Supply Chain Management Project on Metro Inc

Inventory management

The range of sustenance items isn't just purchased and stored to the necessities of the particular nearby customers, yet in addition incorporates a worldwide arrangement to fulfill the requirements of minority groups and culinary trends.

Metro is Canada’s one of the popular store mart for grocery which include items such as meat, fish and seafood, fruits and vegetables, beer and wine, health and nutrition.

Metro focuses around freshness and bases its prosperity on its separated food combination. Since Metro does not have the expenses of a traditional distributer (e.g., home-conveyance) it can offer a superior discount and price-performance ratio to its clients. It additionally offers items in a wide assortment of sizes to interest small and in addition vast clients base.

Stock is sectioned by product type since items need to move at various temperatures. Because of the perishable natured food items, stores must be replenished day by day. When store keeps non-perishable food items, the main issue is to store those products at a right amount of quantity as per the demand and this is the point where supply chain management comes and play a vital role in inventory management. Replenishments have to be planned carefully and frequently so the stores are not overstocking their food items and should be kept in proper warehouse at right quantity.

Rather than working full-scale conveyance centers, Metro have their own few break-bulk platforms devoted to particular item classified such as natural products and vegetables, fish, fresh and frozen food items to accelerate handling and assurance of freshness.

Demand Forecasting

Demand forecasting is the scientific and analytical estimation of demand for a product (service) for a particular period of time. To know in detail about the demand forecasting methods used by the Metro, we met the supervisor of metro who gave us the idea as how they determine the demand for the products. He said that they use mainly 3 methods to determine the demand for the products. The techniques are as follows:

1. Survey Methods.
2. Opinion Poll Methods.
3. Statistical Methods.

1. Survey Methods: Under survey methods Metro conduct surveys about the consumers’ intentions, opinions of experts, survey of managerial plans, or of markets. Data obtained through these methods are analyzed, and forecasts on demand are made. These methods are generally used to make short-run forecast of demand.

Consumer’s Survey: Metro generally uses these methods. Consumers’ survey method of demand forecasting involves direct interview of the potential consumers. Consumers are simply contacted by the interviewer and asked how much they would be willing to purchase of a given product at a number of alternative product price levels. Consumer survey may take any form as:

1. Complete Enumeration
2. Sample survey
3. End-use Method.

2. Opinion Poll Methods: The opinion poll methods make demand estimation by using opinions of those who possess knowledge of the market, such as professional marketing experts and consultants, sales representatives and executives. The collection judgment by knowledgeable persons can serve as an important source of information. Metro does not use these frequently but uses when the product particularly requires a detailed research about the market. In fact, some forecasts are made almost entirely on the basis of personal insights of key decision makers.

3. Statistical Methods: Metro uses the previous research data to determine the demand of the products. The previous data helps the determining the trend of demand and supply which helps metro in analysing the market scenarios.

Procurement

Procurement is the process of recognizing need of the goods, finding a appropriate vendor, establishing an affordable payment terms and actual purchasing of the goods. In other words, procurement means acquiring all the goods, service and work that is required for a company. Metro is a retail base company which provides the wide range of products to the costumers so to offer the best product at the price Metro’s purchasing, merchandising and replenishment teams work in close collaboration. To ensure that the products are available in stores metro’s procurement team perform following steps:

1. Internal requirement analysis – the procurement process of the Metro starts with analysis of the requirement of the goods needed to fulfill the shelves of the stores. In each store of the Metro there is a proper inventory and sales management technology system which keep record how much they sell in one day and how much inventory they have at that time and based on that they estimate what and how much goods they need. That product can be either a brand-new item, or one that is being re-ordered. There are some specific products like fresh and produce which need up to date reorder.
2. Examine supplier options – In every procurement process every company has to decide that from which supplier to get their goods. Metro has the long list of suppliers because it deals with different kind of goods. Metro sticks with its regular vendors to purchase the goods and also trying to find new supplier which can minimize the cost. Metro direct purchase the final products from the large number of manufacturers.
3. Price and Terms – After deciding the vendor a company has to finalize the payment and terms and conditions of the business. Metro has several different agreements and contracts with their vendors. Metro purchase the products from its vendors at low prices and these products at retail prices.
4. Receipt and Inspection – Metro receive the goods from its large number of vendors and then these goods delivered to the Metro’s distribution centers. In distribution employees inspect and, subsequently, accepts or rejects the product. They also reject or submit the claim for the damaged goods. This damage can be done during the transportation of the goods or while in loading or unloading.
5. Delivery – After placing an order goods are delivered to the distribution center of the Metro. In these distribution centers Metro procurement team arrange the goods according to the need of every store and then they deliver these goods to the metro stores according to their order or need.
6. Invoice and Payment – Once the goods have been received the final invoice number has been created and the final payment is made to the suppliers. They need the invoice number, receiving document and the original purchasing order to complete the procurement process and to make the final payment to the supplier.

Warehousing/storage/materials handling

By gathering information with the supervisor of one of the Metro distribution centers, we came to know about company’s warehousing/storage and material handling system.

After the two main largest grocers Loblaw Companies Limited and Sobeys, Metro achieved at third mark with 365 different locations in Ontario and Quebec. The products which come from different distributors later according to their order they send it to different stores for example Metro, Food basics and other retail stores. Products such as meat, sea food, fruits and vegetables, health and nutrition are stored in warehouse and method used to release material is known as First in First Out (FIFO). Metro consists of four types of warehouses, where different products are kept in different temperature. One of the warehouses on a regular temperature contains washing liquid, cat food, water and juice and dry food i.e. pasta, rice flour, cheese flour. Cold chain involves meat and milk product which is kept from the level of 0°C to -5°C. Fruits and vegetables are kept in mix medium temperature from 5°C to 10°C or 15°C by depending on the products.

Material Handling is known as moving material where it is moved by short distance in a storage area. Material Handling includes loading, unloading, palletizing, and de-palletizing. In Metro, Fork-lifts trucks equipment is used to handle materials or place them in storage properly. Metro uses this system to improve customer services, reduce inventory, shorten delivery time, and lower overall handling cost in manufacturing, distribution and transportation.

Transportation

The transportation network of Metro Inc. is considered as one of the best networks for the supply chain and logistics. At Metro, they embrace transport innovation as they continually explore new ways to create collaboration, reduce carbon impact and speed business forward. Metro has the resources and industry positioning to develop and deploy dynamic, business-driven solutions at competitive rates. Constantly improving logistics and distribution is one of the core priorities in order to maintain our competitive advantage in an increasingly competitive market. The logistics sector handles merchandise transport and warehousing.

Metro makes more than one million deliveries a year, and trucks are most commonly used to make these deliveries. Our team works in multiple ways to improve the fuel efficiency of our corporate fleet, including:

• Replacing the old trucks with new ones, also providing more efficient models which can help in minimizing harmful emissions.
• Improving aerodynamics by adding side skirts to trailers.
• Training drivers on techniques for progressive shifting and minimizing idle time.
• They use battery-powered auxiliary power units, rather than using diesel to heat sleeper cabs.
• They recap the tires when threads are worn out which help them to divert wastes from landfill and reduce oil consumption required to produce new tires.
• Improving processes and systems to increase the number of cases per load and reduce the number of empty kilometers driven when trucks return to their point of origin.
• Piloting 60-foot trailers in Ontario.

Thus, the above-mentioned points make the transportation system of metro most reliable and fast-growing sector. Metro is comprised of more than 600 food stores operating under the different banners and their success can be mainly given to their transportation and logistics team which make the delivery of goods and products on time.

Customer Service

In order to review the customer service of Metro that how Metro deals with its customer and what are its strategies, Metro has divided its customers into different segments like the ones who will be focusing on electronics, grocery or apparels. Extra focusing on shoppers who go shopping more frequently near their neighborhood while Real is the one-stop shopping location for weekly purchases. METRO’s strategy is to position each division in its individual market and the various sales formats complement each other and offer a wide product assortment to customers.

In regards to its customer service, Metro offers several services to its customers such as

• longer guarantees
• short repair times or delivery of electronics and beds
• installation assistance, removal of packaging material and the old equipment
• registers and telephones for rent and a freezer emergency service
• service is offered 24/7

One of the effective customer reaching technique used by Metro is employing the sales force who visit customers such as restaurant, hospitals, retailers and utilizes catalogues and discounts for these specific groups. This merchandising system offers distinct discount schemes for various customers and these customers can pre-order quantities and pick their merchandise at the dock of the store. To ensure its customer service and provide the best of it, Metro offers some loyalty programs to its customers which are:

• My Healthy Plate with Metro

My healthy plate with metro program has been initiated by them for consumers who are concerned with making healthy food choices. They have established a team of independent nutritionists to analyse the lists of ingredients and the Nutrition Facts tables to simplify their life by indicating to them that the products meet the standard values.

• Air Miles

For Metro customer is the heart of their strategy and to evolve towards greater personalization in order to better engage our customers they have initiated a loyalty program with Air Miles. The Air Miles Reward Program enables its customers to get Miles for travel, merchandise, entertainment and more simply by shopping at a wide variety of leading Canadian retailers and service organizations.

• My Metro App

The mobile app My Metro was launched, which allows users to manage their purchases before, during and after their trip to the grocery store where users can create their own grocery list and allows customers to read the bar codes of the products they will soon be running out of and automatically add them to their grocery list.

• The Flash

Metro has also developed a newsletter called The Flash which is sent out to members every week. It reminds them to get their personalized coupons at metro.ca every week, along with lots of other information promoting all of the advantages of loyalty programs.

Performance Measurement

Performance measurement is vital part of any small, medium and large organization. To know the success of any company, it is necessary to look at and measure its’ performance and compare with its’ past performance and competitors. After analyzing it, one can know about company’s real performance. There are two types of performance measurements indicators– Qualitative and Quantitative. Qualitative performance measurement indicators are customer satisfaction and quality of products whereas Quantitative performance measurements indicators are profit, sales, share price, no. of customers, expansion of business etc.

Metro Inc. evaluates its’ overall performance using several principal indicators such as:

• Sales growth
• Earnings per share growth
• Return on shareholders’ equity
• Customer satisfaction
• New no. of stores opens etc.

Apart from these, if we talk about business expansion then Metro Inc. has done a significant progress in last three years. Metro and its retailers carried work on a total of 131 stores, in which 23 are newly opened stores, 24 are expanded stores and 84 are fully renovated. Metro Inc. network also work on customer satisfaction by meeting customerэs needs. Corporation offers friendly stores, a customized service and variety of quality items at very competitive prices.

After looking at all this information, it can be say that Metro Inc. is performing well and growing in last few years.

Technology

In today’s highly competitive marketplace, it’s essential for businesses to innovate new ways to modernize their supply chain and optimize productivity. With the aid of modern technologies, one can create better visibility within your supply chain.

Computerized Shipping and Tracking:

With the aid of modern technologies and Internet-based software, you can simplify the supply process and noticeably reduce shipping errors. Software like FlashView enables savvy business owners to consolidate all aspects of their supply chain in one place. The software will allow you to digitally organize inventory data, monitor and manage shipping and tracking information, and create electronic invoices with ease. It will also greatly enhance the customer experience by providing consumers with the ability to continuously track the status of their orders.

Radio Frequency Identification:

Radio Frequency Identification is vital piece of technology that can provide innumerable benefits to the business owner. RFID chips are placed on every product and provide a way for business owner to easily track their inventory.