Logistics - KPI

Logistics and Supply Chain Management (SCM)
Key Performance Indicators (KPI) Analysis

A Canada/United States Retail and Consumer
Product Goods (CPG) Supply Chain Perspective
November 2006
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Executive Summary
The retail and consumer product goods (CPG) supply chain is a complex world divided
between large retailers establishing integrated supply chain practices with manufacturers
and wholesalers, and smaller specialized retailers emphasizing customized or unique
products and services delivered in a Just-In-Time (JIT) manner to their customers.
The desire to react more rapidly to an ever-more demanding and less loyal customer, ever
shortening profit and product life cycles, global sourcing to low cost countries and the
need to avoid even smaller gross margins across the CPG supply chain are the key factors
for developing logistics and supply chain management (SCM) collaboration models.
Measurement of logistics and SCM key performance indicators (KPI) is an essential part
of the global supply chain CPG collaboration concept. The two most preferred KPI
measured by North American (NA) CPG lean manufacturers are logistics and SCM JIT
related (on-time delivery and inventory turns) while traditional lean floor plant measures,
such as cost per unit and manufacturing cycle time, are far behind4.
It is estimated that 37 percent of NA firms that put in place corporate wide measurement
of logistics and SCM KPI achieved a decrease of 15 percent or more in shipment delays
compared to only 7 percent of firms that do not measure those KPI consistently1.
While inventory turns is the main KPI for evaluating supply chain agility, logistics cost
KPI allow firms to evaluate the efficiency of their logistics and SCM operations. The
combination of supply chain agility and efficient SCM practices is key to long term
competitiveness and prosperity of Canadian firms in a global supply chain (GSC)
context.
Inventory Turns
Between 1999 and 2003, Canada was behind its U.S. neighbour in a proportion of 30
percent to 40 percent in terms of inventory turns. This is a major productivity gap
between the two countries.
Inventory turns remained at the same level in the retail sector, both in Canada and in the
United States, between 1999 and 2003, like in the wholesale sector. The Manufacturing
sector increased its inventory turns by more than 20 percent between 1992 and 2005
while wholesale and retail inventory turns were stable. This means that the inventory was
not moved from the wholesalers to the retailers, and that a real productivity increase
occurred in the Manufacturing-Wholesale-Retail supply chain9.
It is important to note that 63 percent of NA CPG firms that are part of supply chain
collaborative initiatives do not measure the value of these initiatives at all3. The lack of
measurement and understanding of the benefits of collaborative KPI, such as sales
increase, stock-out ratios and inventory management across the CPG value chain, can
have an important impact on the innovation and productivity of the Retail and CPG
sector.
Logistics Costs
Canada has total and internal logistics costs in Retail that are, respectively, 16 percent
and 19 percent higher than in the U.S.. On the other hand, the U.S. Retail sector
outsources more logistics activity, by a ratio of three times, than the Canadian Retail
sector13.
For the third cost component, Canadas retail sector has a larger inventory carrying cost
than the U.S. by 31 percent. This is explained by the fact that Canadian firms have lower
inventory turns compared to their U.S. counterparts13.
Technology and Investment
SCM technology adoption is still at an infancy stage in Canada; only 14-19 percent of
Canadian CPG Manufacturers implemented new logistics and SCM processes between
2002 and 200421. In order for CPG firms to achieve the benefits of their respective
logistics and SCM collaboration drivers, the adoption of logistics and SCM technology
and processes across the supply chains is a key component for developing efficient
collaboration networks.
The risk level of investing in logistics and SCM technology and processes is still limited
and firms do achieve concrete improvements from them. More than 65 percent of NA
initiatives to reduce inventory and assets required, or to improve supply chain flexibility,
either met or exceeded initial expectations (only 3 percent of them failed) while 80
percent of NA CPG and Retail sectors that implemented a Lean logistics strategy saw a
decrease as per or above expectations in SCM costs4.
Although the logistics and SCM technology investment level has been low in Canada, the
Retail sector is starting to respond to the increase in complexity of logistics and SCM by
increasing their investment into value added distribution centers and freight terminal
infrastructure. Canadian retail investments in warehousing and freight terminals increased
by more than 222 percent from 2001 to 20037.
In order to benefit from the productivity of logistics and SCM, individual firms must
develop their own personal roadmap. It would consist of documenting the long-term
perspective into specific action items linked to deliverables, performance indicators
objectives, returns on investment and a project time frame.
Table of Contents
Executive Summary ............................................................................................................ 3
Introduction......................................................................................................................... 6
I - Industry Productivity and Competitiveness via Logistics and SCM.............................. 7
II-Inventory Management and Just-in-Time Key Performance Indicators....................... 10
A. Inventory turns comparison: Canada vs. U.S........................................................ 10
B. Sector Specific Analysis: The Canadian Food Supply Chain............................... 12
C. Sector Specific Analysis: The Canadian Furniture Supply Chain ........................ 13
D. In-depth Analysis: Canadian Retail Sector ........................................................... 15
E. Technology ........................................................................................................... 16
III-Logistics and SCM Cost KPI Analysis ....................................................................... 18
F. Internal Logistics Costs......................................................................................... 18
G. Logistics Outsourcing ........................................................................................... 20
H. Inventory carrying costs........................................................................................ 21
I. Total Retail Logistics Cost.................................................................................... 22
J. Importance of Logistics Technology in Cost Reduction ...................................... 22
IV- Final Remarks............................................................................................................. 23
Annex I - Methodology ................................................................................................ 24
Annex II - Definitions.................................................................................................. 28
Annex III Inventory Management Data .................................................................. 31
Annex IV Logistics Internal Cost Data....................................................................... 38
Annex V - References .................................................................................................. 41
Introduction
Retail and Consumer Product Goods (CPG) global supply chains (GSC) are driven by a
customer-centric reality, global sourcing from low cost countries, smart border
requirements, logistics mandates (such as Radio frequency identification (RFID)) from
large corporations and mass customisation in a Just-In-Time (JIT) manner. Logistics and
supply chain management (SCM) are thus expected to play a key role in CPG GSC and
contribute dramatically to productivity growth of Canadian firms within the next few
years.
Although Canadian CPG firms have used logistics performance indicators internally for
decades, there has never been any tool for Canadian firms to benchmark themselves to
their supply chain partners, competitors, sectors and U.S. counterparts.
Manufacturers, retailers and wholesalers in CPG sectors need quality information on
logistics and SCM costs as well as performance indicators in order to facilitate the
development of best practices and benchmarks, justify investment and innovation, and
monitor industry performance.
Industry Canada has partnered with Supply Chain and Logistics Association of Canada
(SCL) Research Committee and the Retail Council of Canada to launch a national
logistics and SCM performance indicators initiative.
The objective of this study is to propose a Logistics and SCM key performance indicators
(KPI) analysis that can be used as a benchmarking tool for firms and policy makers. This
analysis will help firms understand where they are located with respect to leading
enterprises, firms within their own sector and the U.S., and what steps they must
undertake in order to become more competitive.
Logistics and SCM functions can either be performed from internal activities or
outsourced to a third party logistics (3PL) service provider, via wholesale distribution, or
in combination. The following report will guide supply chain managers through these
different key components in order to provide them with a global view of their supply
chain KPI.
Analysis is initiated by a general section on industry productivity and competitiveness
indicators via logistics and SCM. This will be followed by specific sections on inventory
management and Just-in-Time KPI, and a logistics and SCM cost KPI analysis that
includes three components: logistics internal, outsourced and inventory carrying costs.
Finally, sector specific KPI, complete with methodology, calculations and definitions will
be tabled in Annexes in order to provide details to help individual firms policy makers
develop applicable benchmarking tools.
I - Industry Productivity and Competitiveness via Logistics and SCM

The retail and CPG supply chain is a complex world divided between large retailers
establishing integrated supply chain practices with manufacturers and wholesalers, and
smaller specialized retailers emphasizing customized or unique products and services
delivered in a JIT manner to their customers.
These two CPG supply chain models differ while being triggered by the same force:
responding to a customer centric environment. Customers are driving the demand and
product/service levels by requesting complex customised products while at the same time
expecting lower prices. The desire to react more rapidly to an ever-more demanding and
less loyal customer, ever shortening profit and product life cycles, global sourcing to low
cost countries and the need to avoid even smaller gross margins across the CPG supply
chain are the key factors for developing logistics and SCM collaboration models.
Retail and CPG logistics and SCM collaboration is also extremely complex due to both
market pressures of delivering rapid response, and long lead times related to low cost
country sourcing. In fact close to 88 percent of North American (NA) CPG players are
expecting low cost country savings eroded by logistics and supply chain costs1.
The Chinese share of imports for key CPG sectors in Canada has more than doubled in
the short period between 2000 and 20042. Best in class retailers that are turning to low
cost offshore sourcing, such as China, are looking far up the supply chain to reduce lead
times as much as possible and mitigate the effect of complex and less predictable
logistics and SCM operations within the value chain, as shown in Figure 23.
Measurement of logistics and SCM KPI is an essential part of the global supply chain
CPG collaboration concept. The two most preferred KPI measured by North American
(NA) CPG lean manufacturers are logistics and SCM JIT related (on-time delivery and
inventory turns) while traditional lean floor plant measures, such as cost per unit and
manufacturing cycle time, are far behind4.
1- NA CPG Manufacturer Lean KPI Measures

80%
60%
40%
20%
0%
On-time delivery
Inventory Turns
Cost per unit
Manufacturing Cycle Time
In terms of KPI measurement processes, 37 percent of NA firms that have put in place
logistics and SCM corporate wide measurement achieved a decrease of at least 15 percent
or more in shipment delays compared to only 7 percent of firms that did not measure lean
logistics KPI consistently. NA firms that measured SCM KPI also outperformed their
industry counterparts on document issues, which is a key component of Smart Border
solutions1.
percent NA Firms
Achieving
> 15 percent improvement
2- Performance Advantage from Logistics and SCM KPI Measurement1

40%
35%
30%
25%
20%
15%
10%
5%
0%
Total landed cost
Shipment Delays
Corporate wide measurement
Documentation Issues
Measured locally
Not measured consistently
It is important to note that 63 percent of NA CPG firms that are part of supply chain
collaborative initiatives do not measure the value of these initiatives at all. The lack of
measurement and understanding of the benefits from collaborative KPI, such as sales
increase, stock-outs ratios and inventory management across the CPG value chain, can
have an important impact on the innovation and productivity of the Retail and CPG
sector3.
SCM processes and technology enable leading CPG supply chain players to develop new
business practices that will fundamentally change the way their value chain plans and
responds to consumers. The concept of connecting the retail store to its whole supply
chain is based on the Collaborative Planning Forecasting and Replenishment (CPFR)
3- Retail and CPG Supply Chain Collaboration
3
Model Potential Benefits
Cost from unbalanced
inventory and excess
Cycle time
Inventory level
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Productivity Gain
model where partner companies (distributors, manufacturers, suppliers, logistics service

providers and retailers) exchange information on product sales and forecasts in order to
synchronize their operational plans. This approach also integrates the downstream
information flow to take account of manufacturing constraints.
As an integrated approach to demand and replenishment in the CPG sector, connecting
stores to all supply chain players is expected to yield high benefits to firms across the
retail and CPG value chain5.
Collaboration applications are also key for the small specialized retail sector. The
capability to provide Available To Promise (ATP), mass customisation and JIT in small
quantity to specific end customers requires an enhanced level of synchronisation between
value chain participants.
Canadian retailers have also embraced the Internet into their logistics and SCM
processes. The two key benefits of conducting business over the internet in the Canadian
CPG sector are reaching new customers, followed closely by better co-ordination with
suppliers and/or customers and/or partners (a key CPFR foundation principle)19.
SCM technology adoption is still at an infancy stage in Canada6; only 14-19 percent of
Canadian CPG Manufacturers have implemented new logistics and SCM processes
between 2002-200421.
4- Logistics Innovation in the Canadian CPG Manufacturing
21
Supply Chain from 2002-2004
Canadian Firms
20%
10%
0%
Wood product
manufacturing
Clothing manufacturing
and leather and allied
product manufacturing
Food manufacturing and Chemical manufacturing

beverage and tobacco
product manufacturing
Although the logistics and SCM technology investment level has been low in Canada, the
retail sector is starting to respond to the increase in complexity of logistics and SCM by
investing more intensively into value added distribution centers and freight terminal
infrastructure with an increase of 222 percent between 2001 and 20037.
II-Inventory Management and Just-in-Time Key Performance Indicators

A. Inventory turns comparison: Canada vs. U.S.
Key to the success of an agile CPG supply chain is the speed and flexibility with which
these activities can be accomplished and the realization that customer needs and customer
satisfaction are the very reasons for the network itself to exist. Achieving agility starts
with the physical flow of parts, from the point of supply, through the factory, and
shipment through agile distribution channels.
The main logistics and SCM KPI to measure supply chain agility in the CPG supply
chain is inventory turns. Inventory turns can be defined as how many times a year the
average inventory for a firm changes, or is sold. This ratio is a common industry
standard KPI in inventory management performance analysis.
Inventory turns remained at the same level in the retail sector, both in Canada and in the
United States, between 1999 and 2003, like in the wholesale sector. Between 1999 and
2003, Canada was behind its U.S. neighbour in a proportion of 30 percent to 40 percent
in terms of inventory turns8. This is a major productivity gap between the two countries.
5- Retail Cost of Goods Sold / Average Inventory8
Average Inventory Ratio
8
7
6
Canada Total
U.S. Total
4
1997
1998
1999
2000
2001
2002
2003
2004
Levelled inventory turns are actually good news in a total supply chain perspective. The
Manufacturing sector increased their inventory turns by more than 20 percent in the
period of 1992-2005 while wholesale and retail inventory turns were stable. It means that
the inventory was not moved from the wholesalers to the retailers, and that a real
productivity increase occurred in the Manufacturing-Wholesale-Retail supply chain.
Decreasing inventory turns could have meant that the inventory shifted from one link (the
wholesalers) in the supply chain to the next one (the retailers).
Going one step further and comparing the 2003 inventory turns ratios data between
Canada and U.S. for the Manufacturing, Wholesale and Retail sectors can lead us to two
main conclusions. First, Canada is not as efficient as the U.S. in three out of the four
10
sectors. As can be seen in Figure 6, Canada is slightly more efficient than the U.S. in the
Manufacturing-Finished sector, but lags in Manufacturing-Raw, Wholesale and Retail
sectors9. The second conclusion is that there is much more inventory in retail than in
wholesale, and much more inventory in wholesale than in manufacturing.
Average Inventory Turn Ratio
6- Canada - U.S. Comparison of Sectors in 20039

30
Canada - 2003
U.S. - 2003
25
20
15
10
5
0
Man - raw
Man - finished
Wholesale
Retail
This last situation suggests that the principles of JIT are applied more by the
manufacturing sector than by wholesalers and retailers, since they are moving their
inventories faster than in the other two sectors. Although most gains in efficiency were
realized in the manufacturing sector, this should certainly influence positively the whole
supply chain for the future.
The next six figures display retail sub-sectors comparison of Canada vs. U.S. data.
7- Motor Vehicles and Parts

Dealers8
8- Furniture, Home Furnishings,

Electronics and Appliance8
Inventory Turns per Year
7
6
5
4
3
1997
1997
1998
1999
2000
2001
2002
2003
2004
1998
1999
2000
2001
2002
2003
2004
Furniture and Home Furnishings Stores CA

Electronics and Appliance Stores CA
CA
U.S.
Furniture, home furnishings, electronics, and appliance stores U.S.
11
9- Building Material and Garden

Equipment Dealers8
10- Food and Beverage Stores8

16
15
14
13
12
11
3
1997
1998
1999
2000
2001
CA
2002
2003
1997
2004
1999
U.S.
2000
2001
CA
2002
2003
2004
U.S.
12- General Merchandise Stores8
11- Clothing and Clothing

Accessories Stores8
5
7
1998
2
1997
1998
1999
2000
CA
2001
2002
U.S.
2003
2004
1997
1998
1999
2000
CA
2001
2002
2003
2004
U.S.
It is clear from those figures that Canada is behind the U.S. in most of the cases. The
only exception was the Food and Beverages retail sector in 1999 and 2000, but even that
sector is now behind the U.S. in terms of inventory turns per year8. The Motor Vehicles
and Parts Dealers and the Food and Beverages Canadian sub sectors needed to improve
their turns by 28 percent and 19 percent respectively in order to catch up with the U.S.,
while the total Retail sector was behind the U.S. by 41 percent in 20038.
B. Sector Specific Analysis: The Canadian Food Supply Chain
The food CPG supply chain is driven by larger retailers logistics and SCM mandates
such as Efficient Consumer Response (ECR), RFID and other visibility and traceability
initiatives. The Canadian food CPG supply chain is mainly North American with 60-70
percent of imports and exports being from and to the U.S.2.
In terms of logistics inventory productivity KPI, the wholesale and retail sectors are
performing above their respective industry sector average by 20 to 250 percent. This can
be the result of implementing JIT processes for fresh and highly perishable products in
recent years2.
12
On the other hand, the food supply chain manufacturing sub sector is performing below
the manufacturing industry average with the exception of raw materials. The increase in
turns from 1992 to 2004 was very moderate in all these manufacturing sub sectors
compared to the total manufacturing sector7.
14- Logistics Innovation in the Food Manufacturing Sector (2002-2004)
21
50%
Manufacturing
Firms
40%
Food manufacturing and beverage

and tobacco product manufacturing
30%
20%
10%
0%
Manufacturing methods
Logistics Innovation
Innovation processes in production methods and logistics for Food manufacturing,

between 2002 and 2004, was slightly higher than the manufacturing average21. The focus
of these innovations was mainly based on quality and traceability mandates from large
retailers in comparison to cost and productivity for other sectors of the economy, which
explains that inventory turns increase was extremely moderate for that specific sub sector
of the food supply chain5.
C. Sector Specific Analysis: The Canadian Furniture Supply Chain
The Canadian furniture CPG supply chain sector is part of a complex global supply chain
driven by low cost standardised products from foreign countries versus mass
customisation requirements and small production batches.
13
Fruit and Vegetable

Markets
Sector Average
Meat Markets
Specialty Food Stores
Convenience Stores
Grocery Stores
Food and beverage Stores
Beverage Wholesalers
Food Wholesalers
Farm Product Wholesalers
Beverage and Tobacco

manuf-fin.
Food manuf-fin.
Beverage and Tobacco

manuf-raw
Sub Sectors
Fish and Seafood Markets
40
35
30
25
20
15
10
5
0
Food manuf-raw
13- Food CPG Supply Chain
In terms of performance indicators, furnishing wholesalers and stores inventory turns are
below their respective industry average. This can be explained by the shift of imports
provenance in that sector. Chinese share of imports in the household and institutional
furniture and kitchen cabinet sector has increased from 22 percent in 2000 to 47 percent
in 2004, replacing mainly U.S. imports, thus making the logistics processes more
complex and less flexible2.
15- Canadian CPG Furniture Supply Chain JIT Indicator7

45
40
35
30
25
20
15
10
5
0
Furniture and related
product manuf-raw
Furniture and related

product manuf-fin.
Sub Sectors
Home Furnishings
Wholesalers
Furnishing and Home

Furnishings Stores
Sector Average
The furniture manufacturing sector has been improving its velocity with an increase of 89
percent of its inventory turns of raw materials (compared to 25 percent for the
manufacturing sector average) and 44 percent for its finish products inventory turns from
1992 to 2005 (compared to 28 percent for the manufacturing sector average)7. This
increase in productivity allows Canadian manufacturers to have more supply chain agility
and flexibility in activities such as mass customisation, which is becoming a key value
added and differentiating factor.
Innovation in production and logistics methods is key to productivity in the Furnishing
manufacturing sector. Although only 19 percent of these manufacturers have invested in
logistics innovation from between 2000 and 2004 (compared to 44 percent in
manufacturing methods), this represents an increase of 13 percent when benchmarked
against the total manufacturing process (compared to an increase of only 7 percent for the
manufacturing methods)21.
Firms
16- Logistics Innovation in the Furniture Sector (2002-2004)21

50%
40%
30%
20%
10%
0%
Manufacturing
Furniture and related product manufacturing
Manufacturing methods
Logistics Innovation
14
D. In-depth Analysis: Canadian Retail Sector

The next figures will look more closely at the Canadian Retail sub sectors, by comparing
the sub sectors that have the highest velocity in terms of inventory turns to those that
have the slowest ones.
The type of industry, its distribution processes, the corporate strategies adopted internally
and the global supply chain strategy, will all have an impact on the quantity of inventory
that is deemed required. The following comparisons in terms of inventory turns do not
suggest one sub class is better than another, but show that they are quite different indeed.
The Gasoline stations with Convenience Stores sub sector scores an inventory turns ratio
of 21.04, followed by the Fish and Seafood Markets sub sector with an inventory turns
ratio of 18.6610.
The food industry has a strong presence on the first graph below. That industry must
definitely keep a strong focus on its inventory turns, since goods that are not fresh will
not sell. That is displayed in reality by inventory turns ratios, in average, more than twice
as high than those of the average Retail sector.
Still there is a significant difference in percentage when comparing the highest velocity
retailers amongst themselves. In fact, Canadian retailers that display the highest velocity
of their inventories keep approximately between 2 weeks and 2 months of inventory.
17- High Velocity Retailers10

Pharmacies and Drug Stores
Florists
Beer, Wine and Liquor Stores
Computer and Software Stores
Convenience Stores
Grocery (except Convenience) Stores
Meat Markets
Fruit and Vegetable Markets
Gasoline Stations with Convenience Stores
10
15
20
Canadian retailers displaying the slowest velocity of their inventories keep approximately
between 5 months and a year worth of inventory, as per the figure below. The average
for the Retail sector, as displayed in the previous section, was a little over 2 months worth
of inventory. Musical Instruments and Jewellery Stores sub sectors carry respectively
15
between half-a-year and almost a year worth of inventory, which is in average three to
four times more inventory than the average for the Retail sector10.
18- Low Velocity Retailers10
Men's Clothing Stores
Shoe Stores
Gift, Novelty and Souvenir Stores
Recreational Vehicle Dealers
Sporting Goods Stores
Luggage and Leather Goods Stores
Art Dealers
Sewing, Needlework and Piece Goods Stores
Musical Instrument and Supplies Stores
Jewellery Stores
0.5
1.5
2.5
This section compared different categories of retailers in terms of inventory turns. While
having high inventory turn rates seems to be a good thing at first glance, it is important to
understand that this could lead a retailer to display empty store shelves. Without the
appropriate planning and help of CPFR technologies, a retailer focusing solely on
increasing his inventory turns could realize that this is done at the expense of his in-stock
position, thus leading him to a different kind of problem.
E. Technology
Following are displayed some of the most important challenges faced currently by the
CPGs supply chain, all related to inventory management. It is clear from next figure that
Out-of-Stocks are considered by most actors in the CPGs supply chain as a key item to
improve as goods move from different suppliers to the end customer11. Too often, out-ofstock items mean lost sales, and lost sales affect directly bottom lines as well as customer
loyalty.
16
19- CPG's Inventory Planning and Replenishment Related Pressures11

Out of stock create customer dissatisfaction and lost sales
Supply cycle is longer than demand cycle
In-store stock imbalances drive too many merchandise
transfers
Markdowns to drive sell-through is eroding gross margin
'Lumpy' receipt patterns put excess cost into the retail
supply chain
30%
40%
50%
60%
70%
80%
Another key challenge is the fact that the supply cycle ends up being longer than the
demand cycle. This is not a new phenomenon, but what keeps the CPGs supply chain
under pressure is that improvements on the supply side often cannot keep up with the
erosion of the demand cycle by demanding customers.
The concept of supply chain collaboration introduced earlier is indeed a good way to
lessen CPGs planning and replenishment related pressures but is extremely complex.
Collaboration along the supply chains actors helps reduce all of the items above, namely:
out-of stocks, supply cycles, merchandise transfers, markdowns and lumpy receipt
patterns11.
Initiatives related to inventory management help CPGs actors to become more efficient.
As per the two figures below, 65 percent of the initiatives to reduce inventory and assets
required, or to improve supply chain flexibility either met or exceeded initial
expectations12. In fact, less that 3 percent of those initiatives failed, which means that the
vast majority of inventory management initiatives bring tangible gains to the actors
participating in them4.
20- Level of Success of CPG's
Initiatives to Reduce Inventory and
Assets Required4
21- Level of Success of CPG's

Initiatives to Improve Supply Chain
Flexibility4
53%
47%
32%
32%
3%
3%
18%
12%
Initiative failed
Initiative failed
Success below expectations
Success is what we expected
Success exceeded expectations
17
III-Logistics and SCM Cost KPI Analysis

While inventory turns is the main KPI for evaluating supply chain agility, logistics cost
KPI allow firms to evaluate the efficiency of their logistics and SCM operations. The
combination of supply chain agility and efficient SCM practices is key to long term
competitiveness and prosperity of Canadian firms in the emerging GSC context.
Logistics costs occur internally within firms, are outsourced to logistics service providers
and occur via inventory carrying cost. The sum of these three components will enable
firms to evaluate their sector total costs and benchmark themselves against their own
industry, their U.S. counterparts and other key sectors that share similar logistics and
SCM processes.
The mix of internal, outsourced and inventory carrying costs will also allow firms to
evaluate their own logistics and SCM cost structure while enabling them to rethink their
business model, if deemed necessary.
F. Internal Logistics Costs
Internal SCM and logistics costs encompass all logistics activities that occur within a
firm. It excludes all outsourced logistics activities and all production processes.
Comparisons between Canada and the U.S. were done in constant Canadian based factor:
by bringing the U.S. economy to a comparable level with Canada, which meant
downsizing the U.S. economy so that when comparing both countries, it is done for two
economies of similar size.
One of the benchmarks of logistics cost KPI is the logistics wage bill. In most sectors,
Canada has a larger internal logistics wage bill than that of the U.S. In most retail sectors
the U.S. has a larger wage bill share in logistics than Canada. However, this is not the
case for Motor Vehicle and Parts Dealers and for Building Material and Garden
Equipment and Supplies Dealers.
The sectors in which there is the largest difference are Food and Beverage Stores,
General Merchandise Stores and Non-Stores Retailers, the difference being largest for
Food and Beverage Stores (12.3 percentage points)9.
18
22- Canada/U.S. Wage Bill Share in Logistics
14%
12%
Wage bill share
20%
10%
8%
15%
6%
10%
4%
2%
5%
0%
0%
-2%
Motor vehicle Furniture and Electronis
Building
and parts
home
and appliance Material and
dealers
furnishing
stores
Garden
stores
Equipment
and Supplies
Dealers
Food and
beverage
stores
Health and
Personal
Care stores
Gasoline
stations
Clothing and Sporting

General Miscellaneous Nonstroes
clothing
good, hobby, merchandise store retailers retailers
accessories book and
stores
stores
music sotres
Canada
U.S.
Difference
The analysis of logistics costs is done in percentage of sectors Gross Domestic Product
(GDP) and by percentage of sales. Internal cost in percentage of GDP represents the
logistics activity that occurs within a firm compared to all internal value added activities.
It excludes all service and product sourcing costs. This is the most precise indicator of the
size of the logistics activity that occurs within a firm.
Looking at the Canadian economy in a more detailed manner, the following two figures
show the top and bottom five retail sectors with respect to logistics as share of internal
costs (measured through gross margins).
On the other hand, the gross margin ratio allows firms to benchmark themselves more
easily. The percentage of sales ratio includes all the internal costs in addition to service
and product sourcing; this often creates some multiple counting issues, which explains
why the ratios displayed are quite smaller than the percentage of GDP.
23- Logistics' Share of Internal Costs for Canada. Top Five Sectors9
Share of Gross Margins
100%
Logistics' share of gross margin
Retail average
50%
0%
Direct selling
establishments
Vending machine
operators
Automotive parts,
accessories and tires
stores
Building Materials and

supply dealers
Lawn and garden

equipment
19
Difference in % points
25%
Share of Gross Margins
24- Logistics' Share of Internal Costs for

Canada. Bottom Five Sectors9
15%
Logitics' share of gross margin
Retail average
10%
5%
0%
Gasoline
stations
Jewellery,
luggage and
leather good
stores
Shoe stores
Beer, wine and Sporting goods

liquor stores
Surprisingly
enough,
Gasoline Stations is the
sector that has the
lowest share of logistics
in internal costs. This
may be explained by the
fact
that
logistics
activities related to
energy distribution in
this area are carried out
by the wholesale and
manufacturing sectors.
G. Logistics Outsourcing
90%
60%
5000
30%
0
% of storage and
warehousing
Millions of CAD
10000
25- Logistics Outsourcing and Storage and Warehousing

9
Outsourcing for Canada
0%
Manufacturing
Outsourcing
Wholesale
Storage and warehousing
Retail
Percentage of storage and warehousing
The Canadian economy has logistics outsourcing costs that are largest for Manufacturing.
However, the percentage of storage and warehousing included in logistics outsourcing
costs is largest for the retail sector, where it represents 70 percent of logistics outsourcing
costs9.
The U.S. economy has the same characteristics as the Canadian one with respect to
logistics outsourcing. Although logistics outsourcing is higher in the Manufacturing
sector, the percentage of storage and warehousing in logistics outsourcing is highest for
the retail sector.
20
26- Logistics Outsourcing and Storage and Warehousing

9
Outsourcing for the U.S.
40%
80,000
20%
40,000
% of storage and
warehousing
Millions of USD
120,000
0%
Manufacturing
Wholesale
Outsourcing
Storage and warehousing
Retailand warehousing
Percentage storage
H. Inventory carrying costs

Inventory carrying costs are defined as a series of costs that compose a companys supply
chain management costs. They include opportunity costs, shrinkage, insurance and taxes,
total obsolescence (for raw materials, work in process (WIP), and finished good
inventory), channel obsolescence and field service parts obsolescence. It excludes all
distribution cost related to warehousing, which are captured in the internal and
outsourced logistics costs.
Canadas Retail sector has an inventory carrying cost that is 31 percent larger than that of
the than the U.S. This is explained by the fact that Canadian firms have lower inventory
turns compared to their U.S. counterparts. In terms of sector specific analysis, sectors that
are adopting JIT processes with high inventory turns, such as the Fish and seafood
markets sector, have significantly lower inventory carrying cost compared to the total
Retail and other key sectors such as Mens clothing and Pharmacies and drug stores9.
27- Inventory Carrying Cost
as Percentage of Cost of Goods Sold for Canada
10%
8%
6%
4%
2%
0%
Fish and seafood markets
Men's clothing stores
Pharmacies and drug

stores
Retail trade
However, it is important to keep in mind that inventory carrying costs cannot be used to
compare the size of the economic activity of a sector since they mainly represent
21
accounting based costs, therefore they should not be calculated in percentage of sector
GDP
I. Total Retail Logistics Cost
Canada has total and internal logistics costs in Retail that are, respectively, 16 percent
and 19 percent higher than in the U.S.. On the other hand, the U.S. Retail sector
outsources more logistics activity, by a ratio of three times, than the Canadian Retail
sector13.
Constant Canadian Based

Factor (Based on Billions of
CAD)
28- Logistics Costs Structure in Canada and U.S. Retail

9
Inventory Carrying cost
Sector
Outsourcing
20
Internal cost
15
10
5
0
Retail Can.
Retail U.S.
.
J. Importance of Logistics Technology in Cost Reduction
Logistics and SCM cost indicators are amongst those that help evaluate the success of a
Lean Strategy14. The following figure shows how firms who applied a Lean Strategy in
the CPG supply chain were able to reduce manufacturing and SCM costs.
29- Level of Success From Lean Strategy, measured by reduction
4
in SCM Costs
% of firms
60%
40%
20%
0%
Consumer durable
goods
Initiative failed
Consumer
electronics
Consumer
packaged goods
Food/beverage
Base
In general terms, 80 percent of NA CPG and Retail sectors that implemented a Lean
Logistics Strategy saw a decrease as per or above expectations in SCM costs4.
22
IV- Final Remarks

In order to benefit from the productivity of logistics and SCM, individual firms must
develop their own personal action plan. The final step in a business case is to make
recommendations and develop a roadmap for implementing the proposed action plan.
The roadmap exercise consists of documenting the long-term perspective into specific
action items linked to deliverables, performance indicators objectives, return on
investment and a project time frame.
For some firms, the first roadmap action item could be an internal evaluation of their
logistics KPI with some participation in associations and networking activities. For
others, it could be implementing a pilot project with a customer and a supplier. In all
cases, a well-documented roadmap allows firms to gain the support of all their
stakeholders for their logistics and SCM competitiveness strategy and to solicit their
involvement in the implementation phases of the firms logistics and SCM action plan.
Proposed Action Plan:
1- Evaluate internal firm logistics and SCM KPI based on the indicators listed in this
document.
2- Map out business processes, global supply chain and technology adoption.
3- Benchmark your firms KPI to your industry KPI in Canada and in the U.S..
4- Assess firms performance KPI to industry taking into consideration supply chain
processes.
5- Benchmark firms KPI to other industries KPI in Canada and in the U.S. that
share the same logistics and SCM processes and drivers.
6- Create a multi-function project team. Senior management buy-in could determine
the success rate of this initiative, as will a champion at the initial stage.
7- Develop a logistics and SCM competitiveness roadmap.
8- Develop performance measurements of the roadmap initiatives.
9- Educate your company executives across departments, supply chain partners and
service providers on the value of the roadmap for each specific stakeholders.
10- Increase supply chain collaboration initiatives that drive value in your specific
sector.
11- Partner with supply chain partners to develop with you the technology, processes
and information solutions needed to manage the process.
12- Implement KPI program with frequent use of measures focused on cost-effective
customer-driven satisfaction issues with supply chain partners.
23
Annex I - Methodology
SCM & Logistics Costs Methodology
Every company measures its costs related to marketing, human resources, research and
development, etc. Interestingly, very few know how much their logistics costs really are. The
last decade saw a growth in interest for concepts such as JiT, Lean manufacturing and Efficient
Consumer Response, all of which, in addition with the globalization of the supply chains, brought
the importance of Logistics and Supply Chain Management (SCM) from an operational status,
often to a strategic status for the company and its partners.
It is for this reason that Supply Chain & Logistics Canadas (SCL) Research Committee and
Industry Canada have partnered with Jacobson Consulting to launch a logistics cost methodology
research initiative. By combining the industry know-how of SCL with the supply chain research
experience of Industry Canada and the economical modeling specific expertise of Paul Jacobson,
a former director at Infometrica, the partners have developed an optimal research team for this
initiative.
One of the main sources of logistics costs data available until now is the Annual State of
Logistics Report, published in the U.S., which is sponsored by the Council of Supply Chain
Management Professionals (CSCMP). This report provides annual data on the cost of the U.S.
business logistics system in relation to their Gross Domestic Product (GDP). The data provided
goes back to 1984 and is mainly available on a macro level, with categories available such as
Inventory Carrying Costs, Transportation Costs and Administrative Costs, but does not look at
the sector-level data.
It is important for a company to understand the nature and the costs of its logistics and SCM
operations. Furthermore, companies should be able to access that type of information on each
industrial sector for comparison purposes. Comparing the information to GDP is essential to
understanding the importance of logistics on a given sector, while comparing the information to
the Gross margin allows companies to benchmark their logistics and SCM costs to their sector,
their partners and their competitors.
Gross margin = total operating revenue - cost of goods sold
Total operating revenue = sales of goods purchased for resale + commission revenue + sales of
goods produced + repair and maintenance revenue + revenue from rental and leasing + other
operating revenue.
Cost of goods sold = Opening inventory + Purchases - Closing inventory.
Here, the research initiative will focus on providing sector level information of logistics and SCM
costs that occur internally through firms (such as in the manufacturing, wholesale and retail
sectors), as well as evaluating supply chains functions that are outsourced by sectors, and their
relative inventory carrying costs. By combining these three categories, individual firms will have
the opportunity to have a global view of supply chain management costs by sectors and of the
outsourcing trends, thus allowing them to benchmark themselves to their competitors, partners
and other sectors in Canada and in the U.S..
24
SCM and logistics costs can be broken down in three separate, but complementary pieces:
internal costs, outsourcing costs and inventory carrying costs. Each one is described below, with
its methodology and an example when appropriate.
Internal SCM and logistics costs:

Internal SCM and logistics cost encompass all logistics activities that occur within a firm, such as
a manufacturer, wholesaler or retailer. It excludes all outsourced logistics activities and all
production process. Individual firms can evaluate their internal logistics cost by adding their
respective logistics cost activities and their components as stated in the table below.
Internal logistics cost activities
Inbound and outbound transportation
Transportation management
Warehousing
Materials handling
Order fulfillment
Logistics network design
Inventory management
Supply/demand planning
Management of third party logistics services
providers
Custom brokerage
Internal logistics cost components of activities

Logistics wages cost
Logistics infrastructure depreciation
Logistics technology investment depreciation
Transport equipment depreciation
Training cost related to logistics position
Logistics management cost
Logistics and SCM technology management

Sourcing and procurement processes (excluding
purchase of goods cost)
Internal SCM and logistics costs are the most complex to calculate since no organization accounts
for these. The estimates of internal logistics costs in this report were compiled via the following
methodology:
1- Determine the occupational types related to logistics, and link those to logistical activities. In
total, twenty-one occupations were found and assigned to one of the four logistics activities
namely: Distribution Centers (DC), Office work, Truck transportation and Other transportation
(rail, etc.). For example, material handlers are linked to DC activities, while customs & ships
brokers and industrial engineering and manufacturing are part of office related activities.
2- Find for each industrial sub sector the number or persons in each occupational sub category.
There are sixty sub sectors in manufacturing, thirty in wholesale and thirty in retail.
3- Find the logistics suppliers equivalent to the four logistics activities from above. For
example, under Office work were included the consulting services and support to transportation
and warehousing personnel.
4- Calculate the wage bill of the four logistics activities after occupations were linked to them.
The ratio of the total costs divided by the wage bill is then charged to the sixty sub sectors in
manufacturing, to the thirty sub sectors in wholesale and to the thirty sub sectors in retail. For
example, for each dollar spent in salaries, we know that in average 2$ are spent on infrastructures,
technologies and management costs.
All this allows the estimation of the logistics and SCM costs for each industrial sub sector.
Outsourcing costs:
Outsourcing costs encompass activities assigned to a third-party. Outsourcing costs come from
input-output tables from Statistics Canada that indicate how much each industry requires of the
25
production of each other industry in order to produce each dollar of its own output by compiling
the purchases of logistics services by users.
Using the purchases that originate as part of logistics activities is appropriate, instead of using the
sales, because it avoids multiple counting.
Example
A manufacturing firm writes a check for $10 million to a 3PL to assume all its distribution
activities for the current year. That 3PL does not actually own trucks, and hire a transportation
broker to actually contract the required vehicles as necessary, for that same amount. The
transportation broker will sign multiple deals during that year with transportation companies,
again totaling $10 million. By looking at the sales figures in the input-output tables, the logistics
activity in that scenario would now total $30 million. Utilizing instead the purchases of logistics
services allows isolating the real logistics activity, which is indeed $10 million.
An example of the activities that are outsourced and/or done inside a company is displayed in the
chart below.
In-House and Outsourced Supply Chain Activities in Canada20
Customs Clearance
Outsourced
4PL Services
In-House
Customs Brokerage
Freight Forwarding
Factoring
Inbound Transportation
Fleet Management
Cross Checking
Outbound Transportation
Freight Bill
Reverse Logistics
Shipment Consolidation
Supply Chain Management
Distribution Control
Procurement of Logistics Services
Inventory Ownership
Carrier Selection
Warehousing
Rate Negotiation
Information Technology
Order Fulfillment
Order Entry Processing
Customer Service
Inventory Management
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
As can be seen, outsourcing differs largely according to the type of activity. Certain activities are
largely outsourced, such as Customs Clearance or Customs Brokerage, and others are mainly
done in-house, such as Inventory Management and Customer Service.
26
Inventory Carrying Cost:

Lexi-Coms Glossary of Logistics Terms defines inventory carrying cost as follows. One of the
elements comprising a companys total supply chain-management costs. These costs consist of
the following :
1) Opportunity Cost : The opportunity costs of holding inventory. This should be based on your
company`s own cost of capital standards using the following formula. Calculation : Cost of
Capital x Average Net Value of Inventory
2) Shrinkage : The costs associated with breakage, pilferage, and deterioration of inventories.
Usually pertains to the loss of material through handling damage, theft, or neglect.
3) Insurance and Taxes : The cost of insuring inventories and taxes associated with the holding of
inventory.
4) Total Obsolescence for Raw Material, WIP, and Finished Goods Inventory : Inventory reserves
taken due to obsolescence and scrap and includes products exceeding the shelf life, i.e. spoils and
is no good for use in its original purpose (do not include reserves taken for Field Service Parts).
5) Channel Obsolescence: Aging allowances paid to channel partners, provisions for buy-back
agreements, etc. Includes all material that goes obsolete while in a distribution channel. Usually,
a distributor will demand a refund on material that goes bad (shelf life) or is no longer needed
because of changing needs.
6) Field Service Parts Obsolescence : Reserves taken due to obsolescence and scrap. Field
Service Parts are those inventory kept at location outside the four walls of the manufacturing
plant i.e., distribution center or warehouse.
What inventory carrying costs do not consist of :
- all the necessary handling of the goods and/or materials,
- the depreciation of the goods and/or materials.
Those are actually already included in the internal logistics costs above.
Inventory Carrying Cost Rate: The inventory carrying cost rate is applied on the average
annual inventory in order to estimate the cost of having inventory into a specific firm or industry.
The average industry accepted and used rate is estimated at 20 percent17.
TOTAL SCM & LOGISTICS COSTS =

INTERNAL COSTS + OUTSOURCING COSTS + INVENTORY CARRYING COSTS
Inventory carrying costs and outsourcing costs cannot be put in terms of GDP, since they are
accounting-based, and not a real economic activity. Both are compared to gross margins. On the
other hand, internal costs can be compared both to GDP and to gross margin.
Logistics and SCM costs vary widely by sector. The proportion of internal costs, outsourcing
costs and inventory carrying costs is also different between sectors. For example, in a JiT mode,
internal costs tend to increase, but this is balanced by a reduction in the inventory carrying costs;
this happens in volatile sectors, such as upscale clothing, computers and perishable goods.
27
Annex II - Definitions
Collaborative Planning Forecasting and Replenishment (CPFR): Trademark registered by the

VICS (Voluntary Interindustry Commerce Standards) in 1996 designating an approach of
collaboration and integration of the forecasting and planning processes between customers and
suppliers. A certain number of test operations have been conducted between manufacturers and
distributors in the area of mass consumer products, but it is also starting to be used between
manufacturing companies. Partner companies (distributors, manufacturers, suppliers, etc.)
exchange information on product sales and forecasts in order to synchronize their operational
plans. This approach also integrates the downstream information flow to take account of
manufacturing constraints.
Fill Rate: The percentage of order items that the picking operation actually fills within a given
period of time.
Forecast: An estimate of future demand. A forecast can be determined by mathematical means
using historical data; it can be created subjectively by using estimates from informal sources; or it
can represent a combination of both techniques.
Gross margin: This value is obtained by calculating: total operating revenue- cost of goods sold.
Total operating revenue: The sum of sales of goods purchased for resale, commission revenue,
sales of goods produced, repair and maintenance revenue, revenue from rental and leasing and
other operating revenue.
Cost of goods sold: This value represents the cost value of goods sold and recognized in revenue,
during the reporting period. It is determined by calculating: Opening inventory + Purchases Closing inventory.
Hub: A reference for a logistics network as in hub and spoke, which is common in the airline
and the trucking industry.
Input: The sum of all goods and services purchased by a firm or an industrial sector.
Internal logistics cost: Internal logistics cost encompasses all logistics activities that occur
within a firm, such as a manufacturer, wholesaler and retailer. It excludes all outsourced logistics
activities and all production process. Individual firms can evaluate their internal logistics cost by
adding their respective logistics cost activities and their components as stated in the table below.
Internal logistics cost activities
Inbound and outbound transportation
Transportation management
Warehousing
Materials handling
Order fulfillment
Logistics network design
Inventory management
Supply/demand planning
Management of third party logistics services
providers
Custom brokerage
Internal logistics cost components of activities

Logistics wages cost
Logistics infrastructure depreciation
Logistics technology investment depreciation
Transport equipment depreciation
Training cost related to logistics position
Logistics management cost
Logistics and SCM technology management

Sourcing and procurement processes (excluding
purchase of goods cost)
28
The estimates of internal logistics cost in this report were compiled via that specific methodology:
1- Estimate the selected occupation share of the compensation for the third-party logistics sectors
(the components of transportation and storage) at the most detailed sector level for which GDP is
available
2- Apply this share to sector GDPs to get an aggregate GDP weight for the logistics wage bill
3- Calculate the logistics wage bill based on selected occupations for total manufacturing, for the
selected level of manufacturing detail, for wholesaling and retailing
4- Apply the GDP weight to the estimated logistics wage bill to get an estimate of own-account in
each of the required GDP aggregates
Intermodal Transport: Use of two or more different carrier modes in the through movement of
a shipment.
Inventory Carrying Cost: One of the elements comprising a companys total supply chainmanagement costs. These costs consist of the following :
1) Opportunity Cost : The opportunity costs of holding inventory. This should be based on your
company`s own cost of capital standards using the following formula. Calculation : Cost of
Capital x Average Net Value of Inventory
2) Shrinkage : The costs associated with breakage, pilferage, and deterioration of inventories.
Usually pertains to the loss of material through handling damage, theft, or neglect.
3) Insurance and Taxes : The cost of insuring inventories and taxes associated with the holding of
inventory.
4) Total Obsolescence for Raw Material, WIP, and Finished Goods Inventory : Inventory reserves
taken due to obsolescence and scrap and includes products exceeding the shelf life, i.e. spoils and
is no good for use in its original purpose (do not include reserves taken for Field Service Parts).
5) Channel Obsolescence: Aging allowances paid to channel partners, provisions for buy-back
agreements, etc. Includes all material that goes obsolete while in a distribution channel. Usually,
a distributor will demand a refund on material that goes bad (shelf life) or is no longer needed
because of changing needs.
6) Field Service Parts Obsolescence : Reserves taken due to obsolescence and scrap. Field
Service Parts are those inventory kept at location outside the four walls of the manufacturing
plant i.e., distribution center or warehouse.
Inventory Carrying Cost Rate: The inventory carrying cost rate is applied on average annual
inventory in order to estimate the cost of having inventory into a specific firm or industry. The
average industry accepted and used rate is estimated at 20 percent15.
Inventory Turns: The cost of goods sold divided by the average level of inventory on hand.
This ratio measures how many times a companys inventory has been sold during a period of
time. Operationally, inventory turns are measures as total throughput divided by average level of
inventory for a given period; how many times a year the average inventory for a firm changes, or
is sold.
Just-in-Time (JIT): Lean Manufacturing model developed initially by the engineer Taiichi Ohno
at Toyota which consists of monitoring and controlling the production system to eliminate all
sources of waste, in particular related to intermediate stocks and poor quality. Production is thus
equal to demand at all stages of the process.
29
Key Performance Indicators (KPI): A measure which is of strategic importance to a company

or department. For example, a supply chain flexibility metric is Supplier-On-time Delivery
Performance which indicates the percentage of orders that are fulfilled on or before the original
requested date.
Lead Time: Quantitative indicator measuring the time difference between stimulus and
response. This indicator can be applied to different levels of the logistics process, for example to
measure the actual time taken between the placing of an order and the delivery of a product.
Lean Logistics: Characterized by high frequency replenishment and freight consolidation
utilizing networks of crossdocks and milkruns. It promotes continuous flow of products from
origin to destination by the pull of actual consumption and thereby eliminates wastes. The results
are low inventory, high availability, resource smoothing, and improved asset utilization at low
costs.
Lean manufacturing: A management philosophy focusing on reduction of the 7 wastes (Overproduction, Waiting time, Transportation, Processing, Inventory, Motion and Scrap) in
manufactured products. By eliminating waste (muda), quality is improved, production time is
reduced and cost is reduced. Lean "tools" include constant process analysis (kaizen), "pull"
production (by means of kanban) and mistake-proofing (poka yoke).
Outsourcing: Corporate decision to assign activities, previously performed internally, to a thirdparty (for example, a Logistics Service Provider). Initially, the shippers (manufacturing or
commercial companies) outsourced transport, and then progressively did the same for more
value-added logistics services (Co-packing for example).
Radio Frequency Identification (RFID): RFID is a data collection technology that uses
electronic tags to store identification and a wireless transmitter and reader to capture it.
Six Sigma Quality: A term used generally to indicate that a process is well controlled, i.e.
tolerance limits are 6 sigma (3.4 defects per million events) from the centerline in a control
chart.
Supply Chain Management (SCM) Collaboration: Approach to managing and synchronizing
all the processes enabling one or more customer / supplier systems to take into account and
respond to expectations of the end customers (from the supplier of the supplier to the customer of
the customer). This approach is designed to increase the value created for the customer and
improve the economic performance of the participating companies.
Warehouse Management System (WMS): Computer application, and component of SCE
packages, with the goal of managing and optimizing warehouse operations.
30
Annex III Inventory Management Data
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Manufacturing Sector - Historical Inventory Turns Ratios

Raw Materials
Finished Goods
Canada
U.S.
Canada
17.87
23.73
22.47
1992
19.31
24.26
25.07
1993
19.97
24.86
26.62
1994
19.78
24.38
26.76
1995
19.59
24.51
26.05
1996
20.3
25.71
26.24
1997
19.47
25.25
26.49
1998
21.24
26.3
29.01
1999
21.15
25.7
29.31
2000
20.05
25.05
26.16
2001
21.18
26.79
27.47
2002
21.03
27.8
26.94
2003
22.28
29.44
28.92
2004
21.57
29.31
27.83
2005
U.S.
22.77
23.63
24.94
24.61
24.41
25.45
25.34
25.61
24.95
23.6
24.87
25.24
26.65
26.69
Wholesale Sector - Inventory Turns ratio - 2003

Canada
Wholesale Trade Total
Farm Product Wholesaler-Distributors
Petroleum Product Wholesaler-Distributors
Food, Beverage and Tobacco Wholesaler-Distributors
Personal and Household Goods Wholesaler-Distributors
Motor Vehicle and Parts Wholesaler-Distributors
Building Material and Supplies Wholesaler-Distributors
11.47
19.12
55.62
18.76
7.72
15.77
7.99
Wholesale Trade Total

Farm Product Raw Materials
Petroleum and Petroleum Products
Grocery and Related Products
Furniture and Home Furnishings
Motor Vehicle and Motor Vehicle Parts and Supplies
Lumber & Other Construction Materials
13.46
11.46
47.93
19.00
7.93
9.23
10.78
Machinery, Equipment and Supplies WholesalerDistributors
7.23
Machinery, Equipment, and Supplies
4.96
U.S.
Retail Sector - Inventory Turns ratio - 2003

Canada
Retail Trade Total
Motor Vehicle and Parts Dealers
5.35
4.47
Retail Trade Total

Motor vehicle and parts dealers
7.55
5.75
Furniture and Home Furnishings Stores

Electronics and Appliance Stores
Building Material and Garden Equipment Dealers
Food and Beverage Stores
Clothing and Clothing Accessories Stores
3.46
4.19
4.03
12.42
2.69
Furniture, home furnishings, electronics, and appliance stores
6.98
Building material and garden equipment and supplies dealers

Food and beverage stores
Clothing and clothing accessories stores
6.92
14.78
4.75
Sporting Goods, Hobby, Book and Music Stores

General Merchandise Stores
Convenience Stores
Gasoline Stations
Health and Personal Care Stores
2.34
4.81
11.27
21.04
26.99
5.49
Department stores
General merchandise stores
5.80
7.04
U.S.
31
Retail Inventories - Canada - 2003

NAICS
Code
Number
NAICS description
Retail Inventories - Canada - 2003

Cost of
Goods Sold Average
Inventory
NAICS
Code
Number
Cost of
Goods Sold Average
Inventory
NAICS description
Ratio
4
44
441
4411
44111
44112
Ratio
Retail Trade
5.35
44613
Optical Goods Stores
3.99
Retail Trade - Store sub-total (NAICS 44)
5.76
44619
Other Health and Personal Care Stores
4.47
Motor Vehicle and Parts Dealers
4.47
447
Gasoline Stations
Automobile Dealers
4.76
4471
Gasoline Stations
26.99
New Car Dealers
4.75
44711
21.04
Other Gasoline Stations
30.03
Used Car Dealers
4.97
44719
4412
Other Motor Vehicle Dealers
2.43
448
44121
Recreational Vehicle Dealers
2.19
4481
44122
Motorcycle, Boat and Other Motor Vehicle Dealers
2.58
Automotive Parts, Accessories and Tire Stores
3.66
44131
Automotive Parts and Accessories Stores
3.07
44132
Tire Dealers
4.42
Furniture and Home Furnishings Stores
3.46
4413
442
26.99
Clothing and Clothing Accessories Stores
2.69
Clothing Stores
3.36
44811
Men's Clothing Stores
2.51
44812
Women's Clothing Stores
3.75
44813
Children's and Infants' Clothing Stores
3.61
44814
Family Clothing Stores
3.73
44815
Clothing Accessories Stores
2.72
4421
Furniture Stores
3.43
44819
Other Clothing Stores
2.43
4422
Home Furnishings Stores
3.51
4482
Shoe Stores
2.41
44221
Floor Covering Stores
4.72
44821
Shoe Stores
2.41
44229
Other Home Furnishings Stores
2.88
4483
4.19

Appliance, Television and Other Electronics Stores
443
4431
44311
Jewellery, Luggage and Leather Goods Stores
1.18
44831
Jewellery Stores
1.11
4.19
44832
Luggage and Leather Goods Stores
3.66
45
44312
Computer and Software Stores
7.41
451
44313
Camera and Photographic Supplies Stores
4.94
4511
444
4441
Retail Trade - Store - sub-total (excluding NAICS 454)
3.91
Sporting Goods, Hobby, Book and Music Stores
2.34
Sport, Hobby and Musical Instrument Stores
2.07
Building Material and Garden Equipment Dealers
4.03
45111
Sporting Goods Stores
2.09
Building Material and Supplies Dealers
4.05
45112
Hobby, Toy and Game Stores
2.72
1.68
44411
Home Centres
4.11
45113
Sewing, Needlework and Piece Goods Stores
44412
Paint and Wallpaper Stores
3.95
45114
Musical Instrument and Supplies Stores
1.64
44413
Hardware Stores
3.53
4512
Book, Periodical and Music Stores
3.55
44419
Other Building Material Dealers
4.51
45121
Book Stores and News Dealers
3.43
Lawn and Garden Equipment and Supplies Stores
3.78
45122
Pre-Recorded Tape, Compact Disc and Record Stores
44421
Outdoor Power Equipment Stores
2.71
452
General Merchandise Stores
4.81
44422
Nursery and Garden Centres
4.44
4521
Department Stores
4.43
Food and Beverage Stores
12.42
4529
Other General Merchandise Stores
5.23
Grocery Stores
14.34
45291
Warehouse Clubs and Superstores
44511
Grocery (except Convenience) Stores
14.95
45299
All Other General Merchandise Stores
44512
Convenience Stores
11.27
453
Specialty Food Stores
11.82
4531
Florists
5.96
44521
Meat Markets
15.98
4532
Office Supply, Stationery and Gift Stores
2.91
44522
18.66
45321
Office Supplies and Stationery Stores
3.63
44523
Fruit and Vegetable Markets
16.34
45322
Gift, Novelty and Souvenir Stores
2.22
44529
Other Specialty Food Stores
6.88
4533
Used Merchandise Stores
1.88
4453
Beer, Wine and Liquor Stores
6.47
4539
Other Miscellaneous Store Retailers
3.66
446
5.49
45391
Pet and Pet Supplies Stores
4.13
4461
5.49
45392
Art Dealers
1.91
5.7
45393
Manufactured (Mobile) Home Dealers
3.17
4.07
45399
All Other Miscellaneous Store Retailers
4.05
4442
445
4451
4452
44611
Pharmacies and Drug Stores
44612
Cosmetics, Beauty Supplies and Perfume Stores
Miscellaneous Store Retailers
3.8
3.11
32
Manufacturing Sector - Inventory Turns ratio - 2005

NAICS
31-33
311
3111
31111
3112
31121
31122
31123
3113
31131
31132
31133
31134
3114
3115
3116
31161
311611
311614
311615
3117
3118
31181
31182
311821
311822
311823
31183
3119
31191
31192
31193
31194
31199
312
3121
31211
31212
31213
31214
3122
313
3131
3132
31321
31322
31323
31324
3133
31331
31332
314
3141
31411
31412
3149
31491
31499
315
3151
31511
31519
3152
31521
Manufacturing
Non-durable goods industries
Durable goods industries
Food manufacturing
Animal food manufacturing
Animal food manufacturing
Grain and oilseed milling
Flour milling and malt manufacturing
Starch and vegetable fat and oil manufacturing
Breakfast cereal manufacturing
Sugar and confectionery product manufacturing
Sugar manufacturing
Chocolate and confectionery manufacturing from cacao beans
Confectionery manufacturing from purchased chocolate
Non-chocolate confectionery manufacturing
Fruit and vegetable preserving and specialty food manufacturing
Dairy product manufacturing
Meat product manufacturing
Animal slaughtering and processing
Animal (except poultry) slaughtering
Rendering and meat processing from carcasses
Poultry processing
Seafood product preparation and packaging
Bakeries and tortilla manufacturing
Bread and bakery product manufacturing
Cookie, cracker and pasta manufacturing
Cookie and cracker manufacturing
Flour mixes and dough manufacturing from purchased flour
Dry pasta manufacturing
Tortilla manufacturing
Other food manufacturing
Snack food manufacturing
Coffee and tea manufacturing
Flavouring syrup and concentrate manufacturing
Seasoning and dressing manufacturing
All other food manufacturing
Beverage and tobacco product manufacturing
Beverage manufacturing
Soft drink and ice manufacturing
Breweries
Wineries
Distilleries
Tobacco manufacturing
Textile mills
Fibre, yarn and thread mills
Fabric mills
Broad-woven fabric mills
Narrow fabric mills and Schiffli machine embroidery
Nonwoven fabric mills
Knit fabric mills
Textile and fabric finishing and fabric coating
Textile and fabric finishing
Fabric coating
Textile product mills
Textile furnishings mills
Carpet and rug mills
Curtain and linen mills
Other textile product mills
Textile bag and canvas mills
All other textile product mills
Clothing manufacturing
Clothing knitting mills
Hosiery and sock mills
Other clothing knitting mills
Cut and sew clothing manufacturing
Cut and sew clothing contracting
Canada
Raw
Finished
Materials
Goods
21.6
26.0
19.1
34.5
21.1
21.1
37.7
28.4
46.5
36.0
21.4
13.6
47.2
31.6
15.8
25.9
51.3
51.7
51.7
54.9
36.2
69.8
30.0
39.9
64.0
19.4
12.3
31.2
23.7
N/A
20.4
28.9
15.0
18.5
18.6
19.6
20.9
25.7
37.5
65.5
7.0
7.0
12.7
17.0
17.9
14.6
13.8
18.6
15.6
14.8
24.3
33.2
14.8
10.6
10.7
22.6
5.6
10.3
6.6
13.5
13.3
16.8
19.3
15.3
13.0
33.5
27.8
23.1
33.1
25.9
69.4
69.4
27.5
22.4
36.7
20.9
28.9
34.0
33.6
33.8
21.9
11.7
18.6
45.0
45.0
44.5
58.8
38.0
24.2
63.0
79.4
39.9
81.5
50.0
18.9
N/A
17.8
24.0
9.0
N/A
N/A
26.0
15.0
20.3
22.2
39.4
6.0
10.9
7.9
15.5
18.5
14.9
11.3
37.5
27.2
22.4
15.1
12.1
37.0
14.6
12.3
15.5
9.1
20.8
20.6
20.9
9.3
5.4
5.4
5.4
10.3
96.7
33
31522
315221
315222
315226
315227
315229
31523
315231
315232
315233
315234
315239
31529
3159
316
3161
3162
3169
321
3211
32111
321111
321112
321114
3212
32121
321211
321212
321215
321216
321217
3219
32191
321911
321919
32192
32199
322
3221
32211
32212
322121
322122
322123
3222
32221
322211
322212
322219
32222
32223
32229
322291
322299
323
3231
32311
323113
323114
323115
323116
323119
32312
324
3241
32411
32412
32419
325
3251
32511
32512
Men's and boys' cut and sew clothing manufacturing

Men's and boys' cut and sew underwear and nightwear manufacturing
Men's and boys' cut and sew suit, coat and overcoat manufacturing
Men's and boys' cut and sew shirt manufacturing
Men's and boys' cut and sew trouser, slack and jean manufacturing
Other men's and boys' cut and sew clothing manufacturing
Women's and girls' cut and sew clothing manufacturing
Women's and girls' cut and sew lingerie, loungewear and nightwear manufacturing
Women's and girls' cut and sew blouse and shirt manufacturing
Women's and girls' cut and sew dress manufacturing
Women's and girls' cut and sew suit, coat, tailored jacket and skirt manufacturing
Other women's and girls' cut and sew clothing manufacturing
Other cut and sew clothing manufacturing
Clothing accessories and other clothing manufacturing
Leather and allied product manufacturing
Leather and hide tanning and finishing
Footwear manufacturing
Other leather and allied product manufacturing
Wood product manufacturing
Sawmills and wood preservation
Sawmills and wood preservation
Sawmills (except shingle and shake mills)
Shingle and shake mills
Wood preservation
Veneer, plywood and engineered wood product manufacturing
Veneer, plywood and engineered wood product manufacturing
Hardwood veneer and plywood mills
Softwood veneer and plywood mills
Structural wood product manufacturing
Particle board and fibreboard mills
Waferboard mills
Other wood product manufacturing
Millwork
Wood window and door manufacturing
Other millwork
Wood container and pallet manufacturing
All other wood product manufacturing
Paper manufacturing
Pulp, paper and paperboard mills
Pulp mills
Paper mills
Paper (except newsprint) mills
Newsprint mills
Paperboard mills
Converted paper product manufacturing
Paperboard container manufacturing
Corrugated and solid fibre box manufacturing
Folding paperboard box manufacturing
Other paperboard container manufacturing
Paper bag and coated and treated paper manufacturing
Stationery product manufacturing
Other converted paper product manufacturing
Sanitary paper product manufacturing
All other converted paper product manufacturing
Printing and related support activities
Printing and related support activities
Printing
Commercial screen printing
Quick printing
Digital printing
Manifold business forms printing
Other printing
Support activities for printing
Petroleum and coal products manufacturing
Petroleum and coal products manufacturing
Petroleum refineries
Asphalt paving, roofing and saturated materials manufacturing
Other petroleum and coal products manufacturing
Chemical manufacturing
Basic chemical manufacturing
Petrochemical manufacturing
Industrial gas manufacturing
13.4
5.6
16.2
16.7
11.8
12.8
11.8
3.9
179.9
14.3
12.0
12.5
7.6
11.0
9.1
13.2
9.0
7.8
14.4
13.1
13.1
11.8
25.5
93.8
17.2
17.2
12.3
16.3
13.0
18.9
22.9
14.7
13.4
14.2
13.0
12.6
20.8
18.1
16.1
14.3
16.6
14.5
17.9
20.4
24.9
25.9
25.7
23.6
30.7
20.3
25.8
32.2
33.9
27.7
31.1
31.1
29.7
10.6
26.6
57.8
19.5
31.2
90.4
47.7
47.7
51.1
28.8
16.1
20.0
34.1
36.3
123.0
7.6
N/A
6.7
5.4
9.5
12.0
11.9
11.8
N/A
22.0
11.1
7.7
5.6
14.9
8.6
8.5
7.4
17.3
20.9
16.9
16.9
16.8
17.6
17.6
28.9
28.9
6.7
40.1
32.4
19.5
156.1
25.1
26.1
49.1
21.2
19.2
25.0
18.8
19.4
15.1
22.0
16.5
26.2
22.4
17.7
18.7
32.1
9.2
17.0
14.7
15.5
22.0
26.5
14.2
72.7
72.7
68.8
N/A
N/A
N/A
15.8
85.6
353.8
37.2
37.2
38.7
20.7
22.7
18.0
21.2
19.3
65.6
34
32513
32518
32519
3252
32521
32522
3253
32531
32532
3254
3255
32551
32552
3256
32561
32562
3259
32591
32592
32599
326
3261
32611
32612
32613
32614
32615
32616
32619
326191
326193
326198
3262
32621
32622
32629
327
3271
3272
32721
327214
327215
3273
32731
32732
32733
32739
3274
3279
32791
32799
331
3311
33111
3312
33121
33122
331221
331222
3313
33131
331313
331317
3314
33141
33142
33149
3315
33151
331511
331514
33152
Synthetic dye and pigment manufacturing

Other basic inorganic chemical manufacturing
Other basic organic chemical manufacturing
Resin, synthetic rubber, and artificial and synthetic fibres and filaments manufacturing
Resin and synthetic rubber manufacturing
Artificial and synthetic fibres and filaments manufacturing
Pesticide, fertilizer and other agricultural chemical manufacturing
Fertilizer manufacturing
Pesticide and other agricultural chemical manufacturing
Pharmaceutical and medicine manufacturing
Paint, coating and adhesive manufacturing
Paint and coating manufacturing
Adhesive manufacturing
Soap, cleaning compound and toilet preparation manufacturing
Soap and cleaning compound manufacturing
Toilet preparation manufacturing
Other chemical product manufacturing
Printing ink manufacturing
Explosives manufacturing
All other chemical product manufacturing
Plastics and rubber products manufacturing
Plastic product manufacturing
Plastics packaging materials and unlaminated film and sheet manufacturing
Plastics pipe, pipe fitting, and unlaminated profile shape manufacturing
Laminated plastics plate, sheet (except packaging), and shape manufacturing
Polystyrene foam product manufacturing
Urethane and other foam product (except polystyrene) manufacturing
Plastic bottle manufacturing
Other plastic product manufacturing
Plastic plumbing fixture manufacturing
Motor vehicle plastic parts manufacturing
All other plastic product manufacturing
Rubber product manufacturing
Tire manufacturing
Rubber and plastic hose and belting manufacturing
Other rubber product manufacturing
Non-metallic mineral product manufacturing
Clay product and refractory manufacturing
Glass and glass product manufacturing
Glass and glass product manufacturing
Glass manufacturing
Glass product manufacturing from purchased glass
Cement and concrete product manufacturing
Cement manufacturing
Ready-mix concrete manufacturing
Concrete pipe, brick and block manufacturing
Other concrete product manufacturing
Lime and gypsum product manufacturing
Other non-metallic mineral product manufacturing
Abrasive product manufacturing
All other non-metallic mineral product manufacturing
Primary metal manufacturing
Iron and steel mills and ferro-alloy manufacturing
Iron and steel mills and ferro-alloy manufacturing
Steel product manufacturing from purchased steel
Iron and steel pipes and tubes manufacturing from purchased steel
Rolling and drawing of purchased steel
Cold-rolled steel shape manufacturing
Steel wire drawing
Alumina and aluminum production and processing
Alumina and aluminum production and processing
Primary production of alumina and aluminum
Aluminum rolling, drawing, extruding and alloying
Non-ferrous metal (except aluminum) production and processing
Non-ferrous metal (except aluminum) smelting and refining
Copper rolling, drawing, extruding and alloying
Non-ferrous metal (except copper and aluminum) rolling, drawing, extruding and alloying
Foundries
Ferrous metal foundries
Iron foundries
Steel foundries
Non-ferrous metal foundries
18.6
20.9
63.9
48.5
52.9
24.4
15.3
14.9
17.7
10.3
17.5
18.5
15.5
13.5
22.0
9.9
20.6
11.9
19.0
22.4
24.8
25.2
20.5
26.2
17.8
27.1
17.0
29.2
28.1
17.7
41.1
24.7
23.3
27.9
13.0
24.6
22.7
30.3
13.5
13.5
49.1
8.8
30.3
15.9
50.3
30.8
33.0
16.2
19.9
10.5
23.0
19.4
14.4
14.4
14.2
21.1
6.2
6.5
6.1
18.1
18.1
14.0
44.8
32.1
30.3
90.4
23.2
32.9
23.4
23.4
23.3
44.4
14.2
35.5
17.7
21.7
22.9
13.4
14.2
16.6
8.0
12.9
13.1
12.3
15.8
29.6
49.0
21.6
21.4
10.7
12.4
25.2
25.4
22.9
21.1
11.7
27.4
20.6
41.7
25.8
28.4
22.9
54.5
22.5
48.9
113.9
24.6
32.4
25.2
11.6
18.3
18.3
10.3
42.2
28.5
42.7
139.7
7.1
17.5
32.5
29.7
12.2
37.9
25.0
16.6
16.6
12.2
13.2
9.4
16.3
8.1
78.1
78.1
87.3
64.1
35.5
35.4
34.3
51.3
23.9
17.4
14.7
42.9
31.5
35
332
3321
33211
3322
3323
33231
332311
332314
332319
33232
332321
332329
3324
33241
33242
33243
3325
3326
3327
3328
3329
333
3331
33311
33312
33313
3332
33321
33322
33329
3333
33331
3334
33341
3335
33351
3336
33361
3339
33391
33392
33399
334
3341
33411
3342
33421
33422
33429
3343
33431
3344
33441
3345
33451
3346
33461
335
3351
33511
33512
3352
33521
33522
3353
33531
335311
335312
335315
Fabricated metal product manufacturing

Forging and stamping
Forging and stamping
Cutlery and hand tool manufacturing
Architectural and structural metals manufacturing
Plate work and fabricated structural product manufacturing
Prefabricated metal building and component manufacturing
Concrete reinforcing bar manufacturing
Other plate work and fabricated structural product manufacturing
Ornamental and architectural metal products manufacturing
Metal window and door manufacturing
Other ornamental and architectural metal products manufacturing
Boiler, tank and shipping container manufacturing
Power boiler and heat exchanger manufacturing
Metal tank (heavy gauge) manufacturing
Metal can, box and other metal container (light gauge) manufacturing
Hardware manufacturing
Spring and wire product manufacturing
Machine shops, turned product, and screw, nut and bolt manufacturing
Coating, engraving, heat treating and allied activities
Other fabricated metal product manufacturing
Machinery manufacturing
Agricultural, construction and mining machinery manufacturing
Agricultural implement manufacturing
Construction machinery manufacturing
Mining and oil and gas field machinery manufacturing
Industrial machinery manufacturing
Sawmill and woodworking machinery manufacturing
Rubber and plastics industry machinery manufacturing
Other industrial machinery manufacturing
Commercial and service industry machinery manufacturing
Commercial and service industry machinery manufacturing
Ventilation, heating, air-conditioning and commercial refrigeration equipment
manufacturing
Ventilation, heating, air-conditioning and commercial refrigeration equipment
manufacturing
Metalworking machinery manufacturing
Metalworking machinery manufacturing
Engine, turbine and power transmission equipment manufacturing
Engine, turbine and power transmission equipment manufacturing
Other general-purpose machinery manufacturing
Pump and compressor manufacturing
Material handling equipment manufacturing
All other general-purpose machinery manufacturing
Computer and electronic product manufacturing
Computer and peripheral equipment manufacturing
Computer and peripheral equipment manufacturing
Communications equipment manufacturing
Telephone apparatus manufacturing
Radio and television broadcasting and wireless communications equipment
manufacturing
Other communications equipment manufacturing
Audio and video equipment manufacturing
Audio and video equipment manufacturing
Semiconductor and other electronic component manufacturing
Semiconductor and other electronic component manufacturing
Navigational, measuring, medical and control instruments manufacturing
Navigational, measuring, medical and control instruments manufacturing
Manufacturing and reproducing magnetic and optical media
Manufacturing and reproducing magnetic and optical media
Electrical equipment, appliance and component manufacturing
Electric lighting equipment manufacturing
Electric lamp bulb and parts manufacturing
Lighting fixture manufacturing
Household appliance manufacturing
Small electrical appliance manufacturing
Major appliance manufacturing
Electrical equipment manufacturing
Electrical equipment manufacturing
Power, distribution and specialty transformers manufacturing
Motor and generator manufacturing
Switchgear and switchboard, and relay and industrial control apparatus manufacturing
16.8
20.2
20.2
15.1
12.7
11.9
17.9
7.0
12.3
13.6
11.3
15.1
17.0
22.4
12.2
19.3
23.0
16.7
24.0
39.0
15.6
15.4
14.8
10.7
10.6
27.3
17.0
20.8
17.1
15.8
11.1
11.1
33.4
35.3
35.3
26.7
44.6
82.4
62.7
N/A
77.1
29.8
22.1
35.8
28.4
62.4
69.1
15.9
45.3
30.4
40.7
56.8
15.0
24.6
15.3
8.9
16.7
24.5
36.5
19.6
27.7
73.3
31.4
31.4
11.9
22.3
11.9
22.1
22.1
19.3
19.3
15.8
23.9
13.1
15.8
8.9
6.0
6.0
6.8
4.5
22.3
75.5
75.5
31.1
31.1
23.1
13.4
35.8
24.9
31.8
29.0
29.0
22.0
13.1
11.8
11.4
6.7
6.7
15.5
15.5
12.8
12.8
34.6
34.6
10.2
14.2
23.6
12.8
13.1
10.2
13.7
16.5
16.5
9.7
36.5
16.4
54.5
33.6
10.8
10.8
156.8
156.8
33.2
33.2
42.5
42.5
21.8
21.2
15.2
23.8
20.0
16.1
20.7
34.0
34.0
27.6
34.1
38.2
36
3359
Other electrical equipment and component manufacturing
33591
Battery manufacturing
33592
Communication and energy wire and cable manufacturing
33593
Wiring device manufacturing
33599
All other electrical equipment and component manufacturing
336
Transportation equipment manufacturing
3361
Motor vehicle manufacturing
33611
Automobile and light-duty motor vehicle manufacturing
33612
Heavy-duty truck manufacturing
3362
Motor vehicle body and trailer manufacturing
33621
Motor vehicle body and trailer manufacturing
336211
Motor vehicle body manufacturing
336212
Truck trailer manufacturing
336215
Motor home, travel trailer and camper manufacturing
3363
Motor vehicle parts manufacturing
33631
Motor vehicle gasoline engine and engine parts manufacturing
33632
Motor vehicle electrical and electronic equipment manufacturing
33633
Motor vehicle steering and suspension components (except spring) manufacturing
33634
Motor vehicle brake system manufacturing
33635
Motor vehicle transmission and power train parts manufacturing
33636
Motor vehicle seating and interior trim manufacturing
33637
Motor vehicle metal stamping
337
Furniture and related product manufacturing
3371
Household and institutional furniture and kitchen cabinet manufacturing
33711
Wood kitchen cabinet and counter top manufacturing
33712
Household and institutional furniture manufacturing
337121
Upholstered household furniture manufacturing
337123
Other wood household furniture manufacturing
337126
Household furniture (except wood and upholstered) manufacturing
337127
Institutional furniture manufacturing
3372
Office furniture (including fixtures) manufacturing
33721
Office furniture (including fixtures) manufacturing
3379
Other furniture-related product manufacturing
33791
Mattress manufacturing
33792
Blind and shade manufacturing
339
Miscellaneous manufacturing
3391
Medical equipment and supplies manufacturing
33911
Medical equipment and supplies manufacturing
3399
Other miscellaneous manufacturing
33991
Jewellery and silverware manufacturing
33992
Sporting and athletic goods manufacturing
33993
Doll, toy and game manufacturing
33994
Office supplies (except paper) manufacturing
33995
Sign manufacturing
33999
All other miscellaneous manufacturing
Source: Statistics Canada, CANSIM, Table 304-0014, seasonally unadjusted data.
6.3
8.8
4.9
29.4
8.7
35.0
92.5
118.4
27.9
16.3
16.3
18.8
14.2
15.4
23.3
40.5
27.1
112.6
17.4
27.5
98.7
36.7
23.0
21.0
35.6
17.5
10.0
23.8
9.0
17.5
28.5
28.5
19.1
26.4
11.8
12.2
17.1
17.1
10.8
8.8
13.9
89.9
4.9
20.6
7.0
16.5
10.8
15.2
19.1
31.7
67.4
299.3
484.5
59.3
34.0
34.0
50.1
32.2
19.8
49.2
66.1
49.1
73.1
15.3
27.2
261.6
42.7
38.1
31.1
180.0
22.1
39.7
18.8
15.5
43.0
56.5
56.5
41.2
39.4
46.0
16.0
42.7
42.7
12.3
12.6
6.2
22.2
28.5
54.6
16.2
37
Annex IV Logistics Internal Cost Data
(% of sales)
Animal food
Sugar and confectionery
products
Outsourced
costs
Inventory
carrying
costs
Total
logisitcs
costs
3.09%
5.14%
1.98%
10.22%
1.99%
1.59%
1.51%
5.09%
Internal
costs
Fruit and vegetable preserving

and speciality food
Dairy product
Meat product
Seafood product preparation
and packaging
Miscellaneous food
Tobacco
2.70%
3.10%
1.89%
1.62%
3.73%
1.14%
2.75%
1.34%
0.94%
7.07%
8.18%
3.97%
2.39%
4.58%
19.33%
0.97%
9.34%
0.27%
1.92%
1.75%
2.77%
5.27%
15.67%
22.37%
Textile and textile product mills

Clothing
3.26%
3.54%
0.67%
0.31%
1.44%
3.54%
5.37%
7.39%
Leather and allied product

Wood product
Pulp, paper and paperboard
mills
3.94%
3.21%
1.14%
2.19%
3.50%
2.76%
8.59%
8.17%
2.63%
6.02%
2.33%
10.98%
Converted paper product

Printing and related product
support activities
3.10%
1.44%
1.77%
6.31%
2.58%
1.59%
0.94%
5.10%
Petroleum and coal product
0.29%
0.70%
0.94%
1.92%
Basic Chemical
1.38%
2.18%
1.37%
4.93%
Resin, synthetic, rubber, and

artificial synthetic fibres and
filaments
0.92%
1.78%
1.41%
4.11%
Pesticides, fertelizer and other

agricultural chemical
2.48%
2.59%
2.42%
7.49%
Pharmaceutical and medicine
1.52%
0.41%
3.86%
5.78%
Miscellanueous chemical
2.08%
4.65%
2.09%
8.82%
Plastic product
2.42%
0.68%
1.69%
4.80%
38
Rubber product
3.28%
1.93%
1.35%
6.56%
10.03%
3.11%
1.50%
14.64%
3.49%
6.31%
1.83%
11.63%
Primary metals
Fabricated metal product
Machinery
Computer and peripheral
equipment
1.68%
2.96%
2.26%
2.09%
1.78%
0.97%
2.03%
1.84%
2.27%
5.80%
6.59%
5.50%
1.51%
0.95%
3.90%
6.36%
Electric product
Household appliance
2.72%
2.67%
0.78%
0.89%
3.13%
1.79%
6.62%
5.35%
Electrical equipment
1.79%
1.96%
1.87%
5.62%
Motor vehicle
0.70%
1.07%
0.68%
2.45%
Motor vehicle body and trailer
2.35%
1.19%
1.79%
5.34%
Motor vehicle parts
2.72%
0.97%
1.13%
4.82%
Aerospace product and parts
2.30%
0.56%
3.49%
6.34%
Railroad rolling stock
2.90%
0.81%
0.82%
4.53%
Ship and boat building
3.27%
1.09%
1.27%
5.63%
Other transportation equipment
2.46%
1.26%
0.78%
4.50%
Furniture retaled product

Miscellaneous manufacturing
Total manufacturing
Total Wholesale
Total Retail
2.81%
3.04%
2.34%
2.27%
2.11%
1.11%
0.91%
1.59%
0.32%
0.19%
1.49%
2.86%
1.77%
0.27%
0.94%
5.40%
6.81%
5.71%
2.86%
3.24%
Cement and concrete product

Miscellaneous non-metallic
mineral product
Logistics Aggregate Data

Manufacturing Manufacturing Wholesale Wholesale Retail
Retail
Can.
U.S.
Can.
U.S.
Can.
U.S.
Internal cost
15.154
8.3347
9.69
7.2675
5.544 4.65696
Outsourcing
9.366
16.6703
1.366 1.422917
0.491 1.559647
Inventory Carrying cost
9.881985
8.908321 7.817786 6.661961 10.32336 7.84517
Source: Statistics Canada, Jacobson Consulting and Authors Calculations, in Canadian Based
39
Factor (based in billions of Canadian dollars)
Logistics Internal Cost Data
Internal costs in Logistics for Canada
Retail Trade
Motor Vehicles and parts dealers
Furniture and home furnishing stores
Electronics and appliance stores
Building materials and garden equipment and supplies dealers
Food and beverage stores
Health and personal care stores
Gasoline stations
Clothing and clothing accessories stores
Sporting goods, hobby, book and music stores
General merchandise stores
Miscellaneous store retailers
Non-store retailers
Share of Gross Share of

Margin
GDP
11.5 percent 19 percent
14.9 percent
15.3 percent
9.2 percent
29.2 percent
7.0 percent
7.5 percent
1.7 percent
5.8 percent
7.3 percent
18.4 percent
11.6 percent
24.3 percent
Source: Statistics Canada, Census, Input-Output Data and Jacobson Consulting Calculations
40
Annex V - References
1
New Strategies for Global Trade Management, Aberdeen Group, March 2005
Trade data online, Statistics Canada, 2006
3
Consumer Driving Retailer-Supplier Collaboration, Aberdeen Group, 2005
4
Lean Manufacturing Survey, Aberdeen Group, 2006
5
Integrated Supply Chain Planning and execution Connecting the Retail Store to the Factory Door, The
Gartner Group, December 2005
6
Understanding the Demand for Supply Chain Management in Canada, IDC, 2004
7
Industry Canada estimates based on Statistics Canada, Cansim II, 2005
8
Industry Canada estimates based on Statistics Canada Annual Trade Survey, 2003 and US Census Retail
Indicators Branch, 2004
9
Industry Canada estimates based on Statistics Canada, Cansim and Bureau of Census, 2004
10
Industry Canada estimates based on Statistics Canada Annual Trade Survey, 2003
11
The Business Benefits of Advanced Planning and Replenishment, Aberdeen Group, December 2005
12
Lean Sector Breakdown (Special Request), Aberdeen Group, 2006
13
Industry Canada estimates based on Statistics Canada, Cansim, Jacobson Consultings calculations
14
Extending Warehouse Management Beyond the Four Walls, Aberdeen Group, September 2004
15
16th Annual State of Logistics Report, CSCMP, 2005
18
The Canadian Supply Chain Efficiency Smart Border Study, Supply Chain & Logistics Canada (SCL)
and Industry Canada, March 2004
19
The Annual Electronic Commerce, Statistics Canada, 2006
20
Strategic HR Study of the Suplpy Chain Sector, Canadian Logistics Skill Committee and Deloitte
Consulting, July 2005
21 Industry Canada estimates based on Statistics Canada Manufacturing Innovation Survey
2
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What are the main factors driving changes in the retail and consumer product goods supply chain?

What are the main factors driving changes in the retail and consumer product goods supply chain?

What are the two most preferred key performance indicators measured by North American lean manufacturers?

What are the two most preferred key performance indicators measured by North American lean manufacturers?

Logistics and Supply Chain Management (SCM)

Key Performance Indicators (KPI) Analysis

Aussi offert en franais sous le titre Logistique et gestion de la chane dapprovisionnement,

I - Industry Productivity and Competitiveness via Logistics and SCM

1- NA CPG Manufacturer Lean KPI Measures

Cost per unit

Manufacturing Cycle Time

2- Performance Advantage from Logistics and SCM KPI Measurement1

Corporate wide measurement

Not measured consistently

model where partner companies (distributors, manufacturers, suppliers, logistics service

Food manufacturing and Chemical manufacturing

II-Inventory Management and Just-in-Time Key Performance Indicators

Average Inventory Ratio

Average Inventory Turn Ratio

6- Canada - U.S. Comparison of Sectors in 20039

7- Motor Vehicles and Parts

8- Furniture, Home Furnishings,

Inventory Turns per Year

Furniture and Home Furnishings Stores CA

Furniture, home furnishings, electronics, and appliance stores U.S.

9- Building Material and Garden

10- Food and Beverage Stores8

Inventory Turns per Year

12- General Merchandise Stores8

11- Clothing and Clothing

Inventory Turns per Year

Food manufacturing and beverage

Innovation processes in production methods and logistics for Food manufacturing,

Fruit and Vegetable

Specialty Food Stores

Food and beverage Stores

Farm Product Wholesalers

Beverage and Tobacco

Beverage and Tobacco

Fish and Seafood Markets

Inventory Turns per Year

13- Food CPG Supply Chain

Inventory Turns per Year

15- Canadian CPG Furniture Supply Chain JIT Indicator7

Furniture and related

Furnishing and Home

16- Logistics Innovation in the Furniture Sector (2002-2004)21

D. In-depth Analysis: Canadian Retail Sector

17- High Velocity Retailers10

Inventory Turns per Year

19- CPG's Inventory Planning and Replenishment Related Pressures11

21- Level of Success of CPG's

Success below expectations

Success below expectations

Success is what we expected

Success is what we expected

Success exceeded expectations

Success exceeded expectations

III-Logistics and SCM Cost KPI Analysis