Automation is evidently the future for Boots Group PLC. The British pharmaceutical chain has announced that it will close 17 regional distribution centers and transfer operations to a highly automated facility in Nottingham. Boots officials say the move will eliminate more than half of the company's logistics work force, or more than 2,000 jobs
At least those workers will have some warning. Richard Baker, Boots' chief executive, says it will take three years to build the new state-of-the-art facility, which is expected to open in 2009. The new DC will be used to sort all of the company's cosmetics and toiletries into packing cases before they are sent to its network of stores.
As for the decision to consolidate operations, it's all about costs. "Our proposed supply chain investment is based on proven technology delivering greater productivity and lower operating costs," says Baker. "This will allow us to compete even more effectively while delivering a better service to our stores." He says he expects to see a return on the investment in the facility within three years of its opening.
In response to sagging sales, Levi Strauss is closing its distribution center in Arkansas, a move that will eliminate about 340 jobs. The Arkansas location, which has been distributing Levi's Dockers brand clothing, is the last of several small DCs to be shuttered. The closure will leave Levi Strauss with just three large state-of-the-art facilities that it built in the mid 1990s.
"Our distribution network is over capacity and has been for some time," says Levi Strauss CEO Phil Marineau. "We believe it is imperative that we close the Little Rock facility and consolidate the work in our remaining distribution centers."
The San Francisco-based company expects to close the DC by the end of the year. Levi Strauss closed the last of its U.S. manufacturing plants several years ago and moved production overseas.