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Sainsbury's Supply Chain Woes Continue

Problems with Sainsburys' stock replenishment processes have left some key London stores with bare shelves.
Customers were faced with notices apologizing for "the very poor availability of all fresh food lines" when they visited selected stores after New Year.
A spokeswoman told Computing the shortages were due to a manual error and unrelated to the IT-based stock management systems written off in the supermarket's last quarterly trading statement. "It was fundamentally a human forecasting system error, where the stores had run down their fresh stock for the holidays," she said. "There was very little product on the shelf when they re-opened on Tuesday."
A company statement added: "There is an isolated problem in some of our Central London stores that closed over the Christmas period and most of these stores will be fully recovered before the weekend."
Sainsbury's wrote off $486 million in costs associated with flawed IT and supply chain systems last October, blaming them in part for its recent poor financial performance. Chief executive Justin King stressed at the time that the write-off and a return to manual processes would help the company to "save Christmas" revenues.
But these moves, in addition to the departure of its IT head Maggie Miller last month, haven't eliminated this week's replenishment issues, even though these latest problems are unrelated to the abandoned IT systems.
Rhys Williams of financial analyst Seymour Pierce said that the latest stock problems would not have a significant impact on the company, as its problems are seen as far more endemic. "There will be concern if Sainsbury's continues to have availability problems," he said. "But nobody was anticipating they would be solved by Christmas. Even a short-term solution is going to take a couple of months to come through."
"King is trying to turn around a business that has made a $3.9 billion investment in a supply chain which has had serious problems. The main one is overall availability of its sale lines."
-- Miya Knights, Computing, a VNU Business Media Europe publication
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