One of Australia’s largest pet food and supplies retailers embarked on a supply chain transformation journey at the start of last year. Despite being in the midst of a global pandemic, Stow managed to deliver the project on time for PETstock. MHD finds out more.
While the nation was stockpiling toilet paper and pantry goods in response to a pandemic-induced fear of a nationwide shortage of essential household items, pet owners were also committed to ensuring that the furry members of the family would not miss out on their favourite foods and supplies.
“When COVID hit, demand went nuts. People wanted to make sure that their pets also had access to the specialised food that they would usually buy,” Brett De Laney, Supply Chain Operations Manager at PETstock says.
Founded in 2002, PETstock is an Australian family-owned business built on humble beginnings in regional Victoria. The pet retailer currently supplies more than 140 stores around the country.
Prior to COVID-19, PETstock was beginning to roll out a supply chain transformation strategy, which was more than two years in the making.
This transformation included large-scale investment in software and featured a warehouse and distribution network overhaul to offer PETstock’s growing consumer base enhanced services and efficiencies.
The first step in PETstock’s transformation strategy was to build a new national distribution centre (NDC) in Victoria. In 2019, the retailer signed a lease on a new 11,600 sqm DC in Truganina, Victoria.
“The new logistics network has started in Melbourne, with the view to rolling out the rest of the strategy across the nation,” Brett explains.
PETstock selected Stow Australia, a leading supplier of storage solutions for its NDC storage and order picking solution at the new Truganina NDC.
The driving strategy for the new NDC in Melbourne was to support PETstock’s store network.
“Twelve months ago, the goal for the Melbourne NDC was to set up and support 140 retail stores, usually they get 100 deliveries a week from all suppliers but now with the new NDC we have consolidated it into pallet deliveries that come less often which ultimately creates a better experience for our customers,” Brett says.
To meet the rising demands and efficiency gains required, Stow designed a flexible and efficient storage solution using selective pallet racking to store bulk and carton-loads of its pet supplies, and to allow for efficient and effective picking of online orders.
Selective racking allows rapid stock rotation, 100 per cent picking accessibility, and a very fast pick rate. Stow’s racking is designed and manufactured in Europe using high-quality steel and complies with the Australian Standard AS 4084-2012 as well as the more stringent European Standard.
The Stow storage solution was planned to be delivered in three stages. In February 2020 the first stage commenced. This included the e-commerce division , which was made up of aisles of selective racking holding 11,000 pallets, with each pallet capable of carrying 1,000 kgs of stock.
Business as usual
Soon after the first stage commenced, COVID-19 started to disrupt supply chains worldwide and many racking providers were dealing with manufacturing shutdowns and lengthy delays in getting stock to Australia.
However, this was not an issue for Stow. “One of the reasons we selected Stow as our racking provider was because they had an in-country solution where most of their competitors just didn’t have the inventory in Australia,” Brett says.
“When COVID hit, we already had the racks PETstock required so we could be agile and complete the work on time,” Martin Bates, National Sales Manager at Stow Australia says.
For Stow, keeping a high volume of inventory onshore is a deliberate strategy. “As we manufacture our products in Europe, our lead time is longer than many of our competitors who manufacture their products in Asia. Eighteen months ago, we made a conscious decision to always carry at least 20,000 pallet locations of traditional selective racking in stock,” Martin says.
While this is a big commitment financially, Martin says that it gives Stow a strategic advantage over its competitors, which quickly become apparent during COVID-19.
“We were very fortunate during COVID in that we had a lot of inventory here in Australia. Additionally, because much of our manufacturing in Europe was fully automated, we had access to additional inventory, unlike companies with manufacturing in Asia who were reliant on manual labour and impacted by COVID-19,” Martin says.
Furthermore, PETstock ensured that safety was a priority throughout this project. As a result, Stow’s project team adapted to the COVID requirements and adhered to social distancing requirements and sanitisation of frequent material handling touchpoints.
Throughout the entire installation, PETstock continued operations without any adverse impact on the warehouse, staff or customer service levels.
Collaboration, reliability and trust
As with any new DC build, it’s a complicated space to operate in. With builders, developers and many different stakeholders and tradespeople all onsite at once, it’s crucial for a racking provider to develop strong working relationships are built with all of those onsite.
“A challenge for us is to ensure that we work harmoniously with the other teams who are onsite. We have to make sure that we are ordering materials to sequence into the building construction sequence. This collaboration really comes down to our project team who work cohesively around our client’s requirements,” Martin says.
This complexity was only exaggerated with the impact of COVID-19, with workforce capacity restrictions placed on many industries across Victoria in Stage Four restrictions limiting the amount of people able to work onsite, meaning the Stow team had to be creative with the installation of the new racking.
“Our project team worked out of hours to get work finished to ensure that they handed a number of major projects on time. The project team are our unsung heroes,” Martin says.
Brett echoes this sentiment and says that the relationship with Stow is one based on collaboration and trust.
Building a new DC throughout a global pandemic and all the complexities that come with working during this time has been challenging for PETstock, but for Brett success comes down to relationships and working with partners you can trust.
“If I ring Martin and ask him for an update, I get an honest, accurate reliable answer which is critical to the success of the project,” Brett says.
Agility and adaptability
When COVID-19 hit, many of PETstock’s customer demand was unpredictable and e-commerce volumes were accelerated. As a result, the requirements for the NDC changed.
“In February we designed what we thought we needed, but then COVID hit and March came along and we recognised very quickly that we needed to change the rules,” Brett says. Each time there was a change in requirement, Brett and his team sat down with Stow to establish what was the best solution.
“Even at the time of installation, racks had already gone up but we decided to move them closer together to increase capacity to service e-commerce orders. Every time we changed our mind, we sat around with Stow, got the drawings out and worked collaboratively to work out what tweaks we could do,” Brett says.
The new NDC is the first step in PETstock’s supply chain transformation strategy.
The Victorian NDC will ensure that PETstock has capacity for the future, with the e-commerce area being designed to allow for a future third stage conversion into a multi-tier picking floor.
“The project went really smoothly, and to our deadline, and Stow’s project team made it a pleasure. We are delighted with the result,” Brett concluded.