As part of the LCBO’s Future State Modernization (FSM) program, we implemented SAP as our new enterprise resource planning system effective April 1, including SAP Transportation Management (TMS) to manage freight movements from vendor facilities to LCBO destinations, and onward to stores and wholesale customers.

This transformation represents a foundational change in how transportation is planned, executed, and communicated across the LCBO supply chain. While the overall implementation has been successful, we want to provide transparency into the challenges currently affecting product flow and the actions underway to stabilize operations.

What has changed
With the introduction of SAP Transportation Management, transportation planning is now fully data‑driven, replacing many manual and relationship‑based processes that existed previously.

Key process changes include:
•    At purchase order (PO) creation, only the vendor receives notification.
•    Once the PO is confirmed, it is planned in SAP and assigned to a carrier.
•    The carrier is responsible for contacting the vendor to coordinate pickup and delivery.

This represents a shift from prior practices where vendors often played a more direct role in arranging transportation. Under the new model, data accuracy at the article and pickup‑location level is essential to enable automated planning and on‑time execution.

Why product flow has been impacted
As expected with a transformation of this scale, we have encountered several challenges—primarily related to data quality and system readiness across the supply base and carrier community.

In the past, institutional knowledge and legacy workflows often compensated for incomplete or inaccurate master data. In the new SAP‑enabled environment, those gaps are surfaced immediately and can prevent orders from being planned or executed until corrected.

LCBO is actively working with vendors, agents, freight forwarders, and carriers to address these issues and stabilize throughput.

Status by geography and line of business

Imports
Two primary issues temporarily impacted import flows:
•    EDI transmission failures prevented some freight forwarders from receiving orders.
        Status: Resolved as of April 28. Freight forwarders are now booking appointments with vendors.
•    Incorrect goods‑supplier information (e.g. pickup addresses or related data) on some POs.
        Status: These are being corrected as they are identified.

Domestic shipments 
Similar to imports, some domestic carriers initially experienced issues consuming EDI orders.
•    The majority of domestic carriers are now successfully receiving orders and booking appointments with vendors and LCBO warehouses.
•    An information session was held with transportation carriers on April 24 to reinforce the new process and clarify that carriers—not vendors—must initiate pickup coordination.
•    A second session is scheduled for May 1, and the LCBO is monitoring orders by carrier to identify and resolve issues more quickly on a daily basis.

Mexico imports
•    The LCBO has contracted two new carriers to support Mexico imports: Albatrans (Less-than Truckload carrier) and Charger Logistics (Full Truckload).
•    This change is unrelated to the FSM program.
•    Product flow slowed due to the carrier transition, but movements have now stabilized.
•    As a reminder, Less-Than-Truckload (LTL) carriers must be registered with Charger’s customs broker, Bufete. This is essential to avoid disruptions and ensure seamless consolidation. 
•    A small number of lanes will continue to ramp up through mid‑May.

Kegs
•    All Keg POs are currently unplannable due to a PO creation issue related to destination locations.
•    The team is developing an alternative product flow to get these products moving. 

Specialty & small enterprise (SSE)
•    This segment has been heavily impacted by inaccurate goods‑supplier data, particularly pickup addresses.
•    The team is actively working with vendors and leveraging available system information to correct data and restore execution in line with the designed process.

What we need from suppliers and agents
To help stabilize flows and accelerate recovery, we ask suppliers and agents to:
•    Ensure pickup addresses and contact details are accurate and current.
•    Confirm article‑level information is complete and correct.
•    Respond promptly to outreach from assigned carriers, who are now responsible for coordinating pickups.
•    Raise data or pickup‑related concerns as soon as issues are identified to avoid repeated delays.

Our commitment
FSM is a critical investment in the LCBO’s long‑term supply chain resiliency, scalability, and transparency. While the initial transition has created short‑term disruption, these changes will ultimately result in a more reliable, predictable, and modernized end‑to‑end supply chain.

We appreciate the continued partnership and patience of our agents, suppliers, and carriers as we complete this stabilization phase. Further updates will be shared as improvements progress.

We recognize that suppliers may be experiencing other FSM‑related issues beyond transportation, and we are committed to providing an update on these matters next week.