Making It Official -- Dignitaries gathered in Atlanta for last week's ribbon-cutting ceremony. The new PDC, though, has been ramping up to full speed for several months now and is already a big hit with dealers. "You have exceeded our expectations in every way so far," says Lexus of South Atlanta.
Business growth is a good problem to have. But it’s a still a problem. And, like all problems, it demands a solution.
Case in point: Toyota’s two newest Parts Distribution Centers (PDCs).
Since 2000, the Lexus Southern Area has relied on a partnership with Southeast Toyota (SET) to supply parts to its dealers via an SET facility in Jacksonville, Fla. But in recent years, business growth had begun to tax that arrangement.
So in 2013, Toyota started to formulate a solution. It would build a new PDC in suburban Atlanta to keep up with the demand generated by stores in the Lexus Southern Area’s remaining five states: Georgia, North Carolina, South Carolina, Alabama and Tennessee. That would free up the SET warehouse to use all of its capacity in Jacksonville to supply parts to its Toyota dealers. Then it would build a second facility near Orlando to serve Lexus dealers in Florida.
“I call it a double play,” says Neil Swartz, vice president of Service Parts and Accessory Operations. “SET needed the space in Jacksonville. We had the opportunity to expand our Lexus operations so we’d be closer to its customer base. Everyone stood to benefit.”
Go for the Gold -- An employee of Toyota's business partner at the new Lexus PDC in suburban Atlanta picks a part from a yellow storage bin. The facility uses a color-coded system, storing the most commonly ordered parts where they are easiest to reach.
The Latest Technology
The first of the two new PDCs—in Lithia Springs, Ga.—had its official grand opening last week. At capacity, the 107,000-square-foot building will employ up to 30 people and stock some 43,000 Lexus parts. The Orlando facility will be fully up and running by the end of the year.
Operations Manager Jason Brown, who oversees both locations as well as a PDC in Dallas, says the new facilities incorporate the industry’s latest technology and best practices to maximize efficiency and productivity. One example of this are order pickers—motorized devices that lift workers so they can easily get to parts from floor to ceiling, helping to increase storage capacity. Another are rolling deck cages used during delivery that help prevent damage to parts in transit and make drop-offs at dealerships more efficient.
“The design of these new PDCs are a reflection of what we’ve found works best at our existing facilities,” says Brown. “Another key component is our strong working relationship with our business partner, XPO, which employs the people who work there. We learn from them and they learn from us. These new projects have been an opportunity for us to collaborate and grow together.”
Need a Lift? -- The new PDC makes use of order pickers that can easily lift a worker to wherever parts are stored. These lift trucks help to make the most of the facility's available storage capacity.
A Need for Speed
The success of the new PDCs, though, will ultimately hinge on how well they support customers and Lexus dealers. On that score, both facilities promise to significantly speed up the fulfillment of parts orders. In most cases, every dealer in the Lexus Southern Area will be able to order a part in the afternoon and have it ready and waiting for them when they open up for business the next day. Stores in major metropolitan areas might be able to take that one step further and receive and/or pick up parts the same day they’re ordered.
“We introduced same-day delivery in select markets four years ago,” says Swartz. “With these new PDCs, we’ll be able to expand this service to 39 areas in all. No other manufacturer can come close to matching that.”
The faster the PDCs get the needed parts into the hands of the dealerships’ service technicians, the sooner they can return the vehicles to their owners and have them back on the road. A consistently quick turnaround can have a huge impact on owner loyalty which, in turn, can boost the bottom line.
“We know that if we do a good job serving our customers, the dealers, they will be better able to serve their customers, the vehicle owners,” says Swartz. “That will naturally lead to increased sales of genuine Lexus parts as well as Lexus vehicles. Without a doubt, these two new PDCs will help us achieve that objective.”
By Dan Miller