2016 Control State Best Practices Winner: Best Warehouse Innovation
New Hampshire Liquor Commission
The New Hampshire Liquor Commission and its warehouse partner, Exel, placed big bets on each other by signing a 20-year contract in 2013. Exel invested $20 million in a 243,000 square-foot warehouse, and the NHLC anticipated $7 million in annual savings. The partnership has paid dividends for both parties. Exel currently ships up to 150,000 cases of product each week to the NHLC’s 79 stores, and the commission generated an all-time high $678 million in sales last year.
Just within the past year, Exel implemented a series of innovations and improvements at the warehouse, aimed at increasing efficiency and productivity. The company streamlined its auditing process to allow barcode scanning, implemented a bulk-pick process establishing a special location for high-volume products and instituted a bottle-ordering program that consolidated the pallet loading process.
“We have a true business partnership in New Hampshire,” says NHLC Chairman Joseph Mollica. “I couldn’t be prouder of that relationship, because it’s a true give and take. This is the way of the future, with state business partnering with companies that specialize in certain areas like warehousing and transportation.”
The NHLC recently presented Exel with a new challenge – stocking a new 32,000 square foot store in Nashua (the largest in the state) during the peak summer sales season.
“They not only handled the load for all our stores in August,” Mollica says, “they also took in the picks for an additional 40 truckloads of product that needed to go to the new store – and they did it expeditiously.”
The recent upgrades at the warehouse have saved the commission money and increased customer satisfaction at liquor and wine outlets. Fill rates are at 92%, resulting in fewer disappointed customers. The stores have also expanded selection thanks to more SKUs in the warehouse. And efficiently loading pallets means fewer injuries to NHLC staff unloading product at the stores.
Perhaps most impressive is Exel’s immediate commitment to this long-term partnership. In building its warehouse, the company purchased a property that would handle expansion and included that in its plans.
“The end of the warehouse can be unbolted and expanded by 50% on land that’s already been excavated,” Mollica says. “They had the foresight to see our growth could be tremendous, which it has been. We’re looking at a number of initiatives now that would lead to expanding that building to keep up with rising demand.”
Other recent projects undertaken by Exel include the addition of 5,000 square feet of temperature-controlled space for fine wines and temperature-sensitive products, integration of the order management and warehouse management system to ensure delivery accuracy and chimney-stacking of outbound loads to simplify check-in at stores.
“I can’t speak highly enough about who they are and the professionals working there,” Mollica says of Exel. “We’ve been blessed to have them as a partner.”