Distribution Center Processes at Best-Buy

In late 2010, merchandise was mainly shipped to U.S. Best Buy stores from one of six distribution centers located in California, Georgia, Minnesota, Ohio, Oklahoma and Virginia. U.S. Best Buy stores also operated two dedicated distribution centers for entertainment software in Minnesota and Indiana. The majority of U.S. Best Buy stores' merchandise, except for major appliances and largescreen televisions, was shipped directly from manufacturers to a distribution center. Major appliances and largescreen televisions were shipped to satellite warehouses in each major market. U.S. Best Buy stores were dependent upon the distribution centers for inventory storage and shipment of most merchandise. However, in order to meet release dates for selected products and to improve inventory management, certain merchandise was shipped directly to the stores from manufacturers and distributors. On average, U.S. Best Buy stores received product shipments two or three times a week depending on sales volume.

Discussion

• Why do you think - Best Buy did not want manufacturersto send large appliances (e.g, large screen TVs) directly to their distribution centers (DCs)? Comment on some of the challenges that may be involved with DC processes (accumulation/sorting/allocation/assortment) w.r.t. to large appliances.