Stockton, Calif., that will give it more room for growth.
But not all of the former CSK facilities are slated for closure. O’Reilly decided to keep but remodel the Michigan
and Arizona DCs, installing additional automated equipment to support the company’s daily delivery model and to
accommodate projected growth. The Michigan remodel
was completed in April; work at the Arizona facility is
under way.
In both cases, the conversions have involved upgrading
the facilities’ material handling systems to shift from bulk
picking to piece picking. For instance, the Michigan remodeling included the addition of a three-level pick module,
conveyor, automated sortation equipment, racking, seven
shipping lanes, and a new returns area.
Down to business
At the same time, planning was getting under way for the
new DCs O’Reilly would open. With deadlines looming, the
team got right down to business, reports John T.
Giangrande, a senior account executive for Fortna Inc., the
systems integrator and supply chain consulting firm that’s
working with O’Reilly on the DC remodeling and construction program. “We took a look at the time frames and
broke those down into site selection, design, engineering,
and implementation phases and go live dates,” he says. “We
worked through all that in the first few weeks.”
Despite the time constraints, O’Reilly opted against the
one-size-fits-all approach to DC design. “We cannot build
‘cookie cutter’ DCs because we design our DCs based on
market potential,” Johnson says. “The last five or six are
similar, but no two are alike.”
The design work has truly been a team effort, involving
input from Fortna, O’Reilly, and managers from the former
CSK. Larry Ellis, former senior vice president of logistics for
CSK and current Western divisional vice president of distribution for O’Reilly, praises his new colleagues for their
open communication. “The O’Reilly team has not only
worked with us to … teach us the new systems,” he says,
“but they have also included the West Coast distribution
team in the numerous planning meetings through each
phase of the conversion.”
All the planning has paid off. The project continues on
schedule well into year two, putting O’Reilly in a strong
position to move ahead with its expansion. When the integration is completed, O’Reilly will have a total of 23 DCs—
and enough capacity to give the planning team a short
breather. “Prior to the CSK acquisition, we were on pace to
open a new DC about every 18 months,” Johnson says.
“With this plan, we will have the capacity in the distribution
network to take us out for a couple of years.”
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