At Parts Town, a billion-dollar distributor of original equipment manufacturer (OEM) parts for commercial kitchens, a new robotic-driven automated distribution system hovers high over the center of the more than 200,000-square-foot distribution center.
This AutoStore robotics system—a computerized track grid supporting more than two dozen robotic carts—automatically fetches parts like oven switches and refrigerator components from thousands of bins stacked 16 bins high beneath the grid and re-routes them to the right worker below fulfilling orders.
The system, which covers about 75% of the company’s customer orders, is critical to Parts Town in multiple ways: making it possible to quickly move its most popular products; meeting its promise of same-day shipping for orders placed by 9 p.m. Eastern Time; getting maximum use of its one main distribution center; easing workloads for personnel; and keeping up with the distributor’s rapid growth spurred in recent years by its aggressive push into digital commerce.
And yet the AutoStore system—as useful, striking and innovative as it is—is but one of the innovative approaches Parts Town has taken since the early 2000s, when it kicked off a steady rise in business and a 30% compound annual growth rate that transformed it from five people and less than $3 million in sales in 2004 into a billion-dollar-plus company with thousands of employees today—and with a workplace culture highly supportive of innovation.
“We’re a distribution company, but we’re really more of a digital technology company that has distribution,” says Emanuela Delgado, who holds the unusual title of senior vice president of the revolution but also acts as Parts Town’s senior vice president of growth innovation.
Now, Parts Town is looking ahead to even faster growth as it finesses and builds on the technology improvements and customer-serving business practices Delgado and her colleagues have fashioned and tweaked in an ongoing effort to innovate. It’s a growth plan that will rely on the coordinated ecosystem of critical technology applications and skilled personnel Parts Town has assembled, including:
- The AutoStore automated distribution system, which integrates with the Exacta warehouse control system to update inventory records;
- The customer-facing ecommerce site PartsTown.com, built on SAP Hybris technology and a homegrown mobile app;
- Rich product imagery, including 360-degree spins of hundreds of thousands of products;
- A “Parts In Town” marketplace developed on software from Mirakl that connects customers with Parts Town partner service companies located nearest a customer’s location and integrates with the PartsTown.com ecommerce site;
- Syspro enterprise resource planning software, which among other things covers the processing of EDI orders;
- Punchout software from PunchOut2Go for connecting PartsTown.com to customers’ procurement/spend management software; and
- Business intelligence software from QLIK that provides customers with personalized dashboards showing data on their spending records, including what they spend on next-day air, to help them better plan their purchases.
The ongoing goal is to continually improve how Parts Town serves its customers through their preferred means and with integrated systems that foster transparency in customer and product data.
Roots as a family business founded 90 years ago
With its roots as a family business started in 1930, Parts Town took on its current name in 1987 and built a reputation as a supplier of OEM (original equipment manufacturer) parts that commercial kitchens in the Chicago metropolitan area needed to keep their ovens, refrigerators and assorted other tools and equipment humming along.
In 2004, the distributor took a turn toward a more technological and innovative strategy under its then-new top executive, Steve Snower, who came from the perch of digitally experienced electronic components distributor Newark Electronics (now part of Avnet Inc.) and continues to lead Parts Town today as CEO and is also known as chief enthusiasm officer.
At the time, Delgado recalls, the commercial kitchen equipment parts industry was lacking business focus on customer service, and ecommerce and digital marketing appeared to be non-existent. So, Parts Town and its new CEO saw an opportunity to go more digital and differentiate. “We saw all the opportunity in an industry that had a lack of customer service-oriented business and virtually no ecommerce,” Delgado says.
“Our digital marketing, digital selling tools and ecommerce really paved the way for us,” says Linda Ramsey, senior vice president of marketing.
Parts Town also provides more than 100 customized microsites for many of its largest customers, and it has launched Parts In Town as an online marketplace linked from PartsTown.com where restaurants and other end customers can purchase parts and services directly from Parts Town’s partner service firms.
The company’s senior management encourages its teams to innovate, take risks and learn to make adjustments—a policy that has paid off multiple times in multiple ways. “We have to constantly change and pivot,” Delgado says.
When Parts Town introduced its mobile app in 2010, it considered it a game-changer in how customers could identify the right parts for the job with online product images. But it kept improving it and added ecommerce transactions two years later. Customers have downloaded the app more than 160,000 times.
And when Parts Town launched 360-degree spin and zoom technology in 2013 in partnership with Snap36 to display its products online, it took a risk in deploying such imaging on its inventory of mostly small parts—not knowing whether customers would find a benefit from a full view of small items. But it found that buyers received crucial information visually, such as by zooming in to view the types of fasteners a part uses and the small print on a specifications label.
The distributor has also built out a site search and navigation system to help customers choose the right part from among the millions of SKUs it features on its ecommerce site. With its information technology team of some 40 developers, it has worked with the open-source Solr site search technology to help customers search for the right by part number, 30-character descriptions, abbreviations, price and product diagrams. On the customized microsites it builds for corporate clients, it works with customers to incorporate their own wording, product numbers and categories into the search system.
Focusing special services
On the Parts In Town marketplace, which is located at PartsTown.com/parts-in-town, the distributor tweaked it to accommodate the special services it offers. To ensure a smooth process when end customers request same-day delivery, for example, it built in functionality to automatically send alerts to suppliers and customers if a supplier does not send an order acknowledgment within a specified time.
Parts Town figures its innovative push extends to its third-party marketplace sellers, helping Parts Town to expand the range of products and services offered to end customers. “We are giving independent local service companies access to an ecommerce solution through Parts In Town,” Ramsey says.
Parts Town is also expanding internationally. It has operations in Germany and the United Kingdom, and it has hired Martin Rhode, a former ecommerce executive at Amazon Business and Hewlett Packard Enterprise Co., to build its international markets.
And to get even more use of its 200,000-square-foot distribution center in the Chicago suburb of Addison, Illinois, Parts Town plans to expand the AutoStore system.
The AutoStore automated distribution system, which Parts Town deployed with systems integrator Bastian Solutions, is designed to help the distributor get maximum use of its distribution center for storing new inventory arriving from suppliers as well as quickly fulfilling orders to customers.
As some robots scurry along the grid to retrieve parts to send customers, other robots hurry along to grab bins of newly arrived products shipped from Parts Town’s suppliers and send them to the right worker placing them in stock for future customer orders.
In each case where a robot retrieves products and re-routes them, a robot finds the right square on the grid where more than a dozen bins may be stacked vertically; the robot then fetches the bin with the right equipment parts.
When a customer order comes through, a robot follows the grid to find the bin in which the item is stored. If that bin is below others, it places the extra bins on top of the grid, retrieves the right bin, and delivers it to the employee filling out the order. Another robot then places the displaced bins back into their original positions.
The system keeps bins that contain the more popular products as close as possible to the top of the grid so robots can more easily retrieve them.
On the Parts In Town marketplace, Parts Town is using marketplace services firms like MarketPush and ChannelAdvisor to onboard more sellers. And to increase services to buyers, it is working with QLIK business intelligence software to provide customers with an online dashboard that shows such information as the number of purchases they’ve made for particular brands and how much they spent on next-day air for expedited shipments. “So, customers can see if one item started to fail, and make better decisions,” Delgado says.
Parts Town is also improving in other areas. It is building new online tools, such as an application for processing online product returns for customers with technology from Narvar Inc. And it is looking into deploying a new system to expedite last-mile deliveries to customer job sites.
And there is more to come. Delgado says the distributor is happy with its Hybris ecommerce technology from SAP SE integrated with the Syspro ERP system. Still, it is considering adding new yet-to-be-named features in its customer-facing interfaces, relying heavily on technology backed by artificial intelligence and artificial intelligence and application programming interfaces (APIs).
The new features, Delgado says, will support Parts Town’s goal of developing new ways to connect with customers as it pushes ahead with its growth plans based on an ever-improving digital commerce system.
“We’re looking to be a $3 billion company within a handful of years,” she says.
It expects to get there by continuing to invest in growth and innovation, “primarily in digital,” Delgado says, adding, “The industry is evolving, and we want to be on the front end of that evolution.”
With Parts Town’s record, there’s no apparent reason to doubt that plan.
This article also appears with more graphics in a special report from Digital Commerce 360 on B2B technology roadmaps and innovative strategies.
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