EXPANDED WAREHOUSE TO USE NEW TECHNOLOGIES

ADRIENNE COONS

SCHENECTADY, N.Y. (FNS) -- As it embarks on its biggest warehouse expansions ever, Price Chopper, here, plans to implement the latest warehouse technologies and provide a foundation for the chain's future growth.

Among the new technologies and systems to be incorporated into the expanded warehouse: an inventory management system from EXE Technologies, Dallas; radio frequency technology; cross-docking, and the latest in temperature control.

Price Chopper, with 97 stores in the Northeast, recently began the $18-million expansion of its distribution center in Rotterdam, N.Y. The project is expected to be completed by next summer. The 195,000-square-foot addition to the existing distribution center warehouses will be divided with 125,000 square feet added to the existing 415,000-square-foot grocery facility, and 75,000 square feet going to the present 177,000-square-foot perishables facility.

"We're always focused on the future," said Neil Golub, president and chief executive officer of the Golub Corp., parent of the Price Chopper chain. "Without this expansion, we wouldn't be able to service the new stores that are coming next year and the years beyond."

Price Chopper is expanding, replacing or opening about eight to 10 stores per year in its northeastern trading area, he said.

The distribution center expansion will enable Price Chopper to use the new technologies to meet that future, said Renato Cellupica, vice president of distribution. "The new facility and its additional space is going to do is allow us to use the EXE Inventory Management System and all of its functions that cannot be taken advantage of today because of the lack of proper space," Cellupica said.

The EXE Inventory Management System tracks and directs products from the time an order is placed with the manufacturer to its arrival at the stores. The EXE system uses radio frequency technology for more efficient tracking of products.

"Radio frequency technology provides us with real-time information all the time," Cellupica explained. "Whereas the old system worked on what is called a 'bench system,' so that there was always a delay factor in the information."

Cellupica estimated that the old system had a four to six hour delay in all aspects of inventory control before there was an update. The real-time capability in the EXE system means that updates will take place as the activities occur.

"With radio frequency technology, every time a worker or an operator does something, the system knows instantaneously," Cellupica said. "All the files are updated instantaneously so that everybody has the latest updated information. That's a major advance." Not only will the radio frequency technology of the EXE system improve tracking of inventory control on the large scale, but it will also help to improve workers' productivity, he said. The system will be used by all workers, including selectors, forklift operators and truck drivers.

"Number one, it is used by the workers to receive directions as to what their assignment should be, and what their next assignment will be. Number two, it will actually assess and track their performance as to how effective or productive they were in completing that assignment," he said.

"Real-time information is very accurate, up-to-date information. That's critical. There's no delay in any update to the system, in any activities that are going on at any time, simultaneously," Cellupica said.

The additional space also will allow Price Chopper to use a cross-docking system for inventory. Cross-docking allows more efficient inventory shipment by eliminating unnecessary steps.

"Cross-docking can happen when we receive products from a vendor that are store specific. They come in one door and, without being put away, are swung onto another truck going to the store. It actually comes off one truck and then goes onto another for delivery," Cellupica said.

The existing system for product transportation requires inventory arriving from a vendor to be placed on a rack until selected for shipment to the store, at which point it is taken from the rack and put on the truck for delivery.

"In distribution, the less you touch the product, the more efficient you are," he said.

"The cross-docking concept needs a certain structure of the building to be able to effectively employ it. The new space is going to allow us to reconfigure the present space, so that we can take advantage of those functions," he said.

The expansion also will allow Price Chopper to use the latest temperature control technology in the perishables warehouse. The various temperature control rooms are maintained by a computer system to provide the right temperature for different perishables items.

There are also high-speed doors to every temperature control room which are monitored to open and close by computer, allowing an operator to go through a door without having to stop. This prevents any disruption in room temperature.

Price Chopper is continually upgrading door technology, Cellupica said, so the expansion will not involve creation of any new door or door seal technologies. However, he said that the added space will allow them to take every possible precaution with regard to keeping perishables fresh and safe for consumers.

"We place a tremendous amount of emphasis on quality control in all of our perishables, and the new facility is being designed with that in mind, to make sure the temperature integrity that is required to handle the various perishable products is maintained," Cellupica said.

The company now has five distribution warehouses, specializing in different product areas. The perishable and grocery warehouses in Rotterdam, which were purchased by the Golub Corp. in 1961, have been expanded six times. Other facilities include frozen food warehouses in Colonie, N.Y., and Waterford, N.Y., and a general merchandise warehouse in Voorheesville, N.Y.

The distribution center expansion will result in about 340 new jobs, said Neil Golub. "We're experiencing an annual growth rate of 4% to 6% and have an annual payroll that is in excess of $250 million. The distribution center generates a payroll of over $60 million per year," he said.