Modern Materials Handling - April 2010

SYSTEM REPORTSkylights and motion-controlledfluorescent fixtures (top left andcenter) reduce lighting costs inthe new facility. While most of thefacility utilizes conventional materialhandling (top right), automation iscoming.water consumption compared to atraditional warehouse design;• at least 35% of the total energy usagewill be from renewable sources, and• facility lighting uses motion-controlledflorescent fixtures and theuse of natural light from the extensiveaddition of skylights.The facility was also constructed fromenvironmentally sustainable materials:• more than 40% of the buildingmaterials were produced regionally,reducing the carbon footprintassociated with transporting thosebuilding materials;• building materials were manufacturedwith more than 45% recycledcontent, and• more than 50% of the wood productsused in construction werecertified sustainable by the ForestStewardship Council (FSC).Sustainability, however, is only halfthe equation in Tracy. The new campusalso enables Crate and Barrel’s broadersupply chain strategy.“It’s harder and harder to differentiateyourself as a retailer solely on merchandiseuniqueness because the worldis becoming so transparent,” says Ling.“Success often comes down to who canfind the best product and get it to marketthe quickest and at the best value.Our supply chain helps us accomplishthat and Tracy is an important link inour distribution network.”Optimizing the supply chainAccording to company history, Crate andBarrel was founded in 1962 by Gordonand Carole Segal after the Chicagocouple returned from a honeymoon inEurope where they were taken with thecontemporary, but affordable housewaresthey saw during their travels. Toset up shop, they leased an abandonedelevator factory in Chicagoand purchased productdirectly from glassblowers,ceramicists and fromfactories making Frenchcopper pots and simplewhite bistro dinnerware.The first store opened withone employee and no cashregister. With no money tobuy fixtures, they displayedthe merchandise on shippingcrates and barrels—hence the name.Nearly 50 years later, the companyhas grown to 7,500 employees and morethan 170 stores in 16 North Americanmarkets. Two franchise stores in Dubaiwill open in spring of 2010. In additionto its stores, the company manages adirect-to-consumer catalog and Internetbusiness that rings up more than $300million a year in sales—about 25% ofthe business.Ling joined the company in the late1990s. He and CIO Ed Rennemannwere given marching orders to createa distribution network and systemsinfrastructure to support the company’sgrowth. Crate and Barrel had alreadyoutgrown the capacity of an existingChicago warehouse and was storing22 A P R I L 2 0 1 0 / MODERN MATERIALS HANDLING mmh.com