J.C. Penney Company, USA

J.C. Penney Company, Inc. (JCPenney) is one of America’s leading retailers, operating 1,093 department stores throughout the United States and Puerto Rico, as well as one of the largest apparel and home furnishing sites on the Internet, jcp.com, and the nation’s largest general merchandise catalog business.

JCPenney offers a wide array of national, private and exclusive brands which reflect the company’s commitment to providing customers with style and quality at a smart price. The company’s private brand retailing accounts for nearly 50 percent of its merchandise mix. 

Headquartered in Plano, Texas, JCPenney has 155,000 associates, with 2007 revenues of $19.9 billion. The company has positioned itself to be the preferred shopping choice of Middle America.

The challenge: high throughput and completed within six months

JCPenney had two criteria for the Lathrop DC. One, high throughput, capable of handling at least 150,000 - 200,000 cartons per day over two shifts; and two, it had to be built fast, within six months.  

The solution: project on a fast track

Dematic was brought in to design and build out the entire material handling facility. Of JCPenney’s 18 existing distribution centers at the time, two of them were running almost exclusively on Dematic equipment, so it was not unusual for JCPenney to bring in Dematic to engineer and build this one as well. 

Dematic was awarded the contract in February, 2007, JCPenney secured the lease on Lathrop in March, and the 436,000 square-foot DC went live in July. In essence, Lathrop was an existing structure that was completely built out. Some additional construction had to be done to accommodate additional shipping capability. To say the least, it was a project on a fast track.  

The results

JCPenney’s new Lathrop facility is a marvel of logistics ingenuity. The system delivers a product accuracy rate of 99.9 percent. Operating at a 20 percent reduction in speed to move the same volume of throughput as compared to conventional systems means less wear on the system, less repairs, gentle package handling, and a longer operational life. It all boils down to a reduced overall cost of ownership. 

"This DC is performing exceptionally well. It is also very quiet, much quieter than any other sortation system I have used before. We have had the system in place now for 15 months and it has had no difficulties. The system helps meet our business objectives serving our needs into the future."

- Kevin Williams, Facility Manager at JC Penney’s Lathrop RLC


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