MFI, a leading UK based home and furniture retailer, has signed a new five-year deal with DHL Exel Supply Chain, for the logistics service provider to manage the high street giant’s new distribution centre and home delivery operation.
Under the terms of the five-year contract, DHL will invest more than €13.8 million of its own capital into the venture. This investment will help to improve the information technology system which supports the new, streamlined picking and packing process in the warehouse, and also to develop additional warehouse space as MFI’s product range increases.
In early December, DHL and MFI opened a new, major distribution centre in Yorkshire, which signifies the start of this new business relationship. Cabinet Office Minister, Ed Miliband, carried out the official opening at the state of the art 750,000 sq m distribution centre in Thorne (South Yorkshire), thereby cementing a major breakthrough for DHL, as the deal represents one of the biggest ‘shared risk’ partnerships it has ever entered into with a customer.
‘We are delighted to have been chosen by MFI as its preferred supply chain partner,’ commented DHL Exel Supply Chain business director, Matthew Phelps: ‘This has been one of the most challenging projects that DHL has ever been involved in. Our extensive experience in the retail market has allowed us to respond directly to MFI’s needs, and develop a responsive and flexible solution for their home delivery and warehousing operation. We have already completed a €18.3 million fit-out of the 750,000 sq m distribution centre and between now and February 2008, we will create 330 new specialist warehouse and administration positions.’
As Chris Pavlosky, chief operating officer of MFI, explains, the company recently relaunched itself after its 200-strong retail store business was acquired by specialist venture capitalist, Merchant Equity Partners. ‘We are naturally very pleased to be working with DHL during a very demanding and exciting period in our history. With DHL’s support, we plan to reassert the company’s position in its traditional retail markets.
‘The Thorne distribution centre is integral to ensuring that our customer is the focus of our supply chain as we recognize that delivering outstanding customer service is the key to success. We will be utilising the proven expertise of DHL to achieve this goal.’