Supply Chain Management was the focus of two best practice networking events in Eastern Ontario this month. Excellent presentations, examples and discussion left participants considering the possibilities for enhancing and developing their own programs and looking for opportunities to become more efficient and expeditious in this area of their operations.
In Brockville, we were delighted to have our Host, Trillium Health Care Products, and Burnbrae Farms share overviews of their organizations and experience with Supply Chain Management and in Trenton, Members present enjoyed the opportunity to learn from best practices shared by Frito Lay Canada. The Canadian Supply Chain Sector Council, represented by Lorraine Chambers, also joined us providing an outline of the Council, it's 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 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
- 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
- Shelf to supplier and all movement between those
- Managing costs and staying adaptable and responsible
- What do you need to carry and still balance costs - "balance" is the biggest challenge
- Getting accurate demand signals and then producing accordingly
"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.
Trillium Health Care Products - Best Practice
Corey Turnbull, Supply Chain Supervisor
Trillium began in the pharmaceutical business almost 50 years ago. The plant in Brockville started in 1993 and currently produces a line of healthcare and personal care products. There are 270 full time employees and a complete staff of 330 including part time. Nine positions are directly involved in Supply Chain Management.
- Planners and Buyers are the key customer contacts
- Monthly standard and operation calls to review results and opportunities
- Global supply chain management experience
- 1800 raw and packaging materials through 350 sku's
- Basically a contract manufacturer with 18 packaging lines, in-house blow molding and injection molding for bottles, jars and caps
- Not enough to just plan for the factory - they have to know what is going on in the broader context around the world ie. this year has tougher regulations to comply with already
- Vendors offshore are challenging when it comes to longer lead times, unresponsiveness, time differences, language barriers, quality concepts, vendor audits
- Pricing of petro based items continues to climb and has been doing so since 2008
- Capacity of the vendors is almost non-existent - no one wants to bring plants back on board and mergers and acquisitions are building huge unresponsive companies
- Walmart is dictating cost reductions
- Systems and processes can sometimes impede ability to compete - ie. MRP/ERP/Accounting
- Need experience and education to help see the big picture
Seeing the "Big Picture":
- Lean theories
- Enabling people to succeed
- Envisioning the entire picture
- Simple, Simpler, Simplest - Reduce, Redesign and Repeat
- Stopped using systems, processes and regulations as excuses
- Thinking strategically - short and long term plans - link every project, every decision and every dime spent
- Get rid of silos - need good leadership
- Supply chain is procurement to customer and not just another placement and shipment
- Have to treat customers as strategic partners - cost savings opportunity
- Metrics - are they telling you what you need to know
Burnbrae Farms, Lyn, Ontario (www.burnbraefarms.com)
Ian McFall, Vice President Industrial Sales and Procurement
John Esford, Industrial Sales and Supply Chain Manager
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 a huge level of government involvement in all of their programs.
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
- 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, understand bottlenecks, logistics and teamwork
- John and Ian 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
- Burnbrae believes in developing win-win relationships
- Hen housing and animal welfare were also discussed
John and Ian 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
Frito Lay, Cambridge, ON - (www.fritolay.ca)
Larry Maligaya, Warehouse Business Unit Leader
Frito Lay is the leading Food and Beverage company in North America. 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 and 18 $1 billion brands.
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.
The company has a proven ability to innovate - new products, new packaging, new ideas. They are always looking beyond their walls building partnerships, as an example, with the growers for potatoes, corn and sunflower oil.
Their goal is to provide customers with a product of highest quality and value, sell for a fair profit and make service a fundamental part of doing business.
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 for discussions on performance and efficiencies 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, net zero plants, fuel efficient vehicles 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." As such, the company focuses on "inspiring greatness" and supporting their people through such things as:
- Diversity and inclusion
- Employee networks
- Coaching and development
- Work-life balance
- Involving team training
- Seeking input
Larry shared with our group some of the excellent projects the Frito Lay team also 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 tractor trailers - currently utilizing these in the cities of Ottawa, Scarborough, Brampton and Windsor - they partnered with the MTO and Metro police to find routes and the best times to operate
- Development of a World Class 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 reduction and wrap (biodegradable) conversion opportunities
- Implemented a PIT (Powered Industrial Trucks) Safety Program and make use of vests, traffic lanes, stop signs etc.
- Implementing back-hauls from sister plants - product, canisters, pallets, etc.
- Striving for the best fuel economy - 0% Idling - speed reduction, aerodynamics of the vehicles, driver training
- Safety Week - they use the opportunity to have a skills competition among the warehouse techs
These three best practice presentations on Supply Chain Management certainly allowed participants to gain some insight on the breadth of this topic and to recognize its impact on everyone in business.
We look forward to having you join us at a future session on this subject! There is a follow-up event (Supply Chain Management II) being planned October 19, 2011 in Eastern Ontario at Parmalat, Winchester. This event will explore the relationship between "Lean and the Supply Chain". More to come .... stay tuned!
All the best!
Bren and Gay
Bren de Leeuw, Sr. Community Development Manager (firstname.lastname@example.org)
Gay Henniger, Eastern Ontario Field Service Advisor (email@example.com)