T&A's exclusive first look at Kwik-Fit’s £10 million National Distribution Centre
Looking back to the 1970s and 1980s Kwik-Fit sold just 25 different sizes. As anyone in the trade knows, today it is a completely different story and there are up to 700 different size and brand products in the premium segment alone. Something that, according T&A’s Kwik-Fit tour guides, is “a monster to control.” At the same time the floor and storage space available to individual Kwik-Fit branches remains pretty much the same as it was two decades ago.
Toby Leybourne summarized the pragmatic thinking behind the project like this: “Having 90 depots inside the M25, for example, means logistics is key, but now Kwik-Fit’s nightmare has become an opportunity.” Head of Kwik-Fit Fleet, Mike Wise added: “Virtually every new vehicle launched comes to the market with a new tyre size…The proliferation of tyre sizes has made it a necessity that Kwik-Fit has its own distribution operation and is not reliant on tyre manufacturers to deliver tyres to centres, which can take several days.”
In addition to the disruption of multiple daily product drops at its branches and the advantage of controlling wide stock selection on behalf of its own shops, the cost of delivery was something else that troubled Kwik-Fit managers. Traditional direct distribution methods, with the suppliers sending tyres to depots individually (or more recently in small groups of brands), meant Kwik-Fit’s geographical spread across the UK resulted in it effectively providing the critical mass necessary to make such deliveries cost effective for the manufacturers, but without the additional benefit. Now that the NDC is up and running, every brand arrives neatly stacked on a branch-specific roll cage every day.
Tyres on roll cages?
Launching a supply chain that depends on transporting round tyres in rectangular roll cages might seem an unusual step, but for Kwik-Fit GB Ltd the Tesco-esque use of roll cage logistics is a vital element in its new UK distribution strategy. The supermarket style roll cages allow Kwik-Fit to assume far greater control of its supply chain and to offer a more environmentally-friendly solution for the transportation of old tyres. When it comes to products like run-flat tyres and little used premium sizes, the benefits are clear. The new way of doing things means Kwik-Fit no-longer has to fight for delivery from a European availability pool, but is rather able to source orders direct from supplying manufacturers’ factories based on its own sales projections – all with a three-month lead time.
Bearing in mind that a third of Kwik-Fit’s business comes from fleet tyres and that Kwik-Fit reportedly deals with more 1-3 year old cars than anyone else in Europe, this is particularly handy. Previously it could take up to three days for tyres to be delivered – depending on suppliers – but now online ordering at high street and mobile centres, as well as dealers who use Kwik-Fit for tyre replacement, means stocks are replenished daily. If it all goes according to plan, tyres should now generally be available to dealerships on a next-day delivery basis. According to the company, this means centres can order any of the 1,500 ‘standard’ tyres at the NDC until 5.30pm for next day delivery before 3pm.
“As we record details of every tyre replaced we can accurately forecast the tyre sizes that are most in demand and consumption frequency. These are kept at our centres with stocks replenished frequently. The less popular tyre sizes are in stock at the new National Distribution Centre and will be delivered the next day anywhere in the country at the request of our centres. We are now masters of our own destiny,” Mike Wise commented. Supply chain head, Neil Arnott added: “The NDC is a strategic move for Kwik-Fit that will improve our stock availability, create considerable efficiencies within our business and introduce a reverse logistics capability. There are many ‘firsts’ in this project for our industry, the success of which are underpinned by CEVA’s proven experience in the market, robust systems and strong management team with a can-do attitude. This solution helps future-proof Kwik-Fit against industry challenges and will provide us with flexibility and control over our supply chain.”
NDC ‘accelerates’ recycling policy
The introduction of the NDC has also given Kwik-Fit the opportunity to make its processes as green as they have ever been. So at the same time as establishing the new centre, IT systems and logistics plan, Kwik-Fit also ushered in a revolution in used tyre collections. The company’s new reverse logistics policy means worn tyres are collected at the same time new tyres are delivered, before being taken back to the NDC and shredded on-site. In this way, according to company figures, the reverse logistics operation saves Kwik-Fit trucks from driving more than 2.5 million miles per year and goes some way to preventing part-worn tyres from re-entering the retail system. The fact branches no longer need to store worn tyres outside premises means there could also be an impact on forecourt fly-tipping that up till now has cost Kwik-Fit £250,000 a year.
The introduction of ‘reverse logistics’ means the NDC’s new 69-vehicle truck fleets are never empty. For every roll cage of tyres they deliver, they pick up another full of scrap tyres and casings. These are managed, in the same way as new tyres, across five distribution hubs, which means that just eight minutes after a full truck arrives with removed tyre casings and scrap catalytic converters it is reloaded with the next load of outbound tyres.
Tyres and catalytic converters returned to the NDC are then sorted and shredded on-site for reprocessing at Murfitts Industries into artificial sports pitches, equine surfaces and children’s playgrounds. Any remaining chip is used in cement kilns as a fuel and aggregate replacement. Catalytic converters are collected by contractors and sent for recycling on the worldwide scrap metal market. The fact that the specialist tyre waste collector can now collect from the National Distribution Centre instead of calling at individual Kwik-Fit centres also cuts vehicle emissions.
Head of Kwik-Fit Fleet Mike Wise said: “We view worn out tyres not as rubbish, but as the raw product for something else. Amid ever-growing awareness around company and individual environmental and waste recycling responsibilities, it is essential that major organizations…lead by example and display their corporate social responsibility credentials.” Mr Wise added: “Our customers, major contract hire and leasing companies, rental firms and companies with car and van fleets are increasingly conscious of environmental issues and understandably expect their supplier partners to also have a green agenda. We believe it is right that waste material is reprocessed and has a second life.”