Canadian Tire, almost unknown to Americans, is Canada’s hardware. It’s also Canada’s auto repair center, work wear store and gas station.With 468 independently-owned Canadian Tire retail outlets from coast to coast, and a wide variety of retail goods and products to move from ship to shelf in a country where the weather can be less than cooperative - Canadian Tire faces a massive logistics challenge.
Launched from modest beginnings in 1922 when John and Alfred Billes purchased Hamilton Tire and Garage in Toronto for C$1,800 and began merchandising a limited range of repair parts such as tires, batteries and home-made anti-freeze, the company has grown dramatically and, according to Neil McKenna, Director, Transportation Operations, there’s a Canadian Tire store within a 15-minute drive of 91% of all Canadians.
“We also have a network of 57 specialty auto parts stores in some of the more populated regions,” he said. “And, we are the largest, independent retailer of petroleum gasoline, called Canadian Tire Petroleum, with 269 gasoline sites.”
In addition, the company has 67 car washes, 247 convenience stores and a chain of 334 clothing stores specializing in work wear, and a financial services operation headquartered in Welland, Ontario.
In order to handle this volume and diversity of retail products, Canadian Tire has established several distribution centers across Canada. The largest is in Brampton, Ontario, consisting of two facilities, one is a 1.1 million square foot facility that handles “conveyable,” or small package products, and the other is a one million square foot center that handles larger, bulk packages.
The company also has a 950,000 square foot distribution center in Calgary, Alberta, and a smaller distribution center in Montreal, Quebec, that in 2008 will be replaced by a 1.5 million square foot facility, also in the Montreal area.
Roughly 34% of Canadian Tire’s volume is delivered from offshore suppliers, usually in containers shipped to the Port of Vancouver, on Canada’s West Coast, or Halifax, location on Canada’s East Coast.
The company receives containers from 26 countries worldwide and concentrates on nine large ocean carriers to move the product to Canada.
When the containers arrive the contents are trans-loaded, sorted according to the appropriate distribution center, and packed into especially branded 53-foot intermodal containers owned by Canadian Tire. (Canadian Tire owns roughly 3,000 containers, making it one of the largest privately-owned container fleets in North America.)
The containers are then moved inland, primarily by rail, to the various distribution centers and, in some cases, directly to the appropriate store.
A robust forecasting engineA major challenge for Canadian Tire is coping with the seasonality of the products it handles, ranging from antifreeze and hockey equipment one month to lawn chairs and fishing rods the next month.
Coping with this challenge, Serge Carestia Director International Operations and Support, said, comes from the fact that the company has 80 years experience in the business in Canada. “We’re pretty confident that we know what’s coming and when, and we make sure we have the infrastructure in place to deal with it.
“We deal with the same problems anyone deals with in North America,” Carestia said. “The way we overcome a lot of the transportation problems, such as port infrastructure in North America, any railway issues, or any capacity issues, is by having a very sophisticated and robust forecasting engine at Canadian Tire, and we use that forecast to plan.
The Brampton-based operations planning center is central to the company’s logistics.
“We leverage our forecasting and planning information to drive our whole logistics and supply chain, right from vendors through to our stores,” Carestia explained.
“The information that we’ve developed is provided to a
