Snack manufacturer Tayto expects to take up to 250 tonnes of CO2 emissions out of its supply chain by July 2015, thanks to a pioneering ‘virtual warehouse’ system developed jointly by Bibby Distribution and Tayto’s Supply Chain & Commercial Teams.
New figures show the system has already saved 160 tonnes of CO2 emissions since the system was implemented in July 2014, with a further 90 tonnes expected to be taken out by the first anniversary of the system’s implementation. This figure will potentially increase as Bibby Distribution plans to introduce two new 15.6m longer semi-trailers (LSTs) onto the contract in May, meaning fewer runs will be required for deliveries. These new trailers will also be used as mobile advertising for Real Crisps and Mr Porky, two of Tayto’s premium brands.
Furthermore, in addition to generating crucial environmental savings, this joint Bibby Distribution and Tayto virtual warehouse approach has improved on-shelf availability for retailers and provided a platform on which to establish a home delivery market for the largest British-owned snack manufacturer in the UK.
Nigel Smith, Tayto’s Group Supply Chain Director, says: “The virtual warehouse system has been extremely beneficial for our business. It has slashed our annual food miles by around 40,000 a year, plus there are now 3,000 fewer pallet touches which means the risk of damage to our stock is far, far lower.”
The partnership team developed the virtual warehouse system to provide Tayto with the benefits of consolidation, but without the outlay required for a physical warehouse or the logistical costs of transporting goods from two production lines to an additional facility.
A software system provides a single ordering point for customers which then builds multi-sku loads from stock in Tayto’s two major warehouses, and calculates the most cost-effective way of consolidating the load based on other orders in the system, transfer costs and warehousing expenses.
This then provides the cheapest possible route to market, while also making it easier for customers to order, as previously they would have had to place two separate orders depending on whether they were ordering snacks, stored in Corby, or crisps, stored in Scunthorpe.
The virtual warehouse system is also scalable, with Tayto now evaluating the prospect of using it to provide home delivery direct to consumers.
Tayto Impulse and B2B Sales Director, Scott Cooper says: “The virtual warehouse solution has been a notable success – one which has satisfied our customers’ ordering expectations and greatly improved their overall experience.”
