candy
volumes, which resulted in decreased “As we rolled out the program, wherever possible. Once this was average load weight/cube for many of complete, it reflected our new ‘Project we began to immediately see our shipments into Western Canada,” Candy’ shipping schedule,” Owens says Owens. explains. the benefits. We finished 2008 As if the inefficiencies in Nestlé’s “By going to a schedule of three supply chain were not enough, the terloads per week into any particular city, with a full-year on-time ribly cold winter of 2007-8 roared in, there was a greater focus on on-time wreaking havoc on the railways’ scheddelivery,” says Doug Miller, manager of performance of 77% in ules. The perfect storm had arrived. food products and intermodal for CP. “This all resulted in abysmal on-time “Certain days of the week – Wednesday, Western Canada.” performance. The first two months of Thursday and Friday – are busier than 2008 witnessed on-time performance at other days. We said, ‘If you tender your all-time lows, in the 50 to 60% range, freight on [other] days, you will have a defined as delivering within plus or minus 30 minutes of the ap- better probability of success and your overall performance will pick pointed time,” Owens says. Nestlé was shipping approximately up.’ We were very interested in getting freight off the peak days.” 2,000 containers a year to Western Canada. Doing this went a long ways to bring Nestlé’s on-time performance Faced with eroding on-time performance and increasing shipping in line with the 95% on-time performance CP reports for its trains. costs caused by the volume shifts, Nestlé decided to make a thorough One change, then, was to move from shipping goods every day analysis of its whole shipping strategy and assembled a group that to each of six cities in Western Canada – Winnipeg, Regina, included one of its route optimization analysts and CP. First, they Saskatoon, Edmonton, Calgary and Vancouver – to three shipping examined Nestlé’s shipping schedules to see if they made sense. In a days per week, per city. Nestlé worked closely with its customers to number of cases, they did not. For example, Nestlé was shipping to determine the best primary shipping day for each customer. If a customers, sometimes the same ones, every day of the week. customer required a second or third shipping day, these were based Once Nestlé and CP identified all of the issues, they began to on the remaining two days going to that region. “Without the colre-engineer the process. Nestlé’s route engineering analyst studied a laboration of our customers, we would never have been able to bring year’s worth of shipment data to see if it would make sense to assign this initiative to life,” Owens acknowledges. three key shipping days for each region in Western Canada. “The This rationalization not only gave Nestlé customers more predictdays were selected to minimize the in-transit time, to ensure optimal ability for when product would arrive. Consolidating deliveries also container availability and to align to our customer requirements increased weight/cube and reduced shipping costs (since 2008,
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ct&l october 2010
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