Advance Auto Parts 2007 Annual Report Download - page 12

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ADVANCE AUTO PARTS 2007 ANNUAL REPORT
In 2007, we embraced the challenge of improving our parts availability. Using external research as well
as input from our Field Operations Team Members, Store Managers and Parts Pros, we aggressively
worked to improve our merchandise mix by year-end and did so in the following ways:
•Provided better late model and import parts coverage in a number of our key markets.
•Reacted more quickly to store requests for parts by incrementally adding them to inventory.
•Increased our custom mix of parts assortment customized to specific stores.
•Enhanced systems which give our Merchandising Team
more data and greater flexibility to research the parts
needs of our stores.
As part of our availability strategy, we have begun to optimize
our entire supply chain in order to get the right parts closest
to our customers. In addition, we identified ways for our
commercial fleet to act as a store safety net to efficiently move
parts around within our markets and reduce customer wait
time for harder-to-find parts. Redefining these roles will result in a more effective and cost-efficient
supply chain to support our parts availability strategy.
Portions of our parts availability efforts are being funded through tighter management of
existing inventory. Throughout 2007, we began improving inventory productivity through
more targeted product distribution decision-making, effective promotional activity, minimizing
over-ordering capability at the store level, and aggressively returning less productive inventory.
These efforts are resulting in improved inventory productivity rates chain-wide and a more
accurate merchandise mix that addresses our customers’ needs on a store-by-store basis.
We will continue to optimize and innovate within our supply chain in 2008 and lay the foundation
for transformational change in the years ahead. Our ability to create breakthrough in the capability
of our supply chain network, as well as our parts assortment decision support systems, is
paramount to providing industry-leading coverage of the parts our customers need at the right
place and time.
Improved management and flexibility of our supply chain means ongoing improvements to our
availability efforts. This will get our customers out of the waiting areas and into their garages
faster than ever before. Availability is power!
10
RICK ST. PIERRE,
DIVISION MANAGER