Feature: Danks’ Suppliers Night

Danks held a function for many of its suppliers at Crown Casino in Melbourne last month, where it addressed its future direction and the expansion of Danks’ house brands program.

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It has been five years since Danks hosted a Major Supplier Function and among the industry heavyweights were representatives from ITW Retail, Wattle, GMC, Orica Consumer Products, Positec, Nylex, Fletcher Insulation, Corinthian Industries, Hills Industries, and Pine Solutions Australia. ITW Group General Manager, Neil Connon, said the supplier night had further “cemented his company’s partnership with Danks”.

General Manager, John Tregaskis, in his half-hour presentation to suppliers, showed that since 1996 total sales had risen 128% from $221 million a year to $504 million. Warehouse and promotional sales were up 95% and chargeback sales had increased 169%. Trade sales were up 480% over the same period last year and more growth is expected in the coming year when Danks introduces a range of white goods, a complete kitchen offer and laminate flooring.“ This rate of growth placed a great deal of strain on our supply chain network,” he said.

Danks recently added space through a new 8500sq/m facility at Greystanes (NSW) and is planning similar warehouse additions and upgrades in Victoria and Western Australia in the coming financial year. The company is also investigating third-party distribution centres in China. “Going forward, Danks has adopted a fully integrated approach to a total supply chain solution,” Mr Tregaskis said.

In addition to increasing its warehousing capacity he has hand-picked a new team of 12 senior people to drive logistic reforms nationally. “I’m very comfortable with the new management structure and feel confident about the future performance of our supply chain,” he said.

Danks will upgrade its supply chain technology in July. The new supply chain interface – Moveit – is a web-based system enabling order dispatch/delivery management and freight cost analysis, real-time order delivery status updates and track and trace capability, advanced shipment notification, online order status enquiry and proof of delivery.

The company plans to appoint a freight forwarding/shipping agent and to integrate all locally sourced products with local warehousing and carriers.

Other initiatives include a process re-engineering assignment, which is now underway in all DCs and the implementation of a centralised customer service centre in July.

Mr Tregaksis told suppliers he was also confident about the future of Danks’ exclusive brands program – called DEBs – which has grown substantially in sales since its introduction in 1999.

“It’s still only 10% of our business, but it has received overwhelming support from our retailers,” he said. He cited global and national retail trends towards the development of house brands, including the UK where “own label” sales of power tools had 68% of total market share and called on suppliers for their support for the Danks program.

“DEBs were not introduced to erode branded products … they’re positioned to complement them and provide a broader retail offering to consumers,” he said.

DEBs not only broadens the offering to consumers within product categories, they enable Danks’ retail groups of Home Hardware, Thrifty-Link Hardware and Plant Plus Garden Centres to compete through greater profit margin, according to Merchandise Unit Manager, Con Dekazos. He said it was important retailers “can’t be shopped on price” and could offer their customers a brand and product differential to other retailers.

“Our retailers are our first priority with 91% of all Danks sales going through group stores,” he said. “Everything we do is about helping them to become more profitable.”

Mr Dekazos said Danks’ objectives included maintaining and strengthening supplier relationships, conducting and implementing core range reviews, improving inventory management, and maximising promotions to grow key categories.