Larry Ellis says that when your work force and technology work in tandem, anything can happen. Liz French reports.

As the largest specialty retailer of automotive parts and accessories in the West based on store count, CSK Auto has its hands full. Not only does it need to carry a full inventory averaging 17,500 SKUs in its 1,307 locations, but it needs to do it on time and on budget. And according to Larry Ellis, senior VP of logistics, that’s not an easy task. “We take advantage of numerous software packages and have a network of 3PL companies to help us manage it all.”

Phoenix, Ariz.-based CSK Auto has grown exponentially over the past 10 years, starting with the 1997 acquisition of 81 Trak Auto Stores in Southern California, which catapulted the company past the $1 billion mark in 1998. In 1999, the company acquired the Big Wheel/Rossi Auto Parts chain to further penetrate the Northern Plains market, as well as 194 Al’s and Grand Auto Supply stores throughout Washington, California, Idaho, Oregon, Nevada, and Alaska. April of 2000 saw the acquisition of All-Car Distributors, a chain serving Wisconsin and Michigan, and most recently, the company purchased Murray’s Discount Auto stores in 2005.

Larry Ellis

Today, CSK Auto operates over 1,300 stores under four major brands: Checker Auto Parts, predominantly located in the Southwest, Rocky Mountains, Northern Plain states, and Hawaii; Schuck’s Auto Supply serving the Pacific Northwest and Alaska; California-based Kragen Auto Parts; and Murray’s Discount Auto Stores throughout the Midwest.

Expediting shipments
As the company continues to grow, Ellis’ job gets harder, but nothing, he said, is impossible—not even putting special order items into customers’ hands within a day. He explained that the process of getting the right parts to the right stores at the right time starts with product category analysts (PCAs), who study shipping history for replenishment items or shipping forecasts for new items before placing an order on the company’s E3 replenishment software program. That information is then relayed to any number of manufacturers and/or suppliers (the company works with more than 300). Each order is given a lead time, depending on where it is coming from. “This lets our E3 system know when it can expect to see that order in one of our distribution centers,” said Ellis.

Anaheim, Calif.-based Freight Management, Inc. (FMI) delivers orders from domestic manufacturers and suppliers to CSK Auto’s eight distribution centers. The company has four main distribution centers located in Dixon, Calif.; Phoenix, Ariz.; Mendota Heights, Minn.; and Bellville, Mich.; as well as regional locations in Auburn, Wash.; Aurora, Colo.; Clearfield, Utah; and Commerce, Calif. One of the main advantages for CSK Auto is FMI’s tracking system. “We see all or most of our freight on one system, which is helpful when you need to see where everything is on a daily basis,” said Ellis.

For international inbound freight, CSK Auto relies on Seattle, Wash.-based Expeditors, a global solutions provider with its own tracking system called Expo. In the past, CSK and its vendors controlled shipping of international freight, but the company’s growth of SKUs from off-shore manufacturers and suppliers prompted it to partner with Expeditors, which, in 2004, installed, implemented, and trained CSK Auto employees with a new order management system that allows total order visibility.

“The system electronically transfers the files to Expeditors at the same time we place an order with our vendors,” Ellis said. With Expeditors’ order management system, CSK Auto can see whether an order will come in before or after the expected ship date, verify purchase order quantities and shipment time, and reconcile discrepancies. In addition to providing this visibility, Expeditors also takes an active role at all international supplier locations to manage vendor order compliance.

To ensure accurate orders and prompt delivery, employees from FMI and Expeditors work on site at CSK Auto’s Phoenix headquarters in conjunction with the company’s nine PCAs.

On-time guarantee
Once products reach a distribution center, employees start picking and packing, and their productivity is measured using Red Prairie’s labor management software. When employees key into one of the many computer terminals located throughout the warehouse, the software tells them how many minutes and seconds they have to complete their next work assignment, indicates how well they completed the last one, and gives them an overall performance score for that day. Implemented in 1997, the Red Prairie system has saved CSK Auto about $500,000 in labor costs per year.

“Approximately every two years, Red Prairie models the workflow in our distribution centers because their software has to be engineered specific to each operation. It is real-time data on time and motion,” said Ellis.

Employee productivity is also driven by CSK Auto’s proprietary warehouse management software (WMS), which works in conjunction with Manhattan Slotting Optimization, a system that controls slot optimization for slow-moving merchandise, and Dematic Pick Director, a put-to-light (PTL) system used for fast-moving merchandise. Together, these software and hardware packages ensure each item in the distribution center is in an optimal location.

To distribute products to CSK Auto’s stores, the company has two outbound delivery logistics contracts. Penske handles all of the company’s West Coast business, while J.B. Hunt takes the Detroit/Chicago markets. Between the two, CSK Auto can guarantee delivery within 30 minutes before or after the scheduled delivery time. “If I say we’ll have a truck at your store at 3:00 a.m., it will be there between 2:30 and 3:30. We work very hard with the 3PL companies to achieve that goal,” said Ellis, explaining that Penske has a dispatcher in each of CSK’s West Coast distribution centers, and J.B. Hunt has a dispatcher in the Belleville, Mich. facility. “Am I watching to make sure we’ll get there by 3:00? No. But are they? Yes.”

Any large retailer knows that not all stores can carry all SKUs—especially when you have access to over a million of them. That’s why CSK Auto has a network of 32 depots in itsdistribution network that provide 75% of stores with an additional 65,000 SKUs on a same-day delivery basis. That means if a customer—either a do-it-yourselfer or a commercial auto technician—needs a particular part that is not in stock, CSK places that order into its AS400 system, which dictates from which depot the order will be fulfilled. In most cases, the part arrives within 24 hours.