J.C. Penney To Streamline Supply Chain

After halting its Big Book in 2009, and then getting out of mail order catalogs altogether this year, J.C. Penney plans to streamline its supply chain operations.

The general merchant has made significant progress in transforming its company to support the business at an enterprise-wide level, rather than managing the business by shopping channel, such as catalog, Website, and stores, explains spokesperson Tim Lyons.

In the next two years, “we will be creating our next-generation supply chain network to support the current and future needs of our stores and jcp.com customers,” Lyons says.

As part of the restructuring process, Lyons says the company will move from 18 supply chain locations to 13 – this involves reconfiguring the overall network by expanding seven facilities and closing five.

Four distribution centers currently support jcp.com customers and 13 “store support centers” (SSCs) that distribute merchandise to stores, Lyons says, adding some of these coexist in the same buildings. “We also have eight locations that manage furniture distribution, some for stores and some for jcp.com.”

Under the new supply chain, J.C. Penney will have three facilities supporting that support jcp.com, 11 SSCs and three enterprise furniture DCs — again, often with different operations being housed in the same building to achieve the enhanced flexibility.

What’s more, J.C. Penney operates six logistics hubs that serve as the entry points for direct-imported goods and other inbound shipments. These will remain unchanged as they service other DCs.

Lyons says the company closed a call center in Grand Rapids, MI on April 2, which employed about 370 workers. Another call center in Albuquerque, NM, with the same number of employees, is scheduled to close on June 2.

The company in March closed a fabricating operation facility in Sacramento. About 350 employees were affected by the closure. Those operations were moved to a facility in Statesville, NC.

J. C. Penney plans to close its outlet store business by the end of 2012, and it will open about 70 stores by 2014.

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