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Course Title:

Diploma in Logistics Management


Module Title:

Business Logistics Management


Project Title:

Case Study: Canadian Tire

Prepared by:

Teo Poh Lim S2575742D

Table of Contents
Section

Page

1.

Introduction

2.

Current Situation

3.

Countermeasures

4.

Conclusion

5.

Reference

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1.

Introduction

Canadian Tire is one of the largest companies in Canada, located at Ottawa.


It has 4 large distribution centers at Toronto, Victoria, Whitehorse and Iqaluit,
their main focus are to service over 470 tire retail outlets in whole Canada.

Canada Tire recently installed an YMS (Yard Management System), which is


integrated with WMS (Warehouse Management System) and TMS
(Transport Management Systems). The main objective of this change is to
improve the company performance in over-the road transportation
equipment utilization, driver productivity, and warehouse dock/door
utilization.
YMS (Yard Management System)
A system designed to oversee the movement of trucks and
trailers in the yard of a manufacturing facility, warehouse, or
distribution center.
It provides real-time information on the location of trailers in the yard
and allows yard employees to move trailers from staging to docks to fill
orders in an efficient manner.
It also can help prioritize shipment arrivals, identify trailer contents,
manage yard jockey activity, standardize yard processes, reduce the
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time needed to allocate vehicles to loads, and avoid unnecessary


vehicle movements.
WMS (Warehouse Management System)
A software programs designed to centralize the management of tasks
such as tracking inventory levels and stock locations to supports the
day-to-day operations in a warehouse.
It provides management with the information it needs to efficiently
control the movement of materials within a warehouse.
It helps to achieve constant real-time inventory control, improve
customer service through improving picking accuracy; shipments are
done right the first time, increased productivity by allows warehouse
people to crank out more work in less time, lower overhead by
maximize the existing workforce to pick/receive more goods in less
time.
TMS (Transport Management Systems )
A subset of Supply Chain Management (SCM) software focused on
transport logistics.
It facilitates interactions between an Order Management System
(OMS) and the Warehouse or Distribution Center (DC) and serves as
the logistics hub in a collaborative network of shippers, carriers and
customers.

2.

Current Situation

Canadian Tire has invested the software (YMS, WMS & TMS) for continuous
improvement but due to lack of the proper development planning, it was not
fully implemented successfully. Some of the Key Performance Indicators
(KPI) was not in measure, they are

YMS : track, control and optimize the movement of trucking assets,


WMS : receiving

volume received per man-hour, truck time at the dock,

and accurate receipts percentage,


put-away time taken for each put-away, and put-away per
man hour,
storage storage cost per item, and inventory days-on-hand,
order picking/packing order pick cycle time per order,
shipping cost of shipping per order, and utilization of shipping
docks.
TMS : percentage of on-time pick up or delivery performance relative to
requested.

Moving forward, as a new logistics supervisor, I will be using the useful


feature of the software systems to establish and develop a better evaluation
system to measure the operational productivity improvement, developing
benchmarks to measure initial and sustainable productivity improvement as
per requested by top Management.

3.

Countermeasures

A new project plan was developed as per table 1. Whole project will be carry
out in period of 12 months, from November 2014 to October 2015. The goal
is to implement and execute the planned task by stages following the
timeline given; there will be a monthly meeting to update the progress, and
submit a report to management team for review.
i) Yard Management System:
a) The cost of yard drivers including labour costs, fuel, maintenance, and
equipment costs. These expenses are embedded within the overall
transportation budget so it is important to develop the operating
expenses associated specifically to the yard operation.

After deployed the YMS applications, company will typically gain


efficiency with shunting (yard jockey) labour in the range of 25% 35% because the software eliminates all manual searching
processes in addition to maximizing yard driver efficiency by
minimizing empty bob-tail miles.

Company will typically enjoy a minimum increase of 2 - 3 more


trailer moves per worked hour as a good "rule of thumb".
Yard operations will also spend far fewer hours performing yard
checks which provide a means of verifying data integrity in the yard
operation. The need to perform yard checks is significantly reduced
because the YMS has robust trailer tracking capabilities.

These efficiency gains typically translate into reduced labour

requirements and less yard jockey truck requirements.


b) Improvements in trailer utilization rates because of the significant
improvement in how trucking assets are managed in the yard.

The standard time required for trailers to pass through a main


security gate is will typically in the range of 5 - 10 minutes. This time
can be reduced to 30 seconds (or less if green-lined) if the YMS
manages all site check-in procedures while the load is in transit
towards the site.

The ability to provide advance appointments to drivers combined


with the optimized management of trailers within the yard will
typically result in a 10% - 15% reduction in the number of trailers
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required to support a large logistics operation. This can either


translate into a reduced trailer leasing expense or a reduced capital
investment into transportation infrastructure.
Reduced operator errors that result in moving the wrong trailer due
to the replacement of paper instructions and radio communication
devices with real time GE integration and/or telematics .

ii) Warehouse Management System:


a) Receiving activity is fundamental to warehousing function. Unless the
merchandise is properly received, it will be very difficult to handle all
other subsequent functions. By critical measures such as volume
received per man-hour, truck time at the dock and accurate receipts
percentage will show significant consequences through an entire
operation.
b) By measures of time taken for each put-away, and put-away per man
hour, it will help to determine which location to store the accepted
merchandize that is convenient to retrieve for further action.
c) By measures of storage cost per item, and inventory days-on-hand,
will help to identify whether company utilizes manual or automated
storage systems.
d) Order picking/packing is the most expensive and difficult process; it
often consumes the most labor. Its usually more diverse and complex
than the rest of the operation, and it is directly connected to customer
satisfaction, so the emphasis on it is warranted. By measure of order
pick cycle time per order will help to meet the customer satisfactory.
e) By measures the cost of shipping per order and utilization of shipping
docks will help to provide better service not only to customers, but
downstream to other departments or facilities.
iii) Transport Management Systems:
Measures of percentage of on-time pick up or delivery performance
relative to requested help to provide the logistical planning capabilities to
streamline order processing for delivery and execution and the
communication and tracking capabilities to follow the orders through
tendering and transit status.

4.

Conclusion

With the proposed improvement plan stated in the table 1, Canada Tire will
achieved results as below:
i)
Achieving 100% visibility of trailers and their contents,
ii)
Leveraging a single point of yard command & control,
iii)
Managing shipping events proactively,
iv)
Maxih izing yard space utilization,
v)
Facilitating carrier appointment scheduling,
vi)
Ensuring vendor and carrier compliance.
vii) Move and store inventory at maximum efficiency and minimum cost
viii) Better control of the movement, storage and accounting of materials or
finished goods through a warehouse
ix)
Increase customer happiness or service by making sure the customer
has no issue with receiving their product.
x)
Inventory reduction as we are confidence that our customers are
receiving their
shipments on time,
Generally, you are on the right truck but improve
conclusion by quantifying each improvement in
numbers instead of just a statement eg. Instead
of just saying increase inventory accuracy, rephrase it to increase inventory accuracy from
current 80% to 95%

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5.
i)
ii)
iii)
iv)

Reference
Donald J.Bowersox (2013), Fourth Edition, Supply Chain Logistics
Management.
Alan Harrison (2008), 3rd Edition, Logistics Management and Strategy
Competing through the Supply Chain.
Michael H.Hugos (2011), 3rd Edition, Essentials of Supply Chain
Management.
Paul Myerson (2012), 1st Edition, Lean Supply Chain and Logistics
Management.

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