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Building our supply chain for the future in Stoke-on-Trent 

AS A LONG TERM BUSINESS, WE MAKE DECISIONS THAT WILL PROVIDE FUTURE BENEFITS OVER THE YEARS TO COME AS WE CONTINUE TO GROW. WE’RE CAREFUL TO ENSURE WE DO THINGS THE RIGHT WAY, FOR OUR CUSTOMERS AND SUPPLIERS, OUR COLLEAGUES AND THEIR COMMUNITIES.

Distribution Centre 2 “DC2” – Stoke-on-Trent

In June 2016, we opened our new Distribution Centre, a stone’s throw from our existing facilities in Stoke-on-Trent.

Building and opening the new site, was a substantial project with capital investment of over £12m involving a cross-functional team of colleagues working together, alongside external contractors, for a period of two years to get the new facility ready.

The Board’s involvement began at the conception of this project. Reviewing and approving the original business plans, and then providing ongoing challenge throughout the development process ensured that the right long term decisions were being made in the interests of the Company’s employees and its other stakeholders.

Relationships with existing suppliers were encouraged, and new supplier relationships fostered. The Board gave thoughtful input to ensuring that Dunelm maximised the customer benefits from the new build, and carefully considered the impact of the new operations on both the local community and the environment. As is the Dunelm way, ensuring that we do the right thing from a business conduct and ethical perspective was a key area of governance focus.

Long Term Decisions

We opened our first Distribution Centre (“DC1”) in Stoke in 2006, and doubled its size to 500,000 sq ft in 2010. In 2011 Dunelm appointed a Supply Chain Executive Director, who developed a long term supply chain strategy. In 2013 planning began to open further warehouse capacity, to support the growth of the business and the increase in direct-sourced product volumes. At the Board’s strategy discussion in 2014 the decision was made to prioritise growth in our online and furniture businesses which accelerated the need to increase our warehouse capacity and supply chain capability.

In February 2015 the Board approved the business plan to lease the DC2 site and begin the project. The new DC doubled our warehouse capacity to 1,000,000 sq ft, which was anticipated to fulfil our needs for at least the next five years. It would also enable us to bring outsourced distribution operations onto one site to improve operational efficiency, improving crisis management capability, and importantly improving our customer offer, especially relating to online sales orders. In July 2016, we moved our Home Delivery fulfilment operation into DC2.

In November 2016 we acquired the Worldstores business. Pleasingly, the new DC has provided the capacity in Stoke to allow Dunelm to move the Kiddicare and Achica operations from their existing site in Peterborough. This is anticipated to deliver efficiencies of between £1m and £2m per year from FY19.

DC2 – Facts at a Glance

£12m

CAPITAL INVESTMENT

500k sq ft

DEVELOPED

260,000

ANNUAL PALLET
THROUGHPUT CAPACITY

Developing Our Supply Chain Proposition For Our Stakeholders

OUR COLLEAGUES

Our commitment to Stoke-on-Trent has resulted in Dunelm becoming a significant employer in the city with over 600 colleagues working in our two DCs and our local store. During peak times, additional colleagues are engaged to support the volume of activity in the DCs.

Colleague well-being was a major consideration for the Board in the planning of our new facilities:

  • A team of colleagues helped design the look and feel of the building, with product and store imagery and product display areas to showcase current ranges
  • We built a large training area, and a comfortable Pausa coffee shop serving a range of subsidised hot and cold food, drinks and snacks
  • We ran a series of welcome activities for new colleagues and to engage existing colleagues with the changes being made, including fund-raising activities for our nominated charities (Roald Dahl/ Home-Start UK). A free Christmas lunch for all was served by the leadership team!
  • Colleague health and safety is a major consideration for the Board and a complete review of our processes was undertaken. A new Health and Safety Manager was appointed and over 50 colleagues received National Examination Board in Occupational Safety and Health (NEBOSH) training

OUR CUSTOMERS

Making shopping experiences easy for our customers is a big focus for Dunelm. The new DC2 was developed with a range of customer benefits in mind:

  • We have been able to improve availability in store and reduce lead times for Reserve & Collect from 24 to 3 hours due to improved replenishment from our DCs and better store processes
  • Locating our Home Delivery fulfilment in Stoke has improved online availability and enabled quicker delivery to customers’ homes
  • DC2 will be a key enabler for us to launch a Click and Collect service in 2017/18. This will enable customers to access a significantly extended range of products for next day delivery to their local store
  • Increased operational efficiencies through modern logistics technology allows us to continue to offer great value products to our customers, when and where they want to shop
  • The additional capacity has allowed us to bring in more seasonal ranges for customers, as well as accommodate Kiddicare and Achica

OUR SUPPLIERS

Great supplier relationships have been key to supporting Dunelm’s growth. During the development of DC2 we were able to draw on the broad experience of our suppliers to help:

  • Many of our committed store development suppliers were able to support us with the build and fit-out of DC2
  • Supporting our Home Delivery fulfilment partner’s relocation into DC2, by helping them relocate existing colleagues and recruit new colleagues locally

All of our suppliers are required to sign our Anti-Bribery Policy and our Code of Conduct, by which they commit to ensure that their employees and those of their contractors adhere to international standards on the welfare and treatment of employees.

As part of the rigorous work we do to tackle modern slavery, we retrained colleagues in Stoke and employees of our supply chain partners to raise awareness. We also developed a number of safeguards, including extra colleague checks and have deliberately reduced our use of agency labour.

CARING FOR OUR ENVIRONMENT AND COMMUNITY

Developing a sustainable DC2 was a priority for the Board and we’re proud to receive the Planet Mark award highlighting the 416 acres of rainforest protected as a result of the DC2 development compared to benchmark sites. Local primary school environmental awareness workshops run by the Eden Project were funded by this award.

As part of the build, we carefully diverted natural waterways and developed new sanctuaries for wildlife onsite to ensure minimal disruption to the local habitat.

To help aid traffic congestion, we built a large bike shelter and showers / locker rooms, and also arranged with the local council for a bus stop to be put outside the warehouse, and for the route to drop off and pick up around shift start / finish times.

Our DC operations handle recycling from our stores enabling us to achieve high landfill diversion rates. The two DCs in Stoke themselves achieve 100% landfill diversion due to careful planning of materials being used inside.