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A home furnishings and décor company that imported the bulk of its product was having difficulty efficiently processing product through their distribution center and properly servicing their stores. At the time I joined it, this company had contracted for a second distribution center, there was a perpetual inventory of ocean containers waiting to be unloaded some of which were parked in an adjacent field because of the lack of space and which occasionally had to be extracted with a crane after sinking in the mud. The 200,000 square feet was racked 5 high and essentially filled.
By implementing detailed merchandise plans and then revamping the ordering and delivery process to more closely coincide with sales I was able to reduce the flow of product arriving to only the necessities. Simultaneously, we changed the process for receiving waiting containers in order to move the product through the distribution center and avoid the time and effort of put away and retrieval. Within months the backlog of containers was eliminated and within 18 months the top two levels of the distribution center racking was empty. Store stock rooms became less crowded with the majority of merchandise being able to fit onto the sales floor and product getting replenished on a regular basis. As the new warehouse was getting ready to come online, it was clear that it was unneeded and was eventually leased to another tenant and we never took control of the facility.
Resources and expenses were reduced at the distribution center because of the improved flow, the investment in trade inventory was reduced which reduced the carrying costs, and store resources were either reduced or redirected toward the selling floor as the receiving areas and stock rooms became more manageable.
Throughout this process we also implemented the Island Pacific Merchandising System to which we fully converted from our legacy merchandising system in less than 4 months.
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