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FALL 2015 the north west company retail www.northwest.ca / Revenue: $1.6 billion / HQ: Winnipeg, Canada / Employees: 6,647 at the end of 2014 / Specialty: Retailer to underserved rural communities / Denise Allen, vice president of logistics and distribution, Canada: “It really is unlike any other retailer that I’ve seen.” Into the North

Offering an extensive range of The North West Company is developing a new TMS system to goods, The North West Company prides itself on being the major improve service to Canada’s remote communities. By Tim O’Connor retailer to communities near the Arctic Circle.

The Arctic Circle is Company, which was founded ties and our [brand] assortment one of the more isolated as a fur-trading business in 1670. reflects that,” says Denise Allen, and harsh environ- In 1987, investors purchased vice president of logistics and ments on Earth. There Hudson’s Bay’s Northern Stores distribution, Canada. North are few roads and less Division and renamed it The North West’s stable of stores includes infrastructure. Shipping West Company after a competitor 122 Northern stores, which offer DENISE ALLEN goods over 1,000 miles that merged with Hudson’s Bay in food, financial services and general VP of Logistics and Distribution, is always a challenge, 1821. North West has evolved into a merchandise; seven NorthMart Canada but in the north, every retail business and now operates a locations, which sell food, cloth- delivery is a small miracle. number of brands in the northern ing, health products and services; It is in those far reaches where provinces and territories, as well as and 31 Giant Tiger junior discount The North West Company finds Alaska, the Caribbean and Pacific. stores, selling family fashion, its customers. North West traces “We are suppliers of everyday household products and food in its history to the Hudson’s Bay goods to the northern communi- western Canada. Thirteen Quick-

FALL 2015 Supply Chain World retail the north west company

North West’s biggest challenges are the remoteness of the communities it serves and the harsh weather conditions it faces.

“We have been serving these down is an ongoing endeavor. “It ships travel as far north as Artic communities for such a long time really is unlike any other retailer Bay and Pond Inlet, two communi- that I’ve seen,” she says of the ties located on Baffin Island where that we know the communities, we logistics challenges. the hottest day of 2015 was 60 F know the carriers and we know Bringing goods to those remote and the coldest -46 F, according the weather very well.” communities requires multiple to the Canadian government’s modes of transportation and the official records. ______method changes with each sea- “The remoteness of the commu- son. When possible, North West nities and the harsh conditions we stop stores, which offer ready-to- partners with air carriers to make face in respect to the climate are eat foods, petroleum products regular deliveries to its stores us- our biggest challenges,” Allen says. and services, are also part of ing planes such as the ATR 42 and To solve those challenges, carriers North West. “We pride ourselves a Boeing 767 that makes trips form must communicate with North on being the major retailer to the Winnipeg to the hamlet of Iqaluit. West and its store managers to north,” Allen says. “In the north, air freight is the Allen joined North West in primary mode of transportation, North Star Air is a premium airline carrier that provides October 2014 to implement the especially for fresh groceries,” a full suite of cost-effective air transportation solutions company’s new transportation Allen says. for charter, passenger, cargo and fuel services. We service Northern Ontario and beyond from our operating bases in management system (TMS), drive During the summer, when the Thunder Bay, Sioux Lookout, Red Lake, Pickle Lake and Kapus- kasing. Just recently we entered into an agreement with The expense out of the supply chain icy surface of the arctic waters North West Company and became part of the supply chain to and improve service to stores. melts and waterways become service and ensure a steady supply of essential goods and services to many First Nation communities. As we move forward With limited transportation navigable, North West uses Sealift to continue to service the North, we are excited about the infrastructure, Allen says servicing ships to bring bulk supplies to emerging business opportunities and to work together with The North West Company and communities. communities while keeping costs many of its communities. The

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North West’s store staff are members of their communities, and many of them have spent their entire working lives with the company.

keep them informed of inclement weather that can prohibit trips. The wait for a break in the weather can sometimes take as long as a week, Allen says, so when the skies clear it is important for North West and its carriers to move quickly to deliver goods to those communities. Fresh food comes first and other goods are prioritized according to need. Few other companies have North West’s experience in handling these types of transportation issues and the company has learned how to react quickly to changing conditions. “Our advantage is that we have been serving these communities for such a long time that we know the communities, we know the carriers and we know the weather very well,” Allen says.

Role In Community Because they serve such remote places, North West stores often become a gathering point in a hamlet or town. The company takes that role seriously and strives to develop strong relationships in its communities. In many markets, North West stores must offer additional services to fill the needs of the local population, such as check cashing, tax preparation, parts and repairs to all-terrain vehicles and Ski-Doos, while also offering kiosks for popular franchises such as KFC and Pizza Hut. It is important for North West that its employees be seen as part of their communities. A town off the Beaufort Sea might have only 350 residents. There, the regular customers are truly regular and a store manager might see the same locals multiple times each day. In those scarcely populated areas, having the people to work at a retail store can be as important of a resource as the actual goods on the supply chain. “Depending on the size or market, we continually have to recruit, train and invest in our store staff,” Allen says.

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Finding those employees is an ongo- roll out the tracking technology by the ing effort for North West. The com- end of 2016. Allen says the company is pany works to keep staff engaged and still developing a deployment strate- develop talent for future management. gy for the full system and it could be “In the remoteness of these markets, introduced in phases. we count on the training and the good As it improves its TMS, North judgment of those people to make West will continue to take a hands- decisions for us,” Allen explains. on approach to its transportation as Many staff members have spent well. Company executives, including their entire working lives with North Allen, regularly travel to hubs to view West, Allen says, and have developed the supply chain in action and discuss a high degree of loyalty to the compa- issues with carriers. “We like to get out ny. “There is a heritage there and that and touch and observe the goods as coincides with the brand.” they move through the supply chain,” Allen says, adding that it is exciting to Becoming More Efficient see goods loaded on a plane bound for The natural challenges in the supply the north. Major hub locations include chain are unlikely to change, so North the towns of Churchill, Thompson, West is constantly looking for ways Rankin Inlet and Pickle Lake. to improve the logistics process. The effort to create full visibility “The biggest initiative that we have of the supply chain will also support in front of us with respect to supply North West’s intent to invest in its chain is completing the implementa- best-performing markets, called the tion of TMS,” Allen says. Portions of Top Markets Initiative. The company that TMS system are already active developed a capital plan to update its in North West’s supply chain, but stores to support its growth catego- the company is listening to feedback ries. In 2014, those top growth areas from its carriers and has identified included foodservice, pharmacy, pro- additional areas where it can improve duce, meat, baby and children, grocery, software and functionality. furniture and motorized sports. Once completed, Allen says the North West’s executives and board TMS system will create full visibility of directors are dedicated to see the of the supply chain and offer carriers TMS implementation through and more flexibility in shipping goods and receiving a return on the company’s products to stores. The TMS improve- investment, Allen says, because the ments North West is now developing project will benefit North West for will enable the company to have true years to come. “[I’m proud of] the or- end-to-end track and trace functional- ganization’s commitment to reinvest ity and to maximize the available car- in the transportation management go space of each shipment, whether it system,” she adds. “It’s underpinning be a 53-foot truck trailer or an aircraft all other initiatives.” fuselage. Maximizing that space will reduce the cost per proud of each First Nations Trucking (FNT) is proud of their shipment and allow carriers to make association with The North West Company (TNWC), the leading retailer of the North. FNT is an Aboriginal business fewer trips. whose success in providing winter road service to com- North West will begin piloting the munities in northern Manitoba and northwestern Ontario has been made possible by the commitment of TNWC. new TMS system this fall and plans to