Marks & Spencer says “good progress” is being made in the overhaul of its supply chain, IT systems and warehousing.

In its final year results announced today (22 May), the retail giant says the first phase of its warehouse consolidation programme is now well underway.

Following the opening of a new one million ft² warehouse in Bradford, construction has now commenced on a  second new warehouse in the East Midlands, which will be a dedicated e-commerce facility combined with an NDC, and is due to open in early in 2013.

M&S adds that it has been running a trial of the NDC model in two of its warehouses to ensure a smooth transition when the site goes live.

M&S has also consolidated its ambient food stockholding from four existing centres into one site in Bradford, which it says has provided greater control over the supply chain and cost base, increasing visibility of ambient stocks and improving fulfilment to store.

On the IT side, the business has completed the implementation of a new stock management system, which is providing more accurate real-time stock level information and contributing to a 2% improvement in food availability.

In addition, the retailer has started to trial elements of a new warehouse management system, Red Prairie, and associated processes in its ambient food warehouse and the pilot NDCs.

Distribution costs remained fairly static, only rising by 1.2% to £398.1m from £393.5m the previous year. The statement adds: “Distribution costs continue to be very well managed despite inflationary pressure and volume increases in Food and Multi-channel, as we continued to see the benefits of initiatives to improve supply chain efficiency.”