O'Reilly Auto Parts 2005 Annual Report Download - page 16

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95 96 97 98 99 00 01 02 03 04 05
15%
12%
9%
6%
0%
3%
comparable store sales
14
O’REILLY AUTOMOTIVE 2005 ANNUAL REPORT
Our dual market strategy and exceptional customer
service are supported by the most extensive and responsive
distribution system in the industry. Our success in
serving both the professional installer and DIY markets is
based upon our ability to provide an extremely broad range
of parts to our customers. On average, our stores stock
21,000 stock keeping units (SKUs) with access to more than
100,000 SKUs from one of our 13 distribution centers. Our
stores are replenished five days a week and our customers
depend on our ability to deliver hard-to-find parts the
same-day or overnight. This industry-leading parts
availability has proven to be one of our core competencies
and has been a key factor in developing customer loyalty.
Our industry-leading best practices in distribution and
inventory management drive our exceptional customer
service. Each of our stores is linked to our global inventory
management system, allowing them access to order from
the inventory of other stores or any of our 13 distribution
centers. We also customize the merchandise assortment we
stock at each store and distribution center based upon
product demand and vehicle registration in their market
area. We are continuing to implement new initiatives to
reduce costs and improve efficiency in our supply chain,
including the use of slotting software that allows us to
monitor the flow of products in and out of each of our
distribution centers. This has allowed us to maximize shelf
space in the distribution centers and position products with
the highest demand in the most accessible areas. We are
also continuing to implement “hands free/eyes free” voice
directed picking systems in our distribution centers. These
systems eliminate the need for paper picking documents
and improve the efficiency and accuracy of this task.
2005 was a very exciting year for us in the area of
distribution and 2006 promises to be the same. We saw
significant expansion in our geographic footprint in 2005
with the Midwest acquisition and growth in the Southeast
markets supported by a new distribution center opened in
Atlanta, Georgia in March 2005. The 350,000 square foot
distribution center in Atlanta and the Midwest distribution
centers in St. Paul, Minnesota and Billings, Montana were
added to our existing network to support our retail stores
in 25 states. We will continue our expansion in 2006 with
the addition of a 405,000 square foot distribution facility
in Indianapolis, Indiana that will have the capability of
serving up to 250 stores. We anticipate the opening of 170
to 175 new stores in 2006, primarily in the geographic areas
supported by the recent distribution center additions. We
have never been more confident in our ability to support
Sales for existing stores open at least one year rose 7.5% in 2005 over
2004, making O’Reilly one of the leaders in the industry.
Competitive Advantage
Inventory Management & Distribution Systems