Speed bumps

It doesn’t matter what size your company is, at some point in time you’re going to hit a bump along the supply chain and logistics road.

Take for example Elizabeth’s Garden Florist in Prince Edward Island. After more than 15 years with her own shop, Elizabeth Ghiz-Fay now operates the business from her home, and customers have come to expect personal and efficient service.

Ghiz-Fay didn’t think she was fulfilling that commitment one day when she was unable to find a particular house number. This happens from time to time of course, but she was about to give up on the delivery when she realized it wasn’t a house or a business or a building of any kind that she was looking for— it was a tombstone. Undeliverable products can impact the bottom line.

If she had not found the location, she would have been out the cost of any stock she could not reuse, gas and the time it took to look for the right address.

Other businesses have more at stake when deliveries go wrong, particularly those that are seasonal and have their product shipped in large quantities during a relatively short time frame, like Christmas tree producers. In 2011, Canada exported $28.2 million worth of Christmas trees. From that total, Nova Scotia exported more than $6 million; New Brunswick approximately $5.5 million and Prince Edward Island, about $71 thousand.

One of the most noteworthy facets of this industry is that the product needs to go from producer to consumer in a very short period of time. It’s a system that requires a lot of precision and experience to manage, says Donna Morrisey, office manager for Northern Lights Christmas Tree Farms Ltd., in Debert, Nova Scotia. Sometimes Mother Nature can work against a company. A large snowstorm can wreak havoc on delivery schedules, particularly for shipments heading to the United States. “Big box stores want the product before their Thanksgiving, so there’s usually only a three-day window for delivery,” says Morrisey, adding that they won’t accept delivery at any other time. Northern Lights is fortunate to have dependable truckers who they’ve built strong relationships with over the years, but other things can interrupt a schedule.

Trucks are x-rayed at the border, and if something shows up on the x-ray, even a pop bottle left amongst the trees by a worker, customs officials can force the unloading of an entire shipment. When this happens, the company has to pay someone to look after the truck until they’re able to hire help and reload the truck, all while trying to stay on schedule. “We’re very careful to avoid this,” she stresses.

Robert LeBlanc, a supply chain management professional and manager of inventory, distribution and facilities for Atlantic Lottery Corp., has more than a decade of experience working with and optimizing supply chains. One of the most important things he’s learned is that to avoid bumps in the road, a company has to “know what (their) competencies are.”

A company with expertise in sales and marketing is probably not going to have the skills required to optimize logistics, says LeBlanc. Warehousing in particular is often better managed off-site, by a third party with an existing and proven business model that is flexible. Doing so means businesses are free to focus on what they do best, and they’re not hiring and training warehouse personnel during peak times and laying off during slower times. A third party can offer trained staff when required, and they have state-of-theart technology in place to track products.

The key is to be careful in choosing who you partner with. “Not every match is made in heaven,” he says. Don’t just go with the best price, “nine times out of 10 you’ll really get burned on doing that.” He recommends a tendering process and carefully checking references. Sometimes things as simple as hours of operation can become major logistics problems. If there’s an issue late Friday night, it’s important to know your supply chain and logistics partners are open to help solve the problem and keep things on schedule, says LeBlanc.

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