Century Distribution Systems, Inc. is a 100% owned subsidiary of "K" Line, and is a medium-sized operator in the fields of consolidation and distribution. It is firmly established in the US, Canada, Hong Kong and the rest of Asia and is in the process of setting up local operations in Europe. Canadian Tire – perhaps the largest retailer of general household merchandise, sports and leisurewear and automotive parts in Canada – is one of Century’s VIP customers. Since 1999, the two have forged a very effective and dynamic supply chain management partnership, which has continued to evolve and improve over time.
Canadian Tire is one of Canada's top five global importers. It sources many of its products from suppliers in the Pacific rim, mostly in China and Hong Kong. The company's Vice President of Logistics, Geoff Frodsham, explained why it chose to work with Century: "We did not wish to deploy our own operations outside of North America, and we were looking for a partner to help us in Asia. Century is not the biggest operator, but it has the right personnel and network, and has the right technological savvy - it understands our needs. The fact that Century has the backing of "K" Line was persuasive for us, and there is a marvelous size match for both of us." Century represents Canadian Tire overseas, as agents.
Forecasting and improving the lead time of product to market is very important for Canadian Tire. The company issues a weekly flyer to its customers, detailing special offers for that week, and so it is vital for these particular products to be manufactured and shipped on time. Effective and timely liaison with vendors is critical.
Canadian Tire has several supply chain analysts (SCAs), who work directly with overseas vendors, feeding them information on forward sales and building up a forecast model. Purchase orders are normally issued well in advance of actual bookings, for the purposes of the weekly flyers. In the past three years, lead time to the market has been cut by an average of 7-10 days, helping give Canadian Tire a competitive edge.
Century’s web-based VMS (Visibility Management System)® is the tool used to manage this information flow. Purchase orders are dispatched online by the SCAs direct to vendors, and a dialogue is opened up, encouraging feedback on time of shipment and production issues which can ultimately affect Canadian Tire’s forward sales. Since every stage of the supply chain is time stamped, errors and problems are rare. Frodsham explained,"we have helped the vendors to understand their supply chain, to plan production ahead of schedule and improve lead times.”
As well as forecasting, VMS® provides visibility of each individual purchase order from time of booking with the vendor through to delivery to Canadian Tire’s major distribution centers at Vancouver (BC), Calgary, Toronto and Montreal. Up to 300 statistical reports - including shipments per vendor, shipments per origin country and volumes per ocean carrier- can be extracted at any time by Canadian Tire.
Century and Canadian Tire have just rolled out their vendor online management system on VMS®. This now covers 85% of the total offshore business. Previous working methods entailed the use of old-fashioned faxes and much duplication of effort. The online booking will help reduce lead time because US buyers are talking directly to the vendors, cutting out the middleman. Tim Craig, Century’s Vice President of Sales and Marketing, commented “you need a dynamic customer to push this process, and Canadian Tire takes supply chain management seriously. They came out to Asia in April 2003, and together we took the vendors through the training process on VMS®. The vendors now truly feel a part of the supply chain.”
Frodsham is an advocate of partnership throughout the logistics pipeline - “Century has worked with us through this process, and together we have drastically improved our lead time to market. The relationship is long term, and we will continue to improve.”