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Better & Better

Logistics Division improves efficiency in Ottawa, Durham and London.

(FEBRUARY 2013)—While customers don’t often think about the work it takes behind the scenes to bring the product from the supplier and put it on the shelf, for a retailer that prides itself on operational efficiency ‐ as the LCBO does ‐ it’s always a top priority.

Our Logistics Division, under the leadership of George Soleas, who was recently promoted to Executive Vice-President, has a big year ahead. That’s because a number of important initiatives to improve warehouse operations are scheduled for completion. These initiatives will improve the organization’s efficiency, profitability, customer service and, ultimately, the LCBO’s return to the government and people of Ontario.

“I am not known to exaggerate, so when I say it’s a new era for our Logistics group, you better believe it,” says George. “These are exciting times and I look forward to seeing the fruits of all our efforts in the coming year, and many years after that.”

It’s relatively easy to build brand new warehouse space to alleviate the workload at existing facilities. But this is a costly choice, especially for an organization the size of LCBO, which has five distribution facilities serving a network of more than 1,000 outlets in Ontario, including LCBO stores, Agency stores, and The Beer Store.

Optimizing the space, capacity and productivity at existing retail service centres is a far more efficient option and helps reduce operating costs. Here are some of the highlights of the upcoming year:

Ottawa – A third-party storage facility that was used primarily for overflow inventory has been eliminated and the space is being integrated with the main warehouse. This reconfiguration will increase storage capacity by about 144,000 cases, or 40 per cent. At the same time, we can split the shipping and receiving functions at the facility, creating five new receiving docks. In addition, Ottawa will see the installation of ergonomic technology and automation to improve traffic flow inside the warehouse, increase pick efficiency and productivity, improve throughput capacity and enhance the facility’s safety conditions. The addition of midnight receiving has also increased dock availability and reduced congestion.

London – A great deal of work has been done already in London, where the addition of 10 manual palletization lanes nearly doubled the centre’s processing capacity. This year, the focus is on the inbound area of the facility, with the installation of two destuffing platforms coupled to an automatic palletizer. Where a 40-foot container would be emptied at a rate of 350 cases per hour, it will be done at 1,200 cases/hour once the new technology is in place. Products from the destuffer are automatically conveyed, auto-palletized, and automatically strapped for warehousing, which lowers the risk of product breakage and employee injuries.

Durham – The auto-palletization project will reach new heights as the system will be rolled out to 16 of the 28 manual palletization stations. The benefits include fewer injuries, significant savings in operating costs, the creation of a more stable and denser pallet, better traceability of outbound product, and reduced breakage costs. In addition, it was recently announced that, in anticipation of the sale and redevelopment of the head office property, the VINTAGES release operation will be consolidated with Durham. Durham’s infrastructure and systems are being modified in anticipation of transitioning the second floor Toronto Warehouse operation there this summer.

Finally, health and safety remains a priority across the organization, but it’s an area Logistics can be particularly proud. In our warehouses, we have reduced lost-time injuries by 65 per cent over the last three years.

“Safety is part of our mindset and the new technologies we implement will only keep our staff safer,” adds George. “No case is lifted, no button is pushed, no step is taken by any of our staff without thinking about safety first.”

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