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Supply Chain Focus: Mosaic Fashions - Piecing together Mosaic

Balancing huge growth with the logistical demands of eight brands is all in a day's work for Mosaic distribution boss David Roberts

Expansion has been the watchword at Mosaic Fashions in recent years. Since last year's merger with Rubicon, it now has 1,600 outlets in the UK, Europe and the US, plus 170 overseas franchises. It now owns eight brands - Coast, Karen Millen, Shoe Studio Group, Principles, Oasis, Odille, Warehouse and Whistles.

The group operates from distribution centres at Stanton Harcourt in Oxfordshire and Milton Keynes. Group distribution director David Roberts, who joined Mosaic Fashions last December and has 35 years' experience in retail and logistics, is tasked with running the multi-brand supply chain.

- What are the main logistical challenges faced by Mosaic Fashions?

We must maintain a flexible and cost-effective logistics operation with the right levels of service for the different brands. We have to maintain a core joint operation, but recognise that one size doesn't fit all in terms of logistics.

Warehouse, Principles and Shoe Studio Group are based in two warehouses in Milton Keynes, with the rest of the brands in Stanton Harcourt. Our challenge is to optimise the use of our capacity and develop it. That might involve moving the brands around and trying to combine the distribution of those that have similar logistics needs.

- How does the company deal with inbound logistics?

We work with one primary freight forwarder and with specialist companies for smaller markets. We do a limited amount of inbound consolidation overseas, where products from different suppliers are grouped together before being shipped, and we might do more of this in the future.

However, doing this can take longer, and we often need to move replenishment stock very quickly. It might be possible to consolidate launch stock but there is still a cost associated with that, which is not necessarily balanced out by gains in shipping costs.

- Which parts of the UK distribution operation are outsourced?

The Stanton Harcourt warehouse is operated in-house, while the Milton Keynes facilities are run by Clipper Logistics Group. We believe in having a mix of in-house and third-party warehousing because it allows us to benchmark our performance and increases flexibility.

Both sides of the operation have their own fleets, run by Mosaic and Clipper respectively. We also outsource transport in the Manchester area to First Line Logistics and make use of a certain amount of shared-user transport services. Our basic philosophy is to manage any movements that involve going out and coming back on the same day through our own fleet or Clipper's, but to send consignments to more remote areas using shared-user options.

- What is your warehousing capacity at Mosaic?

The Stanton Harcourt building, which opened in 2005, has a footprint of 55,000 sq ft, but we have three mezzanine floors giving a total floor space of about 150,000 sq ft. We have a semi-automated hanging garment sorting system, which gives us good productivity. We don't have automation for boxed items, but we are remodelling that area of the warehouse to increase throughput and optimise space.

We also still have our previous warehouse next door, which is 85,000 sq ft. This handles everything except the current season's stock and is used for activities including storing ancillary equipment and packing products for our international franchises.

In Milton Keynes we have a total floor space of 225,000 sq ft, from a 185,000 sq ft footprint. This warehouse doesn't have automated hanging garment sorting, but otherwise the clothing operation is similar to Stanton Harcourt.

We are looking at how we can get more out of our current facilities, but we will need to expand our capacity over the next four to five years. In principle we would like to expand further in Stanton Harcourt if we can overcome any planning obstacles. It was a spiritual home for Oasis, and other group shared-user services for Mosaic are based there, in addition to distribution.

- Do you use any cross-docking?

A high percentage of our initial allocation of stock is effectively cross-docked - it is a good way of increasing the capacity we can handle. Some hanging garments arrive in ratio packs and some are individually wrapped. For boxed items, we allocate some full cases but will split others before we cross-dock.

Our initial allocation comes in and out in a week, some of it within 24 hours. Replenishment stock is never held for more than a few weeks at a time and our average stock cover is about two weeks.

- How can you meet the needs of different types of stores?

Each brand has different preferences, and within each one there are differences in delivery frequency according to the size of the store. There are also differences in the size of stock rooms at stores, which can cause the frequency of deliveries to vary quite a lot. We expect to pick up every brand each day in the warehouse, but we don't deliver to each store on a daily basis.

- Have there been any synergies from taking on the new brands?

We can bring transport for different brands together so that we don't need to send so many vehicles to the same town on the same day. In a House of Fraser store, for example, we might have concessions for most of our labels so it makes sense to bring them together.

We are able to consolidate deliveries at each warehouse, but can also combine them on one Mosaic or Clipper vehicle. For some provincial towns we might be able to send just one vehicle a day to serve all of our brands.

- Once products arrive in stores, how do you get them to the sales floor quickly?

The products go in floor-ready, so they can be put straight out on sale if that is required. The stores have a set delivery day and time and can see when a delivery is due on our IT systems. Drivers can also communicate with the stores.

Having efficient schedules is about what happens in the warehouse as well as about the delivery itself. Our hanging garment system ensures products that are going to be unloaded first go into the vehicle last. We are continually looking at our schedules and how we organise movements in the warehouse.

- What IT systems are used in Mosaic's warehousing?

We have two different warehouse management systems. One was developed by Durkopp when the Stanton Harcourt warehouse opened, and uses hand-held radio frequency terminals to communicate in the warehouse. The former Rubicon brands in Milton Keynes have a different system, Merret, which also uses hand-held terminals.

The systems are working quite well, but eventually we plan to migrate to one single warehouse management system. We see that as a natural evolution and it will involve deciding which of the two is our preferred system or finding a new one altogether.

- Would you consider moving to a single warehouse for the whole group?

Mosaic has a lot of brands and it's not a viable proposition to have separate distribution centres for each one, but equally we wouldn't want one all-singing, all-dancing warehouse. We see that as a huge risk and a move that would create inflexibility - we have conducted a strategic analysis and found a lot of cons but very few pros.

We favour a group of warehouses fairly close together that enables us to move brands around and to benefit from an element of common transport. Having the two centres of operation, which are near enough for goods to be fairly freely transported between them, is a good solution at the moment.

- How does Mosaic supply its overseas stores?

Our European stores are served by shared-user distribution services, while all movements to the US are handled by a forwarder. Deliveries for our franchised stores are packed by us and then collected on an FOB basis by the franchisee.

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