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ASICS keeps pace with growing demandASICS America's single distribution center couldn't keep up with surging demand for its athletic shoes and apparel. Changing its distribution pattern and adding another warehouse helped the company manage both current sales and future growth.
Supply chain versus the volcano
The disruption to air traffic caused by Iceland's Eyjafjallajökull volcano is a reminder of why we should prepare for both expected and unexpected supply chain risks.
Dealing with our oil addiction
Will the Deepwater Horizon disaster spur us to develop new sources of energy?
There's more to performance management than metrics
Getting people to consistently perform at a high level requires more than implementing an incentive program.
Keeping it personal in a digital world
While electronic communication has become a permanent part of our daily lives, face-to-face communication is still important for supply chain success.
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Distribution center operating costs decline
Recent data from the Supply Chain Consortium indicates that more companies are targeting the distribution center (DC) as the place to find and extract savings in their supply chain operation. That's the view of Bruce Tompkins, executive director of the Supply Chain Consortium, a group of some 120 retail and manufacturing companies that share information with one another.
The consortium's most recent Core Benchmarks Report, a compilation of member companies' data, showed that DC operating costs as a percentage of revenue dropped last year. In 2009, the average DC cost as a percentage of revenue was 2.31 percent, down from 2.89 in 2008 and 2.86 in 2007. "With supply chain costs and transportation costs increasing, distribution is an area where companies are able to alleviate some of the financial strain," Tompkins said.
Consortium members are embarking on initiatives to reduce their warehousing costs in a number of areas, including implementing warehouse management systems with enhanced features, such as voice picking technology. They are also automating manual processes with pick-to-light systems and in-line weighing scales and are implementing changes in slotting programs, cycle counting, and cross-docking.
Finally, Tompkins said that although the group does not yet have definitive data on this point, he believes that companies are consolidating distribution centers and making other changes in their distribution networks to drive down costs.
We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 1 2010: Distribution center operating costs decline"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.
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