This fall, Supply Chain Management and the concept of integrating the tools of Lean Management into our Supply Chains was the focus of best practice networking events across Ontario in Woodstock, Winchester and Leamington! Excellent presentations, examples and discussion by those involved in industry left participants considering the possibilities for enhancing and developing their own Supply Chain Management programs in a number of ways.
In Woodstock, we focused on the generalities of Supply Chain Management and the strength that comes from involving our employees in continuous improvement initiatives. Burnbrae Farms and McCormick Canada shared their experiences. Taking things one step further and looking at the role Lean Management plays in our Supply Chains, Parmalat hosted a session in Winchester and Eaton and Wills Transfer spoke with regard to their efforts on strengthening their Supply Chains. And, in Leamington, members enjoyed the opportunity to learn from Thompson's Limited as they shared their best practices in this regard. Value Stream Solutions participated in our Lean focused events, defining what Lean is and where Lean tools might come into play with SCM endeavours. In addition, the Canadian Supply Chain Sector Council, represented by Lorraine Chambers, joined us in Leamington and provided an outline of the Council, its objectives and the resources they have available for companies to recruit, retrain and retain people within this sector.
Supply Chain Management Preliminary Discussion:
Ross Cooper, Manager of EMC Canada's Value-Added Programs, started discussion on the concept of Supply Chain Management and the challenges industry has faced, particularly in delays and disruptions in the past five years - managing through downturns, the US dollar, a competitive world market and surrounding global issues, and now the Japan crisis and escalating fuel costs. Today's environment is one that we do not have total control over when it comes to remaining viable and competitive. Customers and markets have disappeared for a number of reasons. Our true strength lies in the ability to network and engage each other and to share best practices where we can to enhance our ability to compete.
Members present in some of the sessions were asked what the term "Supply Chain Management" means to them and what challenges they face when it comes to managing that "Chain":
* Movement of materials and aligning product to ship
* No one had supply chain in their title twenty years ago
* Efficient flow of goods and services to meet customer demand
* Reducing lead times and keeping inventories low - dealing with changeovers
* Shelf to supplier and all movement between those - knowing where you are in the supply chain
* Managing costs and staying adaptable, responsible and competitive
* What do you need to carry and still balance costs - "balance" is the biggest challenge
* Getting accurate demand signals and then producing accordingly - marketing and sales forecasting challenges
* Sourcing challenges - globally, natural products, recycled raw materials, local ingredients, dealing with seasonal issues, border and FDA demands
* Commodity management
* Transactional flow of paperwork and traceability knowledge
"A supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer."
Managing the chain of events in this process is what is known as supply chain management. Effective management must take into account coordinating all the different pieces of this chain as quickly as possible without losing any of the quality or customer satisfaction, while still keeping costs down." - Rockford Consulting Group Ltd.
The Canadian Supply Chain Sector Council:
Sector councils are made up of a strategic partnership that identifies and implements "industry-driven", labour market solutions, in key sectors in the economy. Partners include: employers, employees, educators, governments and other stakeholders relevant to the sector. They operate with both private and public funding and support. Primary areas of focus include: preparing labour market information, preparing information for young people regarding career possibilities/education/training and developing standards and certifications.
The Canadian Supply Chain Sector Council has an excellent video available that outlines the breadth of career choices available in this field. There are currently 744,000 employees within seven sub-sectors in this field. Over 86,000 positions will be needed in the next few years as retirement nears including areas of Operational, Tactical and Managerial. The Sector is there to help recruit, retrain and retain people within the scope of Supply Chain Management - starting with the extraction of a product through manufacturing, distribution and ultimately customer delivery - these are all fully integrated positions - their objective is to help companies ensure that they have the right people in the right place at the right time.
The CSCSC website (www.supplychaincanada) has a plethora of information and resources available such as career profiles and National Occupational Standards. They monitor trends, have a career focus program with some funding, and a National Accreditation Program that is now recognized in 36 colleges, universities and independent providers. Please take a moment to subscribe to their monthly newsletter through the website as well for interesting discussion pieces, market trends, case studies and a complete list of upcoming Events.
WOODSTOCK BEST PRACTICE PRESENTATIONS:
BURNBRAE FARMS, Lynn, Ontario (www.burnbraefarms.com)
"Supply Chain Development: Adding Value"
John Esford, Industrial Sales and Supply Chain Manager
Jeff Robinson, Special Projects
John Esford, Industrial Sales & Supply Chain Manager and Jeff Robinson, Special Projects, gave members and guests an excellent history of Burnbrae Farms. They then proceeded to outline the development of their supply chain. John is the first staff member at Burnbrae to have the title of Supply Chain Manager. Supply Chain Management began in the early 1970's with production, border and pricing controls to relieve the volatility of products in the marketplace.
* In Canada a total of 20 million laying hens produce about 500 million dozen eggs per year
* Their business (connected to dairy, food, & agriculture) has a huge level of government involvement in all of their programs
* Burnbrae has about 40% of the Canadian market
* The Burnbrae network includes 400 independent farms and 12 egg processing plants across Canada
* Joseph Hudson purchased a dairy farm in the late 1800's and named it Burnbrae Farms (hill and creek); the family converted to eggs in 1940's and incorporated in 1959
* The Management team at Burnbrae developed the following definitions on Supply Chain and Supply Chain Management:
Supply Chain - strategically manage the flow of goods, services, knowledge and relationships
Value Added - products and services that improve margins and/or enhance the relationships with our customers
Supply Chain Management (SCM) - the steady flow of product to processing facilities and to customers; excellent control of process/QA/logistics; cost effective; sustainable and win-win
* What adds value - meeting customer needs (convenience, food safety, packaging, animal welfare, environment/sustainability, and industry knowledge)
* Through a series of photographs (refer to the presentation) John and Ian illustrated the farm and plant processes
* Other considerations included: contingency planning, understanding bottlenecks, logistics and teamwork
* John and Jeff also took us through their extensive product lines - they are a company that is very focused on supplying whatever the customer wants - markets have recovered because of the choices made available
* Value Chains versus Supply Chains - presents an opportunity to be more responsive to retail and then consumers
* Planning and forecasting at retail level allows for collaboration and promotional impacts
* Burnbrae believes in developing win-win relationships
* Hen housing and animal welfare were also discussed
John and their team feel that the following strategies have been key to success in managing the Burnbrae Farms Supply Chain:
* Strength and flexibility
* Win-win relationships
* Resolving bottlenecks
* Implementing contingency plans
* Continuous Improvement
* Building good teams
McCORMICK CANADA, London, Ontario (www.McCormick.ca)
"Delivering High Performance"
Kim Wolf, Director of Manufacturing - McCormick Canada
Kim Wolf, Director of Manufacturing at McCormick Canada, focused on the importance of engaging the workforce on initiatives such as Supply Chain Management, to assist in implementing change and delivering high performance and she shared their best practices in that regard.
McCormick Canada is the largest spice, dry sauce, seasonings, extract and specialty foods operation in Canada with 600 employees.
* Benefits of using process reliability - replaces efficiency - how much time were you actually producing product? (PR = net production/target rate x scheduled time)
* Downtime affects every department - utilization of pareto's and scorecards to determine the true root cause
* Scorecards - provide a daily overview of performance
* Employee recognition through bonus programs, handwritten thank you notes, publication of successes, recognition from peers, team certificates, small gifts - making an investment in the people
* Changeovers are part of the business and they are constantly striving to become more efficient at them
* "Daily Direction Setting" is a quick 5-10 minutes every shift every day where they go over the previous day and anything outside of the targeted area + 5% results in a root cause analysis
* Every action item is assigned to an individual with a date - after the date it is noted in red and posted at wash station where people pass at least six times a day
* Cross functional support is available - planning/maintenance/logistics
* Building on the Power of the People:
- Developing people who care about results, business, peers and providing tools such as communication and training to be successful: Process Reliability Training; CI Team Processes; SMED; 5-S; RCFA; etc.
* CI Teams:
- Very structured with a sponsor, facilitator, team leader, team member
- There is at least one task to do and one hour of time to do the job - with specific scopes and goals
- Teams can last two weeks through three months
- Have a special CI Meeting Room
- On the road to zero injuries and doing that through the involvement of their people and team assignments (ie. Ladder Audits, Ergonomics, Evacuation, etc.)
* Implemented communication monitors and visual management boards
* Getting people engaged and on board with an initiative - "Changing people's perceptions about how to do things"
* Biggest challenge is to trust and to think a different way
WINCHESTER BEST PRACTICE PRESENTATIONS:
EATON, Brockville, Ontario (www.eaton.com)
"Lean in the Supply Chain"
Ed Reeves, Canadian Supply Chain Manager
Eaton is a global technology leader in diversified power management solutions producing a broad range of products and services. Very familiar with Lean tools and implementation of those resources, Ed shared some of their experiences and best practices when it comes to integrating Lean in the Supply Chain.
* Be creative and look at ways to reduce/eliminate waste
* Ask yourself - "if the building was empty would you have laid it out the same?"
* Engage suppliers - be proactive - have a supplier/strategy day
* If you drop the water level, the rocks come out - opportunities to make improvements and satisfy customers
* Rules for success:
- Management commitment - "believe in"
- Strong communication
- Effectively dealing with "non-believers"
- Commitment to the employees by management
- Celebrate each and every success
- There are "no failures" they are opportunities
- Don't support the land of despair
* VSM - very important and a key to business success - developed a VSM approach with all key processes including Purchasing, Warehousing and Materials Management - sets the stage of where you are today and where you want to go tomorrow
* Look at what is important to the organization - who are the value added suppliers
* Utilize scorecards - line stocked out/number of receipts on time
* Align programs to operational, marketing and business objectives
* Developed standard work processes
* Integrated pull systems (Kanban) - elimination of overproduction between warehouse and manufacturing locations
* Installed a Takt board for warehouse picking activity
* 5-S - biggest supporter of reducing injuries and non-value added time
* Every employee is part of a lean team
* TPM - down 90% in unscheduled maintenance
WILLS TRANSFER LIMITED, Brockville, Ontario (www.willstransfer.com)
"Looking at Lean Opportunities"
Brent Ellis, Director of Commercial Warehouses
Wills Transfer is a full service logistics, warehousing, moving and storage company that has been in operation since 1945. The have four warehouse facilities and a global distribution network. Brent is very involved in the Canadian Supply Chain Sector Council and is looking at where lean opportunities might provide additional efficiencies in their Supply Chain Management processes.
* They have extensive experience on the logistics side of SCM
* Flexible and small enough to make decisions and room to grow
* Finding their niche - learning by osmosis - understanding challenges - and understanding their customers challenges
* Adding value by providing solutions to customer challenges - including providing staffing inside buildings, light manufacturing, consolidation - crating and shrink-wrapping, etc.
* Share costs - through opportunities such as managing vendor managed inventory
* Work in partnerships - storage and handling of materials (kits/sub-assembly)
* Providing services to enable timely deliveries through transportation and distribution of finished goods
* Reverse logistics
* Communication is essential
LEAMINGTON BEST PRACTICE PRESENTATIONS:
THOMPSON'S LIMITED, Blenheim, Ontario (www.ThompsonsLimited.com)
Mark Kennedy, Food Products Manager
Thompson's Limited provides quality seed, grain, processing and agricultural services. They also purchase, process, package and ship food type soybeans, edible beans and commercial grains to domestic and export markets. The company was founded in 1924 by Wesley G. Thompson and white navy beans were their speciality. There are 300 staff employed within the Thompson divisions which includes 12 elevators, five bean processing plants and two seed processing facilities. They export to 30 countries worldwide and are a key supplier to the canning and food processing industry.
* Vertically integrated company
- Seed research
- Crop inputs
- Grower contracts
- Process and storage
- Delivery to customer
* Retail food service - procure, process, dry package and market beans for popcorn and the retail grocery market
* One of their supply chain challenges in the process could be up to 18 months of storage - integrity of storage
* Quality Manager's are at each processing facility - and the aim is for zero complaints
* All plants are SQF certified - they are the only bean and grain supplier in the world to have that certification
* Work with dock stocks to avoid customer plant closures - assure of supply and coordinate shipments - even with competition - sea, road, rail
* Transparent relationship with all aspect of the supply chain - what's your goal, where are you trying to get to, how can we help - development of long-term strategies
* Thompson's Sustainability policy - environmental, good business practices, social responsibility
* Very interested in reducing carbon footprints
LEAN IN THE SUPPLY CHAIN:
VALUE STREAM SOLUTIONS, Ontario (www.valuestreamsolutions.com)
Chad Metcalf, President
Bill Petch, Senior Consultant
Lean is a philosophy that enables the identification and elimination of waste - it is a practice and you are never done.
There are eight "deadly wastes" that can provide significant opportunities for those on a Lean journey:
1. Overproduction - this is the worst one because it creates inventory (raw material/WIP/finished goods)
2. Inventory - represents a huge cost to the manufacturer and provides no value for the time that it sits (it can cost 18% of the value of the good just to keep it every year)
3. Defects - the worst scenario from a defects standpoint is that the product gets to customer
4. Delays in Waiting - scheduling/processing
5. Overprocessing - doing more to the product than the customer asks them to do
6. Material Handling - not having the product at the right place at the right time
8. Underutilized Employees - using their intelligence to engage them and utilizing their knowledge
* One of the key lean tools - Value Stream Mapping (VSM) helps you recognize how your process works
* What do consumers really want
* Lean allows a company to "relentlessly reflect, seek out wastes and eliminate it while simultaneously improving the customer's experience"
* Looking at how we do things in our building - relentlessly - if you rest - others will catch up - ask why do we do it that way?
* Respect for people - most important portion of our business - company cannot exist without them - personal growth, mentoring, coaching, continuous improvement, communication and leading
* How are we structurally set up to advance during tough times
* Ability to accomplish more with less - human effort; material (waste material/environmental ie. less water); development time (getting to market quickly with new things); energy and space
* Value added activities are less than 1% and world class is better than 1%
* What is your Company strategy - do you have a clear focus - why do your customers deal with you - what's your story?
* What is your vision, your goals, your mission in the marketplace? This is a key lean discussion - Business 101
* Cost, quality, delivery - these are just tickets to business now - you need to focus on why customers would come to you and then if they leave how do you get them back?
* Traditional thinking suggests price should be defined as: Cost + Profit = Price
* Lean thinking takes a different perspective: Price - Cost = Profit
* With globalization etc. in mind, what is today's customer willing to pay?
* The supply chain needs to agree and be responsive
* Consumer's mind - sourcing locally versus globally, food safety, environmental concerns, human rights issues
Stages of Supply Chain Management:
1. Confrontational relations with suppliers
2. Arms length relationships
3. Establishing mutual goals - partnerships vs confrontational relationships
4. Fully intergrated partnerships - ie. Honda
Lean in the Supply Chain:
1. Focus on value - what creates value; what adds no value (waste) and should be avoided immediately; what adds no value due to the current technology?
2. Analyze the value stream
3. Eliminate waste
4. Create flow (think of waiting in a taxi at red light) - avoid/eliminate bottlenecks for product/data
5. Establish pull from the customer
6. Continuously improve and involve suppliers in the process
A final thought that has been shared in previous blogs on Supply Chain Management helps emphasize the importance of managing this particular aspect of our businesses in order to remain competitive in today's very global marketplace:
"A well-performing, efficient supply chain can provide the advantage companies need to survive and thrive in today's complex, fast-changing and competitive business environment. In the face of volatile demand, intensifying competition, growing consolidation and a spate of supplier insolvencies, supply chains are increasingly being viewed as critical to their organizations' current and future successes."
- "Supply Chain Priorities in the Spotlight", Grant Thornton LLP, World Trade Magazine, Supply Chain Solutions, Part 3 of 3
Very special thanks to our presenters - Burnbrae Farms, McCormick Canada, Eaton, Wills Transfer, Thompson's Limited, the Canadian Supply Chain Sector Council and Value Stream Solutions for sharing their experiences, best practices and expertise with respect to their processes, their people and their initiatives to improve! Thanks to our Hosts and to all of our participants as well for sharing your experiences, participating in discussion and making these events so informative!