Southern States Restructures Distribution
The past three years have brought a series of change for Southern States and its distribution facilities. The company has 1,200 retail locations across 23 states. In the past, it’s maintained three distribution centers.
“When we partnered with Winfield United for crop protection and crop fertility distribution, that reduced up to 40% of the volume out of one of our facilities,” explains Scott Michaelis, manager of distribution and logistics at Southern States. “We already had been assessing our distribution needs since
another location had a lease come up for renewal.”
Michaelis says the company brought in a nationally known consultant to do an entire distribution network analysis. The result was a plan to invest in the existing Cloverdale, Va., facility.
“In times like this tougher ag market, we are assessing our overhead costs and trying to run as lean as we can. The strategy was to maximize our existing footprint,” he explains. “We reracked the entire facility, updated the lighting, painted and changed its entire layout.”
The Cloverdale facility manages 13,000 SKUs in the 250,000-square-foot facility, which was first opened in 1972. Most of the products found in the facility are animal feed, lawn and garden supplies and retail products.
“Of all these changes, most notably, we developed a ‘Rapid Pick Room’ that organizes a lot of the smaller products together that represent 25% of our business,” explains Willy Lester, plant manager. “Forming that area has led to a 50% productivity improvement.”
Lester says this first phase was a $1 million investment that just scratches the surface of the improvements the facility will make. Right now, the facility can receive an order and ship to most stores with next-day service, but the goal is to make that 100%.
As Michaelis explains, the structural and layout changes will be paired with internal changes of how the facility tracks product flow through the building. “We are reassessing our productivity metrics, benchmarks for performance and other key performance metrics,” he says.