POTENTIAL WEIGHED AS TOPS DEPOT OPENS

MARC MILLSTEIN

LANCASTER, N.Y. -- Tops Markets' new distribution center here, the subject of intense speculation by nearly all segments of the industry for well over a year, has begun accepting, sorting and shipping products.

The facility, which opened this month, measures 867,000 square feet, and reportedly features 157 loading docks; seven rooms with precise climate controls for handling products such as floral, produce, meat and frozens; 75,000 pallet locations, and 37-foot-high ceilings.

But it's the potential for Tops, along with the five other U.S. divisions operated by Ahold USA, Atlanta, to begin integrating distribution systems and aggressively implement highly efficient practices such as cross docking that has the industry abuzz.

In addition to Tops Markets, Buffalo, N.Y., Ahold USA, owned by Ahold, Zaandam, Netherlands, includes Bi-Lo Markets, Mauldin, S.C.; Edwards Super Food Stores, Winsdor Locks, Conn.; Finast, Maple Heights, Ohio; Giant Food Stores, Carlisle, Pa., and Stop & Shop, Quincy, Mass.

The facility has already raised the ire of workers, including the Brotherhood of Teamsters, Washington, who fear that the distribution center's opening, and automated systems, could mean heavy job losses. In response to those concerns, Ahold USA and the Teamsters union this summer announced they would jointly sponsor a study to determine the effect of cross docking on the local economy.

The opening of the distribution center also marks another step in Ahold USA's drive to integrate systems and distribution practices throughout its divisions. Earlier this year, for example, the company drew up plans to begin equipping all its divisions with a suite of software applications and to standardize technology chainwide.

"The five Ahold USA companies [will] benefit more and more from synergy in various fields, such as central purchasing, management development, logistics and distribution, management information systems, information technology and store design," Hans Gobes, Ahold's senior vice president of communications, told SN earlier this year.

Observers believe the new distribution facility will open the door for Ahold USA to begin integrating its distribution system, with heavy reliance on cross docking, throughout its divisions.

"With the old warehousing systems, it wasn't unusual for inventory to age five weeks. In this facility we expect to turn over the entire inventory every 17 days, and that should come down to 14 days within a couple of months," Michael Scott, Tops' vice president of distribution, said in an interview published recently in The Buffalo News, a daily newspaper.

In addition to extensive cross-docking capabilities, the distribution center also is equipped to optimally handle a wide range of perishable and other specialty items. For example, it includes a 28-degree meat room, a 35-degree wet room for leaf vegetables and a pair of floral compartments at 45 degrees and 55 degrees.

It also reportedly includes a row of 17 banana-ripening rooms that have the capacity to ripen 1 million pounds of bananas weekly.