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Mighty-five percent of Canada's 30 million people live within a 15-minute drive of their local Canadian Tire store. Forty percent shop there every week and 9 out of 10 Canadians make a shopping trip to "The Tire" at least twice a year. The name aside, these customers come looking for a lot more than tires.
|"It doesn't matter how polite we are in the store ... if the item is not there. So our key focus when we started all this was to raise service levels.". - Patrick Sinnott of Canadian Tire|
Canadian Tire operates two huge distribution centers in the Toronto suburb of Brampton. The original facility was opened in 1973 and twice expanded to its current base area of 1.4 million square feet. Its younger, sister facility added 1.25 million square feet and a state-of-the art automated and integrated computer-controlled material handling system. Together these centers handle 60,000 outbound loads annually and have:
* 115 million cubic feet of storage space
* Daily throughput capacity of 280 trailer loads and 370,000 cartons
* 158,000 pallet storage locations
* One of the largest automatic storage and retrieval systems in North America
Both facilities are operated with the help of a proprietary warehouse management system. The newer DC, which mostly handles conveyable and packaged material, is equipped with 12.5 miles of conveyors, a carousel system with 10,000 pick slots and pick-to-light technology, and full radio-frequency capability.
|Real-time Collaboration Still Ahead|
Chile the time-phased-replenishment system installed at Canadian Tire provides excellent forward visibility, it does not allow for true, real-time collaboration with suppliers. "We provide great information, but there is no automated way for us to interact with suppliers on an exception basis concerning that information right now," says Patrick Sinnott, vice president of logistics.
A lot of verbal interaction occurs, he notes, "because when a big jump appears on the radar screen at week 16 or week 11 because of a promotion, the supplier often will pick up the phone to confirm that the higher number is for real." Similarly, he says, his team sometimes will call a supplier to make certain it noticed a big demand increase. "But we have yet to make the kinds of advances we need to make in terms of interacting with the information."
One of the reasons is that electronic communications at Canadian Tire currently are dependent on EDI. "EDI is the medium we use and it is not in real time," says Sinnott. "If we were using a medium like the internet, we could get very highly interactive, but at this time we are not on the net with this.
"I think a lot of this will eventually be done more interactively, but I also think we don't need to have true collaborative planning and forecasting on every single SKU," he says. "We really need to do it on items that are promoted, items that are very seasonal, or items that are in urgent demand, such as snow shovels or air conditioners, so that we have a clear understanding and agreement about when those items are needed and in what quantities and any difficulties in the supply chain in meeting those requirements. I don't think collaboration will entail every single SKU getting the same degree of attention."
Canadian Tire currently has a project team studying the issue of collaborative planning and forecasting.
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