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The new and improved CANEX
An interview with Gerry Mahon
By Brigitte Smiley, Communications Manager, CFPSA, Ottawa, 613-996-6393, smiley.brigitte@cfpsa.com
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Earlier this year, CANEX implemented a new management structureto oversee and control all resale and service operations. CANEX moved from a Regional Manager (RM) structure to a National Manager (NM) structure based on “functional” lines of business. Previously, there were six RMs located in Suffield, Edmonton, Trenton, Valcartier, Petawawa and Halifax; with each having responsibility for all operations in their area. In reality, one could say there were six autonomous business units by region. The new structure saw a reduction from six RMs to three NMs, specializing in the operations of retail, convenience, and business development and services. I sat down with CANEX president, Gerry Mahon, to find out more about this.
Brigitte Smiley (BYS):
What prompted CANEX to reorganize?Gerry Mahon
(GM): Simply put, it was driven from the perspective to ensure that we were focused on our business operations. CANEX has really tried to ensure alignment with all objectives of the CFPSA Strategic Plan, in particular financial security and market penetration. For us, that means constantly looking for ways to make our operations more efficient and also to grow the business. In essence, if we are successful in meeting those goals we are not only aligned with the strategic directions of the CFPSA Morale and Welfare Programs but we can ensure a major contribution to the quality and viability of such programs at the Base/Wing level. Two recent events provided the impetus and opportunity to review our existing structure and the way we manage our field operations: the retirement of two RMs and the impact of technology with the introduction of our Store Management System (SMS).
BYS: How did CANEX operate before the reorganization?
GM: RMs had responsibility for all operations within their regions. This included retail stores, grocery stores, convenience stores, food services and concessions, such as barbershops, restaurants, doctors’ offices, and real estate offices. We realized that it was certainly a challenge for one person to be an expert in all of these areas. Equally, it became clear that significant differences in perspective and priorities existed not only between local stores and the HQ, but also across and within the regions. Accountability was difficult to determine and there were too many variables with the potential to preclude achieving progress towards a common vision. Category management or buying, program development and marketing campaigns were pretty well centered in the HQ. While local input could be limited, at the same time there could be great inconsistency in applying these programs in stores across Canada. Evaluating the effectiveness of campaigns against standards was difficult, as regional differences were often considered unique. Clearly we needed to strike a better balance between the two key components of merchandising, normally HQ functions and field operations, seen as store management functions. With the accelerated rollout of SMS it was abundantly clear that to fully exploit the advantages of automated and integrated business processes we needed an operationally focused, responsible and responsive organizational structure with clear responsibilities and accountabilities.
BYS: What is SMS and how did it help you make a decision?
GM: SMS is a software suite integrated with the point of sale that tracks merchandise from buying, to the backroom where it’s received, to the shelf where it’s displayed, all the way through to the counter where the item is rung in, payment is tendered, the receipt issued, the item bagged and the happy customer leaves. This includes pricing, tagging and scanning, which makes inventory management much easier. With SMS we now have current, live information on what sells, what doesn’t and what our inventory levels are. Equally as important, this more direct link with our stores highlighted the fact that not all businesses are the same. In particular, it confirmed that a great deal of concentration was on the retail and convenience part of our business and much less attention was being paid to food services and concessions. At that time we had approximately 250 different concessions and operations that had little consistency in terms of look, feel, and level of service. Customer expectations were not being met! While this large portion of our business had significant growth potential, strategic direction and HQ leadership was seen to be fundamental to success. We also determined that, to exploit the benefits of SMS, common processes and specific business line expertise were paramount. Quite simply, we felt that performance indicators and measures versus strength of personality should underpin the decision making process.
BYS: What did CANEX do with all of this information?
GM: With two people retiring and the SMS information at our fingertips, we concluded that it would be best to reorganize management of our resale operations along three lines of business: retail, convenience, and business development and services. A National Manager (NM), supported by a Field Operations Manager (FOM) now has operational responsibility for each separate line of business. This structure provides a more direct, specialized link between the field and HQ and facilitates communication of field operational concerns. This doesn’t mean that field concerns are always valid. However, while the NM is accountable for operations, they are also involved in setting strategic direction regarding development of programs and marketing campaigns, have direct access to our category managers who do most of the buying and have the performance data available from SMS. We feel that the structure will support much more effective communications and a more responsive HQ. The NMs and the FOMs will bring the field perspective, as they’ll be in the stores 70 per cent of the time, ensuring that local contact and relationships are not forgotten and remain front and centre. This gives each store or business better access to the responsible HQ person in order to discuss their issues and give feedback on programs and marketing campaigns. From a Base and Wing Commander perspective, they will have the added benefit of being in regular, and frequent if required, contact with a NM who has the authority to do the job. As always, I am also just a phone call away if local situations require my intervention. To tie this together, we have also instituted monthly operational meetings and quarterly performance management meetings to review effectiveness of programs and marketing campaigns, and to resolve issues encountered in the field. These meetings are supported by formal Operational Reports that are produced with every NM/FOM visit. These processes and tools, ombined with live sales and inventory reporting from SMS, will give CANEX management the means to assess sales and market activity in an informed and coherent fashion. The “squeaky wheel” won’t cut it but teamwork and facts will keep us on track. This new structure will make CANEX a more nimble operation, able to respond quickly to changing trends and customer requirements.
BYS: Who are the three NMs and FOMs?
GM: Rene Parent for retail and he is supported by Ken Stilwell, the FOM(R). Nalin Tulsiram for convenience and he is supported by Abdo Daccache, the FOM(C). The third, business development and services, is Ward Wilkinson. We are presently holding a competition for a person to be the FOM(S).
BYS: How does this new structure line up with the rest of the retail industry?
GM: CANEX is not a single line or uni-dimensional retailer as compared to most. We have many different footprints and a wide variety of communities that we service. While retailing is a very competitive and dynamic field, to remain successful a retailer has to be responsive, flexible, cost conscious and operationally focused. Mandates and accountabilities must be clear. I believe that these changes bring us in line with the trends in the retail industry. With this new management structure, CANEX will be better equipped to fulfill our mission of “ensuring the availability of competitively priced products and services, which satisfy the needs of our customers, while generating revenue for bases, wings and units.”
BYS: What is the response from the store managers?
GM: Well, I would like to say that they’re all positive and support the change. They feel that they get answers and are heard at HQ. I believe that they see we are giving them the tools to do their jobs and, more importantly, that we are not only interested in their views, but really value their input. That was certainly the feeling that I got when I interviewed all of our managers after introducing the change at our planning conference. However, don’t take my word for it though—ask them for yourself.