Dive Brief:
- Advance Auto Parts recently completed the implementation of a warehouse management system at a distribution center in Thompson, Georgia, as part of a supply chain overhaul, President and CEO Shane O’Kelly said during an Aug. 22 earnings call.
- The overhaul aims to boost the auto parts retailer's supply chain efficiency, with its 14th and final distribution center conversion to be completed by the end of the year, O’Kelly told analysts. The facilities will serve as nationwide replenishment nodes.
- Advance Auto Parts is also pushing for increased inventory productivity with the implementation of a new inventory management system, an initiative the company completed in July. More than 300,000 actively managed SKUs are in the system.
Dive Insight:
Advance Auto Parts is moving forward with its plan to consolidate its distribution network to a single operation after years of relying on two distinct ones.
The retailer's bid to streamline its supply chain operations aims to use 14 large distribution centers operating on a single warehouse management system. Previously, Advance Auto Parts had 38 distribution centers acting as replenishment nodes and operating on different systems.
With 14 nationwide replenishment nodes, remaining distribution centers will be closed or converted to market hubs, which is a key part of its supply chain overhaul, O’Kelly said.
“We are gaining critical insights on managing hub inventory along with determining efficient routes and replenishment frequencies,” the CEO told analysts. “We now expect to open at least 17 market hubs by the end of 2024 and believe that this updated schedule will enable us to effectively apply learnings and develop the right operational model for our hub service stores.”
Advance Auto Parts had 10 market hubs in operation as of mid-August, and aims to open 60 by 2026.
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