Cementing its long-held position as the leading health and beauty retailer, Boots operates over 2,000 stores across the UK and the Irish Republic, employing around 63,000 people into the bargain and serving something in the region of eight million customers every week.
The company is well-known for developing and selling own-brand health and beauty products, a number of which – the No7 cosmetics range and Soltan suncare solutions among them – are leaders in their respective markets. Indeed, own-brand and exclusive products accounted for around 35% of total sales during 2005-2006.
Many of Boots’ products are household names. ’17’ cosmetics, for example, were first introduced in 1968 to capture the teenage market. The analgesic ibuprofen initially saw the light of day a year later, and was then launched as over-the-counter brand Nurofen during 1983. To date, there have been six relaunches of No7 cosmetics, the most dramatic of them in 2005 when the entire new range was introduced overnight to all Boots stores.
Another hugely important contributor to Boots’ business is the Advantage Card. There are now almost 15 million active cardholders, with the cards used in around 70% of all Boots The Chemist sales.
In line with modern retail trends
Boots’ stores are mostly located on the nation’s High Streets but, in line with modern shopping trends, the company is now rapidly increasing its presence in ‘Edge of Town’ retail parks. No less than 48 new stores have been opened in such locations over the past three years alone.
Given the number of stores in its portfolio, it’s no surprise to learn that Boots is in the process of creating an all-new Stores Service Centre which is set for completion at the company’s headquarters in Nottingham early next year. A significant part of the investment needed has focused on a Wiltron ‘dynamic’ picking system. This will allow the retailer to move closer to its bold ambition of being able to despatch 100% of all goods both on time and in full.
By their very nature, the managers of distribution centres will always strive for what seems to be just out of reach – in other words, high levels of efficiency whereby the right goods are always in the right bins in the correct quantities such that they may be picked and delivered to agreed timescales. For a retail business like Boots, if that doesn’t happen then the end result can manifest itself in hugely frustrated store managers, disappointed customers and, of course, lost sales opportunities. Whether missing stock has in fact been stolen or simply mislaid because of human error, there’s every chance the impact on the company’s profitability may be substantial.
The ‘dynamic’ picking system – part of which is already up-and-running – reduces the level of human involvement in the process. Where goods are handpicked out of bins and added to despatch totes, a highly sophisticated software programme generates clear visual indicators at each work station pinpointing from which bins goods must be picked. The barcode of the stock picked is then scanned to validate that the correct item has been selected. All totes are weighed as they travel through the ‘dynamic’ picking system conveyor installation, making sure that the quantities and items are correct. Any variances above or below set thresholds are automatically earmarked for re-checking.
The hope is that Boots’ loss prevention team can now look forward to a significant reduction in shrinkage at the Nottingham Stores Service Centre with the elimination of what in the past could have been losses attributable to innocent errors by members of staff.
How to tackle deliberate theft
However, there remains the problem of how to tackle deliberate theft. While would-be thieves might represent a minority of the total on-site workforce in the Midlands, their impact on shrinkage can be significant.
As is the case when it comes to the challenge of reducing impacts created by human error, it’s not merely the value of goods stolen that needs to be taken into account. Indeed, what concerns Boots’ logistics and loss prevention managers far more is that if certain items are stolen (perhaps in bulk), they’ll not be available for warehouse picking. In turn, this means that further down the line the valuable customer cannot make their preferred purchase. For a service-oriented company like Boots, this sort of eventuality is simply not acceptable.
John Angus – supply chain profit protection manager for Boots’ logistics loss prevention division – commented: “Even though we deploy highly-trained, skilled and motivated security officers on site, CCTV was always going to be playing a major role in helping us keep theft down to a minimum. Having security officers patrolling areas of the warehouse facility is useful, but once they walk away from a given zone the would-be thieves can take their time in helping themselves to valuable merchandise.”
For a distribution facility the size of Boots’ Stores Service Centre, Angus originally estimated that approximately 1,600 CCTV cameras would have to be deployed in order that all the gangways and product picking areas were covered. “Aside from the huge cost of such a project,” added Angus, “I just don’t see how we could have expected our Control Room operators to effectively manage so many cameras. There was also the ‘Big Brother’ issue to be addressed, in so far as the cameras would have been spaced just a few feet apart from each other and created an oppressive atmosphere of mistrust among the workforce towards management. This would have been grossly unfair on the majority of colleagues who work at the Nottingham site and are both honest and trustworthy in equal measure.”
Track-based camera system
Angus researched alternative security options, eventually reaching the conclusion that the most cost-effective and sufficient way in which to visually monitor the 413,000 square feet of warehouse space was to install a track-based CCTV system.
Tim Clark – loss prevention co-ordinator and part of John Angus’ team – told info4security: “One of the major advantages of a track-based surveillance system is that it can be installed at high level, preventing would-be thieves from hiding behind visual barriers such as racking. The systems also act as a powerful deterrent. The track camera carriage is hidden behind a mirrored enclosure, and runs almost in complete silence. Even if would-be thieves know there’s a camera within the track, covert operation means that subjects are completely unaware as to whether or not they are under surveillance at any given time.”
The cameras travel along their tracks at variable speeds, and may be programmed to stop precisely at pre-determined locations. Manual operation by the Control Room operators is an alternative option. PTZ capability allows the cameras to focus on any suspicious activity. “The cameras are so good that we can look down on any of the picking aisles, zoom in and determine an invoice that might be in someone’s hand,” said Clark.
Working in conjunction with Mansfield-based systems integrator TIS, Intrepid Security Solutions – the UK representative for SentryVision’s SmartTrack – was commissioned to install a number of track systems. To date, there are 11 tracks operational over a collective length of 750 metres. When the final sections of the ‘outbound’ area have been updated, another eight tracks are going to be added covering a further 500 metres.
The total project cost associated with installing all of the tracks represents just a fraction of the investment that would have been required from Boots to install a conventional CCTV system boasting the predicted 1,600 camera units. Aside from the cost of the cameras, there would have been huge financial outlays involved with running cabling to each camera, while a much higher number of DVRs was also part of the picture painted.
An added bonus for the end user is that the coverage and flexibility realised when employing the SmartTrack camera system often removes the cost of installing temporary covert cameras in problem areas identified at a later date.
Provision of invaluable management information
In operation, SmartTrack may be programmed for up to six automatic tours, each of which can include anything up to 60 pre-set stopping positions. Tim Clark explained: “During the day when activity levels are high, our Control Room operators will always be proactive, manually controlling all of the cameras. During quieter periods, though, we’re able to rely on the random tours to observe and then supply high quality images to our DVRs for analysis should we need to investigate a particular incident.”
Although Clark and Angus are primarily investing in the track systems for pure security reasons, they also yield invaluable information for management and, by way of an added bonus, assist with Health and Safety issues as well.
“For example,” outlined Clark, “the system’s software can direct a camera to where a fire alarm detector may have triggered, while the cameras are also able to monitor members of staff working near potentially dangerous machinery. Supervisors can then ensure there’s full compliance with the company’s strict on-site safety rules at all times.”
SmartTrack is equipped with digital slow shutters enabling consistent performance in low light levels. The camera carriage may be programmed by end users to stop at anything up to 64 designated points on any one circuit, with the option of automated or manual control. Live images may be integrated within an existing system, viewed on the Internet or, alternatively, on a hand-held computer via wireless LAN.
The effectiveness of the system is fully expected to make a major contribution towards helping Boots’ management team maintain colleague theft levels at low numbers, and assist in ensuring that the ambitious target of a 100% successful pick rate at the warehouse facility is a realistic and achievable goal rather than mere bullish talk in the Boardroom.