SUPPLY CHAIN

Rue21 completes DC upgrade

BY CSA STAFF

Warrendale, Pa. Rue21 announced that it has successfully completed an upgrade to its 189,600-sq.-ft. distribution center and office facility located in Weirton, W. Va.

The improvements will enable the distribution center to support over 1,300 stores under the current business model and positions the company for future growth. The upgrade, which doubled the facility’s store packing capacity, included the implementation of a new pack-to-light system, structural, mechanical, and control systems as well as upgrades to the warehouse-management system. The eight-month project was executed through a partnership between Rue21 and business partners Forte Industrial Equipment Systems, Island Pacific and RSC-AIS Consulting.

Keith McDonough, senior VP and CFO stated: “The increased packing capacity, new systems and performance metrics will vastly improve the speed with which we can ship new merchandise.”

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Sourcing strategy said to lower costs at Walmart

BY CSA STAFF

Improved speed to market, better product quality and reduced costs are the anticipated benefits of a new global sourcing organization that will be led by Ed Kolodzieski who was named EVP global sourcing for Walmart today.

Kolodzieski previously served as president and CEO of Walmart Japan, and in his new role he will report to Walmart vice chairman Eduardo Castro-Wright. Toru Noda, EVP and COO of Walmart Japan will assume Kolodzieski’s responsibilities and report to Scott Price, who joined Walmart last September as president and CEO of Walmart Asia with oversight of Japan, China and India.

The appointment of Kolodzieski is the next step in a revamp of Walmart’s global sourcing operations that began last fall when Castro-Wright announced a strategy to increase the company’s direct source and establish what Walmart calls, “Global Merchandising Centers,” which are intended to increase alignment between sourcing and merchandising.

 

“By realigning our resources, leveraging our scale, and restructuring our relationship with suppliers, we will enable our businesses around the world to offer even more competitive pricing on merchandise and to provide our customers a clear and compelling assortment of better quality products at lower prices,” said Castro-Wright.

The potential to reduce costs is thought to be huge given that Walmart says it spends more than $100 billion annually purchasing private brands. A portion of that amount, approximately $2 billion, will be managed by Li & Fung. The global supply chain and sourcing company will act as a buying agent for Walmart and rename an existing subsidiary WSG Pte. Ltd. to provide buying agency service exclusively to Walmart. As part of the arrangement, Walmart was granted a call option that it has the right to exercise after January 1, 2016 at an undisclosed price that would essentially transfer ownership of WSG to Walmart. The Li & Fung Group operates more than 80 offices globally and works with 15,000 suppliers to serve 2,000 customers.

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Walmart unveils extensive restructuring

BY CSA STAFF

Bentonville, Ark. Major restructuring initiatives announced Thursday by Walmart touch nearly every aspect of the company and are intended to created a new organizational framework to drive growth.

The changes were announced in a series of memos posted on the company’s Web site from president and CEO Mike Duke, vice chairman Eduardo Castro-Wright, chief merchandising office John Fleming and coo Bill Simon. According to Castro-Wright, the changes were made because it was time to escalate efforts associated with the company’s Project Impact initiative begun approximately three years ago.

Although most generally associated with a new store prototype, Project Impact encompasses a wide range of initiatives to strengthen price leadership, improve product assortments and upgrade the shopping experience. Those benefits were realized in large part due to improve alignment among its merchandising, marketing and operations group. Now, a similar strategy is now being applied to the Walmart Realty division which will be integrated with store operations and logistics and report to Walmart U.S. COO Bill Simon.

“This move will help facilitate our growth as we seek to enter new markets and develop new segments across the U.S. and will drive efficiency by allowing us to better leverage our resources,” Castro-Wright said. “We are also building a structure that aligns the store planning team with the customer experience team that currently is part of merchandising. This will also support our efforts to accelerate our speed to market with new formats.”

In addition, the company plans to introduce a new field reporting structure that includes three geographic business units in the west, the south and the north. The company’s previous structure consisted of five major regions.

The shift has resulted in several interesting personal moves as Walmart.com president and CEO Raul Vasquez was given the role of an operator with oversight of the Walmart West area. Rosalind Brewer was name president of Walmart South after previously serving as president of Walmart’s southeast division. Hank Mullany, previously president of the Northeast division, is now president of Walmart North. Mike Moore and Michael Lewis, who previously served as senior VP under the five operating region structure, have been given new roles in the merchandising group. Moore is now responsible for automotive, stationery, hardware, fabric and crafts and sporting goods. Lewis will lead the newly created Global Merchandising Center for packaged grocery product.

Another major merchandising change involves Andrea Thomas who will serve as senior VP brand merchandising for home, hardlines and entertainment reporting directly to chief merchant John Fleming. Thomas was previously responsible for private brand management in the marketing group.

Another noteworthy change involves the creation of a new organization called store merchandising execution. It will be led by Andy Barron who has the tall order of designing merchandise strategies for the geographic business units, executing customer focused programs and will report to both Simon and Fleming.

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