Rite Aid, with $25.5 billion in revenue and a 2014 EBITDA turnaround to $1.325 billion or 5.4% of revenue, is a leading drugstore chain with a strong national footprint of 4,600 stores and 30 walk-in clinics in 31 states. Rite Aid’s growth strategy includes acquisitions and partnerships, investing in their store base with a goal to complete an additional 1,600 stores by the end of fiscal year 2015, and other initiatives to drive operational efficiencies and ensure the highest levels of service for customers.
Before working with Conveyco Technologies, Rite Aid’s strategic plan included capitalizing on store growth and relocation to develop underpenetrated markets and enter markets with positive demographics. As a result, the Supply Chain leadership team was reevaluating the location and quality of its distribution centers.
Key objectives were to minimize capital expenditure on new equipment by leveraging existing infrastructure and repurposing existing conveyor systems, modernize operations and increase overall facility storage capacity, and design a project implementation plan with minimal negative impact on production or disruption of ongoing operations.
Conveyco Technologies’ critical challenge in this project was the requirement to streamline and upgrade existing facilities without disruption to continuing operations, since the facility was tasked with absorbing additional volume as other facilities in the network were closed.
During the Discovery phase, Conveyco engineers traveled to multiple sites to determine which existing assets could be integrated into the overall project plan. These assets were entered into an electronic database of every conveyor bed and storage medium.
In the Analysis phase, a “future state” concept was developed with a goal to maximize reuse of conveyor and storage equipment from the legacy operations. Various Rite Aid groups, including Inventory, Transportation, and Operations, provided feedback to determine which layouts would accomplish the project’s objectives with the least overall risk.
In the Design phase, Conveyco proposed a “phased” project approach that minimized disruption to ongoing operations. Another benefit of this approach was dispersing overall capital investment across several fiscal years.
During the Implementation phase, the project team met frequently to align schedules and ensure operational continuity. This interactive dialogue among internal and external groups resulted in an on-time and safe installation with minimal disruption to ongoing operations.
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