Innovative Retail Technologies

MAR-APR 2017

Innovative Retail Technologies (formerly Integrated Solutions For Retailers) is the premier source for innovative yet pragmatic technology solutions in the retail industry.

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B rentwood, TN-based Tractor Supply Co. is the favorite retail destination of the hobby gardener, backyard chicken farmer, and anyone who likes to spend time turning up dirt, tinkering with tools and power equipment, or raising animals, from kittens to horses. The 79-year-old company's widespread appeal — borne of a carefully curated merchandise selection that attracts rural folks and urbanites alike — has fueled its growth from a mail- order catalog to a $6.78 billion multi- channel retailer operating 1,600 stores and employing 24,000 associates in 49 states. A Snapshot Of The TSC Supply Chain The mix of merchandise carried by Tractor Supply poses some unique challenges to its warehouse and DC operations. While more than 40 percent of its sales comes from its livestock and pet supply category, approximately 20 percent comes from seasonal, gift, and toy items. Other items the store carries vary from small products such as linchpins and brake lights, to medium items such as leather footwear and clothing, pet food, and supplies, and large items such as truck toolboxes, riding lawn mowers, and utility vehicles. More than 70 percent of the products the company sells flows through its eight primary distribution centers in Arizona, Georgia, Indiana, Kentucky, Maryland, Nebraska, Texas, and Washington and two "We have a pretty big focus on being able to trace product movements through the network, to know where items are at any time. We leverage that data to make efficient allocation decisions." Tom Hutchins, VP of technology and IT strategy, Tractor Supply Co. predictive analytics modeling to help its merchants and inventory managers make more informed inventory and allocation decisions. Finally, while e-commerce currently accounts for less than 1 percent of annual sales at Tractor Supply, the company is investing for the future of omni-channel retailing. In 2016, it implemented buy online/pick up in store capabilities at 700 stores. Its unique inventory mix and logistics configuration, combined with e-commerce initiatives hitting its more than 5 million square feet of warehouse and DC capacity, require Tractor Supply's investment in some robust supply chain technology. Supply Chain Investment Supported By Mobile Tom Hutchins is VP of technology and IT strategy at Tractor Supply, and as such, he's responsible for the implementation of much of the retailer's supply chain technology. Flexibility, he says, is key. " There's a significant amount of effort in balancing our queue, including accommodating weight handling characteristics that vary a lot from season to season," he says. "A spike in the sale of riding mowers in the spring changes the entire approach to DC operations compared to the spike in gift items we see during the holidays." From a DC automation perspective, he says scalable conveyors and material handling systems — as well as the software that controls them — are central to the success of those transitions. Beyond enabling the sheer movement of its widely variable merchandise mix, supply chain technology at Tractor Supply must also accommodate product traceability. "We have a pretty big focus on being able to trace product movements through the network, to know where items are at any time," says Hutchins. "We leverage that data to make efficient allocation decisions," he explains. Other technologies utilized in the DC include demand planning, forecasting and replenishment, warehouse management system ( WMS), freight scheduling, and import management. "We average about 60 RF [radio frequency] scanning devices within the four walls of each DC," says Hutchins. Those additional cross-dock facilities in Texas. These smaller facilities are primarily responsible for handling palletized products, such as wood shavings used for animal bedding and wood pellets used for home heating. The cross-dock centers were designed specifically to handle high-volume, low-value bulk products with fast turnover in stores. The remainder of its merchandise is shipped directly to stores from any one of the company's nearly 1,000 vendors. In 2014, Tractor Supply also began implementing a demand planning system designed to analyze sales patterns — both historical and in real time, and leverage 7 Mar-Apr 2017

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