12 minute read
IN THE FIELD
Cargojet appoints new CFO
Cargojet has hired Scott Calver as its new chief financial officer. Calver, most recently the CFO of Trimac Transportation, also served as VP of finance for ICS Courier.
“I have always admired Cargojet’s entrepreneurial spirit and watched its success over the past decade,” said Calver, a London, Ontario native and Chartered Professional Accountant. “I look forward to contributing to the next phase of Cargojet’s growth.”
Calver completed a Bachelor of Commerce at Laurentian University and a Master’s in Business Management at the Richard Ivey School of Business.
“Scott not only brings strong financial and operational skills, he also brings over 20 years of transportation and logistics industry experience,” said Ajay Virmani, Cargojet’s president and CEO.
Tech key to managing disruption: report
According to a study from IBM and Celonis on supply chain resiliency, chief supply chain officers (CSCOs) recognize the role hybrid cloud, AI, process mining and execution management play in overcoming disruption. In fact, 72 per cent expect to automate their processes and workflows over the next three-to-five years, while 69 per cent will accelerate cloud adoption.
The study surveyed 500 CSCOs across 10 industries, showing organizations want to modernize their supply chains through data and hybrid cloud strategies while prioritizing sustainability.
Demand volatility is a top challenge for 80 per cent, while 77 per cent mentioned increased transportation and logistics costs.
Hybrid cloud, execution management, AI and automation can help CSCOs seize opportunities. Almost 87 per cent are implementing execution management and 77 per cent are implementing process and task mining to modernize operations. By 2025, 83 per cent plan to introduce AI-enabled, real-time inventory management.
Hapag-Lloyd add Port Saint John call
Canadian Pacific and Hapag-Lloyd AG have added a call into Port Saint John, NB, via a seasonal extra loader. This follows their inaugural service call in May 2021, connecting via CP rail service to inland markets in Canada and the US. CP regained access to Port Saint John in June 2020 by acquiring the Central Maine & Quebec Railway, which has connections with the Eastern Maine and New Brunswick Southern railways.
Port Saint John is modernizing to increase container capacity to 800,000 TEUs and provide additional on-dock rail capacity over time.
Prince Rupert terminal re-brands as Trigon
The former Ridley Terminals Inc., a bulk export terminal within the Port of Prince Rupert, has rebranded as Trigon Pacific Terminals Limited. Inspired by Coast Tsimshian artistic traditions and Indigenous ownership, the new name and identity reflects recent and future changes at the terminal, and its progress towards a more diversified and sustainable future, the terminal said.
Formerly a Crown corporation, the terminal is now privately held by AMCI Group, Riverside Holdings and the Lax Kw’alaams Band and Metlakatla First Nation.
The three-pointed “trigon” that will be the visual identifier of the terminal comes from the cultural context of the company’s Indigenous co-owners, often seen in Indigenous art. The trigon represents transition and upward movement, reflecting the company’s ownership, community connection and future vision.
Trigon handles steelmaking and thermal coal, along with LPG exports. The company has advanced its strategy to handle new green energy exports by investing in infrastructure upgrades.
Study highlights supply chain collaboration
SYSPRO has released findings from their 2021 global research study exploring the challenges and solutions to supply chain disruptions. The report reveals four themes and highlights the need for a long-term digital strategy using improved customer centricity, external collaboration and decision-making to recover from pandemic disruptions.
The first theme is a disconnect between investment in internal efficiencies and external collaboration. Overall, 70 per cent of businesses experienced supply chain disruptions in recent years, while 60 per cent couldn’t engage and collaborate with customers and suppliers in real-time.
The survey’s second theme was that digital roadmaps don’t align to execution. Overall, 69 per cent considered a digitization strategy to enhance business processes. Only 29 per cent have a full strategy.
Theme three noted supply chains don’t compete globally. Regarding technology investments, 47 per cent had invested in sensors and IoT networks; 20 per cent had invested in data analytics tools, while 5 per cent had investigated AI and ML.
The fourth theme was that customers are placed at the end of the supply chain. Only 22 per cent of businesses saw revenue growth.
FALSE ALARM?
WHY WE SHOULDN’T WORRY SO MUCH ABOUT INFLATION
At the onset of the COVID-19 pandemic two years ago, I did something I had not done for almost five years. I started going to the grocery store regularly. When my wife and I got married seven years ago, we agreed that she would be a stayat-home mother and run the house, while I would basically hold two full-time jobs to support the family. This worked very well for all of us, until the lockdowns upset the Hlinka household’s applecart. If you recall, for several months the only “acceptable” reason to leave your house was if you were shopping for food.
There were two stores that we would visit weekly: No Frills (for basics) and Whole Foods. We’re simple people and there were several items we would always buy at No Frills: No Name potato chips, No Name soft drinks, No Name instant coffee, No Name pasta, bacon, eggs, hamburger meat and various fruits and vegetables. Here’s something I noticed when I compared prices from April 2021 to April 2020. The cost of some products – particularly bacon and hamburger meat – had risen sharply, while the price of the No Name products had stayed the same.
That got me thinking. No Name products might be understood as “inferior goods.” What’s an inferior good? It’s a product where there is an inverse relationship between your income and the quantity you buy. In other words, the wealthier you are, the less you consume. I noticed that not all prices were rising uniformly. The more desirable foods (or “normal goods”) were becoming more expensive. It seemed to me that what we were looking at was demand-pull inflation. This made sense. People couldn’t spend their money on the usual range of goods and services, so they treated themselves with better food.
Fast forward to April 2022. I went to No Frills and the No Name coffee that had cost $5.99 two years before was now $6.49. The 200-gram bags of potato chips that had been $.99 were now selling for $1.29. It seems that the inflation story has pivoted and now we are looking at cost-push inflation. Higher input costs are compelling manufacturers to raise prices. But the important question is whether we are amid an inflationary cycle or is this more like a one-off phenomenon due to the fallout from COVID-19.
WHAT’S INFLATION?
I probably should have started this column by defining inflation. We generally think that when prices of things go up, we’re experiencing inflation. And this is true in one sense. But to a trained economist, inflation is an ongoing phenomenon where higher prices lead to higher prices, which in turn lead to higher prices. I’ve seen a couple of these cycles in my lifetime. In 1973, inflation was 7.5 per cent. It then spiked to 11 per cent and 10.7 per cent over the next two years. Then in 1980, inflation hit double-digits at 10.1 per cent, then 12.5 per cent and 10.8 per cent in 1981 and 1982, respectively.
The fear right now is that history could repeat itself. Inflation is currently running at an annualized rate of 6.8 per cent in Canada. It’s even worse in the US, where inflation has exceeded 8 per cent in the past three monthly reports. We’ve seen central banks on both sides of the 49th parallel increase interest rates to cool things off and there is the expectation that more hikes are coming. There is the danger that this could push the economy into recession, as happened in the early 1980s. But in a sense, the Bank of Canada is between a rock and a hard place. Or is it?
I’ve got a contrarian view on this. The economy was shut down for months. At the same time, money was being pumped into the system. As Milton Friedman pointed out years ago, inflation is always a “monetary phenomenon.” In simple English, an economy will experience inflation when there is an imbalance between supply and demand. However, that has been largely corrected. Things are pretty much wide open with only minimal restrictions. Higher food and gas prices are forcing consumers to spend more of their budget on necessities which will reduce demand for other products.
We should remember that there are some strong anti-inflationary pressures. This year, Canada will welcome more immigrants than ever before which will have the impact of dampening wage growth. Yes, supply and demand holds in labour markets. Oil currently exceeds $110 per barrel and I wouldn’t be surprised to see that cut in half as early as a year from now. The biggest danger our economy faces right now isn’t inflation, it’s tepid growth. And this will be a persistent and long-term problem. And it’s much more worrisome than higher prices. SP
Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.
THE FOUR AMIGOS OF SUPPLY CHAIN
THESE JAPANESE CONCEPTS CAN HELP TRANSFORM SUPPLY CHAIN PERFORMANCE
Meet my four little friends. There are so many new supply chain professionals that a lot of them don’t know what they don’t know. So, I am introducing everyone to Gemba, Gembutsu, Muda and Kaizen.
My four friends, Japanese lean management concepts, have helped me a lot over the years. Three of them are very well known.
The first one I’ll discuss, Gembutsu, rarely gets mentioned. During a course, instructors might refer to this stage as “current state.” It refers to collecting data without making assumptions.
This is a critical stage. Remember that you shouldn’t have an outcome in mind when conducting Gembutsu. Your perceived solution might taint your viewpoint and the research being conducted. You then may end up with a future state that misses needs and requirements.
A trick I learned is that I do need extra help. If you are interested in making changes then go to a postsecondary institution offering supply chain instruction and ask them if they have a capstone for Gembutsu’s nickname, “value stream mapping.” You’ll be impressed by the results.
My next friend is called Muda. When working with Muda, you are going to have to learn that Muda expects that your work area is clean. Muda loves the little things. Muda does not expect big changes. Muda is your champion when it comes to eliminating waste. It does not always have to be material. It can be a waste of resources, time or steps. Muda is all about finding deviations and unwanted activities.
There is a series of videos that you can view for free that might help you learn more about how companies use Muda’s talent. Muda wants you to improve and one way you can do this is by learning from others. The videos are often titled “How it is.” Watch them with Muda’s critical eye and you will quickly see what you might want to change to make Muda happy.
CHANGE FOR THE BETTER
The next little friend needs little introduction. Everyone has heard of Kaizen. You can always tell if someone is popular by the number of nicknames they have. Kaizen is also known as “continuous process improvement,” “change for the better” and “quality circles.” Kaizen is all about taking responsibility, which means you don’t leave challenges for a team or others to solve.
Unfortunately, Kaizen is often asked to help when things are bad. When that happens, management is looking for big changes that are going to make a significant difference. Kaizen is supposed to be the friend that is always there for you, encouraging you to just be a bit better. Over the years, Kaizen will enable you to be the best you can be.
Kaizen is a team player and how you pick your team is what matters the most. I prefer to allow people to ask to be part of the team versus being nominated or appointed. Kaizen is about diversity and perspective. Normally, people think that harmony is needed for Kaizen to work. It does help that the team gets along. It is more important that the discussions are open and transparent. At that point you will then see what I call “catching the magic.”
This is where a team works so well together that significant progress can be made. It is unfortunate that this rarely happens. Yet when it does, it is a joy to behold.
A lesson is to avoid breaking up Kaizen’s team and moving them to different areas of the company to help those areas improve. A lone person with Kaizen is lonely indeed. Kaizen needs the stimulus of others for it to be truly effective.
My last little friend is called Gemba. I shouldn’t play favorites, but I like spending a lot of time with Gemba. When we first met, Gemba was called MBWA. If you don’t know, MBWA is simply management by walking around. There are three ways to learn: auditory, visually and kinaesthetically. I, for example, must go and see, which is often a plant tour. I take what information I already know and see what I can learn.
You need to go to the location and see for yourself how the job is done. Learn to read people versus reports. Ask open-ended questions to learn those doing the job. You need to spend more time with the people and less time on everything else. If the people doing the job say something that you can’t believe is true, you need to ask yourself why they believe it? Look at the situation from their perspective and you might realize what you thought was true might be flawed. Ask “why” to get to the root of the problem of challenge.
Feel free to spend time with my four little friends. I won’t be jealous. I enjoy when they help others make a difference. SP
Gerald Ford is director, supplier development, with Kinetic & CEO of QCsolver Supplier Management.
