McAlpine Hussmann - July2020

MCALPINE HUSSMANN

DIGITAL REPORT 2020

Inside McAlpine Hussmann’s supply chain transformation IN ASSOCIATION WITH

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Inside McAlpine Hussmann’s supply chain transformation

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WRITTEN BY

HARRY MENEAR PRODUCED BY

STUART IRVING

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MCALPINE HUSSMANN

Supply Chain Digital talks to Calum Laird, Supply Chain Transition Manager at McAlpine Hussmann, about the company’s bold supply chain evolution

T

he modern company is only as good as its supply chain. Once the province of a monthly meeting by the accounting

department - and otherwise left to the attention 04

of a warehouse manager or individual department heads – supply chain management has undergone a radical transformation over the past decade.

Driven by a global rise in ecommerce demand, a heightened need for efficiency and the increased potential for technology like AI and cloud computing, the supply chain space has rapidly become a key differentiator between successful companies and those destined for obsolescence.

Founded in the mid 1930s, New Zealand-based commercial refrigeration solutions provider McAlpine has been providing industry-leading services to the region for more than 85 years.

Now a part of Hussmann Inc and owned by Panasonic, McAlpine Hussmann is undertaking a series of bold initiatives to digitally transform and radically modernise its supply chain.

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1932

Year founded

$95mn Revenue in NZL dollars

300

Number of employees w w w.mc a l pi ne hussma nn . co. n z

MCALPINE HUSSMANN

“Up until now, the company hasn’t had a dedicated supply chain focus,” says Calum Laird, who has been serving as the Supply Chain Transition Manager at McAlpine Hussmann since February of this year. A supply chain, logistics and warehousing veteran, Laird has been brought on board

by McAlpine Hussmann to orchestrate a multi-faceted transformation of the company’s supply chain that involves tackling warehouse management, a significant software implementation, 06

McAlpine: Digital Transformation CLICK TO WATCH

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2:32

redesigning procurement process and driving a cultural shift in a company with a long-serving employee base. “There’s a lot of history here, and a lot of people in the business have been here for 20 to 30 years,” he explains. “From a supply chain specific perspective, I’m involving and engaging with everybody that I can, because I know that there’s nothing worse than having some random newbie come in and say ‘this is how we’re doing things now.’”

We spoke with Laird to discuss the transition, and the ways in which

“ We want to make sure that every part of our business is connected, interlinked and using every part of the technology that’s available” — Calum Laird, Supply Chain Transition Manager, McAlpine Hussmann

harnessing the power of technology, procurement transformation and change management are poised to radically empower the McAlpine Hussmann supply chain to embrace the ideology of continuous improvement to further create value for its customers and clients. “There’s a four pillar workstream that I’m running with as part of this project,” Laird explains.

“There’s procurement, warehousing, SAP and technology, and then people and culture.”

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MCALPINE HUSSMANN

E X E C U T I V E P R OF IL E :

Calum Laird Title: Supply Chain Transition Manager Location: Auckland, New Zealand

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My background is varied across a range of supply chain areas from backend retail procurement, inventory management through FMCG, construction sectors and service provider in specialized third party logistics. Over the past 20 years the desire for continuous improvement, business growth and development has built my foundations to ensure that where my career bases me sees the supply chain as an efficient enabler of sales. Right now that base is McAlpine Hussmann.

Outside of the office I am a keen BMX rider that despite the occasional visit to hospital services, has been a lifelong passion. I speak some almost tolerable Portuguese at a basic conversation level, Portuglish to my wife and in-laws. I’m always keen to learn from and about people, over coffee or drinks in all sorts of environments, our stories and histories are all as interesting and unique as those they belong to.

A spirit of supporting others features heavily in my life having consulted to non-profit organisations and getting involved in community based projects locally. Equally as comfortable in boots and oilskin fixing fences as I am in a boardroom there is a diverse range to the way I live.

Chances are if we’ve worked hard together, I’ll offer you a cold beer and a laugh.

WAREHOUSING AND PROCUREMENT

function. As companies scale, decen-

So far, McAlpine Hussmann’s procure-

tralised procurement strategies have

ment function has largely operated with

a tendency to create silos which can

a pre-Industry 4.0 methodology. “For

create major logistical pain points.

a long time, because they know their

“Right now one of our major pain points

product better than anybody, individual

concerns space constraints at our main

departments have been handling

warehouse in Auckland. Part of that

their own procurement,” says Laird. “It

stems from that decentralised procure-

makes sense to some degree, but it

ment function where we’ve got different

also means that the synergies aren’t

things happening in different divisions

really there to streamline that activity

at the same time, but without everybody

and make it the most efficient operation

knowing about it at the same time,” says

that it can be.” One of Laird’s main goals

Laird. “We’ve got things that have been

revolves around the process of cen-

scheduled arriving at the same times as

tralising the company’s procurement

things that are a surprise to us.”

On-Shelf Availability Optimization VUSION - SES-imagotag CLICK TO WATCH

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1:20

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“ One of the things that’s highly important within our partner ecosystem is valuing quality relationships” — Calum Laird, Supply Chain Transition Manager, McAlpine Hussmann

In a business like McAlpine Hussmann, this can be a particularly bitter pill, as the company operates by necessity on a project basis.

“We obviously don’t just sit around with thousands of freezers waiting for someone to build a supermarket,” explains Laird. McAlpine Hussmann’s warehousing and procurement strategy relies on the company’s ability to receive product and then ship it out to be used in projects with a quick turnaround. “The actual stock we hold long

www.refspecs.co.nz

SPECIALIST REFRIGERATION WHOLESALERS Refspecs is a specialist refrigeration and air conditioning wholesaler, selling spare parts and capital equipment to the trade both locally in New Zealand and exporting throughout the Pacific

LEARN MORE

REFSPECS ARE PROUD TO BE A KEY SUPPLIER TO MCALPINE HUSSMANN SINCE 2010

McAlpine: Smart Storage Use CLICK TO WATCH

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1:44

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term is predominantly spare parts.

The nature of this cargo can also

We’re talking about very small bits and

prove challenging, Laird notes. Earlier

pieces in storage and everything else

in his career, he was part of the pro-

is quite transitory,” he clarifies. “We

curement function of one of New

might have 20 refrigerated display

Zealand’s major beverage distributors.

cases today and those might be gone

“Slinging beer and wine, for example,

tomorrow. Then, the day after that

is easy because there’s standardised

we’ll have a bunch of trough freezers

sizing pretty much across the whole

on their way to a different supermar-

world. It’s usually 672 750ml bottles of

ket. The transformation I’m overseeing

wine to a palette, or twice as many if

right now is based around ensuring

you’re dealing with 375ml cans or bot-

that this facility is able to manage a

tles and if you buy and sell X-amount of

transient and ever-changing size and

wine, you know within a few millimeters

volume of cargo.”

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MCALPINE HUSSMANN

up,” he recalls. This contrasts massively to the variation across refrigeration or HVAC unit ranges, where the length, depth and height all vary more or less from unit to unit. “You’ve got everything from ice machines to serve-over cases and freezer troughs. The product range is monstrous,” he laughs. This diversity is further compounded by the fact that most of McAlpine Hussmann’s customers require customised products. “A particular supermarket might want to have a particular coloured bumper they 12

want to use on the front of a unit for trolley protection. All these things are handled on a case by case basis,” Laird explains. “It wouldn’t be feasible for a company like McAlpine Hussmann to be sitting around with a hundred thousand square metre warehouse stacked full of all these ludicrously expensive and specialised units. It just wouldn’t work.”

Redistributing stock in a way that enables this fast turnover, highly transient style of warehouse operation is a key factor in successfully solving the company’s supply chain pain points. Laird notes that communication between business units and an amalgamation of procurement functions will go a long

way towards ameliorating this situation.

However, in order to create the visibility and cross-company data integration to support positive change, McAlpine Hussmann’s technological capabilities will also need to be overhauled.

TECHNOLOGY TRANSFORMATION “While the space constraints and procurement transformation are very physical things we’re dealing with, we’re also rolling out a massive software and digital communications implementation as well,” says Laird. “We want to make sure that every part of our business is connected, interlinked and using every part of the technology that’s available.”

At the heart of this implementation is McAlpine Hussmann’s adoption of SAP’s ERP, MRP, inventory management and warehouse management solutions. In turn these will be integrated with Salesforce’s CRM suite.

“The transition to SAP is going to put us light years ahead of where we have been. It allows for real time transfer of all information,” comments Laird. “Our technicians who are out on the road - if they need a particular part to fix a breakdown that they’ve been called w w w.mc a l pi ne hussma nn . co. n z

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MCALPINE HUSSMANN

VI SI O N

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“There’s amazing technology that’s getting invented every single day,” says Laird. As a digital transformation manager, Laird says that he sometimes encounters problems around the subject of artificial intelligence (AI). “People hear AI and immediately picture Jarvis from Iron Man: a heads-up display crossed with a robot butler that can literally do anything and has a mind of its own,” he says. “That’s obviously not how AI operates.”

The power of AI to automate elements of jobs to assist human workers and drive efficiency is something McAlpine Hussmann is dedicated to bringing to its customers. VUSION is a large part of this initiative. “It’s part of this big push to help upskill our customers because, at the end of the day, the supermarket is the final mile of the supply chain for us,” says Laird.

VUSION uses AI, along with magnetic and digital shelf labels that can be picked up and moved around. When combined with geolocating smart security cameras, the solution can automate processes “to the point that it can send a replenishment order to one of the store staff’s scanners in that department to let them know that a product needs restocking, and then take them along the most optimised route to carry out that task.”

“ At the end of my tenure, I want to be able to say that this business truly understands and embraces continuous improvement, the digital space and the potential of cloud software, AI and technology” — Calum Laird, Supply Chain Transition Manager, McAlpine Hussmann

a 24/7 repair and service model, which is a huge part of our business,” he explains. “We have technicians come into our warehouse at three in the morning who need a part. At the moment, they have to write down what they’ve taken on paper, and then someone comes in the next day and has to go enter that information into the system to make sure the stock is accurate. The flexibility and agility this gives our entire service team, as well as our back end supply chain and warehouse operators, is fantastic. We have all this added transparency in real time.”

It’s an ambitious project. The full SAP

to deal with - can look up the part and

and Salesforce implementation has a

place an order directly from their phone,

go-live date in the first week of October

tablet or other device. They can then

this year. The integration means that

collect that from a local wholesaler, or

there’s still a great deal of data to be

our central warehouse in Auckland.”

cleansed, gathered, entered into the

The SAP integration means that

new system and double checked for

information about part availability,

accuracy. However, Laird is confident

stock levels and location can be

that the transformation will pay big

updated across the entire system

dividends for McAlpine Hussmann,

remotely. Laird expects this to be

and can’t wait to prove it to the team.

particularly useful in alleviating some

“We’re headed for a future where

of the pen and paper data entry that’s

there’s direct interfacing between our

currently generating inefficiencies in

customers, our suppliers and us, and

the Auckland warehouse. “We operate

working to make sure that the days of w w w.mc a l pi ne hussma nn . co. n z

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MCALPINE HUSSMANN

writing things down on bits of paper

partners, Laird firmly insists that

are a thing of the past,” he enthuses.

strong relationships are an essential

“All these integrations mean that we’re

part of doing business. “One of the

building a culture where we not only

things that’s highly important within

rely on, but fully utilise the technology

our partner ecosystem is valuing qual-

at our disposal to make sure we’re

ity relationships. That’s a value that

connected to our suppliers as well

McAlpine Hussmann was founded on

as our customers.”

and it continues to be vital today,” he says. Not only does the company work

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PEOPLE, PARTNERS AND CULTURE

extensively with large-scale, global

Whether it’s within McAlpine

partners from within the Hussmann

Hussmann, across Panasonic’s global

and Panasonic umbrella, but it places

network, or throughout the company’s

equal importance on its relationships

network of trusted suppliers and

with small, local businesses.

McAlpine: Supply Train Transformation CLICK TO WATCH

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1:44

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For over 10 years, McAlpine Hussmann has been working alongside RefSpecs, which supplies them with refrigeration units for the company’s projects. “Companies like RefSpecs really are a huge asset to our business in terms of enabling us to do what we do for our customers. They’re not a huge global corporate; they’re a wonderful, home grown, locally owned and operated New Zealand business.

They’re nearby, agile and have a quick response time,” says Laird. “They’re very supportive of our business, and w w w.mc a l pi ne hussma nn . co. n z

MCALPINE HUSSMANN

we like to make sure we’re supportive of theirs – as we are for all our suppliers and vendors.”

Looking inwards, Laird – like every digital transformation evangelist the world over – acknowledges that managing the cultural shift within the company is every bit as important to a successful transformation as software integrations, AI and cloud computing.

To do this, he’s working to leverage the extensive industry knowledge of McAlpine Hussmann’s veteran team, 18

hoping to empower them to not only solve existing problems, but to develop a passion for tech-driven transformation. “If there’s anyone I need to learn from and leverage knowledge from, it’s these highly experienced and knowledgeable people. They know our products, customers and processes inside and out. By engaging their support, as well as highlighting the benefits of things like our move to SAP, we can benefit one another,” he explains. “Any level of automation and increased visibility throughout a business by way of software is a great thing for efficiency.

I think that some of the people that we’re working with haven’t been exposed to

that kind of thing before, and that’s ok – it’s just a matter of making sure that they understand that no one’s trying to replace anyone with robots.”

GOING FORWARD Looking to the future, Laird is optimistic about the cultural changes that he hopes to effect at McAlpine Hussmann. “I would like to be able to instill a culture by way of proof. I need to show the business just how many benefits they’re going to start seeing to their supply chain when these implementations start coming to fruition,” he says. “It won’t all happen at once. I think that ERP, MRP, inventory management and WMS, plus CRM is probably enough implementation for one year. At the end of my tenure, I want to be able to say that this business truly understands and embraces continuous improvement, the digital space and the potential of cloud software, AI and technology.”

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MCALPINE HUSSMANN 2-6 NIALL BURGESS RD, MT WELLINGTON, AUCKL AND, NZES 1060 T +6 4 9 526-6800 www.mcalpinehussmann.co.nz

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