REGIONAL DISTRIBUTION CENTRE CEDI PARTNERS Noah Chapman Rob
REGIONAL DISTRIBUTION CENTRE CEDI PARTNERS Noah Chapman, Rob Campbell and Kyla Hanson LAC SEUL FIRST NATIONS
Role • MNP was hired by the CEDI partners to determine the feasibility of the Regional Distribution Center in Sioux Lookout Project Initiation & Planning Phase 1 Current Market Analysis Phase 2 Concept Feasibility Phase 3 Analysis Final Reporting
Work Plan Providing the basis for our work plan is the methodology below. We have tailored our approach to this project based on your requirements, and have embedded this methodology into our approach and work plan. It is our experience that by following a well-defined and ‘tried and true’ methodology, we are better able to achieve complete, credible and valid recommendations that meet your expectations. Using this framework at the outset also allows us to work with you to refine our approach and ensure you are comfortable ahead of time that it will meet your needs. In the following five phases we propose to 1. Thoroughly establish the process with you to ensure we are all on the same page for the work to be completed 2. Analyze the current state of the market to determine the feasibility of capturing the required business 3. Develop a general concept of space and market costs and test against general market rates for grocery items in the area; at this stage we expect two or three iterations in terms of size and cost that will zero in on the ‘best fit’ for this project 4. Once that has been determined we will launch more detailed analysis including financial analysis - capital costs, cash requirements etc. – operational analysis, legal structure and governance. Final feasibility will be determined 5. Finally, all previous work will be fully documented in a feasibility report that can, in itself be used for financing or can form the basis for input to the development of a final business plan.
Timeline March 10 -11 Apr 9 -10 April 30 March 11 – April 8 Meeting in Sioux Lookout Industry and Logistics Research May 1 – 21 June ? July/August Feasibility Study Complete Research, Analytics and Creation of Draft Feasibility Report 2 nd Community Engagement st 1 Community Date TBD at 1 st Engagement Conference in Review Draft Report Sioux Lookout Community vist x 2
Determining Feasibility • To determine initial feasibility from a conceptual idea, it is essential to create assumptions within the following areas that can begin to define the overall project. • • • Products Customers Distribution Supply Transaction • Feasibility must rely on concrete data and information to build a functioning model. • There may be other opportunities and ideas that present themselves, and should be considered once the feasibility is determined.
Determining Feasibility (Continued) Customer • Product demand • Buying habits • Expectations Distribution Center Supplier Capital and operating costs Location and infrastructure Competitive position Sources of funding H. R. Plan Legal structure, governance and ownership • Product cost • Economies of scale • Supplier logistics Feasibility Conclusion CEDI Decision Making Freight Community Distribution • Cost • Supplier to distribution • Distribution to customer • Retailer • Industry partner • Social service
Proposed Role of the Distribution Centre Promotion Packaging Coordination Distribution Center Distribution Centre Relationship Development Transaction Warehousing
Observations • Successful models • Bundles concept • Healthy • Affordable • Social Enterprise/Sustainability • Social enterprise – not to maximize profits • Sufficient operational revenue • Community involvement and commitment will be essential
Consumer Habits • • • How often do you grocery shop? Who is the primary shopper in your household? What is the size of your household? How do you pay for goods? Are you conscious of prices while grocery shopping? Do prices affect whether or not you will purchase an item? What is your average spend per month? Have you participated in any kind of “mail order” program? Would you order and wait for items or is immediate possession required? What kind of cost savings is needed for you to consider ordering your groceries?
Consumer Research
Prior Community Research Findings • Food prices in our sample community were not as expensive as promoted in media • Competition is growing • Do not want to impact local merchants • People were not overly enthusiastic in receiving goods in a pre order format unless the savings are significant • There is an acceptance to the local reality • Trend towards healthier food • Social assistance vs. employed
Prior Community Research Findings • Top 10 items 1. Milk 2. Bananas 3. Cereal & Oatmeal 4. Potatoes 5. Eggs 6. Hot dogs or bologna 7. Bread 8. Ground beef 9. Bacon 10. Margarine or butter
Winnipeg Prices vs. Northern Community Item Quantity Winnipeg Price Northern Price Milk 1 L $1. 57 $3. 12 Bananas 1 kg $1. 70 $2. 45 Cereal 350 g $3. 39 $8. 29 Potatoes 5 lb $2. 95 $5. 00 Eggs 1 dozen $2. 97 $3. 99 Ground Beef 1 kg 10. 88 $14. 95 $3. 47 $3. 99 Bread Ground beef 1 kg $14. 95 $13. 18 Yogurt 650 g $2. 47 $4. 50
Next Steps/Future Opportunities • Specialized resources and groups to support the process • Partnering with other organizations focused on a similar objective • Significant business plan • Further promotion and community research
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