Advisors help to increase sales, improve service quality,
troubleshoot if necessary, and, in general, enhance the
overall Costa Express experience for the customer.
SAVINGS IN SIX MONTHS
Just six months after going live with the new IT system,
new third-party logistics provider, and new purchasing
processes, we measured some very significant operational
savings, including:
• 20-percent reduction in field stock being held at partner sites
• 50-percent fewer delivery refusals by our partners
• Centralized stock-holding locations reduced from
nine to one
• Developed direct purchasing relationships with 15
suppliers providing 50+ stock-keeping units (SKUs)
• Negotiated new product prices and pack sizes, leading
to a reduction in the purchase price of some items
• 30-percent reduction in annual logistics operating
costs, and associated annual carbon dioxide (CO2) sav-
ings of 70 metric tons
Costa Express has been able to significantly reduce
the quantity and value of inventory at each partner
site. Previously, the average site was expected to stock
well over 20 cases of various items. This has now been
reduced to approximately 12 cases, just one case of each
item. (Although we have approximately 50 SKUs, indi-
vidual sites typically use 15 or fewer. For example, there
are three different types of stirrers, but a site will use only
one.)
Costa Express also needs to make managing stock
as simple as possible, employees can focus on serving
customers and increasing sales. This new system has
given our partners the confidence that their stock will be
replenished efficiently and in a timely manner, so that
they can get on with running their businesses.
Along with the changes to the Brand Excellence Advisor
role, statistics show that our Net Promoter Score, a popular customer-loyalty metric, grew by more than 10 percent in a six-month period. Furthermore, overall satisfaction and reuse scores (the likelihood of a customer using
our services again) grew by 5 percentage points, and
recommendation levels (the likelihood of a customer recommending our services) were up 6 percentage points.
A FOUNDATION FOR SUSTAINABLE GROWTH
When Whitbread acquired Coffee Nation, the target was
to have 3,000 machines in place by 2016. The changes
made in Costa Express’s supply chain, including the
implementation of the new software, has enabled it to
achieve this target in 2013, a full three years ahead of
schedule. With the help of our new systems, processes,
and roles, we are confident that we can grow interna-
tionally while maintaining confidence in the brand with
top quality and great service. Already, I have been part
of a team that has helped Costa Express to install new
machines in Poland, under the “Coffee Heaven” brand,
and we will soon introduce Costa Express to Ireland.
The company is also about to embark on two important
new projects. Firstly, Costa Express is now part of a new
business-to-business division called Costa Enterprises.
I will be responsible for managing an enlarged supply
chain for Costa Enterprises, which comprises more than
7,000 locations worldwide and dispenses more than 100
million cups of coffee a year.
Secondly, in January we launched our new CEM-
200 “intelligent” coffee station concession, based on
advanced technology from Intel, Microsoft, and Bsquare.
These multimedia machines will be placed in high-end
properties, starting in Dubai. I will be responsible for
the supply chain elements of bringing this multimil-lion-pound innovation to the U.K. and international
markets. Along with those projects, we are also reviewing
ToolsGroup’s software with an eye toward using it to
manage Costa Express’s spare-parts supply chain, which
utilizes three different coffee machine manufacturers,
each at different stages of the product lifecycle.
Quite simply, without the changes implemented
throughout the Costa Express supply chain, the U.K.
business would have struggled to grow at the pace it has.
Costa Express’s supply chain systems are now firmly
situated to sustain both U.K. and international growth.
We have turned supplier and customer relationships
into true team efforts. Partners at both ends of the Costa
Express supply chain are engaged. Suppliers understand
Costa Express’s requirements, and we work together to
mutual advantage. Partners who maintain the machines
and sell the coffee are experiencing the kind of efficient,
worry-free service levels that allow them to focus on
running their businesses. With this foundation in place,
I believe we are solidly positioned to sustain our growth
while maintaining a trusted and highly respected premium coffee brand. c
CHRIS CLOWES IS SUPPLY CHAIN MANAGER AT U.K.-BASED COSTA ENTERPRISES.
