History was made last month when England and Scotland’s top techie wholesalers came together to share knowledge and best practice. Elit Rowland reports
Wholesalers in the same businesses or buying groups frequently open their doors to each other in the interests of sharing information. But it’s not every day you get members of opposing buying groups putting differences aside in the interests of best practice. Yet that’s just what England and Scotland’s top techie wholesalers, JJ Food Service and JW Filshill, have done.
“Everyone in wholesale is doing the same thing and selling the same products, so we have to differentiate ourselves using technology,” says Simon Hannah, MD of JW Filshill. “JJ has excelled in this area and we’re keen to develop our click & collect service, so we decided to take a closer look.”
Both companies are family-owned, data-driven businesses, which gives them many things in common. But there are also significant differences between them.
Glasgow-based Filshill, a Today’s Group member, supplies 168 KeyStore convenience stores across Scotland and the north of England, and has developed a highly efficient warehouse operation. Pickers wear the latest headset technology and use ride-on cage pallet lifters to maximise productivity. The warehouse is set up mainly for deliveries, but the growing demand for click & collect has driven Hannah to look at ways to develop the collection side of the business.
In England, national wholesaler and Landmark member JJ Food Service has a slick front-of-house operation driven by a smart ordering app and website, as well as a physical online ordering and collection area at all branches. Chief operating officer Mushtaque Ahmed is considering how to develop back-of-house operations to further improve efficiencies.
Together, the two businesses represent what could be viewed as the ‘perfect wholesaler’ – streamlined operations from front to back with much to learn in terms of where each business wants to develop. In some ways, it’s surprising that they haven’t come together sooner.
Here are the highlights of the meeting, which focused on data, predictive ordering and talent retention.
Simon: What was it like going from a 100% delivered operation to a click & collect model? How did you adapt the business?
Mushtaque: In 2008, we launched an online ordering function and we centralised all our prices to the tiered system that appears on our website. Our prices became fully transparent and we were able to collate a huge amount of data using the online system, which we have used to develop our machine-learning function. Today, 80% of the orders we receive are from this predictive ordering function.
Simon: What was the biggest challenge during the transition?
Mushtaque: Data has always been the centre point for removing clutter and streamlining operations. Before introducing our transparent online pricing system, we had up to a quarter of a million prices, despite stocking just 3,500 products. This was down to single stock-keeping units having 30 prices or more because sales managers had the power to change prices and run promotions at a local level. This is no longer the case.
Simon: Presumably, there is no existing customer data to use with new customers, so how does your predictive ordering function work?
Mushtaque: That’s correct, but the system can still make suggestions based on what other customers in that sector have used. Customers are asked to define which sector they belong to when they register and the machine-learning function uses complex algorithms to determine what they might order, based on other customers in the same sector. It’s surprising how accurate the suggestions can be.
Simon: Do suppliers ever try to persuade you to recommend their items, regardless of whether the products are commonly bought?
Mushtaque: Absolutely, but as a business we have to prioritise customers’ needs. It’s critical that suggestions are relevant. Our customers trust us and making relevant suggestions builds on and sustains that trust. Selling something that’s not relevant may work once or twice, but not long-term.
Our CEO says you need to treat every product like it was milk – you cannot just stock up because you’re being incentivised. Products have to move fast. Ultimately, if you buy in for the wrong reasons, you will end up discounting to get rid of it.
Mushtaque: We’ve been considering using cages back of house. How have they improved operations within your business?
Simon: 85% of our deliveries are now made in cages as opposed to pallets. Drivers can now drive alone and wheel the cage directly into the customer’s shop, whereas previously, each vehicle would require a driver and a ‘van boy’ to help unload. We invested £500k in ride-on cage pallet lifters and cages. This has helped pickers to pick half a pallet more in the same time, which equates to anything up to 2,600 extra boxes per day. And you don’t have to worry about them being stolen for scrap metal – they’re not 100% metal!
Simon: Do your drivers assist customers?
Mushtaque: Yes, we recently introduced a driver app, which has helped to improve the delivery process, freeing our drivers to focus more on service. The hardware costs just £130 per driver versus the £1,000 we were previously paying for bulky handheld devices. With just a mobile phone, drivers know what to deliver, where and when.
Bluetooth temperature sensors have been added to the multi-temperature vehicles enabling us to track real-time data using drivers’ phones. This has improved their productivity by more than 5%, which is significant with a fleet of 115 vehicles.
Drivers have also told us that the new system has improved their working day as it’s less cumbersome, quicker and easier to use than the previous system.
Mushtaque: Similar to yours, our business promotes from within. How do you go about retaining talent?
Simon: One of the downsides of recruiting or promoting from within is that you can end up being more tolerant of bad performance. One of our biggest focus areas is keeping ambitious staff engaged in the job and helping them to consider where they could go next. We regularly assign exciting projects to high performers and have just introduced a Length of Service Award to recognise staff that have been with us a while.