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Mixing it with the big boys

19 October 2006

Jeff Stanton, chief executive of the CERT Group, has a straightforward objective for the CERT Drinks Network: to grow from 50 million cases to 100 million cases in three years - "a daunting task," he admits, "but one that we think is achievable". He adds: "We think we're good at UK distribution. Although we compete with Exel, Wincanton and TDG, we believe that we punch above our weight. "We aren't trying to be all things to all men - we're not big enough to argue that we can manage a whole supply  chain. But in our one area we've got sufficient critical mass that we've got economies of scale. We've also got a lot of long-serving employees - they understand the product and they understand the customer."

Even within this specialist sector there are sub-sectors, and CERT has them covered. "Although we talk about drinks as one business it's actually three," says Stanton. "There's CERT Drinks Network - large volumes, large customers. Octavian handles medium volumes, smaller customers [mainly wines and spirits for the hospitality trade] - and more complex orders dealing with cases and individual bottles. Then there's Corsham Cellars, which stores 800,000 cases of fine wine." This facility is a former underground quarry - and MoD bunker - offering stable, secure storage for the most valuable bottles of wine. The Drinks Network handles both alcoholic and non-alcoholic drinks: over 800 deliveries a day are made to supermarket RDCs and the cash & carry and off-licence sectors.

Its customers include FGL Wine Estates (part of Fosters), Concha y Toro, Danone Water and Red Bull. "It's a niche market," admits Stanton, "but we've got a big share of it." Stanton says that such a specialist, high-value sector isn't suited to conventional pallet networks instead, CERT's Drinks Network combines its own trunking fleet with established Regional Network Partners (RNPs). These include Lenham Storage Group (Kent & Hampshire), Gregory Distribution (Devon), Fitzmaurice Carriers (Norwich), Elddis Transport (County Durham), Coopers Carriers (Rhyl), Gordon Leslie Distribution (Glasgow) - and MT Haulier of the Year, Knights of Old (Kettering).

Stanton is proud of these associations. "I think it's one of our real strengths - we decided we'd treat them like we'd like to be treated by our own customers. I think it is unique. We call it a loose collection of like-minded people," he says. Contact between the partners comes from daily email activity, monthly performance reviews and a quarterly strategic review. Billing is automatic, according to a tariff. The firm's mission statement is summarised as: "To be the first choice for improved supply chain performance." This extends to helping its customers improve their own efficiency. "We encourage dialogue with our customers," says Stanton. "For instance, this week we hosted a meeting of our smaller customers on managing change and reducing costs. The more integration and management that can take place, the lower the cost can be. For example, when a customer commits to their customer, we should be involved."

Stanton adds that this is "a continuation of the consolidation argument - full warehouses, and customers delivering to the same place, makes a lot of sense. A lot of our customers have asked for our help with inbound logistics. We feel that a natural extension of what we do is to look at inbound - providing the same service to our smaller customers that our larger customers expect". CERT's own vehicles have satellite tracking, and much of its documentation has been automated, with web access for PoD information. "We went to our customers and asked, 'would you like access to this information?' - of course they said yes. The take-up at first was quite low, but now 80% of our customers at the Hoddesdon and Corsham centres use CERT Online. Obviously with bonding you have to get approval from HM Revenue and Customs. The technology has helped, but to be honest HMRC has been a little slow in taking some of it on board."

CERT has 12 bonded warehouses in all the Lutterworth site is near two others in Leicestershire which total more than 20,000sq m. It calls the area the 'centre of gravity for delivery to 95% of all the major retailers'. Stanton adds: "Recruitment is one of the reasons for opening in the same area - we've moved management and staff from the old warehouse to the new one. You bring experienced staff to the new place and then backfill with new staff. The combination of the experienced and the non-experienced is the way forward." The average length of service is over six years, and it has been accredited as an Investor in People since 1999. "The one thing that makes it all work is the people," says Stanton.

While he's obviously passionate about the industry, Stanton's background was far from haulage. "I think I was recruited because I had no baggage," he says. A chartered accountant, he became finance director of Dixons and Granada Rental before going into consultancy. In 1994 he became chief executive of CERT, and established a management team which is largely the same today. A critical issue is congestion, according to Stanton. "Politicians are underinformed," he says. "In London, five years ago we were doing 15 drops a day. Now it's 12, and that's purely to do with congestion." The problem of congestion, he adds, "is why we decided to have a network that was as close as possible to where we want to deliver. The relationship between transport and warehouse costs has completely changed - and you can't provide the level of service if you're miles away".

"We'd like to do more deliveries at night," he says. "Our customers' customers are continually demanding faster service - strategically it's changed the way we think. You need an enquiring mind - and you need to recognise that sometimes the customer is not always right. Sometimes the customer has to be challenged - and sometimes we can help them improve their performance." Stanton: "We think we're good at UK distribution. Although we compete with Exel, Wincanton and TDG, we believe that we punch above our weight." 


Delivering the drinks

The CERT Group has 500 employees, and controls up to 800 vehicles its turnover is around £40m. The drinks sector contributes more than £30m, while the remaining part deals with FMCG, largely in the health and beauty sector - its main customer is Coty. The CERT Drinks Network was officially launched in July, at the opening of its 22,000sq m bonded distribution centre at Magna Park near Lutterworth, Leicestershire. This is the network's national hub for deliveries to multiples, wholesalers and retailers. It is a smart facility in well-planted land, with 19 dock levellers and a dedicated mezzanine for rework.


Toby Clark
Email at toby.clark@rbi.co.uk
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