With e-commerce only continuing to grow in the coming years, many retailers are rethinking their store footprint. At Home Group, a home decor superstore, has recently opened up its second distribution center in Pennsylvania to help support its nationwide growth. Its convenient location near the interstate and freeways is helping the company expand further into the East coast.
Supply & Demand Chain Executive recently had time to host a Q+A session with At Home's president, Peter Corsa. Throughout the discussion he detailed on how important it is to support store expansion and the results cross-dock capabilities and automation can have on one's business.
SDCE: As e-commerce continues to grow, why do you think it is important to have distribution centers closer to city centers? Does At Home Group plan on utilizing micro-warehouses in the future?
Corsa: In order to quickly and efficiently handle product replenishment and cross-dock capabilities throughout our stores nationwide, it is important that our second distribution center is located adjacent to city centers and by the interstate and freeways. By strategically locating our distribution center, we are able to capitalize on the potential to grow to at least 600 locations. We have a proven cross-dock strategy but are always looking at ways to improve and explore new strategies to support our continued growth.
SDCE: With Home expanding into the East coast, can you detail on any challenges you may have experienced finding warehouse space? Why was the expansion crucial to the company?
Corsa: When determining the location of our second distribution center, it was important that we found a strategic location near the interstate and freeways. The warehouse space in Carlisle met all of our needs and served as an ideal location. There are a lot of warehouses in that area but we were lucky to find a second generation, clean box that was ready for us and our real estate team did a great job securing the location.
At Home has the potential to grow to at least 600 locations and in order to support this expansion and long-term growth rates, as well as put no risk to our system, it was crucial that we planned the second distribution center ahead of demand. The Pennsylvania distribution center increases At Home’s total capacity to serve 350 stores, nearly twice the current footprint, a strategic opportunity that further positions us to capitalize on the long runway of growth.
SDCE: Automation is becoming increasingly popular in the warehouse sector, how do you plan on implementing it with Home? What types of results are you expecting or have already experienced?
Corsa: Both of our distribution centers have automation along with cross-dock capabilities in order to efficiently handle products as well as generate meaningful transportation efficiencies. Because of these advancements, At Home has doubled its store base and number of store employees.
SDCE: What are some outcomes you have seen from direct sourcing? Do you think that it will become a permanent trend within the supply chain industry?
Corsa: Direct sourcing is meeting and exceeding our goals. It has given At Home the opportunity to not only reduce product costs, but also improve international sourcing flexibility, increase supply chain diversity, and broaden access to unique and high-quality products. This growing trend continues to have a strong presence in the supply chain industry, as it has proven to have an effective and positive outcome. As a key initiative for At Home, we are using direct sourcing as an investment tool, allowing us to use the savings to help the company continue to grow.