MMDjulaug2015 by Annex Business Media

July/August 2015 $15.00

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you need MM&Dâ&#x20AC;&#x2122;s Equipment Roundtable looks at how to ensure you get the right â&#x20AC;&#x201D;Page 16 goods for your operation.

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Inside

3 Taking Stock 5 Supply Chain Scan 24 Apple Automation 28 Temperature Control News 34 Vertical Storage 38 Air Destratification 41 Forktrucks 42 Leading Edge 45 IT Matters 46 Materials Handling

Thinking about supply chain solutions should put you to sleep. Not keep you awake.

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TAKING STOCK

www.mmdonline.com PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins (416) 510-5130 EAtkins@mmdonline.com ART DIRECTOR: Stewart Thomas (416) 442-5600 x3212 SThomas@annexnewcom.ca SALES: Nick Krukowski (416) 510-5108 nick@ctl.ca PRODUCTION MANAGER: Karen Samuels (416) 510-5190 KSamuels@annexnewcom.ca CIRCULATION MANAGER: Mary Garufi (416) 614 5831 MGarufi@newcom.ca

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Enter a new dimension 3

D printing first came to my attention in 2007. Back then it was referred to as “rapid prototyping” and it had limited application. Mostly, it was used to make scale models of parts. Materials were limited to plastics and the printers were small in size. It’s a different world now. 3D printing has gone from stunts like the first printed handgun, with amateurish home printers, to now approaching mainstream use. Up to 28 percent of products 3D printed are now for the end user. And it will have applications with a potentially huge effect on some supply chains. Indeed, some are calling it the third industrial revolution. The technology is advancing rapidly, and has progressed from plastic to paper to metal foil and now on to laser sintering which builds parts from metal powder. Forecasters have pegged 3D printing as an industry that will show revenues of US$21 billion by 2020, with growth at 31 percent a year. Some of that growth will be at the expense of transportation and storage of finished goods. 3D printing is being called a disruptive technology because it has the potential to turn the supply chain on its head. When products like parts, to identify just one example that’s fast gaining traction, can be manufactured on the site where they are needed instead of being made in one location and transported halfway around the world, you can see how the supply chain could change. Processes that are already just-in-time could be fine tuned, and instead of relying on the timing of other manufacturers and transportation networks for the delivery of parts, manufacturers could print them on hand and as needed from a “library” of files provided by the parts designer. Transportation of raw materials would suddenly become more important, and containerized finished goods, perhaps less so. Inventory would be stored in the form of bulk powders, not complex and awkwardly shaped objects that take up massive amounts of space. Pilot projects and experiments are trying to prove the technology’s worth all over the world. See page 10 for one taking place at the Port of Rotterdam. For a supply chain manager, it’s a development to keep an eye on. MM&D will strive to keep you up to date changes brought about by this technology.

Jul/August 2015  Volume 60  Number 04 16

What you need

Automated apples

Straight up

Join the fan club

Vertical storage solves problems for sheet metal handling

Giant fans keep air moving and heating costs down for Staples

Equipment roundtable looks at requirements and trends

Co-op builds hi-tech storage for crisp crop

www.mmdonline.com | July/August 2015

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SUPPLY CHAIN SCAN

CITT

STATE OF LOGISTICS

M+S

3D parts printing trial in Rotterdam, p 10

Annual conference set for October, p 11

Annual report from CSCMP shows growth, areas of concern for industry, p 12

Appointments and promotions, p 14

Mitsubishi buying UniCarriers MM&D Staff

itsubishi Heavy Industries, Ltd (MHI) and Mitsubishi Nichiyu Forklift Co, Ltd have jointly decided to acquire 100 percent ownership of UniCarriers Corporation. They will purchase all shares currently held by Innovation Network Corporation of Japan (INCJ), Hitachi Construction Machinery Co, Ltd., and Nissan Motor Co, Ltd.

The transaction, if approved by the relevant authorities, will result in MHI and Mitsubishi Nichiyu Forklift holding respective stakes in UniCarriers of 65 percent and 35 percent. Acquisition of UniCarriers is in line with MHI’s new three-year “2015 Business Plan”. Mitsubishi Nichiyu Forklift, in its “Best

Integration 2017” medium-term business plan that got under way in fiscal 2014, is looking to further strengthen its position in its industry as a leading company on global scale. The decision to acquire UniCarriers constitutes a central part of the company’s business strategies for achieving that goal. Through acquisition of UniCarriers, MHI and Mitsubishi Nichiyu Forklift will achieve a full lineup of product offerings. The move will also enhance their R&D capabilities and boost product competitiveness. MHI and Mitsubishi Nichiyu Forklift will work together with UniCarriers to draw up business policies and strategies. Details will be disclosed as soon as they become available. UniCarriers Americas Corporation (UCA), a wholly owned subsidiary of UniCarriers Corporation, designs, manufactures and supports a line of material handling equipment. UCA sells and supports Nissan Forklift, TCM, Atlet, Barrett and UniCarriers brands. UniCarriers Americas has a network of more than 150 authorized dealerships with nearly 300 locations across North, Central and South America.

3PL opens research lab Kenco—a provider of logistics solutions and material handling equipment— has established a department focused on researching and developing innovative approaches to supply chain challenges.

Kenco Innovation Labs and its team of specialists will collaborate with customers to identify, research, and prototype new ideas and processes. This team will also partner with entrepreneurs and vendors from multiple industries to identify trends that can be cost-effectively applied in the supply chain. A test lab and demonstration centre will be created at the Kenco corporate campus in Chattanooga, Tennessee to explore and research these emerging technologies and processes. “A single service model no longer works within the logistics industry—third party logistics providers must innovate to meet customer needs,” 4

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said Kristi Montgomery, vice president, Kenco Innovation Labs. “Kenco has always been ahead of the curve in providing creative solutions, and the lab will continue those efforts with a dedicated team focused on strategic implementation of forward-thinking ideas that create supply chain value, increasing efficiency and effectiveness.” Technologies being assessed include drones, 3D print printing, augmented reality and AGVs. Additional proj projects under investigation include brokerage gamification, digital signage, various robotics solutions, and smart sensors. One of the key tenets of this dedicated team is to seek out existing technology in other industries and bring them to the supply chain. An Innovation Council composed of several members of Kenco’s senior leadership team will guide and approve new research initiatives and prototypes. To support continuous improvement, Kenco Labs will: • Implement a formal process for generating, vetting, and applying innovative ideas; • Creatively pursue funding channels to sustain research activities; • Work collaboratively with customers to identify opportunities for innovation; • Drive measurable improvements across the supply chain; and • Foster a culture of innovation throughout Kenco facilities. MM&D | July/August 2015

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“There’s always going to be risk. The issue is how to manage it.” People who know Distribution, know BDO.

The Manufacturing and Distribution Practice at BDO The logistics business has never been simple. And with recent emphasis on supply chain sustainability, higher safety standards, and an evolving regulatory climate, it’s getting more complex. BDO’s dedicated professionals provide an exceptional array of partner-led services to help you keep up with key issues and maximize profitability, even in challenging times. Assurance | Accounting | Tax | Advisory www.bdo.ca/manufacturing

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SUPPLY CHAIN SCAN

Aftermarket group rebrands Intelligrated has rebranded its aftermarket services group. The company has renamed Customer Service and Support to Lifecycle Support Services.

Material handling operations strive to maximize uptime while driving down overall costs and Intelligrated’s lifecycle approach emphasizes solutions that reduce the risk of downtime and increase system longevity and efficiency. The new name better represents how the company strategically partners with customers on lifecycle planning to maximize return on investment.

“Supporting customers through technical and maintenance support calls is simply not enough in today’s environment,” says John Sorensen, senior vice president and general manager, Lifecycle Support Services. “The industry expects strategic, proactive support to maximize asset performance.” Intelligrated Lifecycle Support Services operates a team of over 435 employees networked through a service management framework. The group provides comprehensive lifecycle management programs to the material handling industry that incorporate critical focus areas such as technology refresh, equipment modifications, maintenance and system assessments, spare parts strategies and track-driven training programs.

BENCHMARKS manufacturing at Raymond. “Built on more than 90 years of innovation, our commitment to operational excellence ensures high-quality production of our products, which directly benefits our customers.” The award was presented to Raymond in early June at the 11th Annual Manufacturing Leadership Summit in Carlsbad, California.

UniCarriers Americas award winners.

UniCarriers Americas has held its third annual supplier conference. Attended by more than 75 suppliers, the conference highlighted the last fiscal year and potential growth opportunities for the future. The conference focused on continuing to develop relationships with suppliers and allowed UniCarriers Americas to set expectations for the future, with a goal to strengthen the supply chain. UniCarriers Americas hosts the annual Supplier Conference to communicate its corporate vision and goals to suppliers as well as recognize top-performing partners with Supplier Excellence Awards. During the event, the following suppliers were recognized: • Camoplast/Solideal • Clipper Industries, Inc. • Northfield Industries, LLC • Strong Forge & Fabrication • Thombert The Frost & Sullivan Manufacturing Leadership Council recently presented The Raymond Corporation with the Manufacturing Leadership Award in the Operational Excellence Leadership category. The award recognizes North American companies that are shaping the future of global manufacturing, distinguishing themselves by embracing breakthrough innovation and responding to customers’ needs with unmatched agility. “The award is wonderful recognition for Raymond and its dedicated employees,” says Rick Harrington, vice president of US

UPS announced the induction of 26 Canadian drivers into its elite “Circle of Honour.” The group has achieved 25 years of safe driving. Collectively, 7,878 UPS drivers worldwide have logged more than 8.5 billion kilometres and more than 221,000 years of safe driving through their careers. That’s enough to travel to Mars and back 36 times. In addition to the new inductees, UPS Canada drivers Robert Avis, Doug Coxon, and Karl Peter reached a milestone of 38 years of safe driving. All three drivers have been recognized as Canada’s longest serving employees and members of the Circle of Honour who have delivered millions of packages throughout their career with no-at-fault accidents. NACCO Materials Handling Group (NMHG) was named a silverlevel superior supplier by the US Defense Logistics Agency (DLA) as part of the US Department of Defense’s Superior Supplier Incentive Program (SSIP). This honour recognizes NMHG as one of the department’s top performing supply contractors for fiscal years 2013 and 2014. “NMHG is proud to supply the DLA with our Hyster and Yale lift trucks, enabling them to transport the items our military forces need to operate,” said David Furman, President of Sales and Marketing, NMHG. The SSIP is designed to incentivize contractor performance by identifying suppliers with the highest rankings in areas such as cost, schedule, performance, quality and business relations. The DLA considered 153 of its parts and commodity suppliers with the largest contracts that have done business with the agency over the past two years. Of those considered, 40 companies were selected as DLA’s superior suppliers.

MM&D | July/August 2015

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SUPPLY CHAIN SCAN

Study estimates $30 billion transportation-associated costs without government action MM&D Staff

million tonnes by 2050 if it can address transportation issues and implement solutions that include increased reliance on alt-fuel vehicles. ew research from the University of Ontario The study, which focuses on the Greater Toronto Area (GTA) and the Highway Institute of Technology (UOIT) in Oshawa sug- 401-407 corridor, takes into account that traffic congestion is already costing gests Ontario can save billions of dollars in fuel costs Torontonians approximately $6 billion per year due to higher fuel consumption, and reduce greenhouse gas emissions by over 100 increased health-care costs and eroded real estate values. By exploring alternative transportation options such as the expansion of natuDONE DEALS ral gas and electric vehicles, especially for heavy-duty Descartes Systems Group has acquired BearWare, Inc, a US-based provider trucking fleets, as well as the introduction of a of mobile solutions to improve collaboration between retailers and their logistics Highway 401/407 rapid transit system throughout service providers. BearWare’s system leverages mobile technologies to scan the GTA and southwestern Ontario, considerable cartons at each point from the distribution centres through to the store front. benefits emerge.

The BearWare system is being used by retailers including L Brands, Restoration Hardware and GNC. BearWare is headquartered in Cleveland, Ohio. Descartes has also acquired MK Data Services LLC, a US-based provider of denied party screening trade data and solutions. MK Data is headquartered in Columbia, Maryland. The purchase price for the acquisition was approximately US $76.3 million in cash plus the assumption of approximately US $7.2 million of contingent and other cash payment liabilities. PAI Partners SAS has agreed to the sale of Swissport to HNA Group Co Ltd, a global enterprise group based in Haikou, China. Swissport, the world’s largest ground and cargo handling company, will remain as a stand-alone business within HNA Group, complementing HNA’s existing activities including aviation, airport management, logistics and tourism. The total transaction value for 100 percent of the company is of CHF 2.73 billion (CAD$3.65 billion). The transaction is subject to regulatory and anti-trust approvals by the relevant authorities. Closing is expected by end of this year. Dicom Transportation Group has added “final mile” and distribution capabilities in the Western US through its acquisition of Extra Express. Extra Express, based in Los Angeles, is an asset-light provider of transportation, distribution and warehousing services. In the last 30 years, Extra Express has become one of the largest independent final-mile service providers on the West Coast. Montreal, Quebec-based Dicom will integrate the services of Extra Express into its existing portfolio of expedited, regional parcel transportation, less-than-truckload (LTL), full-truckload (FTL), cross-border, and final-mile network capabilities. Plug Power Inc, provider of hydrogen fuel cells for the materials handling market, has entered into a definitive agreement with Axane, SA, a subsidiary of Air Liquide SA, to acquire the remaining 80 percent of HyPulsion, its European joint venture, for US$11.47 million in Plug Power common stock, subject to certain post-closing adjustments. The transaction is subject to the satisfaction of certain closing conditions. Plug Power and Air Liquide founded HyPulsion in 2012 to jump-start the hydrogen and fuel cell market in Europe. The original agreement intended for Plug Power to ultimately assume control of HyPulsion, though this was accelerated given Plug Power’s success in the North American market.

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Led by UOIT professor Daniel Hoornweg, the research takes a retrospective view from 2050, and concludes that a long-term approach focusing on clean and affordable solutions is feasible with the use of electric-powered personal vehicles and natural gas-powered buses and heavy-duty trucks. “A large-scale transportation initiative emphasizing mobility, connectivity, integration and leadership is important for Ontario and Canada,” says Hoornweg. In the 1930s, the Ontario government launched a solution to the province’s traffic congestion challenges by developing Highway 401. Construction began after World War II and the final section was completed in 1968. As the country’s busiest highway, it has long served as the anchor for the province’s economy and quality of life. Ontarians now stand at a similar, again crowded, crossroad. Costs associated with congestion are expected to rise to $15 billion by 2030, and likely more than double that again by 2050, according to the study. Key findings suggest that by 2050, the Toronto region and linked cities such as Montreal, London, Peterborough, Kingston and Ottawa will need to be served by an extensive rapid transit system, that should be complemented with dedicated heavy-duty truck routes and shared local commuter vehicle routes. The study recommends these vehicles should switch from gasoline and diesel to natural gas, while personal vehicles should be electric-powered. The potential changes, according to the study, would contribute to decreased greenhouse gas emissions, increased economic productivity and an improved transportation infrastructure. “As a minimum, the proposed approach which includes making the switch to other cleaner, safer and more affordable energy alternatives, would provide fuel savings costs of some $76 billion and reduced greenhouse gas emissions of more than 100 million tonnes by 2050,” says Dr. Hoornweg. MM&D | July/August 2015

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SUPPLY CHAIN SCAN

3D printing trial underway at Port of Rotterdam MM&D Staff

s 3D printing just a passing fad, or does the technology actually allow you to print ship parts that can meet the rigorous demands of modern shipping?

This is one of the questions to be answered in the ‘3D Printing of Maritime Spare Parts’ project, which a consortium of 26 port-related companies is undertaking this summer. At the initiative of the economic development organization for the province of South Holland, and monitored closely by the Rotterdam Port Authority, ship parts such as screws, sealing rings and fluid conductors are 3D printed and tested. The results are to follow at the end of September. From a list of around 30 possible parts, four were chosen. This selection process was a learning experience in itself: What parts are suitable for 3D printing? What are the benefits of 3D printing, and is it profitable to do so?

Broekman Logistics, which specializes in forwarding and shipping, warehousing and distribution and breakbulk terminals, is the only logistics services provider to participate in the 3D-print consortium. Said Broekman CEO Raymond Riemen: “We recognize the value of 3D printing for a number of our customers for whom we store and transport cargo. In addition to the physical warehouses we operate, our membership in the consortium may be the first step in creating a digital warehouse for these customers. We will then also be able to use these warehouses as a basis for supplying products, at the right time and in the right location.” The project will not only result in new printed parts: the consortium will also be testing the parts. Additionally, the partners in the project are creating a database indicating what parts are printed now, in the immediate future, and beyond. This database will guide shipping companies in selecting materials and equipment, production methods and processing aspects, as well as providing participants with the opportunity to take practical advantage of this new technology. The actual 3D printing of the parts was scheduled for July and August, with the parts set to be tested in September, followed by the publication of the report. A progress update on the report will be presented during the World Port Days in Rotterdam in early September, with the presentation of the findings then scheduled for October 2015.

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SUPPLY CHAIN SCAN

CITT conference set for October MM&D Staff

he 2015 Canada Logistics Conference, CITT’s annual thought leadership conference for supply chain professionals, will be held in Niagara Falls, Ontario from October 25 to 27, 2015. Shippers, carriers and vendors from across sectors will learn about important issues facing supply chains, businesses and the people who run them. “Canada Logistics Conference has been getting bigger and bigger every year” said CITT president Catherine Viglas, “And once again this year, we could very well see our biggest conference ever. Early registrations have been pouring in even faster than last year, which was our biggest conference to date.” The conference offers seven sessions and workshops—plus a facilitated tour of the Welland Canal—including topics such as: supply chain maturity, packaging optimization, sustainability reports, attention management, a Canadian regulatory primer, the 2016 economic outlook and the St Lawrence Seaway. The agenda for Canada Logistics Conference 2015 also includes many dedicated networking opportunities for shippers, carriers, and ancillary service providers across sectors. “What makes the big influx of delegates so exciting,” Viglas said, “is that it means the popular networking events like the Opening Reception and the Gala Awards Evening will be very well-attended, giving attendees an incredible opportunity to talk shop, make new connections, and catch up with former colleagues.”

Highlights David Newman will present the 2016 economic outlook. Delegates will learn about the outlook and the freight markets; drivers of supply and demand and impact on pricing and volumes; consumer outlook, industrial production, the currency and interest rate markets; and industry consolidation. Newman is head of research at The Murray Wealth Group, a wealth management firm he helped launch in 2015 after a career spent at investment dealers on Bay Street. He was previously director, equity research, transportation and industrial products (and senior diversified strategist) with Cormark Securities. David Newman

www.mmdonline.com | July/August 2015

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Jack Ampuja will present on packaging optimization. Takeaways from this session include: understanding the gains that packaging optimization has across functional areas and budget lines (from the bill of materials, to warehousing and storage to finished goods freight costs); being able to identify cost reduction opportunities in e-commerce to mitigate the impact of dimensional weight- and density-based pricing and appreciate how fastemerging 3-D printing technology could take pressure off shipping costs; learning how to convince senior management of the benefit of involving logistics people more strategically, early in packaging development processes and involve Jack Ampuja them in key decisions. Ampuja leads Supply Chain Optimizers, which is a North American leader in packaging optimization with more than 500 completed projects. Vince D’Amico will describe the advantages of the St Lawrence Seaway and will personally lead a unique, supply chain focused tour of the 43-km, eight-lock Welland Canal. D’Amico worked in the rail industry for 25 years in a variVince D’Amico ety of progressively senior roles, and is now manager of market development for the St Lawrence Seaway Management Corporation. Paul Larson is offering a session on sustainability reporting. After attending this session, delegates will be able to: draft an outline for a sustainability report, noting the key information it should contain; articulate to stakeholders Paul Larson their sustainability status and strong points; build their organization’s reputation for sustainability; and, implement sustainability practices for higher revenue and lower costs. Larson is the CN professor of supply chain management at the University of Manitoba. MM&D is proud to be a media partner with the Canada Logistics Conference 2015. It runs October 25 to 27th at the Hilton Hotel and Suites at Niagara Falls, Ontario. Learn more at www.CITT.ca/conference.

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2014 best year for logistics since the “Great Recession” CSCMP State of Logistics Report reveals the highs and lows By MM&D Staff

he Council of Supply Chain Management Professionals (CSCMP), along with Penske Logistics, has released the 26th annual State of Logistics (SOL) Report, which provides an overview of 2014 supply chain industry trends and statistics. These serve as important forecasting tools for supply chain professionals to gauge the health of the US economy.

The report, authored and presented by transportation consultant Rosalyn Wilson of Parsons, has tracked and measured all costs associated with moving freight through the U.S. supply chain since 1988. This year’s report presents an overview of the economy during the past year, the logistics industry’s key trends, and the total U.S. logistics costs for 2014. “This highly anticipated report contains the statistics and industry insights that will not only help our members do their jobs better, but also better prepare them for the business demands ahead,” said Rick Blasgen, president and chief executive officer of CSCMP. “Knowing how logistics and supply chain costs affect and are affected by the larger economy is a key part of this understanding. We are grateful for the support from Penske Logistics in issuing this critical industry intelligence.” The report reveals total US business logistics costs rose to $1.45 trillion in 2014, a 3.1 percent increase from the previous year. However, the growth rate for logistics costs was lower than the US gross domestic product (GDP), resulting in a slight decline in logistics as a percent of GDP from 8.4 percent to 8.3 percent.

US GDP grew faster than 3.5 percent in four of the last six quarters; however, the second estimate of GDP growth for Q1 2015 Report author showed a 0.7 percent contraction. This conRosalyn Wilson traction is indicative of the rising US Dollar presents the results Index as prolonged dollar strength leads to lower global sales and a downturn in exports. Conversely, the costs of foreign products in the US have been driven down which should, in turn, boost imports. In 2014, the supply chain industry experienced its best year since the Great Recession. The research examines the economic vitality and associated challenges facing each segment of the logistics industry and concludes with a brief overview of industry indicators for the first half of 2015 and thoughts about performance for the remainder of the year. This year’s State of Logistics Report reveals the transportation sector grew by 3.6 percent in 2014 due to stronger shipment volumes rather than higher rates. The US economy was on solid ground. New job creation was consistent, real net income and household net worth inched up, inflation was low-tomoderate and gas prices tumbled, providing consumers with additional buying power. As consumer spending increased, freight levels climbed as retailers replenished inventories. Consumers had been the missing component in the recovery from the Great Recession, but in 2014 they began returning to the marketplace. The truck driver shortage remains a key concern for the logistics sector with the American Trucking Associations estimating the current shortage ranges from 35,000 to 40,000 drivers. A key indicator of this was the driver turnover rate, which was more than 95 percent on an annualized basis. “Today’s market-leading companies use their supply chains to drive innovation and competitive advantage,” stated Marc Althen, president of Penske Logistics. “This in-turn drives demand for logistics providers. While demand for logistics is increasing, the industry faces a talent shortage and needs more logistics engineers, technology professionals, warehouse workers, and truck drivers to meet the needs of current and evolving freight fulfillment models

MOVERS + SHAKERS At its June 18 annual general meeting, members of the Canadian Supply Chain Sector Council elected four new directors, creating a 23-member board. New directors are Dan Beer, president, Canadian Material Handling & Distribution Society; Steven Bryce, vice-president, supply chain, Reimer and Associates; Linda Craig, senior manager, end 2 end processing; and Paul Pires, National Safety Training Expert, CSA B335-15 Chair (Clause 6&7), CSA Group. Sabah Sohail, Director, Supply Chain, Oil & Gas and Power Divisions, Sherritt International also recently joined the board as the new representa-

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tive of the Canadian International Freight Forwarders Association (CIFFA). Long-time director Lesley Smith left the board, along with former CIFFA representative Chris Gonsowski. Larry Rodo has been named president and CEO of Consolidated Fastfrate Inc and its subsidiaries. Rodo has broad experience in the North American transportation and logistics industry. Most recently, he held the position of president of Day & Ross Freight Continues on page 14

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SUPPLY CHAIN SCAN businesses and consumers rely on for their goods and services.” The first quarter of 2014 saw 390 US trucking companies, each averaging 27 vehicles, go into bankruptcy. Smaller trucking companies are also being forced out of the business due to cost-related pressures stemming from new federal safety regulations. Although these companies represent a small part of the industry compared to the largest carriers, they are often an important source of competition. Freight volume is expected to continue growing at a moderate rate this year, but as seen in 2014, capacity is not expected to keep pace. In fact, the impact of the sustained growth in freight volume on capacity and cost is one of the most important trends to monitor in 2015. It is likely that most of the freight logistics industry’s problems over the next three years will relate to capacity issues. For 2015 specifically, industry experts expect bottlenecks across almost every mode of transport. In Q4 2014, congestion at the Port of Los Angeles/Long Beach reached crisis levels, with delays reaching three weeks in October. A glut of supply was, and remains, the chief culprit. The economics of supply and demand came back into play as chassis, trucks and drivers became scarce commodities; however, rates did not rise.

Shipments through ports increased, with East Coast ports seeing the largest percentage of gains due to congestion and delays at West Coast ports caused by protracted labor issues. Air cargo sector costs declined 1.2 percent as competition from other modes kept rates down; however, in 2014, a record $968 billion of high value merchandise was moved by air—$443.8 billion in exports and $543.3 in imports.

Sector-Specific Results Inventory carrying costs rose 2.1 percent as inventories continued to climb. Interest rates remain well below pre-recession levels, but have been rising in recent months. The other components of carrying costs— taxes, depreciation, insurance and obsolescence—were up 1.2 percent due to inventory growth. The cost of warehousing rose 4.4 percent because of shrinking capacity, which lowered the national vacancy rate to 7 percent. In addition, warehousing costs are on the rise as companies respond to the shortage of workers by offering better pay and benefits. Railroad sector costs grew 6.5 percent as rail traffic reached its highest annual total on record. Total carloads increased 3.9 percent, hitting their highest total since 2006 due to increased shipments of grain and coal. Intermodal volume also increased 5.2 percent, surpassing 2013’s record total. Costs for the water sector rose 8.9 percent, the second highest growth sector in 2014. Inland waterway traffic rebounded due to successful agricultural harvests, higher demand for coal and an expansion of petroleum transportation by barge. www.mmdonline.com | July/August 2015 13

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SUPPLY CHAIN SCAN MOVERS + SHAKERS Continued from page 12

North America. His background also includes extensive commercial and operations experience in both Canada and the US. Rodo is a graduate from the University of Toronto, as well he has earned his PLog, CCLP and CMILT designations. David Morneau, business development director at Morneau Eskimo (part of Groupe Morneau), has been appointed chairman of the board at the Fondation pour la formation en transport routier and president of the Workforce Committee at l’Association du camionnage du Quebec, taking over from Bernard Boutin, the Foundation’s Chairman from 2009 to 2012 and 2014 to 2015. Since 1992, the Foundation’s mission, together with its partners, includes awarding annual scholarships to vocational, collegiate, and university students in the field of transport, in order to stimulate a stronger interest in the freight industry. Scott Streiner of Ottawa, Ontario, is the new chairperson and CEO of the Canadian Transportation Agency for a term of five

years. Streiner has occupied several executive positions, including Assistant Secretary to t he Cabinet, Economic and Regional Development Policy at the Privy Council Office, Assistant Deputy Minister, Policy at Transport Canada, Executive Director of the Aerospace Review, Assistant Deputy Minister, Policy with the Labour Program, and Vice President, Program Delivery at the Canadian Environmental Assessment Agency. Ed Nieroda has joined Reimer Associates as vice-president mergers and acquisitions. He brings over 30 years of transportation experience as a senior level financial executive. After earning his CA designation, Nieroda joined Price Waterhouse where he worked with a variety of clients. In 1990 he joined Reimer Express Lines, now operating as YRC Reimer, where he Ed Nieroda was vice-president and controller until 2007. He then joined the TransX Group of Companies where his role was executive vice-president until 2014.

PROFESSIONAL DEVELOPMENT DIRECTORY

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PROFESSIONAL DEVELOPMENT DIRECTORY 18th SCMAO annual conference

navigating change

Mississauga Convention Centre, 75 Derry Road West October 22–23, 2015

JOIN THESE IMPORTANT AND INFLUENTIAL SPEAKERS AT THE INDUSTRY’S PREMIER EVENT FOR SUPPLY CHAIN PROFESSIONALS! Change is constant and swift in the supply chain industry. Navigating Change will help you embrace and prepare for change!

FEATURED SPEAKERS

WHY ATTEND? This year’s conference brings you two full days of quality education, networking and insights into the latest industry trends and best practices.

• Learn from Top Industry Insiders (and Outsiders): Conference

Jennifer Jones Skip of the 2014 Canadian Gold Medal Olympic Curling Team

Bill Carr Communication Expert and AwardWinning Humourist

Lani Lindsay Senior Director of Supply Chain, Wal-Mart Canada

Paul Ferley Assistant Chief Economist, RBC Royal Bank

Kathy Simon Director, Indirect Procurement and Vendor Relations, Indigo Books and Music Inc.

Geoff Parsons Chief Procurement Officer, Deloitte Management Services LP

speakers, including C-suite level executives, industry leaders and professionals in diverse industries, all share an in-depth understanding of navigating change and thriving through uncertain times, a key skill set for all supply chain professionals.

• Develop Professionally: Earn credits towards your CSCMP designation—up to 10 credits!

• Engage with your Peers: The conference features several opportunities for networking, giving attendees the opportunity to reconnect with peers and meet new colleagues.

ATTEND OUR PRE-CONFERENCE SEMINAR— OCTOBER 20-21 Sustainable Supply Chain Practices for Competitive Advantage: New Strategies for a New Game Join instructor Larry Berglund for this two-day workshop focusing on social procurement and the role of the supply chain professional in this complex and somewhat controversial emerging area.

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T Join the conversation on Twitter #SCMAO15

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Getting what

you need Our Equipment Roundtable looks at trends driving warehouse equipment and how to ensure you are selecting the right tool for your needs

Equipment Roundtable panelists, from left to right: John Ferrari, senior vice-president, engineering, Konstant; Owen Moore, principal, BeWhere; Bruce Buscher, vice-president, Jervis B Webb; Lisa Vegso, general manager, Canada, Peco Pallet; Stan Dunton, international sales manager, Buckhorn Inc; Albert Goodhue, partner, GCL.

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By Emily Atkins

Albert Goodhue

M&D recently brought together a group of warehouse and DC equipment experts to discuss the trends and changes in the business environment that are affecting the choices of warehouse equipment being made. Participants on the panel were: Bruce Buscher, vicepresident, Jervis B Webb, in the factory automation/ distribution automation group; Stan Dunton, international sales manager, Buckhorn Inc; John Ferrari, senior vice-president, engineering, Konstant; Albert Goodhue, partner, GCL; Owen Moore, principal, BeWhere; and, Lisa Vegso, general manager, Canada, PECO Pallet. We asked them to identify the problems and challenges DC and warehouse managers must handle in their operations. What are the demands they are facing, created by both internal and external factors? The group identified several areas that are affecting the way warehousing gets done. These included: • The growth and evolution of e-commerce; • New requirements in customer service levels; • The pressure to reduce costs and gain efficiencies; • Growing need for order fulfillment and the cost of labour to do that; and, • The role of technology in optimizing operations. The growth of e-commerce is seen by all to be a huge influencer on DC operations. And this is making for some big operational changes. But behind it all, said Albert Goodhue from GCL, is the amount of information available now. “Information is the biggest transformation that the industry is facing today. Basically, a distribution centre exists in order to service the customers. What technology can bring, definitely, is behaviour of customers, the big data.” Forecasting has always been key for DC management. But with so much more data being collected about customers, demand, peaks and troughs, Goodhue asked: “What is the ability of the DC manager to make decisions using that information?” It allows for better service time, because the product is the right quantity at the right place for the service. “The paradox of this is that we’re passing from managing pallets to a retail store where everybody goes to

the store, to now breaking that pallet into units, then shipping that same pallet into 500 different orders,” Goodhue said.

Equipment Highlight

Pallet preferences “When I joined PECO two years ago, it was clear the Canadian market had a preference for stringer pallets, at least historically,” said Lisa Vegso. “And we were challenged with coming into the Canadian market, working on bringing our service here. Do we introduce a stringer pallet?” But what became apparent after talking with retailers and manufacturers, is that the market is really undergoing a transition to the block-style pallet. Vegso says the trend is being driven mainly by the retailers, but with gradual, growing acceptance by the manufacturers, who are coming to recognize its benefits. According to Vegso, these include its four-way entry that gives it efficiency gains from a handling perspective. It also weighs 20 to 30 pounds less than a traditional stringer pallet, which provides opportunity for cost savings from a transportation standpoint. But what’s happening now, Vegso adds, is some retailers are mandating a particular type of pallet. “So it’s now become a mixture of stringer and block pallets and that creates a level of complexity,” she said. “So when we talk about trying to drive efficiencies, the retailers are now receiving a mixture of block and stringer pallets.” She cited Costco, as an example that a couple of years ago moved to mandating block pallet-only acceptance, for in order to drive complexity out of their business. “I anticipate in the next couple of years, we’re going to see other retailers move and take a similar stance in the marketplace,” she concluded.

 MM&D’s Equipment Roundtable is an editorial feature, made possible with the support of the following companies.

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Their input was exclusively through their participation in the panel discussion.

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John Ferrari

The proliferation of orders, growing demand for high levels of customer service, order perfection, and increasing speed were all factors panelists noted. “The biggest challenge is you’re handling more orders and smaller-sized orders, so you’re moving

Equipment Highlight

When AGVs and robots marry AGVs have been on the scene in North America since 1958 or 1959. Robots have been around since the ‘70s. “They’ve always been looked at as two different entities,” said Bruce Buscher. “The big trend that we’re seeing in warehouse and distribution right now is marrying the two of them together.” The two already co-exist in warehousing and distribution, he said. From an order picking perspective, for example, a lot of companies want to use robots to do their order picking, because of the speed and accuracy, and they can run it on a 24/7 basis. But, he continued, it comes down the size of area that you are picking from. How do you get picking robots to cover the huge spaces in some DCs? “One of the things we’re doing more and more of these days is taking the robot, putting it on the automatic guided vehicle and taking the robot around,” he said. “The robot is going up and down the aisles on an automatic guided vehicle and doing the picking for the customer.” The trend is being driven by the availability of powerful new battery technology that allows an AGV to power itself—and the robot riding it—with a 30- to 45-second charging cycle. As well, a lot of companies are moving to robots because they don’t have to worry about employee turnover, salaries or ergonomic issues. With vision technology on the robot it can see what it’s picking up, it can pick up one or two pieces and move on. Light picking or voice picking systems may not be required any more because the robot knows how the warehouse is laid out. As well, the whole DC can be in the dark, offering more cost savings opportunities. “The robot’s never going to forget the layout so all he’s got to know is, ‘I go to this position in the warehouse and my tote or my bin is going to be there,” Buscher said. “I’m going to pick up a box or I’m going to pick up three pieces, I’m going to load it onto my system then I’m going to move on’.” Driving the trend in warehousing and distribution, Buscher noted, are accountability regulations. And it’s not just retail; pharmaceutical companies are looking at using this technology because of government regulations. “They’ve got to have accountability and traceability. And what better way to do that? You’ve already got two computers, one running the AGV, one running on the robot; it’s very easy to get that information back to the inventory or the order fulfillment system.”

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away from pallet picking and case picking into piece picking and managing a lot more orders in smaller quantities,” said Lisa Vegso from PECO Pallet. “I see that as the biggest challenge that warehouse managers are going to be facing with e-commerce. And what technology can assist with that?” John Ferrari of Konstant believes the answer is in reducing the amount of time a picker has to travel to complete an order. One possible solution is “the introduction of a customized pick module system, designed for split-case and full-case picking. It integrates gravity pallet flow and carton flow by transporting product from your replenishment rack to the picker.” An added benefit is flexibility. “If there’s a change in SKUs, if there’s an increase in product volume, they can handle that,” Ferrari said. “And they also integrate, for the most part, some degree of automation. The other thing with pick modules is that they truly reduce the amount of contention between replenishment and picking operations.” For Jervis B Webb’s Bruce Buscher there’s a chickenand-egg situation. “Technology can influence a lot of decisions you’re going to make,” he said. “But a lot of the issues we’ve identified actually will drive which technology’s best for you.” For example, if your DC is located in a region with low labour availability, and “you can’t find anybody to operate your fork trucks, well, then, you better be looking at things like conveyors, or storage and retrieval systems,” he added.

Planning Planning is key, the panelists agreed. “One of the challenges I’m hearing comes down to the design and planning on the front end,” Vegso said. “When we look at e-commerce as a growing trend, that didn’t exist 10 years ago, how do you build a racking system to support the needs today, but then have the adaptability and flexibility to be able to evolve that system as needs change?” Flexibility is paramount in planning, even when you know what you have to move and store now. “One of the biggest mistakes any distribution or Owen Moore

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Equipment Highlight

A new use for Bluetooth—asset tracking A low-energy Bluetooth beacon might make its way into your warehouse soon. Owen Moore explained how you can put it on your asset or sensitive shipments, and it communicates to cell phones and tablets from about 250 metres. It tells you the current temperature, the lowest temperature, the highest temperature, how many impacts it’s had and at how much G-force. It also tells you light exposure. You download an application on your Android and then you associate the beacon to your phone. From one up to many thousands of beacons can communicate to your phone and then

warehouse manager would make when he’s trying to figure out what kind of automation to put in, is—if he knows that he’s got all these different shapes and sizes and SKUs—if he tries to find some automation that’s going to solve all of his problems,” Buscher said. “And 99.9 percent of the time it doesn’t exist.” One solution is to capture a reasonable percentage of the volume—Buscher suggested 80 percent as a possible number—that can be managed with standard conveyors and sortation equipment, storage and retrieval and perhaps guided vehicles. And the remainder—the “uglies” as Buscher called them—are dealt with as needed. Ferrari looked at if from an efficiency perspective, starting with choosing the right storage system to meet your business needs. “Whether you’re handling small parts or palletized goods or large, bulky, odd items, you have to be methodical during the design

send that data to a server. It’s battery-powered, and that lasts just over two years. It can be applied throughout your supply chain. You can tell your customers exactly where a shipment is in the supply chain, you can tell them if perishable or sensitive goods have had any damage through impact or exposure to light or temperature. “This can replace RFID and telematics at a fraction of the cost of both,” Moore said. “So this is a tag you can buy for about 25 bucks, put it on a pallet, a more expensive pallet—maybe not a cheaper pallet—and monitor all that information throughout the supply chain.”

process, and truly value the utilization of the building cube, that’s going to house the racking system,” he said. “Most warehouses and distribution centres are going to require a mix of different storage types. And that usually translates into the most effective storage system solution.” Stan Dunton of Buckhorn Inc, points out that the planning process sometimes needs to go a little deeper. “It seems like the returnable packaging we do is the last thing that is thought of in the distribution centre,” he said. The racking gets planned, the retrieval and picking systems get organized, “and then at the very end they say, ‘Hey, we need a plastic tote that’s 22 inches by 22 inches by 13 and a half inches. Go order 42,000 of those.’” Unfortunately, sometimes that tote doesn’t exist. And DC planners don’t realize that it takes time to design and create a mould for a new container, Dunton added.

Lisa Vegso

Equipment Highlight

Sustainable ROI Proper planning is key to ensuring the equipment in your warehouse or DC does what it’s supposed to. But there are other considerations, said Stan Dunton. “When we approach the DC environment some of the tools that we bring to bear are return-on-investment models. You know, if you’re looking at a shipment—let’s say a corrugated box on a wooden pallet with some stretch wrap—there’s the environmental impact of that, there’s the up-front cost of that. If that asset isn’t going to be returned and recovered, well, where does it end up going?” He said it’s important to consider the costs of disposable versus reusable assets, not just from a pure cost perspective but also on the ROI and environmental fronts.

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“Obviously, a plastic pallet’s going to cost more, a plastic shipping container’s going to cost more, but when you offset the longevity of that asset and the price-per-trip continues to go down, at a certain point the packaging is free because it’s paid for itself,” he said. “So we use those ROI models; we use those sustainability scorecards.” There’s also a growing trend towards customers wanting to know the environmental impact of the supply chain. “If your customer or your customer’s customer is keeping track of things like that, some low-hanging fruit might be the types of packaging that are being used, and if a substitute material could be used for that packaging. So that’s generally how we approach it,” Dunton added.

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Vegso concurred: “When you’re looking at implementing any type of automation you’ve got to consider what is the container that’s going to be used, whether it’s a pallet or a plastic container. But certainly make sure your automation is aligned with what packaging or what product is going to be moving through that automation.”

Bruce Buscher

If you try sometimes Assuming that you have the plan and know what you need, the next question for the DC manager is how to persuade senior management to make the investment. “I think the big trade-off for everybody managing a DC is customer service versus cost,” said Goodhue. “The DC exists because there’s product inside and we have orders coming in. And then they have to fulfill the orders in order to serve the customers. Customer service is the reason why the DC exists, and we want to do it at the minimum cost.” BeWhere’s Owen Moore turned the problem on its head. “Do good customer service and cost efficiencies need to be competing factors? Or can you implement some form of Equipment Highlight technology that allows you to improve your customer service without ramping up customer With recent advancements in material handling service personnel, and equipment and trends like rising land costs, stornot have them directly age racks are getting higher. But pallets aren’t competing?” he asked. getting any deeper. According to John Ferrari, tall, slender rack structures can pose a challenge “What are the major cuswith regard to lateral stability in some of the tomer service issues and moderate-to-high seismic zones of this country. what are the technologies A new Canadian rack standard is currently that help you resolve those issues? I always under development that will ultimately be ref-

Rack standards

erenced and enforced through the building code. “So these are exciting times for the rack industry but also for users,” Ferrari said. “The public will be assured that moving forward, suppliers of storage systems will have to comply with the same minimum design requirements.” Ferrari added that customers who are in the market for racking should consider that dealing with a rack supplier who has done performance testing and is very up to date with the research being done on rack structures, could result in significant cost savings in the overall storage project. “It levels the playing field for suppliers of racking,” he said. “And these systems are getting awfully big. So, I think it’s a big step to develop such a document and it’s taken a lot of time. It’s a huge benefit for the storage and warehousing industry in general.”

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look to try and bring in technology that helps improve a company’s ROI.” Ferrari also looked at the numbers: “I tell people, when you’re purchasing rack, consider the total cost of ownership.” With racking this means knowing where the impact areas will be and making sure the cost of maintenance is built in. “If rack is not maintained properly the costs of repairs and replacement of components are going to be exponentially high.” Buscher said the most important point is to know what problem you want to solve and how much you will save by going with a new system. But, he said, “it doesn’t necessarily mean you can justify it.” He points out a customer who is not “saving a dime in implementing this automation. What they are doing is they’re getting 44 percent more efficient with this new automation and the same number of people.” But it isn’t always as simple as identifying the problem and finding a solution, said Goodhue. Every DC and operations manager sees tons of opportunity in front of him because DCs come with limitations: the height, the building, the materials handling, the lift trucks, the racking, warehouse management systems. But even for something as simple as using barcoding it’s hard to get the investment. He went on to describe meeting with a company that wanted to increase its e-commerce fulfillment operation. “I said to the president of the company, ‘How much are you willing to invest and try to understand this?’ And he said, ‘You know what? My logistics and warehousing fulfillment cost is part of our marketing costs.’” Because, Goodhue explained, if he wants to give free delivery, free delivery brings more orders, more customers, more revenue, and it costs a million dollars or $10 million for him to do. “But I think, for us, as supply chain professionals, e-commerce is only Stan Dunton shining a light on us—light that shows we’re a link to revenue.” MM&D MM&D | July/August 2015

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Automating apples Europe’s biggest apple growing co-operative needed a way to increase handling and distribution capabilities. Jamie Alexander explains how MIVOR built a highly automated, refrigerated warehouse for the storage and distribution of fresh apples.

al Venosta Valley, nestled within Stelvio National Park in the northern Italian Alps, presents an enchanting landscape with its clean mountain air and tiny, romantic villages. But underlying the valley’s iconic beauty is its unique microclimate, providing 300 days of sun each year with dramatic temperature differences between day and night, particularly well suited for the growing of apples. In fact, Val Venosta Valley is the most productive apple growing region in Europe, known for producing over a dozen varieties of apples such as Gala, Golden Delicious, Red Delicious, Fugi, Braeburn and Pinova. The valley’s high apple productivity has come about from the combined commitment of its farmers, who formed MIVOR, which became Europe’s biggest apple growing cooperative in 2007. Today, 400 member farmers make up MIVOR, with 2,700 acres of orchards, producing over 500 million apples annually (100,000 tons); 20 percent of this volume is organic certified. Fifty percent of the total harvest is distributed throughout Italy, with the remaining 50 percent exported to 49 countries throughout Europe, North Africa and Asia.

technology, to design and implement a highly automated system to sort apples swiftly, accurately and gently. The new system classifies up to 65 apples per second using 3D modeling, which assesses apple characteristics from 60 pictures for each single apple. The apples are precisely tested for internal and external quality with HD cameras and NIR (Near-Infrared) technology. They are sorted by size, colour and quality. Those that are bruised or cut, or have insect or disease problems, are immediately removed. The sorting system at MIVOR is the largest fruit sorting system of its kind in Europe with a sorting capacity of 25 to 30 tons per hour depending on the apple variety. Once are sorted, the apples are filled back into bins and routed via specially designed transfer cars onto a conveyor system where they are delivered into MIVOR’s new refrigerated warehouse.

Expanding production When MIVOR was formed in 2007, its total apple production was 60,000 tons annually. Since then, the cooperative has expanded its output by nearly 70 percent. This tremendous increase in apple production has necessitated the implementation of more advanced systems for streamlining post-harvest apple sorting, storage and distribution. “Although we are a farmer-oriented cooperative, the formation of MIVOR set in place the critical mass for a logistical leap forward,” said Martin Pinzger, MIVOR’s CEO. “The implementation of automation into our operations was necessary to accommodate our massive apple production growth. Technology is not an end unto itself, the economical results have to add up, while maintaining quality standards.” The harvest takes place in September. In the orchards apples are loaded into lined buckets inside of large bins. Once filled, the bins are picked up by forklifts, loaded onto trucks and transported to MIVOR’s sorting, warehousing and distribution facility in the municipality of Latsch in Val Venosta Valley. More than 300,000 bins with apples are transported to the MIVOR facility each year.

High-Volume Sorting MIVOR’s annual apple yield has been sorted with automation for some time. This sorting system was workable when processing half the current apple volume. But as MIVOR’s yield approached 500 million apples, an upgrade to the automated system became necessary. MIVOR partnered with Greefa, a supplier of produce-grading

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Apple dumpers streamline pre-packaging process.

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not fully shared by other apple producers whose shelf life extension by CA is much less. “Those high-bay, refrigerated warehouses that are the most energy-and cost-efficient have achieved a high density of space utilization,” says Christoph Leopold, head of project management and mechatronics at LTW. “This means the MIVOR warehouse has a space configuration that allows for the maximum number of bin positions to fit into the facility.” High-volume apple sorting.

High-density, high-bay refrigerated storage Like most large-scale apple producers, MIVOR cannot use the whole harvest it receives all at once. As a buffer between the sorting system and its packaging operation, the cooperative’s refrigerated warehouse comes into play. But increasing production led to capacity constraints with bulk bins and storage space in its existing refrigerated warehouse. The result was damage to the product, and accidents with forklift traffic, which led to production downtime. It became apparent that the cooperative’s warehouse was no longer adequate. “One advantage that apples have over other more perishable fruit crops is that they may be successfully kept in storage for a few weeks to several months, providing storage conditions are ideally maintained for specific varieties,” Pinzger explains. “This, however, requires precision environmental control, and precise product tracking and movement throughout the warehouse facility, something our operation did not have. So, we began looking for a better solution.” The challenge was considerable, in that the warehouse needed to be built in the middle of a densely developed area of Latsch; so footprint consolidation was a critical factor. LTW Intralogistics was selected to engineer and build a solution, which came in the form of a 21,600 square-foot high-bay refrigerated warehouse, with an 88 foot-high storage capability to handle 18,600 apple bins. At MIVOR, apples are stored in a controlled atmosphere (CA) temperature range of 34°F, consisting of a modified atmosphere of twoto three-percent oxygen and one- to fourpercent carbon dioxide. Apples can maintain quality under these CA conditions for four to six months. Only the highest quality apples destined for the fresh market are placed in CA storage. Advances in controlled atmosphere technology have had a dramatic effect on apple storage logistics and opened up markets previously unavailable for fresh and processed apple products. This is an advantage

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AS/RS for efficiency

High-density, high-bay warehouse with ASRS for bin storage.

The MIVOR warehouse incorporates the latest automated storage and retrieval system (AS/RS) technology. AS/RSs are computer-controlled material handling machines for automatically depositing, storing and retrieving bins or pallets from defined storage locations. Central to this AS/RS are six stacker cranes, which permit bin inventory to be moved quickly, safely and precisely within the high-bay warehouse environment. Stacker cranes offer reliability and accuracy that exceed the capabilities of forklift trucks. Such trucks transport product in only one direction, then return with an empty load. Stacker cranes place their load into a rack position, and then retrieve a load from storage on their way back out, optimizing the crane’s movements. “MIVOR’s cranes operate within a set of top and bottom rails, which stabilize the crane, allowing greater load capacities, as well as higher rack heights,” continues Leopold. “It is this capability of the stacker crane that makes possible high-bay, refrigerated storage. There is a major benefit for a warehouse switching from manual forklift trucks to an automated refrigerated facility utilizing stacker cranes. That benefit is exemplified in maximized building volume and increased cost efficiency through high-bay accessibility.” These stacker cranes are designed to travel at vertical speeds of 131 feet-per-minute (FPM) and achieve horizontal travel

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speeds of 590 FPM. Digital track positioning, infrared and laser guidance direct the movement of the cranes within the high bay. High-speed PLCs with integrated controls architecture monitor the movements of the cranes, in coordination with the warehouse management system (WMS), via Ethernet. The system coordinates with other automated equipment in the warehouse, creating one single, efficient transport system that provides optimum throughput under at capacity.

water stream without damaging the goods. After the emptying process, the empty crates are automatically stacked on an adjacent conveyor, taken over by a transfer car, and transported to a fork lift removal location for empty crates, or the crates are transferred automatically back into the empty-crate warehouse.

High-bay warehouse for empty bins Built into the high-bay structure is a secondary ambient-temperature 4,000 square-foot warehouse for the storage and transfer of empty bins. This high-bay structure is 52 feet high and is capable of storing 1,652 empty bins, accessible via a single crane AS/RS. These bins are transferred via conveyors and lifts to sorting, and to and from packaging, eliminating the need for forklift transport.

MIVOR’s 16 fully automated apple dumpers.

The dumper is equipped with a camera, which identifies every crate before emptying, while informing the facility’s production planning system to ensure the tracking of apples from each crate. MIVOR’s fruit dumper can process up to 40 bins per hour. LTW installed 16 fully automated dumpers in the pre-zone of the packaging area. “A controlled emptying process without damaging the apples was a key factor in the design of the fruit dumper,” explains Leopold. “Also critical was that the construction and system devices needed to be suitable for use in the handling of food products, and highhumidity environments. So we engineered the complete system from stainless steel, galvanized steel and rust-free materials.” MIVOR apple distribution facility located in Val Venosta Valley, Northern Italy.

Automated apple dumper Leaving the high-bay warehouse for packaging, where more than 100 employees accomplish ultra-short delivery periods, the apple bins are forklifted to an area for automated dumping of the apples into a pre-packaging water stream. Although MIVOR had been using automated dumping for some time, it required a significant upgrade to better control bin dumping, reduce product damage and improve throughput. In 2014 LTW Intralogistics engineered a very streamlined automated solution for dumping the apple bins. The result was the LTW Fruit Dumper. The system is capable of: a) controlled emptying and partial-emptying of the apple bins into the water stream; b) smoother product handling to minimize apple damage; c) exact separation of the fruit with each order change; d) integrated goods identification for every crate/order; e) designed for stand-alone and system-integrated operation, and f) is built of materials suitable for food handling in a high-humidity environment. In this process a stack of apple-filled crates is placed on an infeed conveyor using a forklift, and the number of crates in each stack is identified. The top crate of the stack is automatically grabbed by a gripper, then identified and emptied or partly emptied into the

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Benefits of automation MIVOR’s automated warehouse provides significant benefits for the co-operative’s operations. It delivers rapid throughput at near 100 percent accuracy levels. It permits efficient bin handling and product rotation on a first-in/first-out basis, which better manages product freshness and is essential to supporting the needs of MIVOR’s marketplace. It reduces warehouse labour, improves accuracy in inventory and order fulfillment, lessens product and facility damage from forklift usage, and streamlines energy usage. Because of the warehouse’s highly automated computer-controlled AS/RS and WMS, the facility is capable of monitoring batch numbers, processing dates and weight as the apples and bins are moved through and stored in the facility. This level of analytics allows MIVOR to maintain precise control of its apple products through every stage of their handling—from receiving, to sorting, storage, and through packaging and shipping. “We have full process and product security, with traceability of every apple back to the orchard,” Pinzger says. “Throughput delays are at all-time low. And we are seeing 33 percent energy savings. “While planning and designing we tried to create reserves everywhere,” Pinzger continues. “Then, when we went into operation, the system’s performance exceeded expectations. Although the initial investment in automation was significant, it has panned out nicely in the long term. Everything is running better and faster than planned.”

MM&D | July/August 2015

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Temperature Control News

Seafood by sea Innovation preserves freshness for container cargo

luWrap has completed the first ever shipment of fresh salmon by sea from Chile into the port of Tianjin, China, the largest port city in Northern China, and the major maritime gateway to Beijing. The company’s technology uses its patented oxygen management techniques to create and maintain an all-natural controlled atmosphere environment that extends the shelf life of perishable proteins. BluWrap uses fuel cells to actively reduce and consistently monitor oxygen while the product is shipped in refrigerated containers, extending the shelf life of fresh proteins well beyond 40 days. BluWrap’s patented technology maintains a consistent atmosphere and provides transparency throughout the supply chain by continually tracking temperature and oxygen through built-in sensors. BluWrap’s technology allows suppliers of fresh protein products to ship by ocean freight rather than more expensive airfreight, and still deliver a fresh product to customers. BluWrap partnered with Tianjin PuWan International and worked closely with the Tianjin port cold chain, as well as Salmones Aysen who supplied the salmon for the shipment. “Tianjin has shown great courage in being the first to use this new technology to bring fresh food by sea into the port. Tianjin is living up to the Chinese expression ‘who will be the first to eat crab?’—a

Potato grower goes plastic MM&D Staff Worley & McCullough, a grower-shipper in Colorado’s San Luis Valley that supplies over 1.5 million hundred-weight shipments in potatoes to grocery stores throughout the US, Canada and Mexico, has converted from a standard wooden pallet product distribution platform to a s ystem integration of iGPS Logistics plastic pallets. The company currently ships Colorado regional russet potatoes from its packing shed in Monte Vista in the San Luis Valley to grocery stores across North America. Idaho-based Wada Farms Marketing Group LLC handles potato sales and marketing respon-

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saying that questions who has the mettle to try something new,” said Mark Barnekow, CEO of BluWrap. “With the successful completion of this pilot, we can move forward with our plans to send regular shipments of seafood from Chile to China and expand the availability and variety of fresh proteins to customers in the Northern region of the country.” “Air freight is very expensive and fraught with logistical challenges when shipping from Chile to China,” said Pablo Cajtak, CEO of Salmones Aysen in Santiago, Chile. “China is a rapidly growing and important market for Salmones Aysen and all Chilean salmon producers. BluWrap is a very good logistics solution that makes sense if we want to reach consumers there.”

sibilities for Worley & McCullough Inc, with most of the potatoes shipped under the Wada Farms name and Dole, as well as several private labels. A small number are still shipped under the Worley & McCullough shipping label. “We are committed to promoting health, sustainability, family and our collective future—and by transitioning to the iGPS plastic pallets, we can ensure that we not only have the sturdier plastic pallet to handle distribution of our potatoes, but also a safer and more environmentally-friendly means of transporting them to our clients,” said Erin Cooper, grower relations/food safety manager and daughter of Jim McCullough. The environmental advantages of plastic pallets which includes the fact they do not absorb pathogens or harmful bacteria such as Salmonella, E. coli and Listeria—and are immune from insect contamination since pests cannot penetrate the plastic and infest the potatoes—meshes well with the philosophy of the company, which is using less chemicals by improving soil health. “Given the safety and cleanliness of plastic pallets, along with the ability to track and trace deliveries throughout the distribution system, made it easy to adopt the iGPS plastic pallets as our mode of choice for shipping,” said Cooper.

MM&D | July/August 2015

15-08-11 11:36 AM

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PECO Pallet opens in Calgary PECO Pallet, Inc recently opened a new pallet depot in Calgary to serve customers in Calgary and surrounding areas. Adrian Potgieter, senior vice-president of sales, said: “Opening a new depot in Calgary reflects PECO Pallet’s commitment to serving the Canadian market. We are building a robust infrastructure to support continued growth throughout Canada.” PECO’s wood block pallets are used by grocery and consumer goods manufacturing companies to ship products to grocery and warehouse retailers in Canada, the US, and Mexico. Empty pallets are then picked up and returned to PECO depots, where they are inspected, cleaned, and repaired as needed before being reissued. PECO Pallet’s service network now includes over 1,300 recovery locations, service depots, and manufacturing locations throughout North America.

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15-08-11 11:37 AM

Tight corner By MM&D Staff

ith facilities all over Chile, San Clemente processes apples, grapes, cherries, tangerines and avocados for sale in Canada, the US, Europe, Asia, and Latin America. In 2010, a processing line for apples at its Renaico facility was installed, with the help of system integrator Aweta US. An Interroll Portec Belt Curve was selected to meet the challenge of moving apples from the belt where they enter the system for sorting, to the area where they are washed. The space available to turn the apples was tight, making conventional conveyor equipment an unattractive option. “By installing this extremely adaptable and space-efficient belt curve we were able to avoid modifying previously installed systems and equipment,” said Francisco Amezaga, manager cold storage for San Clemente. This, in turn, reduced costs and time of installation, as well as facility downtime. The belt curve delivers the fruit through a 90-degree angle and spared San Clemente the expense and labour of integrating multiple conveyor lines to perform the desired function. Large amounts of products can now be safely and quickly transferred in a small space.

According to Amezaga, the whole project was very successful in part because of the willingness of Interroll’s engineers to stay involved through the installation process; for example, in determining the optimal position of the gear motor that drives the belt. This required some work to make the system work perfectly.

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Automation for pharmaceutical shipments Order verifier satisfies track and trace requirements By Robyn Schmitt

ew US mandates for the distribution of pharmaceutical products will require high-speed camera-based scanning, integrated with automated labeling to efficiently track and trace the shipments. This results from requirements for real-time data capture of SKU lot codes, and soon, full serialization traceability of product movement across the entire supply chain. To help manage these requirements, SSI Schaefer has developed the first automated solution to verify and document orders prior to shipping, the SSI Order Verifier. Products in an order are identified, counted, verified, photographed and documented in one integrated process. The new system allows pharmaceutical wholesalers to meet the legal track and trace requirements regarding documentation of shipped products, including batch tracing, proving the origin of the shipped goods. “The bulk of pharmaceutical orders, both prescription (RX) and over-the-counter (OTC) products, are packed in small quantities, and delivered for individual drug stores, hospitals and healthcare centers,” said Ross Halket, executive director of ASD Sales for SSI Schaefer. “With a throughput of up to 6,000 items per hour and simultaneous photographic documentation, the SSI Order Verifier presents the most cost-efficient, automated order verification solution to handle these split-case orders.” Incoming order totes are automatically unloaded onto a conveyor, and the items are separated using a system of variable-speed conveyors. At an adjacent reading station the individual articles are scanned and photographically documented. The system recognizes 1D bar codes and/or 2D data matrix codes, and RFID. The articles are then batched together again to consolidate the order for shipping. Key functions of the SSI Order Verifier include: • The order totes are automatically uploaded by a tilt device. The system will accept to up to 300 totes per hour; • Handles cubic products up to a weight of 2.2 pounds; • Up to 6,000 items per hour using variable-speed conveyors; • 1D bar codes and/or 2D data matrix codes, and RFID readout with a 6-side scan; • Each item is photographed to verify having been shipped. • Automated reconciliation of items for customer orders before shipping; • Any “no-read” products are separated to reduce the manual check times. For example, only wrong products require checking, no need to manually rescan the entire order to define the bad reads. Although the SSI Order Verifier is particularly adapted for track

www.mmdonline.com | July/August 2015

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and trace of pharmaceutical products, it can easily be adapted for use with other cubic-shaped product types.

Case study The mail-order pharmacy Aponeo, in Berlin, provides patients throughout Germany with prescription and nonprescription medications, dietary supplements, contact lenses, cosmetics and wellness products. Since 2006, the company’s customer base has grown from 40,000 to 850,000, handling over 140,000 SKUs, and shipping 4,000 packages each day containing over 20,000 items. To handle this exponential growth Aponeo automated its distribution process for the checking and sorting of batch units by implementing the SSI Order Verifier. “Besides being price driven, our clients want a large product assortment and fast delivery,” said Patrick Luig technical director at Aponeo. “It is virtually impossible to carry all products on-site, so we order our slow-movers and medium-movers on demand from our wholesalers. We get about 80 percent of our orders from wholesalers on demand. We then integrate these with our fast-moving SKUs that we keep in inventory to make-up our customer orders. This process of integrating items, and still guaranteeing next-day delivery and even same-day delivery in Berlin, has been a challenge for us that we were able to solve with the order verifier.” Aponeo workers manually empty totes received from the wholesalers onto a V-shaped conveyor. The speed of the conveyor allows for product separation, and once the articles have been separated each individual item is scanned from all sides and photo-documented. The articles are then automatically directed to one of 12 sorter slots with order-specific totes below. Workers place these pre-sorted batch totes onto an automated trolley, which takes them to the picking area where the inventoried fast-movers are integrated into the tote-batched orders. Then workers pack the patient-ready orders for shipping. Before the order verifier, every article was scanned manually, which took two to three seconds per item. Now, Aponeo is running at 0.8 seconds per item. The system cut lead times by 50 percent, Luig said, and allows for almost 100 percent order accuracy. As a bonus, the system is compact, taking only 500 square feet of the DC floor. “Additionally, since our system can now scan 1D and 2D data matrix codes, we are totally set up to be compliant with the upcoming industry documentation and verification regulations,” he concluded.

15-08-11 11:37 AM

STRAIGHT

Vertical lifts allow metal forming shops to control inventory safely By Patrick Roberts

he growing movement toward smaller order sizes and just-in-time delivery has placed very high demands on all aspects of manufacturing, including sheet metal forming. The technologies for mechanical, hydraulic and pneumatic presses used for metalworking have adapted, with improved automation and drive engineering, and extremely fast response times. Many presses have been upgraded for better execution of critical press safety functions by integrating controls and safety into one package for better protection of operators and machines, a welcome addition when running a 500- or 1,000-ton press. But, not all aspects of sheet metal forming are quite so automated. The storage and supply of sheet metal to processing machines, is one such area. Although most high-volume metalworking manufacturers utilize highly automated and usually complex lift systems for storing sheet metal and releasing it into production, most medium- to smaller-volume manufacturers still manage this operation with fixed racking and forklifts. Such manual storage and material handling procedures not only consume large areas of valuable production space, and are highly labour intensive, but they also frequently require interruption of adjacent production areas, slowing throughput, and increasing the probability of workplace accidents. 34

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Safety is key Safety is, of course, a serious issue in sheet metal work. One area of critical focus is forklift safety. The Industrial Truck Association states that over 11 percent of all forklifts are involved in some type of accident each year. OSHA statistics indicate that there are approximately 85 forklift fatalities annually in the US. Plus there are an additional 34,900 serious forklift injuries, and 61,800 forklift injuries classified as non-serious each year. According to OSHA, 42 percent of forklift fatalities occur in manufacturing, and almost half of those deaths are caused by the forklift tipping because of unstable loads. To reduce the possibility of this happening, OSHA recommends keeping the forklift load as low as possible. But this is not feasible when using forklifts to manipulate 5-foot by 10-foot sheets of sheet metal from stationary storage locations 14 feet above the floor. Metalworking manufacturing operations that implement effective safety and health management systems may expect to significantly reduce injuries and illnesses, and reduce the costs associated with these injuries and illnesses, including workersâ&#x20AC;&#x2122; compensation payments, medical expenses, and lost productivity. In addition, such manufacturers often find that process and other changes made to improve workplace safety and health may result in significant improvements to productivity and profitability. Despite these safety concerns and potential benefits, MM&D | July/August 2015

15-08-11 1:58 PM

the vast majority of small-to-medium-size metalworking manufacturers have not availed themselves of automated systems for sheet metal storage. Instead, they continue to rely on forklifts to facilitate the movement of sheet metal in and out of stationary storage racks, risking the potential for worker injury.

Automated sheet metal vertical lifts

Workers can load and unload

This scenario may now be changing for low-tomedium-volume sheet metal manufacturers. A new generation of automated sheet metal vertical lifts, now enable low- to medium-volume sheet metal manufacturers to easily access automated storage within their production areas. Different from vertical lifts used to service high-volume production areas, these new fully automated systems are designed for smaller sheet metal volumes. One such system is designed and built by Manitobabased Vidir Machine. Like the bigger systems, the Vidir lift can be adapted for the storage of sheet metal, bar stock, press brake dies and punches, and other industrial materials. Designed to feed processing centres, and specifically sheet lasers directly, the sheet metal lift creates a storage centre capable of continuously feeding production machines to minimize downtime and increase operational efficiency. The system can be configured between 10 feet and 24 feet in height, with up to 38 shelf storage positions, for storage with pallets or without, each capable of supporting 5,000 pounds. Instead of a forklift suspending a 5,000-pound pallet of sheet metal or a 3,000pound press die a dozen feet above the work area, the systemâ&#x20AC;&#x2122;s elevator, driven by rack and pinion (rack and pinion drive provides a more positive movement, better stability and less servicing compared to chain- or beltdriven designs), travels vertically, bringing the desired shelf supporting the contents down to an ergonomically comfortable position for the operator to access. Once the sheet metal, roll bar or die is accessed by the operator, it can be transported to the process machine via suction device, or carried by forklift at a low, relatively safe height. These new-generation lifts greatly remove the forklift from the equation.

the machine at a safe height

Designed for low- to medium-level sheet metal manufacturers

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Improved operational efficiency

Detail of positioning clip on shelf

The machine can be adapted for the storage of bar stock, press brake dies and punches

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“Vidir developed this lift storage system as a baselevel machine,” said Paul Peters, director of engineering for Vidir Machine. “It was not intended for a large processing facility that would integrate storage modules throughout the manufacturing centre. We developed this unit so manufacturers could load at a safe height, and the machine could then do the put-away. It incorporates a single rack with 20 to 30 storage locations that would serve as a supply point to several presses or laser cutters.” Although this sheet metal lift does not incorporate the integration capability found with larger systems, it nevertheless is equipped with industry-standard controls and safety. PLC-driven automated controls, with a touch screen, enable precise control of the shelves. It is also equipped with inventory control software. The safety system is designed to SIL 3/CAT 4, featuring access restriction fencing around the perimeter, and light curtains to prevent access during operation.

New-generation automated sheet metal storage systems increase workplace safety and product security by providing a secure and controlled delivery method for heavy pallets of sheet metal stored overhead. Manufacturers can reduce their storage footprint by combining multiple sheet metal racks into a single tower that feeds processing machines directly. The added accessibility, increased storage, and improved material flow will increase efficiency resulting in a tangible ROI. According to Peters, “Aside from the improved safety benefits, many [smaller manufacturers] realize a 50 to 75 percent reduction in cycle time when supplying sheet metal to process machines.” No longer do sections of the shop have to temporarily shut down to allow for forklift manipulation of large loads suspended near their work areas. No longer do workers have to be pulled from their assigned production tasks to spot these forklift loads, which impacts labour costs. No longer do manufacturers have to absorb the costs of facility, material and product damage from forklift usage. These are tangible benefits that can be realized by any metalforming facility. Shorter runs and just-in-time ordering are necessitating more frequent changeovers, which means more frequent access to metal storage locations, and more frequent maneuvering of suspended loads with forklifts. These factors are driving small- and medium-volume sheet metal manufacturers to rethink their operational processes. Incorporating vertical lifts is one way they can achieve efficiencies.MM&D

MM&D | July/August 2015

15-08-11 1:58 PM

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15-08-11 11:29 AM

Air destratification helps improve productivity and cuts costs A bath products distributor faced a potential problem with condensation corroding sheet steel in its warehouse, a facility without air conditioning. Before receiving its first steel shipment, the company installed two 4.8-meter fans, which keep the stock warm and dry.

By Kara Kuryllowicz

f your DC employees have ever complained about the ambient temperature in their working area, read on. Staples Canada has managed to reduce energy costs by almost $20,000 a year and at the same time maximize employee comfort in its 50,000 square-foot Mississauga DC, just by installing five ceiling fans. At the DC, Staples relies on a rooftop gas heating system to keep the massive space warm during the winter, but it was an ongoing challenge given the 30-foot ceilings, where the hot air pooled, and the shipping doors at the unloading docks that constantly open and close. “It’s a lot like an oven, in that it will always be hotter closer to the heating element but eventually the entire

oven will heat up,” says Dan Modestino, energy incentive rebate manager at Sandcastle Energy Systems, in Mississauga. During the colder months, because the heating system’s thermostat is within eye and arm’s reach of the average person, the furnace is reading the cooler air closer to ground level and subsequently cycling on and off more frequently, which also consumes more energy. Not only was the system expensive and inefficient year-round, employees were sometimes cold in the winter and often hot in the non-air conditioned space in the summer, which could affect motivation and performance. To see how temperature-related discomfort affects people, please see the sidebar. “One of the largest challenges with a warehouse space

HVAC equipment distributor N.B. Handy battled slick condensation on its concrete floors whenever temperatures or humidity changed. The company installed six high-volume, low-speed fans to combat the issue.

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MM&D | July/August 2015

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is keeping it cool in the summer months. A warehouse is like a big steel box that generally isn’t air conditioned, and lacks air circulation,” says Modestino. To even out the DC’s air temperature, making it feel warmer in the winter and cooler in the summer, Staples’ building managers knew they needed to circulate and mix the air. The existing equipment included a number of 36- to 48-inch diameter ceiling fans, as well as wallmounted and floor fans. However, those fans were too small to effectively move large volumes of air, and also had to turn very quickly to compensate for their lack of size, which in turn consumed more energy. Efficiently and cost-effectively air conditioning a space as large as the Staples warehouse would be virtually impossible. Fortunately, however, mixing the hot air that collects at the ceiling with the cooler air below will help equalize the building temperature from floor to ceiling and wall to wall. In a space that’s 30 feet from top to bottom, if the air temperature is 28.8⁰C (84⁰F) at the ceiling and just 20⁰C (68⁰F) closer to the ground, mixing it will result in an even, comfortable temperature of 21⁰C to 22.2⁰C (71 to 72⁰F). As well, Patrick Wilson, new construction sales manager for Big Ass Solutions in Mississauga, notes that air speeds below 40 feet per minute (FPM) are imperceptible, but anything over 40 FPM will have a cooling effect. For example, ASHRAE’s (ASHRAE is a global society whose members focus on building systems, energy efficiency, indoor air quality, refrigeration and sustainability) Thermal Comfort Tool (http://comfort.cbe.berkeley.edu) indicates that air that is actually 85⁰F (29⁰C) moving at about 120 FPM will feel about 3⁰C or 5⁰F cooler, but at 200 FPM it will feel about 6⁰C or 9⁰F cooler. Wilson also notes that in the summer, Big Ass recommends running the fans faster to provide higher airspeeds and below 40 FPM in the winter to circulate the warm air. Surface area or size, speed/velocity of the fan airfoils and angle of attack are the three factors that affect air movement and determine just how far a fan can throw the air around it. In a warehouse, a small fan can move air around in the immediate ceiling area but unlike an oversize fan, it can’t push it down 20

Jim Beam’s DC installed a 7.3-metre diameter industrial fan to keep the facility’s air movement as smooth as its bourbon. The fans provided a more comfortable environment for the company’s employees.

How temperature affects productivity Over the years, research has shown that temperature-related comfort or lack thereof has an impact on employees on multiple levels. The Canadian Centre for Occupational Health and Safety states that when the air temperature or humidity rises above the comfortable range, people initially feel more irritated, then lose their ability to concentrate and do mental tasks, then become less able to do skilled tasks or heavy work. As well, a 2013 study by the School of Architecture, Tsinghua University, Beijing, China found that variable temperatures as well as temperatures that were uncomfortably hot or warm had a negative effect on learning rates, motivation and performance. It also noted that uncomfortably warm environments were more harmful to performance and motivation than uncomfortably cold environments and that the optimum temperature range was between 22°C and 26°C. Meanwhile, a NASA study showed that telegraph key operators working in 80°F (27°C) for one hour make five errors and in three hours will make 19 mistakes. Increase the ambient air temperature to 90°F (32°C), and they make nine mistakes per hour and 27 errors after three hours. At 95°F (35°C), there are 60 errors in one hour and 138 in three hours. Since so many North Americans start their day in a state of dehydration, doing physical labour in a hot atmosphere is likely to exacerbate the level of dehydration, which according to academic studies can reduce everything from productivity to visual motor tracking to short-term memory, attention and even reaction time.

Source: Center for the Built Environment

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Retail cooperative Federated Co. faced air-circulation problems in its warehouses based in Saskatchewan. Warmer air rose to the ceilings in the winter months, leaving workers chilly below. The company turned to Big Ass Fans, which installed five 7.3-meter fans to efficiently circulate the warm air. The fans worked so well employees requested the thermostat set points be lowered, thereby saving the company 10 percent in heating bills.

to 40 feet at speeds of 90 to 100 FPM. To control energy consumption and improve employee comfort, in 2014 Staples installed five Big Ass Solutions 20-foot Powerfoil X2.0 industrial fans. Big Ass Solutions pairs energy-efficient motors with patented airfoil designs, inspired by airplane wings, to move large volumes of air quietly and efficiently. Big Ass Solutions, which began as HVLS Fan Company (high-volume, low-speed) in 1999, has a research and development lab built specifically to test large-diameter fans. The firm designs, engineers and manufactures overhead and directional fans for commercial, industrial and residential applications and holds 145 patents with another 135 patents pending. Fans range in size from 18 inches to 24 feet in diameter. “In our market, supplier stability and longevity are always a big concern; Big Ass Solutions has been around since 1999 and has one of the best warranty programs in our market with 15 years on the gearbox and motor and a lifetime warranty on the airfoils, hub and airfoil to hub connection,” says Modestino. “As well, their commitment to design, engineering and constant research and development consistently results in new, improved products.” It is estimated the five fans at Staples’ Mississauga DC will save the firm about 100,000 kWh per year and reduce its annual natural gas consumption by 27 percent or $19,313. As well, the electricity and natural gas savings respectively earned Enersource and Enbridge rebates, that when combined met more than one third of Staples’

total retrofit project costs. Energy rebate information can be obtained from local utility providers. A Big Ass fan, which in most commercial and industrial applications is aluminum rather than composite or bamboo, requires about 1,300 watts but it moves more air and uses less power than 40 smaller fans. Big Ass Solutions’s one- to two-horsepower, magnetic direct-drive motors generally run at 43 to 130 rpm, compared to the 800 rpm of a smaller, faster fan. “Hold your hand straight and then at an angle and you’ll understand how the angle of attack affects how much air you move,” says Wilson. “Our fan airfoils are shaped to maximize the air flow while minimizing the drag for improved efficiency.” Despite, their size, each fan creates 55 decibels or less, which is comparable to the background noise generated by a large office, a typical suburban neighborhood or a moderate rainfall. For the sake of comparison, power tools are typically 80 to 110 decibels, a car horn is about 140 decibels and the human voice is about 70 decibels. To maximize the fans’ impact on air flow and temperature, while ensuring the safety of employees, equipment and product, placement is key. For example, locating a fan directly above a shelf is pointless as the shelf and products are being cooled rather than the employees. “Each facility is different so staff is on hand to look at the layout and the application to determine whether a particular placement will work,” says Wilson. MM&D

The air movement provided by high-volume, low-speed fans destratifies the air in warehouses, keeping employees comfortable, preventing condensation and reducing gas bills.

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MM&D | July/August 2015

15-08-11 11:41 AM

FORKTRUCKS

What’s new in forktrucks 1

2 Got data?

Yale has released a whitepaper on the value of “small data” in managing your forktruck fleet. For operations with lift truck fleets, it says, telemetry programs can produce many relevant small data insights for conversion into business intelligence. Even as materials handling operations face serious pressure to maximize output and efficiency, most facilities do not utilize fleet data to its full potential. A recent survey indicates that while 80 percent of companies track lift truck fleet data in some way, only 25 percent track

3 Cellular fleet management

1 Maneuverable pallet truck

The new Raymond Model 8210 walkie pallet truck offers maneuverability and speed control, adaptability for extreme environments and easy service and maintenance. When working in tight areas, such as trailers or lift gates, the Model 8210’s maneuverability and speed control allow for good handling. Its “Click2Creep” technology automatically reduces maximum travel speed and provides a tighter turning radius for pin-wheeling or right-angle turns. The Model 8210 now comes standard with IP65 protection of electronics, meeting the highest standard for water and dust protection. This ensures reliability and performance in extreme wet conditions and during pressurewashing. The removable, ribbed bumper uses the same material found in automotive truck frames to combine accessibility with strength, resilience and efficiency. Engineered with fewer components and maintenance points, the Model 8210 provides longer component life and supports easier access to components.

Toyota Industrial Equipment and Sprint launched T-Matics MOBILE, a forkliftbased vehicle management system designed to increase productivity and profitability, and create safety and operational benefits to forklift fleet owners. Toyota Industrial Equipment will offer T-Matics MOBILE services through both embedded and aftermarket solutions that use Sprint’s advanced Machine-toMachine (M2M) technology. “T-Matics MOBILE works on a cellular signal for companies that rotate forklift fleets between facilities” said Jewell Brown, national manager of fleet management at Toyota. T-Matics MOBILE is an individual forklift-based cellular telematics solution with monitoring and analytic capabilities to generate reports on both individual

equipment and utilization by specific drivers. The cost of not knowing this can be high, especially since more than ever companies are focused on improving profitability, productivity and operator safety. The white paper outlines the strategic advantage of working with small data insights to optimize fleet size and labour, and demonstrates the value of actionable lift truck intelligence in the overall productivity equation. The paper, “Small Data, Big Impact” can be found on Yale’s website.

forklifts and entire fleets. “Toyota’s T-Matics MOBILE will help us increase our fleet services to all of our forklift customers by generating easy-to-access metrics in real time,” said Dave Cater, vice-president of sales at Brodie Toyota-Lift. “T-Matics MOBILE will pay strong dividends to our customers who now have the specific data needed to make decisions on fleet-related issues.” “At Sprint, we want to create innovative solutions like T-Matics MOBILE, which instantly turns forklifts into intelligent communications centres to provide significant safety benefits and enhances fleet management logistics for businesses,” said Mohamad Nasser, senior director for product, platforms and marketing for Sprint’s Emerging Solutions organization.

4 Forktruck with fewer parts

The Nissan Forklift by UniCarriers brand BX series lift truck is available in cushion-tire models in 3,000- to 8,000-pound capacities and pneumatic-tire models in 3,000- to 5,000-pound capacities and is powered by a fully AC motor and controller system. The BX has fewer parts, requiring less maintenance. This series also has better cooling capacity and reliability for high uptime operation. Thermal protection sensors protect the motor and controller systems by reducing speed and alerting the operator to potential overheating. Optional features available for customization on the BX series include a sideshifting fork positioner, rear blue spotlight for pedestrian awareness, strobe light, clamp release switch and freezer packages for operation in temperatures as low as -31 degrees Fahrenheit.

www.mmdonline.com | July/August 2015

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LEADING EDGE

Time for a fresh start? I

Ross Reimer

t was just a few weeks ago while running on the treadmill at my local gym that I was impressed by what I read on the newest customer’s T-shirt. She was obviously new to the facility as she was receiving her introductory tour with the trainer. Most gyms are full of a variety of people ranging from those in great need of attention to their fitness to those who have obviously spent endless hours training. In this particular case it was clear this lady was just getting started and her T-shirt confirmed it. In big letters across the front it said, “fresh start.” I was impressed with her courage to commence with the training program and make her intentions as obvious as she did with the words on her shirt. While the training program can be daunting and no doubt exhausting, it was clear she had a plan and was willing to make a fresh start. It got me thinking about the numerous times in my life that I’ve required a fresh start. For most of us, progress comes both personally and in our business lives as two steps forward and one step backward. It would be nice if the line was always upward but we know from experience it’s not always the case. In my work as a recruiter I often meet with people looking for a fresh start. In some cases the career path they have chosen simply doesn’t meet their needs or match their skill set. In other cases they’ve chosen to work for a company where the environment is less than satisfactory and sometimes even toxic. The result: Changes need to be made. It’s always encouraging to check in with people who have made positive career changes and are experiencing all the good things that go along with that. Unfortunately, just as often I encounter people who

need a fresh start but can’t seem to bring themselves to make changes. There can be many reasons. Sometimes they don’t see the need even when those around them notice it clearly. Other times they understand the need for change but just can’t summon the courage to step forward in a different direction. I can think of one individual who I’ve met with several times over the years who continually expresses his dissatisfaction with his career. Yet, he never takes a real initiative to make changes. It’s a shame when it’s clear he could be much more satisfied in a new role in a more suitable environment. All this leads to the question: What does it take to make a fresh start? In my experience we have to recognize the need for change, actively pursue potential options and then purposefully summon the will to act on our best instincts. Having support from friends, colleagues and perhaps even a mentor can be extremely helpful. Several years ago on a golf course I met an individual who had clearly made a fresh start in his life. It’s not often that one game of golf leads to a significant personal discussion but in this case we really connected. I learned he had been in a business career for nearly 30 years and had done very well financially. That said, he never felt it was his true passion. As a hobby, he had always worked with his hands, and was particularly adept at woodcarving. He explained to me how he ended his business career at some significant risk and launched in a completely new direction that relied upon his woodcarving skills. With hard work and determination he began to sell his work successfully and was truly enjoying the change. It was evident in the few hours we spent together that he was at peace with his decision, and while earning substantially less income, was enjoying life far more. For him a fresh start was what he needed. Is it time to ask yourself if you’re ready for a fresh start? You may not be willing to proclaim it to the world like the woman at the gym, but maybe that voice inside of you is asking: “Am I happy? Am I in the best work situation right now? Should I make a change?” Acknowledge that voice, don’t be afraid to change direction, and get the support you need to move forward. Like the woodcarving golfer, you’ll be glad you did. MM&D Ross Reimer has over 30 years of experience in transportation/supply chain. For the last 15 years he has been President of Reimer Associates, a recruitment firm within supply chain. rreimer@reimer.ca

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Floor level pick module with high density pushback storage above

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Annual Conference on Transportation Innovation and Cost Savings

Wee dnesday, W y September 30, 2015 9 a.m.- 6 p.m y, m The Bram & Bluma Appel Salon Toronto Refe f rence Library 7789 Yo fe Y nge Street 2nd Floor, Toronto M4W 2G8 www.transportconference.org Featured Speakers

John Anderson, Advisory Director, Greenbriar Equity Group, New York Y “Transport ransport Company V Valuations - a Private Equity Perspective” Bruce Bowen, Sr.. VP VP, Scotiabank “Economic Forecast” Captain Stephen Brown, President, Chamber of Shipping of British Columbia “Western Canadian Port Development - Opportunities and Challenges” Ron Cuthbertson, Chief Operating Officer, Luxury Life Brands, former President & CEO, The Source “Retail Challenges for the Logistics Industry” Evan Garner Garner, Sr.. VP VP, Marsh & McLennan “Insurance Liability for the Canadian Transportation Industry” Claude Jolicoeur Jolicoeur, Director Regulatory Af Affairs, McKesson Canada “New Pharmaceutical Logistics Regulations” Vee Kachroo, VP V VP, Supply Chain Solutions, CN “Railway Challenges 2015-2016” Robert Lande, CFO, FXCM Inc., New York Y “Foreign Exchange Currency Forecast” Anthony Lannon, Director, Supply Chain and Logistics, Sun Products Canada “Do More With Less: A Shipper ’s Perspective on the Fight to Stay Competitive Greg Simpson, President/ CEO Simpson Seeds Inc., Saskatchewan “Supply Chain Innovation - A Western Canadian Perspective Mark E. Samis, Vice President, Environmental Sciences, Pario “Environmental Issues with Transportation Spills and Cargo” Catherine Pawluch, Partner,, DLA Piper & Simon Casimir, “Drones - Applications in the Transport Industry”

Food Safety Breakout Hasan Afroz, President, Approved Cold Storage “Refrigerated Warehousing Challenges” Mark FeDuke, Director of Operations, VLM Foods “Recent CFIA & FDA Regulations for Transport of Food Between Canada and US” Pamela Johnston, Esq., VP Financial and Risk Services, Transplace, Arkansas “US Food Safety Modernization Act - Impact on the supply chain”

Automotive Breakout

Transport Law Breakout

Mark Andrews, Partner Strasburger Attorneys at Law, Washington “U.S. DOT vs. Trucks A Report from the Regulatory Battlefront” Tom Keast, Partner, Watson Goepel, BC T “Recent Rail Transport Jurisprudence” Ron Maurice, Senior Partner, Maurice Law, Alberta “Railway Expropriation of First Nation Lands” Carlos Sesma Jr, r Lawyer, Sesma, Sesma & McNeese, r, Mexico “Mexico-North American Transportation Regulations”

Moderators

Mike Riggs, CEO, Jack Cooper Holdings, Georgia “North American Automotive Industry Trucking Review” Jon Haselwood, Assistant VP VP, Auto, CSX, Florida, “Automotive Industry Rail Review” Chuck Clowdis Jr., Managing Director, Transportation, IHS Economics & Country Risk, New York Y “Automotive V Volume Forecast & OEM Service Report” Mark Anderson, COO, United Road Services “Inefficiencies in the Car Hauling Sector”

The Honorable David Collenette, PC, Senior Counselor, Hill+Knowlton (Former Canadian Minister of Transport) Doug Munro, President, Maritime Ontario Freight reight Lines Ltd. John Fiorilla, Chair, Transportation Department, Capehart & Scatchard, New Jersey Greg Keenan, Auto & Steel Industry Reporter, Globe & Mail Dave Corcoran, Director, National Transportation & Distribution, Nestles Canada Hank Seaton, Seaton & Husk LLP LLP, Virginia Christine Brown, Consultant

Shipper - Carrier Breakout

Check our website regularly as we add the names of the manufacturers who will be participating in this popular networking forum This one day conference has become the largest educational event for shippers and supply chain practitioners in Canada. The cost of the event is $1,050 plus HST or $2,000 for two. Booth space is available. For more information contact Richard Lande at 905-319-1244 or e-mail rlande@cogeco.ca

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MAXIMIZE IT

The Internet of Things (IoT) I

f you are like me, you are hearing an awful lot about “The Internet of Things.” At first, I thought it was a self-help guide for people to understand how the Internet worked. Then, the more I heard of it, the more I realized it was one of the pillars for the next evolution of Information Technology—and probably one of the biggest and most controversial. First of all, you usually see The Internet of Things expressed only as IoT. You know technology people and their acronyms. So, for those of you that were like me and wondered what IoT was, let me make it very simple. At first there was the Internet, which connected millions and millions of computers in what we know as the World Wide Web (www). Then, because of the proliferation of smart phones and now even wearable technology, there was the Internet of People. The Internet of People, through the use of the Internet, connected millions and millions of people (via their devices) to each other every day. You see this in all the applications such as Twitter, Text Messaging, Snap Chat, Facebook, LinkedIn, etc, which allow almost instant connections to be made between people through their devices.

Internet-enabled devices Now enter the Internet of Things (IoT). The Internet of Things connects the exponential expanding “internet-enabled devices” that are sweeping the globe. From lightbulbs, thermostats, stoves, refrigerators, to plane engines and more, devices with embedded sensors and can connect with the internet (and therefore company and owner) to share their internal and external states. Think about that for a moment. All these devices communicating to share their information learn and get “smarter” as they experience various states over time: thermostats that know when you are away and adjust the temperature accordingly, lights that come on just before you regularly get home and so on. Sort of like a large central nervous system that spans the globe. The major benefit? Learning and automating a large number of tasks that we humans do to make our lives better—all without human input. However, these devices and the information they store and communicate (via the cloud), is a massive repository of data on what we like and think. Leveraging that data to market new products in a laser-like targeted fashion is also going to revolutionize business models and generate a huge paradigm shift. And it goes way past consumer products. Bridges and www.mmdonline.com | July/August 2015

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roads that have sensors built into the surface which, in real time, communicate with cars to tell them to slow down— or instruct the IoT car to slow down for the driver whether they want to or not. Traffic lights that help manage gridlock by sensing how many cars are waiting at a red when there are no cars going through the green light. Smart roads, smart homes, smart cities—the future capabilities are almost endless.

Kevin Squires

A disruptive shift The IoT will create a fundamental shift in how we make things and how those things operate. It will, by far, be one of the most opportunistic shifts but also one of the most disruptive. With IoT, technology is outpacing most of us. This is evidenced by a great number of you not even knowing what IoT was before you read this. I was also in that category very recently. The biggest mistake we can all do is to do nothing. IoT is coming, and coming fast. So the question isn’t if we should do anything, but what to do first.

Learn to leverage it As a manufacturing industry, how can we leverage this shift early to make the most out of it? I know there are warehousing solution companies that are already looking at “Smart Beam” and “Smart Frame” technologies to possibly warn if a frame has been hit or damaged or a pallet position that is likely to fail due to capacity overload. I am absolutely sure a few of you are white-faced right now, staring at this article, feeling your heartbeat pound in your ears and thinking only one thing: Security. You are right to be alarmed. This is a hacker’s dream. Yes, there are a lot of security advances happening as we speak that will help control things but, if history is any indicator, a better lock just means a better lock pick. Having said that, as with the Internet and online commerce, there is nothing that will slow this oncoming IoT freight train. Well, maybe a command from a sensor on the track that there is an obstacle up ahead. MM&D Kevin is Vice President, Business Technology for the Econo-Rack Group of companies (Konstant, RediRack, Econo-Rack, Technirack.) kevin.squires@konstant.com 45

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MATERIALS HANDLING

Dimensional pricing—Part III T Dave Luton

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he new dimensional pricing changes can be tackled with several instruments from your logistics toolkit. While many people have looked at this from a packaging optimization perspective, there are other ways to deal with the issue. As a precursor, apply normal transportation negotiation strategies. However, these, at best, will delay the cost impact. In time, you will be paying the full cost, even if you are a large shipper with multi-year contract pricing. A few obvious options to negotiate with your carrier include: • Delay the implementation timing for the longest possible period. • Get a phased-in time period for the new density rules. • Review existing packaging and ensure that any round-up factors are minimized, because shipping weight is normally rounded up to the next full pound. One thing you must have is a weight and cube file that provides the accurate dimensions, cube and weight of each product. This is a necessary database that will allow you to achieve the lowest possible shipment costs. From a warehousing perspective, the need for several material handling systems to handle different fulfillment needs of the omni-channel and multichannel markets has recently become an issue. This has been spurred by the current and continuing forecast growth of e-commerce in recent years. In a multichannel warehouse, the emphasis has been on order picking because that is where the highest labour cost occurs. Many traditional order selection operations are not set up to efficiently accommodate a wide range of order types with varying units and lines-per-order characteristics. From a packing and shipping perspective, many of these have been set up so they interface exclusively with small package couriers. For rapid response this makes sense, but faced with a major cost increase, particularly in a country that is geographically larger than the US but with only ten percent of the population, higher freight costs may force a re-think. First, it is important to classify your shipments into two geographic areas; local and farther away. For local you will probably want to do nothing except review the time of shipment. Remember, courier terminals in major centres have two main sortation windows; evening sort and morning sort. The morning sort is traditionally used to sort incoming shipments for local delivery. Ask yourself this question: Have you ever looked at delaying shipping

to local customers so you catch the morning sort and get on delivery with the maximum number of orders and the shortest leadtimes? For longer distance shipments I am talking about one of the most traditional transportation cost-saving strategies: shipment consolidation. Ask yourself how you can can minimize the distance traveled by your courier shipments. As a general rule of thumb you are trying to reduce your costs by shipping the largest consolidated shipment volume the greatest distance by combining as many of your shipments as possible in the same transportation vehicle. In an ideal world, only the shortest distance final leg has the small shipment higher (proportionate) transportation costs. Let us take an example of a shipper in Toronto and a customer (i.e. receiver) in Vancouver to illustrate this seemingly impossible task. The ideal is taking advantage of a linehaul truckload rate to Vancouver, and then local (Vancouver) courier distribution costs for the final leg of the deliver(ies). Most companies periodically send a range of shipment sizes to major destinations. It is pretty easy at the end of your packing line to palletize each courier shipment by destination. Combining these with your LTL shipments, you can ship them together. Tail loading the courier shipment pallets means you can drop them off at a local Vancouver courier for final destination. Even shipments to Vancouver island can be combined the same way, and of course, courier costs from Vancouver to Nanaimo are much less than from Toronto to Nanaimo. There are almost endless variants of this if you are well organized. Even enroute shipments can be included. For example, to travel to Vancouver a truck has to pass through Winnipeg, Regina, and Calgary, to identify a few of the major stopping points. For moves to lower volume locales it maybe best to consolidate shipments to traditional consolidation points for final delivery. In the Maritimes see if Moncton makes sense. Larger volume shippers may be able to use more than one point (Moncton or Halifax). Freight rates increases are not new. To cope with them all we have to do is rediscover old cost savings ideas. Of course if there are major increases it gives us more of incentive to organize ourselves to lower costs. Strategies like freight consolidation have existed forever. Maybe it’s time a new generation discovered their potential. MM&D Dave Luton is a consultant in the greater Toronto area. dluton@cogeco.ca MM&D | July/August 2015

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