Inside Logistics

Bending the space-time continuum

London Drugs shows how to create more time AND space


June 24, 2016
by Ray Tong

Let me take you back to 2012…

Every year the peak season at London Drugs begins in August and September. Vendors begin to produce and ship goods to be sold during our Christmas season.

With the thousands of items London Drugs carries, it takes a lot of effort to receive the goods and get them into the building, making them available for store orders. Historically it has taken time, space and more time.

In our peak season, the inbound operation suffers, with average wait times as long as seven days to book an appointment. At the same time, outbound activity experiences an increase in the number of store orders. With space in the Distribution Service Centre (DSC) a precious resource, there is a constant battle between the two operations for dock door usage and staging room.

2012 was no different. Our In-Bound Department operated to its maximum capacity. The Merchandising group kept in constant contact trying to get their stock in the building:
•    “When can I bring it in?”
•    “How many days out are you booking?”
•    “I need it now!”
•    “It’s a rush Purchase Order!”

Peter Harper, DSC Manager of In-bound Operations, knew there must be a better way. He had to figure out how to get product through the door faster.

Taking a closer look at the process of unloading trucks, sorting items onto separate pallets and completing system work, he uncovered that much of this process is done as soon as the truck hits the door, and can take between four and eight hours for each truck!

This consumes precious time and valuable space. After all, can you imagine road construction in a busy intersection? No one goes anywhere fast!

Peter had an idea: What would happen if the receiving process could take place before inbound merchandise hit the dock door of the DSC? What if most of the receiving work could be performed at the carrier’s work site? We could reduce the time that the stock and the truck sit at the door.

He thought it might work. After receiving the blessing of our Director, Brian Best, Peter had to begin conversations with key contributors to make this work. The parties involved included:
•    IT Department
•    Outside Carrier Companies (“Can I use your
work area for my stuff?”)
•    Merchandising

It took a few months to develop the plan, convince the carrier companies, and invest in the technology, (implementing laptops and connectivity to our host AS400 system from a remote site), but by March 2013 product was being received by London Drugs at our carrier’s site.

Instead of starting the work at our dock door, we place our employee in the carrier’s building to verify, sort and label pallets before the items hit the London Drugs floor.

When the DSC evaluated the process from a “LEAN” standpoint, its value is jaw dropping.

Receiving Appointment Booking:
•    The Best Case scenario reduced from 3 days 50 minutes in 2012 to 1 hour 38 minutes in 2013. Saving: Two days, 23 hours, 12 minutes.
•    The Worst Case scenario reduced from 10 days hours 35 minutes in 2012 to 22 hours 10 minutes in
2013. Saving: Nine days, 13 hours, 25 minutes.

By using the carrier’s floor space, our dock is no longer considered “road construction” but instead a “traffic light”—and one that’s usually green.

Benefits in Time:
•    Booking receiving appointments reduced from an average seven days to two days during the 2013 peak
season;
•    Able to ‘cherry pick’ Hot or Ad items coming in;
•    Stock available for store orders reduced from hours to minutes;
•    Rush POs handled with more ease;
•    Able to receive upstream receipts earlier and more easily;
•    Regular receiving at the DSC benefits with more space and time;
•    Claims handled more quickly (problems don’t land at the London Drugs dock).

Benefits in Space:
•    Increased Dock usage. Docks can be used for Outbound with no negative impacts.
•    Improved space management / less double handling of product with the London Drugs presence at the carrier’s location.
•    DSC staging space not as congested.

Benefits in Morale:
•    Frustration levels of Receiving Staff have gone to zero. There are no emergencies. There is space to perform work. Specific items on the receiving floor are easier to find, with floor space not as crowded.
•    With selected staff working on the carrier’s premises, commuting  time and costs are saved.

Carrier Partnership
•    Carriers are given a standing appointment daily.
•    Trucks are not tied up for four to eight hours at our door. They are  on the road more often, increasing their utilization and saving them money.
•    More business for the Carrier Partners with London Drugs encouraging suppliers to use this NAPS (No Appointment Priority Service) preferred services. One of the benefits the carriers gain is to have a standing appointment with our Receiving department. No need to book appointments. Also, by encouraging our vendors to use this service, the carrier’s business can increase.

The success was immediate and by September 2013 London Drugs was receiving off-site in three carrier terminals, using as many as six of our staff. Today, receipts at the three carrier terminals have increased, and ‘Off-site Receiving’ has branched out to specific vendor locations on occasion.

Ray Tong is Distribution Service Centre Process Engineer with London Drugs.