Supply chain management, once regarded as a non-glamorous and cost-cutting department, has evolved and come of age into a strategic function that shapes an organization’s competitive edge.
In today’s hyper-connected global business landscape, the supply chain could include vendors, manufacturers, intermediaries, logistical services, and customers from anywhere in the world!
Amazon immediately comes to mind, with its HQ in Seattle, managing 30 different country-specific sites, shipping 10 million different products, offering game-changing same-day deliveries, and soon 30-minute drone deliveries with Amazon Prime Air.
Coca-Cola is another masterclass in efficient supply chain management. 95% of beverages are made in the country they are sold to, so they can customize flavours in each country. They manage 59 plants, 279 production lines, and 98 distribution centres.
A report by PWC revealed that companies that operate best-in-class supply chains see 50% higher sales growth and are 20% more profitable.
Additionally, now with Industry 4.0, a.k.a, Supply Chain 4.0, at the forefront, supply chain systems are transforming even faster than before. Businesses are learning how to take advantage of IoT, robotics, AI, big data, and automation to make their supply chains more efficient and responsive.
Canada is a renowned, trusted link in the world’s supply chain, which means it is equipped with almost anything you need to set up and run smooth supply chains for your startup, from a massive variety of manufacturing hubs to a vast transportation network and trade agreements that provide access to billions, and support programs to help you grow.
If you’re a Canadian startup setting up a supply chain management system, in this blog, we walk you through the following:
- Tips on how to set up efficient and responsive supply chains
- Manufacturing Hubs in Canada for different industries
- Common Shipping Methods to and from Canada
- A starter guide to import/export to and from Canada
- Resources for Canadian startups in international trade
Tips on how to set up efficient and responsive supply chains in Canada
- Get up close and personal: If you want your supply chain to work like a well-oiled machine, you can’t settle for a bird’s-eye view. Take the time to go beyond the surface level to get a firsthand understanding of every single step your product goes through before they reach your customers.
This helps you identify, troubleshoot, and fine-tune problems faster as your company grows.
- Create a glass pipeline: From the get-go, design a supply chain with transparency that lets you see every step of your product’s journey. Technology is your friend here. Supply Chain Management software can give you a real-time view of inventory with data checkpoints strategically placed throughout production and shipping. (Browse through Forbes’ 2023 list of best supply chain management software.)
Once you successfully line up your glass pipeline- cash in your brownie points with customers. Clients and customers love transparency!
- Make your suppliers your allies: Imagine having a bond with your suppliers that goes beyond the transactional. With open lines of communication and mutual trust, you can collaborate to forecast demand, strategize inventory management, and anticipate potential challenges well in advance.
- Futureproof your supply chain with backup plans: Now more than ever, businesses understand the importance of backup plans and working with multiple suppliers to mitigate disruptions caused by geo-political friction, natural disasters, or pandemics. Don’t forget to make arrangements and invest in relationships with alternate suppliers or shipping channels that are dispersed across regions.
- Maintain a tech-forward POV: Stay abreast with ways to automate processes, like warehouse automation, shipping automation, and logistics automation, to improve efficiency and reduce errors. Use data analytics or machine learning algorithms to predict demand more accurately. Incorporate software to ensure information flow is in motion at all times – as important as your inventory being in motion! Overall, technology can lend greater agility and responsiveness to your supply chain.
Manufacturing hubs in Canada for different industries
Whether you’re looking for manufacturers or want to supply your products to existing value chains, note these Canadian hubs for industries like Aerospace and Defence Manufacturing, Automotive Manufacturing, BioManufacturing, Chemical Manufacturing, Hydrogen and Fuel Cell Manufacturing, and Medical Devices Manufacturing.
Aerospace and Defence Manufacturing Hubs in Canada
In Canada’s aerospace sector, aircraft manufacturing (civil, defence, and space) accounts for approximately 69% of activities, while aircraft maintenance, repair, and overhaul (MRO) make up 31%.
Montréal, Quebec is a major aerospace hub globally, ranking third after Seattle, US and Toulouse, France. Overall, Canada holds a 5% share of worldwide aerospace sales. Ontario is also a notable Aerospace hub, with companies like Airbus, Bombardier, Collins Aerospace, and De Havilland Aircraft of Canada all calling it home.
Automotive Manufacturing Hubs in Canada
Canada’s automotive industry thrives in the Great Lakes automotive manufacturing cluster, a major vehicle production region. Ontario hosts assembly plants of major OEMs, including Stellantis (Brampton, Windsor), Ford (Oakville), GM (Ingersoll), Honda (Alliston), and Toyota (Cambridge, Woodstock), with over 1.4 million vehicles assembled annually, while automotive suppliers and R&D are dispersed across the country.
Life Sciences and Bio Manufacturing Hubs in Canada
With a strong legacy in the biomanufacturing and life sciences sector, Canada has been a key player in the global production of biopharmaceuticals for a significant portion of the 20th century.
The sector continues to be a priority for the country, demonstrated by the $2.1 billion invested by the Government of Canada across Ontario, Quebec, British Columbia, Alberta, Saskatchewan, and the Atlantic Region in biomanufacturing, vaccine and therapeutics.
Chemical Manufacturing Hubs in Canada
The chemical industry in Canada consists of diverse manufacturing companies categorized into two groups: those that use chemical reactions to transform substances and those that blend different inputs to create functional products for specific use.
The country’s chemical industry primarily centres around crude petroleum and natural gas processing, as well as coal and ore refining. Prominent hubs of the chemical industry include Sarnia, Ontario, and cities such as Leduc and Red Deer in Alberta.
Hydrogen and Fuel Cell Industry Hubs in Canada
Canada is globally acknowledged for its leadership in hydrogen and fuel cell research, development, and early-stage commercialization. In 2022, the world’s top organizations were surveyed, and 87% of organizations reported that their headquarters for hydrogen and fuel cell activities were located in Canada.
The largest cluster of hydrogen and fuel cell companies in Canada is situated in British Columbia, followed by Ontario, Alberta, and Quebec.
Medical Devices Manufacturing Hubs in Canada
In 2020, Canada’s medical devices market, excluding in vitro diagnostics, was valued at approximately US$7.5 billion, representing around 1.8% of the global market. Canada’s medical devices industry is an export-oriented industry; it manufactures equipment and supplies it to the US, Netherlands, Germany, and Japan.
The provinces of Ontario, Quebec, British Columbia, and Alberta are home to the majority of establishments in the medical devices industry.
Transportation methods available for your Canadian supply chain
Canada boasts a remarkable trade network with 15 free trade agreements active with 49 countries. Canada is also the sole G7 nation with free trade agreements established with all other G7 members. These agreements serve as a formidable advantage for Canadian startups and open up a world of opportunities, quite literally, for Canadian startups and their supply chains.
Of course, the role of Canada’s transportation across air, road, rail, and water plays a pivotal role in the inter-provincial and international movement of goods.
Canada’s transportation network includes over 550 port facilities, 26 national airports, extensive rail coverage with 41,465 route kilometres, and a large fleet of over 24 million road motor vehicles. These infrastructure assets contribute to the movement of goods valued at over $1.2 trillion.
Road transportation is a critical component of Canadian industries, accounting for nearly 40% of overall merchandise trade. This heavy reliance is primarily driven by Canada’s extensive trade with the United States and the strong integration of global value chains between the two countries.
Water transportation follows closely behind at 28%, offering a cost-effective and efficient option for trade with non-North American nations, particularly for bulky goods. Air and rail each contribute around 12% to the total merchandise trade, providing unique advantages in specific circumstances.
The remaining 9% falls under the category of “other,” encompassing pipelines and power lines used for shipping energy products like crude oil, natural gas, and electricity.
Below are some of Canada’s popular commercial transport carriers:
Air
Cargojet (Canada’s largest cargo airline)
Kelowna Flightcraft Air Charter (Canada’s second-largest all-cargo airline)
Other airlines that also offer cargo services
Sunwing, CanJet, First Air, Canadian North, Air North, Air Creebec, Air Inuit, Bearskin Airlines, Perimeter Airlines, Air Express Ontario, Air Labrador, Provincial Airlines, Air Saguenay, Flair Airlines, Kenn Borek Air, and Propair.
Water
Maersk Line
Hapag-Lloyd
Mediterranean Shipping Company
OOCL
Hanjin Shipping
CMA CGM
APL
Domestic Shipping (land/air)
Canada Post
Purolator
DHL
FedEx
UPS
Canadian Import and Export Guides
If importing or exporting goods to and from Canada is a vital component of your startup’s supply chain, this starter guide is for you. We’ve compiled the steps of the Canadian import and export process with direct links to the official government website. By understanding the key steps, requirements, and considerations involved, you can plan your supply chain in more realistic terms.
A starter guide to importing to Canada
Before importing to Canada, you will need to carry out in-depth due diligence. Needless to say, you will need a Business Number to proceed. You are also required to identify the goods, assess the need for a customs broker, determine the country of origin, ensure compliance with import regulations, and check for any additional permits or restrictions.
After confirming the eligibility of the goods for import, the next step is to determine the appropriate tariff classification number. This number, along with the country of origin, is important in assessing the applicable duty rate for the import.
In this step, you will need to determine the applicable tariff treatment and duty rate, assess if the goods are subject to GST, excise tax, or excise duty, and determine the value of the imported goods to make an estimation of the anticipated duty and tax payments.
Now you will be allowed to place an order and identify the shipping mode – highway, marine, rail, air, postal or courier service. Regardless of whether you handle the transportation or use a carrier, it is mandatory to report all commercial goods to the CBSA (Canada Border Services Agency).
Be aware that government officials may examine your shipment for compliance, and non-compliance may result in monetary penalties.
To get your goods released, you have two options. You can either opt for full accounting and payment of duties by completing the necessary forms at a CBSA office or choose the Release on Minimum Documentation (RMD) method, which allows for release prior to duty payment. In both cases, you can prepare the documents yourself or hire a licensed customs broker.
After your goods are released, you can address any errors in the accounting information within 90 days. You must maintain all import-related records for six years and be aware that the CBSA may verify and adjust importations up to four years later.
A starter guide to exporting from Canada
As an exporter, your first responsibility is to provide necessary export documentation to the CBSA within the specified time frames. You can delegate reporting to a third party, like a customs service provider, but you are still accountable for ensuring accurate and timely information.
To prepare for exporting goods, identify if they are restricted and may require export permits or licences. Consider the country of origin and destination, as different requirements may apply. Contact the embassy or consulate of the destination country for import requirements.
Determine if an export declaration and/or permit is required based on the value and destination of the goods being exported.
To submit your export declaration, ensure you have a valid business number based on your mode of transportation – air, marine, rail, mail or highway (there are strict time frames to submit your export declaration), select your reporting method (CERS or G7-EDI), classify your goods using the appropriate classification number, provide the proof of report number to your carrier, and present any required export permits, certificates, or licences at the designated export reporting office.
The CBSA or other government officials may examine your goods to ensure compliance with export requirements.
After exporting your goods from Canada, there are important requirements to keep in mind. First, you must retain all export records for six years in Canada. Additionally, if applicable, you may need to provide a certificate of origin to the importer, confirming that the goods are of Canadian origin and meet free trade agreement requirements.
Resources for startups in international business
Consider reaching out to Canadian organizations that offer trade support to businesses. They can help in various ways, such as providing advisory services, data and knowledge regarding markets, funding, and more!
- Export Development of Canada (EDC)
The EDC is a trade support organization under the Minister of Small Business, Export Promotion and International Trade, mandated to support and develop Canada’s export trade. They offer multiple services to large, medium, and small-sized companies that want to do business with the world. They can help you manage risks such as unpaid invoices with their credit insurance product; they can even help you secure financing to grow your business, they can act as your loan guarantees to help you get funds from banks, and also provide trade advisory services.
- Trade Commissioner Service
The Trade Commissioner Service helps Canadian businesses with various funding and support programs, global opportunities, and a vast network of trade commissioners across 160 cities worldwide. CanExport SME is one of their popular programs that can get you to $50,000 in funding, covering 50% of your expenses for enhancing and expanding your e-commerce presence, participating in virtual events, obtaining certifications, protecting intellectual property in global markets, optimizing search engine visibility, and more. They have many more partners like Futurpreneur and BDC who can support your growth.
Want to start up in Canada?
TBDC is the bridge you’re looking for! We are Canada’s premier startup incubator. Successful companies like Ibentos and Ayottaz have graduated from our programs and scaled through North America and the world. Are you ready to do the same and make your mark? To learn more, click here.
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