From the Ground Up - McCain Foods Limited
From the Ground Up - McCain Foods Limited
From the Ground Up - McCain Foods Limited
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TOP: Joe Palmer, president of<br />
Day & Ross, 1972.<br />
BOTTOM: John Doucet,<br />
president and CEO, Day &<br />
Ross Transportation Group,<br />
1999.<br />
had to make certain that Day & Ross stayed in business because somebody’s trucks<br />
had to get <strong>McCain</strong> products from New Brunswick to <strong>the</strong> rest of <strong>the</strong> continent.<br />
Decisions based on necessity sometimes turn out better than ones based on a<br />
grand strategy. As we shall see in <strong>the</strong> next chapter, <strong>McCain</strong> got into appetizers almost<br />
by accident when it ended up owning an appetizer business as a result of a<br />
french fry acquisition. Appetizers have turned out to be a huge win, and so has Day<br />
& Ross. <strong>From</strong> a struggling regional transport firm, it has grown into a major trucking<br />
operation with 2006 sales of $600 million and recognition as one of Canada’s<br />
fifty best-managed companies, an award sponsored by <strong>the</strong> national accounting firm<br />
Deloitte, CIBC Commercial Banking, <strong>the</strong> National Post, and <strong>the</strong> Queen’s University<br />
School of Business. As of 2007, only about 10 percent of Day & Ross’s business was<br />
with <strong>McCain</strong> <strong>Foods</strong>. <strong>McCain</strong> has big plans for Day & Ross. “Our ultimate goal,” says<br />
Day & Ross CEO John Doucet, “is to be <strong>the</strong> brand name in transport that <strong>McCain</strong> is<br />
in french fries.”<br />
Elbert Day and Walter Ross founded Day & Ross in 1950 in Hartland, New<br />
Brunswick. At a time when <strong>the</strong> railroads dominated <strong>the</strong> transport business, <strong>the</strong>y were<br />
pioneers. Their trucks hauled anything that needed hauling, from potatoes and roofing<br />
materials to fertilizer and manufactured goods. Joe Palmer, a Hartland potato<br />
farmer, was a customer and eventually bought control of <strong>the</strong> company, which he expanded<br />
rapidly, although not always profitably. <strong>McCain</strong> gradually bought Palmer out<br />
during <strong>the</strong> 1960s.<br />
Palmer stayed on as president and, in 1977, hired Terry Bird as senior vice-<br />
president. “The company was a basket case,” says Bird. Things were so bad financially<br />
that Day & Ross was delaying mailing out cheques it had already printed.<br />
Palmer was a boss with a style of his own. While Bird was deciding whe<strong>the</strong>r to<br />
take <strong>the</strong> job, he and his wife went to meet Palmer at his home. “It was 10 am on a<br />
weekday,” Bird recounts. “He interviewed me in his bedroom. He was still half asleep.<br />
Afterward, my wife said, ‘If you join this organization, you have to be crazier than I<br />
thought you were.’”<br />
He did join and discovered that, although Palmer was no early riser, he was a hard<br />
worker. “He would work all afternoon, play cards all evening, and <strong>the</strong>n come back<br />
and work on central dispatch through <strong>the</strong> middle of <strong>the</strong> night.”<br />
Under Palmer, Day & Ross had become one of <strong>the</strong> largest transport companies<br />
in eastern Canada. However, when <strong>the</strong> economy weakened in <strong>the</strong> early 1970s, <strong>the</strong><br />
company got into financial trouble. It was dependent on a small number of large customers<br />
that provided small profit margins. Bird decided that targeting small shippers<br />
was <strong>the</strong> way to boost profits, and so Day & Ross became an LTL (less than truckload)<br />
specialist. An LTL transporter moves smaller shipments between terminals. At <strong>the</strong><br />
terminal, <strong>the</strong> shipments are transferred to ano<strong>the</strong>r truck for local delivery.<br />
Day & Ross’s rapid growth during a booming economy had hidden underlying<br />
weaknesses, including a lack of qualified managers. Bird went to <strong>the</strong> universities to<br />
recruit a stronger middle-management team. He initiated <strong>the</strong> creation of a procedural<br />
manual covering all aspects of <strong>the</strong> company’s operations. He worked to improve<br />
relations with <strong>the</strong> owner-operators who drive <strong>the</strong> trucks<br />
and to improve <strong>the</strong> company’s accident record, <strong>the</strong>reby<br />
lowering insurance costs.<br />
Still, <strong>the</strong> company wasn’t making money. “Day & Ross<br />
was haemorrhaging,” says Bird. Harrison would call me<br />
every week. One time I told him what I planned to do<br />
and he said, ‘I don’t agree, but you’re <strong>the</strong> boss, and if<br />
that’s what you want to do, go ahead and do it.’ Never<br />
once did he ever come back to me and say, ‘See, I told<br />
you.’ One of <strong>the</strong> things Harrison and Wallace did well<br />
was know when to give you a compliment and when to tell you to do a bit better.<br />
And it was never when you thought it would be. They were constantly motivating<br />
you to do better.”<br />
There was certainly room for improvement. When David Sanchez arrived in 1991<br />
as CFO, he found, he says, a disaster. Day & Ross lost $20 million that year largely<br />
because of an acquisition that didn’t work out, of a company in California.<br />
In 1992, <strong>McCain</strong> hired a new CEO, John Schiller, whose mandate was to make Day<br />
& Ross profitable. He hired John Doucet, an experienced trucking executive as chief<br />
operating officer. When Schiller left in 1998, Doucet became CEO. “Transport is not<br />
that complicated,” he observes. “We’re only moving boxes around when you get right<br />
down to it.”<br />
The important thing is to get <strong>the</strong> boxes to <strong>the</strong>ir destination intact and on time. In<br />
<strong>the</strong> previous twelve months, Day & Ross’s on-time delivery rate was only 60 percent.<br />
To improve on that, Doucet introduced what he calls pro-active tracking. This meant<br />
that, if a delivery was going to be late, <strong>the</strong> local terminal manager had to call <strong>the</strong><br />
customer between 8 and 10 am and inform him. “The terminal managers soon got<br />
<strong>the</strong> message that if <strong>the</strong>y didn’t want to spend <strong>the</strong> morning on <strong>the</strong> telephone, <strong>the</strong>y had<br />
better get <strong>the</strong> freight delivered on time.”<br />
Doucet offered improved service for higher prices and said goodbye to <strong>the</strong><br />
152 f rom <strong>the</strong> <strong>Ground</strong> up<br />
<strong>the</strong> home front 153<br />
TOP: Day & Ross has Canada<br />
covered coast to coast.<br />
BOTTOM: Terry Bird, 1982,<br />
<strong>the</strong>n president and CEO<br />
of Day & Ross.