EMC Food and Beverage Manufacturers across the Province enjoyed the opportunity to get together to learn about Supply Chain Management and to take in some excellent best practice presentations from Burnbrae Farms, Sun Rich Fresh Foods, ABB Robotics and Frito Lay Canada!
There is a great deal focus on our Supply Chains and on managing them effectively and efficiently - recognizing their importance in our day-to-day business activities and ability to stay competitive in the 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
An overview of the discussion and best practices shared during our Supply Chain Management Events held in Winchester, Brampton and Ingersoll, follow below:
At each session, Ross Cooper, EMC Manager of Value Added Projects gave a very informative overview of this topic relating directly to his personal manufacturing experience. Ross also introduced Lorraine Chambers, Marketing/Outreach Co-ordinator, Canadian Supply Chain Sector Council who outlined the role of their organization in supporting HR needs/issues for Canadian companies. Building upon thought and discussion from Ross and Lorraine, Members then enjoyed the opportunity to hear directly from their peers about some of the great initiatives they have underway.
Special thanks to our Hosts for the very warm welcome at each of our sessions - Parmalat, Winchester - Sun Rich Fresh Foods, Brampton - Ingersoll Cheese & Agricultural Museum, Ingersoll!
Overview of Supply Chain Management
Ross Cooper noted that prior to the introduction of the concept of Supply Chain Management, the functions in a manufacturing plant were very much segregated. Each function worked in silos - independent of one another. More recently managers have begun to look at the supply chain (supplier to customer) as a whole, though purchasing was still often left on its own. The challenge with this type of system is that buying focus was purely on price reductions. Therefore often decisions were made solely on price - ignoring other important qualities such as raw material quality or customer need. Often the materials purchased did not match production or customer requirements. It soon became obvious that it is important to include "purchasing" and all others functions in the supply chain.
Attendees provided their thoughts on Supply Chain Management. These included - all functions in manufacturing plant/company, upstream functions, and everything including scheduling. One member noted that working with a supply chain is like "walking a tight rope".
Many definitions of a "supply chain" and "supply chain management" were discussed. For simplicity sake, one for each is included in this summary. A "supply chain" is the alignment of firms that bring products or services to market. A supply chain consists of all the stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves.
"Supply Chain Management" is the coordination of production, inventory, location, and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.
Ross noted that to meet these challenges today, more companies are using specialized equipment and software to link processes in the supply chain. Increased use of predictive maintenance (focusing on failure modes) is helping to smooth out the process.
Reading from a book entitled "Best Practices in Supply Chain Management", Ross quoted a paragraph that cited working on Supply Chain Management "requires money, talent, time, energy, commitment, focus and guts!"
The Role of 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 Supply Chain Sector is growing to be more pervasive in all facets of business - especially in planning and analysis.
- The Canadian Supply Chain Sector employs 744,000 workers
- The Supply Chain includes all manufacturers, wholesalers, and retailers representing 29% of total Canadian GDP.
- Most Best-in-Class businesses leverage their supply chain to increase distribution efficiency and service differentiation while reducing distribution cost.
- A recent study conducted identifies 26 occupations that are considered part of the sector. It also identified skill shortages in several areas and current education/training and future needs. Approximately 20% of study participants possessed supply chain related certification or designations (e.g. CITT and P.Log.)
- As supply chain management becomes more complex, so too will the need to offer more specialized programming.
- LMI Toolkit available: http://wiki.supplychaincanada.org/wiki/index.php/What_is_the_Toolkit%3F
- National Occupational Standards help to guide HR practices and the development of education and training programs.: http://www.supplychaincanada.org/en/NOS
- Access to Learning System: http://www.supplychaincanada.org/en/NAP
- Human Resources and Tactics: many tools available on this website including HR templates (Virtual HR Department) + Wage subsidy available - Career Focus Program. Be sure to visit this site and ask for a user name and password.
- Consider being part of a Focus Group - Contact: Lorraine Chambers, Marketing & Outreach Coordinator - 905-897-6700/1-866-616-5948 - email@example.com
Burnbrae Farms, Lyn, Ontario (www.burnbraefarms.com) - Best Practice
Ian McFall, Vice President Industrial Sales and Procurement and John Esford, Industrial Sales and Supply Chain Manager
"Supply Chain Development: Adding Value" - Burnbrae Farms
(A copy of this presentation can be found on the EMC Cornwall website under "Resources".)
Ian McFall, VP Industrial Sales & Procurement and John Esford, Industrial Sales & Supply Chain Manager gave members and guests an excellent history of Burnbrae Farms. They then proceeded to outline the development of their supply chain and Ian noted that John is the first staff member at Burnbrae to have the title of Supply Chain Manager.
Ian emphasized the fact that their business (connected to dairy, food, & agriculture) is heavily regulated and there is strong political side to their supply chain management programs.
- In Canada a total of 20 million laying hens produce about 500 million dozen eggs per year
- Burnbrae has about 40% of the Canadian market
- Burnbrae network includes 400 independent farms located from BC to New Brunswick
- Joseph Hudson purchased a dairy farm in the late 1800's and named it Burnbrae Farms (hill & 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 & 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, & 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, understand bottlenecks, logistics and TEAM WORK
- John and Ian also took us through their extensive product lines and included information re: hen housing and animal welfare.
John and Ian and their team feel that the following strategies have been key to success in managing the Burnbrae Farms Supply Chain:
- Strength & flexibility
- Resolve bottlenecks
- Contingency plans
- Continuous Improvement
- Build teams
Sun Rich Fresh Foods, Brampton, ON - (www.sunrich.com) - Best Practice
Jeff Pitchford, Canadian Operations Manager and Anna Carnovale, Logistics Specialist
Supply Chain Management at Sun Rich Fresh Foods
- Established a consolidated purchase order process
- Implemented changes in their shipping times to reduce "order to delivery" times
- Looking at new lane opportunities and utilizing predictable routing - providing a better handling on freight costs
- Developed a shift schedule around the customer need for delivery (order-ship-delivery matrix established)
- Targeting cost reduction on in-bound and out-bound freight
- Implemented a warehouse management system that rotates and consumers inventory in the most manageable way
- Inventory has been reduced from one month to one week
- Working to develop and cultivate strong relationships with their customers
- Looking at packaging procurement
ABB Robotics, Brampton, ON - (www.ca.abb.com) - Best Practice
Mahmud Khamis, Purchasing Manager
Supply Chain Management at ABB Robotics
- Early involvement at bid stage with customer
- Standardized product and component buy (work with designers, engineers, vendors)
- Look for supplier value-added initiatives (design, assembly, transportation, etc.)
- Deal with challenges of low cost country sourcing at early stages
- Have an integrated approach to Supply Chain Management involvement
- Make designs as simple as possible for vendors to eliminate supply issues, defects, inventory
- Need to ensure that process improvements have value add advantages
- Dealing with supplier quality and competency especially due to glove economic climate where previous suppliers are no longer reliable
- Aggressive procurement goals were established in 2009
- Purchase more assembled products and components
- Canadian market share in general industry increased from 4% to 25%
Frito Lay, Cambridge, ON - (www.fritolay.ca) - Best Practice
Geoff Terrill, Distribution Manager and Larry Maligaya, Warehouse Business Unit Leader
Supply Chain Management at Frito Lay
Frito Lay is the largest Food and Beverage Manufacturer in Canada. Overall they employ 285,000 people. In the Fortune 100 Report they were listed as one of the "Most Admired Companies". There are six plants in Canada and 200 distribution centres and 300 BIN's.
Our presenters shared with us the Frito Lay Vision which centers on "Inspire Well Being" and takes into account their products, their partners, the planet and their people.
- Products - looking at ways to reduce sodium and calories, reducing transfats etc.
- Partners - helping with planograms in the stores
- Planet - utilizing smaller, lighter fleets and doubling the fuel economy of their previous trucks
- People - compensation and benefit programs, career enhancement, community involvement and recognition programs
Frito lay is fully integrated and information flows from seed to shelf. They are constantly looking at investing in new technology, route efficiency, truck utilization and continuous improvement through lean and six-sigma initiatives.
Frito Lay has looked at a variety of ways in which to practice conservation including reusable cartons, recycling water, utilizing cleaner fuels, implementing utility walls and establishing Green Teams. They would like to be a leader in this arena and are actively looking at ways to reduce water consumption together with natural gas and electricity usage. As such, they have explored the feasibility of solar arrays, wind turbines and the benefits of compostable packaging.
The company is based on servant leadership and our speaker shared with us a thought from Steven Covey's book - The Speed of Trust - that "…the most important people are those closest to the consumer."
Larry shared with our group some of the excellent projects his team has underway relating to transportation. Some highlights of his presentation are captured below:
- They are currently participating in a pilot project designed to reduce the consumption of fuel through the use of double trailers
- Development of a Traffic Safety Team that meets weekly
- Established engineered standards across the board for picking products complete with the implementation of a scorecard system and quarterly interviews
- Looking at pallet and wrap reduction opportunities
- Implemented a PIT (Powered Industrial Trucks) Safety Program and make use of vests, traffic lanes, stop signs etc.
Special thanks to our presenters, to our hosts and to Gay Henniger and Tim Smith, Field Service Advisors for Eastern Ontario and Brampton for their contributions to this Blog.
Have a great week and a wonderful Thanksgiving!
Take care all,
Bren, Gay and Tim