damaging to the environment. For exam-
ple, an analysis by McKinnon and Woodburn (1994) indicated that
284 Logistics and Retail Management
channelling grocery supplies through retailers’ DCs in the United
Kingdom cut CO2 emissions by around 20 per cent relative to direct
supplier deliveries to the shops.
In some retail supply chains, most notably for clothing and
temperature-controlled food, an additional tier of primary consolida-
tion has been inserted upstream of the DC. This has been necessitated
by the move to quick response replenishment and diversification of
the product range and supply base. While the addition of an extra
warehousing operation and more circuitous routing of products via
primary consolidation centres carry environmental penalties, these
are generally offset by improved vehicle loading on the primary
movements into DCs.
While primary consolidation has added a link to the retail supply
chain, rationalization of the inward movement of imported goods
can remove a link. In response to the huge increase in retail imports,
mainly in deep-sea containers from the Far East, some retailers have
been reconfiguring their inbound supply chains. A few UK retail-
ers have adopted a ‘port centric logistics’ strategy, locating large
DCs at the ports, serving their shops directly from there and, in
many cases, eliminating a link from the supply chain. By ‘destuff-
ing’ inbound containers at a port-based warehouse, UK supermarket
chain Sainsbury’s was able to save ‘700,000 road miles for every
5,000 TEUs handled’ (Mangan et al, 2008). On the basis of a wider
review of the carbon implications of port-centric logistics in the
United Kingdom, McKinnon (2013) concluded that, on balance,
it was likely to reduce the carbon intensity of inbound container
supply chains.
The greater the efficiency and capacity of the logistics system, the
easier it is for retailers to source products from distant suppliers.
The resulting lengthening of supply lines is often criticized for being
environmentally damaging. In the United Kingdom, for instance,
supermarket chains have been accused of extending ‘food miles’
by sourcing more produce from overseas, even when similar prod-
ucts are available locally. The food miles issue has been the subject
of several major studies (eg Smith et al, 2005; Garnett, 2015).
One conclusion to emerge from this work is that the distance a
Improving the Environmental Performance of Retail Logistics 285
product travels can be a poor measure of its overall environmental
impact. When a full product life cycle analysis is conducted, it is
often found that products sourced from afar have lower environ-
mental costs. This can occur where ‘distant suppliers … operate
more energy-efficient, less carbon-intensive production facilities
than local suppliers and the resulting saving in production-related
CO2 exceeds the additional emissions from longer freight hauls’
(McKinnon, 2008). Retailers can also cut these long-haul transport
emissions by minimizing their use of air freight and maximizing
the loading of sea containers. The UK retailer Boots, for example,
managed to reduce CO2 emissions per cubic metre from the trans-
port of imported goods from the Far East by 29 per cent between
2004 and 2007 mainly by switching from air to sea, consolidat-
ing freight in 40 foot rather than 20 foot containers and reducing
the amount of handling at terminals (Barnes, 2007). Since 2007,
many container shipping lines have reduced the average speed of
their vessels, primarily to cut their fuel bills. This practice, known
as ‘slow steaming’ has significantly reduced carbon emissions per
TEU-km, particularly on the Far East–Europe trade lane, which
is heavily used by European retailers. The International Maritime
Organization estimated that over the period 2007–12 ‘the average
reduction in at-sea speed relative to design speed was 12 per cent
and the average reduction in daily fuel consumption was 27 per
cent’ (Smith et al, 2014: 17). Although vessels had to spend more
days at sea, this deceleration of shipping fleets resulted in significant
net reductions in CO2 emissions per tonne-km.
Shifting freight to greener transport modes
The environmental impact of transport modes varies enormously.
Figure 10.1, for example, shows the wide differences in their
CO2-intensity per tonne-km. Switching freight from air or road to
cleaner, lower carbon modes such as rail and waterborne transport,
can markedly reduce a retailer’s environmental footprint.
286 Logistics and Retail Management
Figure 10.1 Average CO2 intensities of freight transport modes: gCO2
per tonne-km
1600
1400
1200
1000
800
600
400
200
0
Longhaul air cargo Diesel vanBattery vanRigidAtrruticckulated trucFkreight trCaoinntainer ship
SOURCE DEFRA, 2017 (well-to-wheel values)
Retailers can switch traffic flows to cleaner transport modes both
on inbound (primary) movements into their DCs and outbound
(secondary) deliveries to shops. In the case of supplies sourced from
other parts of the world, the main choice is between air freight and
deep-sea container services. According to the Intergovernmental
Panel on Climate Change, long-haul air freight services emit on aver-
age around 30 times more CO2 per tonne km than ocean shipping
(Sims et al, 2014). As a result of a process called radiative forcing,
the global warming impact of high-altitude emissions is 2–4 times
greater than greenhouse emissions at ground level. Although air
transport is significantly more expensive than movement by sea, the
difference in rates does not adequately reflect the huge difference
in environmental costs. This is because no tax is currently imposed
on the fuel consumed by air freight and deep-sea shipping services.
Being a much more energy-intensive mode, air freight derives much
greater economic benefit from this tax-free status. In a world subject
to accelerating climate change, it is likely to be only a matter of time
before this environmental anomaly is corrected. As a first step in this
direction, the European Commission brought aviation (including air
freight operations) into the European Emissions Trading Scheme in
2012. In the longer term, full internalization of the environmental
Improving the Environmental Performance of Retail Logistics 287
costs of air freight, most of which are associated with climate change,
could substantially increase air freight rates per tonne-km. This
would further discourage retailers from using air freight for all but
the highest value, most time-sensitive products.
For the delivery of retail supplies over shorter distances, the
modal options are generally road, rail and inland waterway services.
Retailers have traditionally relied much more heavily on road freight
services for three reasons:
●● Their DCs and shops have lacked direct rail (and waterway)
connections.
●● The distances between DCs and shops are usually too short for rail
and waterborne services, which are essentially long haul modes, to
be competitive.
●● Operators of rail freight and waterborne services have found
it difficult to meet retailers’ requirements for rapid and reliable
delivery.
In recent years, however, major retailers have begun to make much
more use of these alternative modes. In the United Kingdom, for
example, supermarket chains Tesco and Asda have switched signifi-
cant volumes of longer haul traffic from road to rail on Anglo-Scottish
routes (Monios, 2015). Tesco’s use of rail freight services removes
approximately 26 million truck-kms from the UK road network annu-
ally and reduces CO2 emissions by 80 per cent on the routes affected
(Direct Rail Services, 2017). Tesco also transports wines and spirits
by inland waterway in the north-west of England. These modal shifts
by UK retailers have been supported by government grants designed
to make logistics operations more environmentally sustainable. These
grants are only awarded where the case for a modal transfer cannot
be made solely on economic grounds. There have so far been few, if
any, examples of retailers in the United Kingdom opting for greener
transport modes at the expense of higher delivery costs. The French
retailer Monoprix, on the other hand, incurred additional costs of
around 18 per cent in 2010 to serve its Paris shops by rail from a
cross-modal hub on the outskirts of the city rather than deliver its
supplies by road (Delaître and De Barbeyrac, 2012). This example of
a major retailer switching freight to rail is also unusual as it occurred
288 Logistics and Retail Management
at an urban scale and involves the movement of goods over short
distances on the last link to the shops. It is estimated that Monoprix’s
rail-based delivery operation in Paris emits 49 per cent less CO2 and
other air pollutants than the previous distribution by road.
Improving vehicle utilization
By achieving higher levels of ‘vehicle fill’ retailers can reduce the
number of truck-kms required to move a given quantity of goods,
cutting traffic levels, energy use and emissions. This fill is generally
measured in two ways: by the proportion of truck-kms run empty and
by the ratio of the actual payload carried to the maximum payload,
usually measured in weight terms. Government statistics seldom
disaggregate truck utilization statistics by sector and so very few
retail-specific figures exist. A series of transport key performance indi-
cator (KPI) surveys were conducted in the United Kingdom between
1998 and 2009 that assessed the loading of trucks carrying retail
supplies (McKinnon, 2009). They showed that loads transported by
road at the retail end of the supply chain tend to have a relatively low
density because of the nature of the goods, the high level of packag-
ing, the broad assortment of products and the nature of the handling
equipment. For this reason, they are constrained much more by the
deck-area and cubic capacity of the vehicle than by the maximum
weight it can carry. This is reflected by the fact that, in both food
and non-food delivery operations, approximately three-quarters of
the available vehicle floor area was occupied, whereas on average
under 60 per cent of the weight-carrying capacity was used. Around
half of the available space on the vehicles was actually used. The KPI
surveys also found significant amounts of empty running by trucks
in retail supply chains. Altogether 23 per cent of lorry-kms in these
chains were run empty, but this was still below the national average
of 27 per cent for all road freight operations in the United Kingdom
at the time. The remainder of this section will examine three methods
of improving vehicle load factors and thus cutting truck-kms within
the retail distribution system.
Improving the Environmental Performance of Retail Logistics 289
Backloading of shop delivery vehicles
Rather than return to the DC empty, a shop delivery vehicle can be
routed via a supplier’s premises to collect orders. The resulting trian-
gular trip can eliminate two empty journeys, substantially reducing
truck-kms. Some retailers also use their suppliers’ vehicles to make
outbound deliveries to their shops on their way back to the factory.
Both practices require retailers to coordinate their primary and
secondary distribution to ensure balanced loading of the vehicles.
Some retailers have tried to achieve this by adopting factory-gate
pricing and thus gaining control of the primary transport operation
(Potter et al, 2007). Maximizing transport efficiency across ‘network
systems’ comprising primary and secondary distribution presents
formidable analytical challenges, however, and requires the applica-
tion of complex software tools.
There are numerous constraints on the backloading of shop
delivery vehicles (McKinnon and Ge, 2006). For example, compa-
nies naturally give precedence to outbound distribution and are
often afraid that delays in the backloading operation might prevent
vehicles returning in time to deliver the next outbound load. There
has, nevertheless, been a significant growth of backloading in retail
supply chains. By 2010, one British supermarket chain was receiving
30 per cent of its inbound supplies as backloads (Freight Best Practice
Programme, 2010).
Use of larger vehicles
Retail supplies in sectors such as grocery, clothing and footwear have
a low density and thus ‘cube-out’ on vehicles before they ‘weigh-out’.
Increases in vehicle size can allow many retailers to consolidate
loads on fewer trips, cutting vehicle-kms and emissions. The extra
cubic capacity can either be gained by lengthening the vehicles or by
increasing their height. In some countries, such as Sweden, Finland,
Australia and the United States, the extra carrying capacity has been
gained horizontally in trucks 25 metres or more in length (OECD/
ITF, 2010). Since 2012 the British Government has been running a
trail of ‘longer semi-trailers’ (LSTs) either 1 metre or 2 metres longer
290 Logistics and Retail Management
than the standard 13.6 metre trailer. The longer option gives compa-
nies an extra 15 per cent of vehicle loading area and cube. By the
end of 2015 this increase in length had cut truck-kms by roughly
5 per cent and it was expected that CO2 emissions would have been
reduced by a similar margin (Risk Solutions, 2017).
The main way in which UK retailers, and their logistics providers,
have also been able to gain extra carrying capacity is vertically, taking
advantage of height clearances up to 5 metres and double-decking
their trailers.2 The benefits of using double-deck trailers was well
illustrated by the case of the UK do-it-yourself (DIY) retailer Focus
(Table 10.1). By replacing standard trailers with double-deck trailers
on journeys from their DC in central England to shops in northern
England, it cut vehicle-kms, fuel and CO2 emissions by almost 50 per
cent (Department for Transport, 2007).
Larger vehicles play a limited role in the delivery of supplies to
shops in inner urban areas and tend to be used more for primary
trunking between factories and DCs, or between DCs and local
depots.
Urban consolidation centres
These centres can be used to consolidate supplies destined from
shops in inner urban areas, integrated shopping centres and airports.
Allen et al (2012) reviewed 114 urban freight consolidation schemes
in 17 countries, most of which were designed to rationalize the deliv-
ery of goods to shops. By reducing the number of vehicles accessing
Table 10.1 Travel distance, fuel and CO2 savings from the use of double-deck
vehicles
Double deck Single Savings
vehicle deck
vehicles
Total distance travelled (miles) 275 532 257
Total fuel used (litres) 163.7 318.2 154.5
Total CO2 emitted (kg) 440 854 414
SOURCE Department for Transport, 2007
Improving the Environmental Performance of Retail Logistics 291
retail centres these schemes can help to alleviate congestion and
environmental impacts in the surrounding area. The final delivery leg,
usually run within an agreed delivery schedule, is often performed by
environmentally friendly vehicles achieving much higher load factors
than the direct shop deliveries that they replace. The main benefi-
ciaries of these urban consolidation schemes tend to be small and
medium-sized retailers selling non-food products and lacking the
upstream logistics infrastructure of the large multiple retailers. Many
of the early consolidation schemes lacked financial viability, though
over the past decade several have managed to become economically
as well as environmentally sustainable. One such scheme is the
Binnenstad service (van Rooijen and Quak, 2010), launched in 2008
in Nijmegen and now established in the inner urban areas of 14 Dutch
towns and cities. It is estimated that this retail consolidation service
typically cuts delivery costs by 10 per cent and related CO2 emissions
by 40 per cent (Bestfact, 2015).
Improving the energy efficiency of retail
deliveries
Retailers and logistics service providers working on their behalf can
improve the energy efficiency of transport and warehousing operations
in many ways. Road freight operators distributing retail supplies can
apply numerous fuel economy measures (McKinnon, 2015), such as
●● providing drivers with training in fuel-efficient driving;
●● offering incentives for fuel-efficient driving;
●● purchasing more fuel-efficient vehicles;
●● matching the vehicle power-rating to the load and duty cycle;
●● reducing vehicle tare (empty) weight;
●● improving the vehicle’s aerodynamic profiling;
●● raising standards of vehicle maintenance;
●● setting engine governors at a lower maximum speed;
●● fitting low rolling resistance tyres;
●● ensuring correct tyre pressures.
292 Logistics and Retail Management
Not all these measures are additive. For example, cutting maximum
speed will reduce the effectiveness of improved vehicle aerodynam-
ics. A fuel management programme should not, therefore, simply
comprise a loose collection of measures. These measures should be
integrated into a coherent package tailored to the needs of particular
types of retail distribution. While many truck fuel economy meas-
ures are generic and can be applied in any sector, some have been
pioneered by retailers. For example, in the United Kingdom, retailers
such as Marks and Spencer, TK Maxx and PC World have trialled
the use of ‘tear-drop’ trailers, which slope both at the front and rear
of the vehicle. Companies using these vehicles typically claim fuel
savings in the range 2–5 per cent.
Using alternative fuels
Biofuels
Biofuels have attracted increased attention in recent years as a result
of concern about climate change and energy security. However,
government policies promoting the use of biofuels and corporate
commitments to switch to these fuels now appear to have been
premature. Recent life cycle (or well-to-wheel) comparisons of the
environmental impacts of biofuels and conventional fuels suggest that
the former are not a panacea as first thought. New evidence suggests
that most forms of biodiesel, with the exception of that produced
from waste vegetable oil, yield little net GHG benefit and, on a life-
cycle basis, can potentially generate more GHG than conventional
diesel. The diversion of agricultural production from food to energy
crops inflates food prices around the world and exacerbates food
shortages. The increasing demand for biofuels is also accelerating the
clearance of native tropical forests and threatening biodiversity. It
was hoped that second-generation biofuels, produced mainly from
agricultural waste and forest products, would alleviate these envi-
ronmental and social concerns and prove a more sustainable means
of cutting CO2 emission, though they have yet to have much impact.
Life cycle analysis indicates that biomethane, made by the anaero-
bic digestion of food or agriculture waste, can yield substantial net
Improving the Environmental Performance of Retail Logistics 293
savings in GHG emissions relative to conventional diesel when used
as a truck fuel (International Energy Agency, 2017). British super-
market chain Waitrose has recently invested in a fleet of 12 dedicated
gas vehicles that run on biomethane supplied by the company’s own
refuelling station and have a range of 500km. By comparison with
the previous diesel-powered delivery operation, these vehicles have
reduced CO2 emissions on a well-to-wheel basis by 83 per cent, cut
fuel costs by 35 per cent and noise levels by 50 per cent (Laney, 2017).
Wider application of biomethane in retail distribution is constrained,
however, by a lack of refuelling facilities, a limited supply of biom-
ethane and competition from other sectors for the available supplies.
Electrification
Electric vehicles are virtually pollution-free at point of use and
extremely quiet. They are therefore particularly well suited to retail
logistics operations in urban areas where dense populations are
exposed by air and noise pollution. In assessing the overall environ-
mental impact of electric vehicles, however, one must take account
of the primary energy source of the electricity used to recharge the
batteries. As the switch from fossil fuels to renewable and nuclear
energy steadily reduces the carbon intensity of grid electricity, the
electrification of shop and home deliveries will become one of the
main ways of decarbonizing retail logistics.
There is currently much debate over the most cost-effective means
of getting low carbon electricity into freight vehicles. At present this
is almost entirely done by batteries and confined to vehicles undertak-
ing local delivery work. The use of battery-powered vehicles has been
constrained by their higher capital cost, their limited delivery range,
the low density of recharging points and the weight of the battery
(Morganti and Browne, 2018). These constraints are gradually easing
at a time when the proliferation of low emission zones is giving retail-
ers and their suppliers an added incentive to acquire battery-electric
vehicles (BEVs). We may also be on the verge of a technological break-
through allowing heavy long-haul trucks to be battery-operated,
though scientific opinion is currently divided on the weight of the
battery that would be required to power such vehicles. Tesla will start
294 Logistics and Retail Management
manufacturing a battery-powered long-haul truck for the US market
in 2019 and Walmart was one of the first companies to place an order
for the new vehicle. If the size and weight of the battery prevents
viable long-haul operation, it might prove more cost-effective to elec-
trify the highway, as currently being trialled in Sweden, Germany and
California. Low carbon electricity can then be directly supplied to
trucks either from overhead cables (the so-called ‘catenary’ system) or
from the road surface using induction or an electric rail.
It has been suggested that in the longer term hydrogen, electrolysed
from water with low carbon electricity, will be used to power fuel cells
on freight vehicles (Pye et al, 2015). This, however, would require the
construction of a new supply network for hydrogen and make rather
prodigal use of the electricity. Powering lorries with hydrogen would
result in energy losses of over 70 per cent (Motshall, 2016).
In summary, it appears that the battery electrification of vehicles
offers the most likely pathway to clean, low-carbon distribution in
the retail sector, supplemented by the electrification of heavily traf-
ficked road corridors.
Topical issues
Managing packaging waste within the retail supply
chain
Retailers have long experience of managing the reverse flow of pack-
aging waste from their shops and distribution centres. In recent years
the concept of the circular economy has given the collection, return
and recycling of packaging materials additional corporate momen-
tum (World Economic Forum, 2014).
Efficient management of waste in the retail supply chain involves:
●● minimizing the use of packaging in the forward distribution
channel;
●● recovering waste packaging in the reverse channel.
Packaging helps to ensure that products reach the customer in a
saleable, undamaged condition and can increase the efficiency of
Improving the Environmental Performance of Retail Logistics 295
the distribution operation. It also, however, accounts for almost
25 per cent of UK household waste (INCPEN, 2017). Retailers are
coming under increasing pressure to minimize the use of packag-
ing, partly in response to tightening government regulations but
also because of heightened consumer awareness of its damaging
effects on the environment. For example, in 2018 UK retailer Iceland
announced that it would be removing all plastic packaging from its
own-label products within five years. The aim is clearly not to elimi-
nate packaging altogether but to minimize its unnecessary use and
switch to m aterials that are more recyclable and/or biodegradable.
Under-packaging products would result in a significant increase in
product wastage across retail supply chains (Advisory Committee on
Packaging, 2008).
In the reverse channel the main aim is either to recapture value
through recycling or re-use, or to dispose of the waste in the most
environmentally sustainable manner. It is now common practice for
retailers to site resource recovery units (RRUs) at their DCs. Vehicles
returning to the DCs first call at the RRU where packaging is removed
and baled, and any trays cleaned and stored for re-use. By manag-
ing packaging and handling equipment in this way, retailers not only
maximize the amount of material recovered, but also exploit the
available backloading capacity in returning shop delivery vehicles.
Carbon auditing and labelling of retail products
Around a decade ago some large retailers, such as Tesco and Walmart,
committed themselves to putting ‘carbon labels’ on the products they
sold. These labels indicate the amounts of CO2 (in grams) emitted
during the production and distribution of the product. It is argued
that consumers concerned about climate change would then be
able to make informed choices at the time of purchase, based on
the emissions data supplied (Anon, 2007). The carbon-intensity
of the supply chains for individual products would then become
a selection criterion influencing the purchasing behaviour both
of retail buyers and final consumers. In the United Kingdom, the
Carbon Trust and British Standards Institute developed a procedure
296 Logistics and Retail Management
for auditing carbon emissions across the supply chains of individual
products (Carbon Trust, 2006).
Initial hopes that carbon labelling would eventually become univer-
sal for all goods and services are now very unlikely to be fulfilled.
Calculating the carbon footprints of individual products involves huge
amounts of time, effort and cost (McKinnon, 2010). Some compa-
nies have reported costs of around £30,000 per product. Others have
quoted average analytical costs per product of £3,000–4,000. Even
if this lower average proved more realistic, when multiplied by the
25,000–30,000 products stocked by the typical superstore, the cost
of carbon auditing this range would total hundreds of millions of
pounds. The first products to be carbon audited for labelling purposes
comprised only a few basic ingredients and moved through relatively
simple supply chains. Carbon auditing the chains of much more
complex consumer products such as TVs, computers and cars would
present a much more difficult and costly challenge. At the rate Tesco
was carbon auditing its product range between 2008 and 2010 it
would have taken around 560 years to complete the process3 (Smithers,
2010). There would also be a need to update the carbon estimates
regularly and to establish a system of independent validation. Such a
high investment in product-level carbon auditing and labelling might
be justified if it were likely to induce a major shift in demand to low-
carbon products. Much of the available evidence suggests, however,
that this would not be the case (eg Uphall et al, 2011).
Relative environmental footprint of online retailing
In logistical terms, is online retailing more environmentally friendly
than conventional (or ‘offline’) shopping? Some online retailers, such
as Ocado, have been actively proclaiming the environmental bene-
fits of online shopping. Early empirical work on this subject tended
to substantiate these claims, though was underpinned by numer-
ous assumptions (eg Matthews et al, 2001; Siikavirta et al, 2005).
Comparative analysis of the carbon footprints of conventional and
online retailing for books suggested that, on average in the United
Kingdom, the latter was substantially less carbon-intensitive (Edwards
et al 2010). Between the point at which the conventional and online
channels diverged and the home, the amount of CO2 emitted per
Improving the Environmental Performance of Retail Logistics 297
book was approximately 8.3 times higher for conventional shop-
ping by car and 2.8 times higher when the consumer travelled to the
shop by bus. This calculation assumed that only one book was being
purchased, the first delivery to the home was successful and the book
was not subsequently returned. Relaxing these assumptions substan-
tially eroded the online channel’s carbon advantage.
More recent research, applying the principles of life cycle a nalysis,
has shown that the net environmental effect is highly sensitive to a
few key parameters, making generalization difficult (van Loon et al,
2015). Comparing the environmental impact of online and ‘bricks-and-
mortar’ retailing is complicated by the broad range of factors that must
be considered including the structure of the respective supply chains,
the nature, loading and routing of the vehicles, the proportion of repeat
deliveries to the home, the level of product returns, the energy efficiency
of shops and DCs, the choice of transport mode for the shopping trip
and the relative use of collection points. One of the key elements in the
environmental appraisal is the extent to which car traffic is replaced
by van traffic. Under certain circumstances, the degree of substitution
may be quite modest. After all, consumers frequently combine shop-
ping trips with other activities such as the journey to and from work
or the ‘school run’. This extends the analysis beyond the traditional
confines of green logistics into a study of personal travel behaviour
and wider lifestyle issues. This is necessary, however, to ‘test the wider
validity of the provisional conclusion that buying online rather than
in a shop helps to cut carbon emissions’ (van Loon et al, 2014: 290).
Conclusions
Large retailers have been a fertile source of logistical innovation.
They have pioneered many logistical management practices and tech-
nologies that have subsequently been adopted in other sectors. The
more progressive retailers also appear to be taking the lead in devel-
oping and implementing green logistics strategies. This chapter has
outlined the numerous environmental improvement measures that
they can incorporate into these strategies. If properly coordinated,
this set of measures can substantially reduce the environmental costs
of retail distribution. At present many of these costs are borne by
298 Logistics and Retail Management
the community at large and do not appear on the retailer’s balance
sheet. It is likely, however, that they will increasingly be internalized
in higher taxes and/or through the inclusion of logistical activities in
emissions trading schemes. Those retailers that by then have mini-
mized the environmental footprint of their logistics operations will
derive a significant financial benefit. They will also have benefitted
financially in the meantime, as many of the green measures discussed
in the chapter cut costs as well as emissions. Perhaps the most impor-
tant driver of improved environmental practice in retail logistics,
however, will be the growing expectation of customers that the prod-
ucts they buy are delivered in a sustainable manner.
Notes
1 HFC 23, for example, has a global warming potential 11,500 times greater
than carbon dioxide.
2 On the European mainland trailer heights are limited to 4.0–4.2 metres.
3 Tesco abandoned its carbon labelling plans in 2012
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303
INDEX
Page numbers in italic indicate Tables or Figures.
3D (three-dimensional) printing, home- Argos 245, 252
based 24, 274 Armani 160
Asda
academic interest in retail supply chains 3–4
accidents related to retail logistics distribution strategy 84
e-tail sales 252
activities 281 fulfilment of online grocery orders 263,
Adidas 40, 80, 102, 130, 134–35, 137
agile supply chain 12, 13, 31 266
George brand 71
fashion sector 72–73 green logistics strategy 282
agility concept 12 Groceries Code compliance 38
Ahold 65, 247, 264 online order fulfilment model 22, 23
supply chain challenges 19
global retail model 89–90 use of greener transport modes 287
retail alliance 87 Wal-Mart’s influence on logistics 88, 89
Ahrendts, Angela 78–79, 163, 164–65 Asos
air pollution caused by logistics business model 15
CDPs 272
activities 281 contracting out logistics 56, 86, 239
Aldi 66 dedicated order-picking model 22
exploitation of Web 2.0
Groceries Code compliance 38
sale of 3D printers for home use 274 opportunities 256
Alexander, Sandy 139 exploiting niche demand 256
Alibaba, drone deliveries 273 fast fashion 98, 105
alternative fuels 292–94 growth of 91, 252
Amazon 55, 272 returns management 26–27, 86, 239,
acquisition of Whole Foods 91
customer reviews and purchase 269
Asos Outlet 256
trends 257 asset specificity 53
drone deliveries 24, 273–74 Auchan 272
e-tail sales 252 automation
exploitation of Web 2.0 253
exploiting niche demand 254, 256 garment production processes 102
launch of its own delivery operation 56 Schuh stock management 143–45
online retailing 91 availability in retailing 221–40
rise of 35 adapting to online retailing 236–37
time required to become profitable 259 approaches to improving in-store
Amazon Fresh 266
Amazon Market Place 257 availability 224–31
Amazon Prime 86 causes of retail stock-outs 223
in-car delivery service 237 channel performance evaluation 236
Android 256 click and collect services 237–38
Ann Summers 245 collection and delivery points 237–238
Ansoff grid 159–60 consumer reactions to in-store product
anti-globalization backlash 76, 137
AO.com 252 stock-out 224
Apple 164 direct-to-customer (D2C)
exploiting niche demand 254, 256
Arcadia 115 distribution 238
employees as knowledge workers
229–30
304 Index
availability in retailing (continued) Casino 87
enhanced replenishment model 230–31 Castrette model 71
failed home deliveries 237 catalogue shopping 245
‘last 50 yards’ problem 222, 223 category management 45
online shopping fulfilment 231–34, 238 CEO Global Forum 47
on-shelf in-store 221–31 Chanel 103, 104, 159, 164
returns management (online) 239 Change Your Shoes (pressure group) 79, 137
role of logistics 4–5
service failure and recovery 234–240 Step Up 112
supply chain challenges 28 child labour 98–99
unsecured deliveries 237 China
Avon 245 erosion of competitive advantage 75–76,
77
back-reshoring 78, 79, 80
backloading of shop delivery vehicles 289 foreign direct investment by 77
Bailey, Christopher 79, 161, 162, 163, 164, industrial upgrading and relocation
165–66 initiatives 102
Bangladesh, Rana Plaza garment factory market for luxury brands 156–57,
tragedy (2013) 111 159–60
Benetton 15, 16, 70–71 supplier relationships 71
Bennenstad service 291 We-Chat social media platform 160
biofuels 292–93 Christian Louboutin 130
Boo.com 247 Clarks 135–36
Boohoo 98 ‘click-and-collect’ systems 22–23, 237–38,
Booker 184
Boots 285 267, 271–72
Bravo, Rose Marie 161, 162, 164 ‘click-and-reserve’ systems 271
Brexit 67, 76 ‘clicks and bricks’ retailing approach 248,
effects of uncertainty 79 260
potential challenges for Tesco 215 Clipper Logistics 56, 86
risk to frictionless trade and supply 31
BRIC markets for luxury goods 149–50 ‘boomerang’ service for returns 269
British Shoe Corporation (BSC) 129–30 Coach (fashion brand) 98, 156, 169
Browett, John 197 Coats 78
Burberry 78–79, 80, 104, 149, 157, 159, Coca-Cola Supply Chain Collaboration
160, 170, 175 (1994) 44, 45
brand repositioning (case study) 161–67 coercive power 36, 40
corporate social responsibility (CSR) 166 Cohen, Jack 185
Burton 70 collaborative planning, forecasting and
business process re-engineering (BPR) 11,
replenishment (CPFR) 10, 19, 42–43,
42, 131 49–52, 85
business to business (B2B) channel 21, 24 Collect + 272
collection and delivery points (CDPs) for
e-commerce 245, 247 online purchases 271–73
business to consumer (B2C) channel 20–21, communications 5
Community Food Connection
24, 256 Programme 199
e-commerce 245, 247–48 competition
business to government (B2G) channel, between supply chains 29
time-based competition 12–16
e-commerce 245 UK supermarket sector 36–37
buyer-driven global sourcing networks, complaint management, service failure and
recovery 234–240
fashion sector 105–07 consolidation centres 18
consumer demand-driven supply 1–2
Calvin Klein 172 Consumer Goods Forum 47
carbon auditing and labelling of retail consumer product goods (CPG)
238
products 295–96 consumer to consumer (C2C)
Carrefour 65, 66 e-commerce 245, 247
Cartier 149
Index 305
container shipping Dior 149, 172
maximizing loading of containers 285 direct-to-customer (D2C) distribution 238
slow steaming practice 285 distribution see logistics; supply chain
use of port-centric logistics 284 distribution centres (DCs) 8, 9, 18
distributor labels 82–83
continuous improvement 11 Dixons 248
contractual theory of the firm 53, 100 Dixons Carphone 252
Coopers & Lybrand survey of the grocery Doddle 273
Donna Karan 157, 158
value chain 45, 46 Dorfman, Lloyd 273
core competencies within the firm 53, 55 Dorothy Perkins 115
corporate social responsibility (CSR) dot.com boom and bust (late 1990s) 246,
Burberry 166 248
defining in the fashion sector 113–17 DPD, drone deliveries 273
environmental impact of retail drive concept 22
drive-through collection and delivery
logistics 279
fashion supply chain 98–99 stations 272
global fashion supply chain 103, 111–17 drone deliveries 24, 273–74
luxury fashion brands 171–75 Drucker, Peter 10–11
cost versus service dimensions of the supply
e-commerce 1, 55
chain 16 alternative delivery options 23–24
Costco 66 availability 231–34
costs of various elements of logistics 2 challenges for dot.com pure
Courtaulds 78 players 259
CPFR see collaborative planning, click and collect systems 22–23
fashion sector 98
forecasting and replenishment growth and development 246–52
cross-docking 9, 194–95 logistical challenges 260–62
customer profiling, internet shoppers online shopping formats 256–57
order fulfilment models 21–22, 23
257–60 profiling online customers 257–60
customer relationship management sectors 245
shortening delivery periods 23
(CRM) 254 supply chain challenges 20–24
customer service supply chain integration 24
on-shelf in-store availability of e-fulfilment 20–22
products 221–22 e-grocery 21
e-tail logistics 245–75
online shopping fulfilment 231–34
service failure and recovery 234–240 ‘click-and-collect’ approach 267, 271–72
customer service framework (Grant) 235–36 ‘clicks and bricks’ retailing approach 260
collection and delivery points
dark stores (picking centres) 55, 84, 197,
265–66 (CDPs) 271–73
distribution of online grocery
data collection and use in supply chains
29–31 products 261–67
distribution of online purchases of
database marketing 35
De Sole, Domenico 161 non-food items 267–73
Debenhams.com 257 drone deliveries 273–74
dedicated order-picking model 21, 22, 23 e-commerce sectors 245
Delhaize 65 exploiting the ‘long tail’ 253–56
demand anticipation 4 Global Retail E-commerce Index 249–51
demand chain effectiveness 16–17 growth and development of the
demand chain management 1–2
demand-led pull model, fashion supply e/m-commerce market 246–52
history of mail order shopping 245
chain 97 home-based 3D (three-dimensional)
demand management 45
design/source/distribute (DSD) model 101, printing 274
135
Dewhirst 78
DHL, drone deliveries 273
digital revolution 35
306 Index
e-tail logistics (continued) environmental impact of retail logistics
hub-and-spoke networks 267 279–98
influence of Web 2.0 252–56
J4U delivery networks 267 accidents 281
‘last mile’ problem in grocery 266–67 air pollution 281
‘last mile’ problem in non-food backloading of shop delivery
items 269–75
logistical challenges of e-commerce vehicles 289
260–62 carbon auditing and labelling 295–96
multichannel retail strategy 248 corporate social responsibility (CSR) 279
niche demand exploitation 253–56 energy efficiency 291–92
online order fulfilment strategies 262–67 environmental initiatives 279–80
online shopping formats 256–57 environmentally friendly transport
pure player e-tailers 247
relative environmental footprint 296–97 modes 285–88
returns management 267, 268–69 food miles issue 284–85
surface delivery robots (droids) 274 green dimension to logistics and supply
top 15 UK e-tailers (2017) 249, 252
unattended delivery systems 270–75 chains 3
greenhouse gas emissions 280
Eastern Europe, footwear production improving vehicle utilization 288–91
137–39 international fashion supply chain 98
managing packaging waste 294–95
eBay 140, 143, 247, 256 noise disturbance 281
ECR (efficient consumer response) 44–52 noxious gases 281
reducing road miles 282–83
category management 45, 46 relative environmental footprint of online
changing relationships between retailers
retailing 296–97
and suppliers 49–52 restructuring the retail logistics
comparison of studies 44–45
demand management 46, 47, 49 system 283–85
enablers 46, 47 sustainability challenge 24–27
enabling technologies 45, 46 topical issues 294–97
initiatives 19 urban consolidation centres 290–91
integrators 46, 47 use of alternative fuels 292–94
introduction of 10 use of larger vehicles 289–90
KPIs in grocery retail 51–52 visual intrusion 282
main focus areas for improvement waste generation 281–82
ways to reduce 282–97
45–52 Environmental Justice Foundation 113
model (Aastrup et al) 47–49 Ethical Consumer Research Association 172
need for collaboration 85 Ethical Trading Initiative 112
product replenishment 45, 46 ethics in global fashion supply chains
role of logistics service providers
111–17
(LSPs) 52–57 European Emissions Trading Scheme 286
supply management 46, 47, 49 European Union (EU) 76, 225
VICS initiative on CPFR 49–52 EUROSKO 137
ECR Community (formerly ECR Europe) everyday low price (EDLP) strategy 39, 78
Exel (logistics service provider) 74, 87
47 experiential online shopping formats
ECR Europe 225, 230
256–57
supply chain study 45, 46, 47 expert power 36, 40
ECR UK 225
Eddie Bauer 248 Facebook 235, 247, 248
EDI platforms 21 exploiting niche demand 256
El Naturalista 137 use by e-tailers 257
electric vehicles 293–94
electronic data interchange (EDI) 9, 68 factory gate pricing 55, 73, 83
electronic point of sale (EPOS) 9 far-right political movement 137
end-to-end supply chain 10, 73–74 fashion industry, decline in growth 40
energy efficiency in retail logistics 291–92 Fashion Industry SCM Promotion
Association (FISPA) 43
Index 307
Fashion Revolution Transparency global sourcing 67–75
Index 112, 172, 174 global warming 280
GlobalExchange 247
fashion supply chain Gobbetti, Marco 166
affordable luxury 98 Goldbergs 139
evolution of 70–73 Google 164
labour-intensive nature of apparel
production 75 drone deliveries 273
managing high returns rates 26–27, 56 exploiting niche demand 256
mass prestige brands 98 government to business (G2B)
outsourcing of logistics 56
quick response (QR) concept 40–44 e-commerce 245
time-based competition 14–16 greenhouse gas emissions from logistic
see also international fashion supply
chain; luxury fashion supply chain activities 280
Greenpeace 172
fast fashion 14–16, 27, 40, 97, 98, 99,
100–01, 105 Detox Catwalk 112
Grenelle 2 Act (2012) France 175
demand profile 107–11 Groceries Code Adjudication
fast-moving consumer goods (FMCGs) 18
Fearne, Andrew 39 Bill (2013) 38
food miles issue 284–85 Groceries Code and Adjudicator 184, 212
food waste in grocery supply chains 26, 199 Groceries Supply Code of Practice 37–40
footwear supply chain 129–46 grocery retail supply chain
challenges facing retailers 129–30 distribution of online grocery
complexity of 131–35 products 261–67
efforts to reduce lead times 131–35
global production of footwear 129 efficient consumer response (ECR)
information flows 134–35 44–45
intermediary processes in footwear
internationalization 73, 74
production 131–34 key performance indicators (KPIs) 51–52
offshore sourcing 135–39 non-UK countries 19
outsourcing 135–39 outsourcing of logistics 53–55
production in Eastern Europe 137–39 United Kingdom 17–20
reshoring 135–39 Gucci 149, 156, 164, 174, 175, 230
Schuh case study 139–46 flawed licensing and franchising
worker exploitation 137–39
Ford, Tom 161 strategy 161
foreign direct investment, presented as
H&M
reshoring 77 fast fashion 15, 27, 97, 100
Fratelli Rossetti 136–37, 169–70 in Ethiopia 77
free on board (FOB) 73, 74 recent decline in profits 40
galaxy model of segmentation 158 Halfords 23
Gantt charts 131 Hammersley, Phillip 129
Gap 77, 111 handling requirements of products 28
GATT (George and Atila Turkmen) 71 Hermès 103, 149, 156, 167, 168, 172, 173,
General Motors, OnStar system 237
Genesco 139 174–75
geographical considerations in supply chain Hingley, Martin 39
Hogan Rebel 139
strategy 83–84 Hollander, Stan 65
Geox 137–38 Home Depot 66
Giorgio Armani, segmentation 158 horizontal competition between supply
Global Commerce Initiative (GCI) 46–47
global logistics service provision 55 chains 29
Global Retail E-commerce Index 249–51 horsemeat scandal (2013) 30, 184, 212
global retail models 87–90 House of Fraser 227, 230
Global Scorecard 46 hub-and-spoke networks 267
Hugo Boss 156
Iceland (retailer) 295
IGD (formerly Institute of Grocery
Distribution) 17–18, 47, 225
308 Index
IMRG (e-commerce statistics provider) 246 international hubs 72
in-car delivery services 237 international sourcing, vertically-integrated
Industrial Marketing and Purchasing Group
companies 70–71
(IMP) 35 internationalization of the retail supply
industrial upgrading 102
infomediaries 247 chain 65–91
information, data collection and use in challenges for the grocery sector 65–66
combinations of offshoring and
supply chains 29–31
information technology, quick response (QR) outsourcing 69–70
differences in distribution ‘culture’ 81–86
programmes 40–44 entry strategy 74–75
Inpost 272 fashion supply chain 70–73
Instagram 164, 165, 247 five levels of sourcing strategies 68–69
integrated service providers 71–72 global retail models 87–90
integrated supply chain management 1 grocery supply chain 73, 74
International Committee of Food Chains international retail operations 66, 67
international sourcing 66, 67–75
(CIES) 47 internationalization of management
international fashion supply chain 97–118
concepts 66, 67
automation of garment production knowledge transfer approaches 86–90
processes 102 need for collaboration between
basic products demand profile 107–09 parties 85–86
buyer-driven global sourcing offshore sourcing 75–80
online operations 91
networks 105–07 reshoring 75–80
competing demands on suppliers 115–17 returns management 86
corporate social responsibility (CSR) 98, supply chain implications 66–75
use of logistics contractors 85–86
103, 111–17 inventory 5
defining CSR 113–17
demand-led pull model 97 J.B. Hunt-Special Logistics Dedicated
demand profiles and uncertainty 107–11 LLC 237
design/source/distribute (DSD)
J4U (just for you) distribution 261, 267
model 101 Janowski, Andy 165
e-commerce 98 Japan
ethical issues 111–17
fast fashion 97, 98, 99, 100–01 automobile industry supply chain 74
fast fashion products demand influence of Japanese business
profile 107–11 methods 11–12
garment sourcing strategies 109–11 QR in the fashion supply chain
industrial upgrading 102
key issues in supply chain 43
JD, drone deliveries 273
management 99–111 Jimmy Choo 130
locations for low-cost garment John Lewis 252
JohnLewis.com 257
manufacture 101–02 just-in-time (JIT) systems 18, 30, 35
manufacturer-push model 97
outsourcing 97–98, 100–04 Kearney, AT 76
quick response (QR) concept 104–05 Kenzo 172
race to the bottom on manufacturing Kering (formerly PPR) 104, 157, 161, 174,
costs 102 175
regional specializations 102–03 key performance indicators (KPIs), in
relationships and responsiveness 104–07
social and environmental impacts 98–99 grocery retail 51–52
sourcing 97–98 Kimberley Process Certification Scheme
sustainability issue 98, 113–17
sweatshops 111–12 174
typology of fashion retailer knowledge transfer in international
relationships 109–11 logistics 86–90
vertical disintegration 100–04 Kroger 66
worker exploitation 111–12
Index 309
Kurt Geiger 130 evolution of the luxury brand 156–60
Kurt Salmon Associates (KSA) 15–16, features of luxury supply chain
40–41, 44, 81 management 167–71
gaining control of marketing
labour costs 75–76
Lacoste 173 channels 160–67
‘last 50 yards’ problem in retailing 222, 223 growth of the luxury fashion sector
‘last 50m issue’ (stock room to shelf) 28
‘last mile’ problem of delivering goods 149–50
history of the concept of luxury 150–55
20–21 management challenges 167–71
impact of new technology 273–75 market segmentation 157–58
in grocery 266–67 ‘new’ luxury 155–56
in non-food items 269–75 online and off-price channels 160
Laura Ashley 115 pyramid brand model 157–58
leagile approach 12, 13 reshoring 78–79
lean approach 30–31 ‘see now, buy now’ (SNBN)
fashion sector 72–73
lean principles 11 approach 165–66, 170–71
lean production 12, 13 social and environmental issues 112
lean supply chain techniques 35 supply chain transparency 171–75
footwear production 134 sustainability 171–75
Leclerc 272 vertical integration 103–04
legitimate power 36 LVMH 104, 157, 172, 173, 175
Levi Strauss & Co. 112
Li & Fung 71–72 m-commerce 1, 55, 245
locker point systems 271–72 customer profiling 259–60
logistics growth and development 246–52
flows of product and information 4–5 online shopping formats 256–57
influence of consumer expectations 1–2
service benefits 2–3 m-tail 245
task of 4–8 mail order shopping, history of
logistics mix
components 5 245
integrated retail supply chain 5–8 ‘make or buy’ decisions in operations
management challenges 5–8
trade-off of costs 84–85 management 52–53
logistics service providers (LSPs) 30, 52–57 manufacturer-push model, fashion supply
collaboration typology 56–57
fourth party (4PL) providers 52 chain 97
role in ECR 52–57 market segmentation models, luxury
third party providers 52
use in international supply chains 85–86 fashion 157–58
‘long tail’ marketing 253–56 marketing mix, four Cs and five Is
longer semi-trailers (LSTs) 289–90
L’Oreal 172 35
Louis Vuitton 103, 149, 156, 160, 167, 169, Marks & Spencer 111
172, 173 e-tail sales 252
luxury fashion supply chain 149–77 European retail strategy 86–87
Groceries Code compliance 38
accessible luxury 155–56 offshore sourcing 70
Ansoff grid 159–60 own-brand products 83
brand product diversification 160 retreat from international markets 65
Burberry case study 161–67 trailer energy efficiency initiative 292
classification of luxury brands 156 mass customization 257, 261
CSR and luxury fashion brands 171–75 Matternet, drone deliveries 273
definition of a luxury brand 150–55 McKinnon, Alan 8–10
development of 150 Metro 65, 66, 88
Michael Kors 98
Millennial (Generation Y) consumers
246–47, 267
Missoni 160
Modern Slavery Act (2015) UK 175
Monoprix 287–88
Monsoon Accessorize 115
310 Index
Morrisons 266, 273 packaging waste, managing within the
Groceries Code compliance 38 supply chain 294–95
supply chain challenges 19
pan-firm orientation 12
Moschino 170 ‘parenting advantages’ for brands 157
multichannel retail strategy 248, 260, 261 Pareto principle (80:20 rule) 254
Multi-Fiber Agreement (MFA) 100 party plans 245
Patek Phillipe 159
N Brown 252 PayPoint 272
near-reshoring 78, 79, 80 PC World, trailer energy efficiency
Net-a-Porter 256, 257
Network Rail 273 initiative 292
network theory 12 Peapod 247, 266
Nevada Bob 257 pick centre order fulfilment model 21, 22,
New Look 40, 130
Next 111, 245, 252 23, 263–65
Next Directory 23 Pixmania 257
niche demand exploitation 253–56 Plank, Kevin 80
Nike 40, 102, 112, 130, 135, 173–74, 238, Polo Ralph Lauren 169
Portugal, labour rates 75
257 power
noise disturbance by logistics activities 281
North American Free Trade Agreement emergence of retailer power 36–40
five power bases 36
(NAFTA) 76 in buyer–seller relationships 36–40
Prada 79, 80, 104, 137, 149, 169
Obama, Barack 76 Primark 105, 109, 130
Ocado 23, 55, 252, 264, 296 primary consolidation centres 54
Office 130 Proctor and Gamble, efficient consumer
offshore QR (quick response) initiatives 68
offshore sourcing 75–80 response (ECR) 44
product lifecycle 40
footwear sector 135–39 protectionism 67, 76, 137
offshoring 69–70 pyramid brand model 157–58
omnichannel retailing 231, 248
one-to-one marketing 253 quick response (QR)
one-touch systems 28 adoption of 9
online auction sites 247 fashion supply chain 104–05
online fulfilment centres (OFCs) 232, offshore initiatives 68
programmes 40–44
233–34
online order fulfilment 231–34, 238 Quick Response Promotion Association
(now FISPA) 43
dedicated order-picking model 21, 22, 23
pick centre model 21, 22, 23 Quidco 256
store-based model 21–22, 23
online retailing, relative environmental Ralph Lauren 157, 170
recycling 25–26
footprint 296–97 Reebok 135
online shopping formats 256–57 referent power 36
outsourcing regional distribution centres (RDCs) 54–55,
factors in outsourcing decision- 73, 83, 85
making 52–57 relationship lifecycle 36
relationships in the supply chain 30, 35–58
fashion supply chain 97–98
footwear sector 135–39 category leadership 39
logistics service providers (LSPs) 52–57 changing relationships between retailers
of production 40
Overstock.com 256 and suppliers 49–52
own-brand products 83 efficient consumer response (ECR)
pace of supply chains 27 44–52
packaging 5 emergence of retailer power 36–40
logistics service providers (LSPs) 52–57
reduction, re-use and recycling 25–26 power in buyer–seller relationships
36–40
Index 311
quick response (QR) programmes 40–44 distribution strategy 84
role of trust 36, 39–40 entry into the Northern Ireland
replenishment and re-ordering systems 9
reserve and collect systems 22–23 market 75
reshoring 75–80 fulfilment of online grocery orders 263,
footwear sector 135–39
reshoring index 76 266
resource-based theory of the firm 12 Groceries Code compliance 38
resource recovery units (RRUs) 295 online order fulfilment model 22, 23
retail alliances 87, 90 restructuring the logistics system 284
retail buying power, abuses affecting retreat from international markets 65
supply chain challenges 19–20
suppliers 37–40 Saint Laurent 158
retail logistics transformation 8–10 sales-based ordering (SBO) systems 9
Schuh 40, 56, 86, 130, 272
control over secondary distribution 8–9 Schuh (case study) 139–46, 269
efficient consumer response (ECR) brand mix 141
distribution system 140–41
introduction 10 history of the company 139–40
end-to-end supply chains 10 managing distressed stock 142–43
logistical systems restructuring 9 online sales 143, 144
primary distribution (factory to stock turn 141–42
technology/systems 143–45
warehouse) rationalization 9–10 Schwartz 66
quick response (QR) adoption 9 Screwfix 252
reverse logistics operations 10 ‘see now, buy now’ (SNBN) strategy
supply chain management (SCM)
165–66, 170–71
introduction 10 SelectUSA programme 76
retail-ready packaging 28 service point systems 271, 272
retailers Shandong Ruyi Technology Group of
control of the supply chain 18–19, China 77
83–84 shelf-ready merchandise 28
Shoesofprey.com 257
emergence of retailer power 36–40 Shop Direct 252
interest in logistics systems of suppliers Shrink and OSA Group 47
SKUs (stock keeping units) 226, 234
and intermediaries 6 social issues, international fashion supply
role in the supply system 6
returns management 4 chain 98–99
e-tail logistics issue 267, 268–69 social media
fashion industry 56
fast fashion retailers 26–27 complaint channel for consumers 235
international supply chains 86 influence on shopping decisions 247
multichannel approach 248 Somerfield 263, 266
online 239 sourcing
reasons for returns 239 five levels of sourcing strategies
‘wardrobing’ problem 239
reverse logistics 10, 25–26 68–69
reverse systems in supply chains 1, 2 international sourcing 67–75
reward power 36 span of supply chains 27–28
RFID 24 Sri Lanka, QR initiatives in the garment
Richemont 157
Romania, supplier relationships 71 industry 43–44
Royal Ahold Group 66 Starship Technologies 274
Ryder-MXD Group 237 Stella International Holding 79
Ryman 273 stock see inventory
stock-outs see availability in retailing
Safeway 19, 87 store-based order fulfilment model 21–22,
Sainsbury’s 252
23, 263–65
B2B internet exchange 21 storage facilities 5
collaborative planning, forecasting and substitution rates in online grocery
replenishment (CPFR) 51 orders 264
312 Index
suppliers centralization 187–89
decline of supplier power 36–40 click and collect 272
industrial upgrading 75 collaborative planning, forecasting and
‘race to the bottom’ on cost 75
replenishment (CPFR) 51
supply chain, comparison with demand competitive advantage from 199
chain 16–17 composite distribution 190–92
continuous replenishment (CR) 193–94
supply chain challenges 20–31 coping with complexity 200–13
availability of products 28 dark stores 197
competition between supply chains 29 direct-to-store delivery (DSD) 186–87
e-commerce 20–24 distribution strategy 84
information collection and e-tail sales 252
utilization 29–31 effects of global recession (after
key issues for retail supply chains 27–31
pace of supply chains 27 2007) 211–13
potential disruption from Brexit 31 environmental issues 198–99
relationships between supply chain establishing control and delivering
partners 30
reverse logistics 25–26 efficiency 185–99
span of supply chains 27–28 exploiting niche demand 256
sustainability 24–27 flow-through/cross-docking 194–95
UK grocery retailers 19–20 food waste 26, 199
global retail model 87
supply chain management (SCM) 10–17 Groceries Code compliance 38
competition between supply chains 16 horsemeat scandal (2013) 184, 212
competitive advantage from 12–16 importance of control of
integration of activities 11
introduction of 10 operations 214–15
service versus cost focus 16 in-store management 194
transformation of retail logistics 8–10 international expansion and
value chain 12
withdrawal 65, 66
supply chain networks, international internationalization 201, 203–13
variations 81–86 internet shopping operation 196–98
lean supply chain 11, 35, 192–99
supply chain pipeline mapping 134 long-term transformation of Tesco retail
supply chain relationships see relationships
business 183–85
in the supply chain multi-channel operations 198
supply chain studies, comparison of scope multi-format development 200–03
network management 194
and savings 44–45 online operations 91
supply chain transparency, luxury fashion online order fulfilment 22, 23, 262,
brands 171–75 263–66
surface delivery robots (droids) 274 Operation Checkout (1977) 185–87
sustainability in logistics and supply primary distribution (factory gate
chains 3 pricing) 195–96
challenges 24–27 scandals 183–84, 212–13
luxury fashion brands 171–75 service versus cost in SCM 16
sustainable fashion 113–17 supply chain development 19
sweatshops 98–99, 111–12 supply chain management 183–215
use of greener transport modes 287
T-shaped skills 229 use of rail transport 26
Tacon, Christine 38 vertical collaboration 192–99
Tesco Tesco Direct 197, 257
Tesco Express 200–02
accounting scandal (2014) 184, 212–13 Tesco Metro 200–02
acquisition of ABF in Ireland 75, 86 Tesco Outlet 256
Brexit challenge 215 Tesla 293–94
business to business (B2B) internet Texon 134–35
The Limited 68, 71–72
exchange 21
business to consumer (B2C) channel 21
carbon auditing and labelling 295, 296
Index 313
The Machine that Changed the World Environmental Protection Agency 174
(Womack) 11 QR (quick response) concept 40–44,
third party logistics (3PL) service 104–05
providers 238 reshoring initiatives 76–77, 78
unitization 5
Tiffany & Co. 149, 174 urban consolidation centres 290–91
time-based competition 12–16
Tisci, Riccardo 166 value chain 12, 14
TK Maxx 292 value stream mapping 134
Tod’s 79, 137, 138–39, 172 Vans 257
Tom Ford 170 Versace 160
Tommy Hilfiger 157, 170, 172 vertical competition between supply
Top Shop 15
Topcashback 256 chains 29
Topman 115 vertical integration of supply chains 40
Topshop 115 vertically-integrated companies 70–71
total quality management 11 VICS (Voluntary Interindustry Commerce
Toys R Us 74
transaction cost analysis 53 Standards Association) 41, 42–43
transaction cost economics 12 initiative on CPFR 49–52
transaction costs, role of infomediaries 247 virtual organizations 53
Transparency in Supply Chains Act (2012) visual intrusion of retail logistics
California 175 activities 282
transportation 5 Volvo, On Call service 237
von Hippel, Eric 255
backloading of shop delivery
vehicles 289 Waitrose 272
biofuel-powered transport 293
improving vehicle utilization 288–91 fulfilment of online grocery orders 266
use of environmentally friendly Groceries Code compliance 38
modes 285–88 Walgreen 66
use of larger vehicles 289–90 Wal-Mart 19
Travelex 273
Trump, Donald 67 B2B internet exchange 21
association with Kevin Plank 80 benefits of environmental initiatives 280
‘Make America Great Again’ slogan 76 carbon auditing and labelling 295
pledge to revive jobs in the ‘rust belt’ 76 challenges of sourcing US goods 78
trust in supply chain relationships 36, competing demands on suppliers 116
CPFR (collaborative planning,
39–40
Turkey forecasting and replenishment) 51
development of ‘supercenters’ 82
labour rates 75 ECR (efficient consumer response) 44
supplier relationships 71 global retail model 87, 88–89
Twitter 247, 248 international expansion 65, 66, 82
international supplier relationships 71
unattended delivery systems 270–75 online order fulfilment model 22
Under Armour 80 online retailing 91
Unilever 80 Retail Link network 24
United Kingdom sales forecast collaboration 49, 51
use of electric vehicles 294
effects of reshoring 77–79 Walton, Sam 65
grocery retail supply chain (UK) Warner-Lambert, sales forecast
17–20 collaboration 49, 51
monthly index of retail sales 246 waste generated by retail logistics
nature of competition in the supermarket
activities 281–82
sector 36–37 waste reduction in supply chains 24–27
reshoring of apparel production 103 We-Chat 160
United States Web 2.0 35
agility concept 12
ECR (efficient consumer response) influence on e-tail 252–56
concept 44–52
314 Index Yodel 272
Yoox Net-a-porter 160
Webvan 23, 262–63 YouTube 256
Whole Foods, acquisition by
Zalando 56, 91
Amazon 91 Zara
Wiggle.com 257
worker exploitation 98–99 fast fashion business model 15, 27, 97,
99, 100–01, 105
fashion industry 111–12
World Business Council for Sustainable lean supply chain 35
vertical integration 70
Development 113
World Trade Organization (WTO) 76
World Wildlife Fund 172
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