Beverage Industry

A Day's Operation

August 1, 2006
A Day's Operation

With a portfolio as large as Mesa Distributing’s, its warehouse needs to be organized as efficiently as possible. Products in the staging area are organized by how quickly they move.
“When they are loading the trucks, they are just turning the forklift,” explains Nick Gagliardi, president of Mesa Distributing and Liquid Investments. “It’s all very close, and it’s designed to be that way.”
Inside its 170,000-square-foot warehouse in San Diego, Mesa averages about 23 days of inventory on the floor. The company places higher volume items closest to the drive-through so enough stock is available for the night crew to  begin loading without the team going all the way to the back of the warehouse. Beverages also are organized by the size of the package because it’s beneficial to have the same type or size of package together for bulk packaging so the layers stack in an orderly fashion, says Mitch Morgan, vice president of operations. “We try to group them by size, by category and by how quickly it moves,” he says.
The warehouse also contains two keg coolers — one around 10,000 square feet that contains domestics and imports, and the other approximately 6,000 square feet that contains imports, crafts and microbrews.
Unlike a typical workday, a typical operations day starts at 6 p.m. Sales orders are transmitted to the information technology department by 4:30 p.m. so by 6 p.m. the orders are downloaded from the server into the operations system. At that point, an employee is in charge of routing the trucks. The trucks are broken down between bulk trucks, which are pallet-built, and bay trucks. Trucks are loaded between 6 p.m. and 5 a.m.
Drivers need to be early birds, arriving around 3:30 a.m. “We stagger them usually between 3:30 a.m. and 6:30 a.m., depending on what kind of route they have and when their first stop is open,” Morgan says.
Restocking cycle
While truck-loading is finishing up and the fleet is hitting the roads for delivery, the operations team begins the replenishing process. Mesa possesses its own line-haul department — made up of nine tractors and 18 trailers — that transports products from the Miller brewery in Irwindale, Calif. At 4 a.m. the morning operations shift arrives, and the line-haul trucks have returned so the shift starts unloading these trucks. At 7 a.m., Mesa allows its outside carriers such as its import and craft brand suppliers to deliver, and the morning shift unloads these trucks as well until about noon or 1 p.m.
At 10 a.m. the operations swing shift begins to clean up the warehouse and take beer from the back of the warehouse and restock all the staging areas, or the pick areas, where employees build loads for delivery. The swing shift reloads the warehouse until about 2 p.m. when trucks start rolling back in. From 2 p.m. to around 8 p.m., the swing shift hits full gear unloading the trucks. They strip trucks of empty pallets and kegs and anything that is returned or broken. At this point, the whole cycle starts over again and the night crew comes back in to load trucks.
From a volume standpoint, Mesa is about 42 percent bulk, and usually runs about 12 to 14 bulk trucks and 25 to 32 side-loaders, depending on the volume. “If we get really busy we can pull a couple more bulk trucks out and get up to 16,” Morgan says. “When volume gets big, we tend to put more volume on bulk because it’s more efficient to deliver.”
The Liquid Investments fleet is approximately 581 units: 27 straight truck (tractor/trailer combined); 119 tractors; 125 trailers; 22 party trailers for special events; 11 tractors and 21 trailers for its total line-haul operations in San Diego and Santa Rosa, Calif.; and roughly 256 cars, vans and pickup trucks.
From a sales standpoint, Mesa’s San Diego operation has about 46 pre-sell routes and two telephone-sell. For operations this means between 38 and 45 trucks on the road a day. Morgan oversees operations for all of Liquid Investments with the help of operations mangers in each division. In total, Liquid Investments has 560 employees, which breaks down into 275 for San Diego, including the operations, sales and office support. Sacramento, Calif., employs 170, Santa Rosa 110 and Grand Junction, Colo., 40.
Proficiently planning
Always concerned with improving efficiencies, this past winter Mesa made an investment in operations to place all drivers on handheld computers. “What that does is allow the drivers to make invoice adjustments at the store level,” Morgan says. “They are not scratching information off of an invoice and doing math manually. They can reprint the invoice with the actual items. So if a case breaks or if a customer wants to cut something, they can do it and give them a clean invoice right there at the store.”
This also helps with reconciliation at driver check in, and gives Mesa the ability to use chain store Electronic Data Interchange (EDI). “It helps with some of the chain stores as we are able to send them the order before the delivery gets there. It speeds up the receiving process for us in the chain stores,” Morgan says.
With Mesa’s San Diego volume increasing more than 40 percent from the winter to summer months, the operations department knows that the week before Fourth of July always seems to be its largest volume week of the year. San Diego experienced a heat wave this year, causing sales to soar and operations to step up its performance even further. “The guys have done a great job,” Morgan says. “They ramp up for the summer, and they know what to expect to meet the challenge.”