LCBO upgrades supply chain software

Supply chain management can be a neglected piece of software for companies that specialize in distribution. While being busy is a nice problem to have, having hitches in your supply chain or slowdowns can be a serious factor in profitability.
So, when Specialty Services, which deals in private ordering for the Liquor Control Board of Ontario, outgrew its homegrown infrastructure, it put the call out to developers for a solution.
Hugh Kelly, senior vice-president of information technology for LCBO, says, “the current Specialty Services private ordering system has been around for a long time and it was a homegrown system when it was written.” It was “cobbled together to get through Y2K, and it’s one of those things that was on a list to be done, but never high enough up the list to get done.”
Specialty Services is the department you’d call if you need a product not available in LCBO locations, or even in Canada. If you want a private order of that hard to find vodka or gin, you call them.
Kelly says it accounts for $200 million in sales annually, the smallest part of the LCBO’s $4.5-billion operation — not anything to laugh at, but low on the totem pole for upgrades. It took a real need for automation combined with changing credit card policies to really push upgrading to the fore.
According to Kelly, “the current system is very manual, very labour-intensive and very paper-intensive, and obviously, in this day and age, that’s just not the way to do business.”
Faced with an overhaul of the entire operation, the LCBO, like many businesses, let a range of companies bid for the service. To win, cost, implementation time and support from the company were considered. “We got six responses. three of those made it to the final evaluation stage, which was two references, on site demos and pricing. Of those three, Tecsys ended up being the winner, both in overall capability and in price,” says Kelly.
Now, they system is in the implementation stages, which Kelly says will take about another year to fully finish. Tecsys Inc. is working with the LCBO, hands-on, throughout the entire process. As Kelly puts it, “they’re doing it right from cradle to grave, taking the requirements document that was part of the RFP, taking their base system and then customizing it.”
Because of the nature of its business, and the LCBO’s policy of buying complete systems, the LCBO wanted a company that would see the process through from customization and modification of the existing software, to implementation, to staff training and oversight.
Kelly is excited, because, after starting discussions in April of this year, “the project is now finally active. We’re looking at about one-year incubation period, so we’ll implement [the final product] summer of 2012.”
Kelly ballparked the project as being a $1.5-million deal. “A million bucks is a lot of money if it’s yours and mine, but when you’re looking at acquiring software and implementation services, it’s really not a whole lot.”
He also says that this is not the only big infrastructure move the LCBO has up its sleeve for this summer. Right now, Apple Inc. and REsearch in Motion Ltd. are approving the LCBO app for smart phones. By next week, Kelly says that it will include “product search, product availability and inventory of product by store.”

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