Up, up and away

As it is today, most of the company’s product was manufactured in Asia and sent out from Hong Kong. Scott Cleaver, Spin Master’s vice-president of supply chain and operations, remembers the problems the manual process created.

“Once we established an order at the factory, we didn’t have any time to make changes. There was no baseline information anywhere…Someone here would call the factory and say ‘we need to cancel 50’, and the factory would ask ‘Is that in addition to the 50 we cancelled yesterday?’ No one knew.

“So our factories were very frustrated with us. After a while, they were as confused as we were about what we really wanted.”

Once an order was (finally) determined, product was shipped from Asia to Vancouver, where it was sent by rail or truck to Toronto for distribution. Visibility into in-transit shipments was practically non-existent.

“To get a status on inbound shipments, we’d be making about 500 calls a day,” says Kennedy. “We’d have to ask about everything. ‘Is it on the boat or in the port? Is it with Customs? Has the trucking company taken it to the train? Where are the trains? What is the ETA for Mississauga?’”

The company’s Canadian distribution operations were split between six warehouses in the greater Toronto area, run by four different 3PLs.

Each warehouse was unique. Some were paper-based, with inbound/outbound deliveries and inventory managed on a card basis. Some used an automated system augmented by manual processes. None was able to communicate with Spin Master with sufficient speed and depth.

“There was no visibility and a lack of control,” Kennedy recalls. “If you want to be effective in consumer products, you want to be opportunistic at all times in inventory management. For instance, if you’re carrying a little more than you want to carry, you can offer discounts.

“If you’re only looking through this information once a month manually from a list, you’ll never catch these opportunities.”

Playing catch-up
The paper-based process propagated miscommunication between Spin Master and its 3PLs, which yielded delays, incorrect shipments and missed deliveries. None of this impressed the company’s retail customers.

“We actually got calls from our customers saying that they didn’t get product, prior to us knowing or the warehouse knowing,” Cleaver says. “We’d spend a lot of time telling the warehouse it was their fault, and they’d say it was our fault, and no one knew who was right or wrong because we were so manual.”