Supply Chain Brain

Transforming Supply
Chains in Canada
For Ryder’s Control
Tower, It’s Wheels Up

A multi-year reengineering of the supply chain

at the Loblaw Companies, Canada’s biggest

food retailer, holds lessons for other companies,

says Peter McMahon, executive vice president of

supply chain and information technology.

Margins are always thin in the grocery business, so you need to always be looking to optimize your supply chain, especially when its so extensive that it includes 1,000- plus stores across a country as large as

Canada.

Loblaw, now in its third year of a supply chain transformation program, has left little if any of its supply chain alone and has some perspective on what’s needed to keep costs low without negatively impacting customers and image. Many of those shoppers are buying down-market due to the economy, and Loblaw is sensitive to that. They have to eat, McMahon says, but they don’t have to patronize your stores. Everyone may be pinching pennies, the retailer included, but they still demand quality products and service.

One of Loblaw’s programs benefits both the supply chain and the environment. It calls for charging five cents for each plastic bag dispensed at the cash register. That saved 380 million bags last year, McMahon says, and customers seemed to receive the program well.

Other programs involve warehousing, transportation and fuel consumption. Some 28 DCs have a new WMS, and a new transportation management system has been implemented as well. McMahon says the company tremendously reduced kilometers clocked by its fleet last year by utilizing intermodal more.

New forecasting and replenishment systems are also being implemented, and finance and procurement packages are being revamped as well.

Personnel training is perhaps one of the most important programs under way. McMahon says 1,400 employees work in the company’s supply chain operations, and they are being schooled in what they need to become the next generation’s leaders.

To view this video interview in its entirety, visit www.SupplyChainBrain.com.

The provider’s “Control Tower” concept is much

like a flight plan in aviation, says James W.

Moore, Ryder Systems’ vice president of supply

chain solutions. When a part or product is

released into the Ryder system, it travels accord-

ing to its plan and issues real-time reports, which

makes everything in its life electronically visible.

Visibility may be a very old concept in supply chain management, but it’s applicability may never have been greater than now. To that end, Moore says, Ryder has bundled the planning, procurement and execution of the world’s largest networks into a system overseen by it’s so-called control tower.

That means any part or product reports its location, path, problems if any, and arrival, just like pilots do with air traffic controllers. That means that pickup and delivery information are real time, all the time, says Moore.

To view the control tower process in context, he says, look at the automotive industry alone. He says more than 30 billion parts were delivered line side in that industry vertical last year. It is a colossal task to monitor and manage events against original transportation and delivery plans when you’re dealing with numbers that large.

At the other end of the spectrum, even relatively small-volume shipments could use something like the visibility Moore speaks of. A company moving 10,000 to 20,000 shipments annually still needs to stay on top of about 400 a week. “It’s just too voluminous to watch,” he say. “The value is in the exception management.”

He says that 1.3 million exceptions were processed last year in Detroit by Ryder against 8 million shipments. “It’s just too much to keep on top of without something like this.”