Mmd oct2013 de

October 2013 $8.00

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The gender gap in supply chain salaries Page 18

Inside 3 4 14 25 26 28 29 30

Taking Stock Supply Chain Scan Calgary corrals: Sears and Canadian Freightways Forklift fleet management case study Equipment Focus: Racking and storage solutions Materials Handling Learning Curve Crunching the Numbers

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TAKING STOCK

www.mmdonline.com PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins (416) 510-5130 EAtkins@bizinfogroup.ca EDITOR: Carolyn Gruske (416) 442-5600 x3265 CGruske@bizinfogroup.ca ART DIRECTOR: Stewart Thomas (416) 442-5600 x3212 SThomas@bizinfogroup.ca SENIOR ACCOUNT MANAGER: Catherine Martineau (647) 988-5559 CMartineau@bizinfogroup.ca PRODUCTION MANAGER: Kim Collins (416) 510-6779 KCollins@bizinfogroup.ca CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x3546 BAdelt@bizinfogroup.ca

BIG MAGAZINES LP Executive Publisher • Tim Dimopoulos Vice-President of Canadian Publishing • Alex Papanou President of Business Information Group • Bruce Creighton HOW TO REACH US: MM&D (Materials Management & Distribution), established in 1956, is published 7 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. EDITORIAL AND ADVERTISING OFFICES: 80 Valleybrook Drive, Toronto, ON, M3B 2S9; Tel: (416) 442-5600; Fax (416) 510-5140.

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Words and numbers T

hank you to everybody who participated in the Annual Survey of the Supply Chain Professional. Without your input, the survey wouldn’t be possible.

After taking the time to answer, I’m sure you have a sense of just how big and broad the study is. It covers all aspects of working in the industry, from wages to company attitudes to job satisfaction.

A survey this complex generates a lot of data. In working to pull together the feature on page 18, I had to wade through multiple spreadsheets and seemingly countless tables, and then compare the findings with the results of past years. And while the numbers provide a nearly endless supply of information, they can only say so much. They don’t do a good job of conveying emotions. That’s where it’s nice to read the answers to the open-ended questions. Although anonymized, those short responses paint pictures the numbers can’t.

One of the open-ended questions dealt specifically with how our readers’ responsibiltites have changed. Here are some answers that include details that could never be captured in a numbers-based survey: • “GM and Ford are putting transportation responsibilities on the shipper or the consignee for product that is not completed for production, so that requires more Customs clearance with PARS or PAPS, which is extra training and work, instead of clearing with FAST or CSA. As things change, it’s my job to train employees.”

• “Due to an increase in business, I have to import more frequently and warehousing has become an issue.”

• “Fewer hours spent on low dollar value items and high consumption items.

More focus on improving cost savings and strategic order quantities.”

• “Higher demands from clients result in much more reporting. Also, increased demand for visibility has increased IT costs.”

• “I now write a bi-weekly blog for our website, in addition to updating the website and Facebook content. I have been involved in some corporate videos.”

• “Staff more willing to break the law and commit criminal acts.”

And no, I don’t know exactly what the last comment means. Sometimes even words don’t tell the whole story. (If this was your comment, please get in touch.

We’d love to hear more.)

October 2013 Volume 58 Number 06 14

18

25

Calgary corrals

He said, she said

Big impact

Job hunt

Visits to the Sears NLC and Canadian Freightways in Alberta

Canadian supply chain working conditions and wages

Food producer uses forklift fleet monitoring system to prevent crashes

How, where and why supply chain pros are looking for work

www.mmdonline.com | October 2013

knowledge, do you think there are

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SUPPLY CHAIN SCAN

CARGO TERMINAL

US ROADMAP

DEMATIC

Melford International Terminal plans to move ahead with container facility and logistics park, p6

Ten trends in logistics and materials handling south of the border, p8

Conference report, p10

Lac-Mégantic update Quebec explosion a major topic at conference

By Carolyn Gruske

U

pdates on legal procedures emanating from the Lac-Mégantic disaster, a presentation about cargo theft, and discussions about how technology is changing the transportation industry were all topics of discussion at the 2013 Transportation Conference.

Held in Toronto, and organized by transportation lawyer Richard Lande, the event brought together shippers, carriers, legal and financial experts, and others interested in the movement of goods.

During the session on Lac-Mégantic, lawyers Peter Jervis, partner with Toronto, Ontario-based Rochon Genova, and Peter Flowers, partner with Meyers & Flowers in Chicago, Illinois, reviewed what is now general knowledge about the Lac Megantic situation—DOT-111 rail tank cars have a long history of being declared unsafe to carry dangerous and flammable materials, Montreal, Maine & Atlantic Railway (MMA) had a poor safety record and a history of runway trains, the shale liquid being transported wasn’t properly disclosed and was highly volatile, MMA (now undergoing bankruptcy proceedings) primarily has one large financial asset: a $25 million insurance policy, and that 47 people lost their lives in the blast the levelled the Quebec town.

They also provided an update on the ongoing legal situation. Jervis, whose firm has filed a class action suit in Quebec, said, “We basically have negligence on steroids.

We have a very broad doctrine, that if your conduct can cause injury or harm, you can be held liable. It is based on the concept of foreseeability. Is it foreseeable that certain things will happen and how remote is the possibility it will happen?”

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In terms of what happened, especially the DOT-111 rail cars exploding, he said, “that is a highly probably result.

That is going to funnel through in terms of liability.”

Jervis said in addition to MMA, the other organizations facing legal action worth “several hundreds of millions [of dollars] on behalf of the town’s victims are Rail World (MMA’s parent company), CP (the primary carrier which hired MMA as a subcontractor), the American lessors (Union Tank Car Company, Trinity Industries and General Electric Rail Car Services Corp) who leased the rail tank cars, and the oil company defendants: World Fuel Services Corp, Dakota Plains Holdings, Irving Oil Limited, and their subsidiaries.

“It seems to me here there are fairly substantial liability issues here with these parties,” said Jervis, adding “the oil producers in Bakken [where the shale oil originated]—there’s a serious questions as to whether they have liability because of the manner of which they were shipping this product. There’s a suggestion that perhaps they should have removed the highly volatile gases before it was shipped by rail.

That’s in the investigation stage.”

He told the audience: “The civil liability issues that are going to arise will be profound.”

Along with the civil suits filed in Quebec, and actions taken on behalf of the Quebec government, there are also 19 wrongful death lawsuits pending in the US against MMA and 14 additional defendants, including the engineer in charge of the train, tanker manufacturers, vendors and lessors, and Rail World and its subsidiaries. As to why suits have been filed south of the border, Flowers said in addition to Chicago being the headquarters of Rail World, Illinois law includes provisions for determining joint and several liability.

“Under joint and several liability, the defendant does not have to be the only cause of the tragedy. Any defendant who is found to be a cause of the tragedy has the legal response to pay fair compensation to the victim.

What percentage of responsibility you have dictates how much compensation you’ll have to pay. Under Illinois law, any defendant that is found to be 25 percent or more jointly and severally liable must pay the entire jury verdict. Any defendant that is found less than 25 percent responsible pays their pro-rated share. Because of that law, the remaining defendants—companies other than MMA—face tremendous exposure if these cases go to trial in Chicago,” said Flowers.

Continued on page 6 MM&D | October 2013

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SUPPLY CHAIN SCAN DONE DEALS Wheels Group Inc, a Toronto, Ontario-based non-asset 3PL, has purchased BBL Worldwide Inc. Etobicoke, Ontario-based BBL is a non-asset 3PL specializing in cross-border truck brokerage services.

Milgram, a Montreal, Quebec-based fright forwarder, Customs broker and transportation company, has purchased BarthcoDart Canada Inc, a freight forwarder based in Mississauga, Ontario, and previously owned by OHL International. General manager Paul Chung and operations manager Henry Ho have agreed to stay on and become part of the Milgram team. BarthcoDart specializes in import and export air and ocean freight with Asia, operates a sufferance warehouse in Mississauga, and offers expedited delivery services.

Toronto, Ontario-based transportation company Vitran Corp Inc, has sold its US LTL business to industry veteran Matthew Moroun, of Detroit, Michigan for US$2 million.

Minneapolis, Minnesota-based HighJump Software has partnered with Toronto, Ontario-based AdvancePro Technologies (APT). Now AdvancePro’s customers and users are able to send and receive EDI documents, including Advance Ship Notices (ASNs), through HighJump’s TrueCommerce EDI system.

Repair Clinic, a Canton, Michigan-based company that sells appliance replacement parts, has hired Integrated System Design (ISD) to modernize its warehouse and improve its picking and packing operations. Wixom, Michiganbased ISD will profile and model Repair Clinics’ inventory, including transferring slow movers into vertical lift modules (VLMs), redesigning and increasing the number of packaging stations and moving them to a mezzanine.

Pittsburgh, Pennsylvania-based 3PL GENCO will manage a truckload transportation procurement project for consumer goods and pharmaceutical retailer Shopko. As part of the arrangement, GENCO will be responsible for the Green Bay, Wisconsin company’s inbound and outbound transportation network.

Rancho Dominguez, California-based ocean freight forwarder DGX– Dependable Global Express and its subsidiary DAX–Dependable Air Cargo Express Inc, have formed an alliance with Novo Express International, an air freight forwarder and US Customs broker headquartered in South San Francisco, California.

Globe Tracker International ApS, a Danish company that provides tracking technology and communications products has completed two recent deals.

First it formed a partnership with Estonia-based Xmetra OU, which makes solutions for remote detection and tracking of hazardous materials leakages during transportation and storage. The companies will integrate their products to provide real-time wireless detection, tracking reporting and management of intermodal tanker containers.

The company also partnered with SensorClip ApS, a Danish firm that supplies power alarm products for the mobile refrigerated industry. GTI will integrate SensorClip’s mobile, wireless battery-operated power alarm solution for tracking the normal operation of refrigeration into its Smart Autonomous Asset Solution and its GTI networks.

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Continued from page 4 He also stated the belief that US companies which “cause catastrophic events must be held accountable in their own country, under their own laws, in front of their own juries and their own judges. Because that’s the best way to prevent this kind of horrible tragedy from ever happening again.”

Flowers explained that because there are cases in both the US and Canada “judges will have to go through a choice of law analysis, applying the standards of Illinois to figure out if Illinois’ law should be applied or if foreign law should be applied.” He added he’s confident Illinois law will win out due to one of the factors the judges take into consideration: “Do Illinois citizens, taxpayers and people on the jury have a strong interest in the outcome of this litigation? Of course they do. Their own companies, Illinois companies, made egregious errors that caused one of the worst catastrophes imaginable...Illinois residents will have a huge interest in this case. The judges will know that and they will apply Illinois law to these cases.”

Since MMA has filed for bankruptcy, Flowers says the lawsuits his company brought against the rail company have been stayed, and no active litigation can be undertaken until the bankruptcy has been resolved.

Other non-MMA companies defendants tried to have the cases removed from the state court system and moved into the US federal system but Flowers says they are working to overturn that order and bring them back to the state level, where the law firm “will be able to use our subpoena powers, depositions, written discovery, to start learning more and more and more about all the mistakes that were made and where we can find each and every company and individual responsible.” He concluded that compensation up to $10 million could be ordered for each of the 39 wrongful death suits the law firm intends to file.

Nova Scotia container terminal moves ahead Melford International Terminal Inc (MITI) has purchased a large parcel of waterfront land from the Municipality of the District of Guysborough (MODG) with the intention of building a new cargo terminal.

Plans call for the Nova Scotia port to include an intermodal facility and a logistics park.

According to MITI, “Melford will be the closest east coast port to Europe and Asia via the Suez Canal.

With no air or water draft restrictions, ice-free, and navigational depth exceeding 90 feet (60 feet at the berth) the terminal will be one of the few North American East Coast ports capable of handling the world’s largest containerships.”

MM&D | October 2013

13-10-22 11:01 AM

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SUPPLY CHAIN SCAN

First look at US logistics roadmap Crowdsourcing and robots are the ways of the future

By MM&D staff

T

he first draft of the US Roadmap for Material Handling & Logistics begins with a fictional, futuristic scenario where a backyard mechanic is able to order Corvette parts while still under his car, thanks to some Google Glass-like contact lenses, a smart, integrated wireless network, a 3D printer at an auto parts shop, and a neighbour who is willing to pick up and drop off parts.

Designed to provide leadership to the supply chain industry and create a plan of action to help organizations, the roadmap aims to “identify the current challenges and necessary future capabilities of material handling and logistics. It projects out to 2025 how the industry will need to adapt its technology, practices and workforce to keep pace with the demands of change.”

The roadmap points out ten major trends its authors expect will change the face of the industry: the growth of e-commerce, relentless competition, mass personalization, urbanization, mobile and wearable computing, advances in technology, sensors and the Internet of Things, big data and predictive analysis, the changing workforce and sustainability. It acknowledges these trends are all in various stages of development and points that some (such as big data and the Internet of Things) won’t be close to mature by 2025.

Besides those key trends, the study noted some common themes in the industry. They include labour shortages and the challenges companies have hiring workers, the obstacles to having businesses Dematic conference attendees learn about picking systems Last month, Dematic hosted 500 convention-goers during its Materials Handling and Logistics Conference.

Held in Park City, Utah, the event offered a variety of presentations ranging across six tracks: leadership, talent, experience, solutions, innovation lab, and lifecycle. Two facility tours were also part of the program.

Among the more popular presentations was one given by Montreal, Quebec-based Marc Wulfraat, president of the supply chain consulting company MWPVL International. In his presentation, “Picking Palooza—How to select a Split Case Picking System”, Wulfraat discussed the pros and cons of a variety of systems, including basic, paper-based (pick-to-list) order picking, radio frequency directed picking, and pick-to-light with conveyors. He also discussed types of technology including AS/RS mini-loads (good for high variety SKUs in small warehouses) and horizontal carousels (most suitable for small-cube SKUs with high order lines).

Wulfraat broke all of the options down and included statistics (receiving/putaway rate, replenishment rate, typical order picking rate, labour cost per pick, etc) for each.

He concluded by stressing there is no “is no such thing as a ‘best technology’ because the business requirements vary by type of operation,” but did suggest that “as volumes increase above 10,000 order lines/day, the fit for automation solutions starts to provides more shareholder value”.

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MM&D | October 2013

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SUPPLY CHAIN SCAN (especially competitors) collaborate and share information to achieve efficiencies (ie reduce empty truck miles), to make better use of sensors and reporting technologies, and to change distribution models to meet the growing needs of the consumer. In particular, the report presents two separate logistics models for the future: high-speed, high-value logistics and low-cost, low-impact logistics.

Participants in the Roadmap Workshops believe the future will demand from the industry more value at a higher speed. The report states: “By ‘more value”, we mean a greater focus on the customer and his or her needs—delivery at exactly the time desired, at exactly the right place, and in perfect condition, along with associated information services about the delivery. By ‘higher speed,’ we mean the ever-increasing expectations that deliveries be made quickly.”

To achieve this type of service, businesses will need to guarantee total supply chain visibility, which includes real-time tracking of all items and assets, and the ability to accurately predict delivery schedules within minutes. There should also be more industry-wide standardization for containers smaller in size than typical intermodal shipping containers. By 2025, the roadmap’s authors also expect to see a universally accepted data format for all types of sensors and more training in supply chain skills at colleges and universities. It also indicates the need for more predictive analysis and planning tools, especially ones that create models for anticipatory logistics.

On the opposite side of the logistics model, low-cost, low-impact logistics will require a business and societal shift to put ecological concerns at the forefront. It will also require more organizations to work together to share warehousing space and

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room in trucks, and common cross-docks to meet the needs of retailers in urban environments, although the authors note this is a contentious issue. “Some in the industry believe it is unlikely that collaboration in material handling, logistics, and transportation will ever be widespread in the US, due to aggressive competition in our market economy. Others are more optimistic.”

According to the roadmap, there is a pressing need for “at least two additional mega logistics parks in the US. There should also be a number of smaller parks that handle only truck trailers or a combination of truck trailers, rail, and barge.”

It also likes the idea of crowd-sourced delivery (ie individuals using personal vehicles to transport goods from stores to people in their neighbourhoods). This, the roadmap says, will be facilitated by lighter-weight and more secure packaging options.

The roadmap also says an increased use of robotics would improve efficiencies and speed up a variety of materials handling practices from picking to unloading trucks.

Go to www.mhlroadmap.org to download a copy of the report.

13-10-18 5:46 PM

SUPPLY CHAIN SCAN

Shippers raise concerns over industry alliance

By Carolyn Gruske

I

n June, three of the world’s biggest shipping companies announced a co-operative, vessel-sharing alliance. Now, a shippers’ organization is raising concerns about what the alliance will mean for competition.

The P3 Alliance is Maersk Line, MSC Mediterranean Shipping Company SA and CMA CGM of France.

They say P3 will be an independently operated network with 255 vessels on 29 loops.

Maersk Line will contribute roughly 42 percent of the capacity (including the new Triple-E ships), or about 1.1 million TEUs. MSC will account for approximately 34 percent of the capacity—approximately 0.9 million TEUs, and CMA CGM will provide approximately 24 percent of the capacity or 0.6 million TEUs. Their loops will include the trans-Pacific route, the North Atlantic, and Asia-Europe.

According to Chris Welsh, secretary general of the Global Shippers Forum, the alliance “is certainly a gamechanger in terms of the container shipping industry”.

He said the combined global market share of the three companies is between 32 and 37 percent.

“The market shares are far in excess of any other vessel-sharing agreement or consortium. In the trans-

Atlantic it’s well over 40 percent. It’s well over 40 percent in Europe-Asia trade, and well over 30 percent in the trans-Pacific.”

He explained when it comes to liner shipping, competition authorities and regulators have traditionally deemed that agreements accounting for 30 percent market share or less are “unlikely to cause competition problems, and will generally provide users with their fair share of benefits in terms of improved services, reduced costs, and so on.

“When it goes above 30 percent, when it gets into that 40 percent territory, issues of market dominance become more apparent. And the potential benefits that may be passed on to customers equally become a bit opaque.”

Welsh added that under European competition laws, agreements over 40 percent are likely to be classified as being restrictive to competition.

He also said that it is up to the organizations forming the alliance to conduct their own self-assessment to determine if their action will hurt competition.

Outside of the initial announcement about the formation of the alliance, Welsh said details about P3 aren’t readily available.

“We know nothing about the agreement—we have no idea what this agreement is,” he said, so the organization has written to the competition authorities, asking them if they have opened a formal investigation of the alliance.

“We’ve tabled a series of questions we are asking the commission to answer for us and also to give us an outline of the essential terms of the agreement, so we can conduct our own internal competition law assessment of the agreement.”

The London, UK-based Global Shippers Forum, comprises member organizations from around the world, including the National Industrial Transportation League in the US and the Canadian Industrial Transportation Association.

BENCHMARKS A team of students from the purchasing and supply management and global logistics programs at Seneca College in Toronto, Ontario won third place in the Association for Operations Management (APICS) International Student Team Competition. Team members Rubin Varghese, Dante Carlos, Kate Marynych, Dilshan AbdulKayoom and Stephanie Tang travelled to Orlando, Florida, to compete against students from five US universities. The third place prize was $1,000.

Toronto, Ontario-based Nulogy won the Canadian Aboriginal and Minority Supplier Council (CAMSC) 2013 CATA Innovation Through Technology Award. The honour was presented at the CAMSC Business Achievement Awards Gala. The award is given to an Aboriginal or minority-owned business for demonstrating innovation in a technology-based product or service. Nulogy produces contract packaging management systems.

The “picture frame” container refrigerator system from Carrier Transicold of Farmington, Connecticut, is 45 years old this year.

According to the company, nearly one million units of the frontwall container system have been produced and sold since 1968.

Earl Congdon Jr, executive chair of the board of directors of Old Dominion Freight line Inc has been awarded the Harry Salzberg

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Medallion. Presented by Syracuse University’s Whitman School of Management, the award is given to individuals for significant accomplishments in supply chain management. According to the university, it is the oldest supply chain award in the US, having been created in 1949. Congdon has been in his current position since 2008, when he retired as CEO after 45 years. His parents, Earl and Lillian Congdon, founded the company in 1934; his son, David Congdon, is Thomasville, North Carolina-based Old Dominion’s current president and CEO. The FedEx Express Hub at the Indianapolis International Airport is celebrating its 25th anniversary in operation. The location, which started with 316 employees is now home to most of the 7,000 people working for FedEx in the Indianapolis area.

Truck leasing and rental company Ryder System Inc, based in Miami, Florida, has racked up over 15 million miles with its fleet of natural gas vehicles. The company has 36 liquefied natural gas and 284 compressed natural gas tractors running in customer operations in California, New York, Arizona, Michigan and Louisiana. Ryder’s began its natural gas vehicle program in 2011, and the company estimates it has reduced emissions by more than 5,290 MTCO2e (metric tonnes of carbon dioxide equivalent emissions) and saved over 2.3 million gallons of diesel fuel.

MM&D | October 2013

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SUPPLY CHAIN SCAN MOVERS + SHAKERS Simon Mainville is Manac Inc’s new sales representative for Montreal and the North Shore. He will work out of the trailer manufacturer’s Boucherville, Quebec office.

The Belledune Port Authority has a new member on its board of directors. Danika Keeley has been appointed for a three-year term at the New Brunswick-based organization.

Cathy Munroe, chair of the Border Commercial Consultative Committee—the link between the Canada Border Services Agency (CBSA) and its commercial stakeholders—has announced her retirement. She will leave her post at the end of December.

BEKUM, a manufacturer of blow moulding machines based in Berlin, Germany, has hired Andreas Kandt as its new managing director and director of sales. One of his main directives will be global customer-supplier relationship management.

Professional Development for Supply Chain Professionals Register today - www.scmao.ca Strategic Supplier Performance, October 30-31, Hamilton

This seminar will assist participants in the development of a supplier management strategy. You will develop a framework that can be applied to improve supplier performance towards achieving organizational objectives. Featuring instructor Shawn Casemore, CSCMP, CPM.

Mastering RFX Drafting, November 6-7, Toronto; November 14-15, Cambridge; November 20-21, Ottawa

If you want to meet the high-speed demands of the tendering cycle, build RFX documents that can withstand legal challenge and develop solid contracts for your organization, you need to get to market with clarity, speed and precision. Featuring instructor Paul Emanuelli, recognized by Who’s Who Legal as one of the top ten public procurement lawyers worldwide.

View the complete fall lineup or register at www.scmao.ca

Want some insight?

Learn from the pros what the numbers mean Join us for the free Annual Survey of the Canadian Supply Chain Professional webinar on November 21st and find out why salaries are going up and what you need to do to see yours climb too.

This one-hour live webinar will include presentations of the results by Michael Power, editor, PurchasingB2B; Carolyn Gruske, editor, MM&D; Lou Smrylis, editor, CT&L; and SCMA president and CEO, Cheryl Paradowski, along with commentary from HR professionals and recruiters.

Register at www.scmanational.ca/annualsurvey Thursday, November 21, 2013 - 12pm ET Canada’s magazine for procurement and supply chain management professionals

MM&D | October 2013

12 Addressing issues affecting Canada’s public procurement professionals

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PROFESSIONAL DEVELOPMENT DIRECTORY Advertorial

eLearning, the elephant, and the blind men.

There is an old story of an elephant and the blind men, in which these men were asked to define the elephant with each man feeling one body part of the elephant. Naturally, each man provided a different definition of the elephant resulting in an argument amongst themselves as to what an elephant is. eLearning is very much like this elephant in that while everyone has a different working definition of eLearning, each is correct based on their own subjective experience or knowledge. eLearning comes in different forms to meet different needs. Jereb & Smitek, in 2006, defined eLearning as “educational processes that utilise information and communications technology to mediate synchronous as well as asynchronous learning and teaching activities�. CIFFA offers certificate programs for members of the global logistics industry that are designed and suitable for different learners with different learning needs and situations.

eLearning On Demand programs are designed for more independent learners to study completely online, at their own pace, and without an instructor.

This method offers learners the greatest flexibility to skim over content or materials they are knowledgeable in and focus on lesser known materials potentially leading to shortened completion time. eLearning/Webinar Supported programs allow learners to access materials for study purposes entirely online, but are supported by instructorled webinars on a scheduled basis. This method allows learners to schedule their learning around work and family commitments at their own pace, and yet have the comfort of interacting with an instructor. Webinar and classroom instructors must have at least 10 years industry experience, have proper credentials, and must pass the CIFFA Certified Instructor Certification process.

Classroom/eLearning Supported programs are centred in a classroom environment where learners have immediate access to the instructor, opportunities to have questions answered directly, participate in and benefit from group discussions, and interact and network with fellow learners. Classroom learners are given online access to learning modules, workbooks, reviews, and scheduled online exams.

And so, the challenge for today’s learner is to find the best way of learning as defined by their own unique set of circumstances and needs. Visit CIFFA. COM to learn more about certificate programs for individuals or companies that need different learning options for global logistics certification.

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www.mmdonline.com | October 2013

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To watch an exclusive report about updated plans to spend $70 million to expand the cargo handling facilities at the Calgary airport see http:// tinyurl.com/ YYCcargo

Calgary corrals In September, the Calgary Economic Development agency invited a number of reporters and editors, including MM&D’s Carolyn Gruske, to visit some of the businesses that form the backbone of the city’s warehousing and logistics hub. Articles resulting from that trip will also appear in the November-December issue, and videos will continue to be posted to www.mmdonline.com.

Counting on the warehouse Sears Canada DCs help boost the bottom line

By Carolyn Gruske To get a look inside the Calgary NLC, see the MM&D video posted at http:// tinyurl.com/ SearsNLC

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L

ike all department and big box stores, Sears Canada Inc, is adapting to a challenging Canadian retail environment. Increasing consumer expectations, more competition from US companies entering the market, and a recovering economy are all exerting pressures.

David Ritch, manager, logistics support, at the company’s Calgary National Logistics Centre (NLC), says Sears is changing how it operates.

“The company right now is undergoing the second year of a three-year transition, so we’re finding our slot in the market,” he said.

As part of Sears’s business improvement, all of the company’s departments, including warehousing and logistics operations, must evaluate how they perform their jobs and figure out how to help their organization meet the demands of the new retail climate.

David Cooper, general manager of the Calgary NLC, says it’s up to him to figure out how to position the warehouse to provide Sears with the greatest advantage.

“I have to be conscious of speed to market. But as long as I can achieve speed to market—and this is a big, big drive for Sears during the next twelve months, to improve our speed to market—I have to get the right mix of the product in this building. Do I fill up a full storage holding or do I keep it flexible so I can respond best to the customer?”

The Calgary NLC is the company’s main western warehouse. Located at the CP intermodal facility in Calgary, Alberta, the DC has been in operation since July 2000, when operations from Vancouver and Regina were consolidated in one location. At over 620,000sqf, the Calgary NLC has 130 dock doors and rack storage for 31,370 pallet positions (based on a 4x4 pallet). It supplies 730 stores in British Columbia, Alberta, Saskatchewan, Manitoba, Western Ontario, Nunavut, Yukon and the Northwest Territories.

When asked about the business challenges Sears is facing, Cooper answered honestly and bluntly.

“Are we still going to be here in 12 months time?

It’s a very fair question. Dave [Ritch] is a lifer, but I’m MM&D | October 2013

13-10-18 5:02 PM

The Sears Calgary National Logistics Centre sits on 45 acres at CP’s intermodal facility.

It is composed of three buildings with three functions: high bay rack storage, low bay storage, and high bay bulk storage.

six months in. When I was leaving my last job to come to Sears, that’s exactly the question I had to ask. I had to be sure I wasn’t joining an organization that was dying on its feet,” he said.

“On the logistics side, we have a lot of new faces at the top end of the organization, and we know there is stuff to do.

“The facility probably looks the way it did eight or ten years ago. That’s not a bad thing because logistics and supply chain are what they are, but there are things we can do behind the scenes in terms of mak making the operation more efficient in the way freight flows through, in the way we conduct our freight into the building and in the way we move freight out. So the focus of my attention is to make this building work more efficiently.”

According to Ritch, some changes have already taken place in the DC to correspond to the business restructuring.

“We’re obviously cost-cutting. But as our volumes go down, that enables us to cut back a little bit. When the facility opened we had about 500 employees. Now we’re about 300-325. It fluctuates with the seasons.

We’re very comfortable with what we have for the volumes we’re currently handling,” said Ritch.

Cooper added that the NLC typically runs at about 75 percent capacity.

Most of what’s handled at Sears is dealt with manually, due to the over-sized nature of the inventory.

Smaller goods tend to be warehoused in a cataloguefocused warehouse in Regina, Saskatchewan.

“Automation is very small. We have a small sorter with two inbound lanes and 12 outbound lanes and a hospital lane. The reason it’s small is this is typically a big ticket facility so we’re racked,” said Ritch. “We’re currently sitting on about $33.5 million of inventory

Operations Targets QR receiving: 24hrs JIT receiving: 24hrs Replenishment receiving: 48hrs Customer orders: 12hrs

www.mmdonline.com | October 2013

06MMD-Calgary.indd 15

Maximum peak throughput in the replenishment area is 40 cartons per minute. Store replenishment orders include hanging and boxed fashions and small-ticket items.

at cost. That’s merchandise Sears has purchased and is paying interest on.”

While that may seem like a large outlay of money for inventory, it tends not to sit in the warehouse for long.

The general rule of thumb is that the warehouse maintains three-days worth of inventory, in case circumstances (such as inclement weather or border troubles) delay shipments, but generally turnover is pretty fast.

“We also cross-dock merchandise from quick response (QR) sources, so we’ll probably cross-dock 30 to 50 trailers a day of QR sources, depending on the season.”

“Two generic types of products come through here,” said Cooper. “Just-in-time product is used to get product quickly to the stores. The other type is quick response. That is where we are flowing that product directly from the vendor, directly through our supply network to the store.

One advantage to being located in Calgary is that many mattress, white goods and electronics companies do their manufacturing or final assembly in the local area, so they deliver on a daily basis, and the products just flow through the warehouse into the supply chain.

Like other retailers, Sears needs to address the growing demands for multi-channel distribution, but Cooper says Sears has an advantage many other retailers don’t have: a history of catalogue sales.

“Sears has just opened up a new direct channel, but Sears has always been known for having that third channel. It was Internet shopping pre-Internet, through the catalogue. That’s part of the business that is really core to Sears’ operation, so as we look at new channels coming on, in a paper-and-pen way, Sears has already been there.”

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Against the grain Canadian Freightways bucks trends to do business differently

By Carolyn Gruske To see a video of Canadian Freightways operations and hear about their staff recruitment and retention programs— including offering Air Miles as bonuses—go to http://tinyurl.com/ CanFreight

Canadian Freightways president Ralph Wettstein wants to see truck driving become a Red Seal profession. He believes having higher training and licensing standards will help improve the job’s image and make it more attractive to younger people. Red Seal is an interprovincial standards and apprenticeship program.

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C

anadian Freightways is a Calgary, Alberta-based LTL transportation provider specializing in overnight delivery. The company, which primarily serves Western Canada, is also a member of a North American partner network.

Canadian Freightways president Ralph Wettstein believes the company’s approach to business development and human resources management differentiates it from its competition.

To start with, he said it offers a service most LTL carriers shy away from: residential curbside delivery.

“Traditional LTL carriers do not like to handle residential deliveries and if they do, they make it difficult and very expensive. On the other hand, we encourage residential deliveries. We understand that’s where consumers are going, where business-to-business is going and where business-to-consumers is going,” he says.

Even odder is Canadian Freightway’s preferred delivery schedule. The company wants customers to take delivery on Saturdays or Sundays.

“Our busiest days for pickups and deliveries are Fridays and Mondays, and on the weekend, we’ve got all our assets sitting there up against a fence. People like to work fewer days rather than more, so we’ll work them Friday to Monday, meaning they’ll get three days off. It may be in the middle of the week, not the end, but I’ll tell you people like three days off, no matter when it is, rather than only two. Now you use the assets you had sitting up against the fence for two days delivering to residents,” said Wettstein.

The company trains its drivers so they know what they’re doing when they exit the cab.

“You need to know if you deliver a fridge inside, before

you take that cardboard off, you have to make sure you place that fridge where you’re going to roll it in, as opposed to taking the box off and then trying to turn the wheels on linoleum and scratching everything.”

Another area where Canadian Freightways is attempting to set itself apart is in the area of reverse logistics.

Wettstein says he’s working to expand that part of the business, and has even pitched Wal-mart with what he feels is a new approach to the problem.

“We’d like to get more into reverse logistics because it’s one area that still is not being handled well. A good example would be Wal-mart. Wal-mart does a great job of controlling their costs going out to their facilities, but on the reverse it’s not so good.

“On the reverse side, it costs the original vendors to send things back. If you go to a typical Wal-Mart, they have four to six skids per day per store going back to eastern Canada and those all go back as single shipments with UPS. There’s a huge cost to the vendor.

“We’re saying, why don’t we go in and pick up those four skids a day, and move them by rail as one shipment, then we’ll break it down in Toronto, consolidate them and then deliver them back to the customer and save the vendor huge amounts of dollars.”

While other companies bemoan the shortage of truckers and qualified workers, Wettstein says that’s not something Canadian Freightways encounters.

He says he has no problems recruiting and retaining staff and attributes that to the fact he’s willing to reward them for doing their jobs well.

As an example he talked about the company’s weights and measures programs. He said that during a discussion with other executives in the network the topic came up about how much the companies could save by properly cubing or scaling freight from customers. (This is a process where shipments are checked by transport company employees to ensure their sizes and weights, as listed by the shipper, are accurate.

That way the trucking company avoids being underpaid if it has to haul a 500lb item listed as 300lbs.)

One company saved $1.8 million, just expecting their employees to find discrepancies. A second saved $3.6 million. It had a team of six dedicated people.

“So then we looked at ours. We picked up $11 million and paid back $365,000 to our employees,” adding that “whatever they gain, we give them $1.50 minimum per shipment where there’s an actual revenue gain of more than $10 and then we give them a percentage of everything over that.”

“It never hurts to give a little bit more,” said Wettstein.

MM&D MM&D | October 2013

13-10-18 5:02 PM

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With nearly 8000 members working across the private and public sectors, SCMA is the principal source of supply chain training, education and professional development in the country. Through its 10 Provincial and Territorial Institutes, SCMA grants the Supply Chain Management Professional (SCMP) designation.

SCMA was formed in 2013 through the amalgamation of the Purchasing Management Association of Canada and Supply Chain and Logistics Association of Canada.

Pay equity in the supply chain: Perception versus reality The 2013 Annual Survey of the Supply Chain Professional compared how men and women are compensated. Read on to learn the shocking truth.

By Carolyn Gruske

A

s in past years, the 2013 Annual Survey of the Canadian Supply Chain Professional asked respondents about their compensation, their working conditions, their industries and the companies that employ them, and this year 2,177 people across the country responded. The survey was conducted on behalf of the industry’s three leading magazines— MM&D, PurchasingB2B, and CT&L—and SCMA, formerly PMAC. The statistics are considered accurate +/-2.1 percent, 19 times out of 20.

In addition to the broader topics, every year the survey puts a special focus on one issue in particular, and this year, it examined the role of women in the supply chain and how much they earn.

The gender gap  HSBC is the proud sponsor of the MM&D Annual Survey of the Canadian Supply Chain Professional.

Professional.

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06MMD-SalarySurvey.indd 18

The majority of male respondents—79 percent to be exact—believe their female counterparts are receiving equal pay for equal work. By contrast, 55 percent of female respondents say women aren’t paid the same.

It turns out the women are right. For men, the 2013 overall average salary is $94,492 (which represents a 3.6 percent increase from the $91,181 they made in 2012).

For women, the average salary is $77,842, which is 3.7 percent higher than the $75,033 they earned last year.

This means women earn only 88.6 percent of the overall average industry salary and 82.4 percent of what their male co-workers get.

Among MM&D readers, in 2013 men take home $99,580 while women earn 83.3 percent of that figure, which is even lower than the industry average. Their mean salary is $82,930.

It doesn’t even matter how long a woman has been in the supply chain field. In every stage of their careers, women make less than men. For those just getting their start in the industry—employed five years or less—the mean salary for women is $59,849, and for men it’s $65,479, a difference of $5,630. This is a significant step back from gains made by this cohort in 2012 when the salary difference in this group was only $437 ($56,127 for men and $55,690 for women).

Those in the next stage of their careers (employed in supply chain for between six and 10 years) also saw the wage gap jump from a difference of $3,864 in 2012 to a $6,318 difference in 2013. In 2013 men in this group earn $76,517 while the women earn $70,253. In 2012 the men earned $71,395 and the women,$67,531.

Even in the more senior ranks, there were differences in pay for the sexes: a $14,693 difference for those employed 11 to 15 years ($87,761 versus $73,068), $10,372 for those in the 16 to 20 year category ($93,238 for men and $82,866 for women), $23,677 for those with 21 to 25 years’ of experience ($108,770 to $85,093), $10,392 for those having worked between 26 and 30 years (men earn $109,429 and women $99,037) and $17,666 for those in the industry longer than 31 years ($110,181 for the men and $92,515 for the women).

As to why this discrepancy still exists, and why

MM&D | October 2013

13-10-18 4:17 PM

Attend a free webinar to learn more about the survey results.

Thursday, November 21, 12:00PM ET Register at: www.scmanational.ca/annualsurvey

90,000

80,000

70,000 Average Males

2012

$60,000

2013

Females

2011

This year Manitoba and Saskatchewan saw the biggest increases in average salary. Supply chain professionals working in those two provinces (grouped together for the purpose of the survey) saw the mean increase by 8.4 percent, from $75,190 in 2012 to $85,519 in 2013.

Those working in Atlantic Canada experienced a decrease, as the average dropped 2.1 percent from $75,781 last year to $74,220 this year.

In between, in descending order were Quebec (4.9 percent higher, resulting in a mean salary of $80,493), British Columbia (a 3.6 percent increase, to $85,831), Ontario (with a 2.5 percent increase and a mean salary of $80,493) and Alberta, which experienced a 1.6 percent growth rate. Salaries in Alberta are still the highest in the country: $103,049.

$100,000

2010

Regional differences

Five-year salary overview

2009

many people don’t think it’s a reality, many respondents insist their company culture and working environment pays employees based on factors other than gender (skill level and experience, for example), promotes employment equity, and has women in senior positions (making the company female-friendly) but as the figures indicates, just because people believe things, it doesn’t make them true.

Industry Only the service industry saw a drop in averages in 2013, with a decline of 1.9 percent to $84,777, after $86,396 in 2012. This is a trend that began the previous year when averages decreased 0.6 percent after reaching a high of $86,900 in 2011.

All the rest experienced at least a little growth. Those in the wholesale or trade industries averaged 1.5 percent more (increasing the mean salary to $79,693).

Government workers averaged $80,225, which is 2.9 percent more. Those in the education sector saw a 3.3 percent increase, bringing the average salary to $77,113.

Manufacturing supply chain employees saw a 5.6 percent increase for a total of $82,222. Supply chain professionals in healthcare showed the biggest average increase: seven percent, which sent their mean salary up from $77,750 in 2012 to $82,222 in 2013.

Natural resources supply chain professionals saw a 3.9 percent bump, which put them mid-pack in terms of average increases, but they’re still earning the most—they’re the only ones to pull in six figures. In 2013 their mean salary is $105,979, up from $101,967 the previous year.

Positions and titles 2013 has been a good year to be working as a consultant. Respondents who used that title saw their mean salaries skyrocket into the stratosphere. They jumped 24.5 percent from $85,596 to $106,601.

www.mmdonline.com | October 2013

06MMD-SalarySurvey.indd 19

Among MM&D readers, in 2013 men take home $99,580 while women earn 83.3 percent of that figure, which is even lower than the industry average. Their mean salary is $82,930.

Evolving warehouse For the first time, the Annual Survey of the Canadian Supply Chain Professional asked respondents who indicated they have duties and responsibilities in the warehouse about the nature of their jobs.

Specifically the question read: “The work being done in warehouses is changing due to new technology, faster turnaround times and cost reducreduction pressures (among other factors). Not including different responsibilities due to a promotion, has your job changed in the past three years?”

Out of a total of 1,281 people (59 percent of all survey respondents), who said their job function involves warehouse activities including logistics, warehousing or inventory and materials control, 58 percent said their jobs had evolved while 42 percent indicated no change.

Topping the list of changes was the taking on of additional responsibiliresponsibilities. Next was a change, not an increase, in responsibilities. Longer hours came in as the third most mentioned change.

Other frequently cited factors that have resulted in change include process improvements, restructuring, new technology, changing customer demands, automation, and cost cutting.

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He said: “At least 50 percent of our She said: “Employer does not staff is female…If pay were unequal see me as long term or reliable there would be staff turnover.” because I run the risk of going on maternity leave.”

While they didn’t jump as high, supervisors and operations/tactical staff also saw averages increase.

Supervisors averaged 9.4 percent more in 2013 than in 2012, bringing their mean salaries up to $83,025, while operations saw 9.2 percent more, getting them $68,859 in 2013.

Engineering and professional averages were up 5.7 percent to $87,815. Clerical and administration positions earned $57,997, which is 3.7 percent higher than last year. Managers saw 3.4 percent more, at $98,656. Only executive averages failed to climb.

Their salaries fell 1.8 percent from $142,322 in 2012 to $139,747 in 2013.

For MM&D readers, relative compensation depends greatly on their positions in their companies. Clerks and administrators earn less than the overall average for people working in the same positions and with the same titles—$55,634 versus $57,997—so do managers ($92,723 compared with $98,656) and supervisors ($74,269 against $83,025). Operations and

tactical readers also get less, earning $66,300 in 2013 versus $68,859.

MM&D readers in other positions earn more than the survey average. On average, engineers get $90,000, executives take home $156,408, and analysts earn $80,667. Those who use the term “strategic” to describe their positions get $95,000 compared with the mean of $82,344.

Company size and revenue The size of the company a supply chain professional works for makes a big difference in compensation. For people employed at organizations with less than $100 million in revenue, the mean salary is $76,275. Those working in companies with over $100 million in revenue earn $98,136 in 2013. That works out to a 1.2 percent increase for people at companies with lower revenue figures and a 3.4 percent increase for their colleagues in the higher revenue category.

Salary by Title/Role

Salary by Classification $120,000

$150,000

2013

2013

2012

2012

100,000

120,000

80,000 90,000 60,000 60,000 40,000

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06MMD-SalarySurvey.indd 20

$67,140 $78,342

$80,885 $80,449

$89,837 $83,056

$77,275 $74,511

$74,036 $78,685

Inventory/ Material Control

Logistics

Information Technology

Warehousing

Purchasing/ Procurment

$85,354 $92,455

$96,127 $99,364

Strategic Sourcing

Other

$85,355 $80,955

Transportation

$103,720 $108,969

Supply Chain Management Executive

$93,588 $97,785

Marketing & Sales

$0

$97,243 $107,695

20,000

Consultant

$57,997

$55,905

Clerical/ Administration

$68,859

$63,082

Operations/ Tactical

$87,815

$83,047

Engineering/ Professional

$106,601

$85,596

Consultant

$98,656

$95,389

Managerial

$83,025

$75,890

Supervisor

$139,747

Executive

$0

$142,322

30,000

MM&D | October 2013

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Role of the supply chain

Atlantic Canada Quebec Ontario Manitoba/Saskatchewan Alberta

$94,400 $94,400

British Columbia

PhD

$87,101 $89,600 University Degree

$91,018 $104,973

$85,854 $87,115 Some University

Other Masters

$80,333 $80,197 College Diploma/ CEGEP

06MMD-SalarySurvey.indd 21

$100,914 $111,596

$83,556 $86,573 Trade/ Technical Diploma

www.mmdonline.com | October 2013

MBA

$79,261 $81,818 High School or Less

According to the majority of respondents, their organizations appreciate the value $85,831 their supply chain employees bring. Seventyseven percent (a figure unchanged from 2012) $103,049 either agree or strongly agree with the state$74,220 ment, “My company has come to realize our business could not function without supply chain management professionals.” $81,519 But recognition doesn’t necessarily trans$80,493 late into influence at the highest levels. $85,254 While 71 percent either agreed or strongly agreed that, “During the last year the supply chain role in my organization has increased in influence with that hasn’t changed in senior management,” that didn’t mean respondents 2013, the number of peohad access to the C-suite. ple who cite that as their This year, 38 percent of respondents said they have primary concern did. In 2012, 32 percent picked cost influence at the C-level. (In 2012 the figure was 40 control as the top supply chain issue. This year, only percent.) Twenty-nine percent said they’d like to 19 percent said the same thing. Reorganization came have more influence, while 23 percent said they second with 14 percent naming that as the key issue. didn’t need it. Four percent held C-level positions Last year, eight percent identified reorganization. and five percent said they didn’t know if they had Next on this year’s list were supplier relationship influence or not. management and skills shortage (each garnering nine percent of respondents), and risk management, foreNature of the job casting, and capacity shortages, which were all listed Every year, supply chain professionals say the most as the top concern by six percent of those who important issue they face is cost control, and while answered. At the very bottom of the list, with one percent each, were corporate social responsibility and environmental Salary by Education responsibility and sustainability.

When asked what issue will top their $120,000 list of concerns over the course of the 2013 next year, once again, respondents 2012 listed cost control, but as with the pre100,000 vious question, the number who gave that response declined from 2012. This year 23 percent of respondents put 80,000 cost control at the top. Last year it was 32 percent.

And as with the previous question, 60,000 reorganization jumped to number two, with 13 percent saying that was going to be top of mind this year. That’s in 40,000 comparison to 2012, when eight percent listed it first.

Along with asking about the big pic20,000 ture of the job, the survey asked respondents to detail what has changed on a more personal basis, and while $0 there has been change, it has been consistent change.

There was definitely more money: 35 percent of people received a raise in 2013 and 26 percent got a bonus.

One quarter reported no change at all in their employment situation,

Salary by Geographic Region

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13-10-18 4:17 PM

while 23 percent have the same job and salary but have been given extra responsibilities due to reduced staffing. Twelve percent were promoted.

Nine percent moved either moved to a new organization or changed jobs within the same organization. Three percent are now job sharing, another three percent are in a new role because their old position was eliminated, two percent were laid off, and less than one percent are out of work due to company closures.

30

4%

Other

2% 3%

Software/ SaaS Installation

Technology Upgrades

Skills Shortage

Environmental Responsibility/Sustainability

Transportation

Inventory Visibility

Capacity Shortages

Reorganization

Forecasting

Risk Management

Supplier Relationship Management

Cost Control

0%

1% 2%

3% 2%

Overseas Sourcing

1% 1%

3%

5%

6%

5% 4%

4% 4%

6%

5

7%

9%

14% 8% 6% 6%

10

7% 6%

8% 9%

15

8%

20

19%

25

Although it’s said money can’t buy happiness, supply chain professionals with higher wages and compensation levels are happier. Those who are either very or somewhat satisfied with their salaries have a mean salary figure of $95,156. In comparison, those who classify themselves as not very or not at all satisfied earn an average salary of $69,123. Last year the satisfied people earned $92,138 and the unsatisfied ones got $66,810.

In total, 72 percent (a figure identical to last year’s) said they were either somewhat or very satisfied with their salaries, which is important given that 98 percent of people said having a competitive salary 2013 is important to how satisfied they are with 2012 their jobs.

The survey also asked about other factors that can contribute to contentedness and happiness with a job including work/ life balance (which 97 percent of people said was important but only 74 percent said they were satisfied with, a significant drop from 81 percent in 2012), the benefits package (83 percent were satisfied) and pension and RRSP contributions (with 80 percent satisfied).

Some of the biggest gaps between how important an aspect of the job is and how satisfied respondents are with that aspect of the job come in the areas of performance recognition (94 percent say it’s important, but only 68 percent report being satisfied with how their companies recognize their performance), opportunities for advancement (62 percent saying they’re satisfied with the opportunities, versus 88 percent who say it’s important to their overall job satisfaction) and influence on the job with 79 percent indicating they are satisfied

Outsourcing

35%

32%

Top supply chain issues faced in the past year

Job satisfaction

How does your salary measure up?

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He said: “They are generally not as capable due to their lack of experience actually doing logistics work, ie driving a truck, forklift, picking orders, writing software.

Most women transition from HR into these roles, and if you’re lucky, customer service where they have some exposure to the actual job.”

She said: “Brought in at a lower wage, very few salary increases, so it’s hard to catch up. They seem to view women as suitable for middle management positions but not top management and the few who make it higher up don’t seem to have the compensation to match.”

with their amount of influence and 96 percent saying their ability to influence is important.

The future When asked how they see their future, 36 percent say they’ll be working in the same job over the next two years. One third (33 percent) are expecting to be promoted and 21 percent think they’ll be employed elsewhere, but still working in the supply chain. Two percent are planning to become selfTop supply chain issues anticipated in the coming year

Skills 32%

35%

employed or shift into consulting, three percent envision a complete career change and five percent expect to retire.

For those who think they’ll wind up working for a different organization, 55 percent feel there are no opportunities for advancement in their current organizations, 49 percent think they’ll earn more, and 46 percent just need a change or a new opportunity. Other reasons offered include lack of management appreciation for the supply chain (34 percent), poor relationship with supervisors, desire to relocate, and expectations of downsizing.

People skills—interpersonal relationships and management—were identified by 30 percent of supply chain professionals as the most important. Strategic leadership was listed second by 14 percent of respondents. Decision-making was a close third, at 12 percent. The most significant change from 2012 was the decline in importance of negotiation. It dropped from 12 percent last year to nine percent this year.

2013 2012

25

23%

30

20

2% 3%

Outsourcing

6% 2% 3%

Software/ SaaS Installation

3%

3% 2%

Overseas Sourcing

4% 3%

3% 3%

4%

2% 2%

5

6%

8%

8% 9%

Summary

5%

7% 6%

Risk Management

6% 7%

7% 7%

Supplier Relationship Management

10

8%

13%

15

24

06MMD-SalarySurvey.indd 24

Other

Technology Upgrades

Skills Shortage

Environmental Responsibility/Sustainability

Transportation

Inventory Visibility

Capacity Shortages

Reorganization

Forecasting

Cost Control

0%

For the most part, there was a great deal of consistency between this year’s results and the results from 2012, especially if you exclude the salary figures and focus on areas like the need to upgrade qualifications or add professional designations.

People are still turning to professional associations and trade publications to keep up with developments in their fields. There are still gaps between what people are paid and how their performance is recognized and what they believe they’re worth, but 87 percent of respondents say they are satisfied with the overall aspects of their jobs, the same as in 2012.

MM&D MM&D | October 2013

13-10-18 4:18 PM

Whole-hog into forklift fleet management Clemens Food reduces collisions using electronic tracking

By Carolyn Gruske

F

orklift accidents can be costly—both in terms of dollars to repair damaged vehicles, structures and racking—and in terms of the man hours it takes to figure out what went wrong and come up with solutions to prevent similar incidents from happening again.

Clemens Food Group, a Hatfield, Pennsylvaniabased producer of pork products, wanted to get a better handle on its fleet and reduce the number and severity of accidents. To do that, the nearly 120-yearold company needed to abandon its paper-based tracking and safety-compliance system, so it turned to one of its forklift suppliers for a solution.

Clemens has 178 forklifts and pieces of mobile equipment (including reach trucks, turrets, walkies and lowboys) dispersed throughout over 1.3 million square feet in three separate locations. The company uses trucks from Raymond, Clark, Bobcat, Linde, Gradall, and Crown Equipment. Clemens has 1,080 operators on staff to run those vehicles. Finding a solution to work on such a large range of equipment was critical.

After looking at solutions offered by three different vendors, Clemens chose the InfoLink System, part of the Crown Insite Productivity Suite, from Crown Equipment.

“The three main reasons we were very interested in this system are the operator compliance [each operator undertakes a safety inspection of the vehicle at the start of the shift], certification management for the 1,000plus operators and all kinds of different equipment (to ensure only qualified personnel are operating them), and impact detection,” said Kevin Shayer, general manager of distribution and warehousing for Clemens.

Before adopting the system, the company used a paperbased process for doing operator checks of the equipment. Now, the screen on the Crown module (attached to the truck) asks operators a series of questions before allowing them to start using the vehicles.

“We’ve got 11 questions, of those 11, four will lock the truck out if the team member answers in a negative manner. For example, “is the truck safe to drive?” If the person says ‘no,” it will lock that truck out. Another one is ‘do the brakes work?’ They know that’s another checklist item that will not let that truck drive until a manager comes over and looks at it and understands www.mmdonline.com | October 2013

06MMD-Clemens.indd 25

why it’s locked out—finds out if it’s an error or a true safety issue that needs to be worked on by a mechanic,” said project manager Jeff Barnes.

The wireless, radio-based system also records how quickly an operator answers the questions. If too much—or too little—time elapses before all answers are given, the truck is locked.

Clemens got Crown to create an interface for its time and attendance tracking program, so updated information about drivers and their qualifications, gets sent directly to InfoLink.

The feature that has led to the most measurable change is the system’s impact detection. Included in the Crown module are sensors that record speed and G-force measurements. That data is used to measure the severity of crashes and impacts. Barnes explained that each impact is given a value from one to 70.

“When we first started, even with a partial start-up, we were seeing probably six-to-eight [70s] a week.

That was with 40 or 50 modules installed. Now we rarely see a 70 any more. I saw a 70 today for the first time in three weeks.”

Managers can set a trigger to send an e-mail if an impact meets or exceeds a pre-set threshold. They can also tell the system to shut off the truck after a crash.

According to their figures, Clemens has reduced major impacts by 80 percent.

Clemens has asked Crown for additional functionality including a way to monitor battery levels and schedule a time when each truck should be brought in for a swapout, and a way to record some aspects of the checklist process, such as when the operator tests the brakes. MM&D

A sample report showing how a company’s operators are doing.

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13-10-22 11:04 AM

EQUIPMENT FOCUS

Racking and storage solutions Load ’em up: New places to stash inventory 1 Suds storage

Keg Flow Racks from Bluff Manufacturing have been created specifically for craft brewers. Designed to be placed into standard-sized pallet racks, the Keg Flow Racks tip forward so the kegs are always at the front of the shelving for easy picking, and allow 60-inch-deep racking to be picked and loaded from the front.

They slot into place without welding or bolting. Using the KegFlow38, a 24-inch pallet rack can hold four kegs per rack.

The KegFlow116 fits a 120-inch rack and holds 12 kegs per rack. A wide range of other sizes is also available.

2 Last-in, first-out

Espace/Max has updated its Flow-Rail Pallet Storage System. The high-density pallet storage system is a non-motorized, 10-pallet-deep system. Designed to be used in temperatures as low as -30C, the system is also maintenance-free and rust-proof. Flow-Rail uses a chain system that slides on aluminum racks. When pallets are removed, the chains slide in the opposite direction. Rails are horizontal, not inclined, reducing overall system height.

The system allows the insertion of a third rail to support weak pallets or loads weighing more than 3,000lbs.

2

3 Track the racks

Zebra Technologies Corp is giving automotive manufacturers a way to track the location, status, condition and history of every reusable rack and container in their supply chain. The Rack & Container Management Solution combines RFID, real-time location systems (RTLS) and visibility software to create a detailed picture of where the racks are as they flow through the operations process. Based on the company’s Material Flow suite, the system can issue configurable alerts and reports and can be queried for specific details about rack location and condition.

1 4

4 Open drawbridge

The Tilt Up cart from Creform Corp uses gas struts to raise and lower the unit’s drawbridge shelf. Highly configurable, the cart is assembled from Creform’s pipe and joint system, which allows a variety of surface materials, including wood, plastic or metal to be used for shelving. Additionally, foam dunnage or shadowboards can be added for parts protection and organization. It comes standard with four urethane casters, measuring 10cm in diameter—two fixed and two with brakes. A towing tongue for a tugger or AGV is optional.

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06MMD-Equipment.indd 26

3

5 Behind closed doors

5

The Lista Storage Wall System from Lista International Corp has been upgraded to include a new tambour door. The door has a double wall, foam-filled aluminum slat design, which decreases weight and increases strength. Behind the door is a configurable, modular drawer, shelf and roll-out tray storage system. Owners of Existing Lista Storage Walls or Control Systems can retrofit the aluminum door.

MM&D | October 2013

13-10-18 5:14 PM

Informa.indd 1

13-10-18 5:15 PM

MATERIALS HANDLING

Deliver promises with care What works in the US might not work here

A Dave Luton

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s e-commerce grows in volume and sophistication, there is continuing pressure to differentiate your offerings from those of your competitors. Inevitably, logistics enters into those business considerations.

I can imagine a business development meeting where the head of marketing makes the following pitch— including the easy-to-talk-about logistics step: “With everybody having new tablets and mobile phones, we’ll take inventory pictures that look great.

We can describe the items perfectly and customers will see exactly what they are ordering.

“We’ll make everything eco-friendly. Get rid of all outside (protective) packaging. Imagine all the money we’ll save. And we’ll deliver right to the customer’s door. Think of their surprise when we get it to their penthouse on the twenty-eighth floor.”

Of course home delivery is nothing new. Older people (like me) remember when we used to have bread and milk delivered right to our doors.

Built into the exterior walls of the house I grew up in was a metal milk box that held four glass milk bottles. It had doors on each side—one was for the milkman to deliver freshly filled bottles and pick up empties, and the other opened into the kitchen. The milk box was insulated to keep the milk cool in summer and to prevent freezing in winter.

“If they could do it back then, why not now?” is the question being asked by businesses and marketing departments. That’s quickly followed by: “How about lowering the delivery cost? Better yet, make it free,” “Let’s speed it up—how about same day delivery?” and “If they can do it in the US why not here?”

These questions lead to a critical issue Canadian logisticians must continue to pound into their marketing counterparts’ heads: unlike the US, we have to service a larger area with a population one-tenth the size. For most e-tail business categories, a smaller population means fewer orders and a bigger delivery area. Add to this greater extremes of weather (we are not called the great white north for nothing) plus higher costs for some key logistics components like fuel, and it is no wonder we have to be careful of the delivery service performance promises we make.

Like all logistics challenges, the key is to find a compromise that solves much of the challenge at an affordable cost.

First, choose your delivery zones with care. Define the same-day and next-day zones carefully. For most things, customers in Moosonee shouldn’t expect the

same service as cheaply those in downtown Toronto.

Carefully define what is involved in the physical handling of a delivery. Delivery of a major appliance, like a washing machine, is not the same as delivering a pizza. Some appliances require more than one delivery person. Often, doors have to be removed to get the appliances into the house. (In our last house in Toronto, the freezer went into the basement and never came out. We sold the freezer with the house.)

A pizza typically needs less handling than a refrigerator, although the service response is more challenging. But this is offset by having the business model designed around a tight, efficient delivery system, including a limited radius from the pickup points.

Take a lesson from our ancestors and their retailers of over a century ago. Some retailers, like Sears, started as mail-order catalogue operation in the late 1800s, when delivery logistics operations were very similar to what e-tailers experience today.

Early on they realized that use of intermediate pickup points, where customers could come and pick up their orders and make returns, would give them the best compromise of service and cost. This way they could avoid the problems of delivering to every house in America. It also solves the problem of having to deliver when nobody is home. Remember, very few delivery destinations have the equivalent of the old milk box where merchandise can be held temporarily. There is also a greater risk of theft today than a couple of generations ago.

Pickup points will work in the downtowns of many cities. The problem in many cities is that vertical heights have increased and every storey adds more headaches for delivery.

Keep yours on ground level and let the last 20 or 30 stories be the problem of your customer. For some items that doesn’t work, but that’s one of the challenges if you want to sell flat screen TVs. Keep in mind there are some smart buyers out there who will take advantage of sales people who do not know logistics. There’s a true story which illustrates that principle perfectly. A purchasing agent bought a shuffleboard table for the games room of his corporation—which happened to be on the 29th floor of an office tower. He negotiated door-to-door delivery and his supplier had to haul it up via the stairs when it did not fit in the elevator.

MM&D Dave Luton is a consultant in the greater Toronto area. dluton@cogeco.ca MM&D | October 2013

13-10-18 5:03 PM

LEARNING CURVE

Gender-based earnings gap Statistics show women still failing to get their due

R

ecently there have been signs the job market is looking brighter.

There’s also been some good news about the earning potential of supply chain professionals. The 2013 Annual Survey of the Canadian Supply Chain Professional shows a 3.2 percent increase in salaries over 2012 numbers, with the average rising from $85,178 to $87,908.

But while these upward trends are encouraging, the same study shows the gender gap in earnings still exists. In 2012, women earned 17.7 percent less than men, and in 2013 they are getting 17.6 percent less.

This year, women in supply chain have an average salary of $77,842 while men earn $94,492.

Clearly, in the supply chain sector, the gap between male and female earners isn’t going to disappear anytime soon. The biggest area of concern is a growing wage gap among managers.

A 2013 salary survey conducted by the Institute of Supply Chain Management (ISM) shows the gender gap for earnings widens with higher-level positions.

A chief of procurement/supply chain position, for example, pays an average of $272,900 for men and $122,875 for women.

According to the Canadian data from the Annual Survey of the Supply Chain Professional, women who have between 20 and 25 years’ of experience working in supply chain only earn 78 percent of men with the same number of working years.

Today, women represent only 18 percent of all leadership positions, with one-third of all Financial Post 500 companies reporting zero females in senior officer positions. Catalyst.org, which provided these statistics, describes this dearth of woman in top roles as both glaring and disappointing—and I agree.

Perhaps it’s time for female supply chain leaders to make better use of the salary survey statistics and other information to target companies that have been embracing female leaders.

And, when the work they do helps companies operate more efficiently and improves relationships with clients, vendors and employees, women should make every effort to proclaim their accomplishments in order to enhance their own career opportunities. Just like men, more women need to learn to take credit when it’s due.

Women typically must also become better at negotiating salary terms. Sheryl Sandburg, COO of Facebook and the author of Lean In: Women, Work www.mmdonline.com | October 2013

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and the Will to Lead, argues that many women only feel comfortable asking for a raise using a senior member of their team as a buffer. She also says many others fail to counter offer at all when negotiating salary. In the book, she quotes a study at Carnegie Mellon University that found 57 percent of male students negotiate for a higher offer but only seven percent of females tried to do so.

“I have advised many women to preface negotiations by explaining that they know that women often get paid less than men so they are going to negotiate rather than accept the original offer,” Sandberg says.

It’s helpful advice, but it’s only one of the remaining issues to solve. Too many women continue to earn less than men, and this frustrating trend will continue unless there is a joint effort by employers and female leaders and influencers.

Still, the message that too few women are being hired—and too few are being fairly compensated—isn’t getting through to enough Canadian businesses.

A 2011 report by Mercer Human Capital Consulting shows Canada lags behind the rest of the world in efforts directed to increasing female leadership. In this country, 82 percent of firms do not have a strategy to promote women. Globally, that number is 71 percent.

Additionally, 20 percent of American firms expressed concerns over the lack of female leadership (within organizations), but only about eight percent of firms in Canada cited the same concerns. When it comes to putting more women in leadership positions, in Canada we don’t appear to see the urgency.

All leaders should be recognized for their abilities based on merit. Legislating equity is a poor substitute for opening the corporate world’s eyes to the facts.

Canada is missing a key strategic talent sourcing advantage. We have qualified women who are not getting the jobs they deserve. This disconnect is stifling organizational development and success, and it is dragging down the careers of countless women.

A high percentage of organizations—in Canada and elsewhere—talk about their great diversity and progressive hiring policies. But, as long as the numbers aren’t supporting their claims, we have work to do.

Corporations need to start walking the talk. MM&D

Tracy Clayson

Tracy Clayson is managing partner, business development, of Mississauga, Ontario-based In Transit Personnel. tracy@in-transit.com 29

13-10-18 5:15 PM

CRUNCHING THE NUMBERS

SUPPLY CHAIN

JOB HUNT Why specifically do you see yourself working at another organization in the next 2 years?

There is little opportunity to advance in current organization

55%

Higher compensation is available at another organization

49%

Need a change/ new opportunity There are more opportunities to advance in another organization Lack of appreciation by management for supply chain roles

Change to job/position Likely to move to a different city/location Poor relationship with current supervisor

Although most respondents (96 percent) in this year’s Annual Survey of the Supply Chain Professional described themselves as “working full time in supply chain” there are always people looking for jobs—whether due to layoffs or just needing a change. Here’s a glimpse at what the job market looks like in 2013.

Online social networking

Job boards

Contacting companies directly

34%

In-person networking

15%

How did you find your current supply chain position?

6%

Professional association

21%

3%

46% 45%

2%

11%

6%

11%

Employer web site

12%

15%

Online job site

Recruitment/ Placement firm

Classified ads

Word of mouth

17% 11% 10%

I expect my current organization will close

6%

I expect to be permanently laid off by my organization

6%

Based on your experience and knowledge, do you think there are more or less jobs in supply chain now compared to 5 years ago?

65% 23% 12%

More

No difference

Less

Crunching the numbers is an editorial feature sponsored by YOUR COMPANY NAME and LOGO here.

Contact Emily Atkins at 416-510-5130 or eatkins@bizinfogroup.ca for more information.

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MM&D | October 2013

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13-10-18 5:17 PM

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13-10-18 5:17 PM