1. www.logisticsmagazine.ca | JANUARY / FEBRUARY 2010 21
HAVING GOTTEN THE start-up
bugs out of its Guelph, Ont. warehouse,
the TDL Group has turned its attention
to making the facility as lean as possible.
“Lean isn’t just for manufacturing
anymore,” says Ken Hare, director of dis-
tribution at the 155,755-square-foot
facility that handles weekly deliveries to
more than 1,200 Tim Hortons locations
in Central Canada.
“We’ve been on a lean journey for the
last year or so, and it has really stabilized
our operations.”
Hare told visiting supply chain pro-
fessionals recently that the warehouse
which opened early in 2006 has been
transformed by principles like kanban,
kaizan, and 5S. And even bigger process
improvements are expected in 2010.
“I’m a big believer in this initiative,”
he says. “The results are undeniable.”
Allan Young, national operations
manager at the facility, says the first steps
in the company’s lean journey involved
rudimentary process changes, strategic
realignments, and the introduction of
new systems to eliminate obvious waste
and improve the flow of the operation.
“That was up to 2008,” he says. “But
once you’ve picked the low-hanging fruit
and you’re climbing higher into the tree, it
takes more resources to get the same
improvements.You really need someone to
help capture more efficiencies,”said Young.
Enter Mike Rogers, the company’s
newly hired lean expert. He has a back-
ground in manufacturing, where many
lean initiatives and just-in-time efforts
were first modeled.
His goal for next year is to further
refine the company’s management sys-
tems, concentrate on continuous improve-
ments, and optimize flow and pull.
“That’s where we really earn our pay,”
he says.
In fact, the company is so focused
on continuous improvement that there
is evidence of it everywhere one looks –
on the warehouse floor, in common
areas like the lunchroom, and in offices.
On a whiteboard in the board room,
yellow Post-it notes trace all the steps in
a particular procedure that is under the
microscope. Question marks indicate
where there’s waste.
A peer recognition system encour-
ages the 420 workers at the facility
(including about 150 drivers) to nomi-
nate colleagues who have made a contri-
bution to warehouse efficiency. Their
commendation cards are displayed for all
to see and are occasionally pulled at
random for prizes.
There are also several idea boards
where employees can offer opinions on
how processes can be improved. Even
rejected ideas are acknowledged by man-
agement. They don’t simply disappear
into the ether.
The company even asks the visiting
supply chain managers to keep their eyes
open for new efficiencies and report
them at the end of the tour.
No opportunity to make the facility
even leaner is ignored.
The TDL Group has five warehouses
CASE STUDY: Tim Horton’s
Lean doughnuts
TDL Group says keepingTim Hortons franchises properly
stocked takes a commitment to continuous improvements.
BY ALLAN JANSSEN
TDL national operations manager AllanYoung (left) and lean expert Mike
Rogers discuss warehouse strategy at one of the Guelph, Ont. facility’s
ubiquitous white boards.
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2. JANUARY / FEBRUARY 2010 | www.logisticsmagazine.ca22
in Canada (the others are in Kingston,
Ont.; Langley, B.C.; Calgary, Alta.; and
Debert, N.S.). The Guelph facility, which
sits on 42 acres just north of Highway
401, is the largest. It features two 100-foot
storage towers – one kept at ambient
temperatures, the other refrigerated for
frozen goods – serviced by a state-of-the-
art automatic storage and retrieval
system (ASRS).
Pallets ride the ASRS conveyors on
slave boards – to avoid the inconvenience
of having a pallet collapse 100 feet in the
air. The practice has proven useful, but
admittedly leads to some extra handling
because boards must ultimately be
returned to the receiving area.
Even this, though, gives TDL an
opportunity to utilize a kanban system of
visual replenishment cues. The slave
boards are collected in designated spots
and when their height extends above the
green and orange markers on the side of
the bin, and into the red, they’re ready to
be moved.
Visual indicators are everywhere,
including where supplies and tools are
kept. Open spaces indicate that something
is missing, and employees are trained to
notice it, and find out what’s missing,
where it is, and why it’s not in its place.
“At a glance we should always be able
to see what’s going on with the opera-
tion,” says Rogers.
To that end, there are plenty of
boards which serve as focal points for
workers. Pre-shift meetings are held at
the whiteboards, where work assign-
ments are reviewed, and scorecard data is
discussed. In the same area, post-shift
meetings are held to review the day’s
activity, with an eye for finding new
solutions and efficiencies.
They know what they’re looking for.
Most of the material handlers who work
in the warehouse have now taken lean
courses.
“We’ve had a good buy-in from the
front-line employees,” says Rogers.
“There’s still a tendency for them to tell
management what needs to be done and
expect it to be implemented from above.
They forget that the new culture is for
them to do it themselves. They’re empow-
ered to take steps to improve the process.”
They try to do a 5S audit (the
acronym stands for “sort, set, shine, stan-
dardize, and sustain”) in at least one area
of the warehouse every day. All audits are
conducted with a warehouse worker and
a supervisor, and the results are posted
for all to see.
Less than 90% success indicates that
there’s a fundamental problem and the
team establishes an action item to fix it.
All processes in the facility are docu-
mented, some with photographs and
screen captures, and they’re all audited
on a regular basis. Sometimes it is deter-
mined that the prescribed steps are not
being followed – which might mean a
better way has been found to do the same
job. If so, it is properly documented and
becomes the default process.
Well-defined processes are critical,
says Young, when you’re carrying 2,500
SKUs, in quantities that vary from 12-
days worth to two-hours worth.
The fastest-moving products like
cups and lids, are kept in trailers in the
yard and are never really put away.
They’re brought into the staging area as
needed, and treated in a cross-dock fash-
ion. Most of everything else, however,
rides the ASRS into the towers, where
pallets are stored two deep. They’re meas-
ured for size and weight before being put
away, however, and any discrepancies
between the expected measurements and
the actual are manually checked.
Once the product is put away, the
warehouse management system monitors
CASE STUDY: Tim Horton’s
From left, Darrin Noseworthy, Murray Vanduyvenvoorde, and
Bart Warzecha gather around a personnel board.
From left, Shawn Johnson, Buzz Houle, and Matt Columbro
discuss warehouse assignments.
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3. inventory levels. When there’s less than a
pallet left, it triggers the ASRS system to
replenish.
Automation comes in particularly
handy in the freezer area, where picking
in -5°F can be unpleasant. To make up for
the discomfort, warehouse workers get a
dollar an hour premium to work in the
freezer area.
Receiving from the company’s 100
vendors is largely completed during the
12-hour day shift. The picking of about
55,000 pieces a day (sometimes as many
as 72,000 pieces) takes up the correspon-
ding night shift.
Future lean measures will improve
pick times by arranging for product to
arrive at the designated bay at the same
time to minimize staging time.
“Next year we’d like to run the
picking process in more of an assembly
line fashion to achieve greater flow,” says
Rogers. Early testing suggests this will
create greater flow and pull efficiencies in
the warehouse.
The point of the company’s obsession
with lean, says Young, is to create capacity.
Already inventory improvements have
allowed TDL to bring some third-party
storage in house to generate revenue.
“We believe we have huge efficiency
improvements coming next year with the
next lean processes,”he says.“We’re hoping
for a 10-per-cent improvement or better.”
“The trick is to implement new ideas
quickly and prevent backslide with man-
agerial support,” says Rogers. “If you
don’t have that back-up, your improve-
ments could stall.”
Change management has been fairly
straightforward, given that employees
have been part of the process from the
beginning.
“They’ve been part of all the
changes,” he says. “It’s not like manage-
ment’s driving it down. The participants
were people from the floor. They figured
out how to achieve the goals that we set
out for them. You have the acceptance
because they’re part of the discussions.
They drafted the standard work, they
came up with the best methods, they
were part of the experimentation and the
testing.”
Hare says employees welcomed the
opportunity to get involved in problem
solving. “They were helping to eliminate
some of the frustrations they were
experiencing and the problems they were
having.”
Perhaps the bigger adjustment had to
be made by warehouse managers, says
Young.
“I think the biggest change has been
in our leadership team. We thought that
was our job: to solve all the problems that
are out there. And it’s not. Our job is to
work with our people to solve the
problems.” I
www.logisticsmagazine.ca | JANUARY / FEBRUARY 2010 23
Warehouse workers like (from left) Clint Fisher, George Kane, and Ryan Grodde are helping identify areas of improvement.
Automation comes in particularly handy in the
freezer area, where picking in -5°F can be
unpleasant. To make up for the discomfort,
warehouse workers get a dollar an hour
premium to work in the freezer area.
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