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LCBO’s Durham Retail Service Centre. February 2014

Durham Reno Underway

Major retrofit project approved for Durham Retail Service Centre.

(FEBRUARY 2014)—LCBO’s Board of Directors recently approved a major retrofit project that will upgrade 12 of the manual palletization lanes at the Durham Retail Service Centre, resulting in significant gains in efficiency, security and enhanced health and safety.

The new lanes will use a second-generation automated mechanical palletization lane system, which consists of two stacked lanes connected to the automated palletization lane.

The re-engineering of the Durham sortation palletization deck has been underway since 2011, which has included the development and testing of a random case algorithm and modifications to the case handling system. A prototype received extensive testing in lanes 1, 2, and 3, which resulted in many refinements and the creation of a second system that will be used in the upgrade.

While the existing palletization lanes have the capacity to manually palletize mixed-sized cases at a rate of 250 cases (per person) per hour, the automated system can palletize up to 1,200 cases an hour, and also deliver benefits in terms of load stability, pallet content tracking and throughput efficiency.

The project will cost $7.8 million but will deliver an annual savings of $5.1 million.

The cost savings and benefits come from multiple areas, including breakage reduction, lower lost-time injuries, improved traceability of outbound product, the creation of a more stable and denser pallet of goods for transport, and decreased labour costs. There is no anticipated reduction to full-time staff at the facility as mostly temp agency employees would be affected.

“We’re looking at a 1.9 year payback on the investment, or 542 per cent,” explains George Soleas, executive vice-president. “This investment will not only yield significant cost savings to the organization, but make the facility more efficient to operate as well as make the working environment even safer for our employees with more stable pallets.”

Two lanes will be retrofitted at a time, with eight scheduled to be completed in 2014/15 and the other four in 2015/16. The phased approach will minimize the risk of any service disruption to stores.

“This project has been in the works for some time and I’m pleased to see it move to the implementation stage,” George says. “We have used a lot of in-house expertise to create this proprietary system and the team should be extremely proud of their efforts, which will save the organization millions of dollars in the coming years and modernize one of LCBO’s most important logistics facilities.”