Metro Inc: A Leading Food Retailer and Wholesale Company in Canada

The business organisation Metro Inc falls under the consumer services industry and the sector within which it has been operating is the food retailers and wholesalers. It is one of the major supermarket chains in Canada that offers various kinds of fresh quality foods, vegetables and fruits for meeting the demands and preferences of the customers. Because of the fresh quality food items offered, the company has managed to create a good place in the market and the brand image and identify have also improved with time consistently. The company has generated a total sales revenue of more than $12 billion and is the only food distribution company that focuses on the satisfaction of customers and even employed over 65,000 employees (1). This has enhanced the organizational efficiency and allowed the customers to obtain long-term loyalty too. The products and services are distributed in retail chains including Food Basics, Metro Plus, Super C and Adonis.

The present situation of the organization is quite good and it has maintained a sustainable position within the business environment by becoming a leader in the food and pharmaceutical food distribution sector in Ontario and Quebec. With its bulk production, the company has more than 600 stores that are operating under the various retail chains of Metro Inc. including Super C, Metro Plus, Food Basics, etc. The consumers have gained accessibility to a wide range of fresh food items and grocery items (2). The consistency in quality and freshness of the food items are considered as competitive priorities of the organisation to keep customers satisfied.

Business processes and operations are critical for the success of any business in terms of profit and competitive advantage. One of the recent processes could be the acquisition of A&P Canada, loyalty programs offered to the customers at the stores of Metro Inc in Ontario and Quebec. Maintenance of codes of ethics is important and so Metro Inc has complied with the guidelines, rules and regulations adopted by Canadian Securities Administrators to ensure successful functioning. Information is exchanged for understanding the behaviors and attitudes of the people and the food items have been delivered according to that (3).   

The main goal or objective of the report is to identify the problems that may be faced by the organisation and develop proper action plan to facilitate the proposed solutions to those issues. The company aims to offer the freshest food items along with various pharmaceutical products to enhance the health and well-being of the consumers.

Current Situation

During the last few months, the company has been facing issues regarding the quality of products and lack of consistency in delivering the freshest quality food products in the market. Though Metro Inc has made huge amounts of investments to innovate the products and services and ensured introducing more fresh quality food. It is aimed to achieve greater level of profit and competitive advantage in business as well. Many frozen food items fare less in terms of quality when compared with the fresh for revolution. Metro Inc has always focused on providing a differentiated experience to the customers with the rising demands for fresh foods. More money is invested in labor management though the risks of lower return and changing behaviours of customers are emerging as well. This has deteriorated the supply chain management activities and resulted in wastage of resources, lack of sales and shrinkage. With the automation processes, new supply chain infrastructure has been formed that has resulted in loss of jobs for many people (4).

Metro Inc also offers pharmaceutical products but the growth of sales has slowed down because of the introduction of biosimilar drugs. These kinds of drugs have increased the level of safety for the people and effectiveness of the medicines, because of its availability at lower prices. The healthcare industry shifted towards value based payments and so the pharmaceutical industry might face issues to estimate the exact time frame for manufacturers to evaluate the efficiency of the drugs. The costs of managing business operations have also increased, because of which the company wants to close some of its banners to bring back the trust and loyalty among the customers. 

It can be understood that the company has faced issues due to more focus on management of labour rather than managing the supply chain activities and inventories. While globalizing the supply chain activities, many issues were faced including the lack of ability to meet the regulatory standards. This also resulted in making the suppliers and products unable to maintain the standards of quality and thus the safety aspects were hindered, which affected the brand image and reputation as well. By focusing more on the management of labor, the company has ignored various important aspects of supply chain, which has damaged the brand reputation and even created issues during the flow of cash (5).

Problem in the existing process

One of the major issues that the company was facing related to the supply chain management could be the lower costs of labour management. Due to lower investments in managing the human resources, the staffs have felt less interested in fulfilling their roles and responsibilities, which further deteriorated the business performance (6). One of the major aspects of supply chain management is the outsourcing that extends the production process internationally. Due to the presence of suppliers in different geographical locations, the supply chain activities have got complicated as well.

Current Business Process

Problem analysis

The cause and effect model was considered to be effective for identifying the issues during the process of procurement

Possible Solutions

Investments are done for the labour management by providing the employees of Metro Inc with training and developmental sessions. This has improved their abilities to understand their roles and responsibilities properly and perform to their potential too. To manage proper globalization of supply chain, the company must adopt the culture of the new market places and ensure production of products and services accordingly. The markets are changing fast, which also affected the behaviours of consumers from the perspective of social, cultural, personal and psychological factors. To meet the market demands, Metro Inc must not expand its number of stores, rather focus on the introduction of new and fresh food items along with value for money pharmaceutical products and at the same time, keep the costs of manufacturing lower. Innovation has been brought for forecasting the demands for the new products in the market and even maintains an agile supply chain for meeting the demands and preferences of the customers (7). To enhance the market presence, improve the supply chain activities’ efficiency and influence the consumers’ behaviors, Metro Inc in Canada has obtained the feedbacks and responses of customers. It is possible by using social media platform and it has influenced the online shopping behavior as well as addressed the quality of products at various levels of the supply chain. There is procurement of raw materials, packaging, logistic and handling of products to make sure that those are transferred properly. Other than the quality control and safety tests, the company has met the regulatory standards while manufacturing and production, packaging and shipping of products and services. This has ensured complying with the quality standards and overcome the supply chain issues with ease (8). While expanding business globally, data and information have been obtained at various levels of supply chain related to the direct and indirect materials, tax related documents, labor agreements and compliance certificates. The ALLOY platform was used by Metro Inc to manage data integration solutions, furthermore supported the storage, retrieval and development of repository consisting of quality data from the processes of production and supply chain management.

Problem Analysis

While entering the foreign markets and expand sales into the global markets, Metro Inc has been unable to adapt the products to different cultures, which might enable losing control on business operations, lack of visibility, control and management over the inventories. The pharmaceutical department of Metro Inc has failed to implement the value based payment system, which created difficulties in assuming the actual time taken for the production and effectiveness of the products delivered. Due to this, the costs of certain drugs could become very high and leave the customers unsatisfied. Thus, the supply chain was not up to the mark that was expected to be.

Goal

Tools used

The ALLOY framework could be used for the management and integration of data obtained from various levels of supply chain. To manage regulatory compliance, FDA Food Safety Modernization Act (FSMA) was implemented for maintaining safety for food supply and prevented any contamination or harmful chemicals used for the production of fresh quality food and pharmaceutical products. The law also ensures that artificial chemicals are not used to ripen the fruits. Warehouse management has been considered as an essential tool for storing enough fruits and vegetables and ensure abundant supply of those to the concerned supermarkets by Metro Inc (9).

The Final Solution

The company’s major focus has been on the maintenance of quality of products to keep the customers satisfied and quality is a major success factor for the food industry. Through the development of new supply chain infrastructure, the company has become responsive to meet the needs of customers.  Another important solution to overcome the issues of quality could be the management of transportation solutions for matching up the demands of consumers and deliver products and services in various supermarket chains within the actual time schedule. Metro Inc’s solution to overcome the issues could be following the safety and quality standards by considering the FDA Food Safety Modernization Act. This has ensured that the quality standards are met and it is possible through proper supply of resources, furthermore has enhanced the effectiveness of supply chain activities (10). These kinds of solutions have leveraged the best technology, controlled costs and reduced the carbon emissions, furthermore created lesser harmful impacts on the environment and maintained consistency in quality all throughout.  

Why it was chosen?

It was chosen for not only improving the supply chain processes, but also to benefit the company from other perspectives too like lesser costs incurred during the production, improvement of warehousing capabilities and reduce carbon foot prints.

How was it chosen?

The various solutions were analysed and the benefits that could be obtained from those after implementation were needed to be compared. By comparing these benefits, it has been found that

Identification of new improved process

With the automation of grocery chain, new and innovative supply chain infrastructure has been formed, which has allowed the company to become more responsive to the needs and requirements of the customers.

Describe how it meets the goal

The company has met the goals and objectives by implementing a new supply chain infrastructure for managing the automation process properly. To do so, the company has managed the distribution  network and continued with the growth and expansion of the business in Ontario. With the modernized supply chain infrastructure, Metro Inc has influenced the distribution process and even responded to the changing needs and preferences of the customers quite comprehensively. By aligning with the Food Safety Modernization Act, the quality and safety of products have been maintained (11).

Problem Statement

Implementation/Action Plan

Follow-up Plan

As soon as the project was completed, it had been important for Metro Inc to bring back the effective employees whose jobs were lost during the process of automation. The food services industry has a high automation rate and so to reduce the employee loss, Metro Inc has created scopes to allow the existing employees become part of the organisation again and their performances were assessed and reviewed thereafter. It helped in understanding their roles, their potential, based on which, they were retained (12).  

Measurement of success

Success was measured in terms of the customers’ services and communication facilitation, which had improved with the development of the new supply chain infrastructure. Many of the existing employees were retained and better customers’ services were provided along with maintenance of consistency in the quality of products. This proved that the project management was successful and noteworthy.

The Team with Roles

The roles of teams differ and it included one team’s management of planning for production while another team was concerned with the management and control of inventories and warehousing. These roles are essential functions of supply chain management that have been managed all throughout the development of new supply chain infrastructure at Metro Inc (4).  

Resources

The resources used by Metro Inc to manage the supply chain included financial and human resources, construction materials that were required for the development of supply chain infrastructure and transportation vehicles too. The human resources mean the people working for the company and thus there are more than 65000 employees while the company also holds over CDN$601.6 million, which is considered as financial resources.

Time Commitments

The project was completed within the allocated time and so the time commitments were met with ease. The total time taken for completing the project was 5 months and at every supply chain levels, progress was measured, which helped in maintaining consistency and appropriateness during the action and implementation plans (7).

Request for Approval

Metro Inc has improved the customers’ services and communication for facilitating the supply chains and distribution networks. The issues were related to the supply chain management and poor quality food items distributed at various supermarkets. To overcome the issues and maintain safety, the organisation had implemented the new supply chain infrastructure and maintained the quality standards of food items by aligning with the Food Safety Modernization Act at Canada.

The solutions:

• The benefits were obtained within 4 months after the new supply chain infrastructure was made
• Reduced the costs of business operations
• Maintained flexibility and met the quality standards
• Both human and financial resources were managed properly

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