If you visualize a business as a complex chain of processes, comprising all the activities essential to supply, manufacture and distribution, then you’ve entered the intellectual arena of the supply chain logistician. In the traditional sense of the word, logistics is hardly a new activity. Implementing best practices of logistics, however, is rapidly emerging as one of the most important operational areas of modern business management. When combined with its associated technologies, supply chain logistics has a demonstrated ability to lower costs and provide tangible gains in productivity.
ENTER THE FAST LANE
By Jeff Keller
As participants in the global economy, Canadian companies source parts and materials from around the world. At the same time, buyers demand customized products delivered in short time frames. The pressure is on producers to have rapid production with long, efficient supply chains.
The adoption – or non-adoption – of supply chain logistics is destined to have enormous consequences for individual businesses, and for the Canadian economy as a whole.
“Competition in today’s markets is generally led by advances in industrial technology, increased globalization, and tremendous improvements in information availability,” says Monique Kack-North, chairperson for industry association Supply Chain & Logistics Canada (SCL) and vice president of Logistics at Grand & Toy. “To that end, companies are focused on how they can drive competitive advantage through their supply chains.”
In 2001, SCL formed a partnership with Industry Canada, along with luminaries from industry, academia and government, to create the Lean Logistics Technology roadmap (LLTRM).
The resulting document is a forecasting tool, explains Phillipe Richer, Industry Canada’s Supply Chain Research project manager. The LLTRM serves to identify the critical science, technology and research necessary for Canadian enterprises to gain strategic competitive advantage through supply chain logistics, and to develop corollary action plans for industry, academia and government.
The Roadmap, says Mr. Richer, identified four important logistics issues for Canadian businesses. One issue, the scarcity of logistics-trained personnel, engendered a $1.1-mil-lion study, conducted by eight associations including SCL, along with the education sector.
That study’s mandate was to define future skill requirements and industry needs, and to encourage the academic support required to disseminate logistical skills.
Efficient border crossing in the wake of 9/11 was also identified as an important issue. Given the United States’ focus on security, Canadian companies must be proactive in their response to initiatives defined by the Smart Border Declaration of December 2001.
A third concern, Radio Frequency Identification (RFID) technology, inspired a study jointly undertaken by SCL and Industry Canada. The burgeoning use of transponder tags is of enormous significance. RFID is already being used – and insisted upon – by Wal-Mart and the U.S. Department of Defense.
The fourth issue, the subject of the second phase of the SCL/Indus-try Canada study, is titled “Competitiveness via Supply Chain Integration Technology.” This study will investigate the integration of supply chain technologies among business partners, their level of collaboration by electronic means, and the efficiency with which information is exchanged along the supply chain.
According to Mr. Richer, some 630,000 Canadians are employed at various levels of the supply chain. “Logistics activity in Canada,” he claims, “is estimated at $125 billion.
Some $50 billion of that is from logistics service providers, while the other $75 billion is driven by the logistics activities of supply chain users, such as manufacturers, retailers and wholesalers.”
Overall in North America, says Mr. Richer, it is estimated that small-and medium-sized enterprises that deploy supply chain technology will enjoy a 5 per cent to 25 per cent decrease in supply chain costs, and a 15 per cent to 40 per cent increase in quality and time-to-market, over companies that fail to make the appropriate investments.
Given the size and importance of the sector, and the benefits of logistics, Mr. Richer finds it shocking that some 54 per cent of Canadian firms do not have a supply chain management solution in place.
“From that figure,” he says, “which was uncovered by the RFID study, we realized that many companies don’t even have the basic applications needed for collaboration. We’re hoping that our research will help those companies make a business case for becoming compliant.”
David Hogan, chair of SCL’s upcoming national symposium, is the director of Marketing, Logistics and Information for Fuji Photo Film Canada. “I look at the supply chain as a profit motivator,” says Mr. Hogan, whose group has helped Fuji Canada cut storage requirements, reduce its working capital requirements by roughly 30 per cent, and decrease obsolescence expenses by 60 per cent. “Many corporations are now realizing significantly favourable impacts on corporate processes and profitability though supply chain management,” he says.
Championing the competitive advantages of supply chain logistics, Mr. Hogan and Ms. Kack-North are inviting stakeholders across Canada to attend SCL’s 2005 cross-country Fall Symposium.
“SCL is excited about bringing a unique cross-Canada symposium to Montreal, Calgary, Vancouver and Toronto,” says Ms. Kack-North. “It is dedicated to the issues, challenges and best practices surrounding global supply chains.”
She adds that both Industry Canada and the Quebec government are strongly supportive of SCL’s national symposium and SCL programs in general.
“By sharing techniques and technologies across industries,” adds Mr. Hogan, “SCL’s Fall Symposium and Logistics Solutions Café will help to enhance Canadian productivity. This will allow all Canadians to enjoy greater prosperity by helping them compete with strength in international markets.”
The symposium will be held in Montreal on October 19-20; Calgary on November 2; Vancouver on November 3; and Toronto November 9-10.
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