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Inside 3 4 19 23 24 26 28 29 30

Taking Stock Supply Chain Scan Canadian Food Chain Learning Curve Equipment Focus: Fork Trucks Legal Link Retail Materials Handling Crunching the Numbers

We tune all makes and models.

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With more than 9,000 modernizations performed on both Dematic and non-Dematic system installations, no other company can match our experience and commitment to the aftermarket. That vast experience means less risk for you. We’ll perform a thorough equipment audit or modernization study. Then work with your staff to develop a cost-effective solution. And commit to a timeline you can count on.

From a minor improvement like replacing a floor rail in your storage and retrieval system over a weekend, to a major modernization like upgrading your entire control system.

No one delivers like Dematic.

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TAKING STOCK

Being good neighbours www.mmdonline.com PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins (416) 510-5130 EAtkins@bizinfogroup.ca EDITOR: Carolyn Gruske (416) 442-5600 x3265 CGruske@bizinfogroup.ca ART DIRECTOR: Stewart Thomas (416) 442-5600 x3212 SThomas@bizinfogroup.ca SENIOR ACCOUNT MANAGER: Catherine Martineau (647) 988-5559 CMartineau@bizinfogroup.ca PRODUCTION MANAGER: Kim Collins (416) 510-6779 KCollins@bizinfogroup.ca CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x3546 BAdelt@bizinfogroup.ca

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his issue, the cover story is about crime and security in the distribution centre. It’s a huge topic—so big that a companion piece about security threats to the trucking operations that move cargo into and out of the DCs had to be posted to www.mmdonline.com as there just wasn’t enough space in the magazine to do it justice.

But no matter how big and how complex the story is, there is one simple way of combating crime that all the experts mentioned: communication.

The majority of DC break-ins and cargo thefts go unreported, and one reason is because businesses don’t want bad publicity. They don’t want word to get out they’re vulnerable. But the truth is everybody is vulnerable—even the police.

Nothing can prevent serious and dedicated criminals from targetting even the most secure, locked-down operations.

One of the best things companies can do is get the word out if they do become victims of crime. The more people that know what happened and what was taken, the better the odds of somebody spotting the stolen goods, leading to their eventual recovery. While that’s to the company’s good, communication also has a community welfare aspect as well.

By sharing information, businesses can create a pool of preventative knowledge.

If you know that your neighbour’s DC was broken into through the skylight, you have the opportunity to strengthen your rootop defences. And if you’ve lost your cargo to a crook who has stolen a transport company’s identity, then your neighbours have an opportunity to beef up their entry and exit protocols. Collectively, everybody can become stronger by sharing information.

By forming tighter bonds with other businesses, especially ones in close geographical proximity, you can become your own informal neighbourhood watch group. If you know the DC across the street doesn’t work after midnight, but you happen to see a tractor trailer pull up and a couple of guys start to fill it up with goods at 3:00 AM, then you’ve got the opportunity to be a hero and stop a crime in progess with a call to the police.

It also helps to talk to the police. Getting informal briefings about criminal activities in the area is another way of learning from the experience of others, and liaising with the business community is a mandate of many police forces.

Take advantage of it.

July/August 2013  Volume 58  Number 04 14

19

24

28

DC security

Canadian Food Chain

Equipment focus

Retail DC

Natural Food Co-Op discusses ERP systems

New models of fork trucks and accessories

Protect your warehouse from crooks

MM&D | July/August 2013

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The final installment in the series

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Supply Chain Scan

CSCMP

Movers + Shakers

Pallets

PMAC

Rick Blasgen talks in Toronto, p 8

Appointments and promotions in the materials handling industry, p 12

Economic recovery increases sales, p 9

National conference report from Ottawa, p 13

Driverless vehicles, higher voltages and more telematics Toyota executives talk the future of lift trucks

By Carolyn Gruske

H

ot on the heels of launching its newest lift truck line, the Toyota 8 Series, Toyota Material Handling USA Inc executives sat down with MM&D to discuss the differences between the Canadian and the US markets, and how the vehicles are likely to evolve in the future. To watch MM&D videos detailing the new fork truck, see http://tinyurl.com/Toyota8.

Canadian market Even though Canadian industry is tightly integrated with what happens on the US side of the border, Toyota Material Handling president Jeff Rufener can easily see differences between what Canadian forklift customers buy versus what gets sold in the US. “I think it tends to be influenced by the European market more than it is by the US,” Rufener said.

Among the big differences is the demand for electric vehicles, added Cesar Jimenez, Toyota’s national product planning manager.

“Canada seems to buy a lot more electric trucks

than we do in the States.

Canada is more 55:45 [internal combustion engines (ICE) versus electric]. We’re more like Jeff Rufener Cesar Jimenez 60:40,” he said.

“As well, 48 volts seems to be more popular in Canada, whereas 36 volts is a lot more popular in the States.”

He said he could easily see even higher voltage trucks—specifically 80-volt vehicles—selling well in the Canadian market, if Toyota offered them. Trucks with pneumatic tires are also more popular in Canada than they are in the US. According to Toyota’s figures, in Canada the company has 6,224 retail orders so far in 2013, which is a slight (0.05 percent) increase from 2012.

“We usually say Canadian sales are about 10 percent of US sales, but actually it’s a bit less than that. Looking at the numbers, it’s more like seven percent of our total sales,” says Jimenez. “The interesting thing I did see is Canadians tend to buy a higher percentage of three-wheelers. The three-wheeled electric is a dock-to-stock type of truck. It’s a multi-purpose unit used to off-load the trailers, take the goods into the warehouse and put them back into the trailer.”

He added that in comparison, Toyota’s most popular products in the US are the Class 4 and Class 5 ICE trucks.

What’s on MMDOnline.com Some of the top daily news stories from the website McKesson realigns network: Closing one DC and building another http://tinyurl.com/McKessonDC Controversial Canadian Tire DC approved: Ontario Ministry of Municipal Affairs and Housing steps in http://tinyurl.com/CanTireDC Canadian auto parts supplier shutting DCs: Revamps entire US distribution network http://tinyurl.com/Uni-Select Del Monte builds DC and plant: Oshawa facility also home to banana ripening room http://tinyurl.com/DelMonteDC Serving the US market: Supply chain segmentation and cross-border network optimization http://tinyurl.com/optimizeUS

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Evolution versus revolution While Rufener and Jimenez were excited to talk about what’s new in the 8 Series and especially about using Toyota-designed and built diesel and gasoline/LPG engines, they did offer some insights into what type of advancements to expect in future fork trucks.

ICE “I think the markets that are typically served by the internal combustion market are more mature. I think we expect the development there to be more incremental. The electric sector provides more opportunity for technology advancements. That’s why I divide our industry into two pieces. Part of it is incremental growth, the other part more market growth,” explained Rufener.

While the Toyota 8 series was designed to meet the EPA’s (US Environmental Protection Agency) latest emissions standards, known as the Tier 4 final MM&D | July/August 2013

SUPPLY CHAIN SCAN regulations, not all of the company’s lift trucks are capable of doing so, at least not yet.

“We still have one more project related to the internal combustion trucks, which is the heart-of-the-line trucks, the 3,000lb to 6,500lb models. We still have the challenge of meeting the Tier 4 final regulations for that. So we are coming out with a solution next year for that,” says Jimenez.

Electric On the electric side, the company is looking for technology that will improve performance, said Jimenez.

“We are working a lot on the electric equipment. We have a lot of products coming down the pipeline from our Class 1, Class 2 and Class 3 products. We are continuing to add new technology, like AC technology.”

Although Toyota now uses AC technology, the company sees its further development as a way to better meet the needs of fork truck buyers.

“The idea is to add the AC technology to more of our products because we still have some of our products that are DC technology,” said Jimenez. “With all the EPA and CARB (California Air Resources Board) Continued on page 6

(877) 724-2327

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BENCHMARKS Burlington, Ontario-based Tech-Con Automation is the first Canadian systems integrator to earn the Certified Robot Integrator designation from the Robotic Industries Association (RIA). RIA certification requires proving capabilities in a wide variety of areas, including customer satisfaction, documentation, integration and business practice. Companies are also required to recertify every two years.

Verspeeten Cartage Limited, based in Ingersoll, Ontario, is holding a celebration to mark its 60th year in business. On August 31, the company will host a dinner and dance for its employees and its invited guests. The company, founded by Archie Verspeeten, is now being run by his son Ron. For the tenth consecutive year, FedEx Express Canada achieved the designation of Contact Center Employer of Choice. It is also the fifth consecutive year the Mississauga, Ontario-based company earned the platinum level of recognition from the US-based training and certification company CCEOC Inc. Adept Technology Inc, a Pleasanton, California-based manufacturer of robots and autonomous mobile solutions is 30 years old. To mark the milestone, Adept is asking customers to share photos and video of its robots in action.

Con-way Freight, the less-than-truckload division of Con-way Inc, celebrated its 30th anniversary in business. It is based in Ann Arbor, Michigan.

automation.ssi-schaefer.us/matrix

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SUPPLY CHAIN SCAN DONE DEALS

Continued from page 5 regulations, some end-users are starting to have to look at other alternatives for their product needs. Some of those end up switching to electric, but the difficulty in doing that is they still have to meet certain productivity levels, and internal combustion [trucks] tend to have higher performance, faster travel speeds, faster acceleration rates, faster lifting speeds.

“We’ve always talked about AC technology closely mimicking the performance of IC trucks but to better match it we need to introduce 80-volt technology—I know our friends in Canada would like to have 80 volts. We’re starting to see that’s more of a growing trend as well in the States. To mimic the performance characteristics of IC, 36 volts and 48 volts don’t quite get there, even with the AC technology but they have bridged a gap. But 80-volt technology we see basically being at the same performance levels as IC trucks.”

Two semi-trailer rental companies—Train Trailer and WestVan Inc, which was headquartered in Etobicoke, Ontario—have joined forces and are now united under the Train Trailer brand.

As well, the Mississauga, Ontario-based company has opened a new full-service facility in Cornwall, Ontario. It also created two new management positions: Matt Kelly is Train Trailer’s new western regional manager and Wayne Rapelje is the new vice-president of business development.

Millard Refrigerated Services Inc has sold its Canadian logistics operations to Brookfield Capital Partners III, a private equity fund owned by Brookfield Asset Management. Under its new name, Brookfield Cold Storage, the company will continue to operate facilities which offer rapid freezing capabilities in Toronto, Ontario and Calgary, Alberta. Brookfield has more than 16 million cubic feet of storage space.

Alternatives As for other means of powering the lift trucks, it doesn’t seem as if alternatives are likely to show up at Toyota dealers in the near future.

“We’ve tried to look at fuel cells. That was a trend at one time. You still hear of hydrogen-powered lift trucks, but it’s more batteryreplacement. But that’s gone really quiet as well because the government resources aren’t necessarily there,” said Jimenez.

Continued on page 7

HighJump Software of Minneapolis, Minnesota, has purchased Evenex, a Danish EDI solutions provider and business-to-business integrator with over 3,000 customers.

Elk Grove Village, Illinois-based Wynright Corp has acquired the software and controls group of BoxLogix Automation.

BoxLogix, a Prairie du Chien, Wisconsin-based systems integrator, will continue to provide customers with mechanical material handling engineering and design services. Wynright will retain BoxLogix staff and will incorporate the company’s software and controls into its Wynsoft warehouse automation software suite.

Long-haul and regional freight service provider Celadon Group Inc has chosen to deploy workforce management solutions from Kronos Inc. Specifically, the Indianapolis, Indiana-based company will be using Kronos’s cloud-based time and attendance, HR and payroll, absence management and hiring applications.

Unit load device (ULD) and galley cart maintenance and repair company CHEP Aerospace and Envirotainer, a manufacturer of temperature-controlled air transportation containers for the healthcare and biotech industries have signed a deal to work together. CHEP will provide IT solutions by placing its CHEP Aerospace Solutions repair management system, ACTIS, at Envirotainer’s facilities. Additionally Envirotainer will open four new locations in Atlanta, Georgia, Amsterdam, The Netherlands, Singapore, China, and Vienna, Austria.

Neovia Logistics (formerly Caterpillar Logistics Services), a supply chain solutions provider in Downers Grove, Illinois, has agreed to acquire the contract logistics division of MIQ Holdings Inc, including nine facilities in the US and Canada. The contract logistics division provides value-added logistics, distribution and warehouse management and fulfilment services.

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MM&D | July/August 2013

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SUPPLY CHAIN SCAN Continued from page 6 Another technology buyers are unlikely to see is a hybrid.

“In Japan Toyota has launched a hybrid truck. We don’t see it coming here any time soon. It’s in a beta-test phase. It’s diesel powered with electric motors,” says Jimenez. “If we were to introduce a hybrid in the States for it to become successful, it would have to be gasoline powered, not diesel.”

Automation One area where Toyota does see a lot of potential is in applying automated guided vehicle (AGV) technology to fork trucks. According to the company’s figures, the AGV market currently sits at about $100 million, but internal projections show that growing to $700 million by 2030.

Automating fork trucks isn’t easy. The vast range of tasks they are used for presents challenges that most existing AGVs don’t have to meet, said Rufener.

“Everybody understands why automation is more efficient, better, more economical, but AGVs have typically been used in manufacturing where the requirements are very static—where there is a very defined roll and travel path. They’ve been specialized in terms of design. All that means is they’re expensive.

“The trend we’re seeing today is to take these technology advancements in controlling the lift truck and apply them to an existing, traditionally designed piece of material handling equipment so you get synergies of mass production. Couple that with advanced control technology, and even the ability to put it on and take it off, perhaps use it as a manually controlled vehicle with an operator and then easily switch back to automated guided vehicles, that’s where the industry seems to be going, and where we’re focusing.”

Telematics and fleet management Rufener says the most important future forklift advances could very well be the devices and software and systems used to manage the trucks. With the proper use of telematics and fleet management applications, businesses should be able to greatly improve the efficiencies of their fleets. Of course, applying these solutions comes with a price—a price Rufener says customers are often reluctant to pay.

When you describe the tenets of fleet management it’s like motherhood and apple pie—‘Absolutely I want that.’ But if you give them an invoice that has fleet manage-

Industrial truck sales solid The Industrial Truck Association (ITA) predicts sales of forktrucks will increase between two and three percent in 2013 over 2012 and grow an additional one to two percent in 2014.

The Washington, DC-based association estimates the total market for industrial trucks to be between 179,000 and 184,000 units this year. In comparison, 178,904 sold during 2012.

ITA members are feeling optimistic, as 89 percent report they expect 2013 to show higher overall factory shipments than 2012. Additionally approximately half of companies surveyed said they are on track to increase the number of production employees over their 2012 employment figures.

ment as a line item, they’ll give it back to you.

“We have to be extremely efficient. We’ve got to be able to mine data that is generated by the lift truck, accumulate it, put it in the database, organize it, analyze it, feed it back to the customer, for almost nothing. When I buy the truck from you, what I pay for the lift truck is my expectation. My expectation is those asset management features, by and large, should be coming with the truck.”

He added that for a fleet or asset management system to work most efficiently, it is best for all of the vehicles to come from one manufacturer.

“You can’t execute fleet management if the customer has three suppliers and has dealer A do the work on the Toyotas, dealer B do the work on the Hysters and dealer C work on the Caterpillars. If you do, how do you execute fleet management or asset management? So they have to give themselves over to one supplier and some customers are reluctant to move toward a single source.”

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04MMD-News.indd 7

13-08-07 5:42 PM

SUPPLY CHAIN SCAN

Supply chain’s link to revenue Taking logistics beyond cost reduction

By Carolyn Gruske

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o matter what its status was in the past, in today’s business world the supply chain represents power and money.

That was the theme of a presentation by Rick Blasgen, the president and CEO of the Lombard, Illinois-based Council of Supply Chain Management Professionals. Blasgen attended a Toronto-area roundtable and spoke to a group of about 50.

While he covered a broad range of topics during his speech—including what will happen when a generation more comfortable with texting than talking enters the workplace, and what changes to the hours of service rules mean for drivers, shippers and trucking companies—he spent the majority of his time reminding the audience about their value as supply chain professionals and the challenges they face when dealing with other business executives.

“Now we’re getting a lot more attention from senior management,” he said, “which is great. And sometimes it’s not so great because they’re learning about what it is we do.

“We’re seeing our talent rise to the top. Tim Cooke, at Apple. He was their supply chain leader. The curTruckers getting older A new report sheds light on a situation guaranteed to affect the entire logistics industry: aging truck drivers.

Earlier this year, the Conference Board of Canada declared the average age for a trucker to be 44, noting that was four years higher than the average worker. The data was pulled from the 2006 Census and Labour Force Survey.

Now another report indicates that figure was a bit low. The Conference Board’s latest numbers come from an analysis of the 2011 National Household Survey (NHS). It has found the average age for a trucker is 46. In comparison, the average age for all workers in Canada is 41.5.

The study also predicts there will be fewer younger drivers getting behind the wheel. In 2006 11.6 percent of drivers were between 20 and 29 years of age. By 2011, that number had declined to 8.5 percent.

Older drivers are also getting older. The percentage of those over 55 increased from 20 percent to 26 percent over the same time period. Approximately 4.4 percent are over 65, whereas in the general labour pool three percent of workers are 65 or older.

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rent and former CEOs of Walmart were logisticians. So we’ve come a long way in our evolution in terms of a discipline.”

To show just how important the industry is, Blasgen pulled out some concrete numbers. In the US logistics costs are US$1.3 trillion—or 8.5 percent of the country’s GDP. Transportation costs represent the largest single component of logistics expenses. Inventory carrying costs also represent a significant component.

Historically logistics costs have risen 102 percent since 1990. Last year the increase was US$44 billion, but to put that number in perspective, Blasgen said logistics and transportation expenses as part of GDP have gone down from 11.5 percent to 8.5 percent.

“We’ve taken great technology and systems and minimized the amount of variability in our supply chain because we now have visibility into all areas of our supply chain.

We’ve redeployed people into more efficient and productive jobs as technology has taken over. We’ve gotten a lot better at what we do, but we just don’t talk about it.”

Blasgen also stressed that it’s important supply chain professionals take positive messages about the industry not just into boardrooms, but out into the streets.

He cited a study that showed the effect of Walmart and its supply chain on the cost of consumer goods.

“You can’t deny the impact that company had on modern day logistics…$263 billion less is spent in consumer goods because of the efficiencies in logistics. That’s a big deal, and we’ve got to make that connection between the ubiquitous access we have to goods in our markets and the logistics activities that get them there.

Of course supply chains don’t always work perfectly, and that’s part of the challenge faced every day.

“Somehow ships collide in the middle of an ocean. You think the oceans are big, but then you hear about ships colliding…then you stick people in a war room and try to make sure it doesn’t happen again. So it’s a very physical game.”

But as skilled as supply chain professionals are in cutting costs and ensuring goods get to where they need to be, Blasgen says they need to do more. They need to become revenue generators as well, especially as revenue, cash flow and profitability are the major concerns of every CEO and senior level executive in the business world.

He reminded the audience that a $1 reduction in inventory is a $1 improvement in cashflow.

“We don’t think about that, but we affect the balance sheet. We affect the P&L all the time. So how can we affect revenue? If we do it better than our competition, our customer may buy more of our stuff—maybe we have a better facing on the shelving—and our market share goes up. So we’ve got to be thinking about how supply chains can grow revenue.”

New standard for robots The American National Standards Institute (ANSI) has approved a new safety standard for robots. The standard, which was developed by the Robotics Industries Association (RIA) is the first update since 1999. It also is harmonized with the International ISO 10218:2011 standard for robot manufacturers and integrators.

Two of the key features of the standard are collaborative operation (which permits the system to be designed to allow the operator to “directly load/unload the robot or manually drive the robot to a selected location thus eliminating costly fixtures”) and the “safety-rated soft axis and space limiting technology” which is “used to control the robot’s motion so that restricted space can be more flexibly designed”.

MM&D | July/August 2013

13-08-07 5:51 PM

SUPPLY CHAIN SCAN

Pallets more plentiful Figures indicate recovery from recession

By MM&D staff

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he number of pallets in the US is going up.

According to the results of a study conducted by the Cleveland, Ohio-based research organization The Freedonia Group Inc, “the size of the US pallet stock is projected to increase 2.4 percent per year to 2.6 billion units in 2017.”

The increase marks a reversal of the most recent trend in pallet stock numbers, since the number of pallets actually decreased 1.1 percent between 2007 and 2012, due to the effects of the recession. During that period, fewer new pallets were purchased, older pallets were more likely to be repaired or refurbished, and other pallets were just left in storage.

According to Freedonia’s numbers, in 2012 wood pallets accounted for 86 percent of all pallets in use. Plastic accounted for eight percent. Metal pallets made up five percent of the stock, and the remaining one percent were corrugated paper.

Taking a closer look at the wood pallet forecast, the number of lumber pallets is

04MMD-News.indd 9

expected to increase at a rate of 1.9 percent annually between 2012 and 2017. In dollar terms, sales should climb 5.2 percent a year to US$14.2 billion. Engineered wood pallets won’t be in as much demand, but there will still be enough sold to reverse the decrease measured during the recession. The study pointed to the cost of engineered wood pallets—at twice the cost of lumber pallets—as the main reason why businesses would buy one over the other, as long as they had a choice and weren’t subject to special handling needs or regulations.

Freedonia has an explanation for the apparent discrepancy between sales of lumber pallets and the increase in stock. “Product sales will expand more than twice as fast as the number of pallets in use through 2017 due to companies’ need to rebuild stocks and replace poor quality aging pallets that had accumulated as a result of the 2007-2009 recession. Increasing shipments will require more lumber pallets, which account for more than four-fifths of the pallet total stock.”

Wooden stringer pallets were more plentiful in 2012 than block pallets—765 million versus 284 million, but the growth rate of blocks looks to be stronger in the future. The study predicts by 2022 there will be 821 Continued on page 12

13-08-07 5:27 PM

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Frontier mentality Emerging markets roundtable examines benefits and pitfalls of extending supply chains into new regions and countries

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Taking Stock Supply Chain Scan 3PL Relationships 3PL Capability Guide Equipment Focus: Dock Products Retail Datacapture Racking Safety Materials Handling Crunching the Numbers

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13-08-08 10:21 AM

PROFESSIONAL DEVELOPMENT DIRECTORY Advertorial

It pays to know what you’re doing – and to have the proof on your resume Are you responsible for the movement, distribution and storage of your company’s products? If you are, a professional designation from CITT can help you develop and demonstrate your expertise in warehousing along with the profitable management of materials within larger, integrated logistics and supply chain systems.

There’s a lot at stake CITT knows you’re handling one of your company’s biggest assets. And that you’re also responsible for the cost and time-efficient management of people, resources and ancillary costs associated with managing this inventory. We understand the decisions you make impact your customers and their continuing loyalty. It’s a lot to manage, and a lot to master.

Fortunately, management believes in professional designations Over 80% of employers will pay for the education you need to obtain a designation.1 Human resource experts also report that companies are investing in specialized development of their people, even during tough economic times.2 And CITT can help you get smarter, faster.

A professional designation from CITT is the most respected and widely-held supply chain and logistics credential, outnumbering all others nearly 3:13

CITT is also industry’s most attainable logistics designation: • Only five expert-level, specialized courses are needed for professionals with a college/university degree • World-class business education is available for professionals who need it • It’s accessible, with all required courses available online • It’s affordable and has the best ROI in the business The five specialized logistics courses from CITT provide the greatest depth and breadth of understanding of the silo-free integrated logistics business of any designation program in the industry. Materials Management pros will especially appreciate Logistics Processes, Integrated Logistics and Logistics Decision Modeling to strengthen their operational competencies for more a more profitable supply chain and logistics system. And business courses such as Organizational Behaviour can be invaluable in sharpening managers’ people skills and their ability to motivate.

Visit www.citt.ca for more information and to download your FREE guide to the logistics industry’s most respected source of professional training and most commonly held designation. And get you on your way to higher pay, enhanced professional credibility and other professional enrichments.

1 ”2010 Salary Survey Results”, MM&D, September/October 2010.

Clayson, Tracy. “Learning Curve: What are you worth?” MM&D, September/October, 2011.

3 ”12th Annual Survey of the Logistics Professional”, Canadian Transportation & Logistics, January 2011.

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Prove you’re a “Logistics Expert”—Add CITT to your professional credentials. And more value to your supply chain.

Course work for CITT’s fall semester begins September 3rd. Register now at www.citt.ca to guarantee your spot.

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MM&D | July/August 2013

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SUPPLY CHAIN SCAN Continued from page 9 million stringer pallets and 486 million block pallets.

While the study found demand for new pallets was on the increase, it pointed out that “refurbished pallets will continue to account for well over half the demand total in 2017”.

Freedonia did note that there will be pressures on producers of lumber pallets, not just from makers of plastic, steel or engineered wood products, but also from other products as well.

“Other material handling products, like slip sheets and plastic totes, also offer functional competition for lumber pallets. For instance, slip sheets are either made from paper products or plastic, making them exempt from international chemical or heat treatment requirements. Additionally they are far lighter and require much less space both when carrying a load and in storage, reducing user costs.”

While manufacturing is still the industry that uses the most pallets—in 2012 it accounted for 1.7 billion in 2012 and by 2022 that number is expected to grow to just over two billion—warehousing applications also used a lot. In 2012, 566 million pallets were found in warehouses, and by 2022 that number will likely be 721 million.

MOVERS + SHAKERS Brian MacAlpine has been promoted to president of Yusen Logistics (Canada) Inc. Most recently, he was executive vice-president of the Brampton, Ontario-based provider of air and ocean freight forwarding, land transportation and contract logistics service provider.

Brian MacAlpine

The Comox Valley Airport Commission (CVAC) in Vancouver, British Columbia, has appointed Keith Tatton to its board of directors.

Toronto, Ontario-based SkyLink Aviation Inc, an aviation, logistics and support provider, has a new president and CEO. David Dacquino has joined the company and succeeded Jan Ottens in the dual role.

Doug Brittin

Visit CIFFA.COM or email education@ciffa.com

UTi Worldwide Inc has named a new regional sales vice-president for the Americas. Mike Valentine, who has been with the Long Beach, California-based company since 2009, will have responsibility for meeting all sales revenue objectives and strategic initiatives throughout the region. He will also lead the non-asset based solutions provider’s freight forwarding, contract logistics Doug Brittin and distribution sales team.

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Doug Brittin is the new secretary general of the Miami, Florida-based International Air Cargo Association (TIACA). Brittin has worked for BAX Global, Panalpina, Emery and Menlo Worldwide and most recently he was division director of air cargo at the US-based Transportation Safety Authority (TSA).

MM&D | July/August 2013

13-08-07 5:28 PM

SUPPLY CHAIN SCAN

Capital ideas PMAC national conference blends power, purchasing and supply chain education

By Michael Power, Editor, PurchasingB2B

T

his year’s edition of the Purchasing Management Association of Canada’s (PMAC) national conference was an event that blended power players from the nation’s capital with supply chain experts.

Held in Ottawa, Ontario, the theme of the 88th annual event, was “capitalizing on supply chain solutions,” and it was in this vein that PMAC board chair Mike Whelan told attendees that “in the shadows of Canada’s halls of power we we’ll harness our own influence to capitalize on opportunities.”

Among the Ottawa insiders who addressed the crowd were Lieutenant-General Romeo Dallaire, and Ottawa Citizen columnist Dan Gardner.

Dallaire spoke on leadership and shared some of his experiences as commander of the UN peacekeeping force in Rwanda. During his keynote he told the audience “the leadership arena isn’t something that’s passive, it’s continuously active.

It’s also got to be out there, it’s got to be anticipating. It’s got to be shaping the future and it’s got to be sensing what’s coming.”

Gardner cited the work of a researcher who concluded that “so-called experts are no more accurate than a dart-throwing chimpanzee when it comes to accurately forecasting events in the future.” He said there are two ways of thinking about an issue: as a metaphorical hedgehog which knows one big idea or as a fox that can examine all the angles. He suggested the fox’s approach to choosing the right action is the better one because the fox can pull information from several sources and revamp its ideas.

Of course, not all of the presenters were names known on Parliament Hill. Supply chain experts also offered their insights. Fraser Johnson, a professor of operations management and faculty director for the MBA program at the University of Western Ontario, for example, shared the findings of 24 years’ worth of research. Ongoing studies begun in 1987 and updated regularly—most recently in 2011—show just how much organizations and specifically the purchasing departments within those organizations have changed over time.

The survey shows that organizations move “all over the place,” he said, shifting constantly between hybrid, centralized and decentralized structures. A total of 52 percent changed their organizational structure, with an even split between centralizing and decentralizing.

In terms of the chief purchasing officer’s (CPO) responsibilities, Johnson said there is a move towards strategic orientation of the purchasing function. “Not only are their structures changing, but

the responsibility of the purchasing organization is changing,” he said.

There’s also an increased use of teams within purchasing. The data show reporting line changes more frequently than structure, Johnson noted, while the average tenure for a CPO is about 4.5 years.

In another session, experts weighed in on the advantages to procurement and suppliers alike in using purchasing cards (p-cards) and ePayables. Their advantages include added efficiencies, reduced paperwork and getting rid of physical invoices, said Paul Cargnelli, Visa Canada’s head of commercial card sales.

By using ePayables (or electronic account payables or automated-payables, among other names) for bigticket items, Cargnelli said organizations can retain some control of the payment process through purchase orders and invoices, to extend days payable, or to obtain rebates from suppliers for early payments.

It’s a best practice for organizations using these solutions to pay suppliers quicker, said fellow panelist Lynn Larson, manager of education at the Minnesota-based National Association of Purchasing Card Professionals.

“Successful organizations are the ones that pay suppliers via a payables solution in, say, 10 days,” she said. “They’re getting the benefit of a faster guaranteed payment and not having to sit around like in the old days.” MM&D

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By Carolyn Gruske

L

The and hows w DC s hys of ecur ity

ou Malbeuf recently experienced something every warehouse manager dreads: a break-in. But unlike a lot of people who have been victims of similar crimes, Malbeuf wasn’t upset.

“We have a large warehouse where we put all our seized property, and last night somebody broke into that place through the roof. It’s funny. It’s hilarious.

Here we just seized almost a million dollars worth of liquor that we’ve stored there, and somebody has broken in from the roof, bypassing the alarm system.

We don’t know what they got—it doesn’t look like they got much—but it just goes to show you that people get information.”

Malbeuf isn’t a warehouse manager, or even somebody who works in supply chain. Malbeuf is a detective sergeant with the York Regional Police’s auto/ cargo theft unit. It’s his job to investigate crimes like trailer and cargo theft and warehouse break-ins.

He admits that maybe the thieves weren’t looking for liquor—he says it’s possible they got wrong information that there were drugs in the warehouse—but it doesn’t really matter. It’s just one more demonstration that warehouse theft “is such a lucrative business for criminals”.

“I’m so busy. It just doesn’t stop. Even if you arrest people they still do it because it’s too lucrative. The sentencing we get for these people is a slap on the hand—judges think it’s a victimless crime because insurance pays for it.”

Malbeuf says investigating crimes is just one aspect of his job. The other part is to get the word out to the business community that inventory and cargo crimes cost companies a lot of money, but that there are steps that can be taken to reduce the probability of being a victim and ways of improving the odds of getting stolen property returned.

Adding up the pieces To read an MM&D web-exclusive companion piece that examines the security issues involved with transporting goods to and from DCs—including trucking company identity theft, fake transportation businesses, and cargo theft—please see http://tinyurl.com/fleetsecurity

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The first step to staying safe is understanding what you need to protect and what are the attributes of the facility where the goods are stored. David Hyde, owner of David Hyde & Associates, a Toronto, Ontario-based security and crime prevention consultancy, says this must be done in stages.

The first step is performing an asset characterization. In other words, figure out exactly what you’re protecting. Then perform a threat profile. Determine what types of criminals would be attracted to what’s stored in your DC. Are there specialized high value items that would have to be moved on the black market, or are there cheaper goods that can be turned over quickly almost anywhere? The third step is to conduct a vulnerability assessment or a vulnerability profile. Check your security protocols and see if there are any holes or gaps that could be exploited.

MM&D | July/August 2013

13-08-07 6:29 PM

While it may be easy to think of a security program as holistic, in reality it’s not. Experts say any security measures must be built around four separate pillars, and every organization will require a different balance of elements to ensure attention and investment are made in suitable proportions.

“The first one is physical,” says Hyde. “Locks, keys, barriers and doors and how secure you are physically.

It could even be fences.

“Then we look at technical security, including alarms and CCTV cameras. There’s a wide range of things that can help. Card access systems that track who comes and goes, so you can tell if an employee is returning at two in the morning—that person may be up to no good.

“Then there’s procedural security. What is the staff allowed to do inside the distribution centre? What kinds of protocols are in place for who can access which kinds of space? When does the loading area open? When are things exposed? What provisions exist for reporting suspicious behaviour?

“And the last one is the human element—personnel.

How do you train them? Do you have loss-prevention staff, and do you need them? Does the staff need to be trained on when to report stuff and what rules need to be enforced?”

Going in circles While technological solutions may be the instinctive choice to deal with security threats—alarms and cameras and access systems—that’s usually not the best place to start. Instead, the building’s physical security is where the most attention should be paid.

Along with the items mentioned above, physical security encompasses things like landscaping, lighting, and most importantly, building design. It’s absolutely cheaper and easier to build a DC with security in mind, but if the need is there, money can be spent and facilities can be renovated and made more secure.

When thinking about physical security, Michael Silva, principal with Silva Consultants in Covington, Washington, says the best image to have in mind is one of concentric circles of protection.

“The idea is to provide multiple layers of security between the outside world and where your high-value assets are. Generally, when designing a facility, that involves providing adequate segregation between the different areas of the building, and a lot of times that’s something an architect won’t give any consideration to at all,” he says.

“What we do is try to get in as early as possible in the design phase and make it as friendly to security as we can.”

When Silva talks about security-friendly designs, much of what he means is layout that is conducive to keeping people out of areas where they don’t belong.

As an example, he points out most facilities are built MM&D | July/August 2013

04MMD-Security-REV.indd 15

to house both warehousing operations and business offices. He says sometimes the buildings are designed so the emergency exits for the offices go through the warehouse. “That means you’ve got doors and you always have to be able to leave the office to get into the warehouse. From a security perspective, you don’t want that.”

Another potential security hole can be the shipping/ receiving areas where drivers are able to get out of their vehicles and enter the DC. “One common vulnerability is to have the restrooms for the drivers at the back end of the warehouse. So they leave their trucks and are allowed to walk through the warehouse and get to the restrooms. That’s not good from a security standpoint, so we suggest providing separate restrooms near the dock areas, in a segregated area, so the drivers can be taken care of but they don’t need to walk through the warehouse. It’s really a matter of divide and conquer. We want to segregate the building into various zones and then provide appropriate controls between those zones.”

Controlling the human element While it’s not pleasant to think employees are dishonest or disloyal, every security consultant and expert agrees that one of a DC’s biggest vulnerabilities is being exploited by those who work there—in other words, crimes are often inside jobs.

Chris Mathers, president of security firm Chris Mathers Consulting Inc, says hiring the right people, and ensuring they remain the right people is the starting point for any DC security.

“You need strong hiring procedures. You need qualified HR people—not just somebody who graduated from university. You need people who know their stuff and you need people who won’t be bamboozled by crooks, which is a big challenge for many HR people.”

Key among those strong hiring procedures is getting to really know the people being hired.

“Do comprehensive background checks and interviews and reference checking of your employees. And don’t start hiring people’s cousins, brothers and friends because that’s when you get collusion between various groups to steal,” he says.

“We see planned infiltration by organized crime groups. We see collusions between various groups within facilities. And this is why I say don’t hire everybody in your warehouse from the same country. Or don’t hire everybody who’s related, or who are friends.

You don’t want to do that. We’re a multi-cultural society so mix it up.”

Iain Morton, vice-president, Canada, for Tyco Integrated Security in Toronto, Ontario goes a step farther than Mathers. He says checking out an employee once just isn’t enough. It should be done annually.

Continued on page 16 15

13-08-07 6:29 PM

Continued from page 15 Even if everybody on the personnel roster passes their background checks with flying colours, Morton says good security procedures still dictate that people’s actions be controlled and monitored, especially if the goal is to prevent internal thefts or shrinkage.

“From a p olicy perspective, it’s important for employees not to be able to carry bags into the actual area where the products are stored. Have a policy that doesn’t allow bulky clothing that something could be concealed under, and other similar appropriate policies. We would recommend that all garbage bags be clear so you can see through them and see if any products are being put into them.

“We would also recommend alarming doors and using appropriate video surveillance with analytics to be able to determine where people are going, where they should not be going and generating alerts for management to be able to follow up. So if there’s a pattern of behavior that can be quickly determined. For example, if one person continually goes out a side door, you can start to track that by time, by shift and get a little bit better data on what’s happening in your facility.”

Third-party certification For businesses that find the prospect of creating and maintaining a security plan on their own daunting, one simple way of approaching the process may be to look to what outside agencies require for security clearances. Canada’s Partners in Protection (PIP) program and the US Customs-Trade Partnership against Terrorism (C-TPAT) both have guidelines an organization can use as a security checklist.

Mike Quinn, vice-president of warehousing and distribution for Giant Tiger Stores Ltd, says the Ottawa-based retailer takes security very seriously.

Giant Tiger has three DCs—an imported goods and general merchandise facility in Ottawa, another in Ottawa for food and health and beauty aids, and a frozen and refrigerated goods warehouse in Brockville, Ontario—which supply goods to 210 stores across Canada. The company has its own trucking division, Tiger Trucks, and multiple relationships with a number of 3PLs. Giant Tiger also has a 12-person loss-prevention team which looks at both internal and external security issues and inventory discrepancies.

When it came time to review its security procedures and policies, Quinn says the company decided it was going to do things right.

“We felt that if we were going to be secure, then let’s go all the way. Let’s meet everything it takes to become C-TPAT certified. We had a consultant come in. We thought, at first, the employees might be a little bit concerned that we were putting in a loss-prevention office and the entrance, and gatehouses, and cameras in the shipping and receiving areas in the yard, and that type of stuff, but we were so wrong on that. In 16

04MMD-Security-REV.indd 16

the end, the staff so much appreciates working in a secure facility.”

Adding the fences and the gatehouse was a major change for Giant Tiger, not to mention the procedures that go along with them (checking the trailers as they both enter and leave the DCs) but now enforcing security standards is an integral part of the way the company operates. Quinn says security is taken so seriously that it expects its 3PL partners to have a similar attitude.

“When we are close to working out an agreement [with a 3PL], our loss-prevention team goes in and looks at the security of the facility and makes a list of what needs to be fixed before we go ahead with that particular company. Loss prevention is very involved in the 3PLs. We do random checks on them throughout the year to make sure their security procedures are working. We’ve asked for cameras in the yard. We had a 3PL about a year ago where their facility wasn’t as well camera’d as it should be. And there was a lot of theft occurring of trailers in that particular area, so we insisted before going forward with the renewal of the contract that they put camera into the yard. That and better lighting. That’s something else our loss prevention team looks for in 3PL facilities: what’s the lighting like on the outside, and how’s the maintenance of the building standards?”

Reporting and insurance So far, Giant Tiger’s security measures seem to be working. Quinn says the company hasn’t experienced any major security breaches or suffered any losses.

But if anything even happens, he knows Giant Tiger will file a report with its insurance company.

But according to those who work in the security field, Quinn’s response isn’t typical. For a number of reasons—including not wanting insurance premiums to go up, and not wanting to gain a reputation in the industry for having sloppy security—a large percentage of warehouse crimes go completely unreported.

Businesses don’t inform their insurance companies, and they don’t contact the police.

According to Malbeuf, this just makes the problem that much worse. Without knowing what has happened, he says the police are often left powerless to deal with the people who committed the crimes.

“We say even if you don’t want to report it to the insurance company, at least call us. If you don’t want to report it, at least tell us something was stolen. We find so many things we don’t know where they were stolen from. We know it’s stolen, but we can’t prove it’s stolen and we don’t have a victim.

And the next thing you know the bad guys get to keep this stuff because we can’t prove it’s stolen, and that’s because nobody wants to talk about what happened. They’d rather just take a loss on their product and go forward.”

MM&D MM&D | July/August 2013

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Leading Ontario organic food distributor opens warehouse to industry peers

By Heather Angus-Lee

A

This barcode scanner, loaded with information from the ERP system, is used to receive and pick more than 5,000 SKUs of organic and natural food and beverage products worth about $3.5 million in the Ontario Natural Food Co-op warehouse.

dozen food companies from the Greater Toronto Area (GTA) and the US recently participated in a tour through the 50,000sqf warehouse of Ontario Natural Food Co-op (ONFC), which has been distributing natural foods since 1976. Boris Harmic, IT manager, led the tour through the warehouse, which holds more than 5,000 SKUs of organic and natural food and beverage products worth about $3.5 million. He answered questions from food industry peers, including the following, about technologies used by ONFC.

Q: What business software system

were you using prior to your new ERP system?

Boris Harmic: For 12 years we were on outdated software. Drivers to getting a new ERP system were unsatisfactory fill rates, inaccurate inventory management (pen and paper), and inaccurate manufacturing chargebacks. Those are the metrics we’ve seen improve the most quickly in the eight to 12 weeks since the ERP go-live.

Q: What ERP vendors did you look at?

Harmic: We narrowed it down to JustFoodERP and two others.

Ultimately we decided that JustFoodERP gave us the best bang for the buck, proposed realistic timelines, and had a professional and knowledgeable team. Also, other vendors said they would add third-party technologies to meet our requirements, but we wanted a single, integrated ERP/WMS system to manage.

Q: How many employees use the system?

Harmic: We have 50 desktop users of JustFoodERP across various departments, not including those who use the JF Floor interface on handheld devices in our warehouse. Altogether we employ 60 people in three shifts.

Q: Is the full ERP system integrated with all of your warehouse operations?

Harmic: Yes, we have a spot in the corner of the warehouse I like to call ‘the nerve centre’ where all setting up of shipments and picks is managed for two shifts each day.

Q: How do you handle the printing of barcode labels?

Harmic: Mobile printers mounted on forklifts can hold up to 150

labels. For bigger label runs, we have larger thermal printers in the receiving area of the warehouse, and at least one mobile workstation—comprised of a handheld and small printer—is wheeled around to where it’s needed in the warehouse. We recommend that you don’t go smaller than four- by six-inch labels, and that you get longer-range scanner guns, even if they cost slightly more.

Q: How do remote employees, members, customers and vendors out in the field connect with the ERP system and get the business information they need?

Harmic: We have invested in a Microsoft SharePoint portal for this purpose and, along with SQL reporting, this provides all the inhouse data reporting. I recommend the addition of SharePoint for any company investing in ERP and WMS technology, for remoteaccess functionality and extended business intelligence.

Q: What inventory management features have impressed you?

Harmic: JF Floor, the browser-based warehouse interface to JustFoodERP, which is used on 40 handheld devices by our warehouse workers, to receive and pick inventory. The replenishment calculator is a neat tool; it will tell you what picking bins require replenishment, and where your oldest replacement inventory is located. We also like that JustFoodERP uses the FEFO (first expired, first out) principal.

Q: How much human capital goes into inventory control?

Harmic: We have four full-time employees, across two of our shifts, working on inventory control. Our ‘cycle counters,’ whose sole job is to correct bin inventory, can work at least an aisle a day, so it takes about a month to do the entire warehouse.

Q: What vital steps need to be taken prior to launching a WMS/ERP system?

Harmic: A full ‘physical’ of the warehouse is critical before the golive to avoid bin inventory issues. Significant investment in training is important to educate pickers on new disciplines related to inventory, to reduce the error rate.

Q: In hindsight, what would you have done differently with the implementation?

Harmic: We would have added a few more key people to the internal core team dedicated to implementation: a dedicated employee in sales, another in marketing, another ‘star’ warehouse employee.

We would have put more focus on documenting how the ERP system will be used for our processes, in particular ‘rainy day’ scenarios.

We learned that no amount of planning or training can substitute for the volume of a real day’s work; the piloting phase and first weeks directly after go-live are very important.

Heather Angus-Lee is a writer for IndustryBuilt Software.

Contact her at heather.angus-lee@industrybuilt.com

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MM&D | July/August 2013

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13-08-08 10:25 AM

Mobilizing outsourcers Managing the handheld tools that track and trace products across the food chain

I Shawn Winter

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04MMD-FoodChain.indd 20

t’s quite likely that if you haven’t already deployed some kind of mobile technology within your organization, you’re probably thinking about it. Collecting important data about your goods and shipments is critical, especially as more attention is being paid to food safety and traceability. Government regulations, such as the Safe Food for Canadians Act, are also becoming stricter and more demanding in terms of data collection and tracking.

Collecting important information about items flowing through the supply chain using barcode scanners, RFID readers, or rugged handheld computers isn’t new. The technologies (combined with backend databases and business intelligence tools) have proven themselves to be fast and accurate. And they definitely help you prove compliance and maintain records for food safety traceability.

But how do you support it all? The components can be complex to manage. One answer is outsourcing: put the responsibility in the hands of people who specialize in this type of technology. But who can you trust to do the job properly and keep you compliant? Here are a few simple guidelines to employ when hiring an outsourcer.

• Get references—The service desk should provide you with plenty of happy clients to speak with. Regardless of the reference’s business type, the processes and procedures implemented should be fairly horizontal in nature.

• Standardized processes and service levels are good—The less customization the better to take advantage of very fast on-boarding and consistency in the service. Discuss your specific needs such as how they will recover and/or protect any food traceability system data that may reside within a damaged device.

• Visit their facilities—You need to see the service desk in action. It doesn’t matter too much if the service desk is local to you, as long as couriers pickup and deliver on a pre-set daily schedule.

• Spares planning—Business continuity planning will be critical when paper disappears in favour of the electronic information being captured with these tools. Ask and understand what happens if (or more likely when) one of your devices fails. Ideally, your service desk provider should have a rotating spares

management process in place where they hold your spare stock for you and dispatch it to your workers as required. When the original device is repaired, they should return it to your spares inventory ready to go out to the next person who needs it.

• Asset tracking and visibility—Technology can be expensive and often it is out of sight at another location or in the field. Regardless, it’s still a corporate asset and needs to be accounted for. Make sure the service desk can give you complete visibility into all of your assets including serial numbers, last known location, and cellular account info (if applicable).

Even historical information can be useful for your accountants to help them amortize the expense over its forecasted usable life.

• Check out the tools—Ask how your team would create trouble tickets or order replacement parts— will it be an online tool or call centre? Do they use master data management (MDM) tools like SOTI or Honeywell’s Remote Mastermind to remotely make changes and monitor devices in the field?

• What about smartphones?—Can the same processes/services be leveraged to manage consumer devices used by your sales, management and admin personnel? Smartphones always seem to hit the floor face down, breaking the screen. Get the employee productive again by using a spares management service, advanced exchange program or perhaps a same-day repair service. Don’t forget about SIM card management and data recovery procedures should the device be replaced.

• What else can they offer you?—When you’re on your tour, look for other areas they may be able to help you with. Perhaps they could create pre-defined kits for specific locations, business units or job functions that might include accessories, specific business software loads or network SIM cards for a particular region.

The changing trade regulations of the food market, including a greater focus on food safety and the need for better traceability systems and automation, all add effort and complexity to your business. At the end of the day, you need to simplify the complexities of IT and keep it running smoothly. Allowing a third party to handle your mobile devices means your IT team can focus on its core functions and help your business remain compliant and efficient.

Shawn Winter is CMO at PiiComm Inc. MM&D | July/August 2013

13-08-07 5:18 PM

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Versacold.indd 1

www.versacold.com

13-08-07 5:34 PM

NEWS Humanitarian hub The governments of Canada and Finland are working with the government of Djibouti and the United Nations World Food Program (WFP) to create a humanitarian aid and food logistics centre in the African country.

The Canadian contribution is $18 million, which is being used to build a hub near one of the country’s ports. The hub will offer silo storage capacity, creating cost savings related to sea freight, port handling, storage and transport of food aid. Once completed in 2015, the hub will be used to route food to people in Sudan, South Sudan, Kenya, Somalia, Ethiopia and Djibouti.

The new logistics hub also has a training component in order to help the Djibouti transport sector grow.

More than 120 truck and forklift drivers and 30 warehouse managers are being trained this year in Djibouti.

IN BRIEF: • Canada Cartage has been contracted to provide transportation services to Guelph, Ontario-based Cargill’s beef processing facility. According to Cargill, the company has re-engineered its entire transportation service strategy.

• The Canadian Food Inspection Agency (CFIA) is working with Health Canda to update the way food is labeled in Canada. The process is expected to take at least two years, during which time the CFIA will consult with consumers, industry representatives, academics, and other governments, departments and agencies.

Currently, it is in the process of collecting opinions from interested parties using an online questionnaire. The survey will be open until August 30. It can be found at http://tinyurl.com/CFIAquestions • The Canadian Trucking Alliance (CTA) is calling on the federal government to ensure a more regimented system of enforcement for livestock transportation services is put into place. The organization has called on the Canadian Food Inspection Agency to require supply chain members to use only trained and certified drivers, and to ensure more fairness in how and why fines are levied at violators, particularly in the area of in-transit losses (hogs) and lost tags in transit.

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 60-gallon collapsible drum was created specifically for the food, powder and liquid handling markets. Its unique rectangular design allows four assembled drums to interlock and cube a 48” x 40” pallet, stacking up to five pallet loads high in storage. Because of its smaller footprint and greater capacity, it offers 25% better cube utilization than 55-gallon alternatives.

Visit buckhorncanada.com to learn more about our full line of IBCs, and request a quote today!

©2013 Buckhorn / Myers Industries, Inc. #032113

US: 1.800.543.4454 Canada: 1.800.461.7579 www.buckhorncanada.com

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

04MMD-FoodChain.indd 22

13-08-07 5:31 PM

LEARNING CURVE

Building better truck drivers And solving the driver shortage problem at the same time

T

urn to any major trucking industry report and you’ll consistently find driver shortages as a leading topic. Statistics point to an aging population and increasing demand for over-the-road (long-haul) drivers. Talk to drivers and they’ll tell you about declining wages, lack of opportunities for advancement, and general disatisfaction with the job—understandable considering the grueling hours most of them spend on the road. It is a demanding profession.

No one can do much about the aging population, but it’s possible to limit negative aspects and features of the job. We can re-evaluate how drivers are paid, as a means to prevent job-hopping. Meanwhile, drivers seeking a better work-life balance can sometimes be moved away from highway driving jobs to more local routes to increase the time they can spend at home with their families.

We also need to recognize opportunities are lacking for drivers to develop new skills, and that the tasks we require of them—driving between calls, making deliveries, loading and unloading shipments, updating onboard data, and communicating with dispatchers, shippers and receivers—can easily become repetitive, leaving them starved for variety in their work days.

Some people become drivers because the job is relatively attainable, not because they love the open road.

A truck driver needn’t complete high school. There are no prerequisite mechanical, numeric or communication skills required. Many find it’s easier getting a truck driving licence than the licence for other trades. I’m not arguing that a driver’s work doesn’t require a specific set of skills that warrant a trade certification process; I’m saying the industry has so far been unsuccessful in initiating more formal ways of developing the next generation of truck drivers.

For decades, the industry has complained about ill-prepared graduates of truck driver training schools.

According to an “Essential Skills” profile created by Human Resources and Skills Development Canada, the two most important skills it identifies for truckers are document use (completing forms by ticking check boxes, reading schedules, and interpreting drawings) and problem solving. It also addresses numeracy, literacy, decision-making, critical thinking, and the ability to work as a team. For the full list see http:// tinyurl.com/SkillsForTruckers.

But if you look at the list and compare it with what’s offered in driver training schools, you find large gaps.

No significant training exists to teach a driver problemsolving and communication skills so he can respond MM&D | July/August 2013

04MMD-lc.indd 23

to customer concerns and complaints. This is troubling, since drivers are often working alone, with very limited exposure to the public. It is tough for them to f lip a switch and suddenly exhibit strong listening skills, or to develop other skills more typically associated with sales and service roles.

Some have complained that graduates and new drivers can’t handle physical work including securing loads with tarps and straps, off-loading product from skid to dolly, or managing booms, forklifts, tailgates and pallet jacks while they are moving skids from the truck to the receiving area.

Problems don’t just exist with new drivers either.

Once drivers have (theoretically) been trained, and have earned their licences, there is no need for recertification or re-testing.

So what solutions are available to improve truck driving as a career option? Some fleets have enhanced their safe driving programs with safety mechanisms to reduce collisions, such as backing sensors and collision-avoidance braking overrides. While technology will never supplant the skills of a qualified driver, driving aids can help truckers avoid potentially dangerous situations, or help them escape situations that have started to go bad. But as with any technological solution, these mechanisms cost money, and sometimes that’s tough to justify, especially against the ever-present need to reduce costs.

On the human side, industry-supported apprenticeship programs are offered at high school, college and trade school. And leaders from stakeholders groups, including those in insurance, fuel, truck manufacturing, trucking companies and private fleets are working toward creating an elevated and skilled professional designation to ensure the continuation of truck driving as a sound career choice. These are positive steps.

But more is required. Companies must combine higher-level functions and training in technology, mechanics, customer service and sales skills in driver training and in the day-to-day duties of a truck driver in order to generate revenue and bring in cost savings.

Also, HR departments should recognize the benefits of promoting from within to enable opportunities for advancement. This can be done using associate training and job shadowing programs. The job may not change, but people can.

MM&D

Tracy Clayson

Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In Transit Personnel. tracy@in-transit.com 23

13-08-07 5:20 PM

FORK TRUCKS & ACCESSORIES

New vehicles, batteries and chargers 4

5

2 1

3

6

1 High reach stockpicker

The Crown SP 4000 Series from Crown Equipment Corp, is a stockpicker able to handle up to 1,360kg (3,000lbs) and reach a lift height of 9.3m (366in). Its lift speed is 30 metres per minute (100 feet per minute) while its lower speed is 24 metres per minute (80 feet per minute) The battery-powered vehicle has a regenerative braking system, an AC traction system, and can travel at speeds up to 12kph (7.4mph). Its on-board display panel shows a battery discharge indicator (BDI), an hour meter, operator and service messages and event codes.

It can be equipped with the company’s InfoLink wireless fleet and operator management system.

2 More powerful battery

The latest version of the Ironclad Workhog battery from EnerSys has been upgraded and now carries a 90 amp-hour capacity. The battery has a square tube technology design, and was built with sleeved separators to prevent misalignment and moss shorts (electrical shorts caused by the growth of dendritic crystals on the negative plates).

The Workhogs have Intercell connector insulators and dust-proof vent/filler caps.

Ironclad batteries come with a five-plusone warranty.

24

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3 Dual voltage forklifts

Mitsubishi Forklift Trucks has a new series of three-phase electric, four-wheel, cushion tire forklifts. The FBC22N2FBC30LN2 Series offers a handling capacity that ranges between 2,040kg (4,500lbs) and 2,950kg (6,500lbs). Lift height is approximately 3.3m (131in). They offer 36-volt and 48-volt engines. Options include LED work lights, four-stage quad masts, sideshifters and foot directional controls. Maximum travel speed for the 36-volt units is 17kph (10mph) and 18kph (11mph) for the 48-volt versions. They come with 107cm (42in) forks. With the mast raised, the overall height tops out at 4,564mm (180in).

4 Electric rider truck

The E80-120XN Series from Hyster Co is a counterbalanced, cushion-tired lift truck with a lift capacity ranging from 3,630kg (8,000lbs) to 5,443kg (12,000lbs). The electric rider trucks incorporate the Hyster Stability System (HSS) to help improve handling while carrying loads. They come standard with a two-stage limited free lift mast, and a two-stage full free lift mast—with or without load back rest (LBR)—is optional. The maximum travel speed ranges between 17kph (10mph) and 20kph (13mph). The E80-120XN Series has a power-assisted braking system and an automatic parking brake.

5 Cold environment battery

The Legacy Arctic Battery from Douglas Battery works in freezer and refrigerator environments. It comes with an electrolyte solution designed for cold environment operations. The battery tray is built with a thermal insulator designed to reduce the effect of cold temperatures on the cells. It has a five-fold plate insulation system constructed with vertical fiberglass strands, a woven glass mat, a compression mat, a perforated PVC shell and a sleeved separator. The batteries come with flip-top vent caps with a water-level indicator. Quick connect cables are optional.

6 Comfortable forklift

The ERC080-120VH electric lift truck from Yale has a five-position tilt steering column, soft-touch surfaces, thumbactuated direction selection, a seat-side power disconnect and self-adjustable hydraulic brakes designed to reduce the effort needed to operate the pedals.

The ERC080-120VH’s seats use no-cinch Emergency Locking Retractor (ELR) seat belts and offer 15cm (6in) of fore/aft adjustment with 13 latching positions. A full suspension is optional. The ERC080120VH has three electric power options: 36 volts, 48 volts or 80 volts. It has a lift capacity of between 3,630kg (8,000lbs) and 5,443kg (12,000lbs).

MM&D | July/August 2013

13-08-08 10:26 AM

FORK TRUCKS & ACCESSORIES 8 11

10

9

7 12

7 Three-wheeled AC lift truck

The TX Series lift truck series from Nissan Forklift Corp has models capable of handling capacities of 1,360kg (3,000lbs), 1,588kg (3,500lbs) and 1,814kg (4,000lbs). The three-wheeled lift trucks have dual-drive AC motors.

They come standard with seatbelt warning alarms, turning-speed limits, traveling lift-height limits and seatactuated power interrupt for lift and tilt-lock functions. An LCD panel and a keypad allow the truck operator to communicate without a separate headset. Options include a freezer package, electronic fingertip hydraulic controls, and assorted masts and tires.

8 New battery chargers

Crown Equipment Corp has two new V-Force V-HFM (High-Frequency Modular) Series chargers. The FS5 model provides a charging current up to 300A. The FS9 provides a charging current up to 540A. The V-Force V-HFM family permits both opportunity charging and fast charging.

Charge logs can be downloaded via a USB port. Crown also introduced a Battery Monitoring Identification Device (BMID), which is placed on the battery and sends the battery charging profile information to the V-HFM Series Charger. This allows any battery to be charged at any charging station, eliminating the need for voltagespecific, dedicated chargers.

MM&D | July/August 2013

04MMD-ProductFocus.indd 25

9 AC Walkie

The LiftMaxx ES30CAX from Stärke Material Handling Group comes with a fully programmable control system from AC Curtis. The counterbalanced walkie is AC-powered and has a vertically mounted drive wheel. The ES30CAX has a 1,360-kg (3,000-lb) capacity and a maximum lift height of 500cm (197in).

Its lift motor is 4.5hp. The walkie can travel at a maximum speed of 5.8kph (3.6mph) while laden. It has an overall length of 264cm (104in), a turning radius of 173cm (61in) and requires an aisle width of at least 289cm (113.8in).

10 Dual hydrogen tanks

The GenDrive 1900 is the latest offering in the GenDriveSeries 1000 line from PlugPower Inc. The fuel cell—the most powerful the company offers—is designed as a drop-in replacement for the lead-acid batteries used on six-ton, four-wheel, Class-One counterbalanced forklifts. The GenDrive 1900 can be purchased with an optional second hydrogen tank, and when both are filled, the fuel cell can store up to 3.4kg of hydrogen with an energy capacity of 50 kilowatt-hours. It is capable of producing a constant power output of 14 kilowatts and has an eight-hour runtime. The GenDrive 1900 can be filled in two minutes.

11 Cool cabin

The DCF50-90 forklift line from the Kalmar division of Cargotec can handle between five and nine tons. The forklifts come with Agco Stage IIIB, Tier 4i engines rated at 77kW or 85kW. They feature an SCR traction control system and a hydraulic fan with a reversed airflow designed to cool the operator cabin and remove dust from the air. The DCF50-90 line comes standard with a conventional steering wheel, but also offers an optional mini-wheel on the armrest or a lever control system. The forklifts can run for 500 hours before their first scheduled maintenance.

12 New four cylinder engines

Toyota Material Handling Corp’s 8 Series forklifts feature brand new Toyotadesigned and built engines. The 1KD is a 3.0L common-rail, fuel-injected, turbo-charged diesel. It produces 74hp and 221lb-ft torque and uses a oxidation catalyst to be EPA Tier 4 emissions compliant. The 1FS comes in single fuel (gasoline) or dual fuel (gas and LPG) versions. It is 3.7L and puts out 93hp and 203lb-ft torque. The large capacity lift trucks can handle between 3,630kg (8,000lbs) and 7,940kg 17,500lbs. There is also a 5,443kg (12,000lb) paper roll special model. The 8 Series offers both cushion and pneumatic tires.

25

13-08-08 10:26 AM

LEGAL LINK

Storage liens—Part two A primer on what they are and how they function

L

Marvin Huberman

ast issue, in Part One of this article (http://tinyurl. com/storageliens), I highlighted some of the key provisions of the Ontario Repair and Storage Liens Act (RSLA). Those included the definitions of “article” and “storer”, the basics of a storer’s lien, and the statutory standard of care imposed on a lien claimant that has possession of the goods.

In this Part, I examined how lien claimants can dispose of property obtained via a lien, and how an application can be made to a court to resolve differences among parties in respect of the subject article. Now I’ll look at how to dispose of property obtained in a lien.

Sales in the ordinary course A buyer of an article from a seller who sells such article in the ordinary course of the seller’s business, takes the article free and clear of any non-possessory lien which arose from a repair or storage done at the request of the seller or seller’s agent, unless such buyer signs an acknowledgment of the debt that is owing on the invoice or other statement of account in accordance with the provisions of the Act. Even where the buyer has signed such acknowledgment, a third party purchaser buying the article in the ordinary course of such buyer’s business takes it free and clear of any lien claimant’s lien.

Seizure of the article A non-possessory lien claimant seizes the article by directing the sheriff to seize the article in accordance with the Act or as otherwise permissible by law.

Sale of the article A possessory storer lien claimant has a right to sell the article in accordance with the Act upon expiration of the 60th day following the date on which the amount required to be paid for the storage or storage and repair became due.

After the article has been seized the Act provides the code of conduct for the proper sale under the RSLA. The article cannot be sold until the lien claimant has given the notice of its intention to sell to the parties described in the Act. The form and content of such notice is specified in the Act. The article may be sold in whole or in part at a private or public sale at any time, place or terms, provided that every aspect of the sale is in a “commercially reasonable manner”.

The lien claimant itself may only purchase the article at a public sale.

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A statutory scheme for distribution of the proceeds from the sale is stipulated by the Act and any question concerning the entitlement to such proceeds may be resolved by paying the funds into court by the lien claimant and resolved by the court on an application to it.

Retention of the article The lien claimant may retain the article in satisfaction of the lien and, if it proposes to do so, it must give a notice of such intention to every person entitled to a notice of sale under the Act. If a person entitled to receive such notice of retention makes an objection to the proposed retention within 30 days of receipt of the notice, the lien claimant must proceed to sell the article under the Act. If no effective objection is made at the end of the 30-day period, the lien claimant is deemed to have irrevocably elected to retain the article in satisfaction of the debt and is therefore entitled to dispose of it or hold it free from the rights and interests of every person to whom the required written notice was given.

Dispute resolution The RSLA provides for two applications to a court to resolve differences among parties relative to the subject article. Under Section 23, any person may apply to the court for a determination of the rights of the parties where a question arises with respect to seizure of an article, the sale of an article, the distribution of the proceeds of the sale of an article, the amount of a lien, or the right of any person to a lien, and any other matter arising out of the application of the RSLA. The court may make such order as it considers necessary to give effect to those rights.

Where a possessory lien is being exercised and the lien claimant refuses to surrender possession of the article to its owner or any other person entitled to it, or where there is a dispute concerning the amount or the quality of the repair or storage, then Section 24 of the Act provides a mechanism to resolve the issue.

The applicant pays a settlement to court and the storer may accept it, release the goods and end it, or begin an action in the court with the appropriate monetary jurisdiction (including small claims court) to determine the issue.

MM&D Marvin J. Huberman, LLM, is a Toronto lawyer, mediator and arbitrator. www.marvinhuberman.com MM&D | July/August 2013

13-08-07 5:21 PM

27 Annual Transportation Conference th

www.TransporTConferenCe.org On Tuesday,

October 8th, 2013

you are invited to attend a one-day conference that has become the largest educational event for shippers and supply chain practitioners in Canada.

Location

Palais Royale 1601 Lakeshore Blvd., West Toronto, M6K 3C1 For more information, please visit our new website: www.transportconference.org or, call Richard Lande at (905)319-1244, or email: rlande@cogeco.ca The cost of the event is $925 for 1 person, $1800 for two (plus GST).

Focus Sessions: Food Safety transportation law t automotive Shipper-carrier

Featured moderatorS: doug munro, President, M-O Freightworks dave corcoran, Director, Nestle Canada mike riggS, Chairman, Jack Cooper Holdings John Fiorilla, Capehart and Scatchard chriStine brown, Shipper-Carrier Breakout

Featured SpeakerS: SuSanne trimbath, CEO & Chief Economist, STP Advisory Services, “Key Economic Indicators for 2015” eric StarkS, President, FTR Associates, “New US Trucking Legislation Update” richard SwierczynSki, President, A-Z Claims, “Cargo Theft and Identity Fraud – Who Really Has Your Cargo?” angelique magi, VP Strategic Initiatives, Guarantee Company of North America, “The Impact of Technology on the Transportation Sector” JacqueS delarochellière, President, ISAAC Instruments, “Measuring Driver Behaviour on the Road Through Latest Innovation” bill SimpSon, President, Supply Chain Systems, “Balancing Inventory, Warehousing & Transportation Costs” tim roulSton, Director of Sales for Intermodal, CN, “Customer First, Passion, Engagement, Execution” richard kunSt kunSt, mariela castano-kunst, VP & Sr. VP, Kunst Solutions, “Creating Warehouse Key Performance Indicators” ronald Snyder, Partner, Fogler Rubinoff Rubinoff, “Dismissals ‘Without Cause’ and Random Alcohol/Drug Testing in the Transportation Industry’. ” harvey SandS, Partner, Richter, S.E.N.C.R.L/LLP, “Business Opportunities in Resource Mining & Forestry, Involving First Nations” mark Feduke, Director Trade Compliance, VLM Foods, “Canada US Food Safety Policy Changes” keith muSSar, VP Regulatory Affairs, I.E. Canada, “Canada s New Food Regulation-Implications for Transportation & Distribution” carol beaul, President Intelli Trade Inc., “How to Survive the Border Successfully” SteFan de Smit, Associate, Hodder Barristers, “Piercing the Corporate Veil in Ontario-When Can the Individual Be Liable” michel huart, Lawyer, Langlois Kronström Desjardins, “Negotiation & Arbitration Under Bill C-52 - New Canadian Railway Law Service Level Agreements” george magliano, Sr. Principal Economist, IHS Automotive, “Current Trends in the Automotive Industry” al boughton, President, Trailcon Leasing Inc., “History and Future Trends of Trailer Rentals as Economic Indicators for Shippers and Carriers”

Last year, over 300 companies attended the event in order to learn and exchange views on logistics innovation and cost savings.

Manufacturing companies from the consumer goods, automotive, grocery industries, as well as trucking, railways and intermediaries, receive an overview of the solutions to a number of current problems in the transport industry. This year we will be focusing on cargo theft, insurance discounts based upon analytics and capacity issues.

RP Lande.indd 1

13-08-07 5:37 PM

RETAIL

The Retail DC series is available in its entirety on MM&D’s website: Program vision: Taking the first steps toward designing a retail DC http://tinyurl.com/ MMDretail1 So you think you need a new DC: Asking questions clarifies the decision-making process http://tinyurl.com/ MMDretail2 Understanding design criteria: Pick the right materials handling equipment and make the best retail distribution system possible http://tinyurl.com/ MMDretail3 Building design—Part One: Wrapping the building around the materials handling solution http://tinyurl.com/ MMDretail4 Building design—Part Two: Wrapping the building around the materials handling solution http://tinyurl.com/ MMDretail5 Project organization— Part One: Keep the egos and silos out of the process http://tinyurl.com/ MMDretail6

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Project organization—Part two Words of warning and conclusion

By Edward Stevens

I

n Part One of the Project Organization column, which ran in the May-June issue, I began to address some of the driving forces that get a retail DC construction project going and keep it running smoothly and efficiently. Now it’s time to issue a few words of warning about problems that can derail these initiatives.

Design and cautions Be cautious of value engineering. The US Institute for Defense Analyses says value engineering “is a technique directed toward analyzing the functions of an item or process to determine ‘best value,’ or the best relationship between worth and cost.”

We have experienced some significant cost expenditures due to deficiencies created by the value engineering approach that were only noted after the turnover to operations. This was because the process was approached as a cost-cutting exercise rather than as a long-term cost-benefit analysis. Additionally, do not start value engineering late in the design phase.

Value engineering can be introduced successfully at the start of a project, netting considerable savings; however, benefits decline rapidly after the detailed design phase of a construction project.

Energy-saving technologies should be assessed early in the design process. Emerging technologies need to be assessed, as more equipment manufacturers are incorporating intelligent monitoring and control functionalities into designs. IT infrastructure must be considered at the same time.

A flexible design allows for different scenarios of growth or reduction in demand. Consider modular systems, which allow for an easier adjustment to meet demand requirements. Building in flexibility is critical because after a certain point, the costs of retrofits become disproportionately high.

Quality assurance in design and construction have always been a challenge. Create a role in the project delivery organization that is solely accountable for the quality of product and process on the construction site.

The construction manager’s role More than just a job title, this role has been integral to success in several new builds we have been involved with.

The construction manager should be on board early in the design process to help ensure the design is constructible and affordable.

Concurrent to the design process, the construction

manager should develop the quality plan. (Praxiom Research Group Ltd defines a quality plan as “a document that is used to specify the procedures and resources that will be needed to carry out a project, perform a process, realize a product, or manage a contract. Quality plans also specify who will do what and when.)

For those who haven’t worked on a project with a construction manager before, here’s how The Princeton Review defines the role: “Coordinating one aspect of construction is a difficult task. But coordinating the entire process, from initial planning and foundation work, through the final coat of paint in the last room, takes someone with the managerial skills of Lee Iacocca, the force of will of General Patton, and the patience of Job. Being a construction manager demands organization, attention to detail, an ability to see the ‘big picture,’ and an understanding of all facets of the construction process, usually acquired through experience. A construction manager is the intermediary between his clients and his workers, between the architect and his subcontractors, and between the project and any regulatory personnel.”

Final thoughts We recommend you apply an integrated approach that establishes target and performance objectives and strategies early on in the design process. Ensure the interdependencies and interrelationships of all building systems are understood, evaluated and appropriately applied.

For some organizations, this way of working together may require a significant paradigm shift. It involves innovation and efficiency and the application of agile project management techniques. Most organizations do not retain the full-time resources required to successfully take on a large distribution centre build. Organizations do, however, have business expertise, which is needed to plan, organize and execute the project.

As with any business project, the key is knowing exactly what you want to do and establish your plan for getting there: Establish the goal. Constantly articulate what the facility will look like, including the operating features; project your operational timelines including the opening day and the true the first day of operation. Seek out the experienced, dedicated and committed talent to help with the project. It will be well worth it in the long run.

MM&D Edward Stevens is the pseudonym of a Canadian retail supply chain professional with over 30 years of experience in the industry.

MM&D | July/August 2013

13-08-12 10:30 AM

MATERIALS HANDLING

Robotic automation Can robots do picking?

T

he impending demise of humans and their replacement by robots has long been rumored in warehouse operations, but the actual implementation has taken much longer than many robotics advocates have anticipated. One of the problems in devising a universal robotic material handling solution is the diversity of functions handled in an individual warehouse.

It’s impractical to examine all of the various functions and their constraints in a single page so we will look only at one function. Order selection is commonly recognized as being among the most labourintensive of material handling operations, so we will focus on that function. To further simplify, we will deal with the traditional type of order selection that can be found in a corrugated-case operation. The permutations and combinations to be found in a hardware or automotive aftermarket parts warehouse are too complex to cover here.

We will assume a limited number of SKUs, organized in the traditional manner, with fixed groundlevel picking and a random unit-load reserve above, with an average of 40 cases per unit-load. Even in this type of warehouse operation there are a large number of different potential order-picking operations. Traditional types of order selection include: • Full unit-load selection • Partial pallet (half- to three-quarters of a pallet) • Layer picking (one-quarter- to one-half pallet) • Case selection • Less-than-full case selection It is not uncommon for one SKU to be picked by more than one picking method for an individual order. This outlines the first issue in designing a robotic picking operation because the order components must be divided among different operations and selection areas.

For a smaller operation, if one is willing to sacrifice efficiency, different types of picking operations can be combined. Case selection can also handle layer and partial pallet selection, at a loss in productivity.

The problem is as the number of cases per pallet selected increases, the inefficiency also extends to other support warehouse functions. Traditionally, full and partial pallet picking functions are selected from upper level reserve pallet locations because selecting them from a pick slot depletes the pick location too quickly and triggers frequent replenishments.

For handling unit loads, old-fashioned wooden pallets still retain their dominance, but there are a number of palletized and non palletized substitutes. Forklift MM&D | July/August 2013

04MMD-mh.indd 29

attachments form half of what is commonly referred to as palletless material handling systems. There are three main unit-load attachments for the most common palletless systems—basiloid attachments for toplift handling systems; clamp attachment systems which work through the application of side pressure (like a bear hug), push-pull attachments for bottom supported systems and used with slip sheets. Each requires different handling characteristics and skill sets.

Our poor robot has to drive a unit-load handling vehicle (of which there are several types) or at least interface with it. For full-pallet picks the robot can proceed directly to the loading dock, while partialpallet picks force the robot to remove some pallets and place them elsewhere—logically in the pick slot.

To solve the unit-load problem we can have a robot drive the vehicle or have a driverless vehicle interface with a case-selecting robot. This range of skills is likely too challenging for one robot type to handle so now we must consider multiple types of robots.

At the other end of the case selection spectrum, lessthan-full case operations (sometimes called brokencase operations) can be as complex to design. Consider a pick-and-pack operation for only a few SKUs—one that is organized so that (potentially multiple) fixed workstation robots can handle the function. For this to succeed, each work cell has to be carefully organized and instead of bringing the picker to the stock, the stock has to be brought and presented to the (robotic) picker. (Think of a carousel or flow shelving.) Exterior packing must be removed first.

Additionally, the correct number and size of empty packing cases have to be selected and the bottoms sealed. At the pick face the robot must select each item correctly and place it in the correct part of the case. The placing orientation must consider the three dimensions of the case (length, width and height) and allow for different case sizes and different types of items to be handled. This can be a complex logic to program into the picking robot because there are usually several layers of product in a case.

While the problems are complex, they are not unsolvable, and robotic automation is creeping into parts of warehouse operations. In future it will continue to grow, but good old Homo sapiens can still count on their versatility to make replacement by silicon some way off.

MM&D

Dave Luton

Dave Luton (dluton@cogeco.ca) is a consultant in the greater Toronto area.

29

13-08-07 5:21 PM

CRUNCHING THE NUMBERS

GLOBAL 3PL MARKET The top companies in the world are relying more and more on their 3PL partners. And the 3PLs serving the world’s biggest businesses are offering their clients more and more services. In a study entitled Trends in 3PL/Customer Relationships–2013, supply chain market research company Armstrong & Associates Inc (www.3PLogistics.com) has looked at Fortune 500 companies and the 3PLs that serve them.

Number of 3PLs used by Fortune 500 firms

down: The study show eak s ices are being provi ed that r b 1 de d b t rv y 3P 7,623 w i e s of s e o Ls H t yp Other

Intermodal

Dedicated Contract Carriage

Lead Logistics Provider

Transportation Management

Percentages of 3PL services offered

International 9.5%

Procter & Gamble Wal‐Mart Stores General Motors Nestlé Volkswagen Ford Motor PepsiCo Hewlett‐Packard, Unilever BMW, Royal Philips Electronics Daimler, Siemens General Electric, Samsung Electronics Johnson & Johnson Toyota Motor Honda Motor Home Depot, Kraft Foods, LG Electronics, Sony Coca‐Cola, Sears Holdings Deere, Panasonic, Pfizer Nissan Motor, Robert Bosch BASF, Bayer, Dell, DuPont, Royal Dutch Shell, Target Danone, IBM Abbott Laboratories, Dow Chemical, Goodyear Tire & Rubber, International Paper, Volvo Johnson Controls, Kroger Michelin, United Technologies Caterpillar, Continental, L’Oréal, Sanofi Bridgestone, Emerson Electric, Exxon Mobil, Honeywell International, Novartis Anheuser‐Busch InBev, Best Buy, GlaxoSmithKline, Hitachi, Merck, Renault BP, Canon 3M, Amazon.com, Carrefour, Chevron, Safeway

33

5.6% 8.1%

Company

53 51 50 45 42 41 40 37

32 30

3.0% 23.7% 3.3% 4.1% 4.5%

Supply Chain Management

#

27 26 25 24 23

Warehousing

21 20 19

18.8%

Integrated Solutions

19.6%

Value-Added TM or WM

18 17

16 15 14 13

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12

Average number of 3PL services, used by industry

11 10

Crunching the numbers is an editorial feature sponsored by YOUR COMPANY NAME and LOGO here.

Contact Emily Atkins at 416-510-5130 or eatkins@bizinfogroup.ca for more information.

30

04MMD-NumberCrunching.indd 30

MM&D | July/August 2013

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