MM&D June 2015

June 2015 $15.00

Gain from Pain ow Italpasta solved a space H dilemma and increased production

Publication mail agreement #40069240.

Inside 3 Taking Stock 4 Supply Chain Scan 18 Italpasta’s success story 25 Manage inventory like a big-box store 26 Why Target failed in Canada 28 The business case for sustainability 30 Datacapture 31 Pallets 34 The Leading Edge 35 IT Matters 36 Legal Link 37 Learning Curve 38 Materials Handling

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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 SENIOR ACCOUNT MANAGER: Catherine Martineau (647) 988-5559 CMartineau@mmdonline.com PRODUCTION MANAGER: Karen Samuels (416) 510-5190 KSamuels@annexnewcom.ca CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x3546 BAdelt@annexnewcom.ca

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Counting on you I

f you are a subscriber to MM&D magazine you’ve probably already received an emailed invitation to take part in this year’s Annual Survey of the Canadian Supply Chain Professional.

If you haven’t already done so, please take the ten minutes needed to complete the online survey questionnaire. It’s pretty painless and completely anonymous. It asks you about your salary, bonus, working conditions and a little bit about the issues you face in your daily work in the supply chain sector. And there’s a chance to win a $350 gift card!

We need your help to continue the long tradition of this survey. It’s not only the longest-running supply chain salary survey in Canada, it’s also the most comprehensive and inclusive. We usually receive well over 1,500 responses, more than enough to give us a statistically valid picture of employment trends in the Canadian supply chain sector.

Each year MM&D partners with the Supply Chain Management Association, Canadian Shipper magazine and PurchasingB2B magazine to produce the survey.

This year we are also pleased to announce that BDO is our sponsor; their support makes it possible to bring you the results of this important and uniquely Canadian benchmark study.

Data collection takes place from June through July, the results are tabulated in August, and between August and October we pore over those data, looking for patterns, trends and anomalies.

You can watch for the results to be published in MM&D’s September-October issue. It usually takes the form of a four or five-page feature, complete with graphs and charts, showing average salaries broken down by various classifications, along with five-year trends in wages, and other key indicators like hours worked, vacation allowances, bonuses and more.

There will also be a free webinar presentation of the results in November. The editors of all three magazines, along with the president of SCMA and a group of supply chain HR and recruiting professionals will offer their analysis of what the numbers all mean for people working in the sector and their employers.

I hope this explanation of the survey will entice you to take part, and add your input to this important, and all-Canadian research. Thank you in advance; we are counting on you!

June 2015  Volume 60  Number 03 18

25

26

28

Gain from pain

Inventory How to manage your stock like a big-box store

Why Target failed

Sustainability

Italpasta gains space and production volume

www.mmdonline.com | June 2015

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Expansion in Canada is not that simple

The business case for sustainable practices in your operations 3

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SUPPLY CHAIN SCAN

HEROS

RISK MANAGEMENT

BC LAW

SQUASH

Selfless acts by brave truck drivers, p 12

Two special reports on supply chain risks due to disasters and crime, p 6 and p 8

Workers Comp Act updated, p 13

PanAm Games squash court a glass act, p 14

Bringing home the beacons Tech start-up uses Bluetooth for tracking

By Emily Atkins

A

Toronto-based start-up is offering a new tracking technology with supply chain applications.

BeWhere Inc’s tech uses smartphone Bluetooth connectivity with small battery-powered beacons to keep tabs on mobile assets or goods in transit.

About the size of a business card and about a centimetre thick, each beacon is equipped with an accelerometer, temperature sensor, light sensor, high-intensity LED and buzzer. They record data such as temperature, motion, light and impact and transmit this to the user’s smart phone in real time, using a low-energy Bluetooth modem.

The LED and buzzer are aboard to help locate the beacon in a storage area or warehouse.

The beacons default to transmitting data to the smartphone every second, but can also be set to transmit ten times a second. However, this will eat through the battery, which is intended to last two years.

They have a 250m range, says BeWhere CEO,

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Owen Moore. But even if they are out of range they are recording and transmit when service is resumed.

On the device there’s a mobile app and a web-based interface for office use.

It will show all the beacons status in real time, and will alert users to a beacon’s status, whether it’s got a low battery or is out of range.

So far, the company has clients who are using the technology to track mobile equipment in the emergency services and construction sectors.

Moore says the goal is to reach transportation providers with a lower-cost alternative to previously available tracking systems.

As with any tech start-up there are a couple technical issues to resolve. In this case, Moore says, it’s the Bluetooth connection.

Because Bluetooth is notoriously buggy, the system uses only the “advertisement” packet to transmit data from the beacon to the phone. This allows one-way communication and is very effective because the phone and beacon don’t have to maintain a connection.

But in order for the phone to activate the LED or the buzzer on the beacon, a two-way connection has to be established and maintained. At the moment, it’s a weak point that BeWhere is working on. The software is being enhanced to make the connection stronger.

Pricing for the service is based on the number of beacons being used. At the moment BeWhere is not charging for users who want to try up to 10 beacons.

Above that, to 100 beacons, the cost is $200 per month. If a user were to have over 10,000 beacons, Moore says the price would come down to about 20 to 30 cents a month per unit. The beacons are sold for $45 each.

MM&D | June 2015

15-06-09 3:33 PM

“There’s always going to be risk. The issue is how to manage it.”

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RISK

MANAGEMENT SUPPLY CHAIN SCAN

Losses due to supply chain disruptions increased in 2014 MM&D Staff

R

apid economic growth in emerging economies, labour disruptions, political instability and a disease outbreak in West Africa led to a rise in business losses in 2014 according to the latest Global Supply Chain Intelligence report from BSI Supply Chain Solutions.

Globally, over US$23 billion was lost to cargo theft in 2014, while the four most economically damaging natural disasters caused a collective $32.8 billion of losses. Within Europe, trade interruption due to an array of strikes caused $1.5 billion of direct losses to business.

The report is based on data from BSI’s Supply Chain Risk Exposure Evaluation Network (SCREEN), which provides continuous evaluation across 20 risk factors in 203 countries. The 2014 data reveals a clear picture of the changing global threat landscape and how this varies by country, continent and industry sector.

A third (36 percent) of the fastest-growing exporters are based in countries rated as high or severe risk for human rights or environmental violations.

Forty percent of Asia’s current top 20 exporters are rated as high or severe risk for environmental violations according to the report, which notes that the business costs of violations are rising. 2014 saw a Chinese court impose the country’s heaviest environmental fine to date, with six firms penalized $26 million for dumping acid waste into waterways.

Shereen Abuzobaa, commercial director, BSI Supply Chain Solutions, commented: “Companies are facing an increasingly wide range of challenges to their supply chain, from human rights issues to natural disasters.

Such complexity creates black holes of risk for organizations, both directly affecting the bottom line but perhaps more seriously, hidden supply chain risk, damaging a company’s hard-earned reputation.”

The report warns companies, particularly those in the apparel trade, to scrutinize their global supply chain closely. Countries such as Haiti are noted by the report as having 29 percent of all children between the ages of five and 14 working in slave-like conditions. This compares to 5.8 percent in the Dominican Republic and 8.4 percent in Jamaica.

In recognition of this growing threat of human rights and environmental violations, governments in Western Europe attempted to push supply chains 6

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towards greater compliance with social and ethical norms, increasing the regulatory burden on organizations.

Port congestion and strikes continued to severely affect business continuity across Asia Pacific, the West Coast of the US and Germany throughout 2014.

Limited container storage space resulted in cargo discharge times of up to a week, increasing operational costs for companies shipping through Hong Kong by nearly $1 million per month. General strikes across Belgium caused $1 billion of direct losses to business, while airline strikes in France and Germany cost $300 million and $198 million respectively.

BSI’s research shows that in 2014 cargo shipments were heavily impacted by a rapid growth in supply chain terrorism. Terrorist organizations such as ISIS imposed systematic controls across Syrian and Iraqi territory, imposing costs of as much as $3 million in revenue per day through extortion and supply chain control schemes.

Europe, the Middle East and Africa saw cargo disruption rates stay stable, in stark contrast to the Americas where they saw an increase in disruptions driven by increased illegal drug introduction, spikes in cargo thefts, terrorist plots and incidents.

The Asia-Pacific region saw a rise in disruption, both from a growing methamphetamine trade, and the long-term challenges of counterfeit production and piracy.

While the report highlights cargo theft as a growing risk, it is still outweighed by the economic impact of natural disasters. 2014’s top four natural disasters caused a collective $32.8 billion of damage to businesses, with flooding across Pakistan and India making up a third of this figure. Three quarters (75 percent) of the top exporters across the Asia-Pacific region are rated high or severe for natural disaster risk.

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RISK

MANAGEMENT SUPPLY CHAIN SCAN

Cargo crime taking a toll in Europe Three major cargo crimes a day targeted high value products in the supply chain in Europe in 2014.

The average loss was €205,624 (approximately CAD$289,000), according to the Transported Asset Protection Association’s (TAPA) 2014 Annual Report for the Europe, Middle East and Africa (EMEA) region.

For the year as a whole there were 1,102 recorded incidents of cargo crime in the region. For the 33 percent

of crimes reporting a value, total losses for the year were €74,847,422 (CDN$105,019,915).

In addition to concerns over the number of crimes and the value of losses, TAPA EMEA says the use of violence by organized criminal gangs continued to grow last year with a 4.5 percent year-on-year increase, driven largely by 102 violent hijackings of trucks, notably in France, Italy and South Africa.

The figures show the top 10 cargo crimes in 2014 involved a combined loss of €32,471,000 (CDN$45,560,710). Overall, there were 15 thefts from facilities and vehicles during the year with losses exceeding €1 million as criminal gangs targeted everything from lottery scratch cards, cosDONE DEALS metics, consumer electronics, and clothing and Penske Logistics completed its planned acquisition of Transfreight North footwear to tobacco products, pharmaceuticals, food America, a provider of third-party logistics and supply chain solutions, from and beverage, car parts and tires, and cash.

Mitsui & Co, Ltd Financial terms were not disclosed. The acquisition adds new customers and associates as well as warehousing, cross-docking, and trucking capabilities to the Penske Logistics business portfolio along with 27 locations across the US, Canada and Mexico.

Kriska Transportation Group Limited (KTG) has acquired JMF Transport (1992) Ltée based in Valcourt, Quebec. JMF Transport will continue to be led by the current management team, including Stephan Brizard, who will remain GM of the company. JMF Transport currently operates 65 tractors and 152 trailers.

With the acquisition of JMF Transport, KTG now operates 535 tractors, 1,650 trailers, and employs 750 people, including owner operators.

Norwegian wholesaler Europris is investing in lithium-ion batteries supplied

by GNB Industrial Power, a division of Exide Technologies. The Norwegian company trialled GNB’s Sonnenschein Lithium batteries in part of its forklift fleet for six months, and lowered its operating costs significantly. Europris is one of Norway’s biggest discount chains, with more than 220 stores. The company has around 200 forklifts across five warehouses. Europris is replacing around 150 forklifts, with GNB providing lead-acid and Sonnenschein Lithium batteries, and a set of GNB chargers.

BT has selected the HighJump warehouse management system. Through the fulfilment of more than 40,000+ orders each day, BT Supply Chain manages the fulfilment, testing and repair of home hubs, TV set top boxes and devices for millions of end consumers; provides tools and equipment to tens of thousands of engineers and businesses; and undertakes inventory management across the BT Group businesses. The roll-out of the HighJump solution is planned to take 14 months.

Colavita USA has launched Robocom’s Warehouse Management System in conjunction with Robocom’s wholesale distribution ERP system, Next Generation. Colavita has been running Robocom’s Next Generation ERP Software since 1996.

Lynden International, a freight forwarding and logistics company, acquired Haas Industries on June 1 to e nhance its network and services throughout the US and Canada. Haas Industries began serving customers in 1989; it is now operating as Lynden International.

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Thorsten Neumann, Chairman of TAPA EMEA, said: “It is well-known that the majority of cargo crime still goes unreported and that is a situation industry has to change. In 2007, a European Parliament study on organized theft of commercial vehicles and their loads put the annual cost to business as €8.2 billion and attacks on the supply chain by organized criminal gangs have certainly increased since then. We also know that the true cost of loss, taking into account all of the factors that can result from a cargo crime, can be five times the cost of the actual stolen product.”

TAPA received information on 157 ‘major’ incidents in 2014 (thefts involving a loss over €100,000).

Continues on page 10 MM&D | June 2015

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RISK

MANAGEMENT SUPPLY CHAIN SCAN Continued from page 8 Germany and the UK stood out as reporting the largest year-on-year increases. Germany recorded the highest number of freight crimes in 2014, with a 42.5 percent growth over 2013, to 285 cargo thefts. With 175 cargo crimes, the UK saw the highest percentage growth among the top countries suffering incidents, climbing 98.8 percent on the previous year, to 175 crimes. The Netherlands, the main location for reported cargo crimes in 2013, saw a 9.7 percent drop over 2013 but still recorded 258 incidents overall.

Thefts from vehicles continued to account for the biggest proportion of freight thefts with over 500 crimes, representing more than 45 percent of all incidents recorded in 2014. Over the course of the year, there were also 193 thefts from facilities and 185 vehicle thefts. Food & beverage products were the most targeted cargo across the region as a whole, closely followed by consumer electronics.

“We know that organized gangs of cargo criminals are operating across our region, particularly within Europe, and we can clearly see that they are becoming

more daring and sophisticated in the way they target goods moving in the supply chain,” Neumann said.

“These are not always products with a high individual unit cost. They might just as easily be a high volume of lower cost goods that can easily be traded on the black market. Nonetheless, we are encouraged by the response from law enforcement agencies across the region, and by government ministries and the European Commission, which all recognize that this is a growing trend causing a significant economic threat and it must be addressed.”

TAPA’s analysis shows that 92.8 percent of the 1,102 cargo crimes in 2014 in the EMEA region took place in just 10 countries; Germany, the Netherlands, United Kingdom, France, Italy, Russia, Spain, Austria, Sweden and South Africa.

The data is collected by TAPA from its members, law enforcement agencies and credible media sources.

TAPA is helping its members achieve supply chain resilience by using its Security Standards, training, intelligence and networking opportunities to enhance their own in-house security programs. As a result, analysis shows that TAPA members are three times less likely to be victims of cargo crime.

Thorsten added: “We are working to ensure the wider implementation of TAPA Security Standards to protect high value, theft-attractive cargo in facilities and during the road transport process, and pushing for investment in more secure truck parks on trunk routes across Europe. TAPA EMEA is also committed to ensuring legislators understand the real cost and impact of supply chain crime.”

GLOBAL FOCUS Delhi and Schiphol sign MoU Delhi Airport and Amsterdam Airport Schiphol have signed a Memorandum of Understanding (MoU) to collaborate on, and promote, cargo business between them.

The MoU’s scope includes business promotion, product development, knowledge sharing, training, performance benchmarking and regulatory agency cooperation. The MoU is intended to enhance Delhi’s and India’s logistics capabilities at a global level.

“Amsterdam can be a global gateway for Indian goods destined for mainland Europe, as well as other markets including the US, Africa and Latin America; Schiphol offers 319 destinations in 95 countries,” said Enno Osinga, SVP Cargo at Schiphol.

“We will build a trade lane between Amsterdam and Delhi, making Delhi a hub and a global gateway. We will work with our friends in Delhi to take air cargo business on this lane to the next levels of business efficiency and operational excellence.”

He added that Schiphol sees Delhi Airport as one of the very few global airports with a robust cargo strategy in place, and it therefore regards Delhi Airport as a natural ally.

Amsterdam Airport Schiphol handled a record 1.63 million tonnes of cargo in 2014, up 6.7 percent from the previous year.

Pharmaceutical products from India form a growing element of its throughput. Delhi Airport handled 679,841 tonnes of cargo in 2014, up 12.24 percent over 2013.

Vanderlande buys Spanish company Vanderlande has bought Dinamic Industrial Business (Dinamic) as part of its ongoing strategy for growth in Europe and the US. The takeover of the Spanish company extends Vanderlande’s

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manufacturing capacity and adds a number of new products to its product portfolio.

Dinamic has had a longstanding working relationship with Vanderlande. A new company, Vanderlande Industries Santpedor SL, will be established in Santpedor, Spain to continue expanding the manufacturing facilities, and developing and selling new and existing products. These include the Scannojet tray return system—an automated security check system for hand baggage inspection—as well as its Beltcurve and extendable conveyors.

As part of the agreement, Vanderlande has also acquired Dinamic Manufacturing USA Inc, in Calhoun, Georgia, which will be renamed Vanderlande Manufacturing USA Inc. This facility will be developed into a comprehensive local manufacturing site.

Broekman Logistics to support Cryoport in Asia Broekman Logistics will support Cyroport’s Operations Center in Singapore. Broekman currently supports Cryoport’s European Operations Center.

Broekman Logistics provides secure, full-service warehousing facilities for distribution and shipping, as well as broker services covering the entire Asian region. In addition, Broekman is CustomsTrade Partnership Against Terrorism (C-TPAT) certified and an Authorized Economic Operator (AEO).

The arrangement between Broekman and Cryoport is inclusive of all solutions and support, beginning with order entry to order fulfillment, monitoring, quality testing, cleaning, and maintenance of Cryoport Express solutions. Central to Cryoport’s global solutions offering is the Cryoportal, the cloud-based operating platform where orders are entered and managed.

MM&D | June 2015

15-06-09 12:49 PM

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SUPPLY CHAIN SCAN

A glass act Schenker moves unique squash court for PanAm Games Emily Atkins

A

s the official logistics supplier to the PanAm Games coming to Toronto this summer, Schenker of Canada Limited has made a few interesting moves.

Among them, this glass squash court, which will be centre-stage in the Direct Energy Centre, one of five competition venues on the CNE grounds. It converts

Need news NOW?

from singles to doubles play and is the only one of its kind in the world.

The court comprises 91 glass panels, a steel frame, aluminum brackets and a double wooden floor, and weighs between 13,750 and 14,250 kilograms, depending on the configuration.

The court was shipped to Toronto from BC, where it was most recently used at the 2015 Canada Winter Games. Previously, it travelled from Germany to Glasgow for the 2014 Commonwealth Games. It was then shipped to Toronto and used for the 2014 Women’s World Team Squash Championship (pictured) in Niagara-on-the-Lake, Ontario.

After being stored at Schenker’s warehouse it will be assembled over six or seven days at the Direct Energy Centre. It requires the use of forklifts, and pallet trucks to unload the pieces, and scissor lifts to complete the assembly.

Once assembled, the court is used in a darkened venue, with lighting only over the playing area. This prevents the players from being able to see out, but allows the spectators to see all the action.

This feat is made possible through the use of glass that is printed with two layers of dots. A layer of dark dots and a layer of bright dots combine to create an optical illusion that prevents those inside from seeing out and allows those outside to see in.

Squash is expected to b e exciting in Toronto; Canadian players have won a gold in every PanAm Games to date.

MM&D

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FOR UP TO THE MINUTE NEWS, FOLLOW US ON TWITTER @MMDONLINE, OR SUBSCRIBE TO OUR TWICE-WEEKLY E-NEWS AND HAVE IT DELIVERED STRAIGHT TO YOUR INBOX. CMHDS presents donation—$8,000 raised at golf tournament donated to Canuck Place Children’s Hospice http://tinyurl.com/cmhds-donation Walmart Canada to expand hydrogen use in Alberta DC— 124 fuel cells for new High Velocity Distribution Center building in Balzac, Alberta http://tinyurl.com/walmart-hydrogen Some GTA carriers considering PanAm surcharges— OTA survey responses indicate the trucking industry is anticipating heavy disruptions to their normal service

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levels due to PanAm congestion http://tinyurl.com/panam-surcharges Battery transport rules confirmed for July 1—Transport Canada addresses concerns on new lithium battery regulations, affirms compliance deadline http://tinyurl.com/battery-transport Beta testers needed for skills matching tool The Canadian Supply Chain Sector Council needs volunteers to test online skills assessment tool http://tinyurl.com/cscsc-beta-testers

MM&D | June 2015

15-06-09 3:28 PM

SUPPLY CHAIN SCAN BENCHMARKS ABF Systems Inc of Boucherville, Quebec has been recognized as one of Jervis B Webb’s top distributors. ABF Systems received the award at the 32nd annual Webb Chain Conveyor Distributor/ Integrator Conference in early April.

Webb’s Distributors/Integrators provide Unibilt enclosed track conveyors, Unibeam I-Beam conveyors, Webb Power & Free conveyors (P&F) and chain conveyor parts. They incorporate Webb’s conveyor products into solutions for companies in a wide variety of industries. Webb established its Distributor/Integrator program in 1967.

This year, the champion will be chosen based on the degree to which safety has improved since the previous year.

KION North America Corporation, a member of the KION GROUP AG, the world’s second largest manufacturer of industrial trucks, won first place in the KION Group’s 2014 cross-brand, interregional safety competition. More than 40 groups from around the world took part in the first corporate competition of its kind.

The purpose of the KION Group Safety Championship was to raise awareness, improve the management and employee safety culture and to reduce unacceptably high accident rates.

The 2015 KION Safety Championship is already well underway.

AMETEK Prestolite Power, a provider of industrial battery charging and fleet management solutions, has met the requirements conforming to ISO 9001:2008, a set of worldwide-accepted standards for quality established by the International Organization of Standardization (ISO) for the manufacturing industry.

By being ISO certified, AMETEK Prestolite Power complies with various international standards, such as product quality, environmental friendliness, safety, reliability and economy. ISO 9001:2008 standards are designed to give consumers confidence when buying products from a manufacturer.

CEVA Logistics has awarded its annual Global Supplier of the Year trophy to the Spanish supplier Alfaland, a provider of warehousing equipment.

This marks the second time that CEVA has held the annual event in Spain. This year’s event in Madrid was hosted by CEVA’s chief procurement officer Simon Boggis, alongside Marco Galbusera, managing director of CEVA in Iberia.

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SUPPLY CHAIN SCAN MOVERS + SHAKERS Lisa Vegso has been promoted to general manager, Canada for Peco Pallet. She reports directly to Adrian Potgieter and will have responsibility for sales, service and operations. Vegso will work with the service and operations teams to lead depot, transportation and distribution strategies in Canada, including acquiring and expanding depot services.

Peco also plans to hire a new sales person for Eastern Canada, who will report to Vegso.

Katherine Mouzenian has joined Mississauga-based TSI Group Inc as its new research and marketing consultant. Joining the TSI team with several years of experience in marketing and communications in the not-for-profit sector, Katherine comes to us from Supply Chain Management Association Ontario (SCMAO), where she served as communications coordinator for almost two years. She also served as marketing and communications specialist for Supply Chain & Logistics Association Canada (SCL Canada) for three years.

VersaCold Logistics Services appointed Mark Dienesch leader of its sales and marketing customer solution team. Dienesch joins VersaCold from iMD Health where he held the role of COO.

Mark Dienesch

Previously he was vice-president sales, National Fast Freight and held progressively senior roles with Consumer Impact Marketing (now Mosaic Marketing) and GE Capital.

Mark holds an Honours BA from the University of Toronto and is currently completing his CCLP designation from the Canadian Institute of Traffic and Transportation.

Mark Erceg has been appointed executive vice-president and CFO of Canadian Pacific. Erceg joins CP from Masonite International Corp where he had been executive vice-president and CFO since 2010. Erceg brings over 20 years of financial management experience. He holds a bachelor’s degree in accounting and an MBA in finance from the University of Indiana.

MOL (Canada) Inc is pleased to welcome Allison Watson as the new sales and customer service manager, working out of Halifax, Nova Scotia. He will report to Tim Harrington, vice president, Canada, and will focus on Eastern Canada and sales activities for Atlantic Canada supported by colleagues in Mississauga and in

18th annual SCMAO conference

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SUPPLY CHAIN SCAN

Lombard, Illinois. Watson joins MOL after 27 years at NYK Line (Canada) where he served as a district manager of sales and a district manager responsible for the Halifax branch office.

Eric Simard is now a director of the Montreal Port Authority. Simard was appointed to this office by the City of Montreal for a three-year term ending March 23, 2018. He replaces Claude J. Melançon, who has served on the Board since March 24, 2012. Simard is a partner with the law firm Fasken Martineau and practices law as a civil and commercial litigant. Simard is a member of the Quebec Bar, the Canadian Bar Association and the Board of Trade of Metropolitan Montreal.

Antonio Fondevilla is now executive vice-president responsible for CEVA Logistics‘s global automotive sector. The automotive sector accounted for 24 percent of the company’s annual revenue in 2014. Fondevilla has more than 20 years of supply chain management and automotive logistics experience. He joined CEVA in 2008 and most recently served as vice-president, global key account management, as well as the company’s interim leader of the European automotive sector.

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Intelligrated has appointed John Sorensen senior vice-president and general manager, Lifecycle Support Services. Sorensen has more than 18 years of experience and a track record of managing large-scale aftermarket service and support organizations. He oversees all Intelligrated aftermarket services from installation and training to maintenance and technical support.

Before joining Intelligrated, Sorensen spent most of his career at Honeywell Process Solutions, working as a director and regional manager before serving as general manager of lifecycle services and solutions.

Tim Webb has been promoted to National Sales Manager at Hyundai Forklift. Webb will direct the district sales manager team, as well the overall sales efforts for Hyundai Forklift in the US and Canada. He will also continue to lead the company’s product development, training and pricing efforts.

Webb brings more than twenty years of material handling industry experience and perspective to his new position. He has been an integral part of the growth of the Hyundai Forklift brand for the past six years, most recently in the role of product manager.

15-06-09 12:49 PM

From

pains to

gains When Italpasta brought SSI Schaefer in to install a new automated packaging solution in its plant, the company’s productivity doubled and many more benefits followed.

Mary Del Ciancio has the story.

I

talpasta is a premium manufacturer of pasta in Canada that has enjoyed continued growth since it was founded in 1989. Today, the company runs like a well-oiled machine from its manufacturing plant on Nuggett Court in Brampton, Ontario.

But this wasn’t always the case. There was a time when an inefficient packaging process caused major problems for the company.

Packaging couldn’t keep up Historically, packaging was a bottleneck of the company’s production. At times, Italpasta even had to stop production because it was producing more than it could package. Employees couldn’t keep up because, while the manufacturing line was fully automated, packaging was a semi-automatic operation.

Once the pasta was packaged and placed in cases, all of the cases were handled by an operator—manually building pallets and applying a handwritten label to the finished pallet. Then a forklift driver would pick up the pallet and deliver it to the shrink wrapper before moving it to the shunting area.

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And with 21 packaging stations—eight in operation at any given time that needed to be replenished with empty pallets—it was a busy process with operators (at least three at every station) and forklift drivers working near each other in a small, congested area.

“We needed to go to the next step in automation, especially on the packaging side,” says Riccardo Bordignon, Italpasta’s plant manager. “Since our plant was, on the production side, completely automated, the missing connection was the packaging and the palletization system.”

In addition to being a bottleneck, the packaging process opened up the opportunity for increased error, as well as injury, due to the manual lifting and the close proximity of the operators and forklifts. And because empty wood pallets were stored near the production area, food safety was also a concern.

The packaging process needed to be addressed for the company to enjoy continued growth and success.

The problem was, the facility’s footprint was too small to accommodate an expanded packaging area, which at the time only accounted for one-third of the comMM&D | June 2015

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ing plant and the finished goods holding area located in the building next door, so the proposed solution could seamlessly extend the packaging process.

Once construction of the 50-foot bridge was completed, two case-conveyor lines were added to connect the 21 lines of packaging to the case buffer area, where Italpasta sorts and stages cases for palletization.

The solution starts on the production side, after the product is boxed and labelled with one of the company’s 750 SKUs. At this point, Schaefer’s software—WAMAS Material Flow Control (MFC) system—reads the barcode of the case, recognizes what its weight is supposed to be, which pallet it will be on, how many cases per layer and how many layers that pallet will be.

That case moves along the conveyor to another station, where it is weighed. If it’s not within its preset weight, it is rejected. If it is within the range, it moves along the conveyor, through the bridge, to the sortation system where the case label is read again.

The system knows how many cases are available for that particular SKU, and when a preset number is reached, the cases are sent to one of four automated palletizing stations where machines palletize the cartons and auto shrink wrap them, apply SSCC/ GS1-128 code labels and prepare them for storage until they are shunted to the distribution centre.

High-tech equipment pany’s production area—too small by industry standards. Italpasta needed more space.

Hello, neighbour Right next door to Italpasta on Nuggett Court was an office for SSI Schaefer, one of the world’s largest solutions providers and components manufacturers, offering automated systems, storage and distribution, materials handling and logistics software.

SSI Schaefer was only using the office space in its building; its warehouse space was available. The two companies worked out an agreement that would allow Italpasta to use that space for its finished goods holding area (though Italpasta now owns that building).

At the same time, Italpasta determined that SSI Schaefer technology was the best solution to its packaging area bottleneck. The technology would help to automate and restructure the packaging process, move material from one building to the other, and work seamlessly with the current manufacturing process, all with minimal impact on operations.

Bridging the gap To implement the solution—which included conveyors, buffers, palletizers, elevators, scales, label applicators and software—Italpasta had to bridge the manufacturwww.mmdonline.com | June 2015

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One of the things that attracted Italpasta to this solution was the sophisticated equipment.

The conveyors used at Italpasta are Schaefer’s FT+, a lightweight, modular and scalable intelligent bin conveyor system. The majority of them are accumulating roller conveyors.

“Depending on the customer requirements, the conveyor system layout is custom-designed to fit exactly into a project and direct the material flow through the facility,” says Roger Campbell, service manager Canada, for Schaefer System International, Ltd. The accumulating conveyors act as a small production buffer, allowing Italpasta’s machines to function even if there is a delay in downstream production.

“Should a conveyor line be required to stop due to such a downstream delay, the product carriers will accumulate as closely as possible to bring the product as far away from the upstream feed as feasible; therefore allowing the machines to continue production output for a while,” Campbell explains.

The layout of the conveyors at Italpasta was designed to m atch the

The infeed point.

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L– R: Frank DeMichino (Italpasta COO), Riccardo Bordignon (Italpasta Plant Manager), Carmen Noori (SSI SCHAEFER VP & Controller) and Joseph Vitale (Italpasta Owner & Founder)

Roller-Switch Diverter (left) and the Interior Bridge (right).

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production output of the machines, streamlining the material flow while merging at the right points to avoid producing throughput overcapacity.

A particular challenge SSI Schaefer needed to consider, says Campbell, was the unique quality of the conveyed product—ie, certain pasta, like penne, spreads out quite a bit if it spills. The FT+ roller conveyors are lightweight and do not have many surfaces where product spillage could fall.

With the roller conveyors, if a spill occurs, the majority of products will fall through the conveyor to the floor, where they can be cleaned up. The belt conveyors, however, are sealed, so if a product spill occurs, it conveys the product to the next roller conveyor, where it drops the spilled product to the ground to be cleaned up. The belt on these conveyors does not have sufficient clearance to the plate below, so there is no risk of product getting wedged below the conveyor belt.

Another piece of the high-tech solution is the case palletizers—four of them. These are from VonGAL Palletizers, now Premier Tech Chronos.

Robert Wallace, client services director with Premier Tech Chronos, was involved with the installation, and says four SPLXMK2 case palletizers were chosen for this application because that model is a “beast that would handle most anything you threw at it.”

The machine, he says, is user-friendly and can handle a wide range of products.

“This machine had to handle 300 patterns, roughly 1,000 different SKUs and it had to handle three different pallets. And we did all that automatically,” he explains.

For his part, the challenge of this installation was that two of the palletizers had to be able to handle product that had been rotated on its side. Using a small, mechanical, belt-driven device called an “upender”, the palletizer is able to turn the cases up on end, convey them into the machine, rake them, form a pattern, put them on a pallet and discharge it out of the machine.

The palletizers are designed to handle up to individual layer sizes of 500 pounds, and load weights of 3,000 pounds. For this application, it had to perform at roughly 84 loads per hour—a key requirement the palletizers met with ease.

Another important part of the solution is the WAMAS software, which ties the system together and is able to handle the high speed.

“The most important part of the software is actually the sortation system where every case entering the system is being scanned at quite a h igh speed,” Bordignon explains. “This system can handle 5,400 cases of finished product per hour...[and] within that speed is able to divert and sort the different product coming in through the conveyor to different buffers, handle the amount of cases at the buffers, control which palletizer to send them to when the preset number of cases for that particular SKU is reached on the buffer, and it handles all of the logistics of the system.”

All this, and it produces reports, too, so the company can get a clear view of its production.

Major gains Since the project completed in August 2011, Italpasta has seen many benefits. First and foremost, the packaging bottleneck is non-existent.

“We eliminated that bottleneck and we are able to produce more because the efficiency went up,” Bordignon says.

The company went from packing 800 to 900 pounds per person-hour before the installation, to packing 1,800 to 2,000 pounds per person-hour—effectively doubling its productivity.

MM&D | June 2015

15-06-09 2:53 PM

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The SPLXMKII palletizer machine with cases on the infeed liveroller and a single layer of product on the slide plates.

Italpasta has also increased its footprint, which allows them to increase capacity. With the additional space, packaging now accounts for about half of the facility.

Furthermore, by not stopping production to wait for packaging to catch up, peak performance capacity has increased.

“Before we were peaking at maybe 1,000 to 1,200 pounds per man-hour. Right now we are peaking 2,200 to 2,400 pounds per man-hour,” Bordignon adds.

In addition, Italpasta reduced 170 person-hours per working week—that’s seven people per shift on a threeshift operation. Bordignon stresses that no one was fired.

The packaging operation historically had a high turnover because it was a difficult job in a fast-paced environment. The company just stopped hiring, and now it’s only the machine operators who work in that area.

And, because the system is automated, turnover has also declined. Another bonus: employee skill level has improved by transitioning from manual labour to more skilled work.

The company has also noticed a drastic reduction in errors now that the packaging operation is automated (though no numbers are available). Cases are no longer put on the wrong pallet, and tags (no longer hand-written) all have the appropriate code for that particular product.

Now that the pallets and the forklifts are in the finished goods holding area, Italpasta has eliminated the company’s earlier employee and food safety concerns, and reduced congestion in the packaging area.

And the company doesn’t have any loss of working hours related to product handling and pallet moving, because there isn’t any manual product handling and pallet moving. This, in turn, has lowered the costs associated with employee compensation.

The solution is so efficient—now packaging 5,400

cases per hour—they will be adding three more packaging lines to the palletization system before the end of the year.

The system is an overall success, and provides Italpasta with many additional benefits the team hadn’t even thought of. More than anything, though, the system gives Bordignon confidence that every case of pasta is going where it is supposed to go.

“What it’s done for us,” he says, “is peace of mind.”

MM&D

PROJECT HIGHLIGHTS System requirements: • The proposed solution needed to be turnkey and dynamic.

• It had to meet the company’s current packaging maximum output, plus five years of growth.

• Cases had to be checked for weight and rerejected if they didn’t meet a preset value.

• The system had to be able to read and apply information on GS1-128 barcodes.

• The equipment had to be able to accumulate cases from multiple lines to form pallets.

• Only one SKU per production line per shift on a pallet.

• The system must be able to trace from which production line the product was produced.

Building size: • Manufacturing area approximately 90,000 square feet • Packaging area approximately 30,000 square feet • Staging/holding area approximately 40,000 square feet System components: • Conveyor connected to 21 packaging lines • Merging and elevating to second storey level • Two conveyors crossing a bridge from manufacmanufacturing/packaging to staging/holding area • Two five-lane buffers • Conveyor sortation loop • Four case palletizers • Case conveyor and pallet conveyor • Handling systems include: automatic case/layer palletizers, scales, label print and apply systems, elevators, sortation • Software solution: WAMAS Material Flow ConControl (MFC) system Productivity stats: • Packages up to 5,400 cases per hour • Packages 1,800-2,000 pounds per person hour

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MM&D | June 2015

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Manage inventory like a big-box store

By Nancy Harris

E

ffective inventory management is the cornerstone of any successful business operation, big or small.

But with more limited cash flow, storage space, and a smaller customer base, small businesses have much less room for error. And with increased customer expectations, small businesses are expected to have a wider variety of products available at all times—or risk losing a customer to a willing competitor.

When done right, inventory management can curb costs, improve the bottom line and enhance customer service. Big box retailers have mastered inventory management and small businesses can take a page out of their book in an effort to better manage their own inventory and increase efficiency, even if you don’t have a big fancy inventory management system at your fingertips.

Keep detailed accounting records The first step to effective inventory management is maintaining up-to-date accounting of the inventory you have on hand at any given time. One of the most effective ways to track inventory is using a perpetual inventory system that tracks inventory purchases, allowing your business easy access to up-to-theminute inventory information.

Many small businesses are inclined to use paperbased systems or spreadsheets to handle their accounting and inventory, in fact, according to the 2015 Sage State of the Start-up Survey, 51 percent of Canadian start-up owners say they do their accounting manually on paper or on spreadsheets on a home grown database system.

As an alternative, they should be considering accounting software instead. Accounting software can help simplify the process by allowing you to easily track inventory, keep tabs on inventory levels, establish a preferred suppliers list that identifies previous pricing for materials or goods purchased, and forecast sales so you can plan ahead and be aware of customer buying patterns.

Take a yearly physical count No matter how meticulous your inventory management records are, they often don’t account for loss of inventory due to theft, waste or breakage. A yearly physical count of inventory will help ensure your inventory numbers are accurate and also help identify ways to improve your ongoing inventory management tracking. www.mmdonline.com | June 2015

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Ask an accountant Your dealings with an accountant shouldn’t be limited to tax time. They can help you year-round by interpreting and analyzing your inventory data to help identify ways to improve inventory management to reduce costs, increase customer satisfaction, and identify areas for growth.

So once you have the basics of inventory under control, what are some more advanced inventory management techniques and processes?

Think big data & analysis Big data isn’t just for big companies. A number of new tools and processes can harness the power of big data to further optimize inventory management.

While big box stores have mastered the power of big data and analysis, there are a number of things that small businesses can do as well.

Using big data to help with inventory management can let you predict customer behaviour and be prepared for any sort of influx or change in business as a result of those predictions. This data can also help guide your business decisions, whether it’s offering different products or ramping up customer service.

How can you start using big data and analysis to improve inventory control? First, look at the data you already have and how you can best use that information to improve inventory, reduce costs and meet customer demand.

An advanced accounting solution can help you analyze, diagnose, and identify seasonal shifts in demand for every item on your inventory; patterns for large customer orders; when you are likely to run out of stock or incur an overage; lost sales; items that are moving slowly enough to warrant draw downs; unsellable items; and, patterns of price reductions and volume discounts from suppliers.

Inventory control is both a science and an art. By mastering the basics and beginning to implement some advanced big data and analysis techniques big box stores use, small businesses have the potential to significantly increase their competitiveness and profitability.

MM&D Nancy Harris is senior vice-president and general manager, Canada, for Sage North America. Her responsibilities include driving the strategy and day-to-day operations for the small business portfolio.

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15-06-09 11:37 AM

Why Target failed in Canada

By Paul Noël

T

aking your retail business international is no easy feat. You face a new competitive landscape, different geographic, supply chain and cultural challenges, in addition to an entirely new set of customers.

Because all of these aspects factor into your potential success, it’s crucial to do your due diligence before diving in.

Take Target for instance.

Instead of slowly expanding into Canada—its first international expansion— by opening a f ew stores initially, the retailer opened 124 new stores here within months. Look where Target is now—pedaling backward just a few short years after its initial move.

Target isn’t the only US retail giant to struggle across the border. Sears announced in October its plans to sell a big stake in its Sears Canada unit in order to keep profits afloat. Electronics retailer Best Buy was forced to close a slew of its Canadian stores two years ago, and has done it again with Future Shop’s recent closure, and Big Lots had to pull the plug on all of its Canadian locations in late 2013.

Clearly, Canada expansion isn’t as “easy” as it seems.

So, where did all of these experienced retailers go wrong?

It’s easy for a company to go into a Canadian expansion project thinking it will play out like expansions into other US markets, but this isn’t the case. While the US and Canada are geographical neighbors with many things in common, there are still major differences to account for.

If US companies hope to make a splash here, they need to plan ahead and fully understand the market. Here are four tips for US companies looking to expand in Canada:

Get a sense of your target market A company must first and foremost understand the needs and expectations of its target customers here.

As with any country, customer preferences will vary depending on what region of the country you’re in.

This is even truer in Canada due to its daunting size and dispersed population.

Choose store locations wisely If store locations are difficult for customers to get to or are located in areas that don’t generate much traffic, chances are the stores won’t incur much foot traffic either. Location is also incredibly important for logistics 26

03MMD-Target.indd 26

purposes. Stores in less than ideal locations present distribution challenges for company suppliers who need to constantly replenish merchandise.

Target bought more than 120 stores from discount retailer Zellers to jumpstart its expansion. However, most of the stores were difficult to access for both customers and distributors. While the Zellers deal seemed like an optimal opportunity for Target to quickly and affordably break into the Canadian market, Target executives should have done their homework and looked into all aspects of the stores besides their price tag.

Slow and steady wins the race It’s better to enter the market at a gradual pace rather than jump right in and open a large number of stores at once. Not testing the waters first prevents you from being able to learn the likes and dislikes of the market, as well as control any potential loss. Important details also slip through the cracks when trying to operate and maintain too many stores right from the get-go.

Target opened more than 100 stores over the course of a few months. However, this led to many supply chain issues and wreaked havoc on Target’s inventory planning. Barcodes on products going to their warehouses didn’t match the numbers in its computer system, causing shelves to come up empty and customers to leave disappointed.

Scope out the competition No matter where you go, there will always be competition. And it’s important to know how your company stacks up against your new competitors before making any moves. There are fewer sizable retailers in Canada than in the US, but the Canadians are already familiar with the market and geographic landscape.

Target made the mistake of going in blind. Not only were its shelves empty, but its prices didn’t match up to customer expectations or the market standard.

Target was competing against Walmart (which has been here since 1994), as well as Costco. Both offered much lower prices than Target and fully stocked shelves. Needless to say consumers quickly caught on and forgot all about Target.

Target and countless others have tried their hand at the Canadian market and have come up short. This just proves how thorough retailers need to be before making any move.

MM&D Paul Noël is senior vice-president of procurement solutions at spend management and procurement solutions provider Ivalua.

MM&D | June 2015

15-06-09 12:34 PM

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The business case for

supply chain

sustainability

By Duncan Wilson

G

one are the days when productivity was the main, if not sole, measure of supply chain excellence.

While efficiency is essential in our industry, a demonstrated awareness of and meaningful attempts to reduce environmental impacts are now an equally important aspect of successful supply chain operations.

Aside from being the right thing to do, incorporating sustainable practices into supply chain operations makes good business sense.

Organizations that effectively manage environmental impacts, and are receptive to the concerns and interests of local communities, enjoy greater levels of public trust, stakeholder confidence and long-term stability. Those that don’t face increasing risk and uncertainty that can threaten their bottom line and, ultimately, the viability of their business.

When considering the pressures, uncertainties and risks that exist now–and even more so in the future–it makes the question of how to sustain value creation all the more important. Which is why sustainability is an increasingly important driver of long-term value for businesses across the supply chain.

Planning The first step towards sustainability is defining what it means for your business. It starts with engaging your organization and key stakeholders—from industry, government and local communities—to identify common ground and build a collective vision for the future.

For example, our Sustainable Gateway Definition Initiative – an ambitious vision for a world-class sustainable port in Vancouver – was developed with extensive input from our stakeholders. As was our Port 2050 scenario planning process, which examined a variety of possible growth trajectories and what 28

03MMD-Sustainability.indd 28

each would mean for port operations.

This type of proactive planning and long-term thinking helps reduce uncertainty for our operations, as well as those of our customers and stakeholders.

It also ensures our organization will be in the best position possible to remain competitive by leveraging our assets, playing to our strengths and mitigating potential risks.

Programs Sustainability programs can and should benefit both the environment and business.

Programs must strike a delicate balance of reducing environmental impacts while enhancing business productivity. For instance, through our Smart Fleet Strategy, we have outfitted all trucks licensed to operate at the port with GPS units and are developing a common reservation system, meaning trucks will operate more efficiently and spend less time idling in traffic.

It is also important to carefully weigh the financial burden of any program. In 2015, we were the first port in Canada to address diesel emissions from operating equipment. Our Non-Road Diesel Emission Program is aimed at reducing diesel particulate matter associated with terminal operations and cargo handling equipment.

The program instituted a fee for the operation of older, dirty equipment. However, before launching it, we undertook extensive financial modeling to ensure fees would not cause undue harm to a terminal operator’s bottom line.

As some environmental programs will involve upfront costs, one way to encourage participation is through incentives. Our EcoAction program, which reduces emissions from ships, offers operators up to a 47 percent discount on harbour rates for vessels that go beyond required emission reduction levels. More than 500 ships participated in MM&D | June 2015

15-06-09 2:38 PM

our EcoAction program this past year, which was the equivalent of removing approximately $1 million from Port Metro Vancouver’s revenue stream— a cost we are ready to absorb because the risk of not addressing environmental impacts is simply too great.

Businesses that produce environmental impacts, as many in the supply chain industry do, only need to consider the potential risks of not taking action, such as being the target of collective action, legal fees or operational disruptions, to immediately see the business case for sustainability.

Relationships Fostering respectful and mutually beneficial relationships with local partners is also an essential component of supply chain sustainability. Without their support, our industry would be unable to operate in and around local communities.

For a relationship to be respectful, businesses need to consider and, where feasible, accommodate the input of local stakeholders. For supply chain operators, that can mean reviewing operational impacts on traffic flows and noise levels. To make the relationship beneficial, businesses should seek out opportuni-

ties to give back and tailor their support to the needs of local communities.

Transparency is also critical to building trust that forms the bedrock of these relationships. Businesses that demonstrate accountability enjoy greater public acceptance. An example is an annual sustainability report, which provides the public with a comprehensive overview of operational, environmental and social performance.

Lastly, healthy, productive relationships require sustained engagement. Businesses should maintain a presence in key local communities. Some options include assigning permanent staff and office space, participating in relevant committees, as well as holding or attending local events that provide an opportunity for both official and unofficial community consultation.

Sustainability is not easy. It means thinking years, if not decades, in advance. It often demands forgoing short-term gains in exchange for long-term benefits. But incorporating sustainability practices today is what will ensure there is a business to grow tomorrow.

MM&D Duncan Wilson is VP corporate social responsibility, Port Metro Vancouver

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DATA CAPTURE

News and products for your inventory and asset tracking needs Digi-key carries Avery Dennison RFID Distributor Digi-Key Corporation, has added Avery Dennison RFID tags to i ts portfolio of electronic components.

Avery Dennison has delivered over four billion RFID inlays to users in a variety of industries such as retail, manufacturing, healthcare, supply chain, and many others.

Handy railcar reader Janam Technologies LLC launched its XM2-RFID for Rail mobile computer. A rugged, handheld RFID reader, the XM2-RFID for Rail offers best-in-class read range and battery life and is the first fully integrated handheld computer to d eliver the ability to r ead Automatic Equipment Identification (AEI) RFID tags to the palm of the hand.

The XM2-RFID is specially-designed to read the AEI RFID tags required on all railcars in North America and widely used globally, allowing rail and intermodal companies to track and monitor equipment effectively.

The XM2-RFID for Rail mobile computer reads AEI tags from at least one meter away, and after five hours of continuous use and more than 40,000 tag reads, a customer’s unit recently still had 20 percent capacity remaining in its battery.

ate with SAP Auto-ID Infrastructure for RFID tag writing and RFID label printing from within SAP solutions.

SATO’s new CL4NX thermal label and RFID encoding printer is the first of SATO products to include this printer interface, with other products scheduled to follow. With the CL4NX printer, users can print directly from their SAP applications without any middleware or additional programming. This significantly reduces time and offers customers a scalable, cost effective, rapid way to print barcodes and RFID labels within their SAP solution-based environments.

Siemens has better memory Siemens is expanding its RFID product range, Simatic RF600, with new transponders that have greater memory capacities and a compact mobile read/write device.

With a capacity of 4 KB, the new UHF RFID data carriers, RF622T and RF622L, allow large volumes of data to be stored on tagged objects as well as facilitating rapid access to them. They are suited to use in distributed configurations for example in the fields of production control, asset management and logistics.

Growing with the Granits Honeywell’s Granit family of scanners has grown, with the addition of the1980i wired and 1981i wireless full-range area-imaging scanners. Capable of reading both 1D and 2D barcodes from six inches to 50+ feet away, these additions to the Granit family enable maximum operator productivity in harsh environments.

Granit is rated IP65 and can withstand 5,000 tumbles from 3.2 ft (1 m) and 50 drops to concrete from 6.5 ft (2 m). Bluetooth wireless technology provides freedom of movement up to 100 meters (330 feet) from base with the 1981i, and reduces interference with other wireless systems.

SAP-SATO printer integration SATO’s XML-Enabled 4.0 printer interface has achieved certified integration with SAP Auto-ID Infrastructure 7.1. The SATO printer interface has proven to interoper30

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Siemens is also launching the new mobile handheld reader, Simatic RF650M. This enables reliable identification of a large number of transponders at a range of up to three metres. The device is specially designed for logistics and service applications.

It has a colour touch display with a resolution of 240 x 320 pixels, a rugged keypad and a large trigger button. Users can fold down the RFID antenna. The device is small enough to be carried in a pocket and it weighs only 235g, including the rechargeable battery, to allow fatigue-free use over long periods. The MM&D | June 2015

15-06-09 12:34 PM

DATA CAPTURE

battery has a life of up to nine hours, ensuring power for at least one shift. Users can also create their own applications for the device based on the Microsoft Windows Embedded operating system.

Barcode sled KOAMTAC, Inc released a barcode sled solution for the Samsung Galaxy Tab Active as the newest addition to the KDC sled line for smartphones and tablets. The Galaxy Tab Active sled has integrated the KDC20, a miniature 1D laser Bluetooth barcode scanner, and KDC30, a miniature 2D imager Bluetooth barcode scanner, as a detachable configuration to maximize business operations.

The typical business tablet requires diverse features such as water/dust/drop protection, security, flexibility and productivity. The proposed challenge to find a tablet with high performance barcode scanning capability has found a solution.

The KOAMTAC Galaxy Tab Active Sled has two scan buttons, in addition to the scan button on KDC20 and KDC30 which enables the user to scan a barcode while holding the tablet with both hands. Simultaneously, the

user may use the KDC20 and KDC30 as a Bluetooth barcode scanner.

KOAMTAC plans to add the PCI compliant detachable Bluetooth EMV/MSR/NFC terminal as a mobile POS companion to the Galaxy Tab Active Sled to support the point of sale (POS) application in 2Q 2015.

KOAMTAC’s sled design protects the user’s investment by providing an easy upgrade option. The future of the EMV/MSR/NFC option will provide full transition options with innovative KTSync data collection and application generation tools.

Are You Getting Enough Greens?

Find out by participating in the 2015 Annual Survey of the Canadian Supply Chain Professional!

Watch your inbox for the Survey invitation, soon!

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15-06-09 3:41 PM

PRODUCT FOCUS: PALLETS & ACCESSORIES 1. Universal walkie pallet attachment

The PalletPal Walkie from Southworth Products mounts to any standard electric walkie or walkie/rider pallet truck. Built on the design of PalletPal Level Loaders, the PalletPal Walkie uses a calibrated spring mechanism to automatically adjust the height of a pallet load as boxes are added or removed. The top layer of the load is always at a convenient working height, allowing employees to load or offload items with no bending, stretching or awkward ergonomics.

No tools are required to mount the PalletPal Walkie on a pallet truck. The specially designed, reinforced baseframe has generous flared openings at the end of each fork channel to receive the forks of all standard electric walkies for easy pick-up and drop-off without binding.

Once loaded onto the pallet truck the PalletPal walkie is ready for use with no adjustments or modifications. Whether under load or empty PalletPal Walkie will not slip on the pallet truck forks.

Typically a worker picks orders until a pallet is full and then drops the load, including the PalletPal Walkie, in a staging area where the pallet is loaded onto a truck. The worker then picks up another PalletPal Walkie and repeats the process.

The platform accepts any type of pallet or skid including GEO and half pallets.

Platform recesses and non-skid base treads allow workers to step up close to the load to minimize reaching across the pallet.

2. PECO now offering half pallets in Canada

PECO Pallet, Inc is now providing half-size (48- x 20-inch) wood block pallets for its Canadian customers. Pallets can be shipped within 72 hours of order.

The half-size pallet is popular with leading Canadian retailers because its smaller footprint makes it ideal for in-store merchandise displays and end-cap promotions. Grocery and consumer goods manufacturers can build floor-ready product displays on the half-size pallets and ship them directly to retailers to be displayed in stores.

PECO’s distinctive red block pallets are used to ship CPG products and fresh produce across North America. Its distributor network now covers over 90 percent of Canada’s grocery retailers, including Loblaws, Walmart Canada, Sobeys, Metro, and Costco.

Once pallets are empty, they are picked up and returned to a PECO depot, where they are inspected, cleaned, and repaired as needed before being reissued. This sustainable practice helps to reduce waste, cut costs, and improve safety and efficiency throughout the supply chain.

The new PECO half-size pallet is a full four-way, multiple-use block pallet built of responsibly forested North American timber.

3a

Lifdek blanks, ready for assembly.

3 Corrugated pallets

Lifdek Corporation, a developer of corrugated paper pallet technology, is launching its site-assembled corrugated pallet system.

Lifdek pallets are constructed from two flat blanks that easily fold together without the use of adhesives or staples, are recyclable and are received and stored flat, thus reducing incoming pallet freight and pallet storage costs.

Lifdek has started production of its pallet assembly machines with Ofab Inc, a contract equipment manufacturer in Ocala, Florida. Lifdek has licensed Unisource Worldwide, Inc, to distribute corrugated products to be used with the Lifdek machines in the US and Canada.

According to the company, its corrugated pallets offer cost savings through reduced weight of freight, fewer forktruck moves and less space required for empty pallets, the option for direct shipping to stores and more.

3b

Assembled Lifdek pallets.

1

Southworth’s PalletPal Walkie

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MM&D | June 2015

15-06-09 11:34 AM

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15-06-08 2:23 PM

THE LEADING EDGE

Fail faster for success M Ross Reimer

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any of us have a si gnificant aversion to failure.

From an early age we are encouraged to be careful and avoid making mistakes. Those of us with children can probably think of numerous times we’ve encouraged our kids to take the safe route and avoid risk. I know of one person who decided a hockey helmet was in order for her toddler who was learning to walk!

This thinking becomes part of who we are and dramatically affects our lives, both personally and professionally.

But maybe a better way to long-term success is to embrace failure.

Thomas J Watson Sr led IBM from 1914 to 1956 as chairman and CEO. Under his leadership the company became an international force in business. By any measure he was a hugely successful innovator and leader of people.

Perhaps his most compelling statement was: “If you want to increase your success rate, double your failure rate.”

At first glance it doesn’t seem like the most intuitive way to approach success. If we heed Watson’s advice we need to be willing to fail more.

So what does it look like to employ this kind of thinking in our working lives?

First, we have to recognize that as leaders we have enormous influence. Perhaps you lead an entire corporation or maybe you lead a small team. Either way the tone you set and the actions you take shape the culture for your team.

In an era where margins are generally thin for most business ventures it can be easy to look only for incremental gains. This kind of thinking is rooted in minimizing risk and rarely produces breakthroughs and dramatic innovation.

What would happen if you employed Watson’s mantra and regularly met with your team to explore risky innovation where failure was part of the process?

Envision a brainstorming session where there are no bad ideas. The team tackles one of your most significant business issues in this fashion. You arrange for an interruption-free and off-line location where each person is encouraged to explore boundaryless solutions with no critical judgment from anyone. The whole exercise is focused around building on each other’s ideas. There’s no pressure to solve the problem in one brainstorming session, and when it’s done you may not have the solution you’re looking for.

What you will have is the beginning of fresh thinking that embraces a new process where failing is part

of the road to success. It will lead to new ideas and potential solutions.

As you employ the new ideas and make decisions, the resulting outcomes may or may not be successful.

In fact there is a good chance that obstacles will rise and midcourse corrections will be required.

This kind of strategy may well lead to failing faster.

It’s at this point that your cultural decision to employ this kind of thinking will be tested. As failure in a particular area becomes clear will you quickly regroup and learn from the results, or will you fall back into much less risky behavior?

The fact is that significant innovation depends upon a collective mindset that accepts failure as an essential part of the path to success. The Wright brothers would never have gotten off the ground without embracing this truth and Neil Armstrong wouldn’t have walked on the moon. Those are dramatic examples, but the final success of their ventures was entirely dependent on thousands and thousands of innovative ideas that didn’t prove successful.

Many midcourse corrections and the determination to pursue success were the key.

I’ve been fortunate to be part of numerous conversations both personally and professionally over the years that were couched in the desire to pursue success while accepting setbacks along the way.

If I were to list some of the ideas that I, and others, have come up with, many of them would look very suspect. That’s okay. Alongside the crazy ideas are some pretty interesting solutions to complex problems. Solutions that would have never have come to the forefront without the willingness to embrace the idea of two steps forward, one step back.

So can Thomas Watson’s exhortation to fail faster be an effective tool in our daily working lives? I believe it can if we, as leaders, are willing to adjust our thinking; if we will purposefully set aside some blocks of time to allow ourselves to look for solutions that are truly outside the box.

Over the long haul there’s no question we will look back on the successes and see how they were directly linked to embracing the inevitability of failure on the journey.

MM&D Ross Reimer has over 30 years of experience in transportation/supply chain. He was an owner and senior executive with Reimer Express Lines and for the last 15 years has been President of Reimer Associates, a recruitment firm within supply chain. rreimer@reimer.ca MM&D | June 2015

15-06-09 11:35 AM

MAXIMIZE IT

As-A-Service and the Cloud I

have had quite a few non-tech people ask me the same question over and over: “What is ‘as-a-service’?”

That is usually followed immediately by “What is this ‘cloud’ I keep hearing about?” So, for those of you nodding your head right now, this column is just for you.

Simply stated, “as-a-service”, referred to in this article as AAS is a service that is specific and usually uses the Internet as a delivery mechanism. If you do online banking, it’s a “service” you access via the Internet. So, in today’s nomenclature, you could call it BaaS, “Banking-as-a-Service” that you access in the cloud (via the Internet.)

Wait! Can it be that simple? Yes, it is. Us IT people like to give acronyms or cute little names to everything; it adds to the mystery of things and makes us feel important. “You simply use it as a SaaS offering in the cloud.” We don’t do it on purpose. It’s just some common flaw in our IT brains.

So why is AAS attractive? Easy. All of the expenses for the service (eg hardware, software, IT personnel, development, disaster recovery, testing, maintenance, upgrades, etc) are absorbed and provided by the service provider. This means all the headaches around maintaining and growing a service or application are theirs.

You don’t need IT resources to run and maintain it.

Ok, that’s great, but you must have to pay for the provider having to buy and maintain everything, right? Well, yes and no. Usually, the price is very reasonable for the solution you are getting. In fact, when you compare it against doing it yourself (an “on premises”) solution, the price is very attractive and is often the selling point.

Ok, so wait a minute, someone else has to buy and maintain everything so there isn’t anything you have to do, you access it from the Internet and it’s cheaper?

There must be a catch.

There is a catch. You never actually own the solution. It is based on a subscription model, so as long as you pay (usually annual fees,) you have access to the service. That isn’t really a downside since the cost of buying or developing an application, procuring the hardware, maintaining everything and absorbing the risk is usually a higher cost than the service.

Also, economies of scale allow the service provider to provide top-notch technology that would normally be out of reach for most organizations due to cost. A good example of this is security. The “cloud” service providers can afford to implement a very robust security environment that will cover all clients and will generally far surpass what we can all individually implement.

This economy of scale upside extends to almost every www.mmdonline.com | June 2015

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other facet of the application infrastructure.

“Ok, that’s great, but my company is different and we like things presented to our employees in a certain way and have unique processes.”

You’ll be happy to know there are companies who will work with your organization and your service provider to customize the service even further so that it meshes with your organization seamlessly. This can be anything from cosmetic enhancements and additional functionality to integration with your financial and/or enterprise software. The result is typically a transparent solution with the desired functionality that looks and acts home grown.

You need to actively manage the partnership with your service provider as you would any other. Ensure you adequately address the following: • Service Level Agreements (SLAs): what is the time frame, by criticality, for resolving issues—and what are the ramifications if those are missed?

• Data: Do not assume you own the data! Make sure you have it in writing that the data belongs to your organization and that there is a plan in place to access your data should the vendor close shop.

The beautiful thing about AAS is because it requires only an Internet connection, you can access it from almost anywhere. The bad thing about AAS is that it requires an Internet connection. If it goes down, you go down. However, most reputable AAS providers have an “offline” mode for this exact scenario. The offline mode will allow you to keep working and synchronize your data when an Internet connection is re-established.

It never ceases to amaze me how old things become new again. Years ago we had the mainframe and the terminal access to the centralized applications. We then moved to the decentralized model for many years with the personal computer. Now, with AAS and “the cloud” we have basically moved back to t he mainframe model, hailing it as the latest and greatest new thing. I better go look for that black fedora I wore in the 80’s; it may be worth something!

MM&D

Kevin Squires

Kevin is Vice President, Business Technology for the Econo-Rack Group of companies (Konstant, RediRack, Econo-Rack, Technirack.)

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15-06-09 11:35 AM

LEGAL LINK

Honesty is the only policy “Whoever is careless with the truth in small matters cannot be trusted with important matters.” -- Albert Einstein

Marvin Huberman

I

n its landmark decision in Bhasin v. Hrynew, released November 2014, the Supreme Court of Canada established a general doctrine of good faith, which requires the parties to a contract to “perform their contractual duties honestly and reasonably and not capriciously or arbitrarily”.

Justice Cromwell, writing for a unanimous court, explained honesty requires that parties to an agreement “not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract.” Parties to a contract are now required to have “appropriate regard” for the other party’s interests.

Although the contracting parties need not subordinate their own interests to the other party’s interest, they must not seek to undermine those interests in bad faith. The Supreme Court was not attempting to impose a duty of loyalty in contractual relationships, but rather decided that there must be a minimum standard of honesty between contracting parties.

It is of great importance to note the doctrine of good faith has existed for a long time in respect of certain types of contracts, the two most important of which are insurance and employment contracts. This article will focus on the duty of good faith and fidelity in respect of employment contracts.

Good faith and fidelity There is implied, as a matter of law, in every contract of employment a duty of good faith and fidelity. This requires that an employee act honestly and faithfully during their employment. An employee must: • Put the employer’s best interests first and avoid any conflicting personal interests; • Avoid competing with the employer during the term of employment; • Avoid any personal interest sufficiently connected with the employee’s professional duties that there is a reasonable apprehension that the personal interest may influence the actual exercise of the professional responsibilities; • Avoid the unauthorized disclosure or appropriation of the employer’s trade secrets and confidential information; • Not conceal from the employer “facts which ought to be revealed”; and • Provide full-time service to the employer.

If the employee’s breach of the duty of good faith and 36

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fidelity is sufficiently damaging to the employment relationship, the breach is grounds for summary dismissal of the employee by the employer. As stated by the House of Lords in Malik and endorsed by the Ontario Court of Appeal in Spendlove v. Thorne, Ernst & Whinney: “…the trust and confidence required in the employment relationship can be undermined by an employer, or indeed an employee in many different ways…the conduct must, of course, impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer.”

Potential harm is sufficient For an employer to establish just cause for dismissal on the basis of breach of the duty of good faith and fidelity by an employee, an employer need not prove actual prejudice; potential harm is sufficient.

As long as the employee continues in the employment relationship with the employer, including any period of working notice, the duty of good faith and fidelity continues in full force and effect. If the duty of fidelity is breached by an employee during the notice period, the employer may well have the right to dismiss him or her for just cause, even if the employer previously agreed to pay severance.

Once the employment relationship ends, employees are generally not bound by the duty of fidelity unless there are specific contractual provisions or other legal duties making the employee bound to continue that requirement, or unless there are trade secrets or confidential information which are the subject of a continuing duty of fidelity on the part of the employee.

Last thoughts The duty of good faith and fidelity in the employment relationship is not one-sided; there are reciprocal duties on both the employer and the employee.

It is clear then that for employees, and employers, honesty isn’t everything, but it’s the core duty which is relied upon by the courts to compel “faithful service” in an employment relationship so as to protect the legitimate interests of both contracting parties.

MM&D Marvin J. Huberman (www. MarvinHuberman. com) is a Toronto trial and appellate lawyer, mediator and a chartered arbitrator.

MM&D | June 2015

15-06-09 2:40 PM

LEARNING CURVE

Managing retail relationships T

oday’s retailers face a great many challenges, but consumers’ lack of buying power is likely to cause the most searing pain. Still, while other Canadian economic trends such as low consumer confidence, higher personal debt and a weakening dollar indicate much of this pain could linger, there are a few steps retailers could take to quell the worst of it.

Consumer confidence (which is a reflection of employment and debt factors on Canadians’ spending habits) has dropped 0.6 percent from Q4 2014 to a disappointing 96 percent. Meanwhile, Canadian retail sales rose only 0.7 percent in March this year, partially due to a consumer price index increase of 1.2 percent.

The Canadian unemployment rate held steady at 6.8 percent, with an increase in employment of 0.8 percent in the last 12 months and 47,000 additional full time jobs gained in April.

Due to a weakening Canadian dollar, some analysts expect the added cost of imported goods will result in rising prices and threaten the likelihood of increased consumer spending. Current debt levels are also causing analysts to grow more concerned for Canadians’ financial stability, with households with incomes between $50,000 and $100,000 having between 37 and 38 percent debt levels. Household debt to disposable income has risen to an alarming 163.3 percent.

At least people are in a buying mood. If a modest increase in spending does happen, retailers will gain a bit of wiggle room to experiment with new (or at least different) ways to capture Canadian consumer dollars.

The biggest change influencing retailer sales is the fact that three in four Canadians are buying products online. As a result, the leading players are changing their ways.

Although Amazon remains the e-commerce titan, Walmart is gaining traction in online sales. Walmart sales were sluggish in traditional markets last year with a 0.6 percent decrease. In response, the world’s largest retailer recently embraced a digital/physical retail strategy and triggered a huge 22 percent increase in online sales and a total of 0.6 percent increase in overall sales.

With the purchase of some of the former Canadian Target stores’ real estate, Walmart is set to grow its grocery business too, which now represents 55 percent of its product mix. In the meantime, Amazon posted a 19.5 percent increase in overall sales, while also growing its grocery business. While it enters a faceoff with Amazon, Walmart will leverage its global 4500-store network to help distribute the goods purchased online. www.mmdonline.com | June 2015

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This could be a wise move. After all, online stores can sometimes represent more than just a threat to brick-and-mortar-only retailers—they can be downright infuriating. This is never clearer than when a customer uses a retailer’s physical store to do a detailed in-person product check before simply going home to buy that same product from a different retailer online.

For this and a host of other reasons, every retailer should be highly invested in understanding the path to purchase. In other words, there is great value in obtaining customer contact and buying information, because these details offer data retailers can use to further assist and/or influence buyers.

Shoppers tell retailers what they want through their buying behaviour, and retailers can then market to them with this critical information in their back pockets. Then, they can combine and bundle complementary items or play around with options, models or the customer experience as necessary.

Online retailing inherently provides a way to get valuable information, when a retailer manages to collect and save it.

Successful retailers make sure to l everage such information to extend their reach to larger consumer bases, by tracking patterns in buying choices and customer trends.

After all, it is never a bad idea to understand more about the way purchases are done or to learn how customers feel about, for example, prepay, mobile pay, loyalty cards and other methods of payment.

One of the most important things to offer when selling products online is a set of delivery options around such factors as time, location and packaging type. Flexibility on this front will allow you to meet many essential customer needs.

But some things never change. The continuation of the buyer/seller relationship hinges, as always, upon the ability of the retailer to engage, satisfy and reengage and re-satisfy the customer.

MM&D

Tracy Clayson

Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In Transit Personnel. tracy@in-transit.com 37

15-06-09 11:36 AM

MATERIALS HANDLING

Dimensional pricing – Part II I Dave Luton

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n coping with an external change to the warehouse environment; like dimensional small shipment pricing, sometimes it is best to start with reducing the issue to its basics and see if this can solve the problem.

To keep things simple, one approach to solving this problem is to ship smaller packages. Smaller packages can have advantages other than lower freight costs.

But how smaller packages are integrated into existing systems is where the complication sets in. Let’s take a look at how this plays out.

Head over to your small shipment packing department. In many warehouses small shipments do not use the original exterior packaging to ship the product but the inner contents are uncased (assuming corrugated packaging) during the picking stage and recased once they reach packing.

At the packing stations you want to view and classify your picked order contents into a couple of categories: Damage-prone or not damage-prone, and if there is a combination, what proportion is there of each?

How much wasted cube in the finished packages before they are sealed? A little or a lot?

Placing these two categories on a simple X-Y grid allows you to categorize your situation and starts the process of solving the problem.

This creates four apparently simple basic situations: A: Not damage-prone and a lot of wasted packaging cube; B: Not damage-prone and limited wasted cube; C: Damage-prone and a lot of wasted cube; D: Damage-prone and limited wasted cube.

From a warehousing viewpoint let’s look at the apparently simplest of the four basic combinations to solve first: Not damage-prone and a lot of wasted cube.

The bottom line is you are over-packaging. This one can be easy to solve by putting your shipment packaging on a diet.

Assuming corrugated packaging, use smaller boxes.

Or—going for the lowest cube option—use one of: polybags, thin envelopes or bubblewrap envelope packaging.

These latter solutions, however, can create another challenge in your processes. This is particularly true for larger warehouses and also in the downstream logistics system.

What’s the problem? The increased variety of package types, and particularly soft bottomed ones like polybags, are a no-no for many types of automated conveyor systems.

Traditional automated conveyor systems use cor-

rugated containers because the flat, rigid bottoms provide an ideal conveying surface and the rigid sides or tops can be positioned for proper throughput gapping and sortation scanning.

Let’s take (the admittedly extreme) example of a roofing supply company that, as a promotion, that ships a hammer with its logo on the handle to all of its customers; one hammer per customer each year.

They use a fulfillment centre that has a nice, automated overhead conveyor system. In the past, using corrugated packaging was no problem. But, faced with the new dimensional rules they switch to polybags as a cost-saving measure at the suggestion of their traffic manager, who looks like a hero.

But guess what happens in the fulfillment centre, particularly as polybags do not eliminate the shape of the interior contents? (Hint: the next time you visit there, you see the staff have started wearing hardhats.)

It could get worse. Some conveyor systems use sensors to regulate flow by sensing the beginning and end of packages. Cardboard boxes have a nice clean exterior shape to determine front and back edges that allows the conveyor sensors to give proper gapping to regulate flow. Bags do not have the same characteristics.

Finally, the labels on corrugated cases can be successfully applied on a rigid surface and provide accurate positioning and presentation for label sortation scanning. Bags can cause both label application issues and legitimate scanner reading concerns.

The bottom line is to save the money on freight, you may need a supplementary conveyor system or enhanced controls.

Remember, we are dealing with the best case of the alternatives. Damage-prone contents are no longer cushioned and are subject to shocks and other issues caused by both interior and exterior (those used by your courier) conveyor systems.

In summary, a transportation cost change this fundamental can have huge impacts on small shipment warehouse operations. They include everything from supplier packaging, to receiving, picking and even scanning and WMS. While I will touch on it in future I recommend that now you give it some attention in your own operation; before you wonder why your forecast is way off for the year.

MM&D Dave Luton is a consultant in the greater Toronto area. dluton@cogeco.ca MM&D | June 2015

15-06-09 11:35 AM

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