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March/April 2015 $15.00

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2015 ProMat: Report from the show floor Publication mail agreement #40069240.

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Taking Stock Supply Chain Scan Canadian Food Chain 2015 ProMat report Palletless racking Forktrucks Maximize IT Legal Link Learning Curve Materials Handling

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TAKING STOCK

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Exuberant exhibition P

roMat took place in Chicago in March, with more than 800 exhibitors vying for the attention of thousands of visitors.

We were among the throng circulating on the massive show floor, and managed to visit a great number of stands, both large and small. It was exhilarating to be there among an upbeat and enthused group of exhibitors and visitors.

On the first day we had several exhibitors tell us the show was already turning into an “order-taking” event. This is surely a sign of a good year shaping up. Such positive energy and optimism are a sign of an industry that’s growing and evolving to meet new challenges.

Coverage of the show can be found starting on page 26.

On another positive note, I’d like to introduce a new columnist to MM&D’s pages. Kevin Squires of the Konstant group joins us to write about all things IT. Kevin brings almost 30 years of experience, partly from the pharmaceutical industry and more recently with Konstant in Oakville, Ontario. You may have read his contribution in the first issue of the year.

He promises his words will be entertaining, informative and different. Check out this month’s inaugural “Maximize IT” column on page 35. And don’t hesitate to offer your feedback or suggestions for future topics.

Also new this issue is a section highlighting online news stories that will not make it to the print edition. There is so much going on in the supply chain world these days that we cannot keep up in print. We do publish news every day (www.mmdonline.com), and it’s normal to have three or more stories posted every day.

These stories are made available via Twitter in almost-real-time (@mmdonline) or we encourage you to subscribe to our twice-weekly e-newsletter. Tuesdays and Fridays we send out a digest of the top stories from the past few days. If you’d like to be included in the distribution, please signup at www.mmdonline.com/subscribe.

Of course, since you are reading this in print, I assume you are a subscriber, but if you borrowed this copy of MM&D and would like to see more, that same link will take you to a print or digital edition subscription sign-up form.

It’s free for people working in the supply chain sector. We welcome your participation. @mmdonline www.linkedin.com/company/mm&d-magazine www.ca.linkedin.com/in/eatkinsmmd

March/April 2015  Volume 60  Number 02 19

26

30

32

Cold chain

ProMat 2015 News from the show floor in Chicago

Palletless Racking

Forktrucks

Temperature control in the great frozen north.

Slip sheets save money but need racking upgrades

www.mmdonline.com | March/April 2015

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Hydraulic hybrid; 3-wheel mini; engines; power steering 3

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SUPPLY CHAIN SCAN

WOOD

RPCS

SHIFTS

AIR CARGO

Update on the packaging rules p 8

Germs may be living in your containers, p 10

Workers tend to thrive day or night, p 14

IATA DG lays out priorities for the air cargo industry at conference in Shanghai, p 12

Supply chains face radical transformation New technology, competition and consumer demand to shape the change

By MMD Staff

T

raditional supply chains will radically change over the next five to 10 years as a result of new technologies, competition and customer demands, according to a new study by MHI and Deloitte. On average, companies surveyed expect to invest heavily in new supply chain technologies over the next two years, with the top 17 percent spending over $10 million.

According to the 2015 MHI Annual Industry Report “Supply Chain Innovation — Making the impossible possible”, companies need to embrace this transformation today and focus on investing in new technologies to help compete and thrive as their supply chains continue to face constant pressure to do more with less.

“The speed at which supply chain innovation is being adopted—coupled with rising consumer expectations for anytime, anywhere service—is stressing traditional supply chains to near-breaking points,” said George Prest, CEO of MHI, the international trade association that represents the material handling, logistics and supply chain industry.

“Companies that continue to use traditional supply chain models will struggle to remain competitive and deliver orders that are accurate and on-time.”

The second MHI Annual Industry Report identifies the realities many companies face and the disrupters that are likely to drive even more change over the next 10 years. The report was launched at ProMat, March 23-26 in Chicago.

Reshaping the supply chain landscape The survey focused on eight technologies that are driving next-generation supply chains: • Inventory and network optimization tools • Sensors and automatic identification • Cloud computing and storage • Robotics and automation • Predictive analytics • Wearable and mobile technology 4

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• 3D printing

• Driverless vehicles and drones

“I believe that we are at the dawn of an innovation wave that will soon hit the material handling industry,” says Scott Sopher, principal, Deloitte Consulting LLP. “The convergence of big data, faster and cheaper computer power, and the increasing demands of customers will likely accelerate the adoption of innovative products and services in the material handling industry.”

The report groups these innovations into three categories—maturing, growing and emerging—based on current adoption levels and anticipated adoption over the next five years.

Maturing technologies The report identifies inventory and network optimization tools, sensors and automatic identification, cloud computing and storage, robotics and automation as maturing technologies.

“Maturing technologies can create dramatic improvements in efficiency and service. For instance, inventory and network optimization tools can reduce supply chain costs by 10 percent or more, with larger potential reduction in total inventory costs,” Sopher said. “Current adoption levels are significant, with 35 percent or more of companies using these maturing technologies.”

Adoption levels of these maturing technologies are expected to reach 80 to 90 percent by 2019.

Growth technologies Predictive analytics and wearable and mobile technology are seen as the growth areas in supply chain innovation.

Adoption levels for technologies such as predictive analytics and wearable and mobile technologies are only at about 20 percent, but are expected to grow significantly over the next three to five years, according to the study.

The current adoption level of 24 percent for predictive analytics is expected to reach 70 percent in three to five years and 77 percent after six years.

Adoption levels for mobile and wearable technology—including smartphones, wireless devices and smart glass—sits at 23 percent, but is expected to reach 64 percent in the next three to five years.

Emerging technologies Emerging technologies include driverless vehicles and drones, as well as 3D printing.

“Although current adoption hovers around 10 percent, company leaders should understand the current and near-term uses of technologies like drones and 3D printing and prepare for significant industry disruption over the next six or more MM&D | March/April 2015

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SUPPLY CHAIN SCAN years,” Sopher said.

“In reality, this idea is not new to the supply chain.

Autonomous vehicles have been used in material handling applications for years, and many related systems are already in use today within the trucking industry,” said Prest.

Examples include electronic stability control (ESC), collision avoidance technology and rear- and forwardview camera systems.

By 2017, the survey states that 20 percent of logistics organizations are likely to exploit drones as part of their monitoring, searching and event management activities.

By 2030, vehicles capable of driving autonomously are expected to represent approximately 25 percent of the passenger vehicle population in mature markets.

“Today, we are seeing the most significant applications of 3D printing in aerospace and defense, automotive, healthcare, consumer products, and retail,” noted Sopher.

Top uses from companies surveyed include: New product prototyping (19 percent); small runs of

high-value replacement parts (10 percent); complex personalized products (six percent).

Barriers to adopting new technologies Leaders surveyed in the study identified two key barriers to adopting these new technologies. Thirty-six percent cited “the lack of a business case to invest”, and 31 percent said there is “lack of adequate talent to utilize the technology effectively”.

Four important considerations for next generation supply chains

The study makes several recommendations for companies looking to remain competitive in the supply chain space.

“Companies that are early adopters of the innovations and technologies identified in this report can improve both their cost and service creating a strategic advantage,” said Prest. “Our industry makes supply chains work, and MHI pledges to be at the forefront of these developments to help our members and their customers boost efficiency, performance and business results.”

According to the study, deciding where and when to invest in technologies is crucial to survival over the next decade. This year’s survey found that 46 percent of respondents are developing partnerships with vendors, analysts, consultants and trade groups to help them understand evolving technologies and develop business cases for where to invest.

As many companies expand their global footprints, adjust their trade flows, and try to meet their customers’ ever-rising expectaDONE DEALS tions for faster response times, they should invest in Manulife, together with Fiera Axium Infrastructure, Desjardins (via its forward-looking technologies and capabilities that insurance subsidiaries and its Pension Plan), Fonds de solidarite des can help them assess and redesign their complex Travailleurs du Quebec, and Industrial Alliance, acquired an equity interest supply chain networks to help satisfy the demands in Montreal Gateway Terminals, which operates two of the three international of a constantly changing marketplace. container terminals at the Port of Montreal. The transaction closed on March With cloud computing, predictive analytics and other advances, there are significant opportunities 5th. The seller was Morgan Stanley Infrastructure Partners. for companies to collaborate with value chain partners. Companies should invest where these collaboraSunstar, an oral care and dental healthcare products manufacturer, is partnering with the Numina Group to implement omni-channel order fulfillment tions can yield the best returns.

“Some of the best companies in the world use colat their new 300,000 square foot automated manufacturing-distribution operation. The operation is scheduled to open in June 2015. laboration to create high-performing, customeroriented supply chains. This collaboration not only provides visibility into the customer experience, but HighJump Software’s TrueCommerce EDI Solutions Group has partnered with NumberCruncher.com, Inc, a provider of inventory and order managedrives innovation by producing a more complete view ment software for the QuickBooks community. Mutual customers can now of their products and supply chain,” Prest said. automate order processing by linking their electronic data interchange (EDI), According to the survey data, 31 percent of respondents inventory management and QuickBooks accounting systems. cited the lack of adequate talent to implement and deploy the technologies as a significant barrier to their implementation. The supply chain workforce crisis is likely Global third-party logistics provider, ROAR Logistics Inc, has joined The Cooperative Logistics Network (The CoOp). The CoOp is an alliance of to only accelerate as new technologies demand a labour freight forwarders around the world who cooperate to reduce costs and risks, pool with increasingly advanced skill sets. develop business and compete in a market with large multinational organiza“Multiple factors are contributing to the talent shorttions. ROAR will be able to include inbound freight services into the US, as age, including an aging workforce,” said Prest. “But the changing skill sets needed for jobs in the supply well as move freight globally through a network of CoOp partners. chain is the biggest factor. Our industry needs a Globe Tracker International, provider of asset tracking services, and CakeBoxx sophisticated and well-trained workforce to operate leading-edge equipment and systems.”

Technologies, developer of door-less intermodal shipping containers, will combine service and product offerings to supply the global shipping market The study was conducted by MHI and Deloitte and is based on interviews with more than 400 supply with an off-the-shelf secure container/asset tracking solution. chain executives from a wide range of industries.

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MM&D | March/April 2015

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SUPPLY CHAIN SCAN

Wood packaging update

By Christian Siviere

T

here is a misconception among some Canadian exporters about an obligation to use ISPM 15 treated wood packaging materials when exporting to the United States.

This may have been triggered by a notice circulating last June saying that the US Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) was ending the ISPM 15 exemption for Canadian wood packaging material effective July 2014. Several Canadian companies implemented this right away and began using more expensive, treated wood, when shipping to the US. However, this ‘notice’ was incorrect, the measure was not put in place and our mutual exemption with the US is still in effect, as can be verified on the CFIA’s website: http://tinyurl.com/7asu9d9.

Most countries around the world adopted the ISPM 15 regulations for wood packaging material (WPM) several years ago and both Canada and the United States implemented them in 2005. However, we have a mutual exemption for trade between our two countries, so when we import products from the US and when we export our products to the US,

we are not required to use ISPM treated wood packaging material.

So long as the wood originates in either country, it is recommended to include a statement to that effect on commercial documents: ‘‘The wood packing material contained in this shipment is of Canadian origin’’ or ‘The wood packaging material is derived from trees grown and harvested in Canada”.

Of course, if the WPM used is not of Canadian or of US origin, for example if we use recycled crates or pallets originating from other countries, then they have to be made from ISPM 15 treated wood, marked and documented accordingly.

Introduced by the International Plant Protection Convention, these measures aim to protect forests from infestation by pests and disease. The ISPM15 regulations require wood packaging material more than 6mm thick to be debarked and treated, either by heat treatment (HT) or fumigation with methyl bromide (MB). This applies to pallets, crates and dunnage used to secure cargo in the shipping vehicle.

Packaging made from plywood or particle board is exempt since it is heated during the manufacturing process. Packages must bear an internationally recognized stamp identifying the country of origin, the certification number of the supplier and the type of treatment. Some countries also require a certificate confirming the treatment.

Although our exemption with the US is still in effect, it is good to start preparing ourselves for the day when it will be lifted. At that time, we can expect an official announcement from both the CFIA and the APHIS, giving industry enough notice to ensure that trade impacts from the implementation are minimized.

GLOBAL FOCUS Taxiway at Schiphol A new taxiway, linking Amsterdam Airport Schiphol’s Kaag runway with the airport’s Sierra cargo zone, has halved live runway crossings for the many freighter aircraft that visit Schiphol every week. The new link is also reducing taxi distances saving fuel, CO2 emissions and time.

The new taxiway enables landing aircraft to taxi direct to the Sierra cargo area from the end of the runway, rather than routing back along the original taxiway stretching the entire length of the runway, and then waiting for clearance to cross the live runway.

VMS for Ford in Southeast Asia ID Systems, Inc will implement its wireless Vehicle Management System (VMS) at a Ford plant in Southeast Asia. Ford currently has ID Systems’ VMS technology deployed in plants throughout North America and Europe. Subsidiary ID Systems GmbH facilitated the order and will provide account and project management for the Southeast Asian facility.

WWL expands in Mexico Wallenius Wilhelmsen Logistics (WWL) has expanded its Mexico operations with the acquisition of integrated logistics provider Carlogistics. WWL Vehicle Services Americas (WWL VSA) is now

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the largest provider of vehicle processing for automotive manufacturers in Mexico.

The expansion adds two facilities and nearly 100 employees to WWL’s auto logistics network in Mexico. Processing centres in Cuautitlan (just North of Mexico City) and near Veracruz (the largest auto port in North America) will perform vehicle processing, body shop work and storage, as well as supply chain and distribution management (including rail and truck loading/unloading).

WWL VSA’s network in Mexico now includes a total of nine vehicle processing centres, and an ocean transportation service that connects auto manufacturers to the United States, Europe, Middle East and rest of the world. The network’s annual throughput in Mexico is 1.6 million cars and it employs approximately 1,100.

CEVA adds DC in Italy CEVA Logistics has opened a local distribution centre for Magneti Marelli After Market Parts and Services, a division dedicated to the independent spare parts network and after sales market, consisting of 1,600 sqm in Padua Interporto, Italy.

The centre has 5,000 shelf locations and is entirely managed by RFID. Orders for users in the Triveneto, Bolzano and Trento areas are delivered twice a day, with a cut-off of 18:00 (local time) for morning orders and 13:00 next day for those received in the afternoon.

MM&D | March/April 2015

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SUPPLY CHAIN SCAN

Research questions cleanliness of RPCs A new series of independent studies from the Center for Food Safety at the University of Arkansas’ Department of Food Science shows bacteria—including Salmonella, Listeria and E. coli—adhere to and form bio films on re-useable plastic containers (RPCs) used to ship fresh produce, meats and eggs.

Salmonella often develops from eggs and proteins, and is the most costly foodborne illness, according to the US Department of Agriculture Economic Research, which analyzes food safety policy.

Center for Food Safety research, led by Dr. Steven

Ricke, found commercial and industrial sanitizing and scrubbing methods such as hot water, alkaline detergent, quaternary ammonium and chlorine could not eliminate biofilms. Ricke conducted three tests of RPCs as a platform for generating the bacteria biofilms of these common pathogens.

“Our research regularly looks at basic food safety implications from farm to fork; how pathogens form, how they transfer to food and how the consumer becomes exposed,” Ricke said.

Once confirmed using Scanning Electron Microscopy (SEM), the biofilms grew and were then sanitized, using methods and agents typically found in commercial and industrial settings, including scrubbing.

In all cases, his research found that bacteria not only attached to the RPC, but

BENCHMARKS Tata Steel has been awarded the 2014 Continuous Improvement award by NACCO Materials Handling Group for its commitment to improving the quality of mast profiles delivered to NACCO plants over the last three years. As a result of this process, the number of rejected parts has been reduced by more than 97 percent.

Tata Steel was one of four suppliers to receive a prestigious award from NACCO, putting them in the top one percent of the forklift manufacturer’s suppliers. Nacco Materials Handling Group, which is responsible for the Yale and Hyster brands, is the third largest forklift truck manufacturer in the world.

NACCO tasked Tata Steel with improving its identification of and response to dealing with problems that might arise during the manufacturing and supply process. To address this challenge Tata Steel committed to NACCO’s Supplier Quality Excellence Programme, which involved building closer working relationships at all levels of both organizations and focus across the global supply chain. As a result of this work, NACCO’s key quality metric, the parts per million (PPM) target, was exceeded within three years.

must also achieve 80 percent or greater on a challenging improvement plan and demonstrate solid quality and business systems.

Battery Watering Technologies earned ISO 9001:2008 certification on February 11, 2015. The ISO 9001 standard is internationally recognized and outlines requirements for an organization’s quality management system to enable consistent production of high quality products. Battery Watering Technologies was audited by American Systems Registrar and passed without any “non-conformances”.

Cargo Human Care e.V. set a new medical care record last year: local nurses and German doctors treated patients around 22,500 times for the humanitarian and medical aid project in 2014.

Around 6,500 patients received treatment from German medical volunteers in six disciplines at the Cargo Human Care Medical Center in Nairobi, Kenya. Lufthansa Cargo supported their work both financially and logistically. Staff members of the cargo airline founded Cargo Human Care e.V. in 2007.

“With our free medical aid we ensure that the poorest of the population have access to medical care in the region around Nairobi”, explains Captain Fokko Doyen, Lufthansa Cargo fleet MD-11F commander and chairman of Cargo Human Care e.V. “Last year, Cargo Human Care was able to extend the range of its treatments once again—also thanks to generous donations.”

2014 saw the introduction of cancer screening for women, and plastic surgery is now also available together with German specialists and the local hospital. Cooperation was established with an eye clinic for the treatment of cataracts.

Daifuku Co, Ltd has been recognized as one of 19 companies receiving Intel Corporation¹s Preferred Quality Supplier (PQS) award for their performance in 2014. Daifuku is recognized for their significant contributions providing Intel with automated material handling systems.

The PQS award is part of Intel’s Supplier Continuous Quality Improvement (SCQI) program that encourages suppliers to strive for excellence and continuous improvement. To qualify for PQS status, suppliers must score 80 percent on a report card that assesses performance and ability to meet cost, quality, availability, technology, environmental, social and governance goals. Suppliers

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SUPPLY CHAIN SCAN also could not be dislodged by either sanitizers or physical scrubbing.

“The risk to a potential victim cannot be seen, as these biofilms are not visible to the naked eye,” said Ricke. “Plus, biofilms are resilient to cleaning, which makes them survive on surfaces and hide in cracks and crevices of the material in which they attach, so it all adds up to potential risk, even sustained risk, pending the exposure.”

To eliminate contamination risk, Ricke recommends shippers and retailers choose single-use packaging.

While some retailers demand growers and packers use RPCs, others prefer corrugated.

Ricke, along with several other food safety experts, encourages retailers to follow the science and avoid risks identified in recent research involving RPCs. He concluded, “Every day, you can pick up a newspaper, turn on the television or read online about a new outbreak on a number of products involving the food supply. Our job as experts in food science is to determine how to avoid those risks. What we know through research is 1) re-use B:8.375” is a source for contamination; and 2) cleaning or scrubbing does not eliminate biofilms; so this will continue to confront us.”

T:8.125” Ricke is Director, University of Arkansas Center for Food Safety, S:7” and Wray

Endowed Chair in Food Safety. Ricke’s research program is primarily focused on virulence and pathogenic characteristics of foodborne Salmonella spp. with emphasis on the growth, survival and pathogenesis of the organism under conditions encountered during food production and processing.

Old Dominion’s focus on premium service means every item arrives with one of the lowest claims ratios and one of the best on-time records in the industry.

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For more information, visit odfl.com or call 1-800-235-5569.

Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners. © 2015 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.

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T:5.5”

S:4.4875”

We make a big deal over the tiniest items.

SUPPLY CHAIN SCAN

Priorities for air cargo IATA chief sets the agenda

By MM&D Staff

T

he International Air Transport Association (IATA) has called for further action on three vital aspects of the air cargo business: transitioning to paperless freight processes, a focus on global handling standards for pharmaceutical freight, and tough action to ensure the continued safe transportation of lithium batteries by air.

Tony Tyler In a speech to the 9th World Cargo Symposium, in Shanghai this March, IATA Director general and CEO Tony Tyler said: “Air cargo has had a challenging few years. 2014 saw the first significant boost in volumes since 2010, a trend we expect to continue this year.”

“Revenues, however, are still down from the 2011 peak, and yields are falling for the fourth straight year. I am a cargo optimist. But business improvement

will only come by constantly improving the value of cargo. There is a long haul ahead to recapture lost revenues, nevertheless the prospects for the future are bright because the industry is really starting to act strategically and plan for the future.”

The transition to paperless freight finally saw lift-off in 2014, as the industry exceeded 24 percent global e-Air Waybill (e-AWB) penetration. Key to the improvement was enhancing collaborative work across the air cargo chain and with Customs authorities. A growing number of routes around the world now have the necessary regulatory approval, including, from November 2014, Shanghai.

“We still have work to do to help businesses transition, but there has been a big change in the mentality of the industry. We can now look ahead and plan for the digitization of other air cargo documents, through a collaborative industry approach,” Tyler said.

The industry is aiming to achieve 45 percent e-AWB

SCMA conference preview

Photo courtesy of DestinationHalifax.com

The Supply Chain Management Association 2015 National Conference will take place June 10 to 12 in Halifax, Nova Scotia. The Conference Kick-Off will be at Pier 21, a National Historic Site, which was the gateway to Canada for one million immigrants between 1928 and 1971.

Attendees will have the opportunity to take in numerous keynote addresses and seminars during the conference, as well as networking events and a sponsor showcase tradeshow, where MM&D will be exhibiting.

Keynote speakers include Michelle Ray, founder & CEO, Lead

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Yourself First Institute, speaking on energizing supply chain relationships; Ed Rigsbee, president, Rigsbee Enterprises Inc on the SCMA; Lt. General (ret) Andrew Leslie on disrupting the supply chain; and Barb Fry, president, Workplace Dynamix, Inc, on managing a multi-generational workplace.

Seminars run the gamut from new technology like 3D printers, to career advice, to procurement topics, managing facilities, people and risk, as well as high-level views on supply chain trends.

Registration is open. For more details see www.scmanational. ca/en/events/scma-national-conference.

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SUPPLY CHAIN SCAN penetration in 2015 and 80 percent in 2016.

Global handling standards for pharmaceutical goods will be an essential step towards air cargo improving its share of the $60 billion a year pharma logistics market. The industry needs to meet customer demands for the integrity of their goods, while complying with increasing amounts of regulation from global authorities.

“If these expectations are not met, air cargo risks losing the opportunity presented by this huge market. Modal competitors to air are working hard to win this business,” said Tyler.

To help foster air cargo’s competitiveness in this

growing segment, IATA has developed a new initiative, the Centre of Excellence for Independent Validation in Pharmaceutical Logistics (CEIV Pharma). CEIV Pharma assesses and validates coolchain processes and provides training to guarantee that they comply with all applicable standards and regulatory requirements.

“The benefit of CEIV certification for all organizations will be to instill trust and confidence with shippers that the sensitive goods will be handled reliably until they reach the customer,” Tyler added.

The continued safe transportation of lithium batteries remains a key concern for the industry. Robust regulations and guidance exist, but these are not being fully followed by all shippers. China is the largest producer of lithium batteries and therefore a key market. IATA has developed the Lithium Battery Shipping Guidelines in Chinese to raise awareness on this vital issue, but the issue is also one for government authorities.

B:8.375” “Regulators need to step up. The industry is doing what it can, but without oversight, surveillance and where necessary, enforcement, compliance at the T:8.125” source of the S:7”shipment will be limited,” said Tyler.

When you need something shipped immediately, Old Dominion Expedited delivers.

Our focus on premium service means every shipment arrives with one of the lowest claims ratios and one of the best on-time records in the industry.

OD Expedited offers: • Next-day arrival • Delivery at a guaranteed time • Weekend Promise: guaranteed Friday to Monday delivery

For more information, visit odfl.com or call 1-866-637-7333.

Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners. © 2015 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.

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We’re on time when time is scarce.

SUPPLY CHAIN SCAN

New insight into working hours Morningness, eveningness and the problem of shift work

S

hift work is common in many industries, including health care, security, transportation and warehousing. Such sectors need employees to maintain high levels of attention in order to minimize risk.

But working shifts is known to lead to cognitive and behavioural problems through disrupted circadian rhythms and sleep patterns. In a new study published in Biological Rhythm & Research, authors Fatma Feray Selvi, Sibel Asi Karakaş, Murat Boysan and Yavuz Selvi find that shift work affects attention deficit, hyperactivity, and impulsivity among nurses, and that an individual’s chronotype—their natural tendency to ‘morningness’ or ‘eveningness’—is a relevant factor. They suggest that a person’s chronotype could help to evaluate their suitability for shift work.

It has been known for some time that shift-work schedules have a marked effect on circadian rhythms and the sleep–wakefulness cycle, leading to cognitive and behavioural problems.

In this study, Selvi, Karakaş, Boysan and Selvi surveyed 206 hospital nurses, 79 working on day shifts and 127 on night shifts. They used a number of tools and surveys to measure the nurses’ motor impulsiveness, non-planning, and attentional impulsiveness as well as how frequently the individuals experienced symptoms of inattentiveness and hyperactivity/impulsiveness.

The authors also identified the nurses’ circadian preferences using the Morningness–Eveningness Questionnaire (MEQ). This measure classifies individuals as morning-types, intermediate-types or evening-types, according to their reported times of activity and alertness.

Among the findings of the study are that shift workers have more attention deficit and impulsivity than daytime workers. Looking at the nurses’ chronotypes, Selvie et al. find that evening-type workers score significantly higher than morning-type employees for attention deficit. Morning-type

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workers report lower hyperactivity scores than evening- and intermediate-type workers.

The researchers also analysed impulsivity scores in relation to the nurses’ demographic characteristics—age, gender, marital status, working schedule, time in employment, tobacco use and duration of smoking—as well as to MEQ. This reveals that unmarried participants and shift-workers have significantly higher impulsivity scores. The average impulsivity score of evening-type workers is higher than those of both the other chronotypes.

“The most important outcome of this study was that those working on the shift system had more attention deficit and more impulsivity than the daytime workers. Even though the effects of shift work on cognitive functions have been analyzed before, this is the first study that has investigated the relationship between the work schedule and attention deficit, hyperactivity, and impulsivity,” the authors said.

The additional findings regarding workers’ chronotypes will be of practical use to employers: assessing whether individuals are morning-types or evening-types will help to determine their suitability for shift work.

Having alert and attentive workers is extremely important for fulfillment centres, both for pick accuracy and safety, especially around mobile equipment like forklifts and pickers.

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SUPPLY CHAIN SCAN

Did you miss it online?

THESE ARE SOME OF OUR TOP ONLINE STORIES. DON’T MISS ANY MORE! SIGN UP FOR OUR TWICE-WEEKLY E-NEWS AT WWW.MMDONLINE.COM/SUBSCRIBE. Canadian Pallet Council closing—Operations to cease by mid-May after 38 years http://tinyurl.com/cpcclosing

UniCarriers completes purchase of Nissan engine builder— Nissan Industrial Engine Manufacturing, Inc. (NIEM) is now a UniCarriers subsidiary http://tinyurl.com/unicarriers-nissan Canadian team selected for Amazon Picking Challenge— University of Alberta team receives travel grant to attend robotic picking competition in Seattle http://tinyurl.com/amazon-challenge

DP World buying Prince Rupert terminal—Fairview Consumers have little tolerance for wrong or late Terminal seen as key gateway port for Trans-Pacific trade deliveries—Nearly 70 percent will switch retailers if an item between Asia and North America they purchase online or by phone is not delivered within B:8.375” http://tinyurl.com/fairviewterminal two days of the date promised http://tinyurl.com/late-deliveries T:8.125” S:7”

Old Dominion simplifies global shipping by doing more than delivering freight. Our focus on premium service means every shipment arrives with one of the lowest claims ratios and one of the best on-time records in the industry.

OD Global offers: • Personalized, single point of contact for status on all shipments • Pacific Promise™: service from 24 Asian ports direct to the U.S. • Direct service to or from Canada, Mexico, Puerto Rico, Alaska and Hawaii

For more information, visit odfl.com or call 1-800-432-6335.

Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners. © 2015 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.

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When you’re driven by details, the world is a smaller place.

SUPPLY CHAIN SCAN MOVERS + SHAKERS

Anthony Grant

Anthony Grant has joined Dematic Canada as Regional Account Manager. In this role, he is responsible for introducing customers in the provinces of Quebec and Atlantic Canada to Dematic products. Grant comes to Dematic with nine years of experience in the material handling industry. He reports to Nick Klein Schiphorst, District Sales Manager for Dematic Canada.

Keith Swiednicki is now President & CEO of KOM International Inc. Swiednicki has been with KOM for over 30 years, managing over 500 supply chain projects. Allan Kohl has served as President for the past eight years and will move to the role of Chairman and continue to manage mandates as well as to provide guidance based on his 42 years at KOM. Algoma Central Corporation has appointed Ken Bloch Soerensen as President and CEO effective April 1, 2015. Originally from Denmark, he was CEO of United Arab Shipping Co. from 2005 to 2009 and also served for two years as the Executive Director of the European Liner Affairs Association in Brussels, representing the

industry on regulatory matters in the European Union.

Greg Wight retired as Algoma’s President and CEO on March 31, 2015. Wight was with Algoma for 35 years, having joined the Marine Division of Algoma Central Railway in January 1980 as the Division’s Controller.

James R. Crane has been appointed a Director of the Cargojet Board. He will replace Terence Francis, who retired from the Board effective March 8, 2015.

David Kneisler, vice president, global quality at Dana Holding Corporation has been elected chairman of the Automotive Industry Action Group (AIAG). AIAG is a not-for-profit, member-supported organization that works collaboratively with automotive and manufacturing companies, suppliers, and service providers to help them operate at peak performance.

Kneisler, a 20-year Dana veteran, joined the AIAG board in 2006 and has served as vice-chairman for the past two years. He has served in multiple roles with Dana including program management, plant management, and in quality roles before becoming vice-president of global quality in 2007.

CORPORATE ON-SITE TRAINING WHY CHOOSE ON-SITE TRAINING? On-site training offers a variety of benefits to both employers and staff. In addition to cost savings and convenience, on-site training can be customized to meet different business needs. On-site training ensures consistent learning across the board from a single team to an entire organization.

WHY CHOOSE SCMAO TO PROVIDE YOUR TRAINING? Expert Instructors – Our expert instructors are leading supply chain academics and experienced practitioners who have real-world SCM experience.

Our Programs – Our programs are designed to enhance skills development, professional competence and strategic perspective of SCM professionals at all levels of career progression from entry, to mid, and executive levels of functional responsibility.

Our Reputation – As the leading supply chain association in Ontario, SCMAO has established a reputation for excellence in education and professional training. Over 70% of our corporate training is provided to repeat clients.

For more information on corporate training with SCMAO, please contact Carol Ship Spencer, Director, Education and Professional Programs at 416-977-7566 x2146 or csspencer@scmao.ca.

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PROFESSIONAL DEVELOPMENT DIRECTORY Advertorial

Looking for smart, effective, proven & trustworthy people?

TOP talent might closer than you think. Within your Unlike a one-time, university degree or a college

Since supply chain logistics is an incredibly complex,

own ranks, among your suppliers, or otherwise

diploma, the best industry-granted professional

constantly evolving field, CITT believes that their

close at hand. Now, you can search Canada’s

designations require their holders to provide

renewal requirement for continuing professional

definitive List of Current CCLPs—updated weekly

evidence that they’ve invested time in their

development is good for industry, companies, as well as

& publicly available online at www.citt.ca/CCLPs.

ongoing professional development. This puts

for the pros who carry CITT’s well-respected credential.

Or hire a CCLP by posting a job for free at

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www.citt.ca/postajob

respected credentials such as the CPA, CA

Viglas adds: “This new public verifiability of our

(Chartered Accountant), PMP (Project Management current credential holders adds extra credibility to Not just anyone can call themselves a CCLP®

Professional) and CHRP (Certified Human

the CCLP designation and more value to our CCLPs

(CITT-Certified Logistics Professional)

Resources Professional), as well as trusted

who make the effort to keep their knowledge sharp

Completing CITT’s academic program is not the

healthcare professionals like pharmacists

and maintain their status year-after-year.”

same as being a full designation holder. To be

and registered nurses.

Since people can complete the requirements for the

eligible to hold the designation, people complete a rigorous, case-based program of study, have a

“CCLP designation holders really work at staying

CCLP designation throughout the year, new CCLPs

minimum of ~10,000 hours of industry experience,

relevant throughout their careers and are very

will be added to The List every week. The List of

accept a professional code of ethics AND commit to proud of their commitment to the supply chain

Current CCLPs is available right now at www.citt.ca/

regularly invest time in their ongoing professional

logistics sector,” says Catherine Viglas, CITT’s

CCLPs. People or companies can also contact CITT

development. After meeting these requirements,

President. “CITT has certified thousands of logistics

directly to verify a professional’s designation status.

CCLP designation holders must recommit to the

professionals since our inception in 1958, but only

business & their own competitiveness every year

those who have maintained their CCLP designation

CCLP ® (CITT-Certified Logistics Professional) is a

by submitting continuing education credits and

into 2015 get to be on ‘The List’.”

registered trademark of CITT

paying member dues.

www.citt.ca

www.mmdonline.com | March/April 2015

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Links in the cold chain When it comes to the temperature-controlled supply chain, distribution centres take great care in ensuring products reach their destination in prime condition with an acceptable shelf life. Mary Del Ciancio explains how two leading companies make sure the process runs smoothly.

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he food industry has changed in recent years. More premium foods are making their way to store shelves; food freshness and quality are more important to the average customer; and food handling and food safety requirements have become stricter. At the same time, these products must arrive to store shelves in a timely manner, safely, with the same freshness and quality as when they left the supplier.

This puts a lot of added pressure on the players in the temperaturecontrolled supply chain, particularly the distribution centres that co-ordinate the cold chain and act as the go-between—receiving products from manufacturers and shipping them to retailers. Not only do these companies have to meet customer requirements, but they have to meet the strict requirements for safe food handling set out by the government. Careful planning, as well as investments in technology and people, are key to ensuring that products are shipped and received safely and in prime condition.

Wal-Mart Logistics: Multiple checkpoints and multiple investments Retail giant Wal-Mart operates two perishable distribution centres (PDCs) in Canada—one located in Mississauga, Ontario, and the other in Balzac, Alberta. Most of the products that arrive at these facilities are in and out within 20 hours.

The challenge, says Ray Matkovich, operations manager with Wal-Mart’s Alberta PDC, is always trying to be as efficient as possible, but still maintain product integrity.

Wal-Mart Logistics goes to great lengths to ensure the quality of the products it ships, stores and ultimately sells at Wal-Mart stores across the country. Products must pass multiple checkpoints to ensure quality and integrity—all before a trailer is even unloaded at one of the company’s 400,000-square-foot PDCs. The paperwork is checked, the trailer is checked, the temperature of the trailer is checked. If there are any discrepancies, the quality assurance team gets involved to verify the condition of the product.

If all looks okay, the operations team can start to unload at the dock.

“We give them the paperwork, and they need to start working on it almost immediately in order to get that product off the trailer and into the correct temperature zones within the warehouse,” explains Michelle Watson, transportation manager at Wal-Mart’s Alberta PDC. There are three temperature zones within the warehouse—a 55˚F area for dry produce; a 36˚F area for chilled product; and a -18˚C section for frozen foods.

During the unloading process, the receiving team has guidelines to follow to ensure food safety, which includes taking the temperature

A special supplement brought to you by

www.mmdonline.com | March 2013

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of the product with a digital probe. Then the quality control department comes in to inspect the product that enters the building to ensure quality and integrity, before it is received into the DC. Careful consideration has been given to the layout of the warehouse. If Wal-Mart Logistics needs to make room for additional stores or products, industrial engineers look at reconfiguring the setup to best utilize the space. In addition, operation team leaders carefully plan their picking processes for flow and staple stock so many functions can run at the same time without congestion.

On the outbound side, shipping team leaders make sure the trailers are pre-cooled, and they’re not loaded until the trailers are at the correct temperature. They use laser guns to make sure that the temperature is at the proper set point before loading. The company

Brilliant lighting of a VersaCold facility equipped with green energy efficient LED lighting.

Image courtesy of VersaCold Logistics Services.

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also requires that drivers have their own digital temperature probes, so that both the store and the driver can check the temperature at time of delivery.

“We just need to make sure that every checkpoint is looked after, and that the process is followed through from the beginning to the end,” Watson explains.

Technology, in fact, greatly contributes to the success of the cold chain. Careful monitoring of temperature is key to ensuring not only quality, but safety as well.

The Alberta PDC has its own fleet of 68 owned or leased trailers.

Each of its trailers have alarm codes—a precise, built-in data recorder that will report any issues on the display (e.g., a fault in the heating or cooling cycle) so that the driver can report them immediately.

If the trailer is in the DC yard and an alarm code is noted by the device, it will send an email to the transportation team in the building so that they are able to call for service immediately.

Each Wal-Mart reefer has a built-in data recorder that documents the set temperature points, the return air temperature, any time the reefer is shut off or turned on, as well as any alarm codes that may have occurred. These “reefer downloads” are very useful if there are any concerns as to the safety or integrity of food.

“Once you get the information, you can tell where the reefer ran throughout that transit time, if there was any increase in temperature or decrease in temperature, if it didn’t run for a period of time. It tells the whole story,” explains Watson.

Some of Wal-Mart’s vendors include “temptales” on their loads, which record the temperature in the trailer. If there is ever a questionable product, Wal-Mart can download the information at the warehouse to learn where the temperature has been at any given time in transit.

Most of Wal-Mart’s trailers are dual-temperature where, for example, one zone on the trailer is freezer goods and another zone is cooler goods. Recently, however, the company started using tri-temp trailers, giving it the ability to include all three temperature zones in one shipment. These reefers feature a centre wall, which Watson says gives the company greater route flexibility.

“Movable, insulated panels and insulated bulkheads come together to create a specification unique to each trailer. We can transport as many as three different temperature loads in the same trailer without compromising the cold chain,” she says.

The ability to fit one store’s shipment in one trailer, rather than sending multiple trailers with different temperatures to multiple stores, is a win for everyone concerned.

“It’s a win for the store, only having to receive one trailer in a night for labour purposes. It’s a win for the DC [because] it’s easy planning. Everything for one store just goes on one trailer. There’s no dividing of the product between trailers. And I think there’s less chance for temperature issues when there is only one store,” says Watson. “If we can reduce the handling, and reduce the number of times that those doors are opened, it’s going to be a win for the customer in the end.”

This equipment will help the cold chain process run smoother as volume through the PDCs increase.

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Continued from page 20 In 2014, the Alberta facility alone saw more than 50 million cases go through its building. But that number is expected to increase this year, as the company shifts its focus to fresher foods and grocery items.

“Our focus is the Wal-Mart mom,” says Watson. “When the mom goes into the store, we want to make sure that product is there when she gets there, in the condition that she wants it to be in.”

VersaCold: Investing in people and technology VersaCold Logistics Services is the largest provider of temperaturesensitive supply chain solutions in Canada. The company has 31 facilities across the country, ranging in size from 42,000 square feet to 403,000 square feet. Its DCs hold product in temperatures ranging from 5˚C to -20˚C, for as little as a few hours, and up to six months for frozen foods.

VersaCold’s challenge is that, though three of its facilities are each designated to one customer’s needs, the other 28 service a variety of customers—a broad grouping of companies with different needs in terms of process and temperature requirements. This is where careful planning is required right from the start.

The company has an in-house supply chain engineering group that looks at a customer’s material flow and processes to determine how they can help optimize their supply chain. Through that set of analytics, they not only look at how they can bring efficiencies and supply chain opportunities to the table, but they also work with them on understanding their needs in terms of temperature specificity and any unique requirements of their products, drafting out standard operating procedures. They look at things like the optimum location for inventory, the ideal level of inventory, and how to get product to market quicker and at a lower cost.

VersaCold has made many investments to ensure the process runs smoothly—$28 million over the last two years in energy efficiency (see sidebar), various technology projects, highway trailer equipequip ment, building upgrades and more.

Last year the company introduced a cold chain assurance group headed by an individual with a chemistry and biology background.

This group works closely with the operations teams, as well as the customers’ teams, around food safety and food quality. They are responsible for ensuring the freshness of product, and meeting food safety requirements.

To ensure integrity of the load during transport, VersaCold monitors temperature throughout the transportation process, and has invested in and implemented real-time reporting capabilities. This allows team members to be aware of issues earlier, so they can work closely with customers in responding to delays, port issues or other challenges that come up.

The company not only monitors temperature during transit, but also when product arrives at the facility and when it leaves.

“When product is delivered into our building, we’ll check the temperature in it in most cases. We’ll record those temperatures.

We’ll monitor the temperature while it’s in the building, and probe the temperature on the way out of the building as well,” says Douglas Harrison, president and CEO, VersaCold Logistics Services.

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One of the trends Harrison sees is that companies are tightening inventory management processes and requiring faster turnaround times on orders. To deal with this, VersaCold has invested in labour management tools for better scheduling of the workforce to ensure they’re meeting those faster demand requirements. This allows them to look at scheduling shipments or receiving, and scheduling labour requirements in the building to match those needs.

The company has also invested in Power 2.0, its proprietary warehouse management system that allows team members to look deeply at planning, operating efficiency, tracking of product, recall capability of products, etc. It allows for deeper metrics and

Dealing with energy costs Energy is a tremendous cost for distribution centres, particularly those that focus on the cold chain, where they have to maintain a range of temperatures for dry, cooled and frozen foods.

It’s one of the cost pressures that VersaCold feels, and one that the company has heavily invested in to bring costs down.

“We’ve invested roughly $4.5 million over the last two years in energy efficiency, technolo green lighting [and] other technoloconsump gies that reduce energy consumption in our facilities, but still provide the required temperature consis consistency,” Harrison says.

VersaCold has implemented auto shutoffs on lighting when certain parts of the building are not in use.

The company has introduced LED light lighting, which is more energy efficient and produces less heat and, therefore, the refrigeration systems work less to main maintain the temperature of the building. The company has implemented variable fre frequency drives, which manage the speed of the fan in the refrigeration system, and ensure it’s not operat operating at times that it doesn’t need to. The company also uses ammonia-based refrigeration systems, which are more environmentally friendly and energy efficient.

Wal-Mart, too, has made major investments in energy. Watson says the company’s Alberta DC is one of North America’s most energy-efficient distribution centres. It’s so sustainable, in fact, that the company has opened it up to tours, where the team highlights all of the energy-efficient features of the building— LED lights; solar panels; material handling equipment that runs on hydrogen cells; two large windmills; and more.

The results are clear when you compare the energy costs of Wal-Mart’s Mississauga PDC, which runs on traditional power, to its Alberta DC. The Mississauga facility uses 1.3 million kilowatts per month, while the Balzac location uses 601,000 kilowatts a month to run a facility the same size.

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operational reporting so that facility managers can better manage their business on a daily and hourly basis. The company has also invested in areas like transportation management, which then integrates back into its warehouse management system to provide that seamless transfer of data and information.

Later this year, the company will launch technology in its transportation fleets that will allow a customer to look at real-time tracking of temperature on its fleet, and receive real-time alerts if a temperature varies outside a certain range.

“The 2,400 employees in the company who care about our customers’ product are very committed to the safety and quality of food in the supply chain,” says Harrison, adding that the company also provides training to employees around food quality and safe food handling. “A lot of training, a lot of investment in people, supported by technology, supported by processes.”

And the company’s efforts are working—the proof is in the numbers.

“Spoilage rates in our organization are incredibly low,” says Harrison.

“They’re less than a percentage point because of all the time and resources we invest upfront in ensuring that there is no loss of product.”

Complexity has increased as more case picking is required due to specialty and high-value food products. Image courtesy of VersaCold Logistics Services.

Continues on page 24

YOU PERFECT IT. WE’LL PROTECT IT. Buckhorn offers an unmatched selection of reusable packaging solutions designed to protect your products and increase your profitability.

Buckhorn’s new Intrepid 48” x 40” specialty bulk box is the perfect addition to our extensive offering for food and distribution. Made of FDA approved material, Intrepid is designed for a variety of industries including meat, poultry, liquid, powder and granular applications. It offers a smooth interior and exterior for easy cleaning, and its heavy duty design can handle loads up to 2,500 lbs.

Stop by ProMat Booth #1219 to learn more about Intrepid, or visit buckhorninc.com for more information.

US: 1.800.543.4454 Canada: 1.800.461.7579 www.buckhorncanada.com ©2015 Buckhorn / Myers Industries, Inc. #012414

BULK BOXES | HAND-HELD CONTAINERS | IBCs | PALLETS | SPECIALTY BOXES

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Continued from page 23

The education factor Education—in customer needs, requirements, safe food handling, etc.—is key to the success of the cold chain.

“We have processes that we’re trained in to be able to maintain product and product freshness, so that when the consumer buys it, the product quality is high, the freshness is high and the integrity of the prod-

uct is excellent,” says Harrison.

Consistency is important, too.

“With food safety and with temperature-controlled environments, everything has to be done the same, every time, and right,” says Wal-mart’s Watson. “If there’s any break there, you’re going to have issues. Everybody needs to be educated and know exactly how the process needs to go in order to make sure that product arrives at the store in a sellable condition and the highest of quality.”

News Low-temperature hydrogen system FreezPak Logistics will be using a GenKey hydrogen solution from Plug Power for its new cold storage distribution centre freezer warehouse under construction in Carteret, New Jersey.

The GenKey deployment includes 25 GenDrive fuel cells, a GenFuel outdoor hydrogen storage infrastructure with two indoor GenFuel dispensers, and total GenCare service for both the fuel cells and hydrogen system. The contract includes a ten-year hydrogen supply agreement.

The GenDrive-powered fleet mix consists of class-3 units for pallet jacks and class-2 units for reach trucks. Plug Power has already manufactured and shipped the entire order, which will begin supporting FreezPak’s facility following its opening, planned for the second quarter of 2015. The GenFuel installation is also targeted for completion during the second quarter.

FreezPak will be a fuel cell pioneer in the cold storage market.

Cold storage applications represent a sweet-spot for Plug Power’s GenDrive units. Unlike lead-acid batteries, which display significant performance degradation in cold temperatures, GenDrive fuel cells perform at maximum operation in environments as low as -22˚F. Brothers Michael and David Saoud are co-owners of FreezPak Logistics. “FreezPak sees the use of Plug Power’s hydrogen fuel cells as a way to bring green technology to our new facility, and a means to improve our operations and better serve customers,” said David.

Michael continued, “FreezPak is committed to investing in and adopting sustainable solutions that will allow us to enhance our operations and successfully compete with other cold storage service providers.”

Case and less-than-case picking in freezers Retrotech is offering a freezer-specific ASRS system designed to alleviate the need to send workers into hard environments to pick small, high frequency orders.

Retrotech claims the PTS shuttle ASR for freezer warehouses has been engineered specifically for the extremely cold environment of freezer warehouses.

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orders has forced companies to send staff into the extreme environment of the warehouse in order to fulfill these smaller orders—which costs companies money and diverts personnel from doing more productive work,” said Tom O’Dette, Retrotech’s director of engineering.

Olive oil conditioning room Due to temperature fluctuations during transit, olive oil changes colour and needs to be heated at 80˚F for 24 to 48 hours to regain its natural colour. 3PL Port Jersey Logistics was initially “using an industrial vinyl wall to partition the space,” said Galo Panchi, the company’s facilities manager. “Our heating expenses were through the roof.”

Port Jersey Logistics is a food-grade, full-service 3PL. It serves the food, beverage, and personal care products market. Temperature and humidity-controlled space is a growing trend for these businesses. The challenge for 3PLs like Port Jersey Logistics is to provide temperature and humidity-controlled areas while retaining the ability to move or expand walls as clients’ needs change.

To solve the olive oil challenge, Port Jersey Logistics used InsulWall to create the heated room at their new 700,000 square foot foodgrade, public warehousing space. By not building a permanent wall, Port Jersey Logistics maintained the ability to reconfigure its warehouse space without costly wall removal and construction.

Based on the savings realized in energy costs, InsulWall paid for itself in one year.

“InsulWall helps us meet our clients’ demands with its ease of installation, ease of maintenance, and ability to create cooler and heated rooms economically,” added Panchi.

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Material handling

high

ProMat 2015 demonstrates an optimistic industry

With units operating around the world in Australia, New Zealand, Mexico, Canada and the US, there are few frontiers left to conquer. That number got smaller with the sale of its first loader in Europe, to Michelin in France. It will be up and running by the fall.

ELS has also opened a second production facility and has been hiring new staff.

SailRail Automated Systems Markham, Ontario’s SailRail Automated Systems was also at the show with its line of ergonomic material handling equipment. President Ian Scarth demonstrated the ErgoKart, which positions and lifts heavy materials. It’s being implemented in every Ford plant in North America. SailRail has been a Ford top ranked supplier for 12 years.

The show was packed

By Emily Atkins

once everyone made it through the Chicago spring snowstorm.

Photo courtesy MHI

CHICAGO, ILLINOIS—Moving ProMat to March was supposed to alleviate Chicago winter weather woes, but without success. A freak blizzard grounded planes and snarled traffic as thousands tried to reach McCormick Place in the city’s south end.

In spite of the elements the 340,000 square-foot show floor was busy at the four-day materials handling extravaganza, and the attendees weren’t just tire-kickers. At several of the 802 booths exhibitors told us “it’s an order-taking show”; a refrain that has not been heard with such regularity at ProMat for years.

Among the 37,091 attendees on the show floor, we chatted with Wecon Systems president Will Egerton and spotted Greg James from 3D Storage Solutions, from afar. (Sorry we missed you, Greg.) Show producer MHI said attendance was 8.8 percent up over 2013.

We also spoke with a number of Canadian exhbitors.

Engineered Lifting Systems Things are looking particularly rosy for Elmira, Ontario-based Engineered Lifting Systems & Equipment Inc (ELS). Richard Kat, VP Sales & Marketing, took a moment out of demonstrating the 2015 MHI Innovation Award-nominated Restuff-IT loader to share some of the company’s recent successes.

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UniCarriers Over at the UniCarriers booth (where we first heard that this is an order-taking show), the mood was buoyant as the company celebrated its first time back at ProMat in about 20 years.

We sat down with four vice-presidents of the newly re-branded company created through the merger of TCM and Nissan Forklift Co to talk about the company’s expansion plans in Canada.

Four dealers have been named: All-Lift in the GTA, AMB Lift Inc in Ottawa, Deval in Montreal and Equipments EMU in Quebec City.

The company is also hiring a national sales manager to operate out of the GTA to serve national accounts.

Schaefer System International Ltd At the Schaefer booth we met with the new Canadian executive sales manager for the Automated Systems Division, Christophe Buchmann. A recent arrival, he is quickly getting up to speed on the Canadian marketplace.

We also had a booth tour with Bob Trojnar, Sales Manager, Material Handling Division Canada.

SSI was showing the automated LOGIMAT vertical lift module (VLM). This goods-to-person concept is simple: Incoming goods are put into the high-density, automated-storage VLM. As orders for parts, or for MM&D | March/April 2015

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“The LC IN-Feeder is designed for quick changeovers for different media stock of various sizes which eliminates time wastage, human error and ultimately reduces labour costs,” said John Panunto, president, PSI Engineering.

HighJump Software Addressing the growing trend for retailers to pick e-commerce orders from their retail shelves, HighJump Software has developed Retail Advantage to help retailers and grocers optimize fulfillment processes to meet the demands of omni-channel customers.

High Jump’s Chuck Fuerst explained this is the system Loblaws is using for its new Click and Collect program that allows shoppers to order online and pick up at the retail outlet.

It’s meant to be flexible and responsive to changing demands as well as offering real time visibility into stock levels.

Plug Power

shipping are required to be filled, the items are automatically retrieved from the storage system and brought to the picker at an ergonomic receipt station, where items are then picked from partitioned trays.

Since the picker does not have to walk, the focus at the pick station is on ergonomics and high productivity. SSI claims LOGIMAT is the most advanced and versatile VLM available, providing a six- to ten-fold increase in order picking speeds, reduced picking errors, and a compact footprint

PSI Engineering PSI Engineering was showing its LC IN-Feeder 3000.

Known for having the longest belt life in the industry, the LC IN-Feeder is low maintenance. Unlike other feeders in the market, the LC IN-Feeder has two stage separations, offering more consistent feeding of one item with large capacity loads. The LC IN-Feeder also includes Front Section Buffer, which prepares products for next cycle feed to aid in better separation of products and marketing material, a requirement during order fulfilment.

PSI Engineering’s John Panunto was having a good show when we stopped in to visit. Photo: Emily Atkins

www.mmdonline.com | March/April 2015

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Plug Power Inc, which provides the GenKey hydrogen fuel cell solution for DC vehicles, is another growth story out of ProMat this year. CEO Andy Marsh sat down with us for a few minutes to talk about the company and its direction. On the heels of tripled revenues and over 100 million hours of work performed by its hydrogen powered forktrucks in the past five to six years, Marsh said the company realized they needed to address the infrastructure needs of clients.

As with many supply chain innovations in the past 10 years, this one was spurred on by Walmart, which was looking for an end-to-end solution for the delivery of hydrogen fuelling for its legion of DC forktrucks.

Plug Power now supplies the whole fuelling infrastructure (GenFuel), delivering the exterior storage station on skids for installation on a platform and piping the connection to the DC. In 2014, GenFuel’s first year, it delivered 10 stations, and can now turn them around in 12 weeks.

Next up, Marsh says, is research into making hydrogen more available and cost effective. The company is operating a two-year strategic plan to address this challenge.

Trelleborg Trelleborg Wheel Systems announced the launch of its new Pit Stop Line tires at the show. The Pit Stop Line answers a critical question—how to know, with 100 percent certainty, when a forklift tire is worn out and needs replacing.

“Solid tires are often replaced with up to 25 percent of their tread remaining simply because people are unaware that tread depth has nothing to do with tire life,” said Ydo Doornbos, managing director of Trelleborg 27

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for the Americas. “Not only does this misconception cause a great amount of wastage, but it also costs companies thousands of dollars every year through unnecessary tire replacement and machine downtime.”

Pit Stop Line tires have a highly visible orange line embedded into the tire. This indictor is designed to reveal itself across the surface of the tire when it reaches the point where it should be replaced, thereby ensuring that tires are not replaced too early or too late.

The Pit Stop Line appears 100 hours or five to 15 working days before the tire needs replacing,

Frazier Industrial Frazier Industrial introduced showgoers to a mock-up of their Pallet Mole system.

Intelligrated At its press conference Intelligrated was full of optimism and plans for expansion. In 2014 the company had 300 new hires, and by March 24th this year had already hired another 200. It’s expanding its Danville, Kentucky plant for production of the One-Level Shuttle (OLS) and is opening new locations in Texas and Minnesota.

Looking at trends that are influencing demand, president Chris Cole talked about e-commerce and home delivery and the increase in detailed order picking. He said the challenge is matching up qualified labour with jobs that people are willing to do.

Automation is the answer he said. “The worst jobs are going to get automated.”

To that end, Intelligrated was showing its OLS and Warehouse Execution System (WES) at the show.

The WES is described as the “operational brain, adjusting workflow through constant analysis to provide the accuracy and speed required for e-commerce and omnichannel fulfillment.”

Student design competition

In addition to browsing on the show floor, ProMat visitors had a multitude of educational seminars to choose from. Photo courtesy MHI

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The Pallet Mole system utilizes the latest technology in high-density storage to maximize available floor space, storing up to six high and 50 pallet positions deep, while measurably increasing warehouse productivity and SKU selectivity. It is also the only pallet shuttle device to earn the Underwriters Laboratory (UL) Certification for conforming to all North American Standards for electric, safety and design requirements.

The Pallet Mole runs underneath the pallet loads on rails, delivering and extracting pallets within a deep lane storage racking system. Working in either FIFO or LIFO applications, the Pallet Mole improves throughput by indexing loads directly to the first position at the aisle face. Using a RF controller, the operator instructs the electromechanical platform to lift, lower or shuttle pallets to the desired position.

The College Industry Council on Material Handling Education (CICMHE) and the Order Fulfillment Solutions Council (OFS) recognized the winners of the 2013-2014 Material Handling Student Design Competition at the show.

The 2013-2014 case was developed by Reddwerks, Corp. and focused on the picking processes at ABC, Inc, a major retail chain with over 200 brick-andmortar stores. In the challenge, ABC is forced to reconsider its current structure with two distribution centres (East Coast and West Coast) due to recent changes in order patterns. Considering new demands such as online orders, and Type I, II, & III small stores, the teams were challenged to create the best possible solution for ABC’s picking and distribution needs.

The information contained in this case study has been developed to provide a real world situation.

A mixture of academic and industry judges evaluated the entries according to the criteria of improved efficiencies, no location changes to current DCs, and improved return on investment, as well as the overall quality of the report.

First prize went to Alex Bones, William Bryan, Ciarra Loli and Annelise Weinmann of Montana State University with advisor Duward K. Sobek II. Second place was awarded to Nathan Biviano, Erika Bliss, Christopher Fenn and Samantha Reinhart of the Rochester Institute of Technology, with Tony DiVasta, advisor. The third place team was Aditya Kasukhela, Benjamin Howisen, Justin Holsworth and Ting Xiao of the University of Texas at Arlington with K. Jamie Rogers, advisor.

ProMat 2017 will be held at McCormick Place from April 3-6, 2017.

MM&D MM&D | March/April 2015

15-04-15 1:22 PM

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15-04-15 1:11 PM

Palletless Racking

Expanding the possibilities of distribution

By Jim McMahon

I

t is not unusual for a large product manufacturer or retailer to use millions of pallets each year for warehousing and shipping products between manufacturing, distribution centres and retail stores.

For the past 70 years, pallets have been primarily made from wood. But the interest in alternative solutions has continued to escalate as companies search for more cost-efficient shipping options, increased product safety, and a more sustainable supply chain.

This is particularly evident in the food and pharmaceutical industries, and where shipping by overseas containers is prevalent.

Paper slip-sheets eliminate the need for pallets One option, which has become increasingly visible in distribution applications, is the use of paper slipsheets. Consisting of a corrugated sheet with two split corrugated cores (tubes) to accommodate lift truck forks, they can support up to 2,800 pounds.

There are many widely used types of slip-sheets, available in different gauges of paper material, such as heavy, laminated paperboard or corrugated fiberboard, that are specified depending on the load weight requirements.

Once a load is built on a paper slip-sheet, it is stretch wrapped for stability.

Paper slip-sheet loads sit lower to the ground—two inches above the floor, compared to four inches for wood pallets. To maneuver slip-sheet loads through warehouses, forklifts can be outfitted with carton clamps or special-purpose forks designed to be inserted easily under the load.

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Not only are they recyclable, paper slip-sheets are cost-effective, ranging from $1 to $3 each, compared to $17 to $20 for wooden pallets.

The benefits of paper slip-sheets come from pallet cost reduction and lower shipping costs because of better loading density. By employing paper slip-sheets, companies can realize a 12- to 15-percent improvement in space utilization within containers and truckloads.

The sustainability benefit is also credible. Eliminating millions of wooden pallets saves trees, and better optimized loads in shipping reduces the number of truck trips, cutting fuel consumption and emissions.

Palletless racking Although paper slip-sheets provide an economical solution for many manufacturers’ container and trailer shipping needs—they have been confined to use in shipping only, storage has not been an option.

Slip-sheet loads brought into a warehouse facility via container or truckload must be loaded onto wooden pallets to be put into low-bay storage. When these loads leave the warehouse, they are removed from the pallets and loaded into a container or a truck for shipment. Rack structures are set up to accommodate wooden pallets, not paper slip-sheet loads.

To fully embrace the benefits of paper slip-sheet loads, current low-bay distribution centre infrastructure—conventional low-bay racking for pallet storage—would need to be adapted.

Such a solution would permit a seamless throughput of paper slip-sheet loads from receiving, through storage, and out through shipping without having to palletize and de-palletize the loads. It would completely eliminate MM&D | March/April 2015

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the need for wooden pallets in low-bay storage.

Warehouse Solutions Plus, Inc, an integrator specializing in warehouse racking systems, has engineered a rack decking solution that can accept paper slip-sheet loads without pallets. Its focus centered on the low-bay rack decking, which needed to be modified to support the weight of the paper slip-sheet load, yet provide adequate space to allow entry of the forklift tines under the load. Low-bay rack supports, which are traditionally found on the underside of the deck, were repositioned onto the top of the deck, and along the sides, and a riser deck was integrated, allowing the same strength and stability, but with added functionality.

The metal riser deck can be customized to conform to the load requirements of specific applications, permitting greater storage capacity and space utilization. The decking can also be modified to accept standard GMA pallets, requiring a four-inch height clearance to accept standard forklift tines.

Savings for IKEA IKEA USA distribution centres have removed pallets from their low-bay storage, using this system. The company expects to save tens of millions of dollars

annually, within just its US distribution operations, simply by eliminating wooden pallets in shipping.

These modified racking systems, with the metal raised decking, can deliver noticeable benefits to distribution operations. Not the least of which is a reduction in damage, both to the racking and to products, due to the raised-decking aspect of the design.

Palletless low-bay raised-decking for paper slip-sheet loads completes the connection of a continuous supply chain—from manufacturing outbound in overseas containers or domestic truckloads, to receipt in distribution centres and put-away into low-bay storage, and then outbound for shipping, without the need for repositioning onto wooden pallets. If retail stores are receiving from a DC, their backroom warehouses can also be equipped with these modified decking systems to accommodate for paper slip-sheet loads, further extending the palletless supply chain.

MM&D

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15-04-15 1:22 PM

EQUIPMENT FOCUS

Forktrucks & Accessories 1 Hydraulic hybrid can save 35 percent Engineers from the world’s leading lift truck manufacturers recently visited one of Eaton’s facilities in Germany to get a first-hand feel of hydraulic hybrid technology installed in a machine demonstrator.

“The Eaton hydraulic hybrid power system means cities and businesses can significantly reduce the amount of fuel consumed and emissions produced,” said Astrid Mozes, chief technology officer, Hydraulics Group, Eaton.

Eaton’s solution demonstrated up to 35 percent fuel savings when compared to a

2 Mini forklift

The Stärke three-wheel Mini Forklift with German-engineered drive axle and mast is now available through the Stärke Material Handling Group across North America.

The Mini Forklift is a compact, light-duty, narrow-aisle workhorse that loves tight spaces. For indoor applications where size matters; the Mini Forklift has an impressive turning radius and is also suitable for construction projects where a light-weight portable lift is required. The Mini works in tight retail settings and trailer loading/ unloading applications as well.

3 New engines for Yale

Yale introduced a new line of industrial engines from Power Solutions International, Inc. (PSI) for its 3,000- to 7,000-pound Class IV and V lift trucks.

Yale Flex Performance Technology comes standard with the new PSI industrial engines and provides selectable performance modes to allow the truck’s performance to be tailored to operational demands–either maximizing fuel economy or enhancing performance.

The new PSI engines also offer extended service intervals and reduced maintenance requirements, helping decrease maintenance and downtime.

They feature hydraulic valve lifters

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baseline vehicle. The improvement was achieved by enhancing system efficiencies and capturing energy from braking, then using it to supplement the engine’s power during acceleration. This reduces energy consumption as well as improving carbon dioxide (CO2) and other emissions by 35 percent over a baseline vehicle.

For productivity, the system manages engine speed and torque, yielding optimal performance. The system also reduces conventional use of brakes, which means less wear and tear on this

key component. It also addresses the engine start, replacing the function of traditional electric starters. These innovations add up to lower maintenance costs.

With this innovation, Eaton technologists have also simplified three operator inputs into one control lever for smoother and more efficient lifting, making it an easier machine to operate.

Additionally, by simplifying inputs, Eaton’s system reduces the potential for operator error, leading to improved worker and operational safety.

One Mini Forklift may eliminate multiple lightweight electric pallet trucks and walkies, replacing them with one unit, while affording the same easy operation as a standard forklift.

With its overhead guard the Mini improves operator safety from falling overhead objects, common in warehouses, while the LED exterior safety lights alert others of its presence.

instead of mechanical lifters, eliminating the need for valve adjustments, while a coil-over plug ignition eliminates spark plug wires and associated replacement requirements.

“Customers using Yale’s new PSI engine will not only see greater fuel efficiency, but also increased travel and hoist speeds along with increased horsepower–up to 10 percent over the previous engine,” said Andrew Omahen, Product Manager, Yale.

Yale lift trucks with PSI engines are currently available for order with production beginning in the first quarter of 2015.

MM&D | March/April 2015

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EQUIPMENT FOCUS

4 Pallet truck gets power steering

The Crown PE 4500 Series has a new power steering option. The PE 4500 rider pallet truck is used in a wide range of applications; most commonly with operators loading and unloading trailers on docks or moving from aisle-to-aisle to pick orders.

Operators using the Crown PE 4500 Series with power steering exert less energy and experience less strain on their shoulders, arms and back while maneuvering the truck. Speed-sensitive steering and automatic speed reduction in turns deliver consistent steer effort, greater control and enhanced truck stability. The power steering option also allows operators to enjoy the traction and durability benefits of a rubber drive tire with no increase in steer effort.

The PE 4500 end rider pallet truck features the industry’s largest drive unit and up to 45 percent more steel than competitive models in areas of the truck that face constant stress and the highest risks of costly damage. Crown backs up the durability of the product with compre comprehensive warranties and a five-year guarantee on the power unit and fork weldment.

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15-04-15 1:12 PM

MAXIMIZE IT

Improving your IT value by wearing new glasses I

have changed jobs a few times. Who hasn’t? If you think back to the first few weeks you were in a new role, you may recall talking to people and creating a list of “low-hanging fruit” that you could address immediately to generate some tangible value and much-needed goodwill; to show that the company was absolutely right in hiring you; and to prove to all your new colleagues that you are indeed the right person for the job.

Hang on, wait a second. You are very happy in your role and, to the best of your knowledge, you aren’t going anywhere soon. So, what does this have to do with you, and why should you keep reading?

I am glad you asked. The answer is that even though you are happy and content, you can employ the same principles as if you were just hired to significantly improve your IT value!

What if you were to adopt the mentality of trying to make any potential replacement need to work extremely hard at showing they were the right person for the job? In other words, why not look at picking a basket full of that low-hanging fruit NOW, while you are still the incumbent?

How? Take a moment and pretend you are new in your role and look at it through those glasses. Take a peek through your new specs at your IT shop and ask yourself what you would immediately tackle if you had just been hired. How can you get at that low-hanging fruit now, make some jam and have a party?

Easy, use your new glasses to examine three key areas: addressing long overdue pain points, doing a peer review of your IT landscape and identifying who you need in the other business areas to be successful.

In most companies, there are widely known issues or common pain points that seem to affect a broad base of users but, for some inexplicable reason, noone has addressed. YOU can be a hero if you are the one that comes up with a solution.

For example, I joined an organization that had a sign-on for almost everything: you had to sign on to the network, to your e-mail, to the reporting system, and even to the intranet. Everyone hated it, but it was just how “it had always been”. Enter Single Sign On (SSO). It was a bit of work but well worth the credibility and good will it created.

Pull off one like this and you are immediately seen as a person who gets things done. So, with your new glasses, look for these pain points that have flown under the IT radar. www.mmdonline.com | March/April 2015

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Another tactic is to use an IT colleague who works for another company. Share your IT landscape with them from a high level perspective (being careful not to divulge any ingredients in the secret sauce) and see what areas jump out to a fresh pair of eyes. Chances are they may have seen some of the things you may be overlooking and can offer you some alternatives you can investigate.

I am sure this type of peer landscape review would have easily caught the Single Sign On issue if my predecessor had taken the time. I’m glad he didn’t, since I am still wearing my red hero cape.

On the subject of networking, continue to use your “new glasses” and ask yourself who you need in other departments to help ensure your success. Do you have them onboard now and have you done sufficient care and feeding of the relationship to be able to count on them in a time of need? If not, develop a small strategy to include them in your plans, clearly demonstrating the value to them: a definite win-win.

When speaking about this approach, it really does cause some lightbulbs to go off. One of the inevitable questions that always gets asked is “How often should you put on your New Glasses?” The answer is “it depends” since there are many unknown factors: time, energy and perceived value all being at the top.

At a minimum, I would suggest once a year if you found any value—more often if you are really getting good ideas and want to make it tough for any one silly enough to try and replace you!

If you make this a routine practice, any potential new guy will curse your name in dark, whispered tones since they will be hard pressed to come up with any quick wins. Make them work hard at creating value the old fashioned way, with their own ideas and experience, and not on the back of your forgotten nuggets. Make them truly earn their own red hero cape!

MM&D

Kevin Squires

MM&D’s newest columnist has over 27 years of experience. Kevin has led IT in some of the world’s largest Pharmaceutical companies (GlaxoSmithKline, Novo Nordisk) and has a strong track record of accomplishments. He made the move to the manufacturing sector in 2011 and is currently the Vice President, Business Technology for the Econo-Rack Group of companies (Konstant, RediRack, Econo-Rack, Technirack.)

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LEGAL LINK

Emerging technologies change everything Marvin Huberman

“We live in a period of PROFOUND TRANSITION - and the changes are more radical perhaps than even those that ushered in the ‘Second Industrial Revolution’ of the middle of the 19th century, or the structural changes triggered by the Great Depression and the Second World War.” — Peter Drucker, Management Challenges for the 21st Century.

I

n today’s society, change is occurring at an incredible pace. Our operating business environment is affected by many trends, such as e-commerce, the knowledge industry and globalization.

Yet, the primary driver causing and/or contributing to change is emerging technologies, particularly in the areas of computer technology, medicine and the Internet.

fairness, equality, and access to the emerging technologies, and the value of human endeavour in the world of robots.

Additionally, critical questions arise as to the rights and obligations of robotic devices with artificial intelligence. We now need and will continue to require answers to these questions.

The emerging technologies

What we should do

We live in an era with in vitro fertilization technology; These technological innovations must be understood. credit cards, PayPal and other electronic payment options, The actual and potential unfair manipulation and even virtual currencies such as bitcoin, which permits abuse of these technologies must be properly regupayment to be made not through a bank or government lated/governed by individuals, businesses, governregulator but rather directly by one entity to another; ments, legislatures, and the courts. Steps must be online social networking, shopping, advertising, even taken immediately to fill the ever-widening gap dispute resolution; Internet connected smart phones, between the emerging technologies and our social, smart cars, smart cards, and smart eye-glasses. legal and ethical norms which cannot keep pace with As developing technologies—especially in the areas technological advances. of computers, life sciences, artificial intelligence and Our digital world must be regulated proactively synthetic biology—continue to move at an exponential and reactively. A proper balance must be struck pace. We have: between emerging technologies and fundamental • 3-D printers; values, rights and freedoms—including privacy and • Data from a Fitbit fitness monitoring device being protection of data—of those who use and are affected used in a trial by a personal injury lawyer in Calgary, daily by these technologies.

Alberta, as evidence of injury New meaningful rules and reguto his client; lations that clearly, consistently, • Custom-made personal and comprehensively address mobile-assistive devices to help these issues must be introduced people with disabilities and to and enforced globally. serve as extensions of their In the end, the power of emergbodies and function as limbs ing technologies must be harand muscles; nessed and properly used, because • Bio-engineered devices and it is the effective and appropriate exoskeletons that show humanapplication of technology that machine mergers. adds value to all of us—in life and These technologies, with their in business.

MM&D inconstancy, instability, mystery and perplexity are “game changMarvin J. Huberman (www. MarvinHuberman.com) ers”. They profoundly affect and 3D printing is just one of the is a Toronto trial and appellate disruptive technologies that challenge our lives, laws, and lawyer, mediator and a regulations will have to catch up with. ethics, especially in the areas of chartered arbitrator. personal privacy, human dignity, 36

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MM&D | March/April 2015

15-04-15 1:17 PM

LEARNING CURVE

Issues around working hours S

ome folks will always push up against—or creep slightly around—established rules. Everyone knows it, and so do regulators.

In 2014, the Ontario Employment Standards Act, 2000, (ESA) added a few significant new amendments that apply to most employees of every provincially regulated employer in the province.

Of specific relevance to our industry are two changes coming into effect on May 20, 2015. First, under the category “Compelling Mandatory Self-Audits,” an employment standards officer will now have the power to require an employer to conduct an examination (self-audit) of its own records, practices, or both, to determine whether the employer is in compliance with the ESA or its regulations. Such employers will be required to conduct the self-audit and report the results to the Employment Standards Officer.

Also, effective May 20, employers will be required to provide each employee with a copy of the most recent informational poster published by Ontario’s Ministry of Labour (MOL), and ministry-prepared translations of such posters, if available, and if requested by the employee.

The MOL says proactive audits of various industries are designed to educate employers, enforce compliance of the ESA, establish the self-audit system, communicate it and raise awareness of the policies.

I say the prime reason for the amendments was to remove wiggle room for those taking liberties. Whatever the motivation, I don’t believe the amendments address the whole problem—especially when it comes to areas currently struggling with contentious rules, such as, for example, around trucking firms and overtime.

A four-year analysis (2010-2013) of the MOL’s workplace inspections determined the top five complaint areas were unpaid wages, vacation pay/time, termination pay, public holiday pay and overtime pay.

The “What You Should Know” poster amendment was put in place as a result of this analysis, as well as a second inspection action in 2014-2015.

On the positive side, most of content on the poster is easily interpreted, with the requirements well known, and easily applied. On the negative side, there are two items on the poster sure to cause employers trouble.

One is around the “hours of work” section that says generally, employees cannot be forced to work more than a daily limit of eight hours a day or the number of hours in a regular work day (if that is more than eight). Employees may work more than the daily limit if requirements for obtaining their written agreement are met. Employees may also work more than 48 www.mmdonline.com | March/April 2015

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hours in a week if requirements for obtaining their written agreement are met and the employer has an approval from the Director of Employment Standards.

(In certain cases and subject to restrictions, where an approval application has been pending for at least thirty days, employees may work a limited number of excess weekly hours.)

The second thorny area is overtime pay. Posters state that most employees must be paid overtime pay after 44 hours of work each week and that the overtime rate must be at least 1.5 times the regular rate of pay.

But in the trucking industry, there are exceptions to both hours of work and overtime pay for for-hire carriers that don’t apply to private fleet operators.

Information on exceptions is listed elsewhere on the MOL website. Unfortunately, because the poster does not reference this information, the document can be misleading to both employees and employers.

This grey area needs correcting, so that members of the audit group at the MOL can spend their time enforcing the rules rather than interpreting them. This would also answer questions like: how would an employer seek to protect itself from an inspection that results in violations, when, for example, a temporary help agency employs workers in that industry?

After all, drivers of trucks used in local cartage and drivers’ helpers are entitled to overtime pay for hours worked over 50 in a work week. But the section in the ESA for highway truck drivers shows overtime pay for hours worked in excess of 60 in a work week.

As stated earlier, the employer is required to calculate the overtime rate using the higher hours of work allowed only if an employer has applied to the MOL and obtained written approval from the ministry’s Director of Employment Standards. The employee still needs to sign off on the agreement to work hours that exceed the standard hours of work outlined in the poster. It’s unclear, to say the least.

Unfortunately, regardless of good intentions to level the playing field through better enforcement and auditing, some firms will choose to break the rules. I am not making a blanket argument for more government regulation and more meddling in companies’ business practices. And, maybe I am being naive to think companies start doing business only with ethical suppliers because it’s the right thing to do. This is really all about cost-containment—but at what price?

MM&D

Tracy Clayson

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

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MATERIALS HANDLING

Adapting to dimensional courier pricing A Dave Luton

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lmost a year ago the major couriers announced a major change for the pricing of packages. They allowed a long time for implementation to permit their customers time to adapt. By now some of the costs of the new policy should start to show and customers should take steps to counteract these added costs, if they have not already adapted.

Couriers implemented dimensional pricing to counteract the effects of more business-to-consumer shipments—thanks to e-commerce—which are inefficient compared to the more traditional businessto-business shipments.

The vast majority of freight shipments are traditionally subject to density pricing. The exception was smaller-sized courier shipments, although oversized cube and weight shipments were always subject to surcharges. With more e-commerce couriers were forced to correct this oversight and subjected all shipments to density-based pricing.

Without getting into detailed calculations and tariff rules, simply put, the new rules subject all packages to a volume and density charge structure. These are often based on the largest dimension, which while fair for shippers using rectangular boxes, have a tendency to overstate cubic volumes for irregular shaped packages.

The freight charge is based on the greater of the calculated dimensional weight or the actual weight of the package.

Thus, if the package is light but large, then its actual weight will be disregarded and its volumetric weight will be used for pricing.

Since the rules have changed, the question is what to do about it? For warehouses performing an omnichannel fulfillment function you have to rethink your small-item picking and packaging functions.

First, do not forget to undertake the non-warehousing corrective actions. What are these?

If your company has many product types, re-examine product pricing, particularly of lightweight bulky products such as deep-dish aluminum containers. It’s possible these were previously subsidized by denser product types, but this may no longer apply.

Check your courier suppliers carefully, as each has somewhat different rules and in particular cases the differences can be important.

Examine the potential for shipment consolidation to distant points so you can use zone skipping (also called zone hopping) to reduce costs.

Use a combination of national and regional couriers to get the best solution. One-size-fits-all may not be the best solution.

Re-examine freight charges levied to customers as they may have to be increased.

Of the solutions suggested, zone skipping may not be familiar to all people. Canada is a big country and to recognize the long distances from any shipping point in the country, couriers have divided the various destinations into geographic zones to reflect added costs of long-distance shipping. Thus, a courier shipment from Toronto to Calgary has higher costs than a local shipment from Toronto to Oshawa.

Zone skipping uses the concept of grouping shipments together to an intermediate point so they can take advantage of a cheaper local rate. Using an extreme case for large-volume shippers, you could consolidate all shipments to Alberta into a truckload to take advantage of lower truckload shipping costs for the majority of the line haul transportation costs. They are shipped to a local Calgary courier and from there they are forwarded onto the end customer. This way they take advantage of cheaper local courier rates within (southern) Alberta.

The best strategy requires analysis of the volumes for each geographic area and is an analysis of the tradeoff of service versus costs. (To get sufficient volume you may have to hold some shipments temporarily.) The same principle can work for large LTL shipments. Warehouse shipping has to be organized by zones and often waves to facilitate this strategy.

To combat the higher costs a closer look at the added freight costs is needed. Using logistics analysis to develop an integrated freight and warehousing strategy will identify the most promising solutions.

Customers should also be advised if shipments will be held temporarily to enable consolidation.

Next we will look at which changes are advisable within the warehouse to facilitate these strategies and other methods to reduce costs.

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

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Athletes put their trust in DB Schenker.

Photo by: Matthew Plexman

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You strive for world class performance. So do we.

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