Federal-Mogul Corp. (USA) has moved quickly to fill a gaping hole in its inventory and distribution network, created when a March 5 fire destroyed its distribution center in Smithville, Tennessee.
The Smithville DC was 244,000 square feet and had been Federal-Mogul's primary DC for Moog and TRW brand aftermarket undercar parts.
Reportedly started by a worker seeking the night off, the fire quickly blazed out of control and eventually destroyed the $100 million facility, including approximately $80 million of inventory inside.
Federal-Mogul has now signed a 20-month lease for a dedicated 500,000 square foot distribution center in Smyrna, Tennessee, southwest of Nashville.
The nearly-new $30 million building, in Smyrna's Southpark Distribution Center, is one of three 500,000 square foot dedicated distribution centers built there since 1999. This particular building had been home to Graybar Electric Co., an industrial product distributor. Graybar, occupying 300,000 square feet in the building, laid off most of its Smyrna employees by late 2002, amidst the economic downturn. The two other nearby 500,000 square foot distribution centers are leased by Nissan Service Parts and Logisco.
The larger-than-needed space will help Federal-Mogul restock more quickly and begin operating sooner than if it were trying to do it all in a smaller space.
"Remember, this is not 'right-sizing,' this is a crash program to get a distribution center up and stocked and running as fast as possible," one disaster recovery expert told eBearing. "Even if they don't use it later, having extra space available to maneuver is a big short-term advantage. Time is money, we know, but in distribution, time is everything."
The displaced Smithville DC's full-time employees are being offered the opportunity to hold onto their jobs by commuting to work at Smyrna, a 70-mile drive. F-M is reportedly hiring in Smyrna, assuming some employees will decline.
During the Smyrna DC setup, F-M is running two twelve-hour shifts rather than the three eight-hour shifts it normally runs.
Federal-Mogul has not revealed if it plans to rebuild a DC in or near Smithville.
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