Canadian experts take logistics execs into the world of automated public, private warehousing.
It was as far as you could go south - to hear our neighbors from the north.
New Orleans hosted the International Association for Cold Storage Construction (IACSC) annual conference and expo last November. The meeting featured two in-depth case studies about automated material handling systems in cold storage operations.
Delivering the keynote address was Bruce Dimmel, vice president of distribution for TDL Group Corp., part of Canada’s popular Tim Hortons restaurant chain. The other presentation featured Larry Laurin, president of public refrigerated warehouse operator Conestoga Cold Storage, based in Kitchener, Ontario. Laurin also is current chairman of the International Association of Refrigerated Warehouses.
Both executives spoke with Refrigerated & Frozen Foods.
“Automation has given us the high (inventory) accuracy levels we were looking for within the distribution center,” says Dimmel. “It also has resulted in improved productivity (compared to manual alternatives) and it has reduced our labor costs.”
Adds Laurin, “The main considerations with automation are [inventory] turns and the ability to start, operate and reliably maintain a very complicated system. That said, we have found that automation works well in fast-moving locations where you have costly real estate and high wages. Automation is more flexible than many people believe.”
Dollars to donuts
Tim Hortons Inc., Oakville, Ontario, says it is North America’s fourth largest publicly traded quick service restaurant chain (based on market capitalization) and the largest in Canada. As of last September, Tim Hortons had 3,527 systemwide restaurants, including 2,971 in Canada and 556 in the United States.
In 2009, Tim Hortons’ supply chain program involved as many as 17 Canadian and U.S. warehouses (private and third-party distributors) including five Canadian sites managed by Tim Hortons Distribution (TDL). Dimmel said TDL and third-party warehouses serve 3,527 stores and were on pace in 2009 to handle 49 million cases of product including dry goods (33 million), refrigerated and frozen products.
Of course this growing restaurant chain had a different supply chain network several years ago. For starters, it previously used a third-party to handle all refrigerated and frozen foods distributed to Ontario-area stores. Dimmel notes that it was as early as 2003 when officials first considered building a highly automated distribution center in Guelph, Ontario.
“We were considering a warehouse and – at the time – we had a 90-acre property,” he says. “Because an automated structure has a smaller footprint, we were able to sell off 48 acres of land with a high level of return.
“Meanwhile, we liked the reduced need for material handling labor while automation enabled us to handle reduced order lead times.”
With that, Dimmel says TDL invested more than C$50 million to build and equip the 8.8 million-cubic-foot Guelph facility between June 2004 and November 2005. The facility featured a 101-foot high freezer tower, cooler and refrigerated dock; in addition to an ambient goods tower and shipping-receiving dock.
Four years later, Guelph alone was handling about 22 million cases each year with 400,000 units received per week and 400,000 units shipped per week. On average, the operation ships 57,000 units daily in 93 truckloads that service between 300 and 320 stores. The warehouse handles as many as 2,500 SKUs, Dimmel said.
Dimmel told convention attendees that there were multiple benefits to automation. They include …