November/December 2013 $8.00
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Live to Play Sports doubles its bicycle inventory with new DC Page 16
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Inside 3 4 14 21 37 38 39 40 41 42
Taking Stock Supply Chain Scan Blooming Distribution Vision 2014: Tips for Productive & Efficient DCs Datacapture Equipment Focus: Safety and Security Products Learning Curve Materials Handling Legal Link Crunching the Numbers
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TAKING STOCK
www.mmdonline.com PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins (416) 510-5130 EAtkins@bizinfogroup.ca EDITOR: Carolyn Gruske (416) 442-5600 x3265 CGruske@bizinfogroup.ca ART DIRECTOR: Stewart Thomas (416) 442-5600 x3212 SThomas@bizinfogroup.ca SENIOR ACCOUNT MANAGER: Catherine Martineau (647) 988-5559 CMartineau@bizinfogroup.ca PRODUCTION MANAGER: Kim Collins (416) 510-6779 KCollins@bizinfogroup.ca CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x3546 BAdelt@bizinfogroup.ca
BIG MAGAZINES LP Executive Publisher • Tim Dimopoulos Vice-President of Canadian Publishing • Alex Papanou President of Business Information Group • Bruce Creighton HOW TO REACH US: MM&D (Materials Management & Distribution), established in 1956, is published 7 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. EDITORIAL AND ADVERTISING OFFICES: 80 Valleybrook Drive, Toronto, ON, M3B 2S9; Tel: (416) 442-5600; Fax (416) 510-5140. SUBSCRIBER SERVICES: To subscribe, renew your subscription or to change your address or information, contact us at 416-442-5600 x3258 or 1-866-543-7888. SUBSCRIPTION PRICE PER YEAR: Canada $82.95 per year, Outside Canada $157.00 US per year. Single copy price: Canada $15.00, Outside Canada $32.65 CDN MM&D is published 7 times per year except for occasional combined, expanded or premium issues, which count as two subscription issues. ©Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher. DISCLAIMER: This publication is for informational purposes only. You should not act on information contained in this publication without seeking specific advice from qualified professionals. MM&D accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue. MM&D receives unsolicited materials, (including letters to the editor, press releases, promotional items and images) from time to time. MM&D, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. PRIVACY NOTICE: From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374, Fax: 416-442-2191 Email: privacyofficer@businessinformationgroup.ca Mail to: Privacy Office, 80 Valleybrook Drive, Toronto, ON M3B 2S9
Thoughts and endings T
his is the hardest editorial I’ve had to write as editor of MM&D, mainly because it’s my last one. As of January 2014, I’ll be moving to another magazine in the Business Information Group. It’s related to the supply chain, but its focus is the logistics side of the equation, rather than warehousing. As with many major life changes, the prospect both excites me and breaks my heart. In the two years I’ve been with MM&D, I’ve come to really love not just the magazine itself—I’m proud of what we’ve published (both in the book and online), I was thrilled with the redesign we undertook, and I was honoured that one of MM&D’s cover stories was nominated for a national magazine writing award—but with the supply chain industry as a whole. When I started here, I was told repeatedly that the Canadian supply chain was a small, tight-knit family, and I’ve found that to be absolutely true. And as with any family, it really seems people care about each other, and are willing to support each other, even if they are technically competitors or industry rivals. I know I certainly felt that people were willing to offer me advice and guidance on my learning curve in the industry, and for that, I’m very grateful. I’m also immensely grateful to have worked with such a strong, capable team here at the magazine. Art director Stewart Thomas does an outstanding job, issue after issue of making pallets, containers, fork trucks and racking visually compelling. Our production manager Kim Collins (and before her, Cathy Li) keeps us organized and on schedule. Circulation manager Barbara Adelt has the momentous task of ensuring thousands of MM&D’s magazine and e-newsletter subscribers keep receiving their issues. And senior account manager Catherine Martineau keeps the ad revenue coming in, which means you’re able to receive your copies free of charge. But no matter who else works on this publication, MM&D wouldn’t be the magazine it is without the leadership of multi-talented publisher and editor-inchief Emily Atkins. Even though we’re a team of trained professionals, her input and oversight makes everything we do that much better. I’ll be forever thankful she gave me an opportunity to join her team, to learn from her, and to be part of this publication’s long history.
November/December 2013 Volume 58 Number 07 14
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Printed in Canada Publications Mail Agreement #40069240, ISSN: 0025-5343 (Print) ISSN: 1929-6460 (Digital). We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage for our publishing activities. MM&D is indexed in the Canadian Magazine Index by Micromedia Limited. Back copies are available in microform from Macromedia Ltd., 158 Pearl St., Toronto, ON M5H 1L3
4.9%
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Flower delivery
New DC build
Future vision
Greenhouse uses rented fleet to ship poinsettias for Christmas
Bike distributor constructs a new facility, doubling its storage space
Experts offer advice to make the DC more productive in 2014
www.mmdonline.com | November/December 2013
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SUPPLY CHAIN SCAN
IWLA
NEW WOOD RULES
DC SAFETY BLITZ
Improving productivity in Canadian DCs, p 8
Government demanding more inspections for wooden packaging, p 5
Ontario warehouses can expect visits from the Ministry of Labour in 2014, p 6
Keeping compliant CITT conference hears why trade compliance should be a key business focus By Carolyn Gruske
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ith a theme of “thrive-ability”, the 2013 version of the National Conference on Supply Chain and Logistics presented by CITT, presented a wide range of advice about how to survive everything from natural disasters to international import/export challenges, and thrive while doing so. Over the course of two days, more than 200 registered delegates participated in a Lean Six Sigma workshop, heard a panel discussion about fuel surcharges, learned the 2014 economic outlook, brainstormed talent management practices, and saw how logistics operations helped divert swelling waters in Manitoba during the 2011 flood to prevent serious damage downstream. They also learned how important it is for businesses to take trade compliance seriously. Nigel Fortlage, vice-president of information technology, CIO and social business leader at GHY International, a Winnipeg, Manitoba-based Customs brokerage, told the crowd that as Canada continues to sign more and more trade agreements, “the Customs regimes will be focusing on your bills of materials, in terms of validating foreign content, making determinations regarding the substantial transformation rules, looking at regional content and even embargoed components.” He explained Customs officials are faced with the goals of driving down security risks, increasing reporting, and lowering enforcement costs, “On the flip side, they want greater compliance, CITT has changed its designation name to “CCLP”. Spelled out, this indicates that its bearer is a “CITTCertified Logistics Professional”. According to CITT, adding “logistics” to the designation provides important, new information about the credential for people in the industry. CITT’s academic curriculum is updated regularly and has evolved over the years to help companies operate profitable, invulnerable and sustainable supply chain logistics systems on a national or global scale.
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greater efficiency, greater safety, and they want additional revenue.” He reminded attendees about the multiplier effect that “continues to grow, the more countries you have, the more agencies that are involved, the more risk you have as you move your goods through various trading nations.” He also said businesses need to be diligent about reviewing supply chain documentation, including things like their NAFTA Regional Value Content calculations. “We’re finding customers who think their products are 90 percent regional content, but because of globalization, when they recalculate, they’re at 60 percent and just making the minimum requirement.” He warned that based on GHY’s data, most businesses can expect some type of interest from Customs officials. “All of our top US and Canadian customers have been audited more than once. And the governments are going back and looking at those report cards and saying, ‘we told you this is wrong, have you done anything about it?’” According to Fortlage, regulators expect businesses to be “on a journey to compliance…they wrote the regulations so they could come back and scold you later. Unfortunately, we know they aren’t going to slap your hand. They’re going to pick your pocket.” Fortlage said mid-sized and smaller companies are typically at more risk of noncompliance than large companies. “They typically outsource. They don’t have management buy-in about the risk of non-compliance, and everybody is transactionally focused because there is typically not a compliance department. He listed seven rules a company needs to follow to ensure it is paying close enough attention to compliance issues: it must be a priority for the leadership; a trade compliance champion or team must be appointed; KPIs must be created for trade compliance; systems and reporting mechanisms must be created to deal with the KPIs; communication regarding compliance issues must be intentional; growth plans must factor in trade compliance; and service providers (logistics, financial, audit, legal, trade, and Customs) must be seen as business partners in the process. Of the seven, Fortlage said the first point is key. “Without this, and getting leadership to understand and drive this, the others don’t happen.”
WHAT’S ON MMDONLINE.COM Alcon extends warehouse Consolidating operations means more room needed for inventory http://tinyurl.com/DC-Alcon Sears not restructuring Says efficiency gains behind DC closure http://tinyurl.com/SearsDC World’s largest e-commerce DC announced Dutch company plans giant automated warehouse http://tinyurl.com/DutchDC
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SUPPLY CHAIN SCAN
New rules for heat-treated wood packaging Inspections to increase
D-03-02, the Canadian Heat Treated Wood Products Certification Program (CHTWPCP)—and one for businesses that build packaging and ship it out of By Carolyn Gruske the country—D-01-05, the Canadian Wood Packaging Certification Program (CWPCP). This regulation applies not only to pallet producers, but any manuhe federal government is revamping the regula- facturer that creates custom-built wooden packaging for its products. tions pertaining to heat-treated wood packagUnder the new rules, businesses already operating under one of the current ing products. programs will see the number of yearly inspections increase by 50 percent. Starting in January 2015, a new set of rules will be “They go from two inspections per year for somebody just building wood in place. Known as D-13-01, the Canadian Heat packaging to three. And for somebody operating a kiln, from four inspections Treated Wood Products Certification Program will per year to six. Those are people already on the program with proven compliance,” said Brian Isard, interim general manager of the Ottawa, Ontario-based be the guideline for every business in the country. Currently there are two separate programs: one for Canadian Wood Pallet and Container Association (CWPCA). “But this is the kicker. If you’re a brand-new manufacturer, you’ll have to have producers who use kilns to heat-treat lumber— six inspections per year. If you are a brand-new kiln DONE DEALS operator anywhere in Canada, you’ll have to have 12 Groupe Yellow, a Montreal, Quebec-based shoe company, is deploying inspections per year. That’s the problem.” software-as-a-service (SaaS) solutions from Dublin, California-based Epicor According to Isard, the changes were instigated Software to help support its retail operations. after pressure from the US. “Seventy percent of all the lumber we ship goes to the United States. Their standard is 12 inspections Montreal, Quebec-based transportation and logistics company TransForce Inc has purchased Clarke Transport Inc and Clarke Road Transport Inc, per year. Now they do a different type of inspection. Their response to Canada was: we want you to move two subsidiaries of LTL company Clarke Inc, which is based in Concord, closer to our standard. Ontario. TransForce has also purchased additional shares of Vitran Corp Inc, “While we disagreed with the need to go there, ultifor a total of nearly 20 percent of the Toronto, Ontario-based LTL. mately we ended up having to adjust our inspection frequencies to come closer to the US standard.” Kenan Advantage Group (KAG) of North Canton, Ohio, has purchased RTLHe added that outside the US, the global standard Westcan Group. Based in Edmonton, Alberta, RTL-Westcan hauls bulk comis typically two inspections per year. modities for over 500 customers in Western and Northern Canada. KAG specializes Industry associations, including the CWPCA, the in the logistics and transportation of fuels, chemicals and merchant gases. Canadian Lumber Standards Accreditation Board Penske Logistics has selected JDA Warehouse Management from JDA Software (CLSAB) and Quebec Wood Export Bureau (QWEB), Group Inc, to use in its global operations and to manage 19 million square will continue to be responsible for running the inspections and for policing businesses that don’t meet feet of warehouse space around the world. the standards. “There will be a mechanism for people who aren’t Daseke Inc, of Addison, Texas, and Clayton, Alabama-based Boyd Bros Transportation have merged, creating one of the largest open-deck/specialty performing to have increased inspections, which they fleets in North America. The combined companies now offer full North American will be charged for. Everything will be performanceopen-deck/specialty coverage, including service into Canada and Mexico. based. The good operators will stay at one level and the poor operators will have their inspection frequency increased,” said Isard. XPO Logistics Inc of Greenwich, Connecticut, has spent US$26.6 million to Heat-treatment is required to ensure insects aren’t acquire Optima Service Solutions LLC, an Atlanta, Georgia-based non-asset provider of last-mile logistics services for US retailers and manufacturers. transported across borders in the containers— a problem which Isard said doesn’t really exist. “The incidents of pest-contaminated material getDSV Solutions, headquartered in Brondby, Denmark, has been awarded a ting out of Canada have been virtually nil. So we’ve long-term contract to operate the warehousing and distribution activities in done an excellent job in our current programs, and the United States for Danish furniture manufacturer BoConcept. Initially, DSV compliance is very high. Our registered facilities are will use its own 10,000sqm facility in Fontana, California, but the plan is to doing the right thing. add two additional DCs. DSV Solutions will be responsible for the entire inbound handling, storage, order management and subsequent distribution “That was our argument and the government’s justification for having lower standards of inspection management of BoConcept products throughout the US. for existing companies in the program.”
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SUPPLY CHAIN SCAN
Safety blitz coming to Ontario warehouses Ministry of Labour will be knocking on dock doors in early 2014 By Carolyn Gruske
O
nce again, warehouse managers are being warned that the Ontario Ministry of Labour (MoL) is intending to make safety a priority. The MoL has scheduled a proactive enforcement safety blitz for the new year. Taking place in February and March 2014, the MoL will focus on five specific elements in the warehouse, according to Chuck Leon, a warehouse/material handling specialist with Workplace Safety and Prevention Services.
Racking systems “Some of the questions they’re going to ask are: What are your capacities? Where is your documentation? Who installed the racking system? By the way, I noticed you’ve got some repairs, who did the repairs and are there PSRs (pre-start health and safety reviews) on the repairs, because in Ontario when you modify a rack you must do a PSR.”
Lift trucks “With your lift trucks they’re going to ask: Have the operators been trained? What kind of training have they had? Are they trained to the CSA standard because even though there is no legal requirement under the law to follow standards, I will tell you right now, the Ministry of Labour weighs very heavily upon the CSA standard for lift truck training, as well as their own guideline. “If you don’t have a copy of the Ministry of Labour guideline, you should get a copy. It’s the
best document written on lift truck operations I’ve ever seen. It walks you through everything a lift truck operator should be able to demonstrate to be deemed a competent operator, so if you follow that as part of your evaluation process for your people you’re going to be laughing.”
Conveyors According to Leon, the MoL will be asking questions about lockout procedures, and safety features such as guards on the head and tension pulleys. Inspectors will also ask about start-up warning devices.
Cranes While not as common in the warehouse, Leon says inspectors will still inquire about pre-shift inspections, whether operators know and understand hook ratings, sling angles and hot work, and if wire ropes on rigging have been replaced according to industry standards.
Loading docks “They’re going to be asking you for documentation, training records, preventative maintenance records of your lifting equipment. When was the last time the loading dock was inspected? When was the last time you did preventative maintenance? He added that while it’s common to do lift truck training, it’s not as common for companies to do training with the trucks and lifting equipment on the loading docks. But that’s something the MoL will want to see evidence of during the visit. Leon, who was speaking at an event organized by the Materials Handling & Management Society (MHMS) of Ontario, reminded the members about how serious inspections visits are. And what their consequences can be. “It’s your due diligence. You’re the one who has to prove you’re innocent because under the Occupational Health and Safety Act, you’re guilty if you’re charged by the Ministry of Labour and it’s up to you to prove you’re innocent. It’s not like criminal law where you have a jury of peers who will say if you’re guilty or not. Not under the Occupational Health and Safety Act.”
BENCHMARKS Canadian companies took home awards from the Hyundai Forklift national dealer meeting. The Norcross, Georgia-based company presented Langley, British Columbia-based Leavitt Machinery with the pinnacle award for top-performing dealer. Lonestar Forklift, which is based in Texas, also won a Pinnacle award. London, Ontario-based Lift Depot Ltd and two US-based dealers, received summit awards for exceptional sales performance.
new account manager. Ross Beggs is in the service department. Viera Davidikova is the inside customer service representative. President Rob Daniel will act as operations manager.
Along with its award from Hyundai, Lift Depot has something else to celebrate. The company opened its third branch after buying Reliable-Liftx Inc, in Cambridge, Ontario, which will now operate under the Lift Depot name. Tony Iacocca is the branch’s
Konecranes Canada, a supplier of lifting equipment for manufacturers, shipyards, ports and terminals, has moved to a new headquarters. The new facility, in Burlington, Ontario will house customer service, a parts DC, and Eastern Canadian crane and equipment sales.
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Markham, Ontario-based Supply Chain Alliance (SCA) celebrated its 20th anniversary. Since opening, the consulting firm has completed over 300 projects for over 120 North American companies.
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SUPPLY CHAIN SCAN
Efficient and productive IWLA Canada conference offers advice for making the DC run better and safer By Carolyn Gruske
A
variety of presentations addressed the theme of productivity in the warehouse at the 5th Annual Fall Conference of the International Warehouse Logistics Association (IWLA) Canada.
Workforce efficiency JP Joei, managing director of Argent Consulting, a La Habra, California-based company that helps business improve workforce efficiency, explained there are steps warehousing and distribution operations can take to make their workforces more productive. Using Argent’s methods, Joei said it’s possible to achieve a 15 to 25 percent labour cost reduction, and 15 to 30 percent improvements per individual. The trick to getting more out of staff is to understand what’s happening on the warehouse floor. “It really starts with work measurements. What gets
measured gets done,” said Joei. “In order to plan accurately and schedule accurately, you have to start with good work measurements, ideally not averages. If you only have averages—cases per hour, pallets per hour, cube per hour—that’s a good start, but it’s not good enough.” Accurate work measurements allow accurate activity-based costing, letting businesses evaluate the profitability of activities for each customer. According to Joei, a typical efficiency improvement program has four stages: • An examination of the facility’s layout, inventory profile, processes, methods, best practices and equipment used before the work measurement starts. • Measurement of activities, equipment speed, and even the racking (with an eye to reducing an employee’s travel time as they pick from different locations). • Integration with the WMS and any other materials handling systems (to eliminate manual tracking processes). • A review of processes, methods and best practices and using these to set standards for future work and efficiency. “The WMS is key. If you don’t have a WMS, it still can be done, but it’s a little more difficult. But manual is better than not doing anything. More important is the approach, the culture and the training of your business,” said Joei. He said undertaking an efficiency program doesn’t involve “taking out the whip and forcing employees to work harder and faster. It’s about measuring their time and making them aware of where they are being unproductive and where they are wasting time.”
Racking safety Tony Mulholland, an engineer and owner of Mississauga, Ontariobased Rack Net-Works and Warehouse Safety Services spoke about pre-start safety reviews (PSRs) and racking safety compliance. While there seems to be a lot required by governments to prove racking is safe, his goal was to convince attendees, “this is not a burden when it comes to cost. There are benefits to be derived from going through the process of being in compliance with regulations.” He explained a PSR is just one element in compliance. It’s not a certification. Instead it is a “statement of capacity”. It’s also the document required before a company is allowed to load its racks. Mulholland said PSRs can be required of any type of shelving or storage systems, no matter the size or height. The main determining question is, does it present “the potential for serious injury should you not have the required capacity? If the answer is yes, you’re into a PSR requirement.” According to Mulholland, when a business begins the PSR process it is looking for two outcomes: to create a safe workplace and to protect itself from financial loss due to government-issued stop work orders or claims resulting from the injury or death of an employee. He said all provinces have regulations regarding racking and racking safety, even if they aren’t always clear or easy to find. He also explained that across the entire country there are changes happening to building codes, and it is becoming more common for municipalities to require building permits for racking installations. “The three main areas when it comes to building permits are 8
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SUPPLY CHAIN SCAN they want to make sure the floors are okay. They want to make sure egress from the building is not negatively affected by the racks. And they also want to make sure you have proper sprinklers and fire protection.” He suggested that businesses have “one cohesive document that deals with the subject of capacity and compliance. It’s much easier to manage.” It’s also important that the PSR be as detailed as possible and be kept up-to-date, especially if the racking has been repaired or modified.
Forklift management Liftow’s general manager of the Western Ontario division, Jamie Stephen, who is based in Kitchener, Ontario, suggested that the best way to manage a fleet is to address the biggest cost items, what he called the “low hanging fruit”. The first one he tackled was labour. “Ninety percent of the cost of material handling equipment isn’t in that piece of equipment. It’s the person who is operating that piece of equipment.” By helping employees work more efficiently and use the equipment better, a savings is reflected in the bottom line. Next, he said, businesses should look at their fuel costs and the conditions in which their trucks operate. He mentioned many companies are enjoying a significant cost savings by switching from propane to electric. He estimated it costs $20 per tank of propane, with one tank required per shift. In comparison, it costs $2 per shift to operate an electric truck (of equal size) and power the battery, resulting in a $4,500 savings per shift per year per forklift. And for operations that require IC engines, he suggested looking for more fuel efficient vehicles.
Maintenance and repairs is the next area businesses should examine. “You’ve got a capital budget and an operating budget. It’s easy to keep throwing repairs in the operating budget and it’s difficult to get equipment to replace it in the capital budget, but that repair budget just keeps going up and up, and you spend a lot of time on the repairs, until the service provider’s technician is like an employee at your place.” He said 10,000 hours is the cut-off point where it stops being cost-effective to maintain a forklift in a multi-shift environment. He said tires are the single biggest cost on a truck. With tires averaging between $1,200 and $3,000 per set, he said it’s important to ensure operators aren’t needlessly wearing the tires down by driving too hard or stopping too quickly. To curtail this, Stephen said torque converter interlocks or speed limiters could be added. He also said it’s a good idea to examine the loading dock to see if it causes excess wear (or chunking). Stephen suggested that downtime is another aspect that businesses need to review. Tied into that is poor utilization of equipment and labour. He said the ideal equipment usage figure is between 60 and 80 percent of the working day. Continued on page 10
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Supply Chain Scan Continued from page 9
Warehouse design
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David Weatherseed, a storage systems specialist with Redirack Storage Systems, spoke about warehouse design for productivity and safety.He began with beam-level design. “Productivity is greatest when we can store things on the floor and pick from the floor, so if we move pallets in and drop them on the floor in a racking system as opposed to elevating, it is quicker. Placing the beam level up higher, is good for operators. It facilitates getting in and picking.” Although high racking beams can be beneficial to productivity, Weatherseed reminded attendees “the farther the distance is between connection points—say the floor and the first beam level—the wobblier and sloppier the column gets and the weaker it is.” He then spoke about options to make high beams work, including columns and braces, different construction materials and specialized methods of anchoring the columns and racks. He warned the audience to be careful when interchanging components, such as beams, from different manufacturers, as while they may look similar and may fit, they don’t all have the same load capacities. Weatherseed also offered some insights into post protection. “With non-guided material handling equipment, you tend to get different types of damage from different types of equipment. With counterbalance trucks, they typically will back into a system. Reach trucks—the outriggers of reach trucks tend to come into the column and you see a lot of damage created because of that. Electric pallet trucks or walkies cause a lot of damage because they tend to come in perpendicular to the racking, and there really isn’t a lot of beefiness or protection for that on you standard frame.” Along with a macro view of the components, equipment, and the physical structure of the building (including floors), Weatherseed also offered the big picture view of storage systems. “If you’re designing a system, look at all the ways you may want to use it in the future and design it for that flexibility.”
Warehouse productivity Sam Lampropoulus, principal consultant at DC Solutions, and a logistics and supply chain instructor at George Brown College, provided advice about increasing productivity. He spoke about work performance measurements not from the point of view of figuring out what can be improved but acknowledging what is working well. “How do we reward our star performers and at the same time, encourage others to meet the expectations that are set up?” he asked. Having worked a lot with the Maynard operation sequence technique (MOST)—a work performance measurement system—Lampropoulus said one of the advantages is employees receive weekly (or even more immediate) feedback, so they knew what they did well and areas where they need to improve. By using such a system, it is possible for businesses to achieve a 10 to 15 percent improvement in productivity. New CEO He also suggested warehouses The new new president and CEO of the Des Plaines, implement a checklist system to Illinois-based IWLA was formally introduced to ensure the right procedures are Canadian members at the conference. being followed, and that those proSteve DeHaan was chosen by a search committee to cedures be treated as standard succeed Joel Anderson, who retired after leading the operating practices (SOPs). association for seven years. “What it’s all about is having all DeHaan has a history of working with industry your materials, equipment and groups and lobbying on their behalf. He most recently processes in place so you’re not served as CEO of the High Point, North Carolinalooking for things. Take a 5S based National Home Furnishing Association, and approach—sort, straighten, shine, before that he was the executive vice-president and standardize and sustain are the lobbyist for the Michigan Home Builders Association. main steps.” MM&D 10
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Supply Chain Scan Movers + Shakers Dorval, Quebec-based 3PL Pival International Inc has added two people to its sales and marketing team. Alexander Zenetzis is the company’s new business development manager. Based in Montreal, he is responsible for the company’s expedited, transport and warehousing sales and service for North America. Alexander Zenetzis Jeff Smart, the new director of supply chain solutions, works out of Pival’s Mississauga, Ontario office. He will be responsible for the growth of the company’s warehousing network across Canada. Both Smart and Zenetzis report directly to president Mario La Barbera. Jeff Smart Don Borsk has joined Reimer Associates Inc, a Milton, Ontariobased supply chain and transportation recruiting firm. Borsk, who has over 30 years of experience in 3PL and supply chain roles, is Reimer’s new vice-president. CITT has elected its 2013-2014 board of directors. Robert Ramsay takes over as chair from Warren Sarafinchan, now a director-at-
large. Ginnie Venslovaitis, from Hudson’s Bay Co, is vice-chair, administration. Perry Lo, of Canaan Transport Group Inc, is vicechair, finance. Andrew Paxton is vice chair, development, and Monsanto’s Donald Connolly is vice-chair, rules. The following were elected directors-at-large: Ajay Gupta (Sterling Agility), Gary Hains (Great Northern Trans-Port Inc), Valerie McSween (Mactrans), Jacquie Meyers (Meyers Transportation Services), Todd Protheroe (Clearwater Seafoods Ltd), and Bruce Waddell (Sun Rype Products Ltd). Michael Loughman of Champlain College and Ernie Solomon of Evermon Consulting Services Inc, are the internal auditors. The Canadian Society of Customs Brokers (CSCB) has elected Kim Campbell as the new chair of its board of directors. A certified Customs specialist and a certified trade compliance specialist, Campbell is principal of mkmarin trade services inc. Tom Ruth will leave his position as president and CEO of the Halifax International Airport Authority (HIAA) on January 17, 2014 to become president and CEO of Edmonton Airports.
Kim Campbell
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SUPPLY CHAIN SCAN MOVERS + SHAKERS Scranton, Pennsylvania-based 3PL Kane is Able Inc, has hired Greg Wells as the new senior director of operations, responsible for Kimberly Clark distribution centres. Bill Edgy is the new regional sales manager, US southeast region, for Pittsburgh, Pennsylvania-based Seegrid, a manufacturer of vision-guided automated guided vehicles.
Beginning in January, 2014, there will be changes in leadership at Maersk. Morten Engelstoft has been appointed CEO of services and other shipping. In addition, he will also take over the position as CEO for Maersk Tankers, as Hanne Sørensen has been appointed CEO of Damco. Russell Bruner has been appointed president and CEO Maersk Line Limited. Bruner will succeed John Reinhart, who will become CEO and executive director of the Port of Virginia.
Advertorial
Demonstrate your expertise with a professional designation There are many options available to gain professional knowledge. An academic degree can provide a knowledge foundation, and conferences and workshops can provide a quick understanding of industry changes. A professional designation is the best way to show colleagues and employers that you have both the knowledge and skills to be a leader in your profession. A professional designation is one of the highest achievements you can attain in your field. It signifies that its holder has completed a rigorous program and adheres to the highest level of professional standards. Completion of a professional designation, such as the Certified Supply Chain Management Professional, combines a rigorous academic program with real world application. The program covers a wide range of SCM competencies and prepares you for success in senior roles. As a core component of achieving
the designation, candidates must be working in the field while pursuing their designation, so classroom principles can be put into action. Academic degrees often gather dust on the mantle. A designation is different than completing a degree, diploma or other forms of post-secondary/graduate education because of the ongoing professional development required to maintain it. New practices and processes are emerging daily and you must continually update your knowledge and skill set to stay at the forefront of your profession. As a highly trained professional you will be poised to drive profitability and bottom line results for your employer. Surveys consistently show that individuals with a professional designation earn more than their colleagues without one.
Make a strategic career move and begin your pursuit of the Certified SCMP today. For further information contact SCMAO at info@scmao.ca, www.scmao.ca or 416 977-7566.
INVEST IN YOURSELF.
SCMAO is pleased to present three new workshops coming in the new year:
With training from SCMAO throughout the year, you will gain more in-depth knowledge to help you manage your supply chain career. We offer a wide variety of supply chain management seminars which will enable you to hone your management skills.
Project Management for Supply Chain Professionals
For more information contact Carol Ship Spencer, Director, Professional Programs, at (416) 977-7566 x 2146 or visit www.scmao.ca to register now and guarantee your spot!
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February 6/7, 2014 (Mississauga) Discover practical and effective management techniques to make your projects successful.
Approaching Conflict with Emotional Intelligence March 5/6, 2014 (Mississauga) Gain the confidence you need to confront situations and manage conflict.
Capital Equipment Procurement and Contracting March 19, 2014 (Toronto) Develop strategies to meet the current challenges of major equipment procurement.
MM&D | November/December 2013
13-11-28 4:11 PM
PROFESSIONAL DEVELOPMENT DIRECTORY Advertorial
It pays to know what you’re doing – and to have the proof on your resume Are you responsible for the movement, distribution and storage of your company’s products? If you are, the CCLP ® (CITT-Certified Logistics Professional) designation can help you develop and demonstrate your expertise in warehousing along with the profitable management of materials within larger, integrated logistics and supply chain systems.
CCLP is also industry’s most attainable logistics designation: • Only five expert-level, specialized courses are needed for professionals with a college/university degree • World-class business education is available for professionals who need it • It’s accessible, with all required courses available online • It’s affordable and has the best ROI in the business
There’s a lot at stake CITT knows you’re handling one of your company’s biggest assets. And that you’re also responsible for the cost and time-efficient management of people, resources and ancillary costs associated with managing this inventory. We understand the decisions you make impact your customers and their continuing loyalty. It’s a lot to manage, and a lot to master.
The five specialized logistics courses from CITT provide the greatest depth and breadth of understanding of the silo-free integrated logistics business of any designation program in the industry. Materials Management pros will especially appreciate Logistics Processes, Integrated Logistics and Logistics Decision Modeling to strengthen their operational competencies for more a more profitable supply chain and logistics system. And business courses such as Organizational Behaviour can be invaluable in sharpening managers’ Fortunately, management believes in professional designations Over 80% of employers will pay for the education you need to obtain a people skills and their ability to motivate. designation.1 Human resource experts also report that companies are investing in specialized development of their people, even during tough Visit www.citt.ca for more information and to download your FREE guide to the logistics industry’s most respected source of professional training and economic times.2 And CITT can help you get smarter, faster. most commonly held designation. And get you on your way to higher pay, The CCLP designation from CITT is the most respected and widely-held enhanced professional credibility and other professional enrichments. supply chain and logistics credential, outnumbering all others nearly CCLP ® is a registered trademark of CITT 3:13 2
1 ”2010 Salary Survey Results”, Materials Management & Distribution, September-October 2010. Clayson, Tracy. “Learning Curve: What are you worth?” Canadian Manufacturing, Distribution and Transportation News, October 31, 2011. 3 ”12th Annual Survey of the Logistics Professional”, Canadian Transportation & Logistics, January 2011.
Prove you’re a “Logistics Expert”—Add CCLP to your professional credentials. And more value to your supply chain. The deadline to register for CITT’s winter semester is January 10th. Register now at www.citt.ca to guarantee your spot.
www.mmdonline.com | November/December 2013
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Greenhouse uses rented trucks to deliver Christmas poinsettias By Carolyn Gruske
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The poinsettias are placed onto rolling carts and then loaded into trucks for delivery to waiting retailers.
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or plants that originated in the tropical forests of Mexico and Central America, being transported from greenhouses to stores to homes during some of Canada’s coldest months can be highly stressful. But that’s exactly what needs to happen for Canadians to use poinsettias as Christmas decorations. Forest Glen Greenhouses Ltd in Brookfield, Nova Scotia grows poinsettias for the retail market. It supplies plants to over 50 stores in the Loblaw supermarket chain in Nova Scotia, New Brunswick and Prince Edward Island. The company’s seven acres of plastic greenhouses also produce other garden plants during the rest of the year, including annuals in the spring and chrysanthemums in the fall. Besides growing the plants, the family-owned and run company also handles most of the logistics and distribution aspects of the business, says Megan Thompson Whidden, Forest Glen’s business manager, and daughter the company’s founders, Judy and Lee Thompson. Although Forest Glen contracts out some of its overnight delivery runs, the majority of its plants are delivered by eight of its own employees, in trucks rented from Ryder System Inc. “In the spring, which is our busiest season, we would rent eight of the [five-tonne] straight trucks and four tractor trailers,” says Thompson Whidden, add-
ing that in the other seasons, the fleet is typically composed of five straight trucks and two tractor-trailers. “We pick up the trucks at the first of the season and we don’t return them until the end.” She says Forest Glen needs to have a ready-to-go fleet on hand as delivery windows can be very short and very quick to materialize. “Because our business is so weather-dependent, the stores can change the orders, so we’re always in constant communication with them. If we had an order for 10 racks to go to the store and it was pouring rain for four days, we wouldn’t go with the 10 racks. We try to really work with the customers and do what is best for them,” she says. “If the sun did peek out, we have to go. We have a small window of time to get the product out. That’s why we do it that way.” Forest Glen delivers its plants on rolling racks. The racks—typically six feet high with five or six shelves each—are loaded with hand-chosen plants and then shrink wrapped. Forty-one rolling racks fit into a trailer and a straight truck can take 20. “Because it’s a live product, we try to load and go and get them off as quickly as possible because the plants really don’t like to sit on the truck,” says Thompson Whidden. At the stores, the plants are sold from the racks, so every time a Forest Glen driver drops off a new shipment of plants at a grocery store, there are empty racks to pick up. At the end of the season, a final trip is made to all the retailers to pick up the remaining racks. According to Thompson Whidden, Forest Glen started renting from Ryder 18 years ago, but entered into an exclusive arrangement approximately four years ago. “We just find that works better. They are able to give us great customer service and the trucks are more reliable than others we have used,” she says. “We try to book our trucks ahead of time so we can get our requests in and they have lots of time to get them for us. We request to have the automatic lifts, as new a truck as possible, and depending on whether our driver has their air brake [certification], we can request an air-brake truck.” At this time of the year, there is one more feature the trucks and trailers need to have: temperature control. Thompson Whidden says poinsettias can’t be in environments colder than 18C. MM&D | November/December 2013
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Handling live plants requires a bit of attention and care. Thompson Whidden says that’s something Forest Glen’s drivers are well trained in. “We always give the drivers a little lesson before they go. A lot of them have been with us for ten years, so it’s nothing new for them.” Some of the drivers are crossed-trained and work in the greenhouses when there are no orders to deliver. Like many companies, Thompson Whidden says Forest Glen finds it difficult to recruit new drivers. “Where it’s seasonal work, it is hard to get drivers for just that period of time.” Just as there are tight timeframes for the actual deliveries, there are correspondingly tight deadlines for getting the orders together. The plants stay in the greenhouse until the order arrives. Then they are selected, moved into the 2,000sqf, four-dock warehouse where they are organized, prepared for shipping, and loaded onto the trucks. “We thought the warehouse was big when we built it,” says Thompson Whidden. “It’s definitely not big enough. We could probably use twice that.” MM&D
www.mmdonline.com | November/December 2013
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BIKES, &MORE
To watch MM&D’s video of the Live to Play DC, see http://tinyurl.com/ LivetoPlay
Live to Play Sports doubles its bicycle inventory with new DC By Carolyn Gruske
T
raditionally, when a company moves into a new warehouse, the business gets a bigger footprint for storing its products. If it’s lucky, the new facility offers room for future growth as well. For Live to Play Sports, the new DC makes a political point, and serves as memorial for the company’s founder. It is also helphelp ing the company evolve into an e-commerce operation that supports local bricks-and-mortar stores.
Business evolution Although Live to Play Sports may not be a household name yet, the company’s original brand is likely much better known: Norco Bicycles. Martin McDonald, operations manager for Live to Play Sports, says because the company distributes parts and accessories from more than 120 different vendors, in addition to its own Norco-branded bicybicy cles, it needed a name to reflect the full scope of its product line, as well as one that would translate well into the e-commerce world. For example, he says if a Canadian online customer is searching for a specific brand of pump, such as Topeak, it makes more sense to be directed to Live to Play Sports rather than to the Norco-specific webweb site (which will continue to exist). “You’re not looking for a bike, you’re looking for a pump. Live to Play filters that and has all our brands on it,” he said. Martin McDonald, operations manager for Live
Shopping locally
to Play Sports was in charge
Although Live to Play Sports will ship orders directly to customers from its warehouse, McDonald says the company puts every effort into supporting its local dealer network, and driving customers into bicycle
of creating a new DC for the bicycle distributor.
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MM&D | November/December 2013
shops—even to the point of crediting the dealers for online sales. If customers are looking for products on the Live to Play website, they are asked to enter their address. The website will return the names, addresses and websites of local cycle shops. McDonald says the cuscus tomer can then order the part, bike or accessory through the local store (or its website). “Not only does it get the general consumer into the dealer store, but we are able to ship directly to the consumer and the dealer gets credit for it. “The order can be picked up at the shop level or it can be delivered directly to the customer. In most cases there is an incentive for the customer to pick it up at the store. We want that brand-new customer to go into a dealer store. E-commerce has affected us business-wise. We’ve had to change and sell stuff on the Internet without affecting the dealers.” He explained the dealer’s website does the payment processing, but Live to Play helps the dealers create their online presence.
arges b ke company n Canada se up shop here he c y has o ake a e b o no ce Tha was he p an We re a Toron o company so we wan o have some npu on Toron o cyc ng ” sa d McDona d No on y d d L ve o P ay nd a oca on n Toron o p cked one n he hear o wha cons ders o be an mpor an po ca oca on s n he ward reprepresen ed by Toron o counc or Doug Ford he bro her o Toron o mayor Rob Ford “I s probab y he arges ac y n he area ha s why Doug Ford came ou or he sod urn ng ceremony ”
A wh e ce ng and ky gh make he h pp ng ece v ng a ea and he e
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BIKES BIKES Log st cs
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Politics Despite the tough economic climate, business has been strong enough for Live to Play to outgrow its old Ontario warehouse. “The [old] facility was built in 1983. It’s a 30,000sqf facility with 22-ft high ceilings. It’s in Woodbridge. We had to o have a lot o o of our b bikes kes o off-site of -s e for or the he last as hree years us because o our grow h Hav ng o ren ex ra space was why we dec ded o pu every h ng n one bu d ng ” F nd ng a new ocat on nvo ved more than ust buy ng he rs emp y p o o and ava ab e L ve o P ay had og s ca and po ca needs ha needed o be addressed “We wan o be n Toron o proper—have a Toron o address ” sa d McDona d “Toron o s he h rd arges c y n Nor h Amer ca bu s no a very cyc e r end y c y By hav ng he www mmdon ne com November/December 2013
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“All our courier and logistics companies can get to us at a later time. We can have a late pick-up. Almost at 8:00PM. So we’ve saved a bit of time moving back into Toronto.” Late pick-ups are important, especially since the company is thinking of adjusting its own business processes to allow dealers to place orders as late as 4:00 or 5:00PM for next day delivery. “That gives the dealers a little bit longer to order. It’s also gives us an edge over our competitors.” The other consideration company executives had was retaining the staff. McDonald said 90 percent of Live to Play’s employees live within Toronto proper, and relocating too far outside of the city presented a risk that many wouldn’t want to make the move. “Our employees are the backbone of this company. We have lots of long-term employees. I’ve been with the company for 17 years. Some of the warehouse staff have been here for 20 or 25 years. A lot of times employees work their way through the company. “If you are a warehouse person, you understand the basics of the product. You understand returns. You understand how we do things in the warehouse. From there, a lot of the warehouse staff go into the warranty area. You can get your hands dirty there, working on forks and bikes, or if you’re inclined, you can go to customer service. Our national sales manager was in warranty. He picked orders like everybody else.”
The building
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When Live to Play bought the 3.6 acres of land and began planning the building, it did so with future growth in mind. While most of the 60,000sqf facility is taken up with warehouse space, there are three floors, each about 3,000sqf, where the office staff and the customer service and warranty departments will be located. These areas will also provide space for an employee lounge and workout area. In addition to the zones dedicated to Live to Play, the 90,000sqf building contains two smaller facilfacil-
ities—15,0000sqf each. Currently, they’re rented to tenants, but the plan is that if Live to Play needs to expand its warehouse again, it can grow in its own building. The DC has seven dock doors and two drive-in doors. There are seven additional doors in the two leased warehouses. The building was constructed with LEED certification in mind and includes envienvi ronmentally friendly thermoplastic polyolefin (TPO) white roofing, and parking for electric cars and carcar pool vehicles. Inside, the facility is as bright as Live to Play could make it, including the ceiling. “In traditional warehouses, you just leave the roof the way it is. We decided to paint the warehouse ceilceil ing white. It brings a lot more light into the building. Environmentally, Env ronmen a y it’ss friendlier. r end er IIt’ss be better er for or the he sstaff. a Tha s a $40 000 pa n ob Bu or he new enan s was de n e y a se ng ea ure “As we here are sky gh s hroughou he bu d ng They re pos t oned at the dock eve doors at the dr ve- n doors Anywhere add t ona ght ng s requ red You de n e y no ce When he sun comes ou hose areas are h gh gh ed pre y we w h a he na ura gh ng com ng n ” L ve o P ay broke ground n Ju y o 2012 and had been n he p ann ng s ages or mon hs be ore ha The o c a move- n da e was December 9 bu he d s r bu or ramped up s order process ng ab y durdur ng November wh e a so br ng ng n nven ory The process has been ong bu ha was de bera e “We probab y cou d have moved n o h s bu d ng a e sooner The prob em s a ec ed he dea ers I we were ry ng o move n o h s bu d ng n Ju y ha wou d de n e y a ec he dea ers So we he d o made sure we were com or ab e p cked a s ower me o he year o make sure d dn a ec he dea er base ”
Rack ng and storage Wh e McDona d had no prev ous y overseen a new warehouse bu d or a warehouse move L ve o P ay Spor s has done be ore McDona d says he company moved s Vancouver ac y abou 10 years ago and earned a o rom he exper ence nc ud ng he esson ha doesn make sense o move rack ng “They earned a ot rom the r m stakes They moved he rack ng over rom one ac y o he o her wh ch was a d sas er They were c osed down or a mos our weeks Tha was probab y he r b gges hurd e r gh here We dec ded we were go ng o pu new rack ng n h s bu d ng We weren go ng o ake he o d s u apar and ry o move over ” In add t on to the downt me the o d rack ng wou dn have been su ab e even L ve o P ay had wan ed o move The new rack ng s h gher—30 — and s des gned o ho d more MM&D November/December 2013
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McDonald said racking supplier Redirack Storage Systems asked questions that made Live to Play think about its future. “They said you need to look where you want to be in five years, in 10 years. You’re looking at your dealer growth of anywhere from three percent to five perper cent,” he said. “Our old facility had 10,000 bikes. So right off the bat we said want to be at least double that. We put in the racking for 20,000 bikes and then additional space for our parts and accessories. And that’s where we ran into a problem for our parts and accessory boxes and our bulk storage. We already ran out of room at 60,000sqf. “We looked at other avenues, including a pick tower, which holds almost 15,000 SKUs. That’s what we decided to do. It also benefits us because we can throw additional people on the pick tower at that 3:00PM cut-off without having people drive around in picking machines. McDonald says a pick tower works out to be not only more efficient, but also more economic over the long run. A qualified driver earns a higher wage than an experienced picker. In addition, there is the cost of buying and maintaining the order picker. In contrast, he estimates a good human picker can pick approximately 500 to 600 lines—roughly double what can be picked using an order picker. He says even a less experienced picker can achieve 300. Live to Play took the approach of creating the buildbuilding around the racking, right down to having the general contractor to position heating vents, skylights and downspou downspoutss around the he rack racking. ng Bu even w h ha approach mod ca ons needed o be made “The n a a s e w d hs were 54 nches The Crown order p cker wou d down here no prob em bu as you wen h gher up n he order p cker he s des wou d h he op o he racks ” sa d McDona d “So he a erna ve was o go o he super a oor Th s way he mach ne wou dn sway and h he s des The prob em s the add t ona cost was a most $100 000 o have a super a oor “The nex a erna ve was o make he a s es w der The rack ng was a ready n p ace so we had o go back o Red rack o ad us h s who e ayou We needed a eas hree nches on e her s de o h s rack ng so he mach nes cou d hrough and hey wou dn h ”
Co our u approach A ong w h he reques o move he rack ng o w den he a s es L ve o P ay gave Red rack one o her ma or reques co our— o s o o and no he usua hues and ones seen on rack ng “Trad ona warehouse guys say e s make he rack rackng b ue and orange and we us go w h ha bu www mmdon ne com November/December 2013
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be ng a b ke company we need d erent co ours The rep was de n e y a e apprehens ve bu we wen w h red and grey And the a um num co ours or the rack ng So t s very br ght And very br an “The rack ng co ours are ac ua y Norco b cyc e s co ours— ha red We wan ed o change up a eb L ve o P ay a so cus om-ordered he co our o s mezzan ne p ck ng a b ack and ye ow pa e e Wh e L ve o P ay was de gh ed w h he co ours o hers ook a e onger o warm up o he ook “The rack ng guys were de n e y a e b s andando sh [abou he co our cho ces] bu now s up here I h nk hey re pre y happy w h A erwards Gabe Mazze pres den o Red rack was pre y mpressed He ked ”
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A egacy Wh e McDona d s happy o ge pos ve eedback rom peop e who have seen he new ac y n person here s one person who won be ab e o o er hose ypes o commen s Norco s ounder and owner Ber Lew s McDona d sa d over the ast decade Lew s had s epped back rom he day- o-day opera ons o he company bu he cons ruc on o he new DC engaged h s n eres “Over h s as year I ve a ked o Ber more han I d ever a ked o Ber because o he new bu d ng “He wan ed o be kep up o da e so I d send h m p c ures The who e me we were pu ng he bu d ng up he never saw When I e-ma ed h m p c ures I d ask he d wan o come ou and see and he sa d No h ngs are go ng good I see he p c ures “Two weeks ago Ber passed away Un or una e y he d dn ge o see he bu d ng wh ch was sad bu de n e y h s egacy ves on here ” MM&D 19
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Special Supplement
2014: A COMPELLING STORY Supply Chain Vision
Supply Chain Vision 2014 is MM&D magazine’s annual outlook forum, where supply chain executives have the opportunity to share their vision for business in the year to come. In the pages that follow you’ll be able to read how leaders from various parts of the business see the coming year. From our perspective, 2014 is a year with tons of promise. We are planning a year jam-packed with interesting editorial content and innovative opportunities for marketers to reach our readers. We are really pleased to be planning such a great year in 2014, and we are looking forward to having you join us. Our partners are key to the success of the magazine—we anticipate a strong year of profitable business as we work together to serve the Canadian supply chain community with a meaningful and compelling editorial product. Please get involved with MM&D in 2014. It’s your magazine and we look forward to working with you on projects of all kinds. We can be reached at the contact details below.
Emily Atkins, Publisher/Editor-in-Chief, t: 416.510.5130 e: eatkins@bizinfogroup.ca
MMDSCV-Cover.indd 20
Carolyn Gruske, Editor t: 416 442 5600 x 3265 e: cgruske@bizinfogroup.ca
Catherine Martineau, Sr. Account Manager t: 647-988-5559 e: cmartineau@bizinfogroup.ca
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Vision 2014 Rethinking your supply chain for the new year If your resolution is to make your operations more efficient and effective, let MM&D help you achieve that goal. We conducted a virtual roundtable to collect some of the best advice from experts on how to streamline operations and improve efficiency in your DC and beyond. By Carolyn Gruske
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s the end of the year approaches, it’s time to look forward to the promise of 2014 and all the fresh possibilities the New Year holds. To that end, MM&D asked some of the industry’s leading vendors and suppliers to share advice, tips and best practices for improving supply chain operations.
Business review Before making any changes or improvements, or even any plans for the future, it is imperative that organizations understand their current situations first. “You don’t know where you’re going until you know where you are, and you don’t know where you are until you know where you’ve been,” said Al Boughton, president of Mississauga, Ontario-based Trailcon Leasing Inc. Having that kind of knowledge means a company has spent time looking at its past results, and making projections about its future growth in a comprehensive business plan. But just having a plan isn’t enough. It’s important to keep it up to date. “I strongly recommend people revisit their business plan, at least every quarter, if not every month,” said Vineland, Ontario-based Dan Garside, Frazier Industrial Company Ltd’s general manager for Canada. “Based on the dynamics of the industry, things could be changing in the marketplace. They could be affected by legislation or by national trade barriers—or the elimination of trade barriers—which creates opportunities that companies can lose if they aren’t aware of them. According to Garside, that means looking at every-
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thing from customers, to staffing, to the equipment being used, to shipping and transportation contracts, to product inventory.
Metrics It’s not even enough to do a review of the business plan or look at what a company has done historically. It’s critical that businesses quantify and measure everything they can, as sometimes perceptions don’t intersect accurately with reality. “It’s important to measure things that you wish to change and improve, so you can know if you are on target or not. Metrics or key performance indicators (KPIs) can be finance-driven (costs, return on assets, etc), customer-focused (order-fill rates, delivery performance, etc) or operational (APICS SCOR levels),” said Dale Kehler, vice-president and general manager for Burnaby, British Columbia-based SYSPRO Business Solutions. “It helps to use an approach like balanced scorecards so your KPIs reflect multiple (typically four) perspectives in the same measure.” Besides just measuring how well the organization and its supply chain are currently performing, metrics can be used to set the business up for the future. “Leaders set metrics and scorecards that tie back to the company’s overall goals and annual operating plan and then tie these back to a three- to five-year strategic plan,” said Douglas Harrison, president and CEO of VersaCold Logistics in Vaughan, Ontario. “Using scorecards, it is easy to identify areas that are out of compliance with goals and therefore more precisely respond with the appropriate actions.”
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He cautioned that sometimes it is too difficult to find benchmarks that are similar enough to what’s happening inside the walls of the DC or warehouse, to do an accurate comparison.
Inventory control Inventory is key to the supply chain, and managing that inventory properly is something every organization needs to be sure it’s doing. “In terms of inventory control, the importance of proper forecasting and use of data analytics should not be overlooked,” said Jason Adlam, vice-president of sales and customer service for CHEP Canada Inc in Mississauga, Ontario. “When used in conjunction with consistent customer order forecasts, you can quickly see whether or not your current supply chain capabilities are adequate enough to support your customer requirements.” While many companies believe reducing inventory is a good way to cut costs and gain efficiencies, that may not always be the best approach. Sometimes it’s necessary for businesses to grow their inventories. “Continuously rethink and be willing to adjust your strategy,” said Vera Friedrich, CEO and vice-president of sales with Mississauga, Ontario-based Dematic Limited, Canada. “For example, we may too often think in terms of squeezing all the excess inventory out of the supply chain. Calculate the business cost of losing business because there was no buffer or safety stock in the chain in order to cover unexpected demand.”
Technology While most organizations will be looking for their supply chain leaders to spend less and reduce costs, sometimes it’s worth spending a little more now (or in the short term) to ensure there are huge cost savings or efficiencies for the company in the future. “The best place to find cost savings is by integrating new technology,” said Mississauga, Ontario-based Jeff Smart, director of supply chain solutions for PIVAL International Inc. “In the ever-changing world of technology, it is vital for organizations to fully understand the tools available that can vastly improve productivity.” According to Nick Klein Schiphorst, executive sales manager, automated systems, North America for SSI Schaefer System International Ltd, in Brampton, Ontario, “the savings achieved in the DC by using automation are immediate and easy to measure.” He said there are typically three cost-saving reasons why businesses turn to automated storage and picking systems: labour reduction, an increase in throughput (using fewer employees working fewer hours) and a reduction in errors shipped.
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“Often, a cost not considered is that of correcting errors shipped. The cost of bringing an item back into the DC and rushing out the correct item is considerable,” he said.
Fleet management Having control of your moving assets, whether they’re fork trucks in the DC or transport trailers on the highway, is another area that should be a focus for well-run supply chains. “By establishing a baseline of costs, from acquisition to maintenance, including short-term rentals, a fleet solution is able to assist the customer in understanding their overall spend, by facility or as the entire enterprise, followed with recommendations to lean the fleet and create cost savings initiatives,” said Michael McKean, fleet sales and marketing manager with Indianapolis, Indiana-based Toyota Material Handling USA Inc. “If you overlook maintaining your equipment to save money in the short-term, it can cost you more in repairs in the future.”
Modes and packaging Companies often get locked into one way of doing things, and don’t bother revisiting decisions made about transportation modes or packaging. Jeff Cullen, CEO North America, of Rodair International Ltd in Mississauga, Ontario says supply chains need to pay attention to these aspects of the business. “Mode rationalization, specifically, could address the use of ocean versus air, or rail versus road, or using expedited services to meet demand instead of having costly inventory sitting. Can your supply chain withstand extra time or sustain longer predictable transit times without causing challenges elsewhere in the business?” he asked. “Packaging and cubing is a low-hanging fruit that can often, significantly, reduce transport costs, and it’s often overlooked. Maximize the amount of space in a carton or on a skid and ship less air.”
Collaboration As supply chains become more complex and extend further around the globe, they become more difficult to manage. It’s hard to see what’s happening on the ground from an office tower, a continent away. That’s why a well-functioning and efficient supply chain needs as many eyes watching out for it as possible. “In the past, supply chains were relatively simple, short and linear,” said Guy Toksoy, vice-president and general manager of supply chain solutions for Ryder Canada in Mississauga, Ontario. “Today, they are complex, global and interconnected. And most importantly, they’re dynamic. With increased competition and tightening profit margins, businesses have to be flexible and agile in the way
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they manage their supply chains. “So to maintain cost-effectiveness while still meeting the demands of the consumer for speed and responsiveness, the best advice I can give is for businesses to move toward a more collaborative approach for supply chain management. This can mean forming collaborative relationships with carriers, customers and even competitors.”
Forging new relationships Even given that the supply chain is all about relationships with suppliers, creating new ties with new suppliers can be something companies neglect to do, said Trailcon’s Al Boughton. “One of the things we encourage is active interviewing and involvement with alternative suppliers,” he said. “When business is good, it’s a great time to be look looking at all your vendors and seeing what other options are available to you. If somebody comes knocking, take the time to listen to their story. I think there are a lot of people that don’t do that.”
Omni-channel Among the business changes precipitated by the need to meet customer demands is 24/7 omni-channel retailing—letting customers engage the business whenever and however they like, and building a warehouse to support those activities, says Dematic’s Friedrich. “The omni-present digital storefront, open 24 hours every day, in combination with the large retail store, small retail store, printed catalogue, call centre, distributor/dealer, route delivery and customer pick-up channels, are forcing businesses to develop agile and more strategic distribution solutions. It means we need to redefine the warehouse. With omni-channel, the warehouse can be the retail store, your supplier, a dealer’s warehouse, a dedicated retail store distribution centre, a dedicated e-fulfilment operation, as well as a multi-channel distribution centre. “This is an opportunity to re-think how inventory is deployed in your supply chain while making sure labour productivity, order accuracy, inventory accuracy and processing speed are in sync to support the omni-channel challenge. It’s also about balancing and accommodating changing SKU velocity, SKU growth, daily order volume, order quantity, warehouse space, and seasonal and promotional peaks.”
Understanding customers Not only should an organization understand its own business needs and requirements, it must extend its understanding to that of its customers and beyond. “Not understanding your customers from and endto-end perspective leaves a lot of pertinent information on the table which will cause ‘scope creep’ during
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implementations. This, in turn leads to increased costs and conversations with new clients that can damage the business relationship,” said Pival’s Smart.
Inside the warehouse As a racking manufacturer, it’s natural for Frazier’s Garside to have opinions about storage in the warehouse—he strongly suggests using diversified storage mediums that fit the range of products companies typically have, and not just sticking with one type of racking throughout—but he also has advice on other aspects of warehouse operations. “Review the length of time it takes to turn trucks around on your shipping and receiving docks. Are you incurring demurrage charges? Do you have to pay premium freight costs because you can’t load trucks fast enough? Do you have a staging area designed to properly facilitate the fast turnover of docks? What’s very interesting is the quicker you can turn trucks around on the dock, the fewer dock doors you require. Or instead of fewer dock doors, the greater flexibility you have to address growth in the future without adding additional doors.”
Processes While it may be relatively easy to bring in the latest piece of equipment, changing the mindsets of people in the DC may be a bit more of a challenge, said SSI’s Klein Schiphorst. “One tendency we often see with companies that are trying to accommodate changing demands and are considering automation to help them do this, is they initially try to stick to processes they have been using for decades in their manual DC. When it comes to keeping up to change and using automation, the most successful companies are those that realize they must re-think the ways they operate, and all aspects of the DC.”
The dangers of cutting costs As much as every supply chain is being compelled by the C-suite to cut costs, there are limits as to how much can be taken out without causing damage, said CHEP’s Adlam. “As the old adage goes, you get what you pay for. Anytime cost optimization exercises infringe upon your product and/or service quality of the goods and services offered by an organization, you need to rethink the cost-cutting exercise. Validating your supply chain initiatives against the customer experience is a must. Conducting customer satisfaction or touchpoint surveys help to gauge the effectiveness of any newly implemented supply chain initiative. When looking to optimize your supply chain you always need to think about customer impact.” MM&D
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SUPPLY CHAIN VISION 2014
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National reach, personal touch The big picture. It is what every business needs to see, but sometimes, the only way to get that perspective is to focus on the small details. “Companies need to look at their supply chains on a macro level,” says Douglas Harrison, President and CEO of VersaCold Logistics Services. “How do customers decrease inventory levels and increase velocity while still meeting and exceeding customer needs?” One way is to work with a partner that can help you understand and evaluate all aspects of your temperaturesensitive supply chain, and that can provide crucial support services—everything from providing inbound transportation, blast freezing, treating, labeling and packaging products, and outbound delivery—freeing you up to work on the core aspects of your business: driving sales and revenue growth. With five separate divisions and 33 facilities across Canada, VersaCold is the leading Canadian provider of value-added logistics services for temperature-sensitive and related products. “Our culture is to work with the customer in defining needs and setting up programs to produce optimized solutions,” says Harrison. “Our national platform and our uniform set of standard operating practices (SOPs) make it easy to do business with VersaCold. VersaCold is unique in the market with expertise in end-to-end supply chain services and the unique nature of temperature-senstive products. We work closely with our customers to provide a single service right through to fully outsourced 3PL and 4PL solutions.” Those solutions are drawn from the wide range of capabilities of VersaCold’s divisions: VersaCold Third Party Logistics • Dedicated facilities • Dedicated contract carriage • Customized engineered solutions • Fully integrated logistics services VersaCold Transportation Solutions • LTL (frozen, refrigerated) • TL (frozen, refrigerated) • Dedicated contract carriage & DSD
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Douglas J. Harrison President & CEO VersaCold Logistics 316 Aviva Park Drive Vaughan, On L4L 9C7 (905) 265-7185 Douglas.Harrison@ versacold.com
VersaCold Transportation Management Solutions & 4PL • Intermodal TL (frozen, refrigerated, ambient) • Domestic & cross-border TL (frozen, refrigerated, ambient) • Transportation management • Fully managed supply chain solutions (4PL) VersaCold Logistics Solutions • Frozen, refrigerated, ambient • Value–added, including labeling & packaging • Reverse logistics & recall management • Cross-docking • Inventory management VersaCold Distributor Services • Specialized distributor of frozen and temperaturesensitive food products • Inventory planning & replenishment • Marketing support & merchandising • DSD and other transportation capabilities • Warehousing & cross-docking Over the last year, we’ve completed an upgrade to a new WMS. Our TMS is world-class. We’re adding a number of self-reporting and monitoring tools to provide customers with even greater insights into their operations. We’ve also invested several million dollars into updating our road transportation fleet and improving the energy utilization and environmental footprint of our facilities, reducing both our CO2 output and our energy usage.
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Creating logistics results in 2014 We want to take this opportunity to thank all the users of Dematic warehouse logistics systems for your continued confidence and trust in our engineering company. In 2013 you asked us to design and implement more high-performance receiving-to-shipping solutions than ever before. To support your growing requirements, Dematic added hundreds of new employees throughout North America in 2013, the vast majority of whom have engineering skills in operations, process improvement, mechanical, electrical, controls and software; this is the expertise we will continue to develop in order to create more logistics results for your operations.
SUPPLY CHAIN VISION 2014
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Vera Friedrich CEO & Vice President Sales Dematic Limited, Canada Tel: (905) 363-6964 vera.friedrich@dematic.com www.dematic.com
As we enter 2014 and look to the future, our engineering teams will focus on designs and methods that will increase the effectiveness of your ever-changing distribution requirements. For example, we can help you with logistics strategies that support omni-channel distribution, efficient retail store shelf re-stocking, route sequenced order assembly and continuous replenishment (smaller orders, more often). In 2014, look for solutions from Dematic that will include new ways to decant and put-away inventory, automate replenishment, and optimize piece picking for e-fulfillment. You will also see new configurations of light- and voice-directed put/pack walls as well as semi-automated and fully automated mixed case palletizing solutions. Meanwhile, we will focus on providing warehouse logistics solutions that focus on your core operational issues: order/inventory accuracy, labour productivity, SKU growth, space optimization, energy consumption and “average-to-peak” variations in order volumes. In the area of system controls, expect to see new functionality in our WCS software suite that will offer increased operational flexibility, modularity and scalability. Expanded software capabilities from Dematic in analytics and operational data allow users to react faster and adjust system operation when activity profiles change in your distribution centre. For example, our real time software tool, Mobile Monitor, brings “mission control” to your smart phone or tablet device. We look forward to including Mobile Monitor and other new software releases in your next system. As always, Dematic is dedicated to improving your logistics results. We would be pleased to help you by creating logistics results in your operation.
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SUPPLY CHAIN VISION 2014
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Never break the chain: Supply Chain Optimization’s winning formulas With the help of a robust, trustworthy ERP (Enterprise Resource Planning) solution that takes in the wider view of the supply chain, planning cycles can be reduced, production scheduling enhanced, and the generation and management of purchase orders automated. Whatever your supply chain looks like—from a single small-scale factory to multinational network—it is most likely composed of organized systems of people, technology and resources. Each of these critical cogs needs to be working at peak efficiency, but how do you achieve this, and how do you know when you’ve achieved it? Dale Kehler Vice-President & General Manager, SYSPRO Business Solutions- Central
Supply chain optimization itself
Let’s not overlook the seemingly obvious: SCO itself needs to be accepted as a force for good—one that can help drive profitability during a stagnant economic period and beyond. SCO processes continuously analyze and monitor costs, time and quality, helping guide management to make decisions that maximize performance across the supply chain.
Inventory optimization
Your inventory is a balance sheet asset, so stock should be kept to the lowest levels while simultaneously guarding against out-of-stocks. Enterprise resource planning software can help you minimize cash tied up in ‘dead’ stock and keep your inventory processes fast, fluid and efficient.
Download Your Free Book: Inventory Management and Optimization Go to http://digital.syspro.com/supplychain Call: 1-888-259-6666, Ext. 5228 Email: marketing@ca.syspro.com Planning optimization
Accurately predicting what and how many items a business will be selling in the future is the supply chain sector’s Holy Grail. Enterprise resource planning software can help forecast future demand, helping production managers plan schedules and deliver products that flow to the customer without gathering dust in warehouses.
Look at the system as whole
Due to the complexity and diversity of modern supply chains, increasingly sophisticated processes are required to ensure total optimization. It is the essence of supply chain optimization to apply processes that will improve the operation of a supply chain in its entirety. Whether you have employed all or just one of the above approaches, you’ll want to look for an ERP, demand forecasting or inventory system that’s designed by a team that understands your business. Only then can your supply chain ever attain the accolade ‘optimized’. SYSPRO is enthusiastically appreciated by the many Canadian companies that already rely on its ERP software.
Manufacturing optimization
Inefficient use of raw materials and the resultant costly wastage is a source of great pain for supply chain manufacturers, hampering further expansion, plant optimization and growth. Manufacturing optimization—known as ‘lean manufacturing’—aims to maximize customer value while minimizing waste, creating higher value from fewer and lower-cost resources.
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www.syspro.com
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SUPPLY CHAIN VISION 2014
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Accelerate your expectations Rodair is proud to profile our new look and brand starting in 2014. Rodair is a high-touch solutions company delivering customized logistics experiences for our client partners. Embedded in the DNA of Rodair is a drive to deliver reliability with every interaction. Through the marriage of high tech and high touch, Rodair creates and delivers tailored logistics solutions supporting key market verticals in fashion, retail, automotive, and mining. Rodair provides international freight forwarding, project forwarding, courier, warehouse and distribution, customs brokerage, and 3PL services. We build tailored solutions to support clients around the globe. Rodair taps into a reach spanning all continents, providing clients solutions that sew together the supply chain from factory floor to retail floor, showroom floor and final user. Rodair is defined by the acronym that identifies our values: • Responsibility means always being our best without compromise • Opportunity means exploring all possibilities and driving innovation • Dedication means delivering on all promises made, always • Accountability means making every decision honestly, responsibly and precisely • Innovation means stretching our imaginations to create unique solutions • Respect means being fair with every individual stakeholder experience All of our values touch on the three core stakeholders we interact with in every unique experience: our client partner, our vendor partner and our employee partner. Every unique experience and interaction supports the values that run to our core. The red in our logo speaks to our roots firmly embedded in Canada, with the red integrated into the logo being the same colour in the Canadian flag. We are proud of our Canadian heritage and our global reach that has grown from our Canadian base since 1996.
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Jeff Cullen CEO - North America Rodair International Ltd. 350 Pendant Drive Mississauga, Ontario L5T 2W6 T: +1 905-671-4655 skype: brijeffcullen http://rodair.com
The arced letter “A” in our name with the red dot represents the individual stakeholder in our world; the individual client, the individual vendor and the individual employee. The shape of the arced “A” represents the strength and security we provide to every one of our stakeholders, while leaving the bottom open for imagination, creativity and acceptance of innovation. We strive to be the standard against which all others will be measured. We are a company that empowers the imagination of all our stakeholders in a supportive environment where innovation is expected. Rodair recognizes that performance at the highest standard is an obligation. We are wholly committed to being Canada’s best provider of reliable customized logistics solutions. The Art of Reliability, as defined by Rodair, is our ability to perform and deliver the highest level of reliability even as the most adverse or unexpected circumstances arise. It is our Artistry that truly differentiates Rodair from our competition by delivering customized solutions with precision and reliability in every experience. In an ever changing global landscape/environment, our solutions are often very sophisticated, but our business model at the core is quite simple: Say what we are going to do. Say what it will cost. Deliver what we promised. No compromise.
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SUPPLY CHAIN VISION 2014
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Designed for your lifting needs Landoll Corporation, which celebrated its 50th anniversary in December 2013, is located in Marysville, Kansas. Landoll is a diverse and vertically integrated manufacturer of products for the Material Handling, Transportation, Agriculture and specialty OEM and Government markets, employing approximately 1,000 individuals. The Material Handling Division manufactures forklifts that operate in aisles as narrow as 56� with lift heights to 40’ and capacities from 3,000 to 12,000 lbs. The Narrow Aisle Forklifts include the original and popular Bendi front articulating forklift that has been converted to AC, as well as the IC truck. Landoll is the manufacturer of the highly reputable Drexel SwingMast line of Very Narrow Aisle trucks. Both the Bendi and Drexel SwingMast forklifts provide maximum utilization of storage space by reducing aisle sizes while still performing all the jobs of a front loading forklift. This includes loading and unloading trailers, going from the dock to the rack without staging, climbing ramps and working in a variety of applications.
Don Landoll Founder & Owner
Landoll Corporation provides a wider range of solutions to those customers wanting to minimize storage aisle sizes, and maximize productivity and equipment utilization. Innovative new designs and continuous product improvements keep Landoll in its position as a leading provider of these narrow aisle forklifts. Landoll distributes and supports its forklift line through over 100 independent dealers worldwide. LANDOLL CORPORATION 1900 North Street, Marysville, KS 66508 800-428-5655 Visit us on the web at: www.landoll.com CONTACT: Ed Campbell, Sales Manager, Material Handling Division ed.cambell@landoll.com, Phone: 540-220-4124
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SUPPLY CHAIN VISION 2014
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Collaboration is key in tomorrow’s supply chains. In today’s complex business environment, companies are more focused on finding new, innovative ways to manage their supply chains to control costs, reduce risks, and remain competitive. They are also relying more and more on third-party supply chain partners to add value, increase flexibility, and bring innovative solutions across different industry verticals. We suspect the challenges supply chain professionals face will constantly evolve for years to come. In the short term, however, we see three supply chain trends that will continue to evolve in 2014: (i) Collaboration, (ii) Nearshoring, and (iii) Sustainability.
To meet demands for speed, quality, and cost effectiveness, businesses are forming more collaborative relationships with both traditional and non-traditional partners—including carriers, customers, and even competitors. The retail industry is a great example of how businesses are finding innovative ways to collaborate, even among competitors. The Canadian Retail Shippers Association (CRSA) is a collection of top retailers in Canada whose members combine their Asian direct import ocean volumes and domestic Canadian transportation volumes to jointly procure a port-to-door service. The Association’s 14 members make CRSA one of the largest retail ocean buyers in Canada. In addition to being able to lower their inventory in the supply chain through more frequent smaller shipments, CRSA members generally enjoy significant savings for origin logistics (PO management, consolidation), ocean freight, transloading in Vancouver and Halifax, and rail due to their combined size. This collaboration model has been a success story for over 30 years helping its members keep their landed costs competitive against larger companies.
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Guy Toksoy, Vice President and General Manager, Supply Chain Solutions, Ryder Canada
Nearshoring is another trend that is changing the way businesses manage their supply chains. As developing countries have evolved into consumer markets, labor costs have risen. In addition, affordable alternative energy, such as natural gas, has dramatically lowered the cost of running energy-intensive production facilities here in North America. Companies manufacturing or sourcing in Asia are also faced with managing a much riskier and complex supply chain. This nearshoring activity has significant supply chain implications. Some of the benefits include removing inventory from the supply chain, predictable quality, more control over intellectual property, and lower transportation costs. But nearshoring is not for everyone and businesses need to consider all the factors that relate to their specific industries. For instance, labor costs remain high for some products that are more labor-intensive to produce, such as shoes and apparel, but still relatively cheap to ship from Asia. There are also capital investments required to set up or retool production facilities making return on investment horizons longer than some companies may be able to accept. Managing supply chains more sustainably will also continue to be an area of focus as consumers and shareholders look for greater transparency, responsibility, and efficiency from the business community. The good news is that many of the strategies that improve sustainability in a supply chain also improve the bottom line. Whether it’s more efficient truck engines, alternative fuels, or re-engineered distribution networks, going green can help reduce environmental impacts and still optimize performance and service.
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SUPPLY CHAIN VISION 2014
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CHEP Canada: Providing value for customers beyond the pallet Providing value beyond the pallet has been the route to steady growth for CHEP Canada over the last 35 years. The company, known for the quality and strength of its pallets, has developed a network of more than 10,000 shipping and receiving locations throughout the country. The pooled pallets carry products along the supply chain from manufacturers to distributors to retailers before returning to CHEP service centres to be placed back into the pool for reuse. “Our wide network coverage is one of the main reasons customers choose to partner with CHEP,” related Jason Adlam, VP Sales and Customer Service. “Plus we offer true flexibility in the marketplace. We are the only pooled pallet company that can provide multiple platforms— hardwood stringer, block and modular display pallets,” he added. “Our sister company, Paramount Pallet, can supply whitewood pallets to customers who need them. And our CAPS partner offers a variety of bulk containers for liquid and dry materials.” But CHEP tends to gain and keep customers for reasons besides pallet quality and its range of product offerings. “We collaborate with customers to determine how we can help them save money by making their supply chains better. The pallet is the enabler to value creation,” said Adlam, noting that in the last fiscal year alone CHEP helped hundreds of Canadian customers save more than $6 million, focusing on all aspects of the supply chain. “We analyze their operations, streamline processes and automate pallet reporting data. We also look for ways
Jason Adlam CHEP Canada Inc. jason.adlam@chep.com Tel: (905) 789-4213
to optimize transportation and cube utilization, either through a CHEP-delivered service or customer pickup,” he explained. “Often times we can reduce pallet costs by having raw materials suppliers deliver on CHEP, so every pallet a manufacturer receives from the supplier is one less that they have to get from a CHEP service centre.” CHEP also offers the Total Pallet Management (TPM) program, which creates a pallet centre at the customer’s facility. Pallets are returned directly to the TPM site rather than going first to a CHEP service centre. TPM is designed to optimize costs, increase efficiency in the supply chain and reduce environmental impact of transport services for the distributor, Adlam explained. The program is expected to help one of Canada’s largest grocery retailers eliminate more than 5,500 gallons of diesel fuel and nearly 60 tons of CO2 emissions annually, he noted. Sustainability is another key element of CHEP’s value proposition to customers. “Our business is based on recovery of our assets, reduction of waste, reuse and recycling of our equipment. We are known globally as a supply chain ‘sustainable leader’ because of our commitment to reduce our own and our customers’ impact on the environment,” he said. “Our purpose is to build better supply chains with our customers. The journey that we’re on now in creating value beyond the pallet is just going to intensify over the next five years as we continue to help our customers transport their goods more efficiently, cost-effectively, sustainably and safely,” said Adlam.
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SUPPLY CHAIN VISION 2014
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Schaefer systems creates efficient distribution solutions The Schaefer team remains committed to providing our clients with unconventional picking and storage solutions. What differentiates us from the competition is our commitment to working closely with our clients to thoroughly understand their operational data, offering a better return on investment. As the need for reducing the footprint of the operation’s floor space continues to increase, the need for developing solutions that include buffering or sequencing systems to feed goods-to-person picking is imminent. Schaefer’s MATRIX design will allow us to continue to help customers meet this demand and ultimately be successful in the upcoming years. The MATRIX design enables Schaefer to access any case or pallet that is stored in their high-bay warehouse (HBW) and transport it directly to any picking station in front of the HBW without the bottleneck of a vertical lift, or a conveyor loop distributing to the various pick stations. A truly unique, three dimensional (XYZ), MATRIX system. Let us show you how. From initial data analysis and consulting services to complete in house manufacturing that includes plastics and software, Schaefer is 100% committed to delivering the best value solution to its customers. SCHAEFER believes there is a more effective way to design a distribution centre than the way we have in North
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Nick Klein Schiphorst Executive Sales Manager, Automated Systems Division Tel: (905) 458-5399, Ext. 11 Fax: (905) 458-7951 nick.klein@ssi-schaefer.ca www.ssi-schaefer.us
America for the past 50 years. We can make better use of land, better use of cubic space and make distribution centres more energy and labour-efficient in the process. SCHAEFER’s automation integrates with any existing system and has earned us an international reputation as the global leader in the material handling industry for all sizes of operations and for all levels of complexity. Over 70 years of experience and 100% commitment to quality back all SSI SCHAEFER products. Contact Schaefer Systems and let us show you how we can help your company design and build a distribution centre that will show you a substantial return on investment in less time than you may believe possible.
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SUPPLY CHAIN VISION 2014
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Right-sizing with the right partner Relationships matter. Having partners you can trust and who will work with you during the good times—and especially during hard times—is something every business needs. At Trailcon Leasing Inc, we understand that need and we’re here to be that partner you can rely upon. The company was founded by Trailcon president Al Boughton over 20 years ago with the goal of creating a trailer leasing, rental and fleet management business built on the principals of honesty and integrity. Trailcon’s other cornerstone is our progressive approach to technology. “We have the best hardware, software and systems in Canada, by far. It’s why we’re in business with Wal-Mart, Target, Canadian Tire and all of the big companies. They know we are superior,” says Al Boughton. “They also know we’re here to look out for our customers. It’s our job to make sure you’ve always got the optimal fleet for your business, and for the economic conditions of today and for the future.” “The most important thing for any carrier out there— whether you’re private, for hire, or a railway—is rightsizing your fleet for today, but having enough flex in it so you can downside or upsize when business opportunities come along,” says Boughton. “There are just way too many companies that right-size for good times, but they don’t have the flexibility for bad times. They don’t have relationships to allow them to adjust to the market.” Having a relationship with Trailcon means having a partner that will give you practical advice and guidance. “If your trailer life is ten years, make sure that 10 percent of all your trailers are expiring every year, so if you’re downsizing because your business goes sideways on you, you can rightsize your fleet as quickly as possible,” says Boughton.
Al Boughton President Trailcon Leasing Inc 6950 Kenderry Gate Mississauga, ON L5T 2S7 905.670.9061 ext. 245 al@trailcon.com
It’s also about having a partner that can offer you the level of service you need. Trailcon can: • Supply short-term rental trailers (including flat decks, refrigerated, dry freight vans, storage and city trailers) across Canada • Offer long-term leases of built-to-order trailers • Provide emergency service for your entire trailer fleet • Co-ordinate your fleet management, taking care of everything from registration storage to tracking maintenance records, to dealing with government inspectors. Trailcon provides detailed spending and analytic reports and accurate modelling and forecasting of upcoming expenses. “We are cost-competitive. We supply the highest level of product but at a price that’s competitive with anybody else in the market,” says Boughton. “We’re also continually working to improve our own operations. We are building a new super-facility in Brampton, Ontario that will become our new company headquarters, plus we’re on the acquisition trail, looking to expand our local coverage. We already have locations in Calgary, Edmonton and Cornwall, plus a sub-branch in Langley, so we can be close to our customers, no matter where they are. Our highly trained and experienced staff are loyal not only to Trailcon, but also to our customers. They’ll strive to ensure you’re provided with the top quality care and attention because that’s what partners do for each other, and because that’s what you deserve. Our customer base is the best in the world.” 24/7 SERVICE NUMBER: 855-ROAD-RPR (855-762-3777)
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SUPPLY CHAIN VISION 2014
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The original is still the best Frazier Industrial Company’s trademarked blue and orange pallet rack is so recognized by warehouse professionals that other lightweight racking companies try to imitate us. We are flattered, but don’t be fooled! For over 60 years Frazier Industrial Company has been an industry leader in the designing and manufacturing of storage solutions. From standard pallet rack to complex pick-to-belt towers and AS/RS installations, Frazier’s expert team of engineers design the best, most costeffective material handling solution for every project. Frazier’s commitment to hot-rolled steel for each customdesigned storage rack solution fits the high standard of excellence that is demanded by us and our customers. Each system design is created to meet the unique need of our customer as well as to satisfy the need of Frazier to produce safe, durable, and cost effective rack. We have successfully implemented various sized projects across multiple industries, including grocery, food processing, retail, automotive, 3PL, home improvement, cold-storage warehouses and beverage. Experience is the best teacher and every bit of wisdom Frazier has accumulated over the years in providing rack systems is incorporated in the design, engineering, fabrication, erection, and the successful implementation of each system Frazier is able to provide a superior product at a competitive price due to its unparalleled fabrication infrastructure. Frazier relies on a highly productive network of U.S. and Canadian owned “mini-mills” that provide the necessary raw material. This raw steel is then manufactured into the required product lines. Our investment in a network of strategically located fabrication facilities enables us to
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Dan Garside General Manager 4130 Victoria Avenue, Unit 200, Vineland, Ontario LOR 2CO. Tel: (905) 562-4500 dgarside@frazier.com www.frazier.com
provide as much material as quickly as possible to any geographic region. Frazier has 10 manufacturing plants strategically located throughout North America as well as our Canadian Sales/Logistics offices in Vineland, Ontario. Frazier’s confidence in its structural rack enables us to offer a Standard Two-Year Warranty against forklift truck abuse… yet another Frazier difference. Frazier’s full line of storage solutions features: The Pallet Mole® high-density storage retrieval system, Selecdeck® full system case flow, drive-in & glide-in systems, cantilever, sentinel series pallet rack and rack supported buildings. Frazier’s custom-designed products like the Label Beam®, Glide ‘N Pick® and Ergo Beam provide additional value-added solutions to specific warehouse situations. See the full-line of Frazier products at www. Frazier.com or call (800) 614-4162 to speak with a Frazier Account Representative.
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SUPPLY CHAIN VISION 2014
Advertorial
Toyota Material Handling, U.S.A. – Celebrating decades of innovation Celebrating more than 45 years, Toyota Material Handling, U.S.A., Inc., serves as the supplier for the number one selling lift truck brand in North America since 2002. Holding the sales leadership position is only one aspect of the company’s success. Setting the Bar in Safety
According to an independent research study conducted by Peerless Media Research Group, Toyota lift trucks rank the safest for two years running. In fact, Toyota led all three categories including: safety; fewest safety-related incidents; most affordable to maintain in terms of safety. This was achieved, in part, by innovative technology such as Toyota’s industry exclusive System of Active Stability™ (SAS), a stability enhancement system that electronically monitors a lift truck’s operations and reduces the likelihood of a tip-over.
Made in North America with Pride
For more than 20 years, Toyota has been proud to provide our customers with high quality products built at the award-winning Toyota Industrial Equipment Mfg., Inc. (TIEM) facility based in Columbus, Ind. A zero-landfill facility and Industry Week’s Best Plant, TIEM manufactures the majority of Toyota’s lift trucks sold in North America.
Exceeding Customers’ Needs for Powerful Performance and Fuel Efficiency
The 8-Series line now includes 8,000 to 17,500 lb. pneumatic large capacity lift trucks with diesel, LPG, gasoline and dual fuel engines, along with cushion LPG-powered models with 8,000 to 15,500 lb. lifting capacities—suitable for almost any work environment. Powering this line of lift trucks are two new Toyota designed engines that are able to deliver the same or greater horsepower and torque than the larger 6-cylinder engines they replaced. These Toyota-built engines offer increased power, while reducing fuel consumption by 30% for the diesel engine and 20% for the gasoline/LPG models. Toyota’s new diesel models meet the EPA Tier IV Final regulations and the new gasoline models meet the EPA TIER II regulations.
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For more information, please visit toyotaforklift.ca, follow us on Facebook.com/ToyotaForklift, Twitter.com/ToyotaForklift or call 1-800-226-0009.
Total Solutions Provider
Toyota is committed to being a total solutions provider, offering customers the solutions they need for a diverse range of material handling needs. In addition to electric and internal combustion forklifts, numerous design advancements and industrial equipment solutions that have improved the material handling process and enhanced the end-user experience, include: • Automated Guided Vehicles (AGVs) – Toyota’s AGVs offer customers several benefits, including higher productivity, continuous operation, reduced product damage, improved process flow and the reduction of non-value-added activity. • Fleet Management – Toyota’s Fleet Management Solution goes beyond simple reporting to actually analyzing your fleet and making the right recommendations to deliver a lean fleet. This lean-thinking approach ensures customers receive optimal fleet performance at the lowest possible cost of ownership.
Industry-Leading Dealership Network
Toyota lift trucks are backed by proven product support from an industry-leading network of dealers who offer a broad range of resources including: factory-trained service technicians, Toyota Genuine Parts and Toyota Certified Used Equipment. A North American network of 70 authorized Toyota dealers with 220 locations work together to offer industry-leading sales, service and parts support to fulfill all of its customers’ material handling needs.
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Pival: Improving to serve you better Background
As Pival continues to support its philosophy in evolving to create value every day and continue its progress to be an industry leading end-to-end supply chain provider for customers, 2014 will prove to be yet another year of positive results. Our commitment to provide the very best solutions for our customers is what drives our vision for our staff which, in turn, reflects a very positive environment within our facilities and improves our customer’s experience.
Mario La Barbera President Pival International 1-877-424-1623 MLaBarbera@pival.com www.pival.com
SUPPLY CHAIN VISION 2014
Advertorial
Improving efficiencies and controlling costs:
2014 brings with it new initiatives within our organization. Specifically we have launched our “Operational Excellence” program in which our goal will be to help our employees embrace a culture of excellence. This involves leading with humility and listening to our employees. Our employees can quickly identify how to make all our processes streamlined, resulting in seamless customer implementations and standardization of all aspects of our business across our facilities in Canada. Another critical element is listening to our customers to determine how to add more value without increasing costs thereby creating significant efficiencies. The best place to find cost savings is by integrating new technology. Pival has improvement and redesign initiatives for our WMS, TMS and website. These initiatives bring a high level of excitement, generating productivity gains within our organization that will surely benefit our goals and expectations for 2014 and beyond. This year we will continue to focus on our unique ability to service our customers with rail access in three of our current facilities. This service has proven to bring with it cost savings and we will continue to look for ways to take advantage of Canada’s expansive rail systems to move products across North America.
Common mistakes:
Lack of planning to market changes and staffing requirements are very costly. For example, if you do not plan on how to deal with major sku proliferation you can quickly fall short on processes, systems and resources to avoid costly errors, delays and poor KPI’s.
Growth:
Our 2014 expansion plans within Canada will allow us to continue to diversify our customer base and showcase our willingness to acquire facilities to better accommodate all customer requests. Pival will add to our already expansive square footage presence in the market place. We will add talent and improve on an already effective/experienced ff ffective/experienced team across Canada. There will be a continued focus on expansion in Contract Warehousing and Transportation Services in the areas of Expedited Ground/Air, LTL, FTL and intermodal. Our continued efforts fforts to remain flexible ff to our customers, offer ffer solutions that are viable and cost ff effective, ffective, will make Pival a value-added partner for our ff current clients as well as future partnerships.
Pival – Partners In Value Added Logistics
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DATA CAPTURE
Datacapture news Pilot project The British Red Cross has embarked on an RFID pilot project. The aid agency is putting RFID tags on field equipment, including laptops, satellite phones, GPS locators, surveying equipment and vehicles used in humanitarian projects around the world. Handheld devices will then be used to scan the tags in the field, and upload information about the items’ locations to servers in the UK. The project is being conducted at the Red Cross international warehouse, located in Bristol, UK, where the agency stores logistics and mass sanitization emer emergency response unit (ERU) equipment. The logistics operations use forklifts, drilling and construction equipment, hygiene promotion items, vehicles and generators—all of which will be receiving the tracking tags. “As an organization supported and funded by our donors, our accountability and visibility are vital, and we take the responsibility of tracking our assets very seriously,” said British Red Cross logistics support officer David Northfield. “The new asset management system will help us do that, as well as streamlining our processes and response”.
Acquisition SATO, a Charlotte, North Carolina manufacturer of barcode printing, labeling and RFID solutions has purchased Magellan Technology PTY Ltd, an Australian-based developer of RFID technology. Magellan is best known for its Phase Jitter Modulation (PJM) transmissions solutions. In the deal, SATO will get the company’s healthcare business as well as all intellectual properties.
Take-over Barcoding Inc, a Baltimore, Maryland systems integrator, specializing in automated data capture and wireless supply chain and mobility systems, has purchased Miles Technologies Inc of Lake Zurich, Illinois. Miles provides barcode and RFID equipment and develops software applications for warehouse management and asset tracking.
Expansion The Association for Automatic Identification and Mobility (AIM), which helps set RFID standards, and lobbies for the industry, has created its European division. Aim Europe will be the umbrella organization for chapters in Germany, the Netherlands and Russia. Frithjof Walk, a senior executive with FEIG Electronic GmbH has been elected president of AIM Europe. www.mmdonline.com | November/December 2013
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Datacapture products RFID printer The ZD500R UHF RFID printer from Zebra Technologies is a thermal desktop printer designed for small spaces. It offers one-touch printing and encoding. Standard printing resolution is 203dpi (eight dots per millimetre) with 300 dpi (12 dots per millimetre) optional. Maximum print speeds are 152mm (6in) per secsec ond at 200dpi and 102mm (4in) at 300dpi. The ZD500R comes with 28MB SDRAM memory and 256MB Flash memory. It is suitable for use in case/ pallet tracking, parts tagging, and asset tracking applications.
Imaging scanner The PowerScan 9500 family of imagers from Datalogic offer omni-directional reading capability and a new aiming system, which uses a central cross with four dots in the corners to help the operator correctly align the item to be scanned. Built for use in ware warehousing, transportation and logistics environ environments, the PBT9500 includes a soft white light for illumination and a ‘liquid lens’ so it can focus at multiple distances. It is Bluetooth 3.0 Certified Class 1. The cradle is built to with withstand 50 drops from 1.2m (3.9ft) onto a con concrete surface, and the PBT500 itself can take 50 drops from 2.0m (6.6ft) onto concrete.
Convertible holder For owners of Motorola mobile computers, the comcom pany’s new RFD5500 UHF RFID Sled can be used to turn the MC55, MC65 or MC67 into a handheld RFID reader. The sled, which features a gun-style grip, comes with an omni-directional antenna and it supsup ports regions based on European, Japanese and US RFID frequencies. The RFD5500 can direct operators to the items needing scanning using a combination of audible and visual cues. It uses Motorola’s MAX Secure to ensure secure data transmissions over either the WLAN or the WWAN.
Rugged terminals The BHT-1300 Series of 1D and 2D handheld wireless barcode terminals from Denso, have domed-shaped keys, making it easier for gloved-operators to use the devices. They have large LCD displays with wide viewing angles for better viewing in the sunlight. The BHT-1300 Series supports the IEEE802.11b/g/n standards. The terminals can be used for up to 28 hours between battery charges. Denso has built the BHT-1300 to withstand 30 drops onto concrete from a height of 2.0m (6.5ft) plus an additional 30 drops from 1.2m (3.9ft)
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PRODUCT FOCUS: SAFETY AND SECURITY EQUIPMENT
Protecting valuable people and property
1. Safeguard the safety equipment
Fortress Interlocks’ tGard line is designed to manage safety products including electrical safety gate switches, mechanical trapped-key interlocks and electrical operator controls. The system includes a variety of solenoid and non-solenoid safety switches, personnel keys, emergency releases, e-stops, indicator lamps and door handles. The components are then assembled into a metal-bodied housing, customized for the user’s application. The final unit can be mounted on flat surfaces, doors, or extruded aluminum profiles.
3. Single control panel
The Platinum Series Master Control Panel from Blue Giant centralizes and integrates dock door controls, including the dock leveler, vehicle restraint systems, overhead doors, dock lights and inflatable seals. The LCD panel displays safety signals and messages. It also has a stop button that permits the operator to halt or limit equipment motion in the event of unsafe conditions. The flat-surface system has touch-screen buttons, a keypad, and a polycarbonate enclosure. It is water- and corrosion-resistant. The Platinum Series Master Control Panel comes with on-board diagnostics and self-testing applications.
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4. Self-locking seal
2. Moisture-diffusing camera
The VPort P26A-1MP-T from Moxa is a ruggedized, fixed-dome, HD IP camera. Designed for use outdoors, it can conduct exterior surveillance of warehousing facilities or truck yards. It operates in temperatures ranging from -40C to 75C. The VPort has a vandal-proof dome cover, a metal housing, and withstands rain and dust. It comes with a built-in dehumidifier membrane to prevent fogging, icing or overheating. Resolution is 1280 x 800 pixels at 30 frames per second. It can stream both daytime and nighttime images in H.264 or MJPEG formats.
The G2G Pallet and Crate Seal from LabelMaster can be used on both steel and poly straps measuring between 1.3cm and 1.9cm. The seals are tamperevident (they break in strategic spots to indicate tampering) and self-locking. They are made from clear plastic polycarbonate. G2G seals can be customized with barcodes, inkjet markings or consecutive tracking numbers. No tools are required to attach the seals. Over 100 PSI of pressure is required to break the seals.
5. Red Alert
ShockWatch 2 Impact Indicators from ShockWatch Inc provide a visual warning if a shipment has been mishandled. The tamperproof, serialized tags stick onto the outside of boxes and packages. The single-use indicators register if a product has been dropped during transit or storage, turning red when impact beyond a specific threshold has occurred. They work in temperatures ranging from -25C to 80C and are sensitive to impacts registering between 5G and 75G of force. The ShockWatch 2 Impact Indicators are field-armable and also serve as a visual deterrent to improper handling.
MM&D | November/December 2013
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LEARNING CURVE
Linking in the supply chain Using social media for career advancement
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inkedIn is a leading, professional networking, social media tool with more than 259 million members, and two new members joining every second. Its worldwide popularity is undeniable. One in five Canadian professionals has a LinkedIn profile, as do 25 percent in the US and 17 percent in the UK. LinkedIn gives members free access to connections (other LinkedIn users), which are made when one person invites another to join his/her network, and the second person accepts. This request process allows people to restrict unknown or unwanted connections. The site also allows users to decide how visible they want to appear to others, inside and outside of their network. LinkedIn also allows an individual to reach out to his or her connections’ connections—if the person connected to both agrees to broker the introduction. LinkedIn’s product functions most often—and very efficiently—as an online résumé-sharing tool. Users can update their résumés (profiles) instantly and display their professional skill sets. Recruiters are constantly using LinkedIn to instantaneously check information about potential employees, or exchange information with them. This type of exchange is enhanced by the fact that both the potential employee and the hiring company can be reviewed and/or endorsed by others. According to the Society for HR Management, 77 percent of recruiters used social networking sites in 2013, compared to 57 percent in 2011. In fact, many LinkedIn members report getting recruiting bites while not even actively seeking new jobs. If you are a potential employee, it is critical that you accurately list your talents in your profile so people can match those skills with existing job opportunities. Jobvite’s 6th Annual Social Recruiting Survey Results, released in September, showed that 94 percent of recruiters and HR professionals who use social media to recruit use LinkedIn. Facebook and Twitter followed with 65 and 55 percent, respectively. Clearly, job boards have lost a lot of market share to these growing, dynamic social media tools. Dan Shapero, vice-president, Talent Solutions & Insights at LinkedIn, recently said 20 percent of members are seeking new jobs, 20 percent are happy with their jobs, and 60 percent can be termed passive jobseekers. So it makes economic sense for businesses and other organizations to use LinkedIn and other social media tools to network, investigate new business opportunities, perform vendor selection, and to keep up to date www.mmdonline.com | November/December 2013
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on industry trends and competitor information. Organizations are now seeing the value in using LinkedIn not just to market themselves as good potential employers, but also as a sales and promotion vehicle. LinkedIn is also a great PR tool for companies, associations and professional organizations. LinkedIn company sites help get current information on events and relevant news out to the public. Advertising on LinkedIn lets companies and organizations better establish their brand and promote new services, features and products. Although there are more than 15 million company Facebook pages, compared with three million company LinkedIn pages, LinkedIn has gained prominence on the professional side, while Facebook is seen more as a personal information and photo sharing application. Besides its free memberships, LinkedIn users can pay to have enhanced service—such as contacting people outside their networks. LinkedIn also offers enhanced services for its Talent, Marketing (HR and recruiting tools), Business and Sales features. Jeff Weiner, LinkedIn’s CEO, says Talent Solutions revenue is $224 million, and represents the largest segment of the company’s earnings portfolio, a full 57 percent of overall revenue. For individuals, remember LinkedIn is your living, breathing résumé, so accentuate the positive and be clear about who you are and what you are good at. Also, remember to add and update your top skills in your profile so they best match the desired skills of potential employers. Ask for endorsements from your connections and leverage your relationships to help gain access to jobs, sales leads and connections. Above all, present the right image. Develop a distinct, memorable and appealing profile by uploading a professional photo, taken in a work context, and write a dynamic tag line and summary in your professional profile. Make sure your usage and posting habits demonstrate your social media communications savvy. Remember, a list of your hobbies might belong on your Facebook page, but they are not relevant to the LinkedIn audience. Your LinkedIn profile is a key portion of your online persona, so make sure you are putting an intelligent and professional face on it. Your future career may depend on it. MM&D
Tracy Clayson
Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In Transit Personnel. tracy@in-transit.com 39
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MATERIALS HANDLING
The last-mile delivery problem E-commerce drives more complex customer demands
T Dave Luton
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he last-mile delivery problem is more commonly associated with the telecommunications industry, but it’s an apt description for problems faced in the supply chain. In telecommunications, “last mile” refers to the challenges posed by bringing the final end-user online. This is the phase where links are created from roadside cables and fibre optics to customers’ private dwellings—particularly for those facilities that require more capacity than traditional copper-based phone lines can deliver (eg broadband versus dial-up). The problem could be better termed a dual send/ delivery problem because the last destination mile of a delivery is the first mile of an outgoing transmission. While main trunk lines have been upgraded to support high-speed communications, the last twisted-pair traditional copper lines are the same as a century ago. In traditional retail or wholesale logistics networks, the last-mile delivery problem is handled by the consumer who picks up at the retail or wholesale outlet. Returns can be properly processed at store level. Unfortunately for e-commerce suppliers, this natural solution is not available. For business-to-business customers, this doesn’t matter as much because larger volumes of orders often encourage delivery by their suppliers. In a perfect world, a customer would place the order on the computer keyboard, hit send, and the delivery would magically appear. What’s more, the delivery would be for free and the returns would be for free. Unfortunately, there are unscrupulous people who will take advantage of that kind of system. As some sellers of consumer electronics have found out, people will buy big screen TVs only to return them after the big game. Obviously, while free delivery systems are great for the customer, sellers who get taken advantage of too often won’t be around to service future customers. Back-end computer systems allow the order-taking process to give the shopper the feeling of instant gratification, but physically there are still momentous challenges to delivering on the promise and making the reality happen, especially if one adds the constraint of affordable cost. Whatever the delivery performance provided, one key constant has remained consistent for decades: “Keep your promises.” A quick way to lose customers is to repeatedly deliver late. And even if you perform as promised, expectations today are for shortened delivery times at an low cost, which most consumers interpret as “for free”. In areas with denser populations, tight delivery
windows are interpreted by consumers as same-day delivery, particularly during peak purchasing seasons and holiday events like Christmas. In a continent-sized country like Canada, delivery systems tend to have two components: long-distance delivery and local delivery. Traditional, over-the-road strategies for long-distance delivery work best if shippers can use high-capacity modes, like consolidated truckload shipments, for as much of the distance as possible. This strategy provides both affordable transportation as well as good service, because large volumes of point-of-origin shipments create economies of scale. High-capacity transportation modes can use dedicated equipment and intermediate cross-dock points for onward moves. The closer one gets to the end customers, the smaller delivery volumes become. Also, much of the delivery volume is to an urban setting. Thus, the final phase of delivery takes place in a transportation environment that is prone to congestion, resulting in shipment delays. At this point, the logistician faces a choice. Does he or she deliver to a large number of intermediate customer pickup points or does he deliver to the end consumer? The advantage of intermediate pickup points is the potential for off-hours lockbox deliveries. This guarantees no deliveries will be missed, which is a problem with home deliveries. Intermediate points can also solve many of the problems of returns which are not packaged correctly. The intermediate point solution, however, is not problem-free. Its headaches involve establishing and maintaining the network and the costs of fixed locations. Instead of dealing with last-mile difficulties, businesses often find it attractive to outsource at least part of the task to a local specialist. Even the largest companies may find the hybrid model of pickup points for rural areas and delivery for urban areas makes the most sense, but obviously, the best model depends on volumes and the business needs of each supplier. But keep in mind, even some couriers have adopted this hybrid model, especially in the case of a missed initial delivery. Certainly, as e-commerce continues to increase market share, the importance of having the right last mile delivery strategy will become even more important than it is today. MM&D Dave Luton is a consultant in the greater Toronto area. dluton@cogeco.ca MM&D | November/December 2013
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LEGAL LINK
Divulging secrets Dealing with corporate breaches of confidence
I
ndividuals, corporations and governments—we all have secrets. Some are of tremendous value; others less so. Some are complex; others are simple. Broadly speaking, it is wrong to divulge a secret. And while there are exceptional circumstances which may justify or even compel disclosure, protecting confidential information is often the paramount consideration. Sometimes, revealing something communicated in confidence is not only morally or professionally wrong, it is also unlawful. For example, when confidential business information is shared and requires protection, a contract known as a confidentiality agreement or a non-disclosure agreement (NDA) is often signed. Where the recipient of the confidential information or trade secrets breaks the confidentiality agreement, that constitutes a breach of contract, affording remedies in contract law to the confider, the most common of which is damages for losses sustained in consequence of the breach of contract. But even in the absence of a confidentiality agreement, the law of equity may be available to protect confidential information and to enforce the obligation of confidence by requiring the recipients—even third parties—to keep confidences and to not disclose or use the confidential information or trade secrets. Equity relies on the doctrine that “he that has received information in confidence shall not take unfair advantage of it.”
Breach of confidence In a civil action for breach of confidence, four elements must be proven: The plaintiff must show he conveyed information that was confidential to the defendant; that he communicated the information in confidence; that the information was misused by the defendant; and that the plaintiff suffered loss or detriment as a consequence of the breach. The test to determine whether the information was conveyed in confidence is if the circumstances are such that any reasonable person standing in the shoes of the recipient of the information would have realized that on reasonable grounds the information was given to him or her in confidence. This determination requires an analysis of the specific context and facts and circumstances of the given case presented. Once information is communicated in confidence, the recipient of that information is obligated to show that the use to which he or she put the information is a permitted use, and not a prohibited one. www.mmdonline.com | November/December 2013
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Numerous types of confidential information may be protected, including business trade secrets, unpatented inventions, innovations, information disclosed to induce the entry into a partnership, joint venture or corporate takeover, or information disclosed to a lender or a potential investor, and even confidences between spouses. Unauthorized disclosure of personal information may also fall within the scope of a breach of confidence action. Claims for breach of confidence may be defeated where: • The plaintiff expressly, or by implication, consented to the disclosure of the confidential information; • The information alleged to be confidential was at all material times public knowledge; • The disclosure of the confidential information was required by law, for example where the rules of professional conduct of a lawyer require a disclosure; • The disclosure of the confidential information was in the public interest and where the interest of the public clearly outweighs the duty of confidentiality, and; • The plaintiff is guilty of laches (unreasonable delay) by consciously holding up the commencement of the lawsuit for an unreasonable period of time.
Marvin Huberman
Remedies In an action for breach of confidence, the court has much flexibility in “fashioning a remedy”. The court will focus on the loss to the plaintiff and, as a result, the position of the plaintiff must be analyzed. In Canada, the courts have authority to award financial compensation for breach of confidence. The aim is to put the confider in as good a position as he or she would have been but for the breach of confidence. In addition to damages, the court may award a permanent injunction where the confidential information was used by the defendant as a “springboard”. In cases of an injunction for misappropriation of confidential information, the court will balance the protection of trade secrets against the public interest in order to maintain competition, preserve commercial morality and to promote inventions. If the defendant has engaged in outright theft, fraud or other similar conduct, the balance will clearly tilt in favour of a more robust injunction. MM&D Marvin Huberman, LLM, is a Toronto trial and appellate lawyer, mediator and arbitrator. www.marvinhuberman.com 41
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The Konstant Group has the most extensive selection of product storage equipment and accessories available in Canada. Large or small we can provide the best solution for your requirements > Structural
and Roll Formed Racking
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Alberta: 403-720-6900 British Columbia: 604-522-7166 Maritimes: 902-468-2127 Ontario: 905-337-5710 Toll Free: 1-866-473-3472 www.redirack.com
Tel: 514-871-3811 Toll Free: 1-877-877-7225 www.technirack.com The Konstant速 Group of Companies
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FASTEST CROSS-BORDER FedEx Freight PriorityÂŽ has the fastest published transit times of any LTL service connecting the U.S. and major Canadian markets with a single network.* Ship smart from the start. FedEx Freight delivers your cross-border LTL freight shipments with the reliability, fast transit times and on-time performance you need to keep your business competitive. Greenlight your LTL shipment with FedEx Freight. Visit fedex.ca/ltlcrossborder or call 1.800.GoFedEx today.
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