Bed Bath & Beyond (BBB) is beginning the next stage of its $250 million supply chain overhaul.
The home goods retailer on Monday announced plans to partner with Ryder System Inc. to develop and operate two regional distribution centers. The centers are expected to leverage the logistics and supply chain solutions firm’s expertise to reduce product replenishment times to Bed Bath & Beyond and buybuyBaby stores to less than 10 days from the 35 days it takes today.
The partnership is part BBB’s plan to allocate $250 million in capital investments to modernize its supply chain over the next three years. The investment will help the Union, N.J.-based retail chain transform from a consolidation-based model to a modernized network that can better respond to market needs. In addition, the overhaul is expected to improve the customer experience, which in turn will help ignite sales and margin growth. The investment is also part of the retailer’s move from a de-centralized inventory management approach to an “omni-always” centralized ordering and replenishment system.
In October, BBB CEO Mark Tritton said the move will “deepen our relevance and connection with customers.” In addition to its supply chain investment, the retailer also plans to invest $250 million over the next three years to update and remodel 450 doors—representing 60 percent of revenue.
“The modernization of our supply chain is one of our core operational transformation initiatives to create greater efficiencies and reduce ‘out of stock’ occurrences for our customers,” John Hartmann, BBB’s chief operating officer and buybuyBaby’s president, said. Investing in the supply chain is imperative for a company that operates an “omni-always shopping environment,” he added.
BBB will rely on Ryder’s logistics expertise and capabilities to help modernize its supply chain and distribution network operations.
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The first regional distribution center slated for updated operations will be a one-million square-foot facility in Frackville, Penn., scheduled to open this fall. The facility, which has the potential for expansion, will provide merchandise to BBB stores throughout the Northeast for both in-store shopping and omnichannel services that include buy online pickup in store or curbside, same day delivery and ship from store. A similar second regional distribution center is set to open next year in Southern California. BBB said the two centers are each expected to create 300 new jobs.
The Ryder partnership comes after BBB selected Oracle as its Enterprise Resource Planning technology provider and Relex Solutions to provide real-time visibility into the supply chain.