September/October 2015 $15.00
long VIEW TAKING THE
Annual Survey of the Canadian Supply Chain Professional reveals salaries up; page 14
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INSIDE 3 5 14 22 26 29 32 34 35 36 38
Taking Stock Supply Chain Scan Survey of the Supply Chain Professional Workforce Management Recruiting Vendor Managed Inventory Assembly Line Automation Learning Curve Materials Handling IT Matters Leading Edge
TAKING STOCK
The HR edition www.mmdonline.com PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins (416) 510-5130 EAtkins@mmdonline.com CREATIVE DIRECTOR: Tim Norton (416) 510-5223 tim@newcom.ca ART DIRECTOR: Barbara Burrows SALES: Nick Krukowski (416) 510-5108 nick@ctl.ca PRODUCTION MANAGER: Kim Collins (416) 510-5190 KCollins@newcom.ca CIRCULATION MANAGER: Mary Garufi (416) 614 5831 MGarufi@newcom.ca
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O
ctober has been MM&D’s traditional Salary Survey edition for many years. It’s the time of year when people get serious about business and hunker down with the threat of winter weather. What better time to take a closer look at your own career and consider that relevance of your company’s remuneration practices. The Annual Survey of the Canadian Supply Chain Professional is produced in cooperation with our partners SCMA, Canadian Shipper and PurchasingB2B magazines, and with the support of our sponsor, BDO. Thanks to the wide reach of all these organizations, we are proud to offer the most comprehensive and complete professional supply chain compensation and working conditions survey in Canada. Starting on page 14 of this issue you’ll find data about salaries across industries and regions and by company type and size, as well as the latest in the battle of the sexes for pay equity. This year, in addition to the in-depth reporting on the survey, we’re also offering a special package of editorial content to help warehouse and DC managers and senior execs learn about technologies and techniques in the field of talent management. Labour costs, after all, make up more than 30 percent of the budgets of warehouses and DCs in Canada—and up to 44 percent in the consumer packaged good industry—according to the MM&D 2014 Canadian DC Cost Benchmarking Study. (See MM&D’s July/August 2014 editon for details on this original research.) Given that fact, there’s absolutely no way a DC manager can afford to neglect this important part of the business picture. To help, we’ve got a feature on workforce management that looks at the pitfalls of managing a part-time and seasonally fluctuating temporary workforce, as well as offering some practical advice on how to organize your operation’s labour in the most cost effective manner. We also talked to a number of Canadian experts in the talent acquisition field about trends in hiring—and keeping—good supply chain managers. Whether you’re in the job market yourself, or are seeking to fill some key positions, I hope this feature will present you with new information that can be put to profitable use. And, in case you want more, we’ve also got a webinar coming up on November 25th, presenting more results of the Annual Surveyy of the Canadian Supply pp y Chain Professional. See page 19 for details.
September/October 2015 Volume 60 Number 05 22
26
29
32
Workforce Management
Recruiting
Inventory
Sprinter
Getting the best staff for your operations
Canadian distributors benefit from managed inventory
Materials handling automation streamlines German van plant
Understanding and organizing DC labour needs
Cover image: DNY59, iStock.com
www.mmdonline.com | September/October 2015
3
SUPPLY CHAIN SCAN
CRIME
BORDER
OUTSOURCING
M+S
TAPA sets goals for cutting costs, p 6
Group to address compliance, p 11
Study reveals need for close collaboration between 3PLs and their clients, p 12
Appointments and promotions, p 13
Canadian robot set to work in warehouses C
learpath Robotics, based in Kitchener, Ontario, has built a self-driving warehouse robot: OTTO. OTTO is designed for intelligent heavy-load transport in industrial environments and is intended to deliver improved throughput and decreased operating costs. The announcement was made at RoboBusiness 2015 in San Jose, California. Modern factories and warehouses need to be reconfigurable, responsive, and efficient to survive. Designed to address these conditions, OTTO uses the same underlying self-driving technology popularized by the Google self-driving car. The system delivers dynamic and efficient transport in increasingly congested industrial operations. Traditional material handling systems require
costly and rigid changes to infrastructure, cannot adapt to a changing environment, and may not always be safe for collaboration with warehouse personnel. OTTO does not rely on external infrastructure for navigation, making implementation simpler. It can transport 3,300-lb loads at speeds up to 4.5 mph, while tracking along optimal paths and safely avoiding collisions. “North American manufacturers are constantly under pressure to find new ways to gain an edge against low-cost offshore competition. Traditional automation is saturating. But what about the more complex tasks too diffilex tasks too difficult or expensive to automate?” said Matt Rendall, CEO and co-founder of Clearpath Robotics. “We created OTTO to reinvent material transport and give North American manufacturers a new edge.” Applications for OTTO include moving pallets in a warehouse or cross-dock, and for kitting or assembly line delivery. OTTO units are currently deployed in five test facilities, the first of which belonging to GE. GE has collaborated with Clearpath on service robot development since 2013 and recently became one of Clearpath’s first OTTO customers. Today Clearpath also announced GE Ventures has become a strategic investor in the company for an undisclosed sum. “We believe robotics will drastically improve the industries that GE serves,” said Ralph Taylor-Smith, managing director of GE Ventures. “We look forward to further partnering with Clearpath and exploring the role large-scale service robots may play for us and for our customers in the future. This Clearpath investment from GE reflects a deepening of the industrial partnership in advanced manufacturing and field service operations with self-driving vehicles and service robots.” “GE is one of the world’s most powerful and innovative brands,” said Rendall. “We are honored to partner with GE and we look forward to shaping the industry with them.”
CP BUYS STEELCARE Canadian Pacific Railway Limited has bought Steelcare Inc, Canada’s largest steel transload facility. The transaction includes TransCare Logistics Corporation, Prometheus Six Inc and East Port Warehousing & Distribution. Steelcare is a transload and distribution hub providing transloading, warehousing and distribution services of steel products. Steelcare’s Plant Six facility in CP’s Aberdeen yard in Hamilton, Ontario, is a 168,000-square-foot facility with two drive-through rail and truck loading and unloading areas. Steelcare is able to handle up to 1.5 million tons of rail transload product a year. 4
AIRBRIDGE FLIES SINGAPORE-MOSCOW AirBridgeCargo Airlines (ABC) has begun a twice-weekly direct freighter service to Singapore from Moscow. The Boeing 747F flights, launched on September 3, will operate on Thursdays and Sundays and offer onward connections to Hong Kong and the rest of ABC’s global route network.
MM&D | September/October 2015
His decision to cut energy costs by 70% with LED high bay lighting was a great idea. And a great start. Once you start seeing the benefits of our incentives for LED high bay lighting, you’ll want to start upgrading your motors, fans, pumps and compressors to higher efficiency systems as well. When you do, you’ll be joining thousands of organizations across Ontario who are already enjoying the savings that our programs deliver. Take a look at their stories and our incentives at
saveonenergy.ca/business
Subject to additional terms and conditions found at saveonenergy.ca. Subject to change without notice.OMOfficial Mark of the Independent Electricity System Operator.
SUPPLY CHAIN SCAN
TAPA sets cargo crime targets MM&D Staff
T
he Transported Asset Protection Association (TAPA) is launching a global campaign to double the number of warehouses it certifies in Europe, the Americas and the Asia Pacific, in the next three years. It also aims to increase the number of trucking companies operating in compliance with its standards. TAPA’s Facility Security Requirements (FSR) and Trucking Security Requirements (TSR) have been developed by supply chain security professionals and logistics specialists. Independently audited, they are widely respected as the leading security standards for the movement of high value, thefttargeted goods and many supplier contracts now demand compliance with TAPA Standards. The campaign includes a new self-certification programme for TAPA’s entry level FSR Class ‘C’ and TSR Level ‘3’ Security Standards. TAPA is providing free training for members’ in-house auditors and once this is successfully completed they can undertake their own audits to demonstrate compliance with Class ‘C’ and Level ‘3’. “The entry level opportunity is important for a number of reasons,” says Scott Dedic, chair of TAPA Americas. “It introduces companies to the TAPA Standards in a low cost, manageable way and once they prove their compliance, it results in reputational benefits and new business potential. For many of our manufacturer members this level of supply chain security would be sufficient for a high percentage of their requirements. One of the main drivers for this campaign is that we believe the majority of TAPA members may already be at, or close to, this level of certification but have yet to complete the audit process. Through this initiative,
Cargo crime is growing massively all over the world and remains significantly under-reported. Companies need to understand it is not just high value goods that are being targeted.
we will help them to take this important step forward.” The certification campaign also aims to build greater awareness for TAPA’s manufacturing members of the freight, logistics and transport companies that provide TAPA-certified facilities and trucking operations. This will include a new quarterly ‘Certification Bulletin’, profiles in the Association’s membership magazine and promotion through a new annual Directory of TAPA Certified Companies. TAPA is also looking to develop a new online tool that will enable manufacturers to ask if their transport and logistics service providers are TAPA certified. The threat of cargo crime continues to increase across the globe. For example, TAPA EMEA’s Incident Information Service (IIS) recorded 1,102 cargo crime incidents in 2014. Only 33 percent of these thefts from the supply chain reported a loss figure but the total value of these crimes alone was nearly €75 million, producing an average loss per incident of €205,624. Data for the first half of 2015 rose 24 percent year-on-year, with incidents recorded in 19 countries in the region and average losses per crime of €149,635. Tony Lugg, Chairman of TAPA APAC (Asia Pacific), noted: “The incidents and losses captured by our IIS intelligence tool are for industry-wide cargo crimes and not only for TAPA members. Our research tells us that TAPA members are far less likely to be victims of cargo crime because of the measures they have introduced. Nonetheless, there is absolutely no room for complacency. Cargo crime is growing massively all over the world and remains significantly under-reported. Companies also need to understand that it is not just high value goods that are being targeted by organized criminal gangs but just about every kind of product that has a resale value on the black market.” TAPA was formed in 1997 to tackle the multi-billion euro problem of cargo thefts from the supply chain. Today, it has over 800 member companies globally, including many of the world’s biggest manufacturers and logistics service providers as well as leading SME freight forwarding and transport operators, and other stakeholders.
PORT OF NEW YORK AND NEW JERSEY GROWS A new economic impact study concluded that the economic value of the Port of New York and New Jersey has grown substantially. The report cites that jobs directly associated with port activity have increased by more than 13 percent since 2012. Personal and business incomes as well as federal, state, and local tax revenues associated with the port have also grown. The Port of New York and New Jersey is the largest port on the East Coast, the third largest port in the United States by volume, and the second largest in value. It serves more than 35 percent of the US population. The employers and employees of the port community support the businesses and population of the largest and most affluent consumer market in the world. 6
MM&D | September/October 2015
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SUPPLY CHAIN SCAN
The main causes of T cargo losses
By Christian Siviere
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he analysis of cargo claims submitted by service providers (freight forwarders, logistics operators, shipping lines, port and terminal operators) to leading cargo insurance underwriter the TT Club, provides good risk management information. The analysis covers 7,000 insurance claims over US$10,000 filed during a five-year period (20102014), totalling US$425 million and the first leading causes are: 1. Traffic accidents: US$68 million (16.1%) 2. Handling equipment collisions: US$57 million (13.5%) 3. Theft: US$54 million (12.7%) 4. Fire: US$44 million (10.5%) 5. Cargo packing: US$41 million (9.8%) The detailed causes may be varied but these five categories dominate. Traffic accidents come first. Many are caused by speed, but technology like the use of GPS tracking and anti-collision sensors, plus training could help prevent losses. Most issues of collisions within cargo handling operations relate to ship loading cranes and accidents involving mobile equipment within container yards. In these instances, increased use of technology and automation could reduce the risks. The remaining top causes are the old “classics� of theft, fire and cargo packing. Theft is more likely while cargo is in transit and appropriate security measures could reduce theft within terminals and warehouses. Cybercrime is a new emerging risk as the increasingly internet-connected supply chain can be vulnerable to data theft and subsequent interception of cargo. Fire, the fourth most costly area, can be devastating to the survival of a business and there is concentration of value both in warehouses and on board ships. Although a significant number of fires are caused by design or maintenance issues, cargo misdeclaration continues to be a concern, as seen in the Tianjin explosions in August. The issue of cargo packing cannot be underestimated and the challenge is to raise the awareness and understanding of good practices with shippers in this respect. Conducting regular analysis is an essential part of an effective risk management and loss prevention strategy, in order to put actions in place to reduce claims, costs and the resulting disruptions in the supply chain. All the more reason to take appropriate cargo insurance to cover our goods against loss or damage during transportation, since all carriers, be they air, ocean or land, have relatively low limits of liability. MM&D | September/October 2015
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SUPPLY CHAIN SCAN
St Lawrence border working group to tackle compliance issues By MM&D Staff
T
he Council of the Great Lakes Region is establishing a new Border Issues Work Group. Bill Anderson, Ontario research chair in cross-border transportation policy and director of the CrossBorder Institute at the University of Windsor, along with Jim Phillips, president and CEO of the Can/ AM BTA, will be co-chairs. Currently, the Great Lakes-St. Lawrence Region is the only major region along the USCanada border that does not have an organized Border Issues Work Group. The region is responsible for roughly 50 percent of the total value of goods trade between the two countries and represents USD$5.8 trillion in economic activity (the third largest economy in the world if the region was a country). The costs of complying and crossing the US-Canada Border, currently amounting to billions of dollars annually in compliance, delays and wait times remain a major concern for importers and exporters. The group will tackle these issues. Organizational details and program of work will be developed and membership on the Working Group will be solicited from members of the Council of Great Lakes Region and the Can/Am BTA. Within the Working Group, a pre-clearance task force will be established to join forces with other regions, such as PNWER, in advocating for the passage of legislation to implement the recently signed US-Canada Pre-Clearance Agreement for Land, Marine and Rail Modes, which would achieve a major shift in the management of the border and help accelerate trade, travel and tourism in the Great Lakes-St. Lawrence Region. The Can/Am BTA, formed in 1992, is a transcontinental, bi-national, broad based organization with participation from all 27 states on or near the US-Canada Border and the Canadian Provinces. The combined network involves over 60,000 companies and organizations in their individual memberships and includes members from border trade, border crossing and transportation segments, such as producers, shippers, brokers, mode transportation providers, bridge and tunnel operators, chambers of commerce, business and trade corridor associations and economic development and government agencies. Established in 2013, the Council of the Great www.mmdonline.com | September/October 2015
Lakes Region (CGLR) is an independent, non-profit corporation that was created to think strategically about the Great Lakes-St. Lawrence Region as a bi-national economic region.
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SUPPLY CHAIN SCAN
Logistics outsourcing study shows major changes ahead By MM&D Staff
T
he 2016 20th Annual Third-Party Logistics (3PL) Study shows continued collaborative and positive relationships between shippers and third-party logistics providers, which have been developing since the study began. Relationships are central to the success of 3PLs and their customers and, for partnerships between 3PLs and shippers to be successful, both parties are expected to invest in the relationships. The report, based on responses from more than 260 shippers and logistics service providers around the world found that 87 percent of shippers and 96 percent of 3PLs have agreed-upon performance expectations, and 80 percent of shippers and 81 percent of 3PLs have formal performance reviews. Tightening capacity, mergers and acquisitions and industry innovations are altering competition, 3PL
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service offerings and shipper-3PL relationships. The ways in which shippers and 3PLs work together is changing as competition within the logistics industry ramps up. Tightened capacity along with increased consolidation within logistics service providers has resulted in fewer partners for 3PLs and increased prices. As a result, 44 percent of survey respondents reported they have enhanced relationships to guarantee shipping lanes and on-time shipments and 40 percent have increased rates. Among shippers, 29 percent said assets have not been available to move shipments when needed. Similarly, 29 percent have engaged with a larger number of 3PLs to get access to capacity. To differentiate themselves, 3PLs are working to provide sustained value, innovative solutions and information to facilitate data-driven decisions. 3PLs are also using technology and data to aid shippers in selecting the right shipment modes to maximize efficiency and reduce costs. Among respondents, 60 percent are using technology to increase visibility within orders, shipments and inventory; 40 percent are using technology for planning within transportation management; and 48 percent are using it for scheduling within transportation management.
MM&D | September/October 2015
SUPPLY CHAIN SCAN
MOVERS + SHAKERS Aaron Lalvani has joined BlackBerry Limited as senior director, business development, IoT. He is responsible for product management and business development for BlackBerry’s asset tracking solution in the global transportation sector. Before joining BlackBerry, Aaron was executive director at CCL and Conlog (a freight Aaron Lalvani consortium of shippers), and was president of Lalvani Group, a logistics consulting firm. He has been a contributor to MM&D magazine many times.
Alan Kunce
UniCarriers Americas (UCA) hired Alan Kunce as its new national sales manager as part of the company’s expansion in Canada. Kunce originally worked for Hewitt Material Handling as a product support representative, branch service supervisor and eventually a major account representative. He lives in Toronto, and is an avid tournament fisherman and a former professional soccer player. Earlier this year,
UCA expanded its dealer network in Canada to nine authorized dealerships with the addition of All-Lift Ltd, AMB Lift Inc, EMU and Deval, covering specific regions throughout the country.
Nationex appointed Frank Bolduc as director of sales for Ontario and Western Canada. Bolduc has a strong background in the transportation industry with a focus on package courier and has held several executive senior sales roles. Previously he was vice-president of sales and marketing for one the largest courier companies in Canada.
Cesar Jimenez has been promoted to director, product planning, technical services and warranty at Toyota Industrial Equipment. He has held a number of positions at Toyota including, most recently, national product planning and training manager. He currently serves as the Industrial Truck Association’s vice chairman of the Energy Storage Systems Subcommittee and also is a member of the General Engineering Committee. He earned his bachelor’s degree in mechanical engineering from the University of Southern California.
CORPORATE ON-SITE TRAINING WHY CHOOSE ON-SITE TRAINING? On-site training offers a variety of benefits to both employers and staff. In addition to cost savings and convenience, on-site training can be customized to meet different business needs. On-site training ensures consistent learning across the board from a single team to an entire organization.
WHY CHOOSE SCMAO TO PROVIDE YOUR TRAINING? Expert Instructors – Our expert instructors are leading supply chain academics and experienced practitioners who have real-world SCM experience. Our Programs – Our programs are designed to enhance skills development, professional competence and strategic perspective of SCM professionals at all levels of career progression from entry, to mid, and executive levels of functional responsibility. Our Reputation – As the leading supply chain association in Ontario, SCMAO has established a reputation for excellence in education and professional training. Over 70% of our corporate training is provided to repeat clients.
For more information on corporate training with SCMAO, please contact Carol Ship Spencer, Director, Education and Professional Programs at 416-977-7566 x2146 or csspencer@scmao.ca.
www.mmdonline.com | September/October 2015
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2015
Brought to you by our survey partners:
largest association in Canada for professionals in supply chain management, the Supply Chain Management Association (SCMA) is the national voice for advancing and promoting the profession. SCMA strives to ensure that employers recognize the critical contribution that SCM professionals make to the success of their organizations. SCMA sets the standard of excellence for professional skills, knowledge and integrity. 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. www.scmanational.ca
f BDO has extensive experience providing services to a broad range of clients in the traditional and emerging areas of distribution, providing us access to firsthand knowledge of trends and insights. We understand your business. Our international network of industry professionals has a wide range of financial and advisory expertise to support your changing needs. www.bdo.ca 14
long VIEW
BRITISH COLUMBIA
$87,587 MM&D: $91,500 K ALBERTA
$104,392 MM&D: $115,889 K
Edmonton
$92,323 Vancouver
MANITOBA/ SASKATCHEWAN
MM&D: $83,500
$84,342 MM&D: $116,400 K
$90,824 MM&D: $91,500
Saskatoon
$89,967 MM&D: N/A
Annual supply chain survey shows salary increases over the past five years
Calgary
$117,962 MM&D: $141,800
The results are in. The 2015 Survey of the Canadian Supply Chain
Regina
$83,571 MM&D: $125,000
Professional shows you what your peers are making across Canada and in
Winnipeg
$78,981 MM&D: $95,300
every industry, company size and demographic. Emily Atkins reveals the details.
S
alaries are up this year, and so is the gender gap. In 2014 we reported that salaries had dropped by about one percent. This year we see an increase of 5.8 percent in the overall average salary.
GENDER GAP MORE
2015
f As the leading and
TAKING THE
For MM&D readers the average is $104,282, a jump of 16.3 percent percent from last year’s $88,571. These are encouraging steps up for those employed in supply chain jobs. And MM&D readers should be doubly pleased to know that they are making 12.3 percent more than the average, which is $92,182. However, women’s salaries did not reflect that same trend this year. They did climb, from $78,819 in 2014 to $83,381 this year, a 5.6 percent hike, consistent with the overall change in the average. For MM&D readers the hike was from $77,834 to $84,000, a bump of 7.6
Men make 6% more than the average Women make 9.5% less than the average 2011
2012
2013
2014
Overall average Male Female
$82,800 $88,300 $74,600
$85,178 $91,181 $75,033
$87,908 $94,492 $77,842
$86,987 $92,276 $78,819
$92,182 $97,945 $83,381
2015
Male vs Female Actual difference % More men make
$13,700 18%
$16,148 21.5%
$16,650 21%
$13,457 17%
$14,564 17.5%
MM&D | September/October 2015
SALARY BY REGION URBAN SALARY AVERAGES ATLANTIC CANADA
$80,930 MM&D: $84,410 K
QUEBEC
$84,763
MM&D vs Industry average
MM&D: $77,080 L ONTARIO
MM&D readers make on average 13% MORE than the overall supply chain industry average
$90,809 St. John’s
MM&D: $108,404 K
$88,333 MM&D: $136,000
Sudbury Montreal
$86,610
$87,626
MM&D: N/A Ottawa/Gatineau
MM&D: $82,773
$93,877
Quebec City
Fredericton
$68,333
$36,192
MM&D: $60,000
MM&D: N/A
MM&D: N/A
Halifax
Thunder Bay
Saint John
$90,333 MM&D: N/A
$68,058 Cambridge/Guelph/ Kitchener-Waterloo
$90,203 MM&D: N/A
Windsor/Sarnia
London
$95,728
$84,991
MM&D: N/A
MM&D: $67,000
$88,660 MM&D: $107,500
MM&D: N/A Greater Toronto Area/ Brampton/Oakville
$96,038 MM&D: $109,871 Hamilton/ Burlington/ Niagara
$70,632 MM&D: N/A
percent. That’s nine percent less of an increase than the men reported. Women are still behind in the salary sweepstakes. Looking at the difference between their wages and their male counterparts, the gap widened this year by a half a percent to 17.5 percent. It’s still an improvement over 2011 through 2013, but it’s shift in the wrong direction. When we look at salaries correlated against both sex and length of time in the industry, however, there is some light at the end of the tunnel. For women with 11 to 15 years of experience, the gap narrowed this year to less than $400. Last year that same gap was $9,000. Likewise, for women with 21 to 25 years in the business the gap declined to $3,500 from last year’s nearly $10,000 difference. While the women in those groups have a little bit to cheer about, it’s still something of a black eye for the industry that the average gender gap remains in the double digits. www.mmdonline.com | September/October 2015
5-YEAR SALARY OVERVIEW
MM&D average for 2014: $105,363
$100,000
92,000 MM&D average for 2015: $84,000
84,000
76,000 Men Average Women 68,000
$60,000 2011
2012
2013
2014
2015
15
SALARY BY NUMBER OF EMPLOYEES
What’s on your mind As part of the survey each year we ask respondents a number of questions about their impressions of the job market and working conditions. This year we find a continuing trend of declining optimism about the number of supply chain jobs in Canada. Last year 65 percent believed there were more jobs available than before; this year that number has dropped to 61 percent. That lost four percent moved directly to the other end of the spectrum, where the number who said jobs have declined jumped from 11 to 14 percent. There’s also a big gap here between SCMA members and the general supply chain population, with 65 percent of members seeing more jobs, while only 54 percent of non-members were that optimistic. We also see a consistent level of job change for those employed in logistics, warehousing and inventory control positions, with 56 percent noting a significant change in their job over the past three years. Also holding steady over the years we’ve been asking the question is respondents’ impression of their influence, and need for it, at the C-level. Forty-three percent say they have it, 27 percent want more and 20 percent don’t need or want it. Last year those numbers were 42, 27 and 23 percent, respectively. Perhaps in keepingwith this year’s salary increases, we see a corresponding increase in those who believe their salary has kept pace with increasing responsibilty on the job. Sixty-three percent say the two are in sync, versus 60 percent last year, while 37 percent say the two don’t match up, versus 40 percent in 2014.
$120,000 Overall average MM&D average $100,000
$80,000
$60,000
1-99 employees
100-499 employees
$117,000
$98,916
$99,250
$86,511
$95,704
$20,000
$82,853
$40,000
500+ employees
AVERAGE NUMBER OF HOURS WORKED
Male Female Mean MM&D Mean
120,000
100,000
80,000
60,000
under 35
16
35 to 39
40
41 to 45
46 to 50
123,545
115,591 103,053 112,739
109,664
114,680 96,178 108,938
95,091
95,365 86,296 91,785
80,215
87,507 80,139 84,532
84,000
84,050 75,721 79,144
60,000
20,000
101,682 58,835 79,238
40,000
Beyond overtime: Working more than a 50-hour week may be exhausting but it pays off in salary earned
50+
MM&D | September/October 2015
“There’s always going to be risk. The issue is how to manage it.” People who know Distribution, know BDO.
The Consumer Business Practice at BDO The logistics business has never been simple. And with recent emphasis on supply chain sustainability, higher safety standards, and an evolving regulatory climate, it’s getting more complex. BDO’s dedicated professionals provide an exceptional array of partner-led services to help you keep up with key issues and maximize profitability, even in challenging times.
Assurance | Accounting | Tax | Advisory www.bdo.ca/consumer-business
Changing jobs Fewer people seem to be expecting to change jobs this year, with the number saying they will stay put increasing by four percent from 34 to 38. For those who do plan a move, however, there has been a big shift in the rationale. Last year 59 percent
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
said they would move because of lack of opportunity in their current position. This year that’s dropped to 57 percent, but the number who say they’ll move because they need a change has jumped from 39 percent to 53 percent.
$160,000
2014 • $141,813
Executive
MM&D 2014 • $134,121 2015 • $148,571
Top Job Title:
K
MM&D 2015 • $136,867
Executive
2014 • $85,690
Supervisor
MM&D:
MM&D 2014 • $76,028
K
MM&D 2015 • $85,478
Managerial
$136,867
2015 • $91,808
2014 • $99,462
Overall:
MM&D 2014 • $90,198
$148,571
2015 • $105,122
K
MM&D 2015 • $107,879 2014 • $102,461
Consultant
MM&D Top Job Title:
MM&D 2014 • $92,434
Manager
2015 • $104,880
L
MM&D 2015 • $87,655
MM&D:
2014 • $83,434
Engineering/ Professional
$107,879
MM&D 2014 • $83,577 2015 • $80,368
2014 • $70,261
Operations/ Tactical
Overall:
K
MM&D 2015 • $89,883
MM&D 2014 • $71,854 2015 • $75,465
K
MM&D 2015 • $84,237
SALARY BY POSITION
$105,122
2014 • $56,479
Clerical/ Administrative
MM&D 2014 • $60,400 2015 • $62,953 MM&D 2015 • $67,410
K
“There’s always going to be risk. The issue is how to manage it.” People who know Distribution, know BDO.
18
Assurance | Accounting | Tax | Advisory www.bdo.ca/consumer-business
MM&D | September/October 2015
SALARY BY EXPERIENCE years
Under 2 Two to 5 5 to 10 10 to 15 15 to 20 20 to 25 25 to 30 30 to 35 35+
In supply chain overall
MM&D in supply chain
$59,072 $63,104 $75,930 $90,765 $96,046 $97,851 $107,733 $107,823 $111,624
N/A 92,333 108,500 91,788 110,236 98,800 111,720 85,000 113,496
At current company overall
MM&D at current company
87,534 88,024 93,136 91,561 97,544 101,441 106,872 105,595 84,828
119,186 112,900 88,474 90,308 121,000 102,720 126,500 N/A 86,730
In current job overall
93,027 91,032 91,119 92,109 101,886 102,033 88,805 52,800 68,865
MM&D in current job
128,030 104,222 95,023 86,600 135,200 104,000 N/A N/A N/A
Experience matters. At almost every level of experience, MM&D readers make more for their long tenure than average.
STATE OF THE SUPPLY CHAIN WEBINAR
Brought to you by
Wednesday, November 25, 2015 – 12:00pm-1:00pm ET Looking for insight into whether you’re being paid fair market value? Want to hear about your future career prospects? Learn more about the results from the 2015 Annual Survey of the Canadian Supply Chain Professional. We invite you to join us on November 25th for a FREE one-hour webinar that will include presentations of the survey results by Michael Power, editor, PurchasingB2B, Julia Kuzeljevich, editor, Canadian Shipper, Emily Atkins, publisher/editor-in-chief, MM&D, and SCMA president and CEO, Cheryl Paradowski, along with commentary from top Canadian HR professionals and recruiters.
2015
REGISTER TODAY AT: www.scmanational.ca/annualsurvey
www.mmdonline.com | September/October 2015
19
MM&D
$122,400 MM&D
MM&D
MM&D
$109,450
500+
$97,309
100 to 499
SALARY BY COMPANY SIZE
$80,078
$95,003
$117,000
$86,511
$82,530
MM&D
$114,913
$99,250
$95,704
1 to 99
MM&D
$99,250
Up to $50 million
$51 m to $1 billion
More than $1 billion
REVENUE
EMPLOYEES
Also startling is the drop from 54 percent to 47 percent in the number who would move for more compensation. And down by five percent is the group who would switch jobs because of management’s lack of appreciation for supply chain roles. Job satisfaction is improving. We specifically asked about this, getting respondents to rate the important of factors like salary, work-life balance, support for professional development, benefits, opportunities for advancement and performance recognition, relations with co-workers, and corporate social responsiblity. In each of those areas, the satisfaction level increased from 2014 to 2015. Overall satisfaction climbed by a point from 88 to 89 percent.
Regional breakdown Looking at salaries, Western Canada once again tops the charts. MM&D’s top pay packets are in Manitoba/ Saskatchewan this year, edging Alberta out by less than $1,000 on the average. Across the board, it’s Alberta at the top with an average annual wage of $104,392. That’s 12.4 percent over the national mean.
Where you work Natural resources industries continue to deliver top dollar. The trend has continued over the past six years, and this year the average salary is $104,231. That’s another 12.3 percent premium over the national average. For MM&D readers service industry jobs are the
Top Industry: Natural Resources. For MM&D readers it’s Service.
SALARY BY BUSINESS TYPE BASE: All respondents Natural Resources Service Manufacturing Health Care Education Trade/Wholesale Public Administration (formerly Gov’t)
20
2011 Mean Salary
$98,500 $86,900 $75,400 $80,200 $74,300 $80,500 $80,500
2012 Mean Salary
2013 Mean Salary
2014 Mean Salary
2015 Mean Salary
2015 MM&D Salary
$101,967 $86,396 $77,750 $77,948 $74,597 $78,478 $77,968
$105,979 $84,777 $82,222 $83,404 $77,113 $79,693 $80,225
$101,023 $87,109 $80,810 $83,991 $80,493 $81,209 $82,341
$104,231 $91,889 $87,000 $90,996 $84,823 $83,178 $84,101
$96,400 $102,641 $96,000 N/A N/A $84,733 N/A
MM&D | September/October 2015
SALARY BY EDUCATION 2011 Mean Salary High School or less Trade/Technical diploma College diploma/ CEGEP Some University University degree/ MBA/Masters/ PhD (NET)
Best Education:
MBA $109,412
2012 Mean Salary
2013 Mean Salary
2014 Mean Salary
2015 Mean Salary
2015 MM&D Salary
$73,100 $77,500
$79,261 $83,556
$81,818 $86,573
$74,386 $84,152
$78,293 $91,614
$91,433 $90,000
Best Education MM&D:
$75,100
$80,333
$80,197
$79,805
$88,694
$117,429
(Not MBA)
$81,400 $98,525
$85,854 $89,299
$87,115 $93,688
$85,304 $93,640
$94,253 $95,431
$91,111 $110,401
Salaries this year have increased well. Supply chain workers are increasingly satisfied with their wages and their working conditions. It would appear that the long hangover from the great 2008 recession has finally dissipated. But with Canada in the throes of a technical recession as we head for 2016, we will be watching the potential effects in next year’s survey results. Will uncertainty once again creep into the job market and be reflected in stagnant salaries and satisfaction? We hope not. MM&D
$170,000
SALARY BY SUPPLY CHAIN BUDGET IN 2015
most lucrative, with an average of $102,641. That’s 10.7 percent better than the national average. And if we break out the industry categories grouped under service we find that transportation/warehousing jobs are the best of the bunch, with an average of $104,388, or 12.4 percent better than the overall mean.
Looking ahead
Masters
Budget sweetspot: $180,000
$20 to $99.9 million
$160,000
Overall Mean Salary:
$101,130 $140,000
MM&D Mean:
$175,000
$120,000
$100,000
$80,000
METHODOLOGY
www.mmdonline.com | September/October 2015
$60,000
Less than $1 million
$1 to 4.9 million
$5 to 19.9 million
$20 to 99.9 million
N/A
$111,003
$175,000
$101,130
$112,950
$95,638
$86,667
$104,413
$20,000
$89,494
$40,000
$89,871
In 2015 1,256 supply chain professionals completed the survey. Readers of MM&D, and sister publications Canadian Shipper and PurchasingB2B from across Canada, as well as members of the Supply Chain Management Association, were sent email invitations in the early summer this year. Responses were collected online between July 2 and 31, 2015. With this response rate the margin of error was plus or minus 2.6 percentage points, 19 times out of 20. Research services were provided by G. Bramm Research Inc.
$100 million or more
21
WORKFORCE
planning Finding the right workers for your DC, human and machine
There’s a lot of work done up front to plan as much as possible —Douglas Harrison
D
istribution centre managers know the challenges of managing a temporary or part-time workforce. Some of those challenges are unique to this “not-fulltime” subset of employees. “Many part-time employees want to be full-time, they want to have stability in their lives,” says Ryan Parry, a distribution centre manager for Toyota Canada at its Vancouver parts distribution centre, in Richmond, BC. “If people get 15 hours one week and 30 hours the next week, it’s hard to keep them engaged. It’s hard to keep people if they can find better jobs somewhere else.” Temporary workers face similar pressures. There aren’t any cure-alls for such challenges, but seasoned distribution centre managers have developed best practices and adopted solutions that can alleviate their effects.
Planning “There’s a lot of work done up front to plan as much as possible,” says Douglas Harrison, president and CEO of VersaCold Logistics Services. He tries to understand both customer demands and VersaCold’s inner workings to develop distribution centre game plans. For instance, the internal HR group looks closely at operations to determine variables like seasonal demand and temporary/contractual labour requirements. The company has also been investing heavily in computer systems to help with planning. “Without those investments, we’d be much more reactionary,” Harrison adds. “All this up-front work takes away many of the typical headaches.” Many, but not all. “Every day you deal with surprises,” he admits.
Early hiring for peak seasons Ian Mackenzie heads logistics and distribution for clothing company Kit and Ace. The professional logistician previously honed his skills as director of logistics for Best Buy Canada, where he faced the double challenges of leasing extra warehouse space and hiring seasonal staff to handle expected Christmas, holiday and Boxing Day sales volumes. 22
While dealing with pressure to arrange temporary holiday season warehouse space by July 1 of each year, he was hiring casual labour before then. He knows this move– bringing seasonal staff on board months before they’re needed–might make chief financial officers cringe. Companies “try to hold off on the investment in people,” he says, “which I get.” “If I needed 100 people for one facility, I would have my team in that market hiring as early as May,” Mackenzie recounts. “It might be two people a week. But we know by the fall, they’re skilled. They might even end up being team leads in charge of other folks we hire in September or October who may just be there to pick and pack shipments and nothing more high-level than that.” His explanation ran like this: “What you save in waiting until the last minute you pay for twice over in inefficiencies, lack of productivity, errors, turnover. Even though (hiring early) looked like more cost and overhead, it actually cost us less.”
Engagement Mackenzie admits, in a stroke of understatement: “Picking up boxes and putting them down for a living is not exciting work. How do you make staff feel part of the solution, and not just seasonal?” Mackenzie looks for such engagement when he visits distribution centres. Managers usually prepare a tour for him, but he likes to go “off-tour” to take a facility’s “temperature”. “I often go find the bulletin board, where staff congregates” near the change rooms or lunchroom, he explains. “I look for stuff stuck overtop of stuff, if there are faded, torn things, people have scribbled on some of them.” Mackenzie advises treating all staff as equally as possible. All staff attend floor meetings and team meetings. All staff participate in special events. Management MM&D | September/October 2015
Photo: Rawpixel, Shutterstock
By Luigi Benetton
would serve pancake breakfasts to all staff. If products were given away (for instance, a vendor wrote off backpacks), all staff got these. “We didn’t want to neglect people because they were only there for 90 days,” Mackenzie says. “Leaders must spend as much time coaching, mentoring, praising the work of part-time and temporary workers as they do for full-time people,” Parry adds. Parry also advises sharing performance metrics, not just for the team but for the company as a whole. Monthly sales volumes, forecasted volumes: “The only thing you can do is be incredibly honest with your staff as to why you need part-time labour. Let people really see and understand.”
Using agencies wisely “We set up long-term relationships with approved agencies across Canada,” Harrison says, where VersaCold may request workers once a week or several times a year. Tracy Clayson, managing partner of In Transit Personnel Inc, says getting employees job-ready takes knowledge of a client’s needs, plus time. By the time clients see employees, they have been recruited, screened, interviewed, had background checks, and undergone other processes that the client doesn’t need to undertake. For their part, VersaCold audits agencies, checks their workers’ compensation compliance, their training requirements. “We take a look at the quality of their labour,” Harrison says. “We look at their processes, their recruiting methods.” In turn, he expects agencies to understand VersaCold’s expectations. www.mmdonline.com | September/October 2015
“It’s a partnership, a marriage of sorts,” Clayson concurs. But if companies use part-time and temporary workers on a “knee-jerk” basis, quality control is absent and companies don’t measure the practices of the staffing company, “Then you’re taking risks,” Clayson says.
Consistent training To train new staff, some facilities use mentors, having new workers shadow seasoned workers during a workday. Mentorship can work, but without consistent training, companies can get varying results from new hires. “You need to ensure a person you hire in January gets the exact same training as somebody you hire in June,” Parry says.
Job sharing Job-sharing means switching people to different jobs week to week to relieve the tedium of continuously doing one task. One week they might pick, the next they could pack, and the following week they can load products onto trucks. Mackenzie notes many workers want to job-share. In some cases, they shifted tasks daily. The centre became more productive since people could switch from places that weren’t busy to places that were. “We actually hired fewer people as the workforce got more dynamic,” he recalls.
If I needed 100 people for one facility, I would have my team in that market as early as May —Ian Mackenzie
Using familiar technology “At Best Buy, you couldn’t bring your cell phone in to work,” Mackenzie recalls. He understood this policy, but he still questioned it as he watched new employees receive at least half a day’s training on handsets, RF readers and other specialized equipment. “Imagine the training curve on an iPhone app. You hand a 20-something a phone, they’d log in, figure it out in three minutes and they’re off working.” 23
Automation Certain entrepreneurs are striving to take automation to distribution centres, where robots haven’t traditionally thrived. They claim collaborative automation helps: facilities onboard temporary workers faster; keep staff engaged; and improve throughput of all workers. First, they need to overcome skepticism. “I’ve seen people throw a lot of money at automation because they think it will fix a broken process,” Parry says. “People build a good process. If you automate a broken process, you make mistakes for your customers faster. Unfortunately, that’s what many organizations do.” Parry also notes more mundane objections to the use of robots in distribution centres. “We deal with many thousands of customers, so packaging sizes are different, configurations are different,” he says. “That sometimes leads to complexity using automated equipment.” “It took a long time to program a traditional industrial robot to do one thing over and over again,” admits Eric Foellmer, manager of product marketing and marketing communications at Rethink Robotics. He ranks vision, mobility and the ability to handle variation as the top three criteria on customer wish lists when they check out Baxter, a robot built by Rethink Robotics. Shipping since 2013, the stationary Baxter roughly resembles the torso, arms and head (a video screen) of a person. Baxter can handle repetitive tasks like loading raw materials onto a line or packaging finished products for shipping.
Programming Configuration of a robot can cost about as much as the machine itself, thanks to the specialized skills involved. But makers of new generation robots insist non-technical staff can program their products. “The same person who is responsible for packing boxes or loading lines or filling orders is the same person who can train this robot,” says Foellmer. Simon Drexler, director of indoor industrial systems at Clearpath Robotics Inc, makes the same claim for the autonomous OTTO. Introduced at the 2015 RoboBusiness conference this Fall, OTTO is a one-foot-tall platform that holds one pallet. Behind its smooth sides, an electric motor turns the middle pair of OTTO’s six wheels. Whenever its human counterparts take a lunch or coffee break, “the vehicle has a spare moment so it goes to an auto-charge stand to recharge its batteries,” Drexler says. OTTO “learns” the layout of a distribution centre when a worker takes it for a tour of the centre. OTTO maps the layout as it travels, then transmits that layout to other OTTOs in the distribution centre’s fleet.
Adjusting to changes Few robots can handle sudden changes in their work environments the way people can, so distribution centres want robots that can quickly adapt to changing conditions. “Traditional industrial robots are put behind cages partly to protect the robot’s workspace from people,” Foellmer says. “People 24
do things like bump tables, move parts, knock things over inadvertently.” Rethink Robotics ships special decals it calls landmarks that workers can stick onto Baxter’s workstation. Baxter uses these landmarks to get its bearings. Should the workstation be moved, Baxter uses the landmarks to reorient itself to elements of its workstation without the need for reprogramming. Once a distribution centre gets rearranged in any way, taking one OTTO for a tour is all it takes to reorient it (as well as other OTTOs in the centre’s fleet). Software can interpret tasks from the company’s workforce management system and assign those tasks to OTTOs, sending them where they need to work with staff.
Safety Both Foellmer and Drexler state that it’s safe for collaborative robots to work next to people. OTTO’s sensors look 35 metres in front of it for obstacles and changes in the environment. Baxter works at slow, human speeds and is only capable of a light (five-pound) payload. “If it does make contact with a person next to it, it won’t injure the person,” Foellmer says.
Worker acceptance Robots like Baxter and OTTO sport various features that help them work with people. “If you’re doing something like mixed-case pallet picking, OTTO can lead the worker to the location of the products to be picked,” Drexler says, noting that finding an OTTO waiting to be loaded with instructions on one of its screens can accelerate a new employee’s orientation to a workplace. Baxter shows a “face” on its screen. This face shows eye expressions and head movements to indicate where the robot will go next.
Workers of the future As current workers leave distribution centres, they won’t be replaced by robots or other technologies, but by other human beings. Those people are increasingly likely to be millennials. Mackenzie notes millennials often seem distracted by devices, entertainment and constant stimulation. “Then put them in a warehouse and tell them to pick up cardboard boxes for eight hours,” he empathizes. “I’d go crazy.” The savvy distribution centre manager creates conditions where younger workers can succeed in their jobs. Harrison concedes millennials are a different group. “We learn to work with them as they want to be dealt with,” he says, but, “We try to blend so it’s not one program for millennials and another program for baby boomers, for example.” Millennials are one reason certain experts believe warehouse jobs must become less labour-intensive and more technologically driven. “(Younger workers) probably think it would be cool to be involved in robotics,” Clayson muses. “I don’t know many kids who say ‘I can’t wait to run a warehouse’ but they wouldn’t mind running drones for Amazon. That sounds cool.” MM&D MM&D | September/October 2015
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D Exploding! Busier than ever. We’re on fire!
26
espite the fact Canada is in a technical recession recruiters are scrambling to fill key managerial and executive positions across the supply chain. Pent-up demand and replacement due to moves and retirement are the key drivers. Following the 2008 recession and consolidation across multiple industries, many firms waited to fill open positions. And now they’re finally hiring. They may be blending positions and asking one individual to fill what was once three roles, but they’re ready for growth. As well, in today’s economic environment and competitive marketplace, key managers and executives stay with one firm just four to seven years rather than the 15- to 20-year cycle that was once common. “They’re more career-minded and looking further ahead—they’re not willing to wait to take that next step,” says Ross Reimer, president of Reimer Associates in Milton, Ontario, whose summer of 2015 was the busiest in years. “There is less loyalty, particularly as employees advance their careers and companies look out for their own bottom line and growth.” To grow in the near and distant future, employers are seeking exceptional individuals who will evolve into senior, managerial roles from their initial positions as inventory analysts and planners. “The succession planning now starts early on, with firms looking for the soft skills required to influence people and behaviour well before they’re promoted,” says Tom Pauls, managing director of SCL Search Consultants, based Mississauga, Ontario.
While the skills are generally transferable across industries—say from the chemical to automotive or pharmaceutical sectors—most employers still prefer candidates with a track record in their particular vertical, although it does vary and depends on the specific role. “Sometimes, it’s good to go beyond sectors to bring perspective,” says Pamela Ruebusch, CEO of TSI Group Inc, in Mississauga. “At times, employers are missing opportunities when they don’t bring people in from other industries who can have a significant, positive impact,” Reimer adds. Naturally, there are regional and sectoral variations, particularly in Alberta, where the hard-hit oil industry is having a ripple effect, but in other locations—southern Ontario, for example—opportunities abound around automotive and construction. As Tracy Clayson, managing partner at Mississaugabased In Transit Personnel, sees it, the volume of components and materials required to feed southern Ontario auto plants and the Greater Toronto area’s condo boom is creating a need from the bottom up. Evidently there is a continuing need for talent with supply chain knowledge and competencies, although there is also a heightened focus on specialized process and analytical skills. On-the-job experience is still crucial and logistics professionals continue to back that up with formal education and training via certification and accreditation with professional associations and supply-chain oriented programs at post-secondary institutions such as University of Windsor, McGill MM&D | September/October 2015
Photo: Piotr Marcinski, Shutterstock
Making the most of a job search, whether you’re hiring or hunting
University, Wilfred Laurier University and Humber College. Experience, hard skills and the APICS Certified in Production and Inventory Management (CPIM) program or Certified Supply Chain Professional (CSCP) program, CITT’s CITT-Certified Logistics Professional (CCLP) designation, and SCMA’s Supply Chain Management Professional (SCMP) designation all matter, but how candidates work is equally important. In today’s competitive environment, where everyone must accomplish far more with much less, project management skills, experience and training as well as one’s ability to lead and motivate team members are of paramount importance. Candidates can certainly talk about how they handled a particular scenario, but behavioural tools will also provide the facts without the personal spin. The more difficult the job will be to fill, the more likely employers are to outsource the search. Across the board, recruiters note that the longer the list of must-haves and the more specific and unusual the job requirements—a bilingual inventory analyst who has SAP experience and has managed 5,000+ SKUs, for example—the greater the challenge. “If filling that particular role were easy, the companies would be doing it themselves,” says Pauls. When someone tells Ruebusch to “go find a director of sales”, she often creates highly detailed, updated job descriptions to clarify the client’s needs and ensure there is a compelling story that will attract candidates who hadn’t been considering a move. It must speak to the firm’s values and include who the candidate would report to, goals for the next six to 12 months and the top three to five targets. “The job description has to be a living document and in many cases, they haven’t updated it since they last hired for that role,” says Ruebusch. “Whether we’re beefing it up or starting from scratch, I’d rather spend the time clarifying the client’s needs up front.” Sales and business development is always a challenge and as Canadians face economic uncertainty, maintaining the status quo, let alone achieving growth, will be harder than ever. Many sales professionals—lots of whom fell into the role—lack the formal training that would hone their skills and abilities and increase their understanding of the sales position and its requirements. Only the biggest firms provide either in-house or third-party salesspecific training, and sales professionals who commit to self-improvement are advised to ensure the providers are credible. Any sales person who has taken the long view and invested significant time and money in the best programs would be sure to get Reimer’s attention. “We know who and where they are, but the highly competent sales people are so rare, the successful ones are being very well looked after,” he says. Once the candidates with the necessary skills and experience have been identified, it’s important to focus on the cultural fit. For example, Reimer would be careful about recommending a candidate whose experience is primarily with publicly-held multinationals for a role with a smaller, entrepreneurial firm, and vice-versa. A firm that requires a home-based vice-president in Western Canada needs to be sure the winning candidate is self-directed, highly motivated and comfortable with walking across the hall to work day after day. “In sales, we’re seeing a real move to home offices because logistically it makes more sense to be on the road to a customer or prospect than driving into the office just to make an appearance,” says Reimer, who makes sure the candidates who make big claims can explain www.mmdonline.com | September/October 2015
exactly what they did to achieve those results. Hiring is costly and time consuming, but since terminating a bad hire can be even more expensive and disruptive, due diligence is as thorough as ever, with four to six interviews, including panel sessions, and multiple reference and background checks. In fact, TSI Group reports that the number of clients requiring such checks has quadrupled over the past few years. “Turnover is so costly and it doesn’t look good on anybody—the recruiter, the hire or the company,” says Reimer. A candidate’s formal education and job experience are frequently verified and background checks typically include criminal and credit. Although issues are very rare, candidates will generally forewarn the recruiters and can often explain a minor past incident. So why bother with such checks? It’s better to know up front about a personal bankruptcy or criminal record if that employee will need a personal credit card when travelling or have to visit US clients. More than ever, background checks include references that go well beyond conversations with the “boss” to include colleagues, direct reports and customers. According to Ruebusch, employers appreciate the different points of view that come with the complete 360-degree perspective. She will pay particular attention if a customer’s comments are markedly different from a colleague’s. Panel interviews are still common. However, a conversation with four or more interviewers may illustrate how the candidate will react under stress, while diluting the interview to the point interviewers actually see less of the person. Behavioural profiles remain important because, as Ruebusch points out, the interview is unlikely to reveal the candidate’s authentic self and the “best interview is not always the best hire”. Technology certainly plays a role in both the search and hiring process, but recruiters still rely most on their extended, carefully cultivated personal networks and the industry associations that help grow and maintain them. “Individuals are more inclined to consider an opportunity that I present if they’ve come to know and trust me over time,” says Reimer. Certainly, established relationships and face-to-face interaction remain of paramount importance, but tools such as LinkedIn, Twitter and Facebook, as well as Monster and Workopolis, can extend a recruiter’s reach. Pauls, who finds up to 40 percent of his candidates through LinkedIn, notes that not even Skype can replace the connections that are made and the non-verbal cues that are revealed through real-life contact. Finally, with Canada in a technical recession, even those who are perfectly content in their current positions may be looking for work six to 12 months from now. That’s exactly why recruiters and those they recruit need to treat every bridge they’ve ever built with care and consideration. Be open to opportunities. See what’s out there, gather competitive intelligence and practice the interview process. Pauls fully supports and even encourages that approach and is baffled at how often candidates express interest, go through phone and face-to-face interviews with the recruiter, then ignore email, text and phone attempts to set up the next interview with the employer. “Respond. Don’t just disappear, because a good recruiter is like a good lawyer–at some point you are likely to need us,” says Pauls. MM&D 27
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VENDOR MANAGED INVENTORY
Helps Canadian Distributors improve customer service, retain existing business and grow market share
By Eric Allais
n recent years vendor managed inventory, or VMI, has grown as a way for manufacturers, big box retailers and others to better manage stock volumes while reducing their operating costs. Suppliers venturing into the VMI space are doing so both out of necessity and as a way to capture a greater share of the market as more and more manufacturers shift to this inventory model. Two examples are Red-L Distributors, a hose, fitting and lubricant distributor, and EB Horsman & Son, an electrical distributor, both with locations in Alberta and British Columbia. Both companies view their VMI services as significant value-adds to their already high levels of customer service. Having implemented VMI programs as part of their WMS rollouts in the last five years, these companies have enjoyed significant improvements in order speed, accuracy and customer service. As the name suggests, VMI makes the supplier of the goods (often the manufacturer) responsible for optimizing the inventory ‘owned’ by a customer. To understand how this is done in practice, let’s take a look at the three most common forms of VMI deployment in use today.
Traditional VMI In traditional VMI models, a salesperson visits the customer, takes inventory, fills out a form detailing what needs to be ordered, and emails or faxes their orders back to the home sales office, where a member of the inside sales team keys in the actual order. In some cases the customers themselves send in their orders. Both are slow and prone to human error due to poor handwriting, incorrect part numbers or clerical mistakes made while entering the order. This traditional model was especially problematic for EB Horsman and Red-L, because many of their customers were located in remote areas. That meant increased travel time for their sales teams, which led to replenishment cycles that were often delayed by two or more days. www.mmdonline.com | September/October 2015
WMS-run VMI Robust warehouse management systems offer VMI modules that greatly streamline cumbersome paperbased processes. Using handheld devices, smart phones, or other technology, sales people (or the customers themselves) are able to re-order product simply by scanning a barcode. These orders are immediately relayed via email or digital network back to the WMS where the items and quantities are validated. Other value adds like custom barcode labeling with the customer part number, description, pictures of the item, etc are commonly managed and printed by the WMS. The end result is faster and more accurate reordering of product with lower cost for the vendor.
Customer-managed VMI More and more customers simply want the benefits of VMI without needing a visit from a salesperson. In these cases they want their vendors to supply the technology to re-order product quickly and easily. With this in mind, EB Horsman’s VMI “program” gives their customers the option of having an EB Horsman sales rep manage their inventory or the ability to manage it themselves. In the latter case, the customers are responsible for the creation and transmission of their orders with an interim review step by EB Horsman staff to make any additions, corrections, etc., and then confirm the order. EB Horsman recently launched its first mobile warehouse using the VMI module to record on-site activity in a remote industrial setting. “Cost control and recording costs at the billing level were very important to our customer,” said Roy Bragg, vice president of operations at EB Horsman. “The onsite trailer allows us to have over 100 items available on site and record and send inventory to multiple jobs within the site, which is reported or billed to those specific jobs. All product entry is done by the customer on site. In conjunction with our ERP, Min Max levels are used 29
Photo: PDerek Hatfield, Shutterstock
I
to capture replenishment for the stock which is then shipped to the trailer.”
Saving time, effort and money
higher likelihood of human error. Even with careful attention to detail, errors due to data entry mistakes and poor handwriting can and do happen. These mistakes can be costly to fix, and damage a hard-won reputation. Barcode labels and scanners eliminate many of these risks and make incorrect orders virtually nonexistent. McNally concurred, saying, “It’s made huge improvements in our order accuracy.”
Both the customer-managed VMI and the WMS-run VMI make replenishment much more efficient and save a huge amount of time. This is the largest benefit to customers and distributors by far. “If you look at typical manufacturers, industrial customers, factories, or service centers, they usually have anywhere from one to two hun- Getting in front of the customer dred items being used daily, weekly or monthly,” said Bragg. “To have Finally, let’s look at how running VMI through a WMS can improve these items on hand at all times reduces the workload for the customer’s customer service. floor staff and purchasing departments, gives them time to concentrate “Our market is extremely competitive, and seeing someone on a on high-value and critical inventory, and ensures that the jobs are regular basis keeps our business relationship strong,” McNally said. done on time. Simply put, it eliminates all of the paperwork and “Since customer service reps spend less time handling each individual procurement time spent on repetitive items.” replenishment order, they can visit their customers more often, advise “As customers experience this freedom, they are adding items to them of new specials and ordering opportunities, and handle any of their VMI lists and improving service levels to their customers,” their problems or concerns on a more regular basis. Red-L’s customers continued Bragg. “In today’s market, customer service and timely are happy because the VMI system reduces their workloads. It’s a delivery of goods is the edge that will produce repeat orders and help win-win situation for all concerned.” If customers want to have greater control over inventory manageyour company gain market share. Our goal is to be part of our customers’ success by extending our operational excellence and technical ment, setting them up to fulfill orders is extremely simple. EB Horsman capabilities to them.” provides this capability to its customers directly to improve re-ordering “We immediately recognized the benefits of the system in time efficiency. “We were particularly impressed with the ability to customize our savings, accuracy and overall effectiveness,” added Sabina McNally, IT assistant and training coordinator at Red-L. “So we knew that we VMI to support VMI-via-email or WIFI using a mobile device, which should move forward and invest in the technology.” Since many of Red-L’s customers are maintenance shops, “Training time for staff is minimal. If new VMI users are already plants and factories located in remote areas, the sales team comfortable interacting with their WMS then I only need to had difficulty making regular trips to check inventory; spend five minutes on the phone with them to bring them this led to longer wait times between replenishment cycles. up to speed,” Since installing the VMI module in its WMS, those times –SABINA MCNALLY, IT ASSISTANT AND TRAINING COORDINATOR AT RED-L have dropped dramatically. Salespeople now simply need to open the order on their handheld devices, scan the vendor’s merchandise and send the orders back to home base. The dramatically simplifies deployment,” Bragg explained. “This can save parts will be picked and sent out the door even before the salesperson on costs for us the distributor but more importantly the customer. makes it to their next customer site. Red-L estimates that its time We’re very proud to be one of the first electrical distributors to give our customers the service level that can be achieved using real-time spent on replenishment has decreased by 80 percent. A well-run VMI program also reduces the workload for customers inventory in a wholesale customer environment.” The point is, VMI modules are highly customizable, so exact prosince they don’t have to spend time managing inventory. Red-L’s largest customer has twelve bins optimized specifically for VMI. The cesses can be tweaked depending on the business practices at an Red-L salesperson simply visits once a week, scans the bins, and the individual warehouse and at customer sites. The program can be order is processed through standing purchase orders.The customers tailored to meet specific needs. are confident the inventory they need will be there when they need “We started using the VMI module about four years ago with 10 it and no one wastes time worrying about order fulfilment. Costs are customers, and now I’d say we have about 40 using it on a regular saved on both sides. basis,” said McNally. “We are able to stay on top of market trends in Are these VMI systems difficult to use? McNally doesn’t think so. parts usage and are able to grow alongside our customers’ business “Training time for staff is minimal. If new VMI users are already as the relationship grows stronger.” comfortable interacting with their WMS then I only need to spend Bragg adds, “Cost control, order accuracy and warehouse effifive minutes on the phone with them to bring them up to speed,” ciency are part of our core strategy, operational excellence, and she said. always at the top of our hit list. VMI has and is helping us service many of our customers in various markets and geographic locaThe right order every time tions. It sets us up for success and market share gains—that’s As mentioned before, the traditional VMI model introduces a much priceless.” MM&D Eric Allais, president and CEO of Washington-based PathGuide Technologies, Inc, has over 30 years of experience in marketing, product management and sector analysis in the automated data collection industry, including warehouse management practices in wholesale distribution. 30
MM&D | September/October 2015
sprint A WELL-PLANNED
Mercedes-Benz Sprinter plant streamlines production
By MM&D Staff
The carsets arrive just in time, and are unloaded automatically.
32
I
t’s really quiet in the Mercedes-Benz Sprinter assembly hall at Ludwigsfelde, Germany, south of Berlin. Unexpectedly quiet for a place that builds more than 200 large vans every single day. Previously there were countless wire baskets, shelves and carriers full of material all around the assembly lines, and employees had to pick the correct parts for each van themselves. Now, the scene is dominated by “driverless transport trucks”. These driverless trucks autonomously supply assembly personnel on the line with prepared goods baskets from the logistics and picking areas. “The Mercedes-Benz Ludwigsfelde plant is the benchmark when it comes to intelligent vehicle production. It’s what future plants should look like: streamlined,
sophisticated processes; pinpoint, highly efficient logistics; and faultless assembly,” says Sebastian Streuff, manager of the Mercedes-Benz Ludwigsfelde plant. “In the last two-and-a-half years, the plant has taken its future into its own hands with its highly qualified and motivated workforce. Today it is a shining example of the use of innovative production systems in the Mercedes-Benz Vans worldwide production network.” With around 2,000 employees, the Mercedes-Benz Ludwigsfelde plant is one of the largest industrial employers in Brandenburg, and Daimler’s third-largest van assembly plant worldwide. Ludwigsfelde is also the only European production site at which the open model variants of the Mercedes-Benz Sprinter “world van” (pickups and chassis cabs) are produced for a
MM&D | September/October 2015
The carsets arrive just in time, and are unloaded automatically
wide range of vehicle bodies. In 2014, the plant had a successful year and increased its output by 13 percent to over 48,200 units. And this positive trend is continuing in 2015, with capacity utilization remaining at a very high level. Since 1991 over 600,000 vehicles have left this assembly plant, which covers a total area of 540,000 square meters (5.8 million sqf) with a production area of 182,000 square meters (1.96 million sqf). This total goes up by over 200 vans per day in a two-shift operation—with the vehicles being exported to around 130 countries. The plant plays a key role in the Mercedes-Benz Vans global production network. Since the end of 2012 the Ludwigsfelde plant has taken major strides forward in terms of efficiency throughout the entire area of vehicle assembly. One main objective was to bring about a clear improvement in the interface and collaboration between assembly and logistics. Experts from the assembly, logistics and production planning departments first examined the entire process from the supplier to the point at which a part is installed on the line. At the same time, they also worked on establishing high-quality, robust and, above all, streamlined processes between assembly and logistics. One example of this is door pre-assembly: while previously there were carriers practically nose-to-tail all the way along the line, and the employees had to locate, fetch and install the parts themselves, today there are just a few tool carts and data terminals. Everything else an assembler needs to fit a side door is presented to the correct vehicle on the line just in sequence and just in time by a driverless transport truck in what is known as “carsets”.
Complexity Here the complexity between assembly and logistics is extremely high: on the production line the employees assemble the Sprinter in over 350 different combinations, depending on wheelbase, weight, motorization or colour. Consequently there is a different sequence for each vehicle, and respectively each Sprinter needs to have different components fitted. Thanks to sophisticated IT networking, exactly the right parts for each Sprinter are prepared in a carset cart and delivered to the assembly line. The driverless transport truck even takes care of unloading completely automatically. After arrival, the carsets are positioned directly to the line, all the worker has to do is take the correct parts truck, attach it to the pendant and start installing the parts. There are clear advantages: improved workstation ergonomics, shorter walking distances, direct access to the material, more space on the line and a reduced accident risk, thanks to the absence of forklifts. www.mmdonline.com | September/October 2015
Michael Bauer, plant manager in Ludwigsfelde until the end of May 2015 and now responsible for worldwide assembly planning at Mercedes-Benz Passenger Cars, said: “We recognized the necessity of a very flexible factory at an early stage, and continuously optimized production processes. In so doing we ensured close coordination between management, the works council and our employees. Only in this way it was possible to take such huge strides forward in terms of efficiency, quality and added value here at the site in such a short time. That is our recipe for success here in Ludwigsfelde.” Driverless transport trucks, computer-assisted picking and ergonomic workstations: the Sprinter plant in Ludwigsfelde impressively highlights what a sophisticated, highly efficient and worker-friendly production facility can look like today. This is also highlighted by a comparison of key parameters since the start of the “Assembly and logistics interface optimization” project at the end of 2012: • Far less space is now taken up by material on the assembly line; • The workstations on the assembly line are even more ergonomic, there are far fewer forklifts, and noise emissions are noticeably lower; • Driverless transport trucks are successfully established at the assembly plant and have become an integral part of the production process; • Fully autonomous material supply in assembly subsections; • Production time is much shorter and capacity utilization on the assembly line is correspondingly higher; • Quality level in the production achieved an all-time high. The high level of investment in Ludwigsfelde shows how continuous further development of the site has paid dividends. In October 2014 Mercedes-Benz Vans defined the long-term strategy for production of the Sprinter successor model, which will be produced in Germany. Mercedes-Benz Vans will be investing €150 million (C$225 million) in Ludwigsfelde alone to modernize the body shop, paint shop and assembly line. MM&D
An empty carset reutns to be refilled with battery pre-assemblies.
33
LEARNING CURVE
I Tracy Clayson
Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In Transit Personnel. tracy@in-transit.com 34
n August, an ex-Amazon employee triggered a flurry of responses, reactions and news stories when she accused the company of having abysmal working conditions. This is an important story for our industry to hear, as consumer behavior continues to take on increased significance and brand loyalty can be rocked by any number of unexpected marketing missteps. This isn’t the first exposé of Amazon’s business practices. Back in 2011, warehouse workers in Pennsylvania complained of 100 degree (F) temperatures in distribution centres run without air conditioning. Some workers said in a given shift, they had to walk more than 15 miles around these overheated warehouses. Many complained of heat stroke. Amazon, without a retail presence, has over the last decade been encroaching on the business of the world’s largest retailer, Walmart. In July, Amazon overtook Walmart as the most valuable retailer in the United
States, by offering online ordering, attractive pricing, convenient delivery and bundled add-on item promotions with each purchase. Of course, as any leader in retail distribution can attest, ensuring merchandise is optimally sourced, shelves are stocked and customers are always happy, is no small feat. Companies also require strong performers who have passion, creativity and commitment to get the job done. But company culture is not only about employee recognition, a healthy workplace, daycares and dog parks. It’s about giving employees the chance to use all their talents to achieve results. To equate career success to how professional ball teams operate, winning teams are generally led by a coach who demands outstanding performance from the players and, while the work is hard and the boss may sometimes be overly stern or demanding, the team wins because it is led and inspired to victory. In Jim Collins’ 2001 book Good to Great, he argued that successful companies are built by strong teams and an enduring corporate culture. These teams engage
the total working group, in contrast with an earlier era dominated by charismatic leaders such as General Electric’s Jack Welch and Chrysler’s Lee Iacocca. While the theory of “the whole is greater than the sum of its parts” may apply, there still needs to be a founder or senior person at the helm creating an idea, a product and a solution while delegating other tasks to teams. Today, a company’s reputation (from an employee’s perspective) isn’t established by leadership on GlassDoor and other ‘rate your employer’-type sites. Almost all of this fodder comes from disgruntled employees venting about their unhappy work lives and those trying to provide useful information to prospective applicants. They will be much more successful if they judge a prospective employer by reputation and their own investigations. All companies should have a code of ethics, policies around fair and equal treatment and employee engagement programs. Growing companies with rapidly changing business offerings and cutting-edge product development should be good at juggling the HR functions of clearly stated expectations, regular reviews, 360 evaluations and professional development and mentoring programs. For his part, Amazon CEO Jeff Bezos responded quickly to the more recent New York Times story, encouraging any employee unhappy with his/her working conditions to send an email to Amazon HR or to him personally. Time will tell if this is enough to turn the PR war in his favour. After all, even today, speaking up to one’s boss about job dissatisfaction can sometimes mean the end of that job. In an employees’ market, companies must be positioned to have their best employees endorse their workplace and for leadership to defend against unhappy employees who may want to express their frustrations publicly. A company’s reputation can take a severe hit from negativity—whether legitimate or not—and discontented workers have more than a few options. Social media, GlassDoor and many other outlets provide a safe haven to anonymously vent. Legal cases are constantly in play between businesses and employees who, allegedly, aren’t receiving fair treatment. So if your company runs well and employees are being treated fairly it still pays to make sure that satisfaction is running high. Otherwise, once a complaint hits the public’s ears you will be opening the door and entering the court of public opinion—and in that court it’s not always a fair fight. MM&D MM&D | September/October 2015
Photo: Corepics VOF, Shutterstock
Maintaining your reputation
MATERIALS HANDLING
The basics of automation W
arehouse automation has been around for a long time, but a number of logistics and market trends have increased demand for it in recent years. Probably the most notable trend is the continuing decline in shippable order size, combined with decreases in quantity per order line. This results in increasing pressure to ship less-than-case sized orders. While this has been most notable in order fulfillment, increasing pressure to automate is found in all warehouse functions. In this environment, it is worthwhile to go right back to basic first principles and consider what your options are in each warehouse department. We will cover it in a couple of columns because it is too large a topic for a single column. Initially we will focus on the inbound side from receiving to putaway into storage. A simple process can be used to categorize types of warehouse or department options by classifying the different types of basic material flows. One simple way of summarizing these is: a) Unit load (usually pallet) in/unit load out; b) Unit load (usually pallet) in/piece or broken case (less-than-full-case) out; c) Piece or full-case in/piece out; d) Piece or full-case in/broken case out; e) Less-than-full-case in/less-than-full-case out. Starting at the beginning, all goods enter the warehouse via a receiving process. The receiving process for full cases handles large or small quantities. 1 For Unit Load Sized Quantities Received per SKU – Automation candidates include specialized non-pallet attachments, along with driverless unloading vehicle technology like AGVs. In this case additional automation equipment includes; pallet inverters; load transfer stations and palletizing equipment (most commonly from manufacturing). 2 For Smaller Full Case Quantities per received SKU – Automation equipment includes extensible conveyors. For receiving less-than-full-case quantities, often a two-stage receiving process is used and the second stage maybe combined with putaway for some types of automation. Note, as well, that automation also involves the WMS/ WCS control system. A good example at this phase is the handling of backordered items, for which the WMS should control special routing. This bypasses conventional putaway into storage, and transfers the items directly to packing and shipping. www.mmdonline.com | September/October 2015
From receiving, the next stage in a traditional warehouse is putaway into storage. This is often integrated with material flow technologies, through the use of pick-up and dispatch or drop-off locations to integrate two automated systems. In some automated technologies (eg AS/RS) the same equipment is also used for order picking. In these instances, the warehouse equipment can be divided into two basic classes: a) Take the picker to the stock, or b) take the stock to the picker. An example of a) is a lift truck. An example of b) is a carousel. Basic material flow (for horizontal and vertical transportation) automation technologies includes: AGVs and SGVs; conveyors; lifts; and, specialized overhead equipment, like monorails. For putaway (into storage) automation technologies include: 1 For Unit Loads – AS/RS; orbital shuttle systems; specialized AGVs like vision guided vehicle (VGV), which are also called vision-guided automated lift trucks (ALT); and, dynamic storage systems like pallet flow and pushback racking systems. There are some hybrid combinations of storage and handling systems that use modifications to traditional equipment to increase productivity, but do not fit the traditional definition of automation. Properly designed, these may permit an interim stage to increase productivity before full automation. An example is a system that permits two pallets to be put away and stored at the same time. This uses conventional lifttruck equipment with a specialized double pallet-handling attachment. The next stage in the automation process is to use a full ‘vision guided vehicle’ for both putaway and order selection. 2 For Cases, Pieces or Less-than-Full cases – Miniload AS/RS; horizontal carousel; vertical carousel; and, VLM (vertical lift module). Specialized automation applications include systems like hanging garment systems, AutoStore from Swisslog and the Amazon Kiva Robots. 4 For automated storage systems like dynamic storage systems, we will cover these more fully in the next column. Traditionally automation in the warehouse has concentrated more on the order selection side of the business because the greater use of labour creates more opportunities for payback. There are also opportunities in other warehouse departments. MM&D
Dave Luton
Dave Luton is a consultant in the Greater Toronto Area. dluton@cogeco.ca. 35
MAXIMIZE IT
The new ROI Revenue, operations and innovation
R Kevin Squires
unning a good IT organization is all about consistency and maintaining a stable, robust platform; “keeping the lights on.” Making sure servers are running at an optimal level and that downtime is kept at an absolute minimum. Fault tolerance, fail over systems, and a plethora of other tools used to ensure your IT systems are up and running and people are productive. Mean Time Between Failure (MTBF) percentages are all the rage and make up the executive summary slides that prove IT is doing their job—and doing it well. Right? Well, operations IS very important and does add inherent value to an organization. Unfortunately, that is the extent of the role that IT plays in a lot of companies.
IT as a competitive weapon
Kevin Squires is vice-president, business technology for the Econo-Rack Group of companies (Konstant, RediRack, Econo-Rack, Technirack) 36
However, in almost all top companies, IT is seen as much, much more. It is a competitive weapon that, if used properly, can be a key contributor to the bottom line, aggressively drive revenue and work towards creating a sustainable competitive advantage. I kid you not. The main difference is encapsulated in one word: innovation. It’s using IT to innovate by creating new ways of selling effectively, selling in multiple channels, creating unique customer experiences and ensuring they come first. Running a good IT organization is all about maintaining a stable and robust platform. Running a great IT organization starts with a great operational IT environment then looks at ways of helping to drive business growth and increase revenue through relentless innovation using technology. Sound easy? It can be. But, the critical element to this transition in how IT is viewed by the organization comes down to leadership. You need the right IT leader and you need to have organizational support that views IT as a business contributor and not just someone you call when your email won’t print. I have seen too many organizations realize they needed to use IT to grow the business through innovation and customer-centric development but fail miserably because they tried to jump right into this new paradigm using the same leaders, processes and approaches that made them a good operational
IT shop. Yes, this can be done, but it is very rare and almost always falls short of what potentially could have been. Why? Good question. Successful operational IT leaders are successful for a reason—they have that unique, detail-oriented mindset that is required to ensure the organization’s IT resources are all working in harmony to create a stable platform for employees to do their jobs effectively. Very important stuff that is focused on the “now.” The same can be said for an innovative IT leader—it requires a certain skill set to be successful—creativity coupled with a strong business acumen that is ultimately aimed at generating revenue. So, simply put, operational IT is about maintaining the known of today, while innovative IT is about discovering the opportunities of tomorrow. So, which approach is best? That’s easy—you need both. If your network is down and your telephones aren’t working, does it matter how innovative you are at that moment? Nope. Establishing an IT shop that goes beyond the traditional service-based approach seen in most organizations requires a strong operational backbone before it can even get off the ground. Both are important. In the end, it boils down to leadership. Executive leadership that is capable of viewing IT differently— viewing IT as a “contributor” to the business and treating them as if they were any another profit-generating division with a seat at the big table. And, as I have already mentioned, an IT leader who possesses an innovative mindset. Easy to say, but this kind of IT leader is very hard to come by outside of your large Fortune 500 companies. They are typically snatched up quickly and don’t come cheap. The focus of IT should be on the operations and innovation. If you do that successfully and with the right leadership, revenue will soon follow. In today’s market where new, viable competition can spring up almost overnight, innovation is no longer something that only the big companies do. It is something every company must do to survive and grow. So, if your organization only views IT as a way to print emails and share services, then you better start thinking about the new ROI because your competition most likely already is. MM&D
MM&D | September/October 2015
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LEADING EDGE
Quitting the boss Y Ross Reimer
ou don’t quit your company. You quit your boss. One thing has become crystal clear throughout my many years in the recruitment profession: people don’t quit their company. No, they quit their boss. It’s almost always personal—a decision based on the specific behaviours of the individual they report to. As a recruiter, I meet with dozens of people every month to discuss positions we have available on behalf of our clients. The vast majority of these candidates are currently working, and I’m the one who initiates the first meeting, since I’m always looking for topnotch talent. Why do they agree to meet with me? In some cases they’re highly focused on the progression of their career, and don’t currently see a clear pathway in their present company. But much more often, the people I meet with are significantly dissatisfied with the person they report to. In many cases, the companies they’re looking to flee enjoy good reputations, and most people would think of them as great places to work. Unfortunately, some of the managers in these “great” organizations actually drive people away. My experience in our industry tells me there are three behaviours that compel employees to seek change: a boss who is unfair, a boss who is untrustworthy, or a boss who lays out impossible expectations. Let’s explore each of these.
Unfairness
Ross Reimer has over 30 years of experience in transportation/ supply chain. For the last 15 years he has been President of Reimer Associates, a recruitment firm within supply chain. rreimer@reimer.ca 38
Employees expect to be treated fairly. People who look for alternate employment as a result of their manager’s unfairness do so because of a consistent pattern, not just a single isolated incident. I could share hundreds of examples with you, some of which are pretty outrageous, and all of which reflect a basic lack of respect and fairness. When people see co-workers receiving the best assignments, for example, or getting insider information from management, or being allowed to do things that would trigger reprimands for others, they become disillusioned. Even in a complex business with significant demands on employees for productivity and profits, a boss can stop before making a decision and first ask: “What’s the fair thing to do in this situation?” Fairness goes a long way with employees, and unfairness is a key reason people finally decide to move on.
been hired with a base salary plus a commission based on her performance. If she met certain targets, she was promised that commissions would flow as per the plan. So, she met her targets, and the commission cheques came through as she had expected—for a few months. Suddenly, however, the owner decided this particular salesperson was earning too much, so he unilaterally changed the game and trimmed the commission payments. Within just a few days of being lied to, this employee—a top performer—was on the phone looking for a boss she could truly trust. People become extremely uneasy when they feel the boss’s word and deed can’t be trusted. Our workplaces present enough unavoidable pressures and difficulties as it is. We certainly don’t need a basic lack of trust to poison this working environment.
Impossible expectations In today’s highly competitive marketplace we all expect our jobs to require important goals and targets. That said, it simply crushes the human spirit when expectations are impossible to achieve. Unfortunately, some bosses believe this is how you get the most from people. They think they need to “crack the whip” and act as though their very command makes the impossible possible. This is absolutely incorrect and drives people away from the organizationand towards new– and more reasonable—opportunities. People are discouraged if they come to work every day and face unattainable goals, along with an unbending boss who is not prepared to clear away legitimate roadblocks or even understand that such obstacles can exist. Many a job search is born from these impossible conditions. The good news? Many very satisfied individuals work in the transportation and supply chain industry. Often I meet people who speak positively about their work environments. They tell me their boss treats them fairly and honestly and lays out attainable goals, making for an encouraging workplace, not a discouraging one. Clearly, this strategy produces not only a low turnover rate and highly loyal employees, but it’s also the best pathway towards consistent productivity and long-term profitability. MM&D
Lack of trust I recently met with a sales representative who had MM&D | September/October 2015
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