On April 17, Food & Consumer Products of Canada (FCPC) held their annual Supply Chain Symposium. It was an excellent event that attracted many of the top food and consumer products manufacturers in Canada. I have attended a number of very good supply chain educational events over the years. This one ranks up there with some of the best CSCMP annual conferences.
This was direct result of how Errol Cerit, Senior Director, Supply Chain & Industry Affairs and his team at FCPC delivered on their theme of “Thinking in New Boxes.” The meeting began with a stimulating interactive session led by Alan Iny, Senior Global Specialist, The Boston Consulting Group. Drawing from his upcoming book on this topic, Mr. Iny opened the day by identifying how we all call upon our paradigms, concepts and stereotypes to shape the boxes we use to classify the data that we receive. This set the stage for the remainder of the day and for Mr. Iny’s closing session.
This was followed by a presentation from Peter McMahon, Chief Operating Officer of Loblaw Companies Limited. Mr. McMahon highlighted how 14 million Canadians go through the company’s 1200 stores across Canada each week. He shared with the audience some of the key market segments driving his business, some of the key forces affecting the retail food industry and then outlined the company’s supply chain transformation strategy to serve customers in the past, present and future. It was very interesting story.
Mr. McMahon was followed by Professor Benoit Montreuil, Canada Research Chair in Enterprise Engineering at Laval University. Mr. Montreuil spoke about creating a “Physical Internet,” a “paradigm breaking” way of creating a physical superhighway or infrastructure for freight transportation that would parallel the IT infrastructure developed for the Information Superhighway.
Professor Montreuil presented a very effective case for the need to create a “Physical Internet.” Logistics costs represent 5 to 15 percent of GDP. Greenhouse gas emissions continue to rise. The professor argued that sixty percent of the weight-volume for freight is comprised of air and packaging. Twenty-five percent of freight travel is the movement of empty road equipment.
Professor Montreuil made a compelling argument for developing a Logistics Web consisting of a Distributed Multi-Modal Network that will be comprised of a series “open hubs” that will be interconnected by road and rail networks. He presented a concept of a driver relay network and how it might work between Quebec City and Los Angeles, California to move goods in a timely and cost-effective way. This is a powerful, exciting vision of the future of freight transportation that we will no doubt be hearing about in the years ahead.
This session was followed by a couple of round table discussions. I had the pleasure of participating in one that talked about the latest Canadian research on the direction of freight volumes, capacity, pricing and service quality. I was joined by Richard Patenaude, Director, Client Integration & Development at The Wheels Group. The track was moderated by Lou Smyrlis, Editorial Director, Transportation Media. Several issues were addressed during this discussion.
They included the expectation of slow economic growth during the balance of this year, understanding the much talked-about driver shortage and potential capacity crunch and the need to implement a core carrier strategy to protect the integrity of a company’s supply chain. The track included a discussion on strategies that shippers can employ to limit freight rate increases during a period of increases in carrier operating costs. The other concurrent track focused on applying Lean Six Sigma to supply chain management.
After lunch, Brenda Hambleton, Senior VP Chief Strategy & Marketing Officer, ES3, took everyone on a 3D journey that was all about “Improving On-Shelf Availability through Collaborative Factory-to-Shelf Management. It was visual roller coaster ride that showcased how to physically move goods though a supply chain in a very expeditious way.
Brenda was followed by Serge Carestia, Vice President Supply Chain, The Home Depot. Mr. Carestia outlined how his company is at the 3 year point in the execution of a 5 year supply chain transformation strategy. He outlined how his company has delivered on its plan to centralize product replenishment, open cross-docks, enable operations and capacity planning, convert cross-docks to flow-through facilities and then leverage that advanced forecasting capabilities within SAP. This is an ambitious plan that is intended to improve customer satisfaction. Home Depot is well on its way.
The day concluded with a fascinating presentation into current trends in consumer purchasing behavior and a wrap-up session that went through the five step process (outlined in “Thinking in New Boxes”) on how to bring marketable, commercially successful products and services to market. A summary of these two presentations will be included in next week’s blog. Kudos to the organizers for a very thought-provoking and stimulating day.