TROY, Mich.—Dayco L.L.C. plans to consolidate its U.S. distribution facilities into a new, larger center in the Memphis, Tenn., area.
The move will allow the firm to expand its customer service capabilities and implement new supply chain systems at the site, which will feature state-of-the-art distribution and logistics technology.
About 200 are expected to be employed at the new distribution center.
A leading engine products and drive systems producer for the automotive, industrial and aftermarket markets, the company is closing in on selection of a complex in Memphis to serve as its central distribution facility, a Dayco spokesman said.
It has evaluated several sites in the Memphis area, he said. The spokesman noted the firm has outgrown its present distribution facilities and moving to one location will improve the operation.
Space needed to expand Dayco's warehouses in order to handle additional growth presently is not available, according to Dayco. The company's U.S. distribution centers are located in Fayetteville, N.C.; Red Springs, N.C.; and Sparks, Nev.
The number of employees impacted when those sites are closed has not been released.
But the spokesman said the company will offer exiting employees outplacement services and severance wages, which are dependent on each employee's number of years of service. He said that is consistent with Dayco's past practices.
Because of continued growth in demand for the company's products and increased product complexity over the past several years, the firm decided to make the capital investment “in order to deliver increased value to our customers,” according to Ed Rammel, president of the North American and Australian aftermarket for the firm.
Dayco's success in the automotive aftermarket “is enabled by a full range of great technology and products, intelligence on applications, great people and especially being able to provide the right products to our customers at the right time, always,” said Dayco CEO John Bohenick.
He said the significant investment Dayco will make in its new center “will increase our ability to make our customers even more successful.”
Spanning about 400,000 square feet, the new center will feature numerous advantages, including a new Tier 1 warehouse management system, the company said.
Once the new center is up and running, it will improve shipping times while increasing the company's fill rates, it said.
Because Memphis is a major transportation hub, the new center will be in close proximity to key shipping companies, Dayco said.
“We anticipate initial product shipments by the third quarter of 2015, with the goal of shipping all products from the new location by the end of the calendar year,” the spokesman said.
Dayco's new center will be used to distribute all of Dayco's products in North America, he said, including belts, tensioners, pulleys, harmonic balancers, hose, hydraulics components and equipment, and all related goods.