Logistics are home-made at Metro
The management of logistics services is a task that simply cannot be outsourced for the Austrian wholesaler Metro Cash & Carry. However, the company simultaneously collaborates with numerous external partners, who manage some of the corporation’s home deliveries for it, as well as some of its warehousing requirements, for example.
The wholesaler Metro Cash & Carry has been trading in the Austrian market for 45 years – and is now undergoing a transformation. The original business model, namely buying goods on the premises itself, paying for them there and then taking them home with you still exists – but today the share of goods dispatched to customers, that is to say door-to-door deliveries for coffee shops, restaurants or other gastronomic locations of various types, for example, is constantly rising. “Today, our business model sees us not only selling goods in our supermarkets, but also distributing them to our customers,” said Klaus Koller, in charge of supply chain management at Metro.
Cooperation with external providers
Delivery services have also pushed digitisation, which is being promoted both by the trade and by the industry. In the future Metro wants to become more strongly involved in the management of its customers’ goods and promote digitisation. “We expect our logistics service providers to take part in this process too,” was a clear statement from Koller.
Planning delivery rounds and order processing and picking operations for customers’ orders, will be carried out in-house at Metro, using their own staff; putting together the deliveries will be carried out in Metro’s supermarkets. Transport to a customer’s location will be effected by external service providers. Metro has developed a special driver app for the drivers involved in home delivery. Using his smartphone an HGV driver can access all of the relevant information about the delivery and make optimise his rounds.
Hardly any warehousing of its own
Logistics is a core expertise at Metro, which it is not willing to outsource. Metro itself only keeps the management of the logistics operations in-house, including trip planning, order management, and the like. It has hardly any in-house warehousing, physical transport and storage activities are managed by external partners.
This is especially true when it comes to increasing demand for home deliveries, which currently makes up around 20% of Metro’s business. Customers order the goods via various communication channels from a Metro supermarket, Metro handles the whole order management process in-house, and then delegates the actual delivery of the consignments to an external logistics partner, mostly a regional operator, who uses SPS plus, an Metro software solution that was developed in-house. This connects all interfaces between order management, warehousing and transport together and allows exact control of the home delivery. “Home delivery is not a standard transport operation for us,” Koller explained.
Interfacing with the customer
The drivers are trained by Metro to be particularly attentive to customers’ needs; they collect money on delivery and represent the performance promises Metro makes to its clients. The customers may be restaurants, amongst others. Procurement processes are evaluated using model invoices. Metro defines the logistics quality standards that apply and are checked at every interface along the supply chain, including platform management.