CANADIAN SHIPPER: The Canadian food industry is becoming a highly competitive one. How is Conestoga adapting its strategy and service offerings to provide its customers with a competitive edge?
Laurin: With the entry of Target into the Canadian market last year and Loblaw’s purchase of Shoppers Drug Mart, the Canadian retail food market is more competitive than ever. As a result, our customers are looking at every opportunity to find efficiencies and save money. Recently, we’ve put a lot of work into integrating with our customers’ computer systems so that any changes made to our system are automatically updated. This includes not only order shipment and product receipts but order and product hold, updating case dimension and real time inventory levels. Ensuring that our customers know the exact status of their inventory at all times gives them a sales advantage as well as more accurate demand planning and production scheduling information. Increased energy and labour costs are particularly difficult to control but investments in new equipment and technologies are paying off. For example, we are in the process of replacing all of our lights with high efficiency LED fixtures that are long lasting, energy efficient and produce far less heat, which is particularly important in the cold storage environment.
CANADIAN SHIPPER: You offer delivery service for all of Canada through Conestoga Franchise Services. Can you discuss this division of Conestoga and its services and capabilities?
Laurin: Conestoga Franchise Services operates a fleet of trucks and distributes to over 350 franchise stores across Canada. We act as the wholesaler for franchise operators and can handle all aspects of product flow from purchasing inventory to storage, picking, delivery and receivable collection. Our system is highly flexible and can be customized to handle any Canadian distribution requirement.
CANADIAN SHIPPER: Good supply chain practices require a robust IT infrastructure. What does Conestoga have to offer in terms of inventory management and how does it keep its IT infrastructure up to date?
Laurin: We are continually investing in our IT infrastructure. We recently completed a hardware upgrade to all of our database servers and have now fully virtualized our back end systems. This has made our systems more robust and has allowed us to cluster data across our network so we can back up our Kitchener warehouse to our Mississauga facility in real time. Virtualization of servers has the added benefit of reducing our total number of servers from over 30 to only six. This has dramatically reduced the potential points of failure, energy consumption and air conditioning required to support our IT systems. We are also upgrading our wireless and network infrastructure to improve coverage, speed and security. We have recently added wireless HD cameras to our stacker cranes so our operators can now troubleshoot most problems from their computer without having to enter the building.
CANADIAN SHIPPER: You offer a fully automated solution for frozen storage. What advantage does this provide your customers?
Laurin: Automation is well suited to the cold storage environment. Our newest building, completed last year, is 125 feet tall and has three fully automated stacker cranes. These buildings provide a much denser level of storage, reduce wasted aisle space and use less land than a conventional 40 foot tall building. Food safety and inventory control are increasingly important and our clients appreciate the additional security that these buildings provide. Product is stored and tracked automatically by robots and damages and misplaced pallets are virtually eliminated.
Technology improvements over the last several years have helped simplify the construction and installation of automated systems but they are still notoriously difficult to get right on the first attempt and are often plagued with software issues or changes to customer requirements. Automated buildings are much more popular in the high labour and land cost areas of Europe than they are in the North American market but we are starting to see some movement towards more automation in the US market.