Canadian Retailer - Fall 2014 - 20

SuppLy chAIN

movements can be quite costly in terms of time,
According to Löwenborg-Frick, IKEA constantly looks to im- money and fuel consumption, particularly when
prove its supply chain and reduce CO2 emissions by trying to by- Western Canadian locations are involved."
pass distribution centers and go directly from supplier to store. It
According to Toksoy, since approximately
also tries to increase filling rates in all types of supply chain flows. 30 per cent of the Canadian population lives
"This reduces trucks and Ikea's ambitious targets
in British Columbia and Alberta, 30 per cent
trailers on the roads and reof the freight was traveling through the West
duces handling in our supply
Coast to Eastern Canada only to be shipped
chain," she explains. "We aim
back West.
to increase our North Amer- Reduction in transport-related
"Ryder has helped a number of retailers
ican supply base and also in- carbon emissions by 2016
look at their international supply chain and recrease filling rates by two per
designed it so that freight entering Canada in
cent each year. Ultimately, we
the West goes through an initial crossdocking
want to bring the supplier clos- Reduction in carbon emissions or transloading process in Vancouver," he reer to the customer. This helps by 2020
veals. "This process allows for solutions, wherein reducing the distances we *as compared to 2011 fiscal year
by freight destined for Western provinces are
are transporting our goods."
split out and shipped to Western stores or disLooking ahead to 2015 and beyond, IKEA has set some aggres- tribution centers directly from Vancouver."
sive greenhouse gas emission targets and sustainability goals.
The reductions in fuel and carbon consumpAccording to Löwenborg-Frick, IKEA has been designing tion are material and customers also enjoy sevproducts for efficient transportation for years.
en to ten day reductions in the delivery times
"Our designers are constantly working with our suppliers to to Western locations.
identify ways to increase the amount of product per pallet," she
"From a supply chain perspective, this is a
explains. "Over the past few years we have worked to eliminate 'win-win-win' with savings in fuel, cost and
wooden pallets from our supply chain by moving to paper pal- product availability," adds Toksoy.
lets which has both increased the amount of product
transported per pallet and reduced the need for re- "...changes in ocean container shipping have draverse logistics for pallets. This initiative has resulted
matically reduced fuel consumption per imported
in a 6 per cent savings in cost and emissions."
In the future, IKEA is putting an even greater container. Because approximately 80 per cent of
amount of focus on bringing its distribution facili- international trade moves by sea, these cumulaties closer to their customers.
tive savings have been significant."
"This helps in reducing the distances we are trans- gUY TOKSOY, Supply Chain Solutions Canada
porting our goods," Löwenborg-Frick says. "Other
strategies that we apply are increasing direct deliveries to our stores which reduces one leg of transport, the use SLoW StEAmINg ShIpS LoNgER thAN
of consolidation points where goods from several suppliers are thE EmpIRE StAtE BuILDINg, AND othER
consolidated and shipped in order to increase fill rate and reduce ocEAN ShIppINg INNovAtIoNS
transports. On the ocean side, we are using higher cubes which
Innovations in the ocean shipping sector of
increases the amount of goods transported per container. We supply chain is also helping retailers meet the
have moved to using paper pallets which has also allowed us to ever-growing challenges of getting the prodfit more product per container."
uct manufactured and shipped into the hands
of consumers, all the while reducing their carRyDER hELpS REtAILERS AchIEvE BIg WINS
bon footprint and impact on the environment.
The environmental benefits Ryder helps deliver to its supply
"Over the past few years, changes in ocean
chain customers often come through transportation efficien- container shipping have dramatically reduced
cies driven by network optimization.
fuel consumption per imported container," Tok"For example, most Canadian retailers bring in a large propor- soy explains. "Because approximately 80 per
tion of the goods they sell from Asia using Western Canadian cent of international trade moves by sea, these
ports such as Vancouver and Prince Rupert," says Guy Toksoy, cumulative savings have been significant.
VP & General Manager, Supply Chain Solutions Canada. "Trad"The reductions have come through a comitionally, all of this freight was shipped directly to customers' bination of changes," he adds. "First, condistribution centers in Ontario and Québec. From there, it was tainer ships have reduced their sailing speeds
processed and shipped out to retail locations or subsidiary dis- significantly-a practice called 'slow steamtribution centers in other parts of the country. These secondary ing.' While these reductions in speed have
BRINg thE SuppLIER cLoSER to thE cuStomER

20%

30%

20 |

cANADIAN REtAILER | fall 2014

Canadian Retailer - Fall 2014

Table of Contents for the Digital Edition of Canadian Retailer - Fall 2014