REGIONAL DISTRIBUTION CENTRE

CEDI PARTNERSNoah 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

AnalysisFinal 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

Meeting in Sioux Lookout

March 11 – April 8Apr 9-10

April 30May 1 –21 July/August

Industry and Logistics Research

Community vist x2

1st Community Engagement Conference in Sioux Lookout

Research, Analytics and Creation of Draft Feasibility Report

Feasibility Study Complete

June ?

2nd Community Engagement

Date TBD at 1st Engagement

Review Draft Report

In First NationSioux Lookout

Warehousing Re-packingTransportation

Sup

plie

rs

Transloading

BusinessFunctions

ConsiderationsProducer supplyCloverbeltSyscoPrattsMacDonaldsGordons

Best Alternative to the Cheapest Option (BATTCO)- add service and systems- add quality and selection

2015Regional Distribution Center

Supply Chain Feasibility Analysis

MNP Feasibility Analysis

Awareness and Consensus

Northern Staging and Re-packing?

ConsiderationsExisting storesDemandAffordable choicesBasket of goodsConsumer EssentialsGaps

Phased Approach?Phase 1 – Sustainable AffordablePhase II – More healthy choicePhase III – Promote changes to

healthier nutrition

Future Reverse Economy (Exports)

Transaction(Order/Payment)

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)

• Product demand

• Buying habits• Expectations

Customer

• Product cost• Economies of

scale• Supplier

logistics

Supplier

• Cost• Supplier to

distribution• Distribution

to customer

Freight

Capital and operating costsLocation and infrastructureCompetitive positionSources of fundingH.R. PlanLegal structure, governance and ownership

Distribution Center

CEDI Decision Making

Feasibility Conclusion

• Retailer• Industry

partner• Social

service

Community Distribution

Proposed Role of the Distribution Centre

Distribution Center

Promotion

Packaging

Coordination

Transaction

WarehousingRelationship Development

Distribution Centre

• 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

Observations

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. Milk2. Bananas3. Cereal & Oatmeal4. Potatoes5. Eggs6. Hot dogs or bologna7. Bread8. Ground beef9. Bacon10. Margarine or butter

Winnipeg Prices vs. Northern Community

Item Quantity Winnipeg Price Northern Price

Milk 1L $1.57 $3.12

Bananas 1kg $1.70 $2.45

Cereal 350g $3.39 $8.29

Potatoes 5lb $2.95 $5.00

Eggs 1 dozen $2.97 $3.99

Ground Beef 1kg 10.88 $14.95

Bread $3.47 $3.99

Ground beef 1kg $14.95 $13.18

Yogurt 650g $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