Staples Advantage grows network

by Carolyn Gruske

WINNIPEG, Manitoba and ST JOHN’S, Newfoundland—For most companies, getting two new DCs up and operating would be the end of a major network expansion project. For Staples Advantage Canada, it’s just the start.

Staples Advantage, the office supply company’s B2B division that counts mid- to large-sized companies, institutions, governments and organizations among its clients, moved out of two small warehouses and into two larger facilities in Manitoba and Newfoundland and Labrador.

Exterior of the new St John's DC (Photo: Staples Advantage)

In St John’s the company had been operating out of 19,000sqf for years. Now it is occupying 43,000sqf of purpose-built space.

In Winnipeg, Staples Advantage moved out of a 12,000sqf DC and into a 60,000sqf building that features nine dock doors (five for receiving and four for outbound).

“They’re both pretty palatial,” said Mississauga, Ontario-based Michael Zahra, president of Staples Advantage Canada.

“Winnipeg is pretty big for us. We’ve built in capacity so we’re not worried about running out of space in a couple of years. We’ve got a forecast out to 2018. Then we’ll have to decide what we’re going to do then.”

Staples Advantage tries to keep the systems and equipment similar in all of its facilities, so the new buildings—both of which are purpose-built long-term leases—feature pick-to-cart with pick-to-voice systems.

According to Zahra, the new DCs were built with environmental efficiency and sustainability in mind.

“We’ve done a lot of things around the environment, so all of these new facilities are ISO 140001 certified. That’s an environmental management system. It’s in all our facilities in Canada. We are also long-time 9001 certified.

“We’ve put in things like compactors to compact corrugate so as we are picking from the vendor’s corrugate box into our box, the vendor’s box becomes empty eventually. It goes out to a special line, it goes out and gets crushed and gets sent out for recycling.

“We also have energy efficient T-5 lighting with occupancy sensors so if there is nobody working in a particular aisle the lights will not be on.

“The boxes we ship our orders in, we’ll take back and re-use. We’ll recycle tons from our customers from these facilities and from the pallets. The inbound as well as the outbound is very green. We’ve won a lot of award from the Canadian Office Products Association and other groups for our green standards.”

Zahra said the DCs hold a wide variety and a deep depth of products.

“Our fill rate is typically around 98 percent. We carry what’s in the catalogue, obviously, but we also carry what we call proprietary SKUs that aren’t in the catalogue but customers have asked us to carry them, so we have them in stock as well.

Getting ready to officially open St John's (Photo: Staples Advantage)

“We can have 8,000SKUs in the catalogue, but we can have between 12,000 and 15,000 SKUs in the warehouse, depending on which warehouse we’re talking about,” he said.

“Winnipeg will have about 9,000SKUs today. We can carry up to 12,000.

“St. John’s between 7,000SKUs to 12,000SKUs.

“At the largest facility, which is here in Mississauga, we can easily have 13,000 to 15,000SKUs because we tend to carry a lot more proprietary SKUs for some of the larger companies.”

Along with proprietary items, and typical office supplies (including pens, toner and paper), Staples Advantage Canada also stocks furniture and facilities products (which could be paper towels, cleaning chemicals, soap, personal protection products, consumable medical supplies and food and drinks).

The assortment of inventory requires an assortment of picking procedures and processes.

“There are primary pick locations which would have each-picks. For example, pens come in a box of twelve from the vendor. But not everybody buys a box of twelve. Instead they buy three. So there’s a location where we’ve got broken-pack to include in orders,” said Zahra.

“There are also bulk locations where if somebody is buying 12 binders and they happen to come in a box of twelve from the vendor, we’ll just put our licence plate and barcode on the vendor’s box of 12 and ship it that way. Or things like toners or large white boards. We’ll call that bulk. So there are each-pick locations and bulk pick locations. And obviously there are back-up stock locations and safety stock locations.

Inside Winnipeg (Photo: Staples Advantage)

“There are all kinds of different classes of products going through the facilities based on whether they’re each picks or bulk picks or whether they’re A, B, C, or D SKUs depending on how quickly they would sell. An A SKU would be something like pens or pencils that we just pump through a lot every day. D items would be things we would sell a little less frequently like microwave ovens or a little fridge that goes under your desk that we sell a lot of but not as frequently.”

The DCs typically operate three shifts, typically running approximately 18 hours per day, although that can increase to a full 24 hours during the company’s busy seasons. The morning shift is inbound, the second shift, which Staples calls mid-bound is putaway, and the third shift does outbound picking, packing and loading operations.

“That could go to 4:00AM and the receiving shift starts at 5:00AM, so it could be a 24 hour operation if it’s a busy time of year,” said Zahra.

Being busy and experiencing booming business is pretty much standard operating practice for Staples Advantage these days. That’s why the company is planning to add other large DCs.

“We are busting at the seams because of growth and we need to do something similar with all our facilities across the country,” said Zahra.

Another view inside Winnipeg (Photo: Staples Advantage)

“In Mississauga we’ll be moving to one brand new facility. It will be huge. It will probably be 500,000sqf and it will consolidate all the existing buildings in Mississauga into one brand new facility.”

Edmonton, which is currently home to a Staples Advantage DC, is also scheduled to get a larger facility.

But beyond just expanding existing capacities, there are also plans in the works to begin consolidating operations between different business divisions.

Besides Staples Advantage Canada (which was formed when the company bought Corporate Express in 2008), Staples Inc also operates the Staples and Bureau en GrosMC retail stores, the consumer website and a business unit devoted to promotional marketing and corporate-branded merchandise.

Currently, the retail stores and consumer website are served by their own DCs, just as Staples Advantage has its own network, but that is going to change in the future.

“Coast-to-coast we’re going to fold the Staples Advantage buildings into the buildings or vice versa, depending on which city we’re talking about. And that’s all going to happen probably starting in the end of 2015,” said Zahra. “In many markets we’ve got side-by-side warehouses from these two different business units in Staples.”

The Mississauga DC project is going to be part of this process, and is likely to be one of the earliest conversions. The new building will likely go up at the end of 2015 or in early 2016, and the entire consolidation project is expected to take approximately three years.