Advance Auto Parts is restructuring its supply chain system in an effort to bounce back from lackluster sales, reports The Wall Street Journal.
To offer a wide array of parts that can get where they need to be quickly, Advance is transitioning to a system that will have goods delivered from distribution centers, to regional market hubs, and finally to traditional stores.
This decision came from studying Advance’s competitors, and finding they were able to deliver parts more efficiently using similar models.
“This market-hub node helps solve for that,” said Chief Executive Shane O’Kelly. “What it introduces is about 85,000 parts that are available to a store, and hence a customer, inside of the same day.”
With 19 market hubs currently in the U.S., Advance plans to expand that number by 10 this year, and to have a total of 60 hubs by mid-2027.
This transition has also involved the consolidation of warehouses and store closures. Since O’Kelly started with Advance in 2023, the company has closed 10 of 38 U.S. distribution centers, and will close another 12 this year. Advance plans to have a total of 12 warehouses nationwide by the end of 2026.
Additionally, about 500 corporate stores and 200 independently owned locations are expected to close by the end of March.
Rather than stock stores based on what has sold in the past, Advance is restructuring its assortment-planning process to prioritize items likely to be in demand in a particular region. If a given area has a proportionally large number of truck owners, a local Advance store will likely have more parts specific to trucks.
