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Anderson-DuBose 'One-Stop' Shop for 500 McDonald’s
LORDSTOWN, Ohio -- For patrons of McDonald’s restaurants from Cleveland to Pittsburgh, the 180,000-square-foot distribution operation at Ohio Commerce Center here is key to every visit, from the pickles on your Big Mac to the 75-gallon tanks that dispense soft drinks.
Operating just over a year, the headquarters and distribution center of the Anderson-DuBose Co.’s serves as a “one-stop shop” for nearly 500 McDonald’s and 70 Chipotle Mexican Grill restaurants, allowing them to order all of their products, whether food or accoutrements – including the Happy Meal toys for McDonald’s, says Warren Anderson, president and general manager of the operation, which grosses $450 million annually.
“It really makes it easier for the restaurant, where rather than having to order different products from different vendors, they can order essentially most all of their food products through one vendor,” he says.
Anderson-DuBose, which owns the distribution rights for the markets between Cleveland and Pittsburgh, recently completed the purchase of the greater Syracuse, N.Y., market, which includes Rochester and Buffalo. The firm is regularly ranked among the largest minority-owned enterprises in the country. Last year it placed ninth on Black Enterprise magazine's list of the nation's 100 largest black-owned businesses.
Previously headquartered in Solon, Anderson-DuBose sought a new site to replace two 30-year-old warehouses. “We were out of capacity in both Cleveland and Pittsburgh and so we were looking for a way to consolidate the two buildings,” he says. That search resulted in choosing Lordstown, which he describes as “a great centroid factor” between the two markets. Ground was broken in August 2011 on the building that consolidates the two warehouses and serves as the headquarters and where 180 are employed.
The warehouse, near the Lordstown interchange of the Ohio Turnpike, has “excellent road access” to both Cleveland and Pittsburgh, Anderson says, as well as rail access to supply one of the central items on the McDonald’s menu.
The operation begins in customer service, where orders are taken from restaurants electronically, by phone or fax. “This creates a database of what we need to order,” he explains.
“It’s just everything they need on a day-to-day basis to go ahead and operate,” said Samantha Schlesinger, ROP – or Restaurant Order Proposal – planner. Schlesinger, who started working with McDonald’s at age 16 when the stores in the Mahoning Valley were operated by Covelli Enterprises and who eventually became a manager here and elsewhere, has been with Anderson-Dubose since March.
“ROP is the process that McDonald’s goes through to go ahead and place their orders,” she says. The process is based on inventory control software that generates future orders and recommended shipments for the locations. At each store a specific manager is responsible for inventory, she says, and the customer service center receives between 100 and 200 orders daily.
McDonald’s employees are training on a new system for the stores, which projects how a product or promotion might do based on the past three years “to help minimize any losses in the locations,” she says.
Each year, the distribution center takes in some 11 million crates of food and other products. “We’ll turn over our inventory every four days,” Anderson says.
The warehouse is “a state-of-the-art building for a couple of reasons,” Anderson says. One is the height of the building -- with 36-foot high ceilings pallets can be stacked five high. “Most places you can only go about three high,” he says.
Warehouse manager Michael Genova also characterizes the building as state-of-the-art. At Anderson-Dubose a little more than 18 months, he started working in distribution in 1994 at the area Kmart Distribution Center, and then worked for Giant Eagle in Cleveland, Tamarkin Co. in Austintown and Frito Lay in Cranberry Township, Pa. before coming here.
“It truly is a flow-through building,” Genova observes. “It was built so that we can receive product on one side of the building and ship out on the other side, whereas a lot of the other facilities that are out there, they have a challenge of utilizing the same doors for inbound and outbound.”
Dry goods are kept in one section, produce and dairy in a cooler area and frozen goods in a 20,000-square-foot freezer kept at minus 10 degrees. “It’s a big freezer and it’s very cold,” Anderson remarks.
The environment is “pretty fast-paced” year round, Genova says. There is some slowdown in the winter. After that volume rebounds until Memorial Day, then continues through summer. Summer volume tends to be 20% higher. “So when the kids get out of school, you can rest assured that the Happy Meals are going to be going pretty fast and that a lot of great promotions that McDonald’s puts forward happens and that drives volume,” he continues.
Supply is the primary challenge to the operation, Genova says. The warehouse orders products from 70 or so vendors. “You have challenges when you’re coming across the United States to get product with a short shelf life into the building and then ship it out to meet the demands of the customer,” he remarks.
Then there’s the issue of fluctuating staffing. “When you’re working in the freezer, minus 10 degrees or minus 5 degrees, it’s not necessarily what everyone is looking for,” he allows.
One frozen product inventoried is among the most popular items on the McDonald’s menu, the french fries. Fries and hash browns arrive by rail car to two bays from the tractor-trailer docks. The company usually gets four rail car deliveries each week, about 45,000 cases per rail car. “That takes four truckloads off the road,” he says. “It really is an initiative of ours for sustainability and being green.”
The distribution center has its own maintenance and wash bays for trucks as well as a system for taking ice off the roofs of trailers before they get on the turnpike. It also receives fuel a couple of times each week for the fuel depot it operates and has backup generators.
“We have a lot of redundancies,” Anderson says. The goal is “whatever it takes” to ensure that the stores are supplied.
“We have a challenging customer,” says transportation manager Terrance Love, who started working for Anderson-Dubose in 2007 when it acquired the company he worked for; he has been with the operation for 28 years overall. “On-time percentage,” he says, “we’ve got to be within a 30-minute window.” He has a crew of 60 drivers and an administrative staff of seven.
Anderson-DuBose delivers six days each week, 34 trucks going out each day, Genova said.
As they moved into the new building, Love says, staffing and recruiting from the area was the main challenge. The company lost several drivers who didn’t want to transfer because of the longer commute.
Anderson acknowledges turnover in the operation has been a challenge, particularly drivers.
“It’s demanding work. Some of our associate hires have underestimated the rigors of the job,” he says, but that appears to be settling down. Warehouse workers often have to distinguish boxes and descriptions that look very similar. Drivers have to be able to navigate trailers in the often confined spaces of McDonald’s parking lots, which some drivers find challenging.
“There’s more competition [for drivers] than we anticipated when we first were planning on building this plant,” he allows, partly because of the growing oil and gas industry in the region.
The operation in Lordstown is positioned for growth, Anderson says. Although there are no plans to expand the warehouse, the company purchased enough land to “grow extensively,” he points out.
“The thing that makes me excited about being a McDonald’s supplier is they’re a world-class company and they’re always setting the bar higher so they have new product introductions all the time,” Anderson remarks.
While McDonald’s faces competition from rivals that include other fast-food chains and other modestly upscale operations, the company understands “the value proposition,” Anderson maintains. “There’s no doubt in my mind that they’re going to grow and they have very aggressive growth plans, and those growth plans are going to work no matter what the competition is doing because they really have the forward-thinking ability to anticipate customer needs."
Copyright 2013 The Business Journal, Youngstown, Ohio.
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