Case Study: Lean Supply Chains

Case Study: Lean Supply Chains

The following case illustrates the importance of Lean Supply Chains to drive competitive advantage by looking at Gian Tiger. As you read through the case, think about their innovative practices and how those practices have helped Giant Tiger to compete in the competitive Canadian retailing landscape.

Giant Tiger: History

Gordon Reid opened Giant Tiger in 1961 in Ottawa, Canada. Initial sales were approximately $140,000. The initial strategy of the company was based upon low operational cost, high volume to enable an everyday low-price provider of products to Canadians. Their assortment includes womens, mens and childrens clothing and footwear, furniture, hardware, automotive, sports, toys, jewellery, grocery and electronics.

Using a franchising model, Giant Tiger expanded operations in 1968 and now has over 250 stores in 8 Canadian Provinces: Alberta, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Saskatchewan. It remains a privately held company with approximately 9,000 employees.

Early LEAN Deployment 20^th Century

The franchising operations enabled Giant Tiger to respond to regional demand based upon the experience and expertise of their franchisees. By keeping the overall footprint of stores relatively small compared to competitors, Giant Tiger is able to differentiate itself and keep inventories low across the chain. In 1987, 26 years after opening their first store, Giant Tiger launched their own trucking fleet. This launch was quickly followed with the opening of a buying office in Montreal, close to the garment district. In launching their own fleet and locating close to their suppliers, Giant Tiger was able to achieve competitive advantage with a LEAN supply chain. With their own trucks they could schedule more frequent deliveries to their stores. By locating close to their suppliers, they were able to adapt to new design trends quickly, enabling shorter delivery times and a better assortment for the Canadian consumer.

Lean Deployment 21^st Century

With the franchising model and local supply, Giant Tiger demonstrated their demand planning responsiveness late in the 20th-century, and were able to compete successfully against Walmarts entry into Canada in 1994. In the 21st century, new entrants have included Target in 2013 with over 17,000 employees and Marshalls in 2011. While Marshalls remains, Target withdrew from Canada. What has made Giant Tiger successful? Giant Tiger has continued to deploy LEAN principles in their supply chain to drive competitive advantage. First, with their trucking fleet and second with their new distribution center, located in Johnstown, between Montreal and Ottawa on the 401-corridor.

LEAN Transportation

The trucking fleet, Tiger Trucking is known as one of the safest fleets in Canada and has implemented many sustainability initiatives to save fuel costs and reduce their carbon footprint. Those initiatives include: automatic transmissions, outfitting 60% of their fleet with aerodynamic skirts which reduce air drag, and introducing Long Combination Vehicles (LCV). LCVs are 40 metres in length, which include a truck pulling two semi-trailers. By increasing the volume of goods transported as compared to two 23-metre truck/trailer combinations, LCV reduce fuel consumption. According to the Canada Safety Council, LCVs are involved in at least 40 per cent fewer collisions than regular tractor-trailers, improving road safety for Canadians.

LEAN Warehousing

In 2018, Giant Tiger opened a new warehouse facility with a symbiotic robotic AS/RS including 220 high-speed robotic runners and a fully automatic robotic palletizing equipment. The robots can configure and load pallets based upon the merchandises location at store level. This automated pallet configuration software allows for faster, more efficient order fulfillment and service delivery to the stores with a full-case pick accuracy of 99.99 percent. On any given day 100 stores orders are processed and delivered within 24 hours.

People-enabled Processes

With a tight labour market, Giant Tiger has blended the technology with the manual labour required to run a warehouse. Facilities include an on-site gym and cafeteria. As a result of people empowered processes, Giant Tiger has one of the lowest staff turnover rates in the industry.

Questions

Each case must have answers to the following:

a. What is the problem/issue addressed in the case?

2. How has Giant Tiger demonstrated a LEAN supply chain across all components of quality, cost, delivery, employee satisfaction & morale, and safety and sustainability?

3. Outline how Giant Tiger has reduced variability and lead times and improved its decision-making capabilities.