Professional Documents
Culture Documents
SIPMMDIPLOMACOURSE
WRITTENASSIGNMENT
Submittedby:
AzmiSahab
Submissiondate:
28thJanuary2015
Wordcount:
2065words
TABLEOFCONTENTS
Subject
PageNo.
1. Introduction
2. CurrentIssuesFacedinCanadianTire
2.IWarehousingissuesfacedbyCanadianTire
2.IITransportationissuesfacedbyCanadianTire
3. SolutionstoIssuesFacedinCanadianTire
3.ISolutionstoWarehouseissuesfacedbyCanadianTire
3.IISolutionstoTransportissuesfacedbyCanadianTire
3.IIISolutionstoManpowerissuesfacedbyCanadianTire
4. Conclusion
11
5. ReferenceList
12
1.
INTRODUCTION
Canadian Tire is one of the largest companies in Canada. We operate four large distribution
centres, serviceing over 470 tire retail outlets.
We have recently installed a YMS (Yard Management System) that we have integrated with
our existing WMS (Warehouse Management System) and TMS (Transport Management
System). Following this recent installation, we would like to present this report which seeks to
discuss an evaluation system to measure Canadian Tires operational productivity
improvement.
This evaluation system will measure if the above system upgrades have removed or improved
Canadian Tires problems in product management and transportation issues in distributing our
products to all the tire retail outlets. We expect to have an improved performance in over the
road transportation equipment utilisation, driver productivity and warehouse dock/door
utilisation.
2.
Prior to the installation of the YMS, Canadian Tire faced significant issues in equipment
utilisation and employee productivity. These were largely due to the lack of integration and
synergy between the two existing supply chain information technology support systems
Warehouse Management System or WMS, and Transport Management System or TMS we
had already installed and were in use at Canadian Tire, resulting to inefficiencies in the
utilisation and productivity levels in the company.
While both the Warehouse Management System and Transport Management System are key
parts of our distribution process at Canadian Tire, each system manages separate entities of the
distribution process. The WMS controls the movement and storage of materials within a
warehouse and process the associated transactions, including shipping, receiving, putaway and
picking (Wikipedia, 2015). The TMS, takes on the baton from WMS and helps companies
move freight from origin to destination efficiently and encompasses solutions for moving
freight in all modes, including intermodal movements (Wikipedia, 2015).
The two main areas of issues faced by Canadian Tire have been identified as
I.
Warehousing issues
II.
Transportation issues
I.
Because of the sheer volume of inventory at Canadian Tire and subsequent amount of orders
from the retail outlets we distribute to, it was identified that we are not utilising our warehouse
space due to an inefficient warehouse layout. Inventory and picking areas, forming, checking
and loading areas are not set up in sequence. It has been feedbacked that this creates much
chaos in the warehouse, with cases of damaged goods and equipment and also the occasional
accidents and injured staff. This situation is worsened when floor areas are chock-full with
checked orders waiting for hours to be loaded into trucks that are not yet available to be loaded.
This also creates a backlog of orders waiting to be packed and formed, not because of lack of
available inventory but rather lack of holding areas.
This chaos also results to redundant work done by the warehouse staff. We have seen same
orders being formed more than once and same checks done repeatedly. On the other hand,
orders from our retail outlets have also been ignored as staff assume they have been formed by
their colleagues. Repeated orders also add on to the volume faced at the holding areas, not
helped as our trucks are not fully utilised with each shipping trip to the retail outlets.
Staffing issues plays a big role in our warehouse. Surveys among our staff show a desperate
need for on-the-job training, worsened by the fact that many of the more experienced staff have
left the organisation with their expertise, leaving lesser competent resources to train newer
staff. Staff that are not trained well have shown more probability of repeated mistakes,
especially when picking orders and a higher tendency to cause damage to our products and
warehouse equipment.
Our WMS unfortunately also does not allow the warehouse managers to assess each individual
warehouse staff in below areas:
II.
Our country-wide distribution reach of over 470 retail outlets means Canadian Tire faces a
large transportation cost in distributing our products to the outlets. The unit cost increases as
our utilization levels decreases.
In order to maximize utilization, each truck that leaves our warehouses and headed to the retail
outlets needs to be full. It has been identified that this is not practiced by many of our warehouse
managers. Trucks are leaving the warehouse not full, and the delivery route provided to each
driver shows that orders are delivered by chronology of order instead of by areas. This means
that a truck may make one delivery to Retail Outlet 1 and 3, for example, because these orders
were formed before Retail Outlet 2. Although Retail Outlet 2 is located nearer to Outlet 1, their
order would have been delivered in a separate trip as their order was formed later. This is
clearly an inefficient use of our trucks and not maximizing the productivity of our trucks and
drivers, and also not efficiently distributing our tires to the retail outlets in a more timely
manner.
As mentioned in the warehouse issues faced by Canadian Tire, manpower issues is the also a
main concern faced by Canadian Tire. We face a severe shortage of trained drivers. Many of
our more-experienced drivers have resigned due to subpar pay levels and lack of job
satisfaction.
By having installed the YMS, a software system designed to oversee the movement of trucks
and trailers of a manufacturing facility, warehouse, or distribution centre (Techtarget, 2015),
it is expected that the integration between our WMS and TMS will improve the above problems
in Canadian Tires transportation and warehouse problems.
3.
With the recent installation of the YMS and its integration with our WMS and TMS,
management expects an improved performance in the issues mentioned above.
In order for Canadian Tire to efficiently operate our four distribution centres and service the
retail outlets, we must successfully integrate our management systems in order to have a strong
Supply Chain Information System Functionality (Bowersox, Closs, Cooper and Bowersox,
2013) as shown in Figure 1.
Strategic
Planning
DecisionAnalysis
ManagementControl
TransactionSystem
Figure 1: Supply Chain Information System Functionality
Once a strong foundation in the transaction system is in place, ie. the integration of the YMS,
WMS and TMS, Canadian Tire will be able to evaluate the issues or discrepancies in our supply
chain management processes, and put into place the appropriate measures and solutions to
improve our work procedures.
I.
In order to measure any positive impact of installing and integrating the YMS to the existing
WMS and TMS at Canadian Tire, we have decided to evaluate our warehouse performance
against three general metrics: Operational Efficiency, Fulfilment Efficiency and Stocking
Efficiency (Cohen & Roussel, 2005), as shown in Figure 2.
Operational
Efficiency
Measuring
Warehousing
Efficiencies
Stocking
Efficiency
Fulfilment
Efficiency
levels, and if there are any improvements prior and after the installing of the Yard Management
System.
Transportation
Management
Load
Efficiency
Miles
Optimization
a. Load Efficiency
In measuring load efficiency of the Canadian Tire trucks, we seek to measure the average
capacity utilization of each truck by recording the number and size of deliveries on a per
delivery and daily basis. This will help us to compare the utilization levels, and if there are any
improvements prior and after the installing of the Yard Management System.
b. Miles Optimization
In measuring miles optimization of the Canadian Tire trucks, we seek to measure the average
number of miles for a unit of tire in our distribution system. This will help us to evaluate our
route plans to ensure the trucks are better utilized perhaps to cover certain areas in close
proximity instead of delivering orders based on their chronological order, regardless of their
locations.
looking into providing on-the-job training, including a Buddy System for new staff. We are also
currently conducting market pay reviews to evaluate the pay grade systems of the truck drivers.
4.
CONCLUSION
Following the implementation of the YMS and its integration with the WMS and TMS, we
expect to see drastic short-term (3 to 9 months period) improvements in our warehouse and
transport utilizations, and increased efficiency in meeting demand from the retail outlets
Canadian Tire serves.
The long-term improvements will be especially seen in warehouse staff and truck drivers
productivity from a more dynamic nature of business. We will be able to see a leaner working
process, with faster turnaround time in our transportation process.
5.
REFERENCE LIST
Anklesaria, J. (2008). Supply Chain Cost Management: The AIM & Drive Process for
Achieving Extraordinary Results. New York: American Management Association.
Bowersox, D.J., Closs, D.J., Cooper, M.B. & Bowersox, J.C. (2013). Supply Chain Logistics
Management. New York: McGraw-Hill Education.
Cohen, S. & Roussel, J. (2005). Strategic Supply Chain Management: The Five Disciplines for
Top Performance. New York: McGraw-Hill Education.
Jacoby, D. (2009). Guide to Supply Chain Management. United Kingdom: The Economist.
Prater, E. & Whitehead, K. (2013). An Introduction to Supply Chain Management: A Global
Supply Chain Support Perspective. New York: McGraw-Hill Education.
Saxena, R.S. (2009). Inventory Management: Controlling in a Fluctuating Demand
Environment. New Delhi: Global India Publications Pvt Ltd.
Wikipedia.
(2015).
Warehouse
Management
System.
Management
System.
http://en.wikipedia.org/wiki/Warehouse_management_system
Wikipedia.
(2015).
Transport
http://en.wikipedia.org/wiki/Transportation_management_system