The popular clothing retailer American Eagle Outfitters is building a new distribution center that will handle both store replenishment and direct-to-consumer orders from the same inventory.
Typically, these two functions are handled by different operations, but the new AEO distribution center currently under construction in Hazle Township, Pennsylvania, will be a streamlined, fully-automated facility that will offload deliveries and process them to both retail and individual customers without palletizing them.
No Need for Warehousing
The high tech system eliminates the need for bulk storage. That means there will be no need for forklifts. In fact, the system doesn’t require any type of mobile equipment of any kind.
From the moment trucks back into the facility’s dock bays, conveyors reach into the back of the vehicles and remove shipments that already are floor-loaded by suppliers. An elaborate system of conveyors that run throughout the 1 million square foot facility then offload these cases of clothing products to a Dematic-brand slat shoe magnetic-driven inbound sorter.
The sorter than diverts the cartons to one of six different fulfillment modules, where a second diverter sends select products to a value-added processing area where clothing products can be adjusted or re-ticketed, if required.
This dynamic assignment streamlines inventory placement so that products can be sorted, sent to the proper area, and packed without ever having to be stored. This cuts down on both warehousing costs and inventory.
Facility Allows for Future Growth
By combining both retail replenishment and direct to customer orders under one roof, the Hazle Township facility — which is close to American Eagle Outfitter’s Pittsburgh headquarters — reduces costs, streamlines delivery and positions the company for anticipated future growth, according to David Repp, the company’s vice president for North American distribution.
“We needed the infrastructure to support that growth,” Repp told DC Velocity. “We also wanted to get close to our customers. And it allows us to co-locate our inventory and better optimize that inventory.”
Everything Under One Roof
When the Hazle Township DC becomes fully operational later this year, it will bring practically all of the company’s distribution operations under one roof. Currently, American Eagle stores east of the Mississippi were serviced by a distribution center in Warrendale, Pennsylvania, while those in the West were served by another DC in Ottawa, Kansas. A third Kansas fulfillment facility handled all online orders.
Once the new facility is online, American Eagle will close its Warrendale site.
With retail and online fulfillment under one roof, the company no longer will need to maintain duplicate inventories, which essentially eliminates the need to carry inventory.
Seeking ‘Green’ Certification
The new facility has been designed to be more environmentally friendly as well. Not only will combining operations reduce operating costs by an estimated 10% to 15%, but the facility features energy-saving low-power conveyors that shut off when product is not present. Plus, its space-efficient, providing as much operational functionality as the Ottawa facility in 20% less space.
The company has applied for a Leadership in Energy and Environmental Design (LEED) certification from the US Green Building Council.