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Canadian Tire orders inventory early, charters cargo ships to keep shelves stocked

Halifax Tar

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Imagine, planning and coordinating stores to be available when needed instead of just in time.

The CAF could learn a thing or two...
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Canadian Tire Corp. Ltd. is ordering spring and summer products early and chartering its own cargo ships to import goods as it doubles down on an inventory strategy that's buoyed the retailer through the pandemic.

The company's approach has helped it work around bottlenecks at ports and avoid surging spot market shipping rates, keeping store shelves stocked amid shortages elsewhere.

 
~20 years ago there was a tomato shortage to the extent that one of the fast food companies would only put a tomato slice on your burger if you asked for it. A reporter asked McDonald’s if they were thinking of doing the same. They said no, we saw this coming and set up contracts a year ago.
 
Imagine, planning and coordinating stores to be available when needed instead of just in time.

The CAF could learn a thing or two...
____________________________

Canadian Tire Corp. Ltd. is ordering spring and summer products early and chartering its own cargo ships to import goods as it doubles down on an inventory strategy that's buoyed the retailer through the pandemic.

The company's approach has helped it work around bottlenecks at ports and avoid surging spot market shipping rates, keeping store shelves stocked amid shortages elsewhere.


Henry Ford had his own shipping line to get around supply chain issues. This type of supply chain ownership, literally, is what the Chinese Belt and Road initiative is all about

The Ford Fleet​


Beginning in 1915, Henry Ford, began developing the Rouge property in Dearborn, for a new Ford Motor Company plant on the east side of the Rouge River. The plan was to utilize the river to transport raw materials from coal mines and lumber mills to the factories. By 1923, the “river navigation project” was complete. The Rouge had become such a large facility, however, that one ship could not handle transporting the huge quantities of raw materials needed for production. Mr. Ford began acquiring his own fleet of ships for the company by ordering two ore carriers to be built. These ships, the Henry Ford II and Benson Ford– named after Mr. Ford’s grandsons – and would remain in service for over 50 years.

 
Henry Ford had his own shipping line to get around supply chain issues. This type of supply chain ownership, literally, is what the Chinese Belt and Road initiative is all about

The Ford Fleet​


Beginning in 1915, Henry Ford, began developing the Rouge property in Dearborn, for a new Ford Motor Company plant on the east side of the Rouge River. The plan was to utilize the river to transport raw materials from coal mines and lumber mills to the factories. By 1923, the “river navigation project” was complete. The Rouge had become such a large facility, however, that one ship could not handle transporting the huge quantities of raw materials needed for production. Mr. Ford began acquiring his own fleet of ships for the company by ordering two ore carriers to be built. These ships, the Henry Ford II and Benson Ford– named after Mr. Ford’s grandsons – and would remain in service for over 50 years.


HF also realized the better you treat your employees the more they will produce.

He was an eccentric man but he had some skills and vision we are in dire need of today.
 
It's funny, because previously we had a lot of stockpiles of things for this specific reason (ie supply chain resilience) until the flavour of the day became 'lean operations' with J-I-T logistics.

That makes no sense with the GoC procurement rules to start with, but hopefully this will get the MBA pendulum to swing away from blindly copying what works in specific industries without understanding the context and risks instead of focusing on the rewards.

Right now buys are so backed up that it's hard to get something without an HPR, but if you do get an order in, we're buying several years worth minimum. A lot of these are batch productions to our spec, so having them delivered in phases isn't frequently an option. We're at the point where things like valve bodies and other big chunks of metal are failing due to age so they are big, expensive and long lead things to buy and store, so J-I-T doesn't apply.
 
It's funny, because previously we had a lot of stockpiles of things for this specific reason (ie supply chain resilience) until the flavour of the day became 'lean operations' with J-I-T logistics.

That makes no sense with the GoC procurement rules to start with, but hopefully this will get the MBA pendulum to swing away from blindly copying what works in specific industries without understanding the context and risks instead of focusing on the rewards.

Right now buys are so backed up that it's hard to get something without an HPR, but if you do get an order in, we're buying several years worth minimum. A lot of these are batch productions to our spec, so having them delivered in phases isn't frequently an option. We're at the point where things like valve bodies and other big chunks of metal are failing due to age so they are big, expensive and long lead things to buy and store, so J-I-T doesn't apply.

Full disclosure I have never worked in the ADM(MAT) world or been in the LCMM/SM wheel house.

But it astounds me in dealing with LCMMs how many do not know its their job to fill the shelves. I could write a lengthy novel if I was to describe every time I had to explain to an LCMM that ships do not buy their own spare parts, that is your job Mr/Mrs LCMM person. Or my LS getting a call from an LCMM because the LCMM wanted to know how to find out how many outstanding requisitions he had. I could go on and on...

HPRs... that's a beast, that whole NAVORD and needs to be rewritten we make Supply too complicated. Its really very simple:

1) Get stores
2) Warehouse Stores
3) Manage Stores
4) Issue Stores, as required
5) Replenish stores

Thats it.

I truly think we need a dedicated Supply Officer not a mix'n'match Navy LogO and I think they should all be produced from within the MMT Trade.
 
I assume the CAF/Federal government is the same as Ontario provincial government agencies who, about the first or second week of January, realize there is still money in the kitty and if they don't spend it by the end of fiscal it is gone, and start spending like it's mom's credit credit card.
 
Henry Ford had his own shipping line to get around supply chain issues. This type of supply chain ownership, literally, is what the Chinese Belt and Road initiative is all about

So do the Irvings, They own/owned their own ships for hauling petroleum products.

Word is during the gas crunch of the 70's he ordered this ships to anchor offshore and he waited for the gas price to rise until he allowed them into port.
 
It's funny, because previously we had a lot of stockpiles of things for this specific reason (ie supply chain resilience) until the flavour of the day became 'lean operations' with J-I-T logistics.

That makes no sense with the GoC procurement rules to start with, but hopefully this will get the MBA pendulum to swing away from blindly copying what works in specific industries without understanding the context and risks instead of focusing on the rewards.

Right now buys are so backed up that it's hard to get something without an HPR, but if you do get an order in, we're buying several years worth minimum. A lot of these are batch productions to our spec, so having them delivered in phases isn't frequently an option. We're at the point where things like valve bodies and other big chunks of metal are failing due to age so they are big, expensive and long lead things to buy and store, so J-I-T doesn't apply.
I would argue that we need a decent hybrid approach. Our national warehouses are full of stock that was bought in the era of "iron mountains" that just sits there collecting dust. It is/was so bad there is dedicated staffs just trying to clear out dormant material. We defintely do not need more of that.

There is a time an place for good batch productions and a time and place for buying a lifetime's work of something. Determining that and doing the heavy work on those files is stuff the EPMs wants no part of. Lots of reasons but main driver as I see it are partially because it is hard to do and the easier solution is to procure all at once or procure in arrears where everything becomes urgent. EPMs are not resp for storing the material or distribution so the considerations of how does this affect the Defence Supply Chain are never fully explored

But it astounds me in dealing with LCMMs how many do not know its their job to fill the shelves. I could write a lengthy novel if I was to describe every time I had to explain to an LCMM that ships do not buy their own spare parts, that is your job Mr/Mrs LCMM person. Or my LS getting a call from an LCMM because the LCMM wanted to know how to find out how many outstanding requisitions he had. I could go on and on...

HPRs... that's a beast, that whole NAVORD and needs to be rewritten we make Supply too complicated. Its really very simple:

1) Get stores
2) Warehouse Stores
3) Manage Stores
4) Issue Stores, as required
5) Replenish stores

Thats it.

I truly think we need a dedicated Supply Officer not a mix'n'match Navy LogO and I think they should all be produced from within the MMT Trade.
Meh, MMT is a very weak trade that would do no better without some very serious changes. My folks and I spend our days telling MMTs across the country very basic things they should know themselves. Every time I see something especially grievous I give it to some former peers that are in posns of influence in that realm showing them the failure of our training system and the lack of knowledge we have as an institution.

That said, you are not wrong that the SM world is weak. They are struggling through unprecedented turnover and with it comes a lack of experience that is telling.

I don't know what the RCN wrote for their HPR order, but the HPR re-write for the SAM that was recently done needs a number of changes to make it a better policy. It is decent but has stuff in there that should not be there at all (the depot will release all HPRs at the end of the day like what?). I will say across the board HPRs are down though and that is a good thing, although 1 CMBG is still addicted to them despite them having 5/8 units essentially co-located with a depot as they have double the other two CMBGs combined.
 
"Why plan if you can react" is a hell of a drug.

And until we empower depots to return HPRs to superior HQs (cc'ing the L1s) saying "You've been allegedly planning this for months, but just sent in the supply request at the last minute, no fill." or something similar, we are countenancing this failure of leadership to properly plan.
 
"Why plan if you can react" is a hell of a drug.

And until we empower depots to return HPRs to superior HQs (cc'ing the L1s) saying "You've been allegedly planning this for months, but just sent in the supply request at the last minute, no fill." or something similar, we are countenancing this failure of leadership to properly plan.

The Depots should not be the police for this. This rightfully should fall onto ADMMAT and the L1s to police themselves. One way to ensure good usage of prem transport is have the L1 pay for it as right now it is all nationally "covered"
 
"User pay" suddenly modifies a great variety of behaviours.
 
"User pay" suddenly modifies a great variety of behaviours.
It would be interesting to see a certain RCAF base justify their order of 100 first aid kit inventory booklets as an HPR
 
Meh, MMT is a very weak trade that would do no better without some very serious changes. My folks and I spend our days telling MMTs across the country very basic things they should know themselves. Every time I see something especially grievous I give it to some former peers that are in posns of influence in that realm showing them the failure of our training system and the lack of knowledge we have as an institution.

You aren't wrong. In my 22 years, my QL3 was in TNR, my QL5 in MIMS and my QL6 was in DRMIS. Throw into that SVICA, UNITRAK, WHIMS, BMIMS and FMAS as well. Pretty hard to maintain an even keel when I am being trained on a new system every 2.75 years lol. But again I do see your point. I will maintain a dedicated Supply officer produced from within the MMT trade should help steady the training and production as well as advocate for the trade and employ our rules and regulations.

That said, you are not wrong that the SM world is weak. They are struggling through unprecedented turnover and with it comes a lack of experience that is telling.

I often lump in the SMs but I find them to be better and more knowledgeable than the LCMMs.

I don't know what the RCN wrote for their HPR order, but the HPR re-write for the SAM that was recently done needs a number of changes to make it a better policy. It is decent but has stuff in there that should not be there at all (the depot will release all HPRs at the end of the day like what?). I will say across the board HPRs are down though and that is a good thing, although 1 CMBG is still addicted to them despite them having 5/8 units essentially co-located with a depot as they have double the other two CMBGs combined.

I am on French right now so I haven't seen the SAM in a while. But we amplify the SAM and put our own spin on it though NAVORDs (Naval Orders) Specifically (Correct me if wrong who ever reads this) NAVORD 3250-5. Generally this is the go to for RCN HPRs as it deals with the nuance and Navy-isk side of the supply and distribution of HPRs.

I just stumbled across this...

 
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"Why plan if you can react" is a hell of a drug.

And until we empower depots to return HPRs to superior HQs (cc'ing the L1s) saying "You've been allegedly planning this for months, but just sent in the supply request at the last minute, no fill." or something similar, we are countenancing this failure of leadership to properly plan.

Interesting. I haven't encountered this much. The vast majority of HPRs I have dealt with (At sea and in Log Ops) has been in direct support of a deployed unit, a soon to be deployed unit or a ship in refit and these are again almost always to rectify broken machinery.

That isn't to say the RCN takes into Logistics when planning better than any other...

One of the areas we fall down; and its in the paper I linked above, is routine requisitions being submitted as HPRs.
 
I assume the CAF/Federal government is the same as Ontario provincial government agencies who, about the first or second week of January, realize there is still money in the kitty and if they don't spend it by the end of fiscal it is gone, and start spending like it's mom's credit credit card.
It is. In December it’s all ‘we’re in the hole, don’t buy anything!’, then in Feb, oh crap! We have too much money! Spend it! Spend it now!
 
I would argue that we need a decent hybrid approach. Our national warehouses are full of stock that was bought in the era of "iron mountains" that just sits there collecting dust. It is/was so bad there is dedicated staffs just trying to clear out dormant material. We defintely do not need more of that.

There is a time an place for good batch productions and a time and place for buying a lifetime's work of something. Determining that and doing the heavy work on those files is stuff the EPMs wants no part of. Lots of reasons but main driver as I see it are partially because it is hard to do and the easier solution is to procure all at once or procure in arrears where everything becomes urgent. EPMs are not resp for storing the material or distribution so the considerations of how does this affect the Defence Supply Chain are never fully explored

So I'll give you a good example of what we're working with in the EPM. We spent about two months in the summer with every LCMM reviewing every catalogued NSN in the inventory to update the 'min/max' and required supply levels. Those are theoretically in DRMIS, and should trigger automatic buys when you get below certain stock levels, but also let the LCMMs tag things as 'insurance items', which are those long lead parts that almost never break, but when they do you are foxed. We usually have major gear components for that reason, as the lead time will usually be in the 2-3+ years timeframe.

Because of the extended procurement times, we used two years worth of supply as the rule of thumb for setting the min levels to trigger a new order.

In reality, there isn't sufficient SM/procurement to process those autobuys, and we can't afford it, so all of it goes into a pile that is picked at when we can.

Knowing that, LCMMs manually push orders to get filled, but with the limited SM/Proc Os, they also go into a pile that is picked at when they can, with HPRs getting the priority. At busy times even HPRs are getting triaged because there isn't enough people, and not unusual to have a 3-4 month processing time for HPR procurements to be on the street.

So frequently things that are HPRs are HPRs because the routine re-supply under the min/max isn't happening, and we're doing everything manually, with a fraction of the staff, a lot of new people, and not enough of the right kind of beans to buy stuff.

A lot of collective frustration in both the SM/LCMM side about it, as and I see a few HPRs a week that have been on our 'buy list' for a year or more. COVID isn't helping and we had a few suppliers shut down at various points (or had their suppliers shut down at various points) so even when we get contracts out the EDDs can sometimes blow months or years past the contract date. We had one supplier be honest and tell us that when they did start up, their priority was filling the USN orders first, so we don't even have any real buying power in a lot of cases.

So sure, there has to be a balance, but a lot of the assumptions on lead time and process time are right out the window, which pushed our tower of cards right over, and basically broke things. It's bad enough we're looking at an ISSC to basically do the basic item procurement (and warehousing) functions, because that drops the LOE on the procurement side to a single big contract management, instead of thousands of buys.

So it's not that LCMMs aren't aware of the supply chain impacts or the storage requirements; things are just so f&d it's just not even on our radar of things to care about, because we will usually spend more on workarounds then the parts for a full fix are worth. If we have a shelf full of stuff normally we're just relieved to have actual parts somewhere.

Did find some obsolete NSNs against my own TA code from the 50s and 60s though; they were so old that took forever to figure out what they actually were, and had to go to e-bay to find some background. Those will be disposed of at some point, but on the Navy side we did our best to clear out a lot of the obsolete equipment when we disposed of the tankers and 280s, which also came along with a lot of extra stuff as scrap weight with de-militarization instructions to get rid of it. Obviously missed some of it, but we cleared out a few hundred tonnes of excess stuff that had been sitting around for a few decades, so progress.
 
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