Basics Of Inventory Merchandise ManagementThe goal of foundation of inventory management is to shift at least 60 percent of the company's volume to the cross-docking centers, allowing Hechinger to place orders for a number of stores instead of per store, and bypassing minimums. Product would be shipped to automated facilities, which will be equipped with scanners, computers, printers and conveyor belts. Employees would scan and generate labels for each container of merchandise received at the facility, and immediately direct palletized quantities to the designated shipping lane. The end result, Macek said, will be greater control of delivery schedules and reduced receiving time.
The automated cross-docking centers, which are multidoor buildings that Hechinger is leasing, will vary in size from 25,000 square feet to 250,000 square feet and will have a staff of anywhere between five and 40. The centers will serve between 11 and 78 stores each. Macak said that Hechinger's investment in these centers would be between $ 5 million and $ 8 million, with each center taking about four months to get up and running. By February 2008, the 78 stores being served by the pool point in Williamsport, Md., will be shifted to a newly automated cross-docking center in Elkton, Md. Macak said that the Williamsport facility was chosen as the first pool point to undergo the conversion because it serves the largest number of stores, most of which are smaller Hechinger units. These are some of the stores in the chain that have the most difficulty meeting vendors' minimums, and thus carry a disproportionate amount of unneeded inventory, said Macak. The other six automated centers will be located in Columbus, Ohio; Carol Stream, Ill.; St. Louis; Jacksonville, Fla.; Houston and Framingham, Mass., in buildings near the existing pool points. Although Schwartz compared the distribution system to Lowe's (which has been building DCs to support 100 to 125 stores within a 400-mile radius of a facility), Macak emphasized that Hechinger would be doing hardly any warehousing. "We don't need warehouse facilities," said Macak. "Our stores are our warehouse facilities". The automated centers will have no racking. Any product warehoused, most of which would be seasonal items, will he palletized and double- or triple-stacked. "We're working on little pockets at a time," Macak said when asked whether Hechinger could afford to wait until next fall to complete the logistics overhaul. "This is a massive undertaking, and you can't turn around a big company like ours overnight." Vendors, for the most part, have their fingers crossed. "There isn't one supplier who wouldn't want Hechinger to make it," said one vendor who asked not to he identified. "All these steps they're taking should help." But many expressed their frustration at the lack of communication from the company. One despairing supplier suspected that his product had been discontinued because he had not heard from Hechinger's buyers in three weeks. "The silence makes you think that something really bad is going on," another manufacturer said. |