How Tradeteam puts technology to work

Once upon a time horses trotted along the road from pub to pub, pulling a dray loaded with barrels. Now the horses have been put out to graze and it's satellite technology that is taking over.

Lorries delivering to pubs in the South West and on the South Coast have begun using equipment linked to spacecraft circling the earth. It means their position can be pinpointed by their depot to within a few feet, so they can be alerted about traffic jams or licensees can be warned of delayed deliveries.

The technology is being piloted in part of the fleet operated by distributor Tradeteam and, if successful, will be installed in cabs nationwide.

It is part of the multi-million-pound investment that has been poured into Tradeteam since it was formed three-and-a-half years ago as a joint venture between Bass and Exel Logistics, part of global distributor NFC.

Its management and the network of sites have been restructured, with new depots added in the South East, and a new Midlands base has been built at its headquarters at Hams Hall in Sutton Coldfield, West Midlands. It has also renewed distribution contracts and won new ones from regional brewers and pub operators, extending the services it can offer.

But despite this growth, the management seems to feel it is still unloved in some quarters.

Managing director Liam Tucker said: "It is a very conservative industry and until recently nobody believed that anybody else could have the skills to handle their products.

"Tradeteam is managing to break down that doubt."

With a fleet of more than 700 vehicles and a workforce of 2,200, Tradeteam is spread between 42 locations, north to Inverness, east to Norwich in Norfolk, south to Newquay in Cornwall and west to Portmadoc in north-west Wales.

It now makes about 25,000 deliveries a week, which mounts up to eight million barrels of beer a year.

While its major customer is Bass, others include Cumbrian brewer Jennings Brothers, Lancashire-based Devonshire Pub Company, cidermaker HP Bulmer, Scottish brewer Caledonian and soft drink supplier Cott.

Its most recent win was a five-year agreement with Avebury Taverns to provide one-stop deliveries to its 728 pubs. It is the most comprehensive account yet, providing the full range of services from teleselling to customer service facilities and inventory management.

Tradeteam is considering expansion into delivering other products, such as point of sale material or snacks, but it intends to continue concentrating on drink. It hopes the success of the Avebury contract will encourage other customers to buy in a broader range of services.

Tucker arrived at Tradeteam in February from Wincanton Logistics, followed by a new commercial director, Phil Storer, who was involved in setting up the original business before a spell at NFC's European arm.

Storer said: "The consolidation in the industry has meant everyone has been focusing on expanding their estates, but now they are starting to look at how they can run that estate more efficiently.

"There is now more pressure on margins, so the pendulum has swung and they realise they have to find ways to run the business more profitably."

Tradeteam claims outsourcing can lead to average savings of between 15 and 20 per cent on the bottom line.

Its skills come from being controlled by Exel Logistics, one of the world's leading distribution groups. Tradeteam's "significant" profit growth last year compensated for losses elsewhere within the group's European operations.

Tradeteam has been investing about £24.3m over the past three years in replacing the Bass livery on its trucks with its own blue and silver logo.

Storer said producers were originally reluctant to see their names disappear from the sides of vehicles.

"The costs argument is winning them over and they are becoming less possessive about having their name so clearly branded on the supply process," he said.

Bass Brewers remains the biggest client, delivering to about 25,000 pubs and other outlets — last year it extended its on-trade contract, which runs until 2005, to the take-home market.

Production director Martin Thomas said the quality of deliveries had improved since Tradeteam was formed in October 1995, allowing it to save cash and channel it elsewhere.

"It needed some strong nerves in the early days because it was a dramatic change for a lot of people and a bold step for brewers," Thomas said.

"Deliveries to customers are an important part of our business but we do not have the specialist expertise that Tradeteam has in distribution. We are now able to concentrate on what our business is about, which is building brands, production and meeting the needs of the consumer."

Bass owns 49 per cent of Tradeteam and has directors on its board, but Tucker said it was more of a "sleeping partner".

"Being associated with Bass did cause some worries initially but we make it clear that we are employed by Exel Logistics and that Bass is a minority shareholder," he explained.

He compares it to Exel's distribution for the grocery industry, where it delivers to different supermarket chains who are notorious for their arch rivalry.

Tradeteam has also been working hard to reverse some of the negative feelings that held them back in the initial period after the changeover. As well as investing in in-cab communications, it is spending on other technology as well as training and initiatives to improve customer service.

Tucker said: "We are continuing to invest and have a positive agenda for growth over the next five years."