MM&D (Materials Management & Distribution) by Annex Business Media

January/February 2013 $8.00

Frontier mentality Emerging markets roundtable examines benefits and pitfalls of extending supply chains into new regions and countries

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Inside

3 Taking Stock 5 Supply Chain Scan 15 3PL Relationships 16 3PL Capability Guide 23 Equipment Focus: Dock Products 24 Retail 27 Datacapture 28 Racking Safety 29 Materials Handling 30 Crunching the Numbers

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TAKING STOCK

Safe and healthy new year 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 Printed in Canada Publications Mail Agreement #40069240, ISSN: 0025-5343 (Print) ISSN: 1929-6460 (Digital). We aknowledge the financial support of the Government of Canada through the Canada Periodical Fund (CPF) 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

afety should always be a concern for employers and employees, but since this is MM&D’s first issue of 2013, it seems suitable to address the topic now. While working in the supply chain may not seem to be a dangerous occupation—there are no bombs to defuse or lions to tame—there is plenty of opportunity for people to be injured or even killed. Supply chain professionals work around moving equipment all day long: tractor trailers, railcars and planes outside the DC, and lift trucks, jacks, and conveyors on the inside. And whenever people come into contact with moving equipment, the possibility always exists for accidents to occur, even if we dismiss the probability as remote. In Ontario, for example, between 2009 and 2012 there was a total of 390 incidents with forklifts and lift trucks that were serious enough to report to the Ontario Ministry of Labour, including three deaths (and that’s not counting the worker who died while repairing a forklift in September 2012). Reports of injuries were divided into two categories: non-critical (a total of 314), and critical (a total of 73) over three years. Unfortunately, the government’s statistics don’t specify which of those injuries or fatalities occurred during supply chain operations, and which ones are attributable to some other industry, but even without that knowledge, it’s good to see these numbers and treat them as a reminder that there can be serious consequences to poor safety and maintenance practices. And it’s not just moving equipment that can pose a danger. As pointed out in the article on page 28, stationary objects like racking can also be hazardous to employees if not properly cared for and repaired. Even ignoring the equipment, supply chain workers are susceptible to injuries. Bending down to pick up boxes from the floor, or turning and stretching to place items on shelves can easily lead to injuries, either acute or chronic. So as an industry, let’s set a resolution for 2013: let’s make this a year with fewer accidents and injuries. Let’s ensure workers get updated safety and ergonomic training. Let’s review our maintenance and repair procedures. Let’s keep everyone strong, healthy and on the job.

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Frontier mentality

3PL Capability Guide

Roundtable discussion about supply chains in emerging markets

Find your 3PL partner

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Datacapture

Crunching the numbers

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RFID, AutoID and automated processes

Industry data infographic

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Global reach. Local expertise.

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SUPPLY CHAIN SCAN

COMING

HARMONY

US and Canada raise the ceiling on low-value threshold imports. p8

MANIFESTING BORDER CHANGE Advance Commercial Information program and eManifest bring paperless Customs transactions to import procedures. p7

Innovation, enthusiasm and world dominance Positive feelings for supply chain and materials handling industry on display at ProMat 2013 By Carolyn Gruske

racing winter winds blew through Chicago, Illinois this January but even they couldn’t cool down the energy and excitement that seemed to resonate out of McCormick Place as it played host to ProMat 2013. The materials handling tradeshow drew 785 exhibitors and 34,085 attendees, who packed the tradeshow floor. Informal polling by MM&D found exhibitors reporting a seeming uptick of senior level executives—people who could make purchasing decisions and open the purse strings—visiting their booths, and that impression was confirmed by the facts. ProMat officials report 85 percent of attendees had buying authority and 34 percent planned on spending $1 million or more on equipment and systems over the next 18 months. According to MHI (the new name for the association formerly known as the Material Handling Industry of America) people intend to open their purse strings. MHI forecast a six percent (or better) growth rate across the industry for 2013 and a 10 percent rate for 2014. MHI cautioned there is some risk of a downslide for the first half of 2013, but even so, it expects the global industry to be strong. The only negative numbers MHI reported were those for trade growth, import growth and export growth. It found trade growth slowed by more than 50 percent in 2012 due to reduced US demand and economic problems in foreign markets. Import growth dropped nearly 19 percent and export growth slipped 13.5 percent from the previous year. The projections follow a series of positive numbers generated in 2012. Orders for new materials handling equipment grew 7.7 percent in 2012, while shipments grew 9.6 percent. For 2013, that number is expected to grow approximately seven percent, with the following year seeing a nine percent growth rate. Positive feelings about the future weren’t just found in data projections. Organizers added a new element to the show. They hosted a competition and gave awards to the most innovative new and existing products. The winners were iQFusion, a custom-sized cardboard box automated packer, by Packsize LLC (new product) and the dual sided packing slip/shipping label printer application TwinPrint System by FOX IV Technologies Inc (existing product). But more than just passing out some hardware, the competition spurred discussion about the competing products and about advancements in the industry in general. The show’s headlining speakers echoed enthusiasm for the industry. The Wednesday morning keynote, in particular, featured a panel discussion about the future of the materials handling industry, and the industry experts on the panel all seemed to be genuinely optimistic about the industry’s health. The discussion was led by futurist Edie Weiner, president of Weiner, Edrich, Brown Inc. But before moderating the discussion, she opened with a presentation MM&D | January/February 2013

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DONE DEALS Trimac Transportation Ltd, a Calgary, Albertabased provider of bulk trucking and logistics services, won a $15 million three-year contract with Holcim (Canada) Inc, a building materials and construction company. Trimac will haul product for Holcim’s Atlantic Canada business operations. Montreal, Quebec-based TransForce Inc has completed its purchase of Velocity Express and all its subsidiaries. TransForce expects Velocity Express to generate $160 million in annual revenues. RSI Logistics Inc of Okemos, Michigan has acquired King of Prussia, Pennsylvania-based Freight Resources Network and its USRail.desktop software application. RSI offers rail logistics services and software and manages bulk transload facilities throughout the US. Pelican Products Inc, a maker of protective case solutions and portable lighting systems based in Torrance, California, bought Minnesota Thermal Science (MTS), a supplier of temperature-controlled transportation products. Minnesota-based MTS will be merged with Pelican’s BioPharma division.

Joseph Woodland, designer and co-founder of the UPC code died in December. He was 91. Woodland’s original design for the barcode was based on Morse code, with thicker and thinner lines substituting for dots and dashes. The lines were displayed in concentric circles, like the rings of a tree. Woodland and his partner, Bernard Silver, received the patent for their design in 1952. The black and white rectangular version in use today was made by Alan Haberman and adopted as an industry standard in 1973.

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SUPPLY CHAIN SCAN about how changing perceptions and technology will allow the industry to leap forward. She stressed that the concept of storage is going to play an increasingly important role, not just in the materials handling world but in everyday life. “Solving the storage problem will be a tremendous opportunity of the future. People will want to pay for it.” Developing a better understanding of what goes on outside of the four walls of a business is one way the industry is changing, according to panelist Michael Mikitka, CEO of the Warehousing Education and Research Council (WERC). “We’re hearing more from our members they’re becoming more involved with sales teams and customer service when it comes to delivering on the promises made by the company to its customers. They’re getting involved to see how the product, once it hits the customer’s door, is being used. Then they can provide input and take back information that provides value to the relationship.” He added that not only is the industry adapting to this new business approach, but it’s trying to quantify and understand it as well.

“Obviously numbers and benchmarking are important, but we’re moving beyond the numbers to what we refer to as soft metrics. We’re finding some of our members are now trying to evaluate relationships they have with business partners: the flexibility they have, their reliability, etc. Using that, they consider all the other metrics—what’s been delivered on-time, what’s been delivered damage-free, what’s the best supplier who’s been reliable and dependable. The relationship side is a metric our members are looking more closely at.” Closely examining every aspect of the operation is the necessary first step organizations must take if they want to drive their supply chains into the future. They really need to understand their business as it is today and determine what they want it to be in the future. “I think our role is so core, the role itself doesn’t change, but how we implement and how we innovate, that makes the supply chain more efficient,” said George Prest, CEO of recently rebranded Material Handling Industry (MHI). “Our industry literally touches everything. We are just one small part of it, but we tend to look at ways of improving productivity because if we can increase productivity we have a healthier economy, which creates jobs and a higher standard of living. So what I see is more and more innovations. The role itself doesn’t change—move, handle, store, protect—but the way we do it will evolve.” Liz Richards, executive vice-president of the Material Handling Equipment Distributors Association (MHEDA), also spoke about how jobs have evolved. “In 2009 our members really, really struggled and the sales process changed. The cycle became much longer. There was a realization the skill-sets needed by sales people changed with it. They needed to be much more solutions-focused. I think an organization can BENCHMARKS take its core beliefs and flip them over, and that’s Brampton, Ontario-based Blue Giant Equipment Corp opened a new manureally where our members need to go and really see how things have changed, ” facturing facility in Greensboro, North Carolina, a move that marked the dock equipment manufacturer’s expansion into the US market. The US locaRichards said the industry must do a better job tion will manufacture and distribute the company’s line of dock seals and recruiting talent. She told the audience of the efforts shelters, stationary and retractable truck shelters, full access seals, and rain MHEDA is making to introduce high school and university students to the supply chain world. shrouds. Blue Giant will celebrate its 50th anniversary in May. “Whether they become our employees or our suppliers, it’s important for them to see who we are. We’re Morai Logistics Inc, a Mississauga, Ontario-based 3PL with an agency agreement representing Mode Transportation, won the “Doing Business International an industry hidden in plain sight. We need to bring Award 2012” from WEConnect Canada. This award is given to a female-owned in young people to help us and turn things around business that acts as a high volume supplier to a major North American and uncover new paradigms and flip our core beliefs. corporation. The presentation was made to Morai president Kelli Saunders. Rick Blasgen, president and CEO of the Council of Supply Chain Management Professionals (CSCMP) also said he regretted the supply chain not having as Kal Petrov has won CIFFA’s 2013 Young Freight Forwarder of the Year award. In high a profile among students addition to the title, he will receive a $1,500 cash award and is in the running to be nominated for an international award. Petrov is currently employed by Panalpina “Students coming out of universities are receiving Inc, and is responsible for the ocean import customer service Europe LCL desk. higher paying job offers than engineers, so we’re getting there. The career opportunities for supply chain professionals have never been greater. If you want an Algoma Central Corp launched its first Equinox-class vessel. The Algoma Equinox departed the Nantong Mingde Heavy Industries shipyard in Nantong, China international opportunity, it’s easily accomplished. on December 24, 2012. It is the first of seven new ships—four gearless bulk There are networks of people in our organization lookcarriers and four self-unloading bulk carriers—the company will operate on ing for individuals who want those roles. And those the Great Lakes-St Lawrence system. people are becoming senior leaders in companies. Look at Tim Cook. He ran the supply chain before taking over the reins at Apple. Or Walmart’s last two CEOs Montreal, Quebec-based Delmar International has opened a new US office. The Philadelphia, Pennsylvania location will operate as an international freight were out of their logistics organizations because we forwarder and Customs broker with a special focus on air and sea from movsee so much and understand our suppliers and our customers. Frankly we’re taking over the world and ing to and from the US. everybody hasn’t figured it out yet.”

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SUPPLY CHAIN SCAN

Manifesting border changes Advance Commercial Information program and eManifest change border crossings By Carolyn Gruske

or decades businesses have been promised streamlined, paperless solutions for all their business processes. While we’re still nowhere close to a global paperless world, Canada Border Services Agency is doing its best to ensure that 2013 will usher in as many paperless solutions as possible.

The third phase of the Advance Commercial Information (ACI) program— more casually known as eManifest—is getting into full swing this year, which means those who ship or carry cargo face key deadlines that will change the way business is conducted. Trucks and highways

The full eManifest program is being implemented in stages with staggered deadlines. The most carved-in-stone deadline is May 1. That’s when eManifest for highway carriers becomes mandatory, and trucking companies and 3PLs will be required to electronically submit information about their cargo to CBSA before vehicles arrive at the Canadian border. Carriers who don’t won’t be allowed to enter the country.

The information required is the same type information shippers would typically present in paper form (type of cargo, quantity of items shipped, origin of shipment, delivery destination, etc.). The degree of required detail, however, is greater than typically found on paper manifests. Carriers with lower volumes can submit the information using a portal on the CBSA website. Larger-volume carriers can use EDI to send the data. CBSA originally chose November 1, 2012 to be the mandatory implementation date, but a couple weeks beforehand, “CBSA decided to call it a ‘soft enforcement period’—call it an informed compliance,” explained Deanna Pagnan, director of policy and government relations for the Ontario Trucking Association.

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See http://tinyurl.com/ACIeMan for more details and the full version of this story.

“So while it is considered mandatory, trucks are not currently being turned around at the border. They won’t be ‘AMPed’—receive administrative monetary penalties—if they don’t submit an ACI. Instead the border service officers are providing information. There’s a tear-off sheet that tells them what they should have done under ACI.” Freight forwarders But it’s not just highway carriers who face a new way of communicating with CBSA. The agency also has a plan applicable to those who employ other methods of bringing goods into the country.

“While they’ve been implementing the highway portion, the CBSA has been designing the next phase, which is a freight forwarder’s house bill implementation,” explained Ruth Snowden, executive director of CIFFA. “We go voluntary in April, 2013 and mandatory in July, 2014. “One of the reasons we support it so fully, other than increasing security for all Canadians, is because this will give us, the freight forwarders, the opportunities to go paperless.”

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SUPPLY CHAIN SCAN

Coming to harmony Canada and US align low-value shipping thresholds By MM&D staff

nother step has been taken to streamline the movement of goods and cargo across the Canada-US border. Working under the mandate of the Beyond the Border Declaration, which was signed by Stephen Harper and Barack Obama, the Canada Border Services Agency (CBSA) and the US Customs and Border Protection Agency (CBP) have harmonized their low-value shipment (LVS) thresholds on goods destined for expedited Customs clearance. As of January 8, the LVS threshold is now $2,500 in both Canada and the US. This marks a significant change in policy; prior to harmonization, the Canadian level was set at $1,600 and while the US limit was $2,000. In addition, Canada also agreed to increase the LVS threshold to $2,500 for exemption from NAFTA Certificate of Origin requirements, which parallels the US threshold. LVS goods receive an automatically triggered release with payment for duties and taxes not coming due until the following month. That’s in contrast to high-value shipments, which need to go through a CBSA release process. The CBSA also requires payments for high-value shipment duties and taxes to be made within five days. According to estimates provided by a CBSA spokesperson, “an increase in the LVS threshold to $2,500 will result in approximately 1.5 million shipments being transferred from the regular import stream to the Courier LVS Program, increasing its yearly volume to

36.3 million shipments. Accordingly, the regular import stream is expected to see a decrease of 1.5 million shipments. “Because the Courier LVS Program is an expedited and simplified release process, importers will benefit from decreased costs and LVS will simplify the import process and reduce administrative burden. The increase will facilitate trade, allowing 1.5 million shipments to be cleared on the day of arrival.” CBSA says the other main advantage for shippers is the potential to reduce costs as it will “decrease the number of penalties imposed on importers because more shipments qualify for the LVS extended accounting timeframe, thereby affording importers additional time to formally account for their goods. The decision was well-received in the industry, said Cristina Falcone, vicepresident of public affairs for Mississauga, Ontario-based UPS Canada, in an interview with MM&D. “It’s a positive change, not only for the carriers but also for Canadian importers because it provides additional certainty that goods that are moving across the border are going to be able to continue in their flow and be delivered on a timely basis without worries about ‘on-holds’ for Customs reasons,” she said. “With values under $2,500, typically they are low-risk shipments, so it maintains security at the border, but it also keeps the flow of trade moving, which also improves the competitiveness for both Canadian and American businesses, as they have improved speed to market.” MM&D

MOVERS + SHAKERS Michael Schulz has been appointed chief financial officer at Toronto, Ontario-based Schenker of Canada Limited. He replaces Petra Kuester, who was named CFO at London, England-based DB Schenker Logistics UK. Schulz will report directly to Heiner Murmann, CEO of DB Schenker Americas.

the Toronto, Ontario-based company’s transportation insurance operations and cross-border solutions offerings.

Storage manufacturer Akro-Mils has hired Doug Trasatt to be its new director of sales and marketing. He will oversee all communications initiatives for the Akron, Ohio-based company.

Larry Rodo has joined Day & Ross Freight as the company’s new president. He will have complete responsibility for the Hartland, New Brunswickbased company’s LTL and TL divisions. Day & Ross also appointed Doug Harrison to the role of chief operating officer. He will be responsible for the company’s overall strategy, its four operating companies, and a number of its support groups.

Art Mesher, chair and CEO of Descartes Systems Group, has joined the board of directors of the Toronto, Ontario-based supply chain software company Nulogy Corp.

Michael Schulz

Doug Trasatt

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Zurich Canada Commercial has appointed Victoria Stirling as national director of its transportation business. She will be responsible for overseeing

Doug Harrison

MM&D | January/February 2013

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Professional Development Directory

Advertorial

Soft skills are a key to professional success The Ontario Institute of PMAC (OIPMAC), often receives questions from members wondering how they can achieve their professional goals. Obtaining the right credentials, such as a CSCMP, and relevant experience are a critical starting point, but how do you truly differentiate yourself? You may be surprised to learn that soft skills are often a huge factor in your career success.

This is likely only partly true; if your experience was insufficient, why would they have interviewed you? The interview allows employers to evaluate your soft skills, such as communication, interpersonal, and negotiation skills. These are indicative of how well you would work with other employees, and how you would represent their company to suppliers and customers.

We’ve probably all entered an interview with high hopes, only to hear that a candidate with “more experience” was chosen.

Each time you interact with a colleague, client or supplier, you will be forming their impression of you and your company.

How can you be sure you’re properly managing professional relationships? You’ve already taken the first step by recognizing the vital role of soft skills. Some skills may come naturally, such as listening, but others may not be as simple. For example, a positive attitude has a significant impact on those around you, but can be hard to maintain when budgets are being slashed. As a result, engaging in professional development to learn, improve and practice soft skills is a key contributor to professional success.

In response to feedback from members, OIPMAC is pleased to present a series of seminars to help supply chain management professionals enhance their soft skills. The seminars will deliver relevant and valuable learnings that you can apply in your workplace. Learn more at: www.oipmac.ca.

Photography by Roger Yip

oing business in foreign countries is nothing new for those employed in supply chain operations, but more and more these days businesses are heading into essentially unknown territory. While emerging and frontier markets hold the promise of wonderful business opportunities, realizing those opportunities involves research, planning, hard work, and long-term investments of time and resources. That’s the consistent message from roundtable panelists, Wendy Trudeau, general manager, central region for FedEx Trade Networks; Todd Winterhalt, group vice-president for international business at Export Development Canada (EDC); Ruth Snowden, executive director of the Canadian International Freight Forwarders Association (CIFFA); Brian Macdonald, Montship president and CEO; Lise-Marie Turpin, Air Canada Cargo vicepresident cargo; and Eric Allard, global head of logistics at Husky Injection Molding Systems.

Emerging markets vs frontier markets

Frontier mentality Venturing into emerging markets offers high rewards—and risks

MM&D began the year by hosting a roundtable of industry experts who shared their thoughts about how and why supply chains should extend into emerging markets. Carolyn Gruske moderated the discussion and reports on the conversation.

Roundtable participants (Clockwise from top left): Lise-Marie Turpin; Wendy Trudeau; Eric Allard; Brian Macdonald; Ruth Snowden; Todd Winterhalt. 10

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Although there are no hard and fast rules about exactly how to define an emerging market, the panelists agreed on a number of features as indicators of an emerging market. These include rapid industrialization, low wages, low input costs, underdeveloped financial, legal, physical and technological infrastructure, rapid social change (including a growing middle class with a desire to purchase products new to their market), political risk, and difficulties conforming to (or implementing) international trading compliance and regulations. According to Todd Winterhalt, “if you go with the technical definition, these are really non-OECD-type markets. So you’re talking about 145 to 150 markets worldwide, out of between 180 and 200, depending on how you categorize them. Just to give you an idea of scope. There’s a lot of them out there.” Categorizing them, however, can be an exercise in shifting definitions. As Ruth Snowden pointed out, “I think there’s a phrase in the financial industry— they call them ‘frontier markets’. These are geographies that usually have serious capitalization and regulatory issues. And they’re not emerging markets yet,” she said. “These are pre-emerging markets, where there’s even more opportunity and risk.”

Rewards Stretching a supply chain into any new market isn’t something that should be done on a whim. There have to be solid business reasons behind any expansion. One good reason for trying a new and emerging market is to counterbalance existing market conditions. “If you’re focused strictly on one region, you want to diversify your market so you can mitigate some of the risk of economic downturns,” Wendy Trudeau said. MM&D | January/February 2013

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Beyond protecting what you’ve already established, the move into an emerging market can also present the possibility for future expansion. “It’s about growth opportunities,” according to LiseMarie Turpin. “Once you establish yourself in mature markets, where are you going to go for growth?” “If you look post-Lehman [Brothers], it’s the emerging markets who were not exposed to the toxic credit that the developed world was, so today’s there an even better opportunity to grow than there was prior,” Brian Macdonald added. Even in business, not all rewards are financial. Sometimes there are secondary positive spin-offs that can prove rewarding on non-monetary levels. “We have whole countries with low literacy rates, with unemployment, with poverty. So if we can create opportunities there, I think it helps the whole world. It helps all of humanity to improve. We have a great lifestyle here, not so much maybe in Guatemala or Nicaragua, or Vietnam. So I think we have an opportunity to benefit other people,” said Snowden.

Challenges As noble as altruism may be, extending a network into an emerging market is always a risky venture and one that needs to be made with an eye on the bottom line. It requires careful planning down to the last detail. As a manufacturer of machinery and equipment to produce plastic beverage bottles, Husky Injection Moldings has production and DC facilities in 12 countries, and a supply chain that reaches across the globe. The related challenges are pricing, regulations, duties and Incoterms. “We need to have a grip as an industry, from a manufacturing side, on what are the Incoterms. It’s amazing what people do not understand in the responsibilities they’re signing off in trade compliance and antidumping,” said Eric Allard. “You open a plant in China, to support the Asian market, but guess what? You do not send machinery from China into India. There’s a 300 percent duty on a multi-million dollar machine, and your customer is very upset,” he said. “You have to do your homework. In each specific country, set your rules and regulations. It’s one thing to have a business plan, but there’s a lot more work to be done.” As an example of this, Allard spoke about denied party screening—ensuring that parts and equipment Husky sells won’t be resold into embargoed or banned markets, such as Iran. “I need to back-screen every one of my customers around the world and make sure they’re not going to dismantle my machinery and use certain parts that could have military applications,” he said. Allard also spoke about delivery (both to and within the market) and infrastructure challenges, but all the panelists agreed these are to be expected. MM&D | January/February 2013

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Montship’s Mcdonald said every time the shipping agent looks at entering a new market, there is a long list of questions to be asked. “Do they have a port system? Can they handle our ships? What kind of productivity are we going to get at the ports? What’s their technological set-up? Can they track and trace?” He warned if businesses can’t guarantee service delivery standards “it’s going to tarnish your overall brand, so that’s a concern.” Emerging markets often present difficulties when it comes to the more intangible aspects of business relationships, according to Air Canada’s Turpin. “Language definitely. And understanding the context in which the people are operating,” she said. “These things have a big impact on how well we’re going to communicate and how well we’re going to understand what needs to be done. “And asking the right questions, too. We may assume something, and yet if we’re not thorough enough or ask the appropriate questions, we may not have the information we need to make the right decision. So it is an important thing, and one that’s not easy. It takes many years to get your head wrapped around that so you can actually ensure you are getting the right information to make the appropriate decisions.”

Another challenge is ensuring the company’s business ethics, not to mention the minimum acceptable legal standards of the country where the company is headquartered, will be applied in the new market. “When we’re entering these markets, we’re doing our research beforehand. We’ve got experts we’ve identified and we’re able to bring onboard. If we were to find it is a market that is—I don’t want to use the word corrupt—but it’s a market we can’t do business in while protecting our brand, then we would probably rethink. That’s part of our research in advance,” explained Fedex Trade Network’s Trudeau. Corruption and crime are concerns across the board. They are found everywhere from the micro level

The Emerging Markets Roundtable took place in January 2013. It was sponsored by FedEx Trade Networks. This is an editorial report detailing highlights from the event. 11

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(individuals cheating single businesses) to the macro, where the political structures and governing bodies operate in a manner considered unethical. EDC’s Winterhalt said examining political risk is one of the key steps any organization needs to take before committing to a frontier or emerging market. “The way we sometimes talk about it, we place political risk at the highest level, but then that breaks down. So is it a risk of an asset that you’ve got in a warehouse that you’ve made an investment in? Or is it beyond that? Is it repatriating your dividends back out of their country? Maybe you can’t. Maybe you’ve got foreign exchange controls that can apply after you’ve already made your investment. So that concept of political risk, broadly speaking, ties together and goes into the security aspect. And it certainly does get into corruption. Also, are there environmental or other types of concerns that as a business you have to be aware of?”

Market pressures As great as the challenges can be, many businesses are being forced into emerging markets. They fear by not expanding their supply chains, they’ll be left

out in the cold, unable to compete. Competitive pressure is a very real and strong driver, according to Winterhalt, especially when growth is flat or down in Western markets, including Europe and the US. “There’s the cost of doing nothing, which is potentially the diminution of your own business—or worstcase scenario, you go right out of business because you’ve lost the market in the traditional market, as well as the opportunity in the emerging market space. We find that drives a lot of people, beyond just mitigating risk, this is not only a growth strategy, it’s a survival strategy because this is the way, generally speaking the world is going—to the emerging markets space.” Even if a business finds itself forced to jump, and jump quickly, into new supply chain territories, that doesn’t mean it should expect quick rewards in return. “When we’re thinking of emerging, we’re thinking of a rapid pace,” said Turpin. “I think sometimes when one goes into these markets the companies are expecting rewards to come in much more quickly than they will. Because, even though we talk emerging, it is a long run. It is a marathon. This is not something that happens overnight. I think we need to be mindful of that because of the challenges.” Mcdonald provided an example of that. “It takes a long time to build a terminal. MOL built the terminal in Cai Mep [Vietnam] early on, and it was a beautiful terminal, but there was no road coming in. It was a dirt road, and you’ve got containers you’ve got to get off there. So then you have to wait for the land side of the infrastructure to catch up with the terminal. And there are pinch-points all along the road. But if you can get in early there are advantages for sure.” One of the main pressures when entering an emerging market, is to have people on the ground who understand the business, regulatory and social environments who can act as in-country contacts and advisors. Many organizations find this impossible, so they rely on local experts, but that practice is not without challenges, especially when it comes to maintaining the organization’s brand reputation. “From our standpoint, when we’re entering these markets, we are looking at local in-market experts. We’re not bringing people in from other parts of the globe to run the business there because they don’t have the knowledge of customs, language and regulations. They don’t have the knowledge of the carrier base. So it’s important for us to have those in-market experts join our organization and then we can teach them our quality management system, our processes and so on. So in that respect, we can give the local flavour with the global FedEx brand,” said Trudeau.

Regions and countries Since supply chains run in essentially two directions (raw materials and goods in and finished products out) it’s critical that every new market be examined 12

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for its potential to improve each side of the equation. From Husky’s perspective, a country like “Saudi Arabia is not going to produce anything. They’re going to be buying. But if you take a look at some of the old Russian countries, in terms of iron, metal and minerals, they great exporters. They’re not going to be buying anything because they don’t have the infrastructure to produce,” said Allard. “If I talk to my sales and marketing guys, they’re going to say, ‘you know what, Eric, we sell two machines to Uzbekistan every year, but we buy $40 million dollars worth of products.’ So the perspective is going to change based on the need. Is it inbound or outbound selling? To me—and I’m very opinionated—both of these supply chains have different, demanding needs.” Businesses must realize just because they’ve dealt with a supply chain in a similar country, they shouldn’t presume to think they know exactly what to expect. “People always short-sell the amount of time required to do the due diligence. They think ‘I’ve done it once.’ There’s a level of comfort that builds up. But every market is different,” said Winterhalt. “China and India: night and day difference. Vietnam and Thailand? Different. They may be close, but they’re going to be completely different. So that expectation, that level of time and investment of energy, research, thought power at the company level, needs to be very clearly articulated right at the beginning.” As for which countries are catching the attention of the roundtable members, the list of markets contains both expected and unexpected names. BRIC countries were top of mind, but Brazil, Russia, India and China are no longer the sole or dominant players. Winterhalt said TIMBI —Turkey, Indonesia, Mexico, Brazil and India—is worthy of attention. Another region he singled out is the southern corridor that runs along the bottom half of the world, through places like Chile, South Africa, southern India, Indonesia and Australia. He said EDC expects the corridor to see approximately $8 trillion in CAPEX (capital expenditure) investments across three sectors—extractive, energy and infrastructure—in the next 10 to 15 years. But even that area doesn’t show the most short-term potential. “If you’re looking at the greatest growth, from our perspective it’s southeast Asia over the next three-to-five year period.” Mcdonald said from the Montship perspective, “in Asia we’re looking at Vietnam of course, because we’re established there, but also Myanmar [Burma], and Cambodia. Almost all of South America is an extremely good market right now.” Snowden echoed Mcdonald, saying: “You can’t get a hotel room in Burma, because every company that wants to do business there is buying up hotel rooms. To me that indicates somebody thinks this is going to be a market. You know they’re pulling their staff, they’re looking at MM&D | January/February 2013

01MM&D-Roundtable.indd 13

“People always short-sell the amount of time required to do the due diligence.” building, they’re looking at infrastructure, so I look at a country like that as very exciting. Huge challenges, but that whole area is going to be very interesting. And Vietnam—if they can get over their congestion issues.” Trudeau said for Air Canada, South America is important. “I think there’s still huge potential there. We talked about Brazil. And Chile is fairly well established, but I think in the northern part of South America, there’s huge opportunity in Colombia and Ecuador and so on.” For Turpin and Air Canada, it’s still China that is most tempting. “We’re investing a lot in China because the middle class has been growing and there’s desire for what we have over here over there. We’ve really seen a shift in the balance between Canada and China.”

Turpin added that Brazil in particular and South America in general are also of great interest to the company. “Our problem is getting more capacity to be able to serve these markets more fully,” she said. “And one that I think is very interesting—that we’re about to focus on this summer is Turkey: Istanbul. That really is a gateway for us to get to points in Africa and the Middle East, notwithstanding Turkey iself. We think there’s opportunity there as well. Most African countries (with the possible exceptions of South Africa and Morocco) rank at or near the bottom of the roundtable participants’ list when it comes to possible areas of expansion. While this may seem appropriate at the moment, Winterhalt added that in the longer term—approximately five to ten years from now—the potential of these countries will present opportunities to Canadian businesses. Allard said Husky is casting a wide net. “I’m going to say it’s everything outside of North America for us. The focus is obviously on Southeast Asia, Africa, Russia and the Middle East, all at the same time.” MM&D 13

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3PL Capability Guide

Productive partnerships Relationships between 3PLs and shippers need nurturing and work to produce business results By Carolyn Gruske

elationship. Partnership. Marriage. Liason. Defining the connection between a 3PL and a shipper is nearly impossible, as each one is unique. Some are short and transactional in nature. Others are long-term arrangements between highly integrated organizations. It’s much easier to point out characteristics common to strong, healthy relationships and the warning signs indicative of failure. Communication is the key indicator. “Everybody says they’re good at communication, but not everybody is,” says Tim Boyce, chief marketing officer of Mississauga, Ontariobased Wheels Group Inc. Boyce says both parties need to understand what is expected right from the start. “Tell me what you need and how you want it.” Guy Toksoy, vice-president and general manager of supply chain solutions for Ryder Canada, says understanding can’t occur unless the fundamentals of the relationship are defined. “You need a definition of the goals and the metrics wrapped around those goals—measurable outcomes, timelines and penalties. You have to have a common understanding of what is defined as a success, but it’s not enough just to define it. You have to expect both sides’ teams to be accountable to achieving success.” Not only do metrics need to be established, both parties need to ensure the data flow, used to determine success or failure, is reliable. “Information flow is the most important criteria—two-way information flow—accuracy of data and timeliness of data or information. Knowing about changes in their supply chain ahead of the time makes it easier for us to adapt MM&D | January/February 2013

01-3PLintro.indd 15

and manage to” says Andrew Kirkpatrick, director of sales and marketing with Mississauga, Ontario-based Sherway Group. “EDI and automation of information and dataflow obviously help because there is less human intervention and potential keying errors.” It’s also important to keep in mind that there are often outside forces and additional parties involved in the relationship, which means that it’s not just about making data flow in two directions or having a two-way conversation, it’s about multi-directional co-operation. Dan Einwechter, chair and CEO of Challenger Motor Freight Inc, in Cambridge, Ontario, says just because a shipper hires a 3PL, it doesn’t mean the 3PL will handle all the cargo movements. Often it will use trucking firms, adding an additional party to the relationship. “There needs to be a level of understanding and appreciation for all parties to do their jobs profitably,” he said. Part of the understanding is recognizing the realities of market conditions and working with partners in a way that acknowledges the challenges everybody faces. “There is subtle and continuous growth,” he says. “I know the market will be tight for the year. Used truck prices have firmed up, so it will be a rather interesting year or two.” Along with the shipper, the 3PL and the carrier, there is another player who has to be kept happy. “A good relationship is where you are actually working together to satisfy the ultimate customer,” says Sandro Sagrati, director of key accounts at Mississauga, Ontario-based Schenker of Canada Ltd. “In many cases, shippers have been told to use freight forwarders or 3PLs by the ultimate customer and there is

some resistance so it is a matter of working together with the shippers to satisfy the customer’s needs.” Building a relationship and creating a sense of trust takes time and effort. Einwechter suggests looking at “the financial strength, the integrity and the skill set of the people involved,” as a way of evaluating the other partner’s ability to deliver on promises. Once the partnership has begun, Toksoy says it can’t be allowed to rest on its laurels. “You need to remain engaged and remain invested in the outcome. And that needs to be driven from the top down,” he says. For example, he says Ryder uses a LEAN approach and a philosophy of continuous improvement to manage clients’ accounts. Some relationships develop to the point where 3PL staff work on-site at the shipper’s business. Others sit in on planning meetings and offer their input on everything from constructing new DC facilities to better ways to ship new goods. “Gaining visibility earlier leads to planning loads much more effectively by consolidating shipments and reducing costs for everybody, not just for customer but also the 3PL,” says Sagrati. Of course not every relationship is meant to be. When supply chain relationships break down, usually there are often warning signs. “Errors start happing,” says Kirkpatrick. “If you need to have a lot of dialogue, asking ‘why do we have errors’ that’s an indication things need to be changed.” And when the communication stops, that’s when it’s really over. “In the perfect situation, the customer tells you [why it’s over]. In the worst situation they go, and don’t tell you anything,” says Boyce. MM&D 15

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3PL Capability Guide: Services To use this guide, browse through the 3PLs listed alphabetically below. You’ll find the capabilities of each company indicated by bullets under the appropriate category headings. An alphabetized list of contact information for the firms starts on page 22.

MARKETS SERVED LEGEND

OVER- MARKETS VIEW SERVED

OVERVIEW LEGEND A: Asset-Based N: Non Asset-based AN: Both

COMPANY NAME

3PL Links Inc. A.G.O. Transportation Inc. A.N. Deringer Inc. A52 Warehouse Inc. Accuristix Affiliated Customs Brokers Ltd./Global Logistics Agility All-Can Pro Logistics Inc. All-Connect Logistical Services Inc. APL Logistics ASL Distribution Services Ltd. Axsun Inc. BCG Logistics Inc. Bellville Rodair International Bison Transport Inc. C & E Express Inc. C.H. Robinson Worldwide, Inc. C.V. Logistics C.W. Henderson Transportation Camron Consulting Inc. Canada Cartage System Canadian Pacific Logistics Solutions Cavalier Transportation Services Inc. CEVA Logistics Challenger ChemLogix LLC Churchill Logistics Inc. Cole International Inc. Confederation Freezers Customized Global Logistics Damco The Day & Ross Transportation Group Delmar International Inc. DHL Global Forwarding Dominion Warehousing & Distribution Services Ltd. DTA Services Ltd. EGI Transportation Services The Erb Group of Companies EveryPoint Logistics Solutions Expeditors Canada Inc. Fargo Transportation Services Limited FedEx Trade Networks Transport & Brokerage (Canada) Inc. First Choice Logistics - Div. of Thompson Ahern & Co. Ltd. Fort Storage Warehousing & Distribution Fraser Direct Logistics Ltd. Freightmate Inc. Georgetown Terminal Warehouses Hub Group Canada Huron Services Group, CPC Logistics Company Hyphen, member of the Calyx Transportation Group Inc. I to I Logistics Inc. Indis ISG Transportation Inc. J.D. Smith & Sons Limited

01-3PLguide&dir.indd 16

TRANSPORTATION

CUSTOMS

Areas Se rved A sset-Ba sed ISO Cert ified Distribu tors Manufa cturing Retail Service Industri es Air Bulk Dedicate d Contr act Carr Drivers iage Expedite d Fleet Ma na g e m e nt Hazardo us Mate rials High-Va lue Intermo dal Leasing LTL Ocean Rail Seaway Small Pa ck ag e TL ACE ACI C-TPAT FAST Licensed Custom s Brokers PIP

C: Canada N: North America G: Global

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If you have any comments about this guide, or would like to apply to be included in next year’s edition, please contact MM&D’s MM&D’ publisher and editor-in-chief, Emily Atkins, at eatkins@bizinfogroup.ca.

WAREHOUSING

SPECIAL SERVICES

TECHNOLOGY

Carrier S election Cross-Bo rder Forw arding Inbound Logistic s Integrate d Lo Inventory gistics M a na g e ment Just-In-T ime Process Planning Product Lifecycle M a na g e Project C ment argo Service Parts Lo gistics Shipmen t Trackin g Tempera ture Con trolled Vendor M a na g e ment Wareho using Consolid ation/D econsoli Cross-D dation ocking Distribu tion Cen tre Man Fulfillme ag e m e n nt t Location Services Pick/Pac k Sub-A ssembly Vendor M a na g e d Inventory Consult ing Delivery -To-Hom e Delivery -To-Store Finance H u ma n Resourc es Import/E xport/C ustoms Insuranc e Marketi ng/Cust omer Se Paymen rvice t Audit/P rocessin Quality g A ssuran ce Regulato ry Comp liance Reverse Logistic s Security Services Vehicle Mainten ance Advance Shippin g Notice D o cu m e ntation ED I Real-Tim e Invento ry Visibil RFID Ca ity pable Satellite / Wireless Commu Transpo nication rtation M a na g e m Wareho ent Syst use Man e ms ag e m e n Web-Ba t System sed Ship s ment Tra cking

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3PL Capability Guide: Services MARKETS SERVED LEGEND

OVER- MARKETS VIEW SERVED

OVERVIEW LEGEND A: Asset-Based N: Non Asset-based AN: Both

COMPANY NAME J.P. Enterprises - Logistics Corp. JAG Freight Lines Katoen Natie Canada Kenco Logistic Services Kintetsu World Express Canada Koch Transport Limited Kuehne+Nagel Ltd. Lakeside Logistics Lantrax North America Logistics Lean Supply Solutions Inc. Logisticworks Lynden International Logistics Co. Maisliner Toronto Manitoulin Transport McKenna Logistics Centres Menlo Worldwide Logistics

TRANSPORTATION

CUSTOMS

C: Canada N: North America G: Global

N N G N G N G N CN N N C G G G G

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SHERWAYGROUP GROUP SHERW SHERWAY

WAREHOUSING WAREHOUSINGINC. INC.

Customized logistics and supply chain solutions TRANSPORTATION

4 24/7 operations 4 Same day/next day/ expedited service 4 Dedicated fleet management 4 GPS real-time tracking 4 Food-grade transportation 4 Retail expertise 4 Rockett service

WAREHOUSING

4 1 Million+ sq. ft. 4 Dry and Cooler space 4 AIB superior warehouse rating 4 In-house co-packing 4 Food-grade storage 4 Organic certified 4 NHP certified 4 HACCP compliant

LOGISTICS

4 Transportation management 4 LTL and FTL North American ground transportation 4 Seamless coast-to-coast distribution 4 Container transfers 4 Customs brokerage 4 Courier services

www.sherwaygroup.com

For more information on how Sherway Group can make a difference to your business, contact: Andrew Kirkpatrick, Director of Sales and Marketing Sherway Group

Tel: 905-362-9070 – Cell: 416-420-3257 Email: akirkpatrick@sherwaygroup.com – Website: sherwaygroup.com

01-3PLguide&dir.indd 18

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3PL Capability Guide: Services MARKETS SERVED LEGEND

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OVERVIEW LEGEND A: Asset-Based N: Non Asset-based AN: Both

COMPANY NAME

Metro Supply Chain Group Inc. Meyers Transport/MorTrans Inc/Mosaic Logistics Midland Transport Milgram & Company Ltd. MIQ Logistics MTE Logistix Edmonton Inc. National Logistics Services Inc. Neovia Logistics OPTVIA Logistics Inc. Panalpina Penske Logistics Pival International Polaris Global Logistics Inc. Porter Warehousing & Distribution Inc. Positive Fulfillment Services Ltd. Precision Total Fulfillment Professional Distribution Services ProMiles Canada Inc. Propulsion + Quik X Logistics Remco ReTrans Precision Logistics Ryder Canada Saddle Creek Logistics Services Sameday Worldwide Schenker of Canada Limited Schneider National SCI Logistics SDV Service Freight Systems & Warehousing SGT 2000 Inc. Sherway Group SLH Transport Inc. Sotech Nitram Inc. Specialized Transportation Inc. (STI) Stonegate Logistics Sylvite Transportation Group Synergex Logistics Tandet Technicolor Global Logistics Thomson Terminals Limited (Thomson Group of Companies) Total Logistics Group of Companies Trailcon Leasing Inc. Transpro Freight Systems Ltd. TransX Group of Companies TST Overland Express UPS Canada UTi Worldwide Versacold Logistics Services Vimich Traffic Logistics Vitran Supply Chain Western Canada Express / Apex Motor Express Wheels Group of Companies (Wheels International; Wheels MSM; Wheels Logistics) XCD Logistics Solutions Ltd. XTL Logistics Inc. YRC Reimer

01-3PLguide&dir.indd 20

TRANSPORTATION

CUSTOMS

C: Canada N: North America G: Global

N N N G NA C C G G G G C N C G G N N G G CN G G N G G N C G N N CN N G CN N N G CN N N CN N CN N CN G G C CN N C G N N G

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MM&D | January/February 2013

13-02-15 1:54 PM

WAREHOUSING

SPECIAL SERVICES

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3PL Capability Guide: Contact 3PL LINKS INC. Woodbridge, ON 905-850-9002 wgrossi@3pllinks.com www.3pllinks.com A.G.O. TRANSPORTATION INC. Montreal, QC 514-631-6663 ago@agotrans.com www.actionago.com A.N. DERINGER INC. St. Albans, VT 802-524-8110 marketing@anderinger.com www.anderinger.com A52 WAREHOUSE INC. Langley, BC 866-966-0252 aweiland@a52.ca www.a52.ca ACCURISTIX Oakville, ON 905-829-9927 marketing@accuristix.com www.accuristix.com AFFILIATED CUSTOMS BROKERS LTD./GLOBAL LOGISTICS Laval, QC 450-681-4555 dpaquette@affiliated.ca www.affiliated.ca AGILITY Mississauga, ON 905-612-7561 mshum@agilitylogistics.com www.agilitylogistics.com ALL-CAN PRO LOGISTICS INC. Belleville, ON 613-966-0796 kellyn@allcandcs.com www.allcan3PL.com ALL-CONNECT LOGISTICAL SERVICES INC. Oakville, ON 905-847-6555 customerservice@allconnect.ca www.allconnect.ca APL LOGISTICS Etobicoke, ON 866-896-2005 inquiries@apllogistics.com www.apllogistics.com ASL DISTRIBUTION SERVICES LTD. Oakville, ON 905-829-5141 khammel@asldistribution.com www.asldistribution.com AXSUN INC. St. Hubert, QC 450-445-3003 sramescu@axsungroup.com www.axsungroup.com BCG LOGISTICS INC. Mississauga, ON 905-238-3444 tmedeiros@bcglogistics.com www.bcglogistics.com BELLVILLE RODAIR INTERNATIONAL Mississauga, ON 905-671-4655 jeff.cullen@bellvillerodair.com www.bellvillerodair.com BISON TRANSPORT INC. Winnipeg, MB 204-833-0131 marketing@bisontransport.com www.bisontransport.com C & E EXPRESS INC. Brampton, ON 905-495-7934 marketing@ceexpress.ca www.caeexpress.ca C.H. ROBINSON WORLDWIDE, INC. Eden Prarie, MN 800-323-7587 solutions@chrobinson.com www.chrobinson.com C.V. LOGISTICS Rosemere, QC 450-965-8251 derekvincent@cvlog.com www.cvlog.com

01-3PLguide&dir.indd 22

C.W. HENDERSON TRANSPORTATION Etobicoke, ON 416-674-5826 dhardy@cwhenderson.ca www.cwhenderson.ca CAMRON CONSULTING INC. Brampton, ON 416-845-5716 tom@camronconsulting.com

CANADA CARTAGE SYSTEM Mississauga, ON 905-564-2115 bmartin@canadacartage.com www.canadacartage.com CANADIAN PACIFIC LOGISTICS SOLUTIONS Calgary, AB 403-319-7487 David.Walker@cpr.ca www.cpr.ca CAVALIER TRANSPORTATION SERVICES INC. Bolton, ON 905-857-6981 bledson@cavalier.ca www.cavalier.ca CEVA LOGISTICS Jacksonville, FL 904-928-1400 julie.palus@cevalogistics.com www.cevalogistics.com CHALLENGER Cambridge, ON 519-653-6226 info@challenger.com www.challenger.com CHEMLOGIX LLC Blue Bell, PA 215-461-3828 www.chemlogix.com CHURCHILL LOGISTICS INC. London, ON 519-649-0008 cchurchill@churchill-logistics.com www.churchill-logistics.com COLE INTERNATIONAL INC. Calgary, AB 403-262-2771 nicole.gordon@cole.ca www.cole.ca CONFEDERATION FREEZERS Brampton, ON 905-791-1564 www.confederationfreezers.com CUSTOMIZED GLOBAL LOGISTICS Burlington, ON 905-319-3449 gtaylor@cglogistics.com www.cglogistics.com DAMCO Madison, NJ 973-514-5126 mark.byrne@damco.com www.damco.com THE DAY & ROSS TRANSPORTATION GROUP Hartland, NB 506-375-5300 kdeering@dayandrossinc.ca www.dayross.ca DELMAR INTERNATIONAL INC. Montréal, QC 514-636-8800 www.delmarcargo.com DHL GLOBAL FORWARDING Mississauga, ON 289-562-6500 jamie.beggs@dhl.com www.dhl-dgf.com DOMINION WAREHOUSING & DISTRIBUTION SERVICES LTD. Toronto, ON 416-744-2438 bdineen@godominion.com www.godominion.com DTA SERVICES LTD. Toronto, ON 416- 487-3311 mgracey@dta.ca www.dta.ca

EGI TRANSPORTATION SERVICES London, ON 519-686-6290 isk1@sympatico.ca THE ERB GROUP OF COMPANIES New Hamburg, ON 800-665-2653 contactus@erbgroup.com www.erbgroup.com EVERYPOINT LOGISTICS SOLUTIONS Pointe-Claire, Québec 514-426-3043 sales@everypoint.ca www.everypoint.ca EXPEDITORS CANADA INC. Mississauga, Ontario 905-290-6000 ric.condello@expeditors.com www.expeditors.com FARGO TRANSPORTATION SERVICES LIMITED Georgetown, ON 905-873-1199 jim@fargotransportation.com www.fargotransportation.com

FEDEX TRADE NETWORKS TRANSPORT & BROKERAGE (CANADA) INC. Mississauga, ON 9056777382 www.ftn.fedex.com FIRST CHOICE LOGISTICS - DIV. OF THOMPSON AHERN & CO. LTD. Mississauga, ON 905-677-3471 mjohnston@taco.ca www.taco.ca FORT STORAGE WAREHOUSING & DISTRIBUTION Winnipeg, MB 204-488-9774 alan.s@fortstorage.com www.fortstorage.com FRASER DIRECT LOGISTICS LTD. Georgetown, ON 905-877-4411 customsbrokers@fraserdirect.ca www.fraserdirect.ca FREIGHTMATE INC. North York, ON 416-633-4331 www.freightmateinc.com GEORGETOWN TERMINAL WAREHOUSES Georgetown, ON 905-702-7084 hvisser@gtwcanada.com www.gtwcanada.com HUB GROUP CANADA Oakville, ON 905-820-2070 boneill@hubgroup.com www.hubgroup.com HURON SERVICES GROUP, CPC LOGISTICS COMPANY Oakville, ON 905-845-4075 j.thomson@callcpccanada.com www.hurongroup.ca HYPHEN, MEMBER OF THE CALYX TRANSPORTATION GROUP INC. Vaughan, ON 877-549-7436 Ext. 6024 shannonk@hyphenateit.com www.hyphenateit.com I TO I LOGISTICS INC. Mississauga, ON 905-362-1603 mdocherty@i2ilog.com www.itoilogistics.com INDIS Concord, ON 905-761-8251 ted.brown@muirscartage.com ISG TRANSPORTATION INC. Brampton, ON 905-799-1300 spencer@isgtransport.com www.isgtransport.com

J.D. SMITH & SONS LIMITED Vaughan, ON 905-669-8980 Ext 347 sales@jdsmith.com www.jdsmith.com J.P. ENTERPRISES LOGISTICS CORP. Mississauga, ON 905-949-0046 jponeill@jpent.com www.jpent.com JAG FREIGHT LINES Mississauga, ON 905-607-7167 info@jagfreightlines.com www.jagfreightlines.com KATOEN NATIE CANADA Mississauga, ON 905-821-0514 patrick.donalds@katoennatie.com www.katoennatie.com KENCO LOGISTIC SERVICES Chattanooga, TN 800-758-3289 info@kencogroup.com www.kencogroup.com KINTETSU WORLD EXPRESS CANADA Mississauga, ON 905-677-8830 info@kwe.ca www.kwe.ca KOCH TRANSPORT LIMITED Cambridge, ON 519-653-8530 jschneider@kochtransport.com www.kochtransport.com KUEHNE+NAGEL LTD. Mississauga, ON 905-502 7776 info.canada@kuehne-nagel.com www.kuehne-nagel.com LAKESIDE LOGISTICS Oakville, ON 800-387-7108 michael@lakesidelogistics.com www.lakesidelogistics.com LANTRAX NORTH AMERICA LOGISTICS Surrey, BC 604-526-8729 rod@lantraxlogistics.com www.lantraxlogistics.com

LEAN SUPPLY SOLUTIONS INC. Vaughan , ON 866-924-5777 info@leansupplysolutions.com www.leansupplysolutions.com LOGISTICWORKS Brampton, ON 905-792-6140 agallant@m-o.com www.m-o.com LYNDEN INTERNATIONAL LOGISTICS CO. Vaughan, ON 905-879-0114 apeluffo@lynden.com www.lilco.lynden.com MAISLINER TORONTO Toronto, ON 416-767-1700 sales@maisliner.com www.maisliner.com MANITOULIN TRANSPORT Mississauga, ON 905-670-8990 svalenzuela@manitoulintransport.com www.manitoulintransport.com MCKENNA LOGISTICS CENTRES Mississauga, ON 905-274-1234 sales@mckennalogistics.ca www.mckennalogistics.ca

MENLO WORLDWIDE LOGISTICS San Mateo, CA 630-449-1084 info@menloworldwide.com www.menloworldwide.com

METRO SUPPLY CHAIN GROUP INC. Concord, ON 905-738-5577 rcranwill@metroscg.com www.metroscg.com MEYERS TRANSPORT/MORTRANS INC/MOSAIC LOGISTICS Peterborough, ON 888-291-4442 sdearman@meyers.ca www.mosaiclogistics.com MIDLAND TRANSPORT Dieppe, NB 506-858-5555 www.midlandtransport.com MILGRAM & COMPANY LTD. Montréal, PQ 514-288-2161 sales@milgram.com www.milgram.com MIQ LOGISTICS Mississauga, ON 905-542-7525 contact_us@miq.com www.miq.com MTE LOGISTIX EDMONTON INC. Edmonton, AB 780-944-9009 mteinfo@mtelogistix.com www.mtelogistix.com NATIONAL LOGISTICS SERVICES INC. Etobicoke, ON 416-246-9536 ext 7018 hmacpherson@nls.ca www.nls.ca NEOVIA LOGISTICS Downers Grove, IL 630-743-4156 cheryl.cryer@neovialogistics.com www.neovialogistics.com OPTVIA LOGISTICS INC. Guelph, ON 519-823-7860 scott@optvialogistics.com www.optvialogistics.com PANALPINA Mississauga, ON 905-755-4500 www.panalpina.com PENSKE LOGISTICS Reading, PA 800-529-6531 logistics@penske.com www.penskelogistics.com PIVAL INTERNATIONAL Vaudreuil, QC 450-424-1623 mlabarbera@pival.com www.pival.com POLARIS GLOBAL LOGISTICS INC. Mississauga, ON 905-671-3100 larry@polaristransport.com www.polaristransport.com PORTER WAREHOUSING & DISTRIBUTION INC. Edmonton, Alberta 780-453-5192 porterinfo@porterwarehousing. com www.porterwarehousing POSITIVE FULFILLMENT SERVICES LTD. Toronto, ON 416-213-0299 info@positivecan.com www.positivecan.com

PRECISION TOTAL FULFILLMENT Woodbridge, Ontario 905-850-5044 admin@precisiongroupag.com www.precisiontotalfulfillment.com PROFESSIONAL DISTRIBUTION SERVICES Mississauga, ON 905-502-1098 pdonalds@professionaldist.com www.professionaldist.com PROMILES CANADA INC. Bowmanville, ON 888-736-4537 info@promilescanada.com www.promilescanada.com

MM&D | January/February 2013

13-02-15 1:54 PM

EQUIPMENT FOCUS

Dock products 1 Truck cooler

The Solar Shield from Patterson Ventilation Company Inc is designed to keep employees cool while working in trailers parked at loading docks. The cooling system intermittently sprays a thin film of water on the trailers’ roofs. As an evaporative cooling system this pulls heat away from the trailer which, according the to company, can decrease the temperatures inside the trailers by up to 22C (40F). The spray system is operated by a control box, which can group the doors together in zones so they can be watered at the same time, or treat them individually. A thermostat wired into the system measures the temperature and ensures the Solar Shield is only activated when it is hot enough for evaporation to occur. The spray nozzle, located above the door, can only be activated if a trailer is present. Spraying lasts for between six and seven seconds at a minimum of five-minute intervals to allow time for evaporation. Approximately 2L (0.5 US gallons) of water is sprayed in each application.

PROPULSION+ St-Colomban, QC 514-917-4575 ygagnon@propulsionplus.com QUIK X LOGISTICS Mississauga, ON 800-554-2264 award@quikx.com www.quikx.com REMCO Lachine, QC 514-625-1022 jcohen@remco.ca www.remco.ca RETRANS PRECISION LOGISTICS Toronto, ON 416-213-0131 lthompson@re-trans.com www.re-transcanada.com

RYDER CANADA Mississauga, ON 905-812-2396 caroline_jacobs@ryder.com www.ryder.com SADDLE CREEK LOGISTICS SERVICES Lakeland, FL 863-665-0966 sales@sclogistics.com www.sclogistics.com SAMEDAY WORLDWIDE Mississauga, ON 905-676-8960 kal.atwal@dayandrossinc.ca www.sameday.ca SCHENKER OF CANADA LIMITED Mississauga, ON 905-676-0676 fabiana.varela@dbschenker.com www.dbschenker.com/ca

SLH TRANSPORT INC. Kingston, ON 888-854-7548 micampb@slh.ca www.slh.ca SOTECH NITRAM INC. Laval, QC 877-664-8726 ventes@sotechnitram.com www.sotechnitram.com

MM&D | January/February 2013

01-3PLguide&dir.indd 23

AeroGo Inc’s LoadRunner pallet jack uses a compressed air system (with a built-in compressor) and Aero-Casters to “float” the load as it moves across the floor. It is designed to transport loads weighing up to 1,135kg (2,500lbs). Its deck measures 100cm (42in) by 125cm (49in) and has a 5cm (2in) insertion height. It is operated by throttle-style fingertip controls and is suitable for use in manufacturing areas, cleanrooms, assembly, testing, and warehouse applications requiring redundant and recurring load movement. The LoadRunner is emission-free.

2 Guidance lights

SCHNEIDER NATIONAL Guelph, ON wahbaj@schneider.com www.schneider.com SCI LOGISTICS Toronto, ON 888-755-1528 business.development@ scilogistics.com www.scilogistics.ca SDV Ville Saint Laurent, QC 514-956-7870 b.mercier@sdv.com www.sdv.com SERVICE FREIGHT SYSTEMS & WAREHOUSING Burlington, ON 905-319-6565 randys@servicefreight.com www.servicefreight.com SGT 2000 INC. St-Germain, QC 800-363-4216 info@sgt.qc.ca www.sgt2000.com

SHERWAY GROUP Mississauga, ON 416-420-3257 sales@sherwaygroup.com www.sherwaygroup.com

3 Load lifter

Guide-Pro Truck Lights from TMI LLC illuminate the dock face to provide a visual guide for drivers backing their trucks. They are constructed from rib-reinforced, high-impact polycarbonate and are designed with a low profile to reduce the chance of impact. Guide-Pro Truck Lights operate on 12-volt AC/DC and use standard automotive replacement bulbs. The lights have adjustable reflectors which can create a focused light pattern to precisely illuminate the dock surface. They measure 38cm (15in) by 8cm (3in) by 8cm (3in). SPECIALIZED TRANSPORTATION INC. (STI) Fort Wayne, IN 800-234-2788 marketing@stidelivers.com www.stidelivers.com STONEGATE LOGISTICS Mississauga, ON 905-671-9072 wayne@stonegatelogistics.com www.stonegatelogistics.com SYLVITE TRANSPORTATION GROUP Abbotsford, BC 604-854-6633 acarbone@sylvite.ca www.sylvite.ca SYNERGEX LOGISTICS Mississauga, ON 905-565-1212 info.yyz@synergexlogistics.com www.synergexlogistics.com TANDET Oakville, ON 905-603-6291 stilley@tandet.com www.tandet.com TECHNICOLOR GLOBAL LOGISTICS Camarillo, CA 805-445-3093 supplychain@technicolor.com www.technicolorgloballogistics.com THOMSON TERMINALS LIMITED (THOMSON GROUP OF COMPANIES) Toronto, ON 416-240-0897 sales@thomsongroup.com www.thomsongroup.com TOTAL LOGISTICS GROUP OF COMPANIES Vaudreuil-Dorion, QC 450-424-1700 jzeppetelli@totallogistics.com www.totallogistics.com

TRAILCON LEASING INC. Mississauga, ON 905-670-9061 aboughton@trailcon.com www.trailcon.com TRANSPRO FREIGHT SYSTEMS LTD. Milton, ON 905-693-0699 info@transprofreight.com www.transprofreight.com TRANSX GROUP OF COMPANIES Winnipeg, MB 204-632-6694 michael.banville@transx.com www.transx.com TST OVERLAND EXPRESS Mississauga, ON 905-625-7500 dmurray@tstoverland.com www.tstoverland.com

UPS CANADA Mississauga, ON 905-364-5941 mmendes@ups.com www.ups.ca UTI WORLDWIDE Long Beach, CA 562-552-9400 Cslotten@go2uti.com www.go2uti.com VERSACOLD LOGISTICS SERVICES Vancouver, BC 800-563-2653 info@versacold.com www.versacold.com VIMICH TRAFFIC LOGISTICS Tecumseh, ON 800-284-1045 ron@vimich.com www.vimich.com

VITRAN SUPPLY CHAIN Concord, ON 416-798-4940 sales@vitranlogistics.com www.vitran.com WESTERN CANADA EXPRESS / APEX MOTOR EXPRESS Concord, ON 905-738-2106 bpoe@apexltl.com www.westerncanadaexpress.com WHEELS GROUP OF COMPANIES (WHEELS INTERNATIONAL; WHEELS MSM; WHEELS LOGISTICS) Mississauga, ON 905-602-2700 info@wheelsgroup.com www.wheelsgroup.com XCD LOGISTICS SOLUTIONS LTD. Thornhill, ON 647-669-1257 skopyto@xcdlogistics.com www.xcdlogistics.com XTL LOGISTICS INC. Mississauga, ON 416-742-3883 craig.germain@xtl.com www.xtl.com YRC REIMER Mississauga, ON 905-670-9366 www.yrc.com

13-02-15 1:55 PM

RETAIL

Building design—Part One Wrapping the building around the materials handling solutions Edward Stevens

n previous columns I’ve described initial steps that need to be taken in the early design stages of a retail DC construction project. Now it’s time for the physical construction of the building. I cannot emphasize enough the importance of working closely with the full team of designers and builders, but don’t let them take over the project. They will focus on cutting costs and staying on budget, regardless of any business reasons you have for asking for modifications to improve storage and throughput capacity, operational safety or building efficiency. The physical building should wrap around the selected material handling equipment and systems. Not the other way around—unless you are renovating an existing facility or moving into a spec building.

Column spacing

Designers typically want to have the building column spacing consistent throughout the facility. This often restricts product-flow or reduces storage capacity. Building columns should not be in any rack aisle, as they are targets for mobile equipment. To prevent operator injuries and product and equipment damage, protect columns within the equipment layout, consistent with efficient flow of equipment, people and material. If columns are necessary in the shipping and receiving dock areas or floor bulk picking areas, wider bay spacing is preferred. My colleagues and I often suggest at least an 18m (60ft) marshalling bay between the docks and the first interior column line. Regardless of bay size, bright yellow building column protectors or painted black and yellow stripes improve column visibility. We often wrap columns in concrete measuring 1.2m (4ft) high and 0.6m (2ft) diameter, and paint it safety yellow.

Clear height

It is important to specify the clear height—which can be between nine metres (30ft) and 12m (40ft)—and to understand how it is calculated. For DC operations, minimum clear height is measured from the finished floor to the truss or any obstacle under the truss, including: electrical power runs, cable trays, air circulation fans, lights, sprinkler pipes or ductwork. 24

01MM&D-retail.indd 24

Floor

Floor point loads are determined by the traffic usage, racking, and other structures planned for the facility. Materials handling equipment providers will give you specifications based on current and future needs. Floor levelness (FL) is the variation in elevation between two points 300cm (10ft) apart. Floor flatness (FF) is the variation in elevation between two points 30cm (12in) apart. The exact FF/FL specifications are determined by the combination of storage height and type of storage equipment to be used. Be sure to include these specifications in the final building design documents, including the plan for measuring and testing to insure your requirements are met. High bay racking will require an “above normal” flat floor finish with floor flatness of FF60 to FF80 and the floor levelness of FL60 to FL80. Shipping and receiving areas and warehouse bulk floors usually require floor flatness around FF30 and floor levelness around FL25. Note that floors require at least 28 days to cure before racking is installed. Saw cuts along all columns lines and additional saw cuts between every column to allow for concrete shrinkage will reduce cracking. Epoxy sealants are used to seal the saw cuts and need to be applied 90 days or more after the concrete cures. Construction joints subject to hard wheel traffic should be doweled with smooth bars that are debonded on one side and aligned to permit horizontal movement (keyways often don’t work under heavy traffic). Boxed-out diamonds (separately poured concrete) around all building columns create a better floor. For very high racking systems, strip pouring may be necessary but it can be two- to three-times more expensive than open pouring due to extensive, accurate formwork, large crews and small pour sizes. Exercise extreme caution when agreeing to floor tolerances for a project, since if they are poorly understood they may require the use of specialized techniques or other design changes in order to be achieved. To reduce rack shimming, the complete pick modules should be situated on a single concrete pour. To reduce complaints from mobile equipment operators long, wide, main aisles should also be located on a single concrete pour. MM&D For the second part of this column see the March/April issue of MM&D. Edward Stevens is the pseudonym of a Canadian retail supply chain professional with over 30 years of experience in the industry. MM&D | January/February 2013

13-02-14 6:18 PM

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DATA CAPTURE

New Products Barcode terminal

RFID consequences Retail adoption challenges suppliers By MM&D staff

s retailers begin plastering more RFID tags on mer mer-chandise destined for the shop floor, suppliers will be forced to develop a new relationship with the technology—one that brings benefits and disadvantages. American Apparel, Marks & Spencer, Walmart and Macy’s are among the chains rolling out RFID to some degree. According to a report published by Newton, Massachusetts-based ChainLink Research, over one billion items of apparel merchandise were RFID-tagged in 2012, and that number is expected to rise this year. Bill McBeath, chief research officer for ChainLink and the author of the report, says it makes sense for the retailer to have the merchandise arrive pre-tagged from the supplier. While suppliers are experienced adding barcodes or other tickets, they’re going to have to add a step or two to their labeling system. For suppliers to avoid paying chargebacks or other penalties resulting from non-functioning RFID tags, they will need to implement “testing to verify that the tags actually work. This testing is typically done in bulk mode (often by a service bureau) before the tags are applied. However more diligent suppliers are also adding a testing step after applying the tags to the items, but before shipping to make sure there are 100 percent readable tags going into the carton.” That tags can be so easily tracked means mistakes are easily exposed. “Some retailers find, as they start implementing item-level RFID, that the rate of supplier error seems to rise suddenly. Of course suppliers aren’t suddenly getting worse. Rather now their errors suddenly become visible. This can result in an increase in chargebacks unless suppliers correct the issue.” One positive for suppliers is RFID makes it easy to prove a shipment has arrived as scheduled. McBeath says electronic Proof of Delivery (e-POD) can reduce the number of disputes, “especially when the supplier has verified the shipment before sending”. RFID does come with one concrete disadvantage for suppliers: added cost. McBeath estimates tags add between 10 and 30 cents per item shipped. MM&D | January/February 2013

01MM&D-datacap.indd 27

Denso’s BHT-1200 Series of handheld wireless barcode terminals come in 1D and 2D versions. The BHT-1200 Series can read codes at speeds of 400 scans per second, using the company’s advanced chargecoupled device (CCD) technology. They are capable of scanning damaged or complicated codes, and can read codes from a distance of 7.6m (25ft). The scanners include a built-in 5.0 megapixel camera, useful in taking pictures of defective or mislabelled products. The BHT-1200 Series also features a nine centimetre (3.5in) HVGA colour display and a specially designed keyboard that includes 12 function keys. They conform to 802.11b/g/n communication standards, and run on a WPA/WPA2 wireless network. The BHT-1200 Series is designed to survive 30 separate 1.5m (5ft) drops onto a concrete floor.

Barcode scanner The DataMan 503 barcode scanner from Cognex Corp is designed for use in logistics applications and distribution centres. It performs single-sided scanning with an oriented barcode, single-sided scanning of omni-directional barcodes, two-sided scanning, three-sided scanning, five-sided scanning and presentation scanning (put-to-light/pick-to-light). It has a 2.1 megapixel camera, an image acquisition rate of over 100fps and synchronous multi-camera operation.

AutoID reader The VICAMsnap from Vitronic Machine Vision Ltd, is a hands-free, camerabased autoID reader designed for use in automated convey and manual sorting environments. It can be configured to read 1D or 2D matrix codes. It uses white illumination to read barcodes and can also read damaged barcodes or barcodes printed on coloured backgrounds. Its width of field is 310mm by 260mm (12in by 10in) and its depth of field is 300mm (16in). A red “go/no-go” LED flash provides visual feedback for the operator and audible tones or voice confirmation provide audio-feedback. The VICAMsnap allows image capture/archiving and complex processing routines to be completed in real time.

13-02-15 1:57 PM

SAFETY

Pallet rack safety myths Ensuring the safety of storage systems and warehouse workers

R Chuck Leon

acking and storage systems loom large and carry a heavy load. Your employees move around them all day long, loading and unloading them (and in some retail environments, the customers do the same too)—and yet, too often, racking systems are overlooked when it comes to health and safety. Pallet racks are common in DCs, warehouses, retail operations, and manufacturing plants. Whether you installed them yourself or you inherited them when you purchased the space, you are required to adhere to standards, and to protect employees and customers from harm when they are working around them. In November 2011, the Ontario Ministry of Labour conducted a racking blitz and inspected over 977 workplaces. The blitz resulted in over 3,063 orders being issued, including 118 stop work orders. Here are five common myths about racking safety that should be addressed.

MYTH 1: There are no standards for the safe use of pallet racks. This isn’t true at all. In Ontario, the Occupational Health and Safety Act (OHSA) says companies must maintain equipment in good condition (OHSA, section 25(1)(b)) and provide safety information and instruction to workers as appropriate (OHSA, section 25(2)(a)). Sections 7 (pre-start health and safety review), 45 (manual material handling) and 51 (lift truck safety) of the Industrial Establishments Regulation are also important. The first step to ensuring the safe use of pallet racks is to access a recognized source for proper procedures. The Canadian Standards Association (CSA) has two standards that provide the information you need: • CSA A344.1-05 User Guide for Steel Storage Racks; • CSA A344.2-05 Standard for the Design and Construction of Steel Storage Racks.

MYTH 2: Pallet racks collapse solely due to errors in installation. Racks collapse due to poor design, incorrect installation, improper use, or flawed maintenance and repairs. You should work with a reputable rack installation company to assess your storage needs and ensure you obtain the correct product. The same company should do the installation. You should conduct regular and thorough inspections using a checklist to help you focus on priorities and look for signs of damage such as cracked paint, dents and damaged components. Any damage discovered should be repaired. 28

01MM&D-Maintenance.indd 28

MYTH 3: Inspection frequency depends upon damage and accident rates. According to the CSA User Guide for Steel Storage Racks, the frequency of racking inspections should be governed by a number of factors, including the nature of the environment where the pallet rack is located, frequency of damage and local safety regulations. You should always know what your local regulations for inspections are, and conduct inspections more frequency if you have a high incidence of racking damage and/or move product to and from storage racks on a frequent basis.

MYTH 4: If modifications to existing racking are made, the manufacturer assumes liability. If racking modifications are made and not engineerapproved, the liability of a collapse will rest with the owner of the racking. If the racking was there when you moved in, you’re still obligated to have the appropriate drawings and paperwork to show that standards were met. If you don’t, you’ll need to conduct a prestart inspection. Do not attempt modifications or repairs without approval from a certified engineer or a rack maintenance repair company.

MYTH 5: Keeping employees safe around racking requires little training or supervision. Supervisors need to take a “hands on” approach. That means walking the floor of the warehouse on a regular basis and observing the work habits of employees. You also need to be involved in the inspection process. It’s critical that you are properly trained so you understand what you’re looking for and can spot potential hazards or unsafe behaviour before an incident occurs. Storing items on multi-level racking systems is a learned skill. Employees need to be provided with the appropriate training to ensure they are using the equipment properly, they know how to do their jobs safely and they have the ability to spot potential issues and problems before they arise. A successful racking safety program is a shared responsibility. It requires a commitment from all levels of the organization and the investment of time and resources. MM&D Chuck Leon is a warehouse/material handling specialist with Workplace Safety & Prevention Services, part of Health and Safety Ontario. He is a Certified Registered Safety Professional (CRSP) with a Professional Materials Management (PMM) designation. MM&D | January/February 2013

13-02-14 6:19 PM

MATERIALS HANDLING

WMS evolves for 3PLs Growing needs and functions drive software development

arehouse management systems (WMS) and related software have gone through a number of design evolutions. If one goes back to ancient times, which is only a couple of decades ago, most warehouse management systems were in their infancy. Most were designed to operate mainly with paper-based systems, although a couple of providers had foretold the future with customized systems involving RF and barcode technology. The core of many WMS systems was functional capability like: • receipt processing, recording and exceptions (over, short and damaged); • putaway and pick slot replenishment; • less-than-full case order picking and packing; • shipping and manifesting; • inventory control (including in-warehouse location management, and lot control in some specialized cases); • support functions like inventory counting, archiving and records, pallet control, etc. Technology leaders that specialized in real-time applications also offered other solutions, like labour management programs. Much of the software required lots of customization, which meant modifications to meet customer-specific needs were both time-consuming and expensive. Software was usually written in a hard-coded style with limited flexibility, so accommodating multiple customer needs was very difficult—if not impossible— unless the underlying code was very well designed. This created another problem for vendors: with the continuing rapid evolution of computer hardware, updates to the software were continuously needed. Many of these issues came to a head due to the Y2K software bug scare. New WMS software expenditure drastically dropped as companies gave priority to the immediate operating concerns and the upgrades needed to ensure Y2k survival. The result was a wave of industry consolidation amongst vendors which has continued to this day. Compared to private industry warehouses, 3PLs face multiple customer requirements, including: • Different practices and processes by 3PL clients within the same facility. • Additional labour information to support accurate cost allocation and billing by the customer, and to avoid under- or over-billing. • Information for such things as labour efficiency and tracking to support the marketing and sales staff in rate negotiations. This is a need not commonly found in normal private distribution centres, MM&D | January/February 2013

01MM&D-mh.indd 29

which often worry more about functional totals. • Good stock location information, including capacity and occupancy by type of storage media. • Varying billing practices for different clients. • Demands for real time information by customers. • Integration of WMS and TMS systems to operate multi-customer freight consolidation programs. • Protecting customer confidentiality while dealing with a wide variety of supplier and retailer communication formats and styles. • Efficiency needs and evolving data capture needs. The average 3PL WMS vendor didn’t have the architecture to support many of these needs, leading to the growth of niche vendors who answered the demand. After the Y2K consolidation mass customization rather than hard-coded software became the trend. This was often accompanied by business process engineering of customers’ processes and practices. In effect, this meant the software companies no longer tried to accommodate every customer’s need but offered a standardized profile. Mass customization also allowed for enhancements to be implemented independently of the underlying source code, greatly simplifying the updating and upgrading process. With the industry consolidation there was also an effort to expand functionality into new areas. Today, those areas include: • Order fulfillment, inventory sourcing and allocation from multiple sites. • Engineered labour standards, particularly if combined with voice recognition. • Slotting, location and capacity management. • TMS and yard management. • Trade partner integration. For 3PLs, in their middleman role, communication integration with multiple parties has been an IT need for decades. This need has increased as large customers have levied heavy penalties for late deliveries, and as mobile devices have become common. Serviceoriented architecture, in which independent devices, protocols, and platforms communicate with each other, has developed to meet the need. For the smaller 3PL operator, software-as-a-service applications (SaaS)—which outsource the IT function—will prove attractive. While many companies have been reluctant to place data in the cloud, it is likely the ultimate step forward. MM&D

Dave Luton

Dave Luton is a consultant in the greater Toronto area. dluton@cogeco.ca 29

13-02-14 6:19 PM

Crunching the Numbers

Men, women, power and money MM&D presented the results of the Survey of the Canadian Supply Chain Professional in the October 2012 issue (and online at http://tinyurl.com/ SCSCP12), but it seems that wasn’t enough. Many have asked for more details and information from the survey. In particular, people wanted a better understanding of the salary differences between men and women. So we’ve returned to the data, crunched some more numbers, and can now shed more light on this portion of the survey.

Type of job held Clerical/administration

11%

Consultant

Engineering/professional

Executive

13%

Managerial

45%

30%

Operations/Tactical

14%

Analyst

Strategic

Supervisor

10%

Other positions

$91,181 83,813

$75,033 71,664

101,302 123,663 97,164 88,720 83,501 82,753 84,489 98,004 67,193 94,761 85,163 91,865

87,340 98,963 87,553 68,510 67,644 59,524 69,718 64,723 46,000 77,362 74,000 77,707

75,947

62,067

83,230

89,000

78,436 79,853 86,583

70,591 75,857 57,257

65,900 83,190 96,402

90,000 72,030 85,559

86,019

71,730

Salary by Sector

Men’s average salary in 2012

Average salary in 2012

$91,181

$85,178

Women’s average salary in 2012

$75,033

influence at the C-Level 6%

Yes, I am at the C-level

43% 35%

Yes, I have influence at the C-level

26% 29%

No, but I would like to have influence

21% 28%

No, I don’t need to have influence

Don’t know

Total Respondents Agriculture, forestry, other natural resources Mining, quarrying Oil and gas extraction Utilities Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing Information and cultural industries* Finance and insurance* Real estate and rental and leasing* Professional, scientific and technical services Management of companies and enterprises* Administrative & support, waste management and remediation services* Educational services Healthcare and social services Arts, entertainment and recreation* Accommodation and food services* Public administration Other services (excluding public administration)* Other organizations *Fewer than 100 respondents

Print and online sponsorships are now available for our new Crunching the Numbers section. Please contact Emily Atkins at 416-510-5130 or eatkins@bizinfogroup.ca for more information. 30

MM&D | January/February 2013

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