Finning & JTM Foods

Part
01
of four
Part
01

Profile: Brent Davis

Brent Davis is a senior leader at Finning with over a decade of management experience at the company. Additionally, he appears to be devoted to community service, both in a professional and personal capacity.

Education

Work History

  • Although there is similarly limited public information about Mr. Davis' work history, his accounts on social media provide details into his time with Finning.
  • Notably, he has held leadership positions of increasing authority during his 13 years with the company.
  • Most recently, and for the past 7 years, Mr. Davis has served as Finning's Vice President of Mining Solutions.
  • Prior to 2013, he also served as the General Manager of Operations for Oilsands (4 years, from 2009 to 2013) and the General Manager of Health and Safety (2 years, from 2007 to 2009).

Work Accomplishments

  • Mr. Davis has received significant public attention for his leadership at Finning in the area of community engagement and investment.
  • In addition to his most recent sponsorship efforts in 2019 with the Fill the Box campaign to support local hockey leagues, Operation SMART Program for local girls and Operation Bear Hug for local hospital patients, Mr. Davis has an extensive track record of leading Finning's community and charitable endeavors.
  • For example, in 2018, he led Finning in partnering with Keyano College to move and re-assemble teaching tools at the trade school.
  • As part of this, he not only strengthened Finning's "long-time partnership" with the college, but also engaged the support and resources of other business partners.
  • Just the year prior, in 2017, he led the creation of the Finning Canada Endowment Fund at Keyano College by leading a $100,000 donation to the school.
  • Even back in 2012, when he was still serving as a General Manager at Finning, Mr. Davis led several additionalt community outreach and engagement initiatives.
  • Meanwhile, Mr. Davis has also assumed key local leadership positions, including his position as a director within the Alberta Chamber of Resources Board.

Business Philosophies

Recent Press

  • All three recent media mentions of Mr. Davis in the last year are consistent with his extensive work accomplishments in the areas of community service and engagement.
  • For example, Mr. Davis appeared on the Fort Mac Hockey Bros show on local radio station 93.3 Country this past April 30, 2019.
  • During the show, Mr. Davis discussed Finning's contribution to the Fill the Box campaign, which raised over $100,000 in funds to support local children's hockey leagues and donated over $40,000 in hockey supplies for local children.
  • In particular, he mentioned his "pride" at participating in this cause, and his commitment to continuing to support such local efforts, whether through "time, effort or money."
  • Additionally, Mr. Davis emphasized that the leadership by local boys in the community was "inspirational" for everyone and gives "hope for the future."
  • More recently, on September 9, 2019, statements by Mr. Davis were included as part of an announcement of Finning's latest partnership with Girls Inc.
  • Once again, Mr. Davis emphasized his and Finning's "pride" at contributing scholarship awards to support local girls with their STEM education.
  • Finally, on December 16, 2019, remarks by Mr. Davis were highlighted as part of an article that recognized key contributors to a hospital fundraising campaign named Operation Bear Hug.

Personal Details

  • The limited personal information about Mr. Davis suggests that his personal life and interests mirror his professional accomplishments.
  • Specifically, in addition to his leadership around community engagement and investment at Finning, Mr. Davis also volunteers in his personal time.
  • Most notably, he has served as a volunteer helper in the warehouses of the Fort McMurray Food Bank for the past 4 years (since 2016).
Part
02
of four
Part
02

Finning: Deep Dive

Some challenges or threats facing Finning include net revenue decline, slow customer activities related to coal mining, construction as well as forestry, low equipment sales (new and old equipment), frequent changes in leadership, and a corresponding inadequate employee turnover rate, among other challenges or threats.

Finning's Competitive Space

  • Finning is known as the world's largest dealer of Caterpillar products and has delivered unrivaled service for more than 85 years. The company sells, rents and provides parts as well as services for equipment and engines to its customers across various industries, such as construction, mining, petroleum, forestry, and several power systems applications.
  • Finning delivers product support for several infrastructures with unmatched service capabilities. The company provides solutions that enable its customers to enjoy low equipment owning as well as operating costs and also maximize up-time. With over 13,000 employees world-wide, Finning operates across three geographies and has its headquarters in Vancouver, Canada.
  • Finning boasts of unrivaled services to several industries like mining (including oil sands), marine, transportation, construction, forestry, pipeline/oil field construction, agriculture, government sector, fisheries as well as the commercial transport sector.

A Decline in Net Revenue

  • Based on the analysis of quarter four for 2018 and 2019, Finning had a problematic year from its South America line of business in Q4 of 2019, and this resulted in flat consolidated earnings (insignificant growth) per share year over year.
  • Net revenue gets calculated by subtracting directly-related selling expenses from the gross revenue of a company. Declining net revenue is an undesirable scenario and a challenge because companies need a healthy net revenue as one of the essential metrics to persuade investors that are in the process of "making a decision" to invest in a company.
  • The net revenue of Finning in Canada decreased by 4% between the fourth quarter of 2018 and the fourth quarter of 2019.

Why Finning's Decline in Net Revenue Is A Threat

  • The primary point that makes revenue important is that without it, a company cannot earn profits or stay viable in the future.
  • Finning is striving to capture a significant share within the "competitive markets," which it operates. The company expects "continued growth in product support" and also plans to grow its revenues from product support, among other business lines. The study considers declining revenue as a threat because it reflects poor performance in Finning's competitive markets and does not align with the company's goals or expectations.

Slow Customer Activities (Slow Demand/Delivery)

  • One of the challenges or threats facing Finning is slowing requests from customers.
  • An analysis of Q4 operations of 2019 and Q4 of 2018 reveals that in Canada, Finning experienced "slower customer" activities in the areas of coal mining, construction as well as forestry in Q4 2019.
  • Slow customer activities or a sluggish economy refers to the state of an economy when growth is either slow, flat, or declining. It can affect an entire economy or some components (sectors) of the economy. Long periods of sluggish customer activities (low demand) can result in a recession.
  • In 2018, Finning's revenue experienced a negative impact by reduced operational activities in the construction sector across "Argentina and Bolivia."
  • Revenue from FInning's South American operations experienced a negative impact in 2018 from a slowdown in processing as well as "delivery of parts and components" to mining customers due to a new ERP system launched in Chile in November. Revenue earned from product support went down by 4% in 2018 when compared to 2017.

Why Slow Customer Activities Is A Threat

  • Slow customer activities, slow demand, and delayed delivery are challenges or threats because they translate into slowing or low revenue per examined period. Sluggish activities in Chile and Argentina resulted in a decline of revenue by 4% for Finning's South American line of operations in 2018 when compared to 2017.

Low Equipment Sales (New and Old Equipment)

  • Another challenge or threat facing Finning is low or slow sales of equipment.
  • The sales of new and used equipment in Finning's Canadian segment went down by 8% and 22% respectively between Q4 2018 and Q4 2019.
  • Sales refer to a transaction between at least two parties through which the buyer gets tangible or intangible goods, services, or assets for some money the buyer pays. Low sales may be the result of challenges with the economy, a company's "pricing model," or some other factors. A company affected by weak sales might feel some negative impact on its "sales revenue."
  • In 2019, Finning's Q4 net revenue went down when compared to Q4 of 2018 by "5% mostly due to" low sales of new equipment.
  • In South America, Finning also experienced a decline in "new equipment sales." Between Q4 2018 and Q4 2019, Finning's sales of new equipment went down in South America by 40% as a result of disruptions as well as a slowdown of the market in the region.

Why Low Equipment Sales Is A Threat

  • Low sales volume of equipment is a challenge or threat to the business of Finning because it negatively impacts the outcome of business by leading to low revenue, which the company is trying to build. When compared to its 2018 Q4 net revenue, Finning's 2019 Q4 net revenue went down by "5% mostly due to" low sales of new equipment.

Frequent Changes in Leadership

  • Based on employee reviews, one of the operational challenges and threats facing Finning relates to frequent changes in management. Finning has a 4.0-star rating on a scale of 5 based on 613 employee reviews.
  • In 2018, Finning announced leadership changes for its Canadian line of operations and some international positions. These changes affected the roles of President of Finning Canada and Chief Operating Officer, as well as Managing Director of Finning UK and Ireland. In 2020, Finning announced additional changes in the leadership of Finning International, which affected the roles of Executive Vice President and Chief Financial Officer.

Why Frequent Changes in Leadership Is A Threat

  • A former staff of Finning that once occupied the position of safety manager in Alberta reveals that frequent hiring of staff at Finning gives the company a "ridiculous" turnover rate. According to Forbes, regular replacement of employees raises "turnover costs." Experts reveal that hiring an $8/hour employee may add the cost of about $3,500 in turnover costs to a company's direct and indirect operational cost.

Social Unrest and Geopolitical Events

  • One of the challenges and threats are facing Finning's operations includes social unrest in some regions of its operations such as Chile.
  • Social unrest is said to occur in a geopolitical setting following collective dissatisfaction, which manifests in unconventional or violent forms of behavior. Such behavior disrupts the ideal social order of society. It often results in riots, arson, murder, and promotes other non-economic or unproductive activities.
  • Social unrest across Chile, as well as geopolitical events such as the "subsequent devaluation" of the Chilean currency (peso), negatively impacted Finning's Q4 2019 performance. Social unrest decreased its earnings per share (EPS) by $0.05.
  • In Q4 of 2019, Finning reported "lower consolidated revenue" when compared to Q4 of 2018, which got attributed to the impact of the social unrest in Chile. The recent devaluation of the Chilean peso recently increased uncertainty in every sector of Finning's operation in Chile, as well as a significant reduction in customer activity in the region.
  • Finning's construction revenues for Q4 2019 were slightly lower than that of Q4 2018 because equipment markets adjusted to reflect the continued uncertainty from events like Brexit.

Why Social Unrest and Geopolitical Events Constitute A Threat

  • Social unrest and geopolitical events constitute a threat to Finning based on the negative impact they portray on its business operations and outcome. Finning estimates that the effects of social unrest across Chile and geopolitical events such as the "subsequent devaluation" of the Chilean currency (peso) reduced its Q4 2019 earnings per share (EPS) by $0.05.
  • In its "forward-looking statements," Finning identifies "changes in political" as well as economic environments, events, or similar disruptions as some assumed risks and uncertainties confronting it.
  • Geopolitical events such as social unrest often negatively impact the consolidated revenue of Finning, as revealed in its 2019 report. Its "lower consolidated revenue" in Q4 of 2019 when compared to Q4 of 2018 was attributed to the impact of the social unrest in Chile.

Initiatives

  • Some initiatives have been taken by Finning to mitigate some challenges and threats it is facing. These initiatives have been reported collectively in its annual report and include disciplined cost management, lowering cost base in Canada, improved execution, inventory reductions to generate significantly healthy as well as free cash flow in 2020. The company also intends to maintain a strong balance by offering shareholders value through share repurchases and other dividends.
  • According to its 2019 annual report, Finning's operations in Canada and the UK & Ireland demonstrated improved execution, disciplined cost management, to boast of stable gross profit margins, and market share gains. Despite several challenges in Canada like slow customer activities in coal mining, construction as well as forestry in Q4 2019 when compared to Q4 2018, Finning's EBITDA in Canada grew by $17 million for the same period consequent to the "adoption of IFRS 16."
  • Finning increased its invested capital in Q4 of2019 when compared to Q4 2018 by strategically acquiring 4Refuel at $241 million. By acquiring 4Refuel, Finning intends to go into a meaningful synergy and expand its opportunities.
  • Approximately 50% of 4Refuel's customers are in western Canada. By combining forces, Finning will have the opportunity to sell equipment, product support, rental, as well as more of its value-added services to a group of customers that it is currently not reaching with its "full suite of services."

Research Strategy

The study examines challenges or threats facing Finning and focuses on operational challenges and threats. The study has also examined actions being implemented by the company to address the identified challenges and threats. The negative impacts of the challenges and threats on Finning's business and operations are in the study. Some initiatives implemented by Finning are in the study. The study examined the annual reports, media reports, the website of Finning, among other resources. There were no insights on what the company is doing to address (specifically) each of the identified challenges or threats. The company may not be under any obligation to make such details public.
Part
03
of four
Part
03

Profile: Martin Karg

Martin Karg attended the Universidad Nacional Autonoma de Mexico from 1987 to 1992. Some of his work accomplishments include achieving 100 days without a reportable accident, reducing customer complaints, and reducing waste.

Summary

  • Martin Karg describes himself as a visionary and a "strategic plant and operations professional."

Education

Work History and Experience

  • Martin Karg has worked in Kellogg Company for a total of 14 years and 4 months.
  • Some of his roles within Kellogg Company include plant manager, plant director, director of supply chain and manufacturing director.
  • Martin Karg joined JTM Foods LLC as the vice-president of operations. He stayed in this role for 23 months between November 2017 to October 2019.

Work Accomplishments

  • Thirty-three of Martin Karg's former colleagues at Kellogg Company has endorsed his skills in supply chain and supply chain management.
  • Thirty of Martin Karg's former colleagues at the Kellogg Company has endorsed his skills in demand planning.
  • In his technical services manager role at Kellogg Company, he supervised 20 employees.
  • As a plant director at Kellogg Company, Martin was responsible for the leadership of a production facility "that contained 12 production lines and 1,200 employees." In this role, he reduced "recordable safety incidents from a TRI of 1.4 to 0.4." He also elevated EH&S function and has achieved 100 days without a reportable incident.
  • At JTM Foods, Martin Karg controlled "all the company's operations, including overseeing operations, high speed automation, contract manufacturing, logistics, and material procurement."
  • Brands under his control "included JJ's and private brands."
  • One of his many work accomplishment includes reducing customer complaints by 40%, lowering safety accidents by 71%, and reducing waste by 55%.
  • His efforts in best practices have always enabled employees "to achieve high production results, secure the best possible quality production and the lowest possible expense ratios."
  • Other successes Martin Karg has achieved in his career include — streamling production to cut costs while meeting stringent FDA standards, concurrently managing multiple manufacturing locations and "driving technology deep into processes to improve schedule delivery."

Recent Press Articles

  • There are no recent press articles mentioning Martin Karg within the past 12 months.

Personal Details

  • Martin Karg watches soccer and supports the Mexico National Football Team.
  • On Facebook, a few applications Martin Karg like are Angry Birds, Audible, and BajaLibros.
  • On Twitter, Martin Karg has stated that he "liked Avatar."
Part
04
of four
Part
04

JTM Foods: Deep Dive

Current challenges facing JTM Food Group in the categories of operational challenges and threats are listed her. One importance factor considered, is JTM recovering from reputation damage which occurred in 2017 and 2018, will hopefully be remedied by JTM’s Director of Marketing, Brad Nelson. JTM is launching a New Corporate Brand for 2020.

Revenue recovery

  • JTM Food Groups’s revenue dropped from $300 Million in the 4th quarter of 2018 to $50 Million in the first quarter of 2020. The drop in revenue was a dramatic decrease — it went from $300 Million to $100 Million by the first quarter of 2019 and is just beginning to recover.
  • September 23, 2017, recall — The pulled barbecued beef products were produced on Sept. 23, 2017. They have the number "EST. 1917" printed inside the USDA inspection mark. These items were shipped Indiana, Kentucky, and Ohio.
  • These products are subject to recall: 14-oz. plastic trays covered with a paper sleeve labeled "Bar-B-Q Sauce With Pulled Beef" with Julian pack date 17266 printed on the label.
  • The problem was reported when the company received two consumer complaints regarding contamination. No confirmed reports of adverse reactions have been reported.
  • J.T.M. Provisions Co. is recalls cooked ground beef patty products could be contaminated with Listeria monocytogenes, the Department of Agriculture’s Food Safety and Inspection Service announced Friday. USDA Food Safety and Inspection Service September 4, 2018.

TO REMEDY THE BAD REPUTATION

  • J.T.M. Food Group Launches New Corporate Brand As Company Prepares For 40th Anniversary In 2020, Continued Growth In National Markets

Keeping pace with competitors

  • JTM Food Group’s top competitor is Lakeside Foods Inc. — $800 Million. Other top competitors are Moy Park Limited — $1 Billion, Home Market Foods Inc — $100 Million, Overhill Farms Inc — $194 Million, Golden State Foods Corp. — $6 Billion, and Zwanenberg Food Group Inc — $75 Million.
  • One example of competitors gaining on JTM is HPS, LLC, is a Group Purchasing Organization ("GPO") whose focus is to negotiate savings for its members.
  • HPS members enjoy $4.5 Billion Dollars in purchasing power with US Foods and, as such, have their most competitive prices. In addition, our members enjoy enhanced rebates, larger product selections, top-quality items, more price protection, DSO, and delivery size incentives. HPS, LLC services: Hospitality: Hotel & Motel, Schools, Colleges, Universities, Catering & Event Venues, Recreation & Country Clubs, Casinos & Gaming, Healthcare: Hospitals & Medical Practices, and Long-term Care & Assisted Living
  • HPS, LLC lists its 34 suppliers, and JTM Food Group is listed in the number 33 position.

Truck Driver Shortage

  • The ATA forecasts a shortage of 160,000 drivers by 2020. Addressing those empty miles that America's 1.8 million truck drivers are already driving and adding a load to them could greatly reduce the shortage, Biesterfeld said. The article was published on January 14, 2020.
  • "One of the first pieces I see it affecting on our time is lead time,said Paul Burton, director of logistics and distribution at JTM Food Group, a company that supplies and manufactures food products for retail, restaurants, and schools. “The food industry tries to run a lean supply chain. It's tougher to run a lean supply chain when your service isn't what it once was.”
  • Many retailers operate with minimal back stock, and when trucks are late to deliver, it’s easy to run out of product. For JTM, “It's hurting our cost,” said Burton. “It's affecting our budgeting and projections.”

Keeping the brand relevant on Social Media

  • Social platforms connect your company with customers and increase awareness about your brand. With more than three billion people around the world using social media every month, it's no passing trend.
  • Facebook — 1,920 Followers as opposed to Lakeside Foods with 1,305 Followers
  • LinkedIn — 1,923 Followers on LinkedIn as opposed to Lakeside Foods with 1,923 Followers
  • Twitter — 630 Followers as opposed to Lakeside Foods with 1 Follower.

Research strategy

Your research team conducted a thorough search of business websites and multiple industry articles, referencing JTM Food's business challenges and threats. Finding the current material was a challenge. We did, however, find particularly relevant information.
Sources
Sources

From Part 04