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P&O Nedlloyd cuts shipping lead times by five weeks

Published:  23 July, 2008

Shipping giant P&O Nedlloyd has cut lead times for Australian shipments by nearly five weeks.

In a case study with an (unnamed) UK supermarket, the company compressed lead times from 77 days to 44 days - and claims that this reduction equates to a saving of nearly $2 million (1.1 million), based on 132,000 cases at $15 (8) a case. A further $2.94 million (1.6 million) was saved by cutting stock order levels from 12 weeks' worth to five weeks.

A spokesman for P&O said that in the past, many UK supermarkets had too much stock at the wrong place at the wrong time, and shortfalls of required stock in the right place at the right time'. He added that the reduction in lead time had been achieved by:

- using P&O's wine fulfilment centre in Adelaide, in which stock is stored; and

- using the company's advanced purchase order management system, which allows the customer to replenish stock.