PRICE CHOPPER UPGRADING ITS INVENTORY MANAGEMENT

SCHENECTADY, N.Y. -- Price Chopper Supermarkets here will equip its main grocery warehouse later this month with a new inventory management system designed to greatly reduce store order lead times and out-of-stocks.The system will enable the retailer to begin using radio-frequency-based computers on forklifts and lay the groundwork for increased use of pallet bar coding, cross-docking and flow-through

SCHENECTADY, N.Y. -- Price Chopper Supermarkets here will equip its main grocery warehouse later this month with a new inventory management system designed to greatly reduce store order lead times and out-of-stocks.

The system will enable the retailer to begin using radio-frequency-based computers on forklifts and lay the groundwork for increased use of pallet bar coding, cross-docking and flow-through logistics practices, said Ron Cellupica, vice president of distribution and transportation.

Price Chopper will equip all other warehouses, including frozens, perishables and general merchandise, with the new system by the end of 1997, he added.

Cellupica said the new system represents a major upgrade from its current warehouse package, which was unable to support a number of key initiatives, including radio-frequency communications.

"It was time to move on," he said. "We had a very good system all through the years, but over time, systems get antiquated. You can only put so many Band-Aids on it. Eventually you have to do major surgery."

The new warehouse technology, from Dallas Systems, Dallas, will improve Price Chopper's store billing procedure by allowing more time to incorporate last-minute changes to outgoing orders, which will significantly reduce out-of-stocks, Cellupica said.

Warehouse crews will now be able to incorporate additional incoming product shipments into any store order not yet assembled. Because the retailer will now bill and assemble fewer orders at one time, many other store orders not yet assembled could receive new items as late as noon.

"As we're receiving product on the inbound side, that product is put into inventory real-time," he said. "The product becomes available to those stores that have not been billed yet."

Under the old warehouse billing system, all Price Chopper store orders were processed daily at about 2 a.m, he said. While the orders were built at various times during the next day, no new items could be added to the shipments because the billing process had already been finalized.

As a result, Price Chopper wound up writing off some products as being out-of-stock when, in fact, they arrived in its warehouse later that day.

"If the product didn't show up until 8 a.m., nobody got it [that day]," he said. "Even if we didn't select that store until noon, it had been billed at 2 a.m."

Price Chopper hopes to enhance its warehouse productivity even further by installing radio-frequency-based computers in its forklifts that will communicate directly with its new management system.

Cellupica said forklift operators will be able to receive upcoming assignments on the on-board computers. The assignments will show where the order is located in the warehouse and the estimated time required to pick the order.

"The system is going to totally direct the [forklift] operator with every assignment," he said. "It's going to tell them how long each assignment should take them and where they should go."

The system will also automatically determine forklift operator assignments based on the proximity of operators to upcoming orders.

"Right now we don't have that capability," Cellupica said. "The forklift operator may have to travel an extra 200 feet [to fulfill an order] when there's somebody probably nearer that we're not using."

While the retailer has yet to implement pallet bar-code scanning, the system is already set up to accommodate the technology, he said. The system also is already capable of managing initiatives like cross-docking and flow-through distribution.

"The system already has a module that will allow us to allocate product to the stores before we even receive that product," Cellupica said. "When [the product] arrives at a warehouse door, we will cross-dock it right into the store orders."