Canada’s parcel locker company, Snaile, has announced major changes to its supply chain to better meet demand for its automated smart lockers effective in the first quarter of 2022. As a result, the lockers are now almost entirely made and assembled in Canada with close to 95% of their manufacturing cost born in Canada while still being price competitive for customers. Snaile can now fulfil customer orders faster and meet target deadlines.
“Previously, we only assembled our products in Canada, and we were heavily reliant on international supply chains including Mexico, the UK and Taiwan for vital parts,” said Patrick Armstrong, CEO of Snaile. “We have seen a large increase in demand for our automated parcel lockers in recent years. But like most technology companies, including heavy hitters like Apple and Tesla, we were faced with shortages of electronic components, experienced problems with shipping costs and timelines. We found we were under significant pressure to fulfil orders. This was compounded by the need for our products to pass Canadian electrical & fire certifications which meant any changes in parts we made due to shortages resulted in re-inspection adding significant delays. So the decision to move to a vertically integrated supply chain despite it being a lengthy heavy lift was the right decision for Snaile’s customers and our long term goals.”
Now, after significant changes, Snaile only needs to import items that are not readily made in Canada at competitive prices and can revert to all Canadian components if required. Imported parts currently include only the user interface screen, cameras and the motorized locks. Metals, wiring, power supplies, breakers and circuit boards are made locally in Ontario, and the products are assembled by Snaile’s Canadian staff in Mississauga.
“We feel it’s very important to support Canadian businesses, and we know our customers feel the same way,” exclaimed Armstrong. “And by that, I mean businesses that are owned by Canadian shareholders, operate in Canadian real estate, employ mostly Canadians, and pay Canadian taxes.”
Armstrong explains that most of Snaile’s competitors are importing smart lockers from Asia, Europe and the US. Many are US companies feigning to be Canadian by employing a skeleton crew of Canadian staff or using a Canadian location owned by a foreign entity. Some Canadian companies are reselling foreign products, which means most of the Canadian-derived revenue, income tax dollars, and employees’ wages do not stay in Canada which of course benefits foreign companies and citizens instead of Canadians.
As well as gaining more control of its supply chain, sourcing parts, owning the circuit board technology, firmware and assembling its lockers in Canada, the changes mean Snaile can improve delivery times. The introduction of a Delivery Time Guarantee Program later this year will help bring back certainty to Snaile’s supply times. This will be a welcome relief to many of Snaile’s customers who have also seen delays across their entire portfolio of suppliers such as their suppliers of HVAC, plumbing and electrical products brought on by the pandemic.
“The delivery guaranteed program is something we can do due to our local support. It’s also because we have control of our raw materials and own all the intellectual property down to the printed circuit boards,” explained Armstrong.
Having control of all the electronics and software also helps Snaile stay ahead of the security requirements its customers are adopting for data security and privacy. Snaile currently meets market demand with its ISO 27001 compliance and SOC 2 compliance, which will be completed within the first half of 2022.