MM&D November/December 2012

November/December 2012 $8.00

Thinking robots Publication mail agreement #40069240.

Canadian logistics company deploys Kiva robots in the warehouse

Plus: Safety, security and the bottom line Reposition 2012 report New financing options for supply chains Vigilance against vermin Scanners, mobile computers & printers ProMat 2013 new products preview

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Taking Stock

Planning for the future A

t the end of the year, it’s natural to look ahead to the coming year and in this issue we’re trying to help you do exactly that.

In the news article on page 4, we’ve outlined some of the changes to food handling regulations expected in 2013.

In the feature on supply chain finance (page 18), we’ve previewed a new method of making secured payments between buyers and sellers.

On page 6, we’ve written about the introduction of the COR health and safety certification system to Ontario.

We’ve even presented a sneak peek of some of the upcoming products scheduled for launch at ProMat 2013, which takes place in Chicago in January.

But all of that is just the tip of the iceberg. There are more changes coming than we can pack into a single issue.

During this past year, we’ve told you about how the USDA intends to force companies shipping

goods into the US to heat-treat their wooden pallets, thereby adding increased cost and regulatory complexities to cross-border trade. Enforcement of these regulatory changes is expected to start in 2013.

We’ve reported extensively on the relationship between shippers and railway companies, and about the findings of the Rail Freight Service Review, all in anticipation of the upcoming changes the federal government plans for the Canada Transportation Act. Given all this, not to mention other changes we’ve reported about in the pages of the magazine and on our website (www.mmdonline.com) we expect 2013 to be a year in which volatility is the norm.

As supply chain professionals, you’re experts in dealing with the unexpected and reacting to changing conditions. As a journalism organization we thrive on the latest news developments and breaking stories. So as 2012 draws to a close and 2013 dawns, let me say I hope you’ve found value in the news we’ve delivered to you during the past year. I also hope you’ll continue to rely on MM&D to keep you up to date on changes to the industry, especially since next year promises to bring in the new with a vengeance.

November/December 2012 | Volume 57 | Number 7

Contents Departments

Columns

Features

3 4 7 9 11 12 12

35 Materials Handling Managing auto ID in the warehouse 36 Retail Understanding design criteria 38 Legal Link Bills of lading

14 Thinking robots Canadian 3PL turns to Kiva robots for a competitive edge

Taking Stock Supply Chain Scan Global Focus Done Deals Benchmarks Movers + Shakers Professional Development Directory

18 Vermin vigilance Avoid costly infestations with proper pest prevention 20 Supply chain finance

Tools to make trade easier and less risky 22 Equipment focus

Scanners, printers and mobile computers

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ProMat preview See product launches before they hit the tradeshow floor, page 10

IWLA

Conference focuses on safety and security, page 6

Inside | WMS sales up, page 12 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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Food handlers facing new regulations in 2013 Food chain one of many topics at 2012 Transportation Conference

By Carolyn Gruske

A

ny company that handles, stores or transports food better be prepared for major changes to government regulations regarding food safety, even if nobody is entirely sure exactly what those changes are going to be.

Speakers on a food safety and transport panel delivered that message to one group of attendees to the 2012 Transportation Conference.

Held in Toronto, the conference included keynote speeches and breakout sessions. Topics of the keynotes included: improving the efficiency and sustainability aspects of trucking operations (presented by Dan Carruthers, director of supply chain services for Lakeside Logistics); Chinese investment in Canadian and international markets (presented by Wenran Jiang, project director of the China-Canada Energy and Environmental Forum and associate professor of political studies at the University of Alberta); the bull run in the worldwide commodities market (presented by Patricia Mohr, vice-president and commodity market specialist at the Scotiabank Group); and doing business ethically (presented by Don Soderquist, former Walmart COO and founding executive of the Soderquist Centre for Leadership and Ethics).

The breakout sessions, which allowed attendees to interact with each other and presenters, covered transportation law, the automotive sector, shippercarrier networking and the previously mentioned food safety track.

The food safety track focused on the Canadian Food Inspection Agency (CFIA), Bill S-11—the Safe Food for Canadians Act, the US Food Safety and Modernization Act, the US Federal Department of Agriculture (FDA) and how, over the coming year, these agencies and regulations will alter the way the food handling industry operates.

“In Canada we are entering into an environment of unparalleled change in how food is going to be regulated, inspected and enforced, which will require changes to your fundamental business structure. If you deal with food, you will be impacted,” warned Keith Mussar, vice-president of regulatory affairs at IE Canada—the Canadian Association of Importers and Exporters.

South of the border, the US Food Safety and Modernization Act was signed into law in January 2011, but it is on January 1, 2013 that it will take effect. By that date all domestic and foreign facilities that manufacture, process, pack or hold food for human or animal consumption in the US will be required to have registered with the Food and Drug Administration.

But it’s more complicated than simply registering. There are additional levels of oversight being imposed on food handlers and shippers who send foodstuffs to the US, says Mark Feduke, director of trade compliance for FLM Foods Inc, describing the changes as a CTPAT-equivalent for foodstuffs.

“The United States, under the Food Safety Modernization Act, will essentially

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CITT

Rough waters ahead for carriers, page 8

Movers + Shakers Appointments and promotions in the materials handling industry, page 12

create a two-tiered import channel for food going into the US. If you export or carry food into the United States, you will need to be aware of this. The two channels are a basic channel and a trusted channel. Those are my words not the FDA words.

“When I say ‘basic’, I say that tongue-in-cheek because basic will be the minimum criteria moving forward and it’s far from simplistic. Section 301 title 3, uses very restrictive language as to who is now defined as an importer, and how US Customs defines an importer is not going to be the same as how FDA defines an importer.”

According to Feduke, “An importer, for FDA purposes, is the US owner or consignee of that product at the time of entry—not release. In the absence of a US owner or consignee is the foreign owner’s or foreign consignee’s agent in the US.” Feduke says the importer will be required to demonstrate to the government they are actually verifying the food released overseas meets the same food safety standards as foods produced and sold in the US. “The regulations have not been homologated yet, but the actual details are in law where potential verification activities might include record monitoring, lot-by-lot certification, on-site inspections.”

While there is only one piece of legislation in the US that requires action, there are a number of initiatives happening in Canada.

First, a food import licensing program for foods that fall into the non-federally regulated sector is

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Supply Chain Scan

being carried out under the Canadian Agricultural Products Act. The government of Canada is “instilling greater responsibility on food importers to be responsible for what happens in foreign jurisdictions, be accountable for what happens during the transport of food from the foreign jurisdiction into Canada, and greater accountability for the safety of that food once it arrives in Canada,” says Mussar.

“The regulation will say essentially this: ‘As an importer you will have to have a licence. You will have to pay a fee for that licence. And this regulation will come into force roughly fall next year.”

In his presentation, Mussar outlined a number of steps needed in order to qualify for the licence. First, applicants must be residents of Canada. He warned that US-based companies without Canadian residents, and courier companies, especially those offering expedited services, may have difficulties with this portion of the regulation.

“There could be unintended consequences. If, for example you are representing a carrier business from an American exporter, under licensing they now have to have a licence holder that is domiciled in Canada, so how will that affect the supply chain?”

In order to qualify for a licence, businesses must show they have a prevention safety plan in place, have implemented a series of best practices with regards to preventative controls, will have to undergo a risks evaluation, and finally the risk control system will need to be audited and verified by the Canadian Food Inspection Agency (CFIA).

Besides the licensing program there is also Bill S-11, which passed into law in November. It applies not only to all importers and exporters, but also to business that manufacture products that cross provincial border. It requires all such businesses to be licensed, to have mandatory food recall plans, and preventative plans.

Mussar says the food licensing regulations will likely be applied in March 2013 and fully implemented by October.

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Supply Chain Scan

Safe and secure

Fighting crime and improving health and safety at the IWLA Fall Conference

By Carolyn Gruske

T

raditionally, you wouldn’t expect the Annual Fall Conference of the International Warehouse and Logistics Association’s (IWLA) Canadian Council to bear any similarity to an episode of the TV show Law & Order.

However, when the theme is “Security and Safety Hits the Bottom Line Hard”, and one of the speakers is a detective who just a few hours earlier was catching tractor trailer thieves in a sting operation, crime fiction comparisons tend to find their way into the day’s conversations.

Held in Woodbridge, Ontario, just north of Toronto, the conference opened with constable Morris Shaw of the York Regional Police offering tips on preventing crime through the use of environmental design.

Appropriate lighting, such as bright white LEDs that create good visibility and don’t distort colour recognition (important when describing and identifying what suspected criminals are wearing) should be deployed around facilities. Landscaping should follow the three/seven rule. Shrubs should be kept below three feet and tree branches should be above seven feet. That way there is a four-foot vertical surveillance area, making it easy to see who is on the property. Decorative boulders can serve as barricades.

Shaw also spoke about the care and attention security systems need.

Cameras, for example, are useless if they are placed behind obstructions (such as trees or columns) or if they aren’t aimed in such as way as to capture people’s faces as they enter and exit buildings.

Shaw admitted security measures can be thwarted—wheel boots and locks on tractor trailers can be circumvented by anybody who has watched “lock bumping” videos. He acknowledges “security is a huge inconvenience”, but by taking measures to make it harder for criminals to do their jobs, you can minimize losses by making your business a harder target.

Detective sergeant Lou Malbeuf of the York Regional Police’s auto/cargo theft unit was the second speaker of the day. Malbeuf and his team had spent the early hours of the morning catching a tractor trailer cargo theft gang, a bust made possible thanks to a tip from somebody in the industry about a fired employee who had been leaking information about deliveries and schedules.

Knowing a theft was likely to take place, the police loaded a “bait” trailer with cargo (and a hidden GPS unit and a silent security device to notify them when the trailer was moved), and allowed it to be stolen and taken to an offsite warehouse location. There, the police not only found people unloading the shipment, but they also discovered a large cache of items that were likely stolen goods. Malbeuf applauded the person who gave him the tip, saying he needs as much help as he can get. “Without you guys, I can’t solve crimes.”

Malbeuf emphasized most supply chain thefts, whether they occur in truck yards or warehouses, are inside jobs, so he strongly recommends criminal background record checks on all employees.

Keith Parisien, an associate and senior project manager in the security and

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IT systems group of Thornhill, Ontario-based program management and engineering firm MMM Group, was next. He reviewed and compared different types of security monitoring and access systems. While there is no one best solution for everybody, he said businesses need to employ best practices when it comes to maintaining, managing and operating any security system.

He also reminded the audience the relationship with the security system vendor and support team is vital.

“We see issues with core components becoming obsolete and no longer supported by the manufacturer, so with no replacement parts available, the system stays down,” he said. Suppliers should provide not just sunset/end-of-life agreements, but also offer full support during the lifetime of the products.

Tim Reed, an actuarial associate with the Workplace Safety and Insurance Board of Ontario, said the WSIB is imposing a two percent increase for 2012, raising the average premium rate from $2.35 per $100 of insurable earnings to $2.40 for companies classified as general trucking or warehousing.

Paul Casey, vice-president of programs and strategic development for the Infrastructure Health and Safety Association of Ontario (IHSA), was the final presenter. He said the Safety Group rebate for 2011 will be $3.9 million, which will be shared among the 168 member firms of the organization. Safety Group members get a slight (5.3 percent) reduction on their WSIB premiums compared with non-participating companies.

Casey also discussed the arrival of the Certificate of Recognition in Ontario (COR).

COR is an employer-driven, best practices, continuous improvement health and safety certification program backed by mandatory audits.

To achieve COR certification, companies apply to the IHSA, complete three courses and perform a self-assessment. The IHSA conducts a desk audit and offers suggestions for improvements.

A full third-party audit follows. Certification lasts for three years.

All COR programs address 13 common elements including hazard analysis and safe job procedures. Ontario adds five additional ones: occupational health; first aid; health and safety committees; workplace violence and harassment; return-to-work policies; and management reviews.

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Supply Chain Scan Global Focus Italian acquisitions ECS Group, a general cargo and sales service agent (GSSA) based in Paris, France, is purchasing three Italian companies.

Air Transport Consultants Spa (ATC) is an air cargo GSSA. Airfreight and Data Processing Srl (ADP) is also a GSSA, and Airline Logistics Srl is a cargo handling company created to support ADP and ATC customers. It operates from airports in Milan and Rome.

Energy group creates supply chain arm PHI Group Inc, a Las Vegas, Nevada-based energy and resources company, established a supply chain management operation with the goal of providing industrial and agricultural commodities to Asia. It has agreements with producers and suppliers of thermal and coking coals to provide supplies to Vietnam and other Asian countries. It also has interests in commodities such as iron ore, palm oil and sugar.

UPS adds healthcare DCs UPS expanded its global healthcare distribution facility network by adding three new facilities. Two of the DCs are located in China—in Hangzhou and Shanghai—and the third is in Sydney, Australia. Hangzhou is 22,000sqm, Shanghai has 7,575sqm and the Sydney’s facility is 5,388sqm.

UPS now operates 36 healthcare DCs worldwide.

Volga-Dnepr services UAE Russia-based heavy cargo airline company Volga-Dnepr Group now has a maintenance and repair operations (MRO) team located in a 20,000sqm hangar at Sharjah Airport in the UAE. It will offer MRO services to aircraft operators. Besides typical MRO services, Volga-Dnepr will be able to repair wheels, brakes, and batteries, perform structural repairs and provide customers with storage facilities and offices. Full operations are expected to begin January 2013.

Panalpina operates for BMW Brazil Panalpina has taken control of a new 10,000sqm logistics centre in Cajamar, Brazil and will operate the spare parts supply chain for BMW in Brazil. It will handle all goods receipt, storage, order picking, return goods handling, order management and spare parts deliveries within the country and will supervise incoming Customs clearance.

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Supply Chain Scan

Rough waters ahead

Modal shift While trade flows are changing, so too are modal preferences, fuelled by the continuing focus among shippers on cost control. Some large customers are seeing significant shifts to marine freight from airfreight, Cullen said. Another example is the growth in acceptance of intermodal as a viable alternative

By Lou Smyrlis to over the road transportation. Until recently, it was commonly accepted that the economics of rail hanging trade flows, modal shifts, labour challenges and the persistent surpassed the economics of trucking services at need to leverage the power of technology will shape transportation deci- around the 750 mile mark. During the discussion sion making in 2013, according to a panel of transportation stakeholders of the C-Suite panel, however, it was revealed that addressing CITT’s Reposition 2012 conference in Halifax. may have shifted down to 500 miles, with many Sitting on the Multi-Modal C-Suite panel were: Lisa Marie Turpin, vice-president, motor carriers themselves using rail services. And, Air Canada Cargo; Doug Harrison, COO of Day & Ross Transportation Group; in some cases, rail service could be viable at as low Jeff Cullen, CEO Bellville Rodair; Neil McKenna, vice-president of transportation as a 350-mile distance if used to avoid congested for Canadian Tire; Rudy Mack, founder of Rudy Mack Associates; and Jean Jacques corridors such as Toronto to Montreal.

Ruest, executive vice-president and chief marketing officer at CN Rail.

CN’s Ruest, however, emphasized that rail has to do a better job of addressing service concerns to Ocean seize on such opportunities. The future success for Slumping trade volumes between China and North America could not come railroads in Canada will hinge on their ability to at a worse time for marine container lines. The globe’s ocean shipping lines provide more innovative offerings and improve are already bleeding badly with no immediate relief in sight, according to customer service rather than provide low pricing.

Mack, president of Rudy Mack Associates, a New York, New York-based “Even though we have lower-cost solutions, in maritime consultancy. too many cases customers can’t use us because of A combination of excess capacity and volatile rates is staining profit ledgers the service we provide. Rail needs to address better in red ink and can only lead to further industry consolidation and possibly service. It’s not the cost of the service; it’s if we further government intervention, warned Mack. can provide a service the customer can live with….

“There will have to be long-term financial patience from the marine lines We need to be more innovative and creative with and long term financial guarantees and financial help from government… our services. We need to be faster to get services When I look at the future, I do see a better horizon but not until 2014-15.” to market.”

Jeff Cullen, CEO of freight forwarder Bellville Rodair, believes the shift in trade patterns could pose a threat to Canadian shippers over the long term.

Labour unrest The strength of the Asian economies and the weakness of the North American The potential of a dockworkers strike shutting recovery are creating independence from North American trade, said Cullen. down deliveries along the US Atlantic and Gulf “This leads to redeployment of assets (the larger containerships for example) coasts is causing shippers to reconsider their transto inter-Asian trade routes. Smaller vessels back here lead to lower economies portation strategies for 2013, Canadian Tire’s of scale and higher pricing,” he explained.

McKenna warned.

“As a shipper, it’s the threat of a strike or lockout Border issues that causes shippers to move (to alternative ports).

Meanwhile, growing issues with border clearance are introducing increasing Forty-eight hours’ notice (about labour disruption) complexity to North American trade routes. is not enough. We need to be moving to unaffected For air cargo operators in Canada, 2013 will start with a bang—the imple- ports months in advance.” mentation of Transport Canada’s mandate to screen all cargo in the belly holds of passenger planes taking off from Canadian airports. Cargo not prescreened Responsiveness can’t be mixed with prescreened cargo.

Harrison, from Day & Ross, said customers’ actions Turpin said the last few months have been very challenging because many are driving change. shippers don’t want to pre-screen the cargo themselves, preferring the airfreight “Companies are looking to be a lot more responsive carriers handle that task. Yet it has not always been clear what Transport at the last minute. This creates pressure on suppliers Canada expects with the new regulation. to be very agile,” he said, adding agility requires “Ideally, we would like to see goods tendered to us pre-screened. But we visibility into supply chain operations, which permits have put in equipment at all our major stations. Someone who doesn’t tender fast and intelligent decision-making and that techprescreened will have a bit of a delay,” Turpin said. nology is necessary for reaching that state.

CITT Reposition panel predicts what 2013 will look like for the shipping industry

C

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Supply Chain Scan Done Deals Express delivery company TNT Express NV has sold its airlines. The Netherlands-based company is transferring ownership of TNT Airways SA and Pan Lineas Areas SA to Dublin, Ireland-based ASL Aviation Group. The conditional sale will be finalized immediately before a merger between TNT Express and UPS is completed.

MWPVL International Inc, a Montreal, Quebec based supply chain and logistics consulting firm, has signed a deal with Toledo, Ohio-based New Course LLC, a consulting and integration services company focused on SAP supply chain projects. The two companies will work together to provide complementary consulting services.

JDA Software is being sold to RedPrairie. Atlanta, Geogiabased RedPrairie agreed to purchase all outstanding stock of Scottsdale, Arizona-based JDA for US$1.9 billion.

Montreal, Quebec-based CN and Tundra Energy from Calgary, Alberta signed an MOU to construct a crude oil railcar-loading terminal in Cromer, Manitoba. Starting

in Q2 2013, it will serve Bakken crude oil producers in Manitoba and Saskatchewan, and will initially load 30,000 barrels of crude per day into the rail cars.

Customs broker and trade consultant, Livingston International, which is headquartered in Toronto, Ontario, has purchased Minneapolis, Minnesota-based Norman Jensen Inc, including its Canadian brokerage company, Jensen Customs Brokers Canada.

The Meyers Transportation Services division of Belleville, Ontario-based Meyers Transport Inc has acquired a new 7,432sqm (80,000sqf) warehouse and distribution centre in Cheektowaga, New York. The new division will operate under the Meyers Distribution International brand.

CEVA Logistics, headquartered in Hoofddorp, the Netherlands, signed a deal with vehicle fleet location-based telematics company Webtech Wireless Inc of Vancouver, British Columbia. CEVA is using the Webtech Wireless data pump and MDT3100 units at its Michigan location.

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Supply Chain Scan

ProMat 2013 promises plenty

Take a sneak peek at what will be debuting on the tradeshow floor Mitsubishi Caterpillar Forklift America Inc Intralox LLC ἀ e Jungheinrich Warehouse Navigation system uses transponder RFID ἀ e Dual Activated Roller Belt (DARB) Sorter S400 technology to control guided Jungheinrich very-narrow-aisle lift trucks. In has bi-directional capability. It enables right-angle addition to guiding the truck around the warehouse, the system controls lift- sorting of over 60 cases per minute, diverting items ing and putting away the pallet. ἀ e system works with both rail or wire guided into two opposing directions. It can be used to feed trucks. If the racking layout changes in the warehouse, the transponders can into a mini-load AS/RS because it can sort and be reprogrammed with the new configuration. merge from the same side of the conveyor at speeds of over 30 cases per minute. It can also sort into Kardex Remstar accumulation lines, sequence cartons, divert rejects, ἀ e QuickPick Light Pointer uses an LED or and change carton orientation during sorting. ἀ e laser light to illuminate the correct picking DARB Sorter S400 uses a modular plastic belt with position. ἀ e light is mounted on a horizontally embedded rollers sitting on a carryway. Products moving slider. ἀ e QuickPick Light Pointer on the belt move in the direction of belt travel until works with Kardex Remstar’s Shuttle VLM. the carryway activates embedded rollers from below, causing packages to move in a direction different George Utz Inc from the belt travel.

Pallet manufacturer George Utz Inc, is showcasing a two-piece, snap-together plastic pallet. Designed for use with automated systems, it measures 48in by Seegrid Corp 40in. It can be ordered in reinforced or non- ἀ e driverless GT10 tow tractor reinforced versions. Standard features include from Seegrid Corp can move up a smooth, solid deck (available with and with- to 4,535kg. It uses visionout safety edges) anti-slip grommets, ergo- guided technology to navigate nomic handles, and fields for hot stamping, through the warehouse and labels, label placards and mold-in logos. doesn’t require tapes, lasers, or magnets to guide it. It Vocollect can learn and store 24km ἀ e SRX2 is Vocollect’s latest wireless headset for DCs and wareof routes and travels at houses. Its modular construction makes it easier to share speeds up to four kph. ἀ e the use of the headset electronics over multiple shifts. tractor weighs 816kg and has a Vocollect says its SoundSense technology height of 150cm (260cm with the camera) and meareduces ambient background noise. ἀ e headsures 91cm wide. It comes standard with an LED sets are ruggedized and can be used in freezer lightbar and an independent laser-based obstruction environments with temperatures as low as sensing system.

-30C. Batteries in the SRX2 are designed to last two shifts in dry environments and one full shift in Landoll Corp freezer environments. ἀ e Drexel Model R60i4 Swingmaster Rytec Corporation Sideloader and ἀ e Powerhouse SD from Rytec is a roll-up rub- VNA truck has ber door. It is designed to respond to high pres- been redesigned by sure and wind loads by increasing resistance. If Landoll Corp. New accidently hit, the rubber panel releases without features include a hydrostatic drive system, a Tier damage and resets with the push of a button. A IV-approved 4.3L GM Vortec engine, and a redeloop-seal compresses at the bottom of the door, signed front pivot/shift assembly. ἀ e R60i4 can while side columns create side seals. ἀ e door handle sideloads weighing up to 2,727kg (6,000lb). comes with standard safety features including It comes standard with solid pneumatic indoor/ a light curtain, warning lights and a wireless outdoor tires and can climb a 15 percent grade while reversing edge. carrying a full load.

MM&D

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Supply Chain Scan Benchmarks Al Boughton, CEO of Trailcon Leasing, was presented with the Shaw Tracking/Ontario Trucking Association (OTA) Service to the Industry award for 2012 at the 86th Annual OTA Convention. Boughton has served with a number of organizations, including the Allied Trades Board of Directors (where he acted as chair), the Canadian Trucking Alliance, the Toronto Transportation Club, the Intermodal Association of North America and the Missisauga Board of Trade’s transportation and airport committees (which he also chaired). He is the first OTA Allied Trades member to be presented with the award.

Toyota Industries Corporation (TICO) is in the running for a major product design award. TICO’s Automated Guided Container Transport System has been nominated for the Japan Institute of Design Promotion’s 2012 Good Design Best 100. Already a finalist, the automated guided vehicle (AGV) system is now competing for a gold award.

The Automated Guided Container Transport System dispatches AGVs and other cargo handling equipment, including gantry cranes, in container yards.

Lufthansa Cargo earned third place at the ÖkoGlobe awards. The awards are an international environmental prize for the mobility industry and its suppliers.

Lufthansa’s entry was an airfreight container 13kg lighter than conventional aluminium containers and made from composite material.

The Railway Association of Canada (RAC) announced the winners of its 2012 Safety Awards. Among the winners were CN, which created a process for measuring and auditing the safety culture in the organization, and QNSL (Quebec North Shore and Labrador Railway) which began using a portable ultrasound device to detect air leaks in its trains, thereby allowing minor repairs to be carried out and preventing the leaks from worsening.

The Canadian Supply Chain Sector Council has recognized triOS College’s supply chain and logistics programs with accreditation under its National Accreditation Program (NAP). The accreditation is good for a three-year period.

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

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12-11-26 4:39 PM

Supply Chain Scan Movers + Shakers Konstant has a new president. Gabe Mazzetti has been promoted to the position after serving as senior vicepresident of sales for the Oakville, Ontario-based industrial shelving manufacturer and distributor.

Jeff Bryan, president and CEO of Jeff Bryan Transport Ltd in Burford, Ontario, was inducted as the new chair of the Ontario Trucking Association (OTA) at the association’s 86th annual general meeting. He has served on a number of boards and committees and is the OTA delegate on the Canadian Trucking Association’s board of directors.

Tim Boyce is the new chief marketing Gabe Mazzetti officer at Toronto, Ontario-based Wheels Group Inc. Before joining the company he worked at a number of transportation companies, including Canpar Transport, TST Overland Express and CP. Mike McCarron, one of the founding partners of MSM Transportation, (purchased by Wheels in October 2012), has joined the Wheels’s mergers and acquisitions team.

Cambridge, Ontario-based Pival Expedite has two new members. Sheila Romanini joined the company’s logistics division as operations co-ordinator. She will be responsible for the division’s service lines including FTL, LTL, rail and intermodal. Marko Miskovic joined Pival as the company’s newest expedite specialist.

Montreal, Quebec-based Delmar International Inc appointed Marvin Rosenzweig vice-president of Delmar Ontario. He has held logistics positions at Canada Post and UPS Supply Chain.

Lexington, Kentucky-based Clark Material Handling Company has a new sales manager for North America. Dale Guckian will be responsible for Canada, the US and Mexico.

Dale Guckian

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MM&D | November/December 2012

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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.

Prove you’re a “Logistics Expert”—Add CITT to your professional credentials. And more value to your supply chain. Course work for CITT’s winter semester begins January 16th. Register now to guarantee your spot.

1 ”2010 Salary Survey Results”, Materials Management & Distribution, September-October 2010.

2 Clayson, Tracy. “Learning Curve: What are you worth?” Canadian Manufacturing, Distribution and Transportation News, October 31, 2011.

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

CITT11E-PA02-profitability - OUT1 1

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3/9/2011 3:42:41 PM

12-11-26 4:40 PM

Thinking

robots

Ontario 3PL looks to automation for a competitive edge Carolyn Gruske visited Think Logistics to watch its robots in action.

P

umpkin orange, with violet-coloured lights and white oval badges proclaiming its name—3512—a robotic drive unit rolls between the legs of a hanging garment rack pod and begins spinning in circles. As it twirls, its four-spoked metallic lifter rises, makes contact with the bottom of the pod and lifts the entire rack off the floor. Then, 3512 pivots again to face the direction it intends to travel.

With the rack carefully balanced, 3512 heads for the picking station. It travels from deep inside one of the aisles of pods filled with a variety of merchandise—including items such as emergency kits, folded paper road maps and movie DVDs—and heads toward its delivery destination. 3512 navigates by reading 2D barcode place markers stuck to the floor in a grid formation inside the robots’ enclosure.

As a safety measure, the area where the robots manufactured by Kiva Systems operate is fenced off from the rest of the warehouse. When a human crosses from the open area of the warehouse into the robots’ domain, an alarm sounds.

3512 lines up behind 3506 and waits in line until the picker, who stands at the open doorway to the cage, is ready for the items 3512 is programmed to deliver.

As soon as the picker has removed the inventory necessary to fulfill the order and releases 3512, it heads back into the aisles to pick up the next pod for delivery.

Kiva Systems LLC (purchased by Internet retail giant Amazon.com in March 2012) is headquartered in North Reading, Massachusetts, but 3512, 3506 and 13 other Kiva robots aren’t rolling across DC floors in New England

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or Seattle. These robots, resembling mobile ottomans, are deployed in a warehouse owned and operated by Think Logistics, located outside Toronto, in Vaughan, Ontario.

The company Think Logistics was officially launched in October 2011, the robots were delivered in June 2012, and construction of the Think offices is still ongoing.

However, its parent company, Duplium Corp in Thornhill, Ontario, has been offering 3PL and distribution fulfillment services for over 15 years.

Duplium began its life as a maker of optical computer disks, specifically floppy disks. It quickly grew beyond simply manufacturing the disks to offering services such as disk replication, printing and packaging. As technology evolved, so did Duplium. It now produces CDs, DVDs, BluRays and flash drives.

Each change in formats required Duplium to invest in new equipment, so the idea of buying new technology became familiar to the company.

MM&D | November/December 2012

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Check out the MM&D website to see Think’s Kiva robots in action: http://bit.ly/WnyqYS

An operator programs the system for directed putaway.

Ideas about adapting to the changing marketplace also became embedded in the company’s culture, especially since Robert Hashimoto, president of both Duplium and Think, could see the writing on the wall. At some point in the future, technological advances and online content distribution would likely spell the end to the business of distributing content on physical media.

“During those years, not just in order to try to capitalize on the opportunity, but also at the request of our customers, we began to expand our service offering. Outside of the disk, we got into the procurement of print needs. We were buying all the materials for producing finished goods inventory.

The last step was ‘you’ve got my finished goods, so rather than shipping it to my distributor, why can’t you just ship it to the retail store?’ So that’s where we got into the fulfilment, logistics, and supply chain space, to service our clients.”

Not frightened of embracing technological change, and looking for a way to distinguish the

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Photos by Roger Yip.

business in a tight 3PL market, Hashimoto went looking for the solution to set Think apart.

“Strategically we wanted something to give us a competitive advantage here in Canada, which prompted us to look at Kiva. I went to Boston in 2009 to get a demo and within five minutes of seeing it, I said ‘this is the future of distribution, especially when you look at e-commerce and where we see it going.’”

The Kiva implementation Currently, Think stores 2,000-3,000 SKUs in its 1,115sqm (12,000sqf) Kiva enclosure, which is housed in a warehouse totaling 8,360sqm (90,000sqf).

Besides the 15 robots, there are 217 pods. These are shelving and storage units each capable of holding the equivalent of a pallet—about 544kg (1,200lb)—in 1.9 cubic metres (66 cubic feet). There are also 430 fiducials (designated and marked storage locations) and two pick/put workstations, but the entire $3 million system was built with expansion in mind.

“The design principle we had going in was ‘let’s set it up for growth, rough-in some of those workstations and a lot of these floor spots, so when we do engage some clients we’ll be able to rapidly implement and get them going,” says Adam Zanatta, vice-president supply chain solutions. “We’ve got two charging stations, and generally you want an 8:1 ratio or a 10:1 ratio between robots and charging stations, so we’re better than the ratios.”

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The robotic drive units converge at one of the two picking stations. After making their deliveries, they are released to head back into the aisles to pick up a new pod for the next delivery. The 217 pods each hold the equivalent of a full pallet (or 544kg) in 1.9 cubic metres of configurable shelving.

Zanatta says Think has seen pick speeds of 150-180 lines per hour and putaway rates of 80-90 lines per hour, with accuracy levels exceeding 99.9 percent. Kiva is designed so pick and put operations can be performed concurrently from the same workstation. Putaway operations can be either manually directed or self-directed by the system. As long as it is fed information about the size, dimension and weight of the products to be stored, it can choose optimal bin locations to maximize capacity and utilization.

The picking and putting operations are light-directed. When the pod is delivered to the workstation, a laser beam points to the bin that contains the order item (or will be the storage location for the inventory item). On the workstation, a light indicates to the worker where the picked order item needs to be deposited.

At present, Think Logistics has 18 people working in the warehouse and estimates without the Kiva system it would need between two- and five-times as many employees to process the same volume of orders.

boxes] as we would in a normal retail operation. We also have built the logic within our DFS [warehouse management system] to pick out of our standard pallet rack, mesh deck operations, and merge it with items that are picked out of the Kiva system.”

Zanatta says it is important for some clients with larger retail shipments to be able to case-pick and merge that with unit picks from the Kiva system.

At present they have about 2,500 pallet positions and some flexible, bulk storage space.

DFS is a proprietary WMS developed in-house on the Microsoft.Net framework and residing on a Microsoft SQLServer platform, which means the company can pull and use whatever data and metrics it needs to solve business problems, improve effiBlended operation ciencies or measure productivity.

The Think Logistics executives are enamoured with and enchanted by the “We have an in-house team of developers who robots. Hashimoto refers to them as “cool”, “smart” and “funky”, and Zanatta write DFS and tweak it. Coming from a world where says they have been the most exciting part of the job, and just watching them I’ve worked with very small to very large systems, move makes him say “wow”. But their infatuation doesn’t mean they are ignor- ranging from SAP to mainframe applications, being ing the other aspects of their logistics operations. able to have the keys to the car internally allows us Zanatta says integrating the automated Kiva system with traditional 3PL to be agile and flexible and capture opportunities. operations was critical to the business.

If we see a different way to release orders or a dif“We do have the ability to pick inners [cartons contained in larger shipping ferent way we want to manage inbound to be more

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The Think Logistics team from left to right: Robert Hashimoto, Stuart Pearson and Adam Zanatta.

efficient, we can quickly deploy those changes.

That’s key for 3PLs today,” says Think’s Stuart Pearson, vice-president of contract logistics.

Think’s philosophy Hashimoto, Pearson, and Zanatta want to position Think as a driver of change in the 3PL industry and they see the implementation of leading-edge technology as one way they can lead by example.

“When coming into this, the big thing for both Stuart and me was seeing the need within the industry to reinvigorate, and to reconfirm our commitment to moving the industry forward. It drove a lot of this very early on. Our roles are to continue innovating, to continue looking for areas we can move forward,” says Zanatta.

As much as the company embraces change, according to Pearson, there is one change that did give Think’s executives a moment or two of worry: Amazon’s purchase of Kiva.

“The first time we heard about it there was cause for concern, but as we’ve spoken to Kiva and Amazon further, we really don’t have any concern. If you look at the other technologies Amazon has brought to

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Robot 3510 gets an energy boost at one of Think’s two recharging stations.

the marketplace, part of their business model is to invest in infrastructure that is good for their business, and the other part of their business model is to take that technology and make it available to other users. We don’t foresee a time where it will be kept for themselves. We can also say we have assurances from Amazon we will be able to continue to grow and expand our solution [although] they haven’t given us anything in writing.”

MM&D

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12-11-27 10:36 AM

VERMIN Integrating pest management programs limits risks

By Bill Melville

A

s a supply chain professional, you know how to manage risk. No matter if you’re in transportation, procurement, warehousing, or another side of the industry, there is one risk everybody must face: pest infestation.

Fortunately, by taking the right steps and implementing the correct procedures, it’s a risk that is easily minimized.

Pests of all types—be they insects, rodents, small mammals or even birds— can damage a variety of products. Cockroaches and flies, for example, carry dangerous diseases like salmonella and E coli that can infect food. Coupled with the fact that the presence of pests can result in a lower audit or inspection scores—not to mention damaged reputations—pests should always be considered in your risk management strategies.

No matter where you are in the supply chain process, you have to work together with your vendors, customers and partners to ensure a pest-free system. The following tips will help you minimize your risk of pest infestation and work toward the ultimate goal: a quality reputation and product.

• When you receive food or other perishable products from a supplier, remove a sample and place it in a tightly sealed and labeled container. Monitor the sample and watch for the appearance of insects.

If you see any, inform your supplier and inspect the rest of your inventory.

Do your part It’s also important to hold up your end of the bargain with a quality pest control program. The most effective program uses an Integrated Pest Management (IPM) approach, which incorporates steps like sanitation and facility maintenance to limit pest pressures, while reducing the need for reactive chemical treatments. Your pest management professional can help you create a personalized plan for your specific situation, but here are some best practices: • Many pests can fit through an opening just two Reach out to your partners millimetres wide, so ensure there are no cracks or The risk of a pest issue occurring increases with every supplier or business crevices in the foundation of your building or added to the supply chain. To protect your role in the process, the first step transportation vehicles. is to ensure those you work with have a strong pest management program, • Maintain a sanitary environment at all times. This which means you need to: includes removing dust and debris from hard-to• Talk with your partners to ensure they each implement a pest control proreach areas and thoroughly cleaning all equipment gram at or above your standards. Don’t just take their word for it—ask to and transportation vehicles. see inspection results to confirm they have a successful track record.

• Pests can use cardboard for shelter, and cockroaches • Inspect incoming shipments and their packaging for signs of pests such can even feed on the glue that holds cardboard as gnaw marks, droppings and live or dead pests. If you do receive boxes together, so store boxes slightly above the shipments with pest infestations, refuse to accept them and alert your floor if possible and get rid of unnecessary ones. provider immediately.

• Supply chain best practices apply to pest control as well. For example, ensure all product is tightly sealed— especially food—so pests don’t have access to it.

Show staff their roles Your employees are typically the first line of defence when it comes to risk mitigation, so they play a crucial role in ensuring your supply chain remains pest-free. As part of their education, you need to explain the risks to them and show them how their actions can help you reach that goal. For example, pests are constantly searching for food and water, so make sure your employees clean up spills imme immediately and tightly seal any food containers. Let them

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VIGILANCE know that if they see pests, or evidence indicating pests have been present, they need to notify you.

Simple pest-sighting memos can be a valuable tool in your pest-prevention arsenal.

Your pest management professional can provide staff training sessions to educate your employees on signs of pests and what to do if they see them.

Know your emergency plan The best way to deal with a pest emergency is to have a plan in place before one occurs. Work with your pest management provider to establish a regular monitoring and reporting system.

Set up a process for pest emergencies and ensure everyone knows the procedure. This plan should include: • Closing off the area with the pest issue.

• Inspecting all product in the area and isolating or disposing of any that is damaged.

• Involving your pest management professional, who can assess why the pests arrived and help you select the appropriate treatment, if necessary.

• Taking the proper steps to correct the issues that caused the infestation.

• Being transparent about the issue and informing vendors and customers who need to know.

These steps will help you minimize the risk of pest issues and ensure you have a plan in place if you do face a pest problem, so your whole supply chain doesn’t suffer needlessly.

MM&D Bill Melville is quality assurance director for Orkin Canada.

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The changing world of supply chain finance Electronic documents, emerging currencies, new middlemen and trading networks are altering the way business gets done question, information about the shipment is uploaded to TSU automatically. If the details of the shipment ince the 2008 financial crisis there have been changes—both major and match the details in the purchase order, the payment minor—to how trade networks and supply chains are financed. And more is made, also automatically. The TSU provides credit changes are due in 2013. enhancement beyond just the buyer’s ability and According to Jacob Katsman, CEO of Global Trade Corp, a Toronto, Ontario- willingness to pay, through the BPO. based software developer of multi-trade platforms for supply chain finance, “It’s similar to a letter of credit, but it’s all autoroughly 20 percent of global trade is conducted using secure payment instru- mated data matching. It doesn’t involve the presenments (including letters of credit and bank guarantees) while the remaining 80 tation of commercial documents to the bank. Just percent is done through unsecured open account trading. the data.

As much as there is a movement toward open, unsecured accounts, Katsman “If the bank chooses, and has a credit facility for says there will always be a place for more traditional financial arrangements, the buyer (which is still a requirement), the bank can even if they are conducted in a less-than-traditional manner. issue its BPO over that data exchange transaction, “We lived through the financial crisis and all of the sudden these things and that becomes a financeable instrument to the became much more apparent and much more needed,” he said. “In my view seller and the seller’s bank can then choose to provide they will not go away. People need different mechanisms to trade. There are financing, working capital to the seller, either precertain levels of trust and certain levels of transparency, and letters of credit shipment or post shipment, against that BPO. That and guarantees will always have a role to play. They will always be there.” is a very important development in the industry,” says Grills.

BPOs BMO and the Bank of China were the first two Beginning next year, completing a totally electronic, secured transaction will financial institutions to test BPOs for SWIFT in get even easier, as that’s when the Society for Worldwide Interbank Financial 2010. Since then, work has been ongoing to establish Telecommunications (SWIFT) is expected to officially introduce its Bill Payment and ratify the rules of how BPOs will be used. Final Obligation (BPO) financing to the market. (SWIFT is a co-operative comprised adoption is expected to happen in April 2013. of banks and corporations. Its purpose is to create and enforce standards relating to the secure exchange of proprietary financial data.)

Factoring “A BPO is essentially a replacement for (or an evolution of) the technique This post-recession era has also seen the growth of of a letter of credit,” says Toronto, Ontario-based Peter Grills, director of trade some less-used practices, including factoring. finance for BMO Capital Markets.

Nabeel Siddiqui, director of global treasury soluSWIFT created a platform called Trade Service Utility (TSU) which allows tions for AscendantFX Capital Inc, a foreign data about purchase orders and the goods being shipped to be exchanged exchange transactions and international payment between the four key parties involved in any transaction: the seller, the seller’s solutions provider in Toronto, says he sees more bank, the buyer’s bank and the buyer. companies, especially those in the apparel business, Under the TSU purchase order data is uploaded to the network and transmit- turning to factoring. ted from the buyer’s bank to the seller’s bank. When the seller ships the items in “Company A, that sells women’s clothing in

By Carolyn Gruske

S

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Toronto, wants to buy $100,000 worth of apparel out of the UK. A middleman will broker the financing.

The middleman has a relationship with the company in the UK and with the company in Toronto. It guarantees both sides and says, ‘Yes, we will finance the company in Canada and pay you, Company B in the UK. And don’t worry, Company A in Toronto, we will make sure Company B in the UK will manufacture and deliver those goods to you,’” says Siddiqui.

in their calculation of working capital. It means that as a company, I am able to get more cash for my accounts receivable.”

FX Siddiqui says companies need to put more effort into ensuring they aren’t losing money on exchange rates. Companies need to pay more attention to FX netting payables and receivables in the same currency.

“Companies don’t do that as often as they should. Basically if a company has US$20 million in payables but they also have US$5 million in receivables, there are ways to match that off, or net it out, so your exposure is only US$15 ARI million. That US$5 million in savings could amount to more savings of tens Accounts receivable insurance (ARI) isn’t new, but of thousands, maybe even hundreds of thousands extra, depending on how Ottawa, Ontario-based Benoit Daignault, senior volatile the market is.” vice-president and global head of financing and He adds businesses also often neglect to look ahead and make suitable investments for Export Development Canada, says arrangements for future foreign currency transactions. it will likely become more popular.

“I saw it happen just last week, where a company neglected to tell us six “As a company, you sell products to Company ABC. months in advance they had something going on in Europe and the rate moved You just want to make sure you’re going to get paid, about four pennies against them during that time. If they had only spoken to so you buy insurance that ABC will be able to make us—we expected this change to happen—we could have saved them almost the payments in 60 or 90 days,” Daignault explains. $90,000. That’s somebody’s salary.”

“It’s a great risk transfer tool, but at the same time Companies should also consider trading in emerging, non-traditional curit’s a great liquidity provider too. When banks cal- rencies, such as the Chinese renminbi, advises Grills. By doing so they can culate how much money they can advance, they garner favour from their foreign trading partners, who prefer to work in their look at receivables. They will take into consideration local currencies, and they can avoid inflated charges foreign companies often if there is an insurance product on the receivable, tack onto bills in order to cover the risks associated with billing in what is (to and they will tend to include that account receivable them) foreign currencies such as Canadian or American dollars.

MM&D

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Scanning, Printing and Mobile Computers Showcase

Scan, compute and print

Tools for warehouse and logistics applications Scanner and reader ἀ e MC9190-Z from Motorola Solutions Inc, is a rugged, handled barcode reader and medium-to-long range RFID scanner for use indoors and out. ἀ e scanner has a nine-centimetre VGA colour touchscreen. It was designed to survive a 1.8m-drop, 2,000 one-metre tumbles and is sealed to prevent damage from dust and liquids. It offers native FIPS 140-2 Level 1 encryption certification. Common access card (CAC) capability allows the use of optional accessories to support authentication for government applications. ἀ e MC9190-Z is compatible with Motorola’s Mobile Security Suite and Mobile Virtual Private Networks.

Tabletop barcode printer ἀ e ZT200 printer series from Zebra Technologies Corp was created for use in order-picking, packing shipping, receiving and warehouse applications. ἀ e printers offer thermal-transfer printing capabilities as an option, have a standard printing resolution of 203dpi (300dpi optional), a maximum print width of 104mm, and a print speed of 152mm per second. ἀ ey come standard with USB 2.0 and RS-232 ports and are designed with a side-loading supplies path. ἀ e ZT200 printers have a metal frame construction. ἀ e ZT230 model has a rugged, metal case while the ZT220 uses a high-impact polymer case.

Mobile computer Intermec Inc’s CK3X is designed for warehouse use. ἀ e rugged mobile computer comes with a choice of integrated area imagers for standard Wearable scanner range or near/far range scanning of 1D, 2D and damaged barcodes. Socket Mobile Inc has ἀ e CK3X uses the 1GHZ OMAP architecture and supports 802.11a/b/ added Android supg/n and Bluetooth radio. ἀ e CK3X was built to withstand multiple port for its Socket 1.5-metre drops to concrete, in all operating temperatures. ἀ e com- Bluetooth Cordless puter comes with the CloneNGo, which copies settings from a single Ring Scanner (CRS) 9P master to multiple devices. It runs on the Microsoft Windows hands-free barcode Embedded Handheld operating system. scanner. Created to collect data in high-velocity warehouses, the software update now allows the 9Ps to GHS compliant printer be used in conjunction with Android smartphones ἀ e ColorWorks C831 Wide Label Printer from Epson America Inc, allows and tablets to track assets and inventory in real time. carriers and manufacturers of chemicals to print labels that comply with It is also compatible with BlackBerry devices, and Globally Harmonized System (GHS) standards. GHS rules hardware running Windows Embedded Handheld require information (including pictograms and symbols) and Windows operating systems. conveying warnings about potential hazards to be displayed in vibrant colours. ἀ e C831 was designed to Ruggedized tablet produce high volumes of large format—up to 22cm— ἀ e Algiz 10X from the Handheld Group can be drum and chemical labels at speeds up to 16.5 pages per used outdoors. ἀ e 26cm touchscreen can display minute. ἀ e printers use Epson’s DURABrite Ultra detailed maps and other visuals in bright sunlight.

Pigment inks that are resistant to chemical and water ἀ e tablet meets military standards for protection damage, smudging and fading. against dust, water, vibration, drops, varying altitudes and extreme temperatures. It comes with a Mobile scanner u-blox GPS receiver, is WWAN Gobi 3000-ready ἀ e PodPad Wireless Document Scanner from PodPad LLC can scan up to and has an integrated modem and antennas. ἀ e six 8.5in by 14in documents per minute. ἀ e portable scanner Algiz 10X comes with a five-megapixel camera, an can be used to scan bills of lading, receipts and other docu- LED flash and waterproof USB 2.0, VGA and RS232 ments. ἀ e scanner tracks the date, time, location, customer, ports. It ships with 4GB of DDR3 RAM standard. document ID and employee name related to each document. Memory can be expanded up to PodPad uses Bluetooth to transmit the scanned PDFs to any 128GB using a microSD card.

Android, Blackberry or Windows smart phone running the ἀ e Algiz 10X weighs 1.3kg and PodPad application so they can be e-mailed back to the office. is 32mm thick. It comes with ἀ e scanner is shipped with a cigarette lighter adapter, a USB Windows 7 Ultimate but is cable and a wall adapter.

Windows 8 compatible. MM&D

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Special Advertorial Section

2013:

A compelling story Supply Chain Vision Supply Chain Vision 2013 is MM&D magazine’s first annual outlook forum, where supply chain executives have the opportunity to share their vision for business in the year to come. In the pages that follow you’ll be able to read how leaders from various parts of the business see the coming year.

From our perspective, 2013 is a year with tons of promise. We are planning a year jam-packed with interesting editorial content and innovative opportunities for marketers to reach our readers.

We are really pleased to be planning such a great year in 2013, and we are looking forward to having you join us. Our partners are key to the success of the magazine—we anticipate a strong year of profitable business as we work together to serve the Canadian supply chain community with a meaningful and compelling editorial product.

Please get involved with MM&D next year. It’s your magazine and we look forward to working with you on projects of all kinds.

We can be reached at the contact details below.

Emily Atkins, Carolyn Gruske, Editor Publisher/Editor-in-Chief, t: 416 442 5600 x 3265 t: 416.510.5130 e: cgruske@bizinfogroup.ca e: eatkins@bizinfogroup.ca

Catherine Martineau, Sr. Account Manager t: 647-988-5559 e: cmartineau@bizinfogroup.ca

Supply Chain Vision 2013

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Recession lessons Sherway Group uses cost cutting and risk management strategies to fuel growth The economic recession hit businesses hard, and its consequences are still being felt today.

We think cost-cutting is going to be an ongoing effect from the recession. When the economy picks up, people will still want to make sure they’re lean, and partnered with the right providers who understand their business risks.

Sherway Group is that provider.

Andrew Kirkpatrick Director of Sales & Marketing Sherway Group 416-420-3257 akirkpatrick@ sherwaygroup.com www.sherwaygroup.com

We’re one of the largest privately held 3PLs in Canada.

We own our own trucks and have over 1.5 million square feet of warehousing space.

But it’s how we work with you that makes us different.

We help you develop new initiatives and adapt to changing situations to support you as you grow. Plus we will work as closely with you as you’d like.

With some accounts, we sit in on their weekly strategy sessions and look at where they are going to be in the future. We represent the whole supply chain for the company. We’re listening to their production schedules, their planning sessions, their sales teams and their marketing projects. We’re a key element of their business.

We listen to where they want to get as a company and we give them the back-end support for their supply chain.

Sherway Group believes having a close, co-operative, long-term and trusting partnership helps our clients manage their risks better.

Our clients have the confidence we are taking care of them, and are always thinking about ways to cut costs, gain efficiencies or create new initiatives. We ask “how we can help them be more competitive in the future.

How can we grow their business and build their brands?”

That’s how we see our role.

Even though we’ve been in business for over 35 years, we still pride ourselves in being a customer-centric, quickto-respond company with that entrepreneurial spirit.

Our employees are empowered to help customers when then need it—they don’t need to wait for approval or cut through miles of red tape.

We’re also a company that believes in technology. In our opinion, technology is a must have. It’s not really a valueadd anymore.

Sherway Group provides our clients an exceptionally easy to use interface to our warehousing and transportation management systems. In fact, we’ve got those two applications completely integrated, resulting in a centralized access point, which makes it simple for our clients to plan orders and manage freight schedules and look deeply into their supply chains.

At Sherway, we have spent the past five years reinventing our company with an eye toward growth. Currently, we’re on track to hit the aggressive growth rates we set for ourselves. So we understand what needs to be done in order to make a business leaner, more efficient and highly successful. Let us help you do the same for your business.

New technology drives business growth Atum uses Microsoft-based solutions to make supply chains more efficient Atum Corporation is your industry expert in Microsoft Dynamics CRM and ERP business applications and hosted solutions. Based on the outlook of our clients in the Supply Chain and Logistics industry, in 2013 more companies will proactively search for ways to utilize business technologies to become better, faster and smarter.

The Canadian Supply Chain and Logistics industries continue to be highly competitive, and the most common issues are reported as a result of underutilized or outof-date technologies slowing down operations. Global competition is spurring a record increase in demand for productivity, which accelerates the pressure on old technology to keep pace and remain effective.

Find Technology that Fits. For years companies have come to Atum with similar obstacles preventing them from successfully driving their business forward. Adapting to ‘work around’ software solutions with limited functionality ultimately creates more work for each business unit. Dated manual processes are losing pace with the speed of business demands, but the majority of companies have yet to find an automated alternative that fits! Many share concerns about dropping the ball on first response resolution and customer service because of inaccurate reporting and tracking methods. Universally, companies fear that they lack complete Business Intelligence across organizational units.

Get the Most from Your IT with class-leading Microsoft Dynamics CRM and ERP business applications customized for Supply Chain and Logistics.

• Invest in Business Intelligence features including quick, accurate reporting across business operations and direct visibility into profits and cost centres.

• Instantly improve customer service capabilities.

• Replace manual workflow with faster, automated processing.

• Simply analyze live data and control real-time tracking of reports and incidents.

Whitepaper Promotion: Download your MM&D exclusive copy of: “5 Reasons to Expect ROI from CRM & ERP in Year 1” w ww.atum.com/MMD

John Posan Director of Business Development jposan@atum.com 1-877-893-3266 ext. 2114

Jason Williams CEO www.atum.com jwilliams@atum.com 1-877-893-3266

“ A Microsoft Dynamics solution has the transformative power to automate your entire business process and offer industry recognized best-practice advantages.”

—John Posan, Director of Business Development Atum offers the Microsoft Dynamics Advantage • Industry-specific sales and service module customizations.

• Seamless integration with existing mission-critical systems, including WMS, inventory, financial, and sales-order processing.

• View KPIs in real time with intuitive dashboards and run reports to track customer quotes, orders, and service inquiries.

• React quickly with access to cross-organizational insights and expanding the reach of information to teams and executive decision makers. “ Disruption to workflow is a non-issue. Our clients love the familiar Microsoft Dynamics interface because it makes it easy for sales and service staff to hit the ground running with efficiency and minimal training.”

—Jason Williams, CEO Atum Corporation is the Supply Chain and Logistics partner, specializing in licensing, customization, consultation, implementation, training and support for Microsoft Dynamics CRM & ERP. Change your outlook on 2013. Call us for a demo today!

Supply Chain Vision 2013

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Supply Chain Vision 2013

Good-bye to the client/server paradigm SaaS-based C3 Reservations immediately and transparently transforms dock operations The recession changed many things, including the way we think about technology.

The old client/server model is disappearing. The market says it’s not paying for licensing fees and maintenance anymore, only for usage. That’s the paradigm that’s being broken as software-as-a-service (SaaS) is becoming the must-have technology in every supply chain.

At C3 Solutions we firmly believe in the benefits of SaaS. High ROI? Check.

Quick implementation? Check.

Minimal requirements for IT input? Check.

Easy-to-use interfaces? Check.

Real-time integration capabilities between business systems? Check.

Minimal financial commitment? Check.

C3 Solutions provides advanced software applications that transform static logistics operations into dynamic flowthrough centers. C3 Reservations is a dock scheduling system that offers key functionality with all of the benefits of SaaS.

Gregory Braun Senior Vice-President, Sales & Marketing sales@ c3solutions.com (514) 315-3139 www.C3Solutions.com

Nicholas Couture President

necessary steps for making companies more efficient and capable of dealing with today’s fast-paced business world.

C3 Reservations allows companies to automate and optimize their dock operations all while eliminating the warehouse “call centre” syndrome through the use of a selfservice kiosk accessible by all your carriers and suppliers.

Even in the recent past, there hasn’t been the need for the kind of immediacy and transparency that is required today. It used to be common for retailers to have three months to plan a promotion. Today, those same retailers are given three weeks to do the same job.

The system lets everybody—buyers, carriers, vendors and schedulers—keep up to date on the progress of your appointments, and immediately informs all parties when changes have been made to the appointment schedule.

Short deadlines aren’t just for promotions. IT and infrastructure projects must also be turned around rapidly, so they can begin generating a significant ROI as quickly as possible. SaaS solutions make this possible.

It also gives businesses valuable scorecarding tools to measure vendor and carrier compliance to operating policies.

Because C3 Reservations is hosted by C3, your company’s IT department only needs to get involved to approve the security measures that are built-into the solution and to optionally perform limited amounts of integration work between your core systems and the solution’s interface.

This means a smoother, easier, more rapid rollout for you.

By using C3 Reservations, customers have been able to smooth out the peak period labour demands, streamline the scheduling process, improve dock productivity and increase visibility into the appointments schedule, which are all

While the old client/server model formerly held a dominant place in the business world, that role is quickly fading, and companies that continue to rely on the old technology will get left behind by competitors who embrace easier, cheaper, and ultimately more powerful SaaS applications. Don’t get left behind. Make 2013 the year C3 Solutions brings your dock scheduling solution up-to-date.

The future is in your hands Lean Supply Solutions makes mobile devices and cloud technology work for your business If there has been one consistent message that has come out of the economic recession, it has been “do more with less”. But when it comes to technology, many companies are doing the exact opposite.

For too long businesses have been locked into using expensive, single-purpose devices to scan data, take photos, track inventory, manage the labour force and perform other crucial tasks. Not only are these devices expensive to purchase, they can become difficult to both use and manage.

Rather than relying on this type of equipment, smart companies are turning to mainstream, generic mobile devices designed for consumers. Smart phones and tablets are already here. They’re capable of performing a wide variety of necessary business functions, meaning one device can replace multiple pieces of specialty equipment.

Deploying them in your warehouses, production facilities, offices and through the entire supply chain is a natural next step for many companies.

Lean Supply Solutions is a third-party logistics provider specializing in providing supply chain solutions through utilization of LEAN processes through the entire supply chain, supported by innovative and unique utilization of mobile technology and software.

Not only can Lean Supply Solutions design the right solution for your business, we can also provide a turnkey solution to fully implement it and operate it based on mutually set objectives.

Robert Rogut & Tom Krzepkowski, Founding partners Lean Supply Solutions 905-482-2590 www.leansupplysolutions.com

Due to LSS’s mandate to apply LEAN principles to every project undertaken, we ensure the solutions developed adhere to the LEAN philosophy and produce a quantifiable result for all clients.

Lean Supply Solutions is the right partner for you because of who and what we are. “ We’re not just consultants. We’re not just IT. We provide real-life solutions. We offer a combined approach that provides the greatest benefit to our clients.

—Robert Rogut, founding partner “ We are a third-party logistics company with a focus in the utilization of hardware, software and innovative concepts that exist in consumer marketplace and to use those solutions to reduce cost within the supply chain industry.

—Tom Krzepkowski, founding partner Lean Supply Solutions can offer your business as much (or as little) support as you need. We can help you plan, reorganize and streamline your inbound and outbound operations. We can come in and manage your warehouses and DCs and run your logistics operations. It’s up to you, but no matter how involved we get, we always apply the same methodology.

We find the right blend between LEAN processes and leading-edge information technology, then we draw on our unparalleled experience in the supply chain industry to create efficient, effective and customized solutions for our clients, so let Lean Supply Solutions help you make 2013 the year you LEAN your supply chain operations.

Supply Chain Vision 2013

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Supply Chain Vision 2013

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Schaefer Systems Creates Efficient Distribution Solutions Schaefer Systems provides our clients unconventional picking and storage solutions, increasing their efficiency and delivering Best Value.

SCHAEFER SYSTEMS’ goal is to design and build systems for our clients that accurately generate more throughput in less space with fewer people to give them operational visibility.

SCHAEFER SYSTEMS believes there is a more effective way to design a distribution centre than the way we have in North America the past 50 years. We can make better use of land, better use of cubic space and make distribution centres more energy- and labour-efficient in the process.

SCHAEFER SYSTEMS’ automation integrates with any existing system and has earned us an international reputation as the global leader in the material handling industry for all sizes of operations and for all levels of complexity.

Over 70 years of experience and 100% commitment to quality back all SCHAEFER SYSTEMS products.

3-D rendering of Automated Picking System

Nick Klein Schiphorst Sales Manager, Automated Systems Division Tel: (905) 458-5399, Ext. 11 Fax: (905) 458-7951 nick.klein@ssi-schaefer.ca www.ssi-schaefer.us

My personal goal is to ensure that every concept Schaefer Systems proposes to our customers is the right fit for their operation. Contact me and let us work together to design a system for your existing facility or design and build a distribution centre that will show you a substantial return on investment in less time than you may believe possible.

Changing to meet the future Pival evolves to help your business seize upcoming opportunities Pival International is marking a milestone in 2013. It will be our 10th year in operation. But rather than just reflecting on all our past accomplishments, we’re looking forward to the future.

We know the Canadian business economy will grow next year, but we also believe it’s unlikely to grow steadily across all sectors and geographic regions. While some segments will boom, others, unfortunately, may lag behind a bit.

Mario La Barbera President Pival International 1-877-424-1623 MLaBarbera@pival.com www.pival.com

We’re looking at 2013 with some focused optimism. We think the coming year will present businesses with some well-targeted opportunities.

So we’re doing everything possible to be agile and flexible.

Our goal isn’t to be responsive to current economic conditions, it’s to be ahead of the curve so when our customers ask us questions about serving their diverse markets and meeting their logistics and warehousing needs, we’ll have solutions ready for them.

We’re working from one transportation management system and we’re able to take any call on a 24/7 basis and we’re getting the real synergies of centralization. This allows us to provide a higher level of service consistently, and consistency is what makes a good partner when you care about getting good service.

Just as your business is changing and evolving, so is ours.

We’ve recently centralized our transportation division’s asset based and non-asset operations in Cambridge, ON. By integrating our expedite and logistics services under one roof, it means we’ve got the highly experienced professionals in place to handle all your transportation needs, no matter how complicated or urgent the request.

Sometimes companies just grow because the economy grows and they fall because the economy falls. It’s as if they’re dependent on the tide. That’s not us. Pival’s philosophy is simple: we expect to evolve and create value every day. This has been our driving force since our early days as a dedicated warehousing company serving Tier-1 clients in the highly disciplined automotive sector. These goals directed our growth into non-assetbased over-the-road trucking and rail transportation services. They drove us to acquire our own trucks so we could offer asset-based solutions. And they’ll continue to push us as we expand our service offerings and enter new markets—all in advance of meeting and exceeding your needs and having the best solutions ready for you when you call.

There’s a lot of knowledge sharing that can take place.

The combined pool of expertise leads to creative ideas and solutions, and allows us to look at opportunities in different ways.

The other advantage that comes with centralizing is having a single point of contact.

Pival operates over 1.4 million square feet in Canada, including our new headquarters, which boasts indoor rail access.

Supply Chain Vision 2013

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Supply Chain Vision 2013

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FedEx Trade Networks You may know the company FedEx, but what you may not know is that FedEx has a freight forwarding arm known as FedEx Trade Networks. This means that there is a FedEx company that provides international ocean and air freight transportation, customs brokerage, distribution and related services to create flexible solutions for global cargo shippers. We help customers of all sizes with unique routing, transit time, service-level and pricing needs to move their cargo efficiently.

FedEx Trade Networks is not your typical freight forwarder, simply moving goods from Point A to Point B. We offer best-in-class services and an innovative approach to building solutions with the support of the entire FedEx portfolio. That’s what FedEx does best. FedEx has an unparalleled network of capabilities across its operating companies, and that includes strong freight forwarding and customs brokerage with FedEx Trade Networks.

For the past several years, FedEx Trade Networks has invested in the expansion of its global cargo-handling services. We now have established operations in 25 countries and opened 51 new offices to reach 91% of the world’s GDP. As our company has grown, so have our volumes.

Lately, the ocean freight business segment has gained more attention. As a whole, shipping via ocean has improved in terms of reliability and flexibility, evolving into a more viable option for many companies. As a global freight forwarder, FedEx Trade Networks can offer ocean freight solutions with high-quality technology and customer service, which is why our ocean volumes continue to grow.

Lynn A. Wark Vice President FedEx Trade Networks Transport & Brokerage (Canada), Inc. Lynn.Wark@fedex.com

This growth is good news for Canadian companies looking for a reliable shipper that has an infrastructure as strong as FedEx and we’re poised to take on more business with this increased capacity to meet the needs of every customer in Canada, today and long into the future.

Most ocean customers also have air freight, land transportation and distribution needs. Each customer has varying reasons for the chosen mode of transport; and no two customers are exactly alike. What FedEx Trade Networks can do better than others is create multimodal delivery solutions perfectly tailored to the unique needs of customers.

As our company moves into 2013, we are aware of the current global economic conditions and the pressures that this will put on Canadian shippers and freight forwarders around the world. We know that these shippers will be seeking global forwarders with fully integrated solutions that include a variety of timed options for international air and ocean freight forwarding.

And, we’re confident that we can meet these needs by offering a combination of fair rates, global access, local market presence and expertise, specializing in industryspecific product handling, technology and a variety of value-added services to meet their supply chain needs.

Is Your Supply Chain Designed or Accidental?

Who designed this supply chain? This is a common question from senior executives when confronted with an end-toend view of their supply chains.

In fact, many of the world’s largest and best-known companies’ supply chains are as much a product of a series of historical accidents as they are intentionally engineered systems. A simple mapping and visualization of supply chain flows, manufacturing footprints, customer fulfillment, sourcing locations, and inventory stocking locations can often initiate critical questions such as: Why are we sourcing, producing, warehousing, and transporting products in this flow path? What is our total cost to serve for each customer? Are we being efficient?

Integrated operations systems (ERP, TMS, WMS) do a great job helping to run the supply chain you’ve defined.

They help streamline financial operations, ensure daily transportation is on time, enable optimal picking and placement of products, and balance manufacturing demand and capacity efficiency.

However – these systems aren’t designed to answer the “what-if” questions a company needs to be competitive.

And they are often being applied to supply chains that are sub-optimal or broken altogether from the start.

Supply Chain Design – as a both a technology and discipline – provides companies with the tools to connect all parts of their supply chain in a rational, measured, and efficient manner so that other systems can do their jobs to maximum effectiveness.

John Trus Manager, Canadian Business Development 416 318-4931 john.trus@llamasoft.com www.LLamasoft.com

By creating living models of the corporate supply chain, companies achieve three key benefits: 1. Visibility: What is the current structure and flow of goods through my supply chain?

2. Scenario Analysis: What if we try X? How would my supply chain react to Y? 3. Rapid Response: How should I react to this unplanned event?

Supply chain design, when done well, is a key discipline that enables sustainable competitive advantage through ever-changing market conditions. And helps answer any number of questions.

It is this “design” of a supply chain that unleashes its true potential across all key metrics including cost, service, sustainability and risk.

In a world of sustained volatility, complexity, and rapid change – supply chain design has become a critical business function and one in which forward-thinking businesses are continuously improving. They are using commercial solutions incorporating advanced modeling, optimization, and simulation technologies to examine how their supply chain will perform under a wide range of market conditions and assumptions. Analyzing the trade-offs between cost, service, and risk – these leading companies are empowering their people to collaborate – using this information in the decision making process.

LLamasoft solutions enable companies across every industry to model, optimize and simulate their supply chain network, leading to major improvements in cost, service, sustainability and risk mitigation.

Headquartered in Ann Arbor, MI and with global offices including in Mississauga, ON – LLamasoft is a leader in supply chain excellence and innovation, advancing technology focused on continuous improvement of enterprise supply chains for the world’s largest organizations. For more information contact John Trus at 416.318.4931 or john.trus@llamasoft.com or visit us at LLamasoft.com.

Supply Chain Vision 2013

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Supply Chain Vision 2013

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50 years of innovation Forklift manufacturer Landoll enters golden anniversary year with deep product line Don Landoll Founder & Owner

All New Drexel R60i4

Landoll Corporation, which celebrated its 49th anniversary in December 2012, is located in Marysville KS. Landoll is a diverse and vertically integrated manufacturer of products for the Material Handling, Transportation, Agriculture and specialty OEM and Government markets.

The Material Handling Division manufactures forklifts that operate in aisles as narrow as 56� with lift heights to 39’ and capacities from 3,000 to 12,000 lbs. The Narrow Aisle Forklifts include the original and popular Bendi front articulating forklift that has been converted to AC, as well as the IC truck.

Landoll is the manufacturer of the highly reputable Drexel SwingMast line of Very Narrow Aisle trucks.

Both the Bendi and Drexel SwingMast forklifts provide maximum utilization of storage space by reducing aisle sizes while still performing all the jobs of a front loading forklift. This includes loading and unloading trailers, going from the dock to the rack without staging, climbing ramps and working in a variety of applications.

Landoll Corporation provides a wider range of solutions to those customers wanting to minimize storage aisle sizes, and maximize productivity and equipment utilization. Innovative new designs and continuous product improvements keep Landoll in its position as a leading provider of these narrow aisle forklifts. Landoll distributes and supports its forklift line through over 100 independent dealers worldwide.

Contact: Ed Campbell, Sales Manager Material Handling Division ed.cambell@landoll.com Phone: 540-220-4124

Wood pallets & containers must comply with new regs for crossing the U.S. border Canada’s supply chain will experience a hiccup during 2013 that will have nothing to do with the goods being transported.

The federal government is signatory to an international protocol that requires wood packaging material (WPM)— pallets, containers, skids—to eliminate forest pests by heating all lumber components in special kilns. Compliance to this phytosanitary standard (ISPM-15) is a prerequisite to stamping the heat-treated WPM, and the stamp is considered to be a ‘passport’ for the importing country.

For the past decade, Canada and the United States have allowed wood packaging to flow across our borders without this stamp, on the assumption that the Emerald Ash Borer, Mountain Pine Beetle, Asian Long-horned Beetle and other invasive forest pests already move freely through our joint forests, and are more likely to hitchhike a ride in the bark of firewood or of trees. In late 2010, the US announced its intent to terminate this exemption, and Canada said it would reciprocate.

The Canadian Wood Pallet & Container Association estimated that the final cost to manufacturers of WPM would be $60 million ($30m for each country) that would be needed to cover the purchase of more heat-treated lumber components. We also said that exporters would need to heat-treat their inventory of pallets at a total cost of $600m (again, split equally between US and CA consumers) before their existing WPM could continue to cross the border.

Despite its initial rush to terminate the bilateral exemption, the US has not announced an implementation

Bill Eggertson Executive Director CWPCA (613) 521-6468 x202 http://CanadianPallets.com

date, although it is widely anticipated for January 2014. A formal decision on timing is expected now that the US Presidential election is out of the way.

CWPCA has pushed aggressively for at least one year of advance warning (“informed compliance”) to ensure that exporters are notified of any potential non-compliant loads before they are stopped at the border. We have called for simple administrative procedures to expedite clearance at customs, and we are developing a number of tools to help affected parties, such as truck drivers, to understand the new rules and to meet the expectations of US customs inspectors.

For a number of industry sub-groups that use WPM to ship only within the continent, they will be caught under the new rules and they need to prepare immediately for the transition. CWPCA administers the heat-treatment program on behalf of the Canadian Food Inspection Agency at 500 facilities across the country, and we are working to identify these groups and to inform them of what they need to do. At the same time, we are working with government to revamp how the ISPM-15 standard is implemented in order to increase the credibility of the process and to ensure that Canada’s exports are never constrained by foreign suspicion that our wood packaging harbours a forest pest.

For more information on ISPM-15 and the certification process, go to http://WoodPackaging.ca. For details on how a WPM manufacturer can help with the new rules, go to http://CanadianPallets.com.

Supply Chain Vision 2013

New rules for wood packaging

Supply Chain Vision 2013

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Celebrating 45 years Toyota Material Handling, U.S.A., Inc., serves as the supplier for the number one selling lift truck brand in North America since 2002. Holding the sales leadership position is only one aspect of the company’s success.

Setting the Bar in Safety

According to an independent research study conducted by Peerless Media Research Group, Toyota lift trucks rank the safest for two years running. In fact, Toyota led all three categories including: safety, fewest safety-related incidents and most affordable to maintain in terms of safety.

This was achieved, in part, by innovative technology such as Toyota’s industry exclusive System of Active Stability™ (SAS), a stability enhancement system that electronically monitors a lift truck’s operations and reduces the likelihood of a tip-over.

Made in North America with Pride

For more than 20 years, Toyota has been proud to provide our customers with high quality products built at the award-winning Toyota Industrial Equipment Mfg., Inc. (TIEM) facility based in Columbus, Ind. A zero-landfill facility and Industry Week’s Best Plant, TIEM manufactures the majority of Toyota’s lift trucks sold in North America.

Electrically Charged, Environmentally Driven

The future is electric. In an effort to help meet the growing demand for cleaner running electric lift trucks, Toyota recently introduced the 8-Series, 4-wheel ACpowered electric lift truck line. The AC-powered system is comprised of a series of subsystems – conserving energy and regenerating power to extend battery run time and maximize operational productivity between battery charges. With up to 21 percent faster travel speeds, the new 8-Series minimizes the performance gap with its internal combustion counterparts. Now customers can have the best of both worlds – a powerful and environmentally friendly lift truck made in the United States.

For more information, please visit toyotaforklift.ca, follow us on Facebook.com/ToyotaForklift, Twitter.com/ToyotaForklift or call 1-800-226-0009.

Total Solutions Provider

Toyota is committed to being a total solutions provider, offering customers the solutions they need for a diverse range of material handling needs. In addition to electric and internal combustion forklifts, numerous design advancements and industrial equipment solutions that have improved the material handling process and enhanced the end-user experience, include: • Automated Guided Vehicles (AGVs) – Toyota’s AGVs offer customers several benefits, including higher productivity, continuous operation, reduced product damage, improved process flow and the reduction of non-value-added activity.

• Fleet Management – Toyota’s Fleet Management Solution goes beyond simple reporting to actually analyzing your fleet and making the right recommendations to deliver a lean fleet. This lean-thinking approach ensures customers receive optimal fleet performance at the lowest possible cost of ownership.

Industry-Leading Dealership Network

Toyota lift trucks are backed by proven product support from an industry-leading network of dealers who offer a broad range of resources including: factory-trained service technicians, Toyota Genuine Parts and Toyota Certified Used Equipment and flexible financing packages through Toyota Financial Services. A North American network of 70 authorized Toyota dealers with 220 locations work together to offer industry-leading sales, service and parts support to fulfill all of its customers’ material handling needs.

Materials Handling | Dave Luton

Managing auto ID in the warehouse and supply chain

Technology crucial in handling e-commerce orders

A

s the number of people choosing to shop online grows, more and more orders are shipped directly from warehouses to consumers, while fewer orders are picked up at retail outlets. This change in consumer behavior results in the need to redesign the logistics system to better service the customer.

Any organization attempting a customer-centric, e-commerce redesign, however, has to address a number of challenges.

The first one is the small size of the quantity being ordered. Orders typically represent a broken case individual item or SKU instead of the master packs or full cases, or the larger quantity orders usually shipped to retail outlets.

Total order size per order is also significantly reduced, compared to retail store deliveries. This, in turn, greatly increases the number of orders, which decreases efficiency. Large volumes of small quantity orders present both order accuracy and order processing cost challenges.

Another key issue is the need to increase order quality and to deliver what has come to be known as the perfect order. In simple terms this means a complete, intact, undamaged order, delivered on time.

An often unrecognized portion of the order process is the need for easy, transparent traceability by the end consumer. This tracking is often not needed in a retail environment, because consumers pick items from store shelves and retain them in their possession, except for oversized goods (such as furniture or mattresses) or out-of-stock items.

Traceability means the order should be tracked in the distribution centre, where it is processed, and in the delivery transportation network. Achievement of this elusive goal means all elements of an order must be identifiable within and outside the distribution centre. For both environments the use of automatic identification technology (auto ID)—either barcode or RFID—is essential to allow monitoring

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and tracking. Upon the start of shipment, the data must be summarized so it can be tracked by the delivering carrier.

Whichever auto ID technology is employed, proper management of the technology is required. With the need for traceability and control, real-time visibility becomes essential, especially if several processes must be monitored and integrated at the same time. This integration is often complicated by the use of several types of equipment, including fixed workstation units and mobile units, which depend on the integration of wireless technology with the main command and control system.

Within a distribution centre there are two types of general locations where scanning technology can be employed. The first is a fixed work station location— for example, a scanner on a conveyor sortation system, or a packing station.

Barcode labels require line-of-sight visibility between the scanner and the label. Thus, for the scanning technology to work with a barcoding system, the object being scanned must have the proper orientation so the identifying barcode can be read by the scanner. An object scanned at a packing station can be oriented by the operator so that a correct scan can be obtained.

Fixed workstation scanners can be hardwired to a controlling computer system and thus can be directly connected to the controlling computer hardware. Often they are managed and controlled by a subsystem of the main warehouse software, commonly called a warehouse control system.

Mobile scanners are usually vehicle-mounted or handheld scanners. They are combined with an RF controller and a number of antennas (the number is usually determined by the site survey which looks at the factors such as the number of readers and the size of the facility). To prevent loss of data during a power failure, they should be backed up by a UPS battery system. These all feed into the controlling warehouse management software system.

After receiving a shipment, the carrier must put scannable labels on the parcels so their movements can be monitored throughout the delivery process.

For smaller e-commerce orders the carrier is typically a courier who processes the shipments through one or several parcel sortation systems, depending on destination. At each location it is scanned, and the information recorded for tracing purposes.

Finally, the shipment is scanned at destination and (ideally) a signature is electronically recorded for proof of delivery and invoicing purposes.

Many carriers use a transportation management system to direct the entire shipment process and provide the desired track and trace capability for the customer to retrieve.

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

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Retail | Edward Stevens

Understanding design criteria Pick the right materials handling equipment and create the best retail distribution system possible

I

f we were handed a straightforward list of static data, business requirements, product handling characteristics and growth rates, it would be relatively simple to design a cost-effective materials handling equipment, systems and facility model, but retail distribution is far too unpredictable today. Designing a facility for sustainable use is no longer a fixed target. Unless the retailer is highly specialized, a SKU proliferation demands a flexible solution.

When designing for five to 10 years into the future, serious consideration should be given to a phased construction approach which will allow the organization to: • Delay spending capital; • Fully utilize the new space as phases are constructed; • Reduce taxes; • Reduce building operating expenses.

Businesses should start building just the space necessary at the moment, even if that only amounts to a third or half of projected total space. Then, at a later date, the remainder of the facility can be constructed just before it is needed. One important lesson learned from experience is not to design and construct a facility for use ten years in the future with very aggressive growth forecasted. This can cause the construction of an oversized facility with operations using only half the facility for the first five years after it is commissioned.

The materials handling equipment design and installation must be a combination of automation (high volume, low labour content) and manual processes (low volume, high labour content). Equally important is the realization or acceptance of the available (inherent) flexibility of each of the choices.

Design criteria During the process of designing the materials handling equipment of the new DC, one must not lose sight of the business case and customer service objectives established in the program vision. The ultimate question must be asked: “What products will be handled throughout the distribution centre?” Based on our experience, directing this type of question to the wrong level of the organization can result in unproductive conversations.

The responses will vary in detail, depending on the individuals’ areas of expertise, years of experience in the role (or in various supply chain roles), and their personal agendas. Our job is to deconstruct the replies and present the decision-makers with plans based on solid business requirements.

The logical starting point for gathering the needed information is historical data. Current WMS and business systems can provide much of the detailed data. This information will provide a base for developing the projections that will define the materials handling requirements in a new DC. Creating future projections, however, is another matter. Once again, the importance of the program vision comes into play. Is there a requirement for the new distribution centre to support future volumes, new markets, new customers, or new product offerings? The final design criteria for the project

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must be consistent with and reflect the vision and objectives of the program.

Before embarking on the design of the materials handling systems, prepare and obtain approval of the design data. This includes detailed numerical data describing SKUs, inventory and throughput.

While of great significance, this numerical information is not all that is needed. All assumptions regarding operating conditions—days and hours of operation, customer service objectives, operating cost factors for analysis of options, etc—must be documented.

The most important factor in developing the design criteria is that flexibility is accommodated in the final design. The only sure bet regarding the final approved design criteria is that in some way it will be incorrect in describing the future. Is there way to avoid this, or at least plan for it?

Understanding a product’s weekly profiles and seasonal peaks allows the WMS to recommend product relocation within the facility during the year as seasons change. Fully utilizing more expensive materials handling systems for high activity items may mean that slow moving items are relocated to the appropriate case flow or shelving systems for the slow season. Seasonal reslotting of product can reduce the materials handling equipment needs and system cost for a new facility.

Basic design At a high level, the distribution centre will support storage and throughput. The materials handling system for a facility designed to store large quantities of a small number of items is vastly different from a facility designed for a large number of very small items. The typical situation will fall somewhere between these two extremes. For retail distribution centres, there will likely be a wide range of movement volumes and, depending on the business type, there may also be a wide range of physical characteristics across the SKU set. These details all impact the final materials handling design.

The most obvious factor in determining storage design is the physical characteristics of the items to be stored. Very large, awkward or heavy items

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not compatible with pallet storage and handling are typically stored in open floor areas, sometimes with the aid of metal stacking frames. Small or low-volume items that require storage in a carton or less-than-carton quantity are usually stored on solid surfaces such as decked rack or shelving.

The most common situation in retail distribution centres is storage on pallets. The design data must provide the information necessary for selecting and evaluating appropriate alternatives such as height and depth of storage and liĀ truck type.

Regardless of physical characteristics, the storage design must consider throughput. A product will oĀen be physically received differently from the way it is ships (ie received as a unit load full pallet, but shipped out to a store as a single carton). Here again, the design data will provide the information for determining correct quantities and designs for each situation.

Experience has taught that a rack layout may need one or more drive aisles that are wider to accommodate liĀ trucks passing each other and that not all the aisles should be the minimum width.

In addition to aisles that can accommodate passing, larger than normal aisles may also be required to allow for: • Access to high-volume storage areas; • Access to double-deep storage areas; • Two-way-traffic movement; • A pedestrian walkway beside the main traffic aisle; • Overhanging pallet loads.

When developing the throughput design we always recommend starting with shipping. Why? This approach will help ensure that your design is compatible with transportation and service level objectives.

Major distinctions in shipping design include shipment volume (trailer load, LTL and parcel), loading characteristics (large awkward items, pallets, and cartons) and delivery system from storage to shipping (manual, liĀ truck, and conveyor). And in our experience, designing for the outbound volume (characteristic, behaviours) greatly simplifies the design of the rest of the facility.

Just as the storage design must consider throughput, the throughput design must be compatible with the storage system. The forward location replenishment design is the link between storage and throughput. Too oĀen this design aspect is not given sufficient attention. The tendency is to concentrate on order filling without adequately addressing the fact that it is impossible

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to fill demand from an empty location. Of course order-filling design also requires close attention. The materials handling design must reflect order filling schedules, waves, and the order filling process, whether it is batch, cluster or discrete order filling.

Automation There is something of a renaissance taking place in automation. Any new or retrofit DC project undertaken today should consider the potential for automation, recognizing that it can take many forms—from near complete receiving to shipping application to tactical implementation for a single process.

Some general factors to consider when evaluating automation for a project include: • Compatibility of product characteristics; • Potential for decreased flexibility; • Risk level—tried and true, leading edge or bleeding edge; • Vendor alternatives and stability.

The most common justifications for automation are operating-cost reduction and service-level improvement. The reduction in labour that typically accompanies automation can be particularly beneficial in highly competitive labour markets. The biggest trap in evaluating automation is the tendency to get caught up in the wondrous capabilities of modern day materials handling systems. The result may be the implementation of automation for automation’s sake, which could result in poorly applied systems that may not deliver the expected benefits. We have seen many situations where a design is actually dependent on a business model change that never materializes.

Another important lesson is an automated system has a maximum throughput per aisle, per hour and the maximum is really the maximum. An additional process of balancing the activities across the aisles oĀen becomes necessary for maintaining effective system performance. Having too much activity in an aisle may extend building cycle times or force the recycling of the orders to another day.

Evaluation and justification OĀen, multiple materials handling designs may seem to be compatible with the program vision. A thorough evaluation of these alternatives will identify the preferred system for implementation. This evaluation must address compatibility of the design with all objectives and fully consider all quantitative and qualitative aspects of each alternative.

The final facility design should consider the flow of product from receiving docks to shipping docks. It must be based on an understanding of the systems’ constraints or limits with the following goals: • Reduce the number of times a person touches a product; • Be able to pick the largest unit of product that can be ordered—pallet, layer, carton or unit; • Use automation or mechanized systems to move product between activities wherever possible; • Use the WMS system to track all product movement and balance activities. MM&D Edward Stevens is the pseudonym of a professional who has worked in the Canadian retail supply chain industry for over 30 years, with a strategic focus on the physical distribution of goods and the systems that make up flexible, cost-efficient and effective delivery design.

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Legal Link | Marvin Huberman

Bills of lading

Powerful documents deserve careful attention

B

ills of lading play a leading role in contracts of carriage. Issued by carriers, they not only provide evidence of the character and quality of goods shipped, but also operate as a receipt and a contract.

Formal bills of lading will usually be treated as containing the entire contract of carriage, including limitation of liability clauses, subject to speciĀc facts and circumstances and any applicable federal or provincial legislation governing the contract of carriage. They are very powerful documents.

In Pro Transport Ltd v Day & Ross Inc, the Court of Appeal of New Brunswick recently reaffirmed the primacy of a bill of lading and the effectiveness of the limitation of liability clause contained in it.

The facts of the case In August of 2008, Pro Transport Ltd contracted Day & Ross Inc to transport two pallets from Bathurst, New Brunswick to Edmonton, Alberta. The Bill of Lading indicates that one pallet weighed 2251lb and the other pallet weighed 564lb. The bill of lading on the front page of the document speciĀed the following: “Maximum liability of $2/lb or $4.41/kg computed on the total actual weight unless declared valuation states otherwise. Please see additional terms and conditions on reverse.”

The court found there was no declared value on the reverse of the bill of lading for the value of the goods being shipped. It also noted the reverse of the bill of lading had the following terms and conditions indicated: “This contract for carriage of goods includes all uniform terms of carriage enacted for the carriage of general freight pursuant to any statute, regulation or by any lawful authority, which is in force and effect in the jurisdiction of origin of this contract at the time of shipment.”

Questions about the value of the goods being shipped and the bill of lading came about after Day & Ross only delivered one pallet to the Ānal destination. The second pallet went missing. Stored on the missing pallet was a hydraulic pump.

According to a Pro Transport official, “...it was important that the pump be located because we were leaving Edmonton and going to another project in the Northwest Territories, and [we] needed the pump to carry out that job. We remained in Edmonton for three extra days hoping that the pump would be located. Finally, we had to leave and we rented a replacement pump but it was impossible to rent a pump with the same capacity as the one on the missing pallet.”

The trial judgment The trial judge held the carrier (Day & Ross), who lost the appellant’s hydraulic pump, liable to pay the amount Āxed in accordance with the bill of lading.

The bill of lading provided that the carrier’s liability for non-delivery was limited to $2 per pound, unless the consigner declared the value of the goods on the face of the bill of lading. Since the consignor failed to do so, the carrier argued that its liability should be based on the weight of the pump—1,277kg (2,815lb)—and not the value of the new replacement pump ($18,785) as claimed by the appellant.

The trial judge agreed with the carrier, and Āxed damages at $5,630, while provisionally assessing the appellant’s damages at $5,910, should the limitation of liability clause be declared inapplicable.

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The appellant argued that the limitation of liability clause should be determined to be inapplicable because once the pump arrived in Edmonton, Alberta, from Bathurst, New Brunswick, and was mistakenly transported to another consignor, the contractual relationship between the parties was now governed by law of bailment and the New Brunswick Warehouse Receipts Act and not by the bill of lading, and therefore the carrier could no longer rely on the limitation clause contained in the bill of lading.

The trial judge rejected this argument and concluded that the pump was lost in transit. The appellant appealed, insisting that the trial judge made a palpable and overriding error in concluding, as a matter of fact, that the pump was lost in transit.

The appeal court’s decision The Court of Appeal dismissed the appeal, writing: “In our view, however, it makes no difference whether the pump was lost in transit or lost after it arrived in Edmonton. In either case, the bill of lading prevails. There is no logical reason or legal support for the proposition that the contractual relationship between the parties was transformed from a contract for the carriage of goods to a bailment contract once the goods arrived in Edmonton. The reality is that the bill of lading placed an express limitation on the carrier’s liability with respect to the non-delivery of the goods to the consignor (the appellant). The law of bailment simply has no application and nothing found in the provincial limitation alters this legal reality.

Hence, this case comes squarely within the legal framework governing bills of lading and limitation of liability clauses, outlined in Day & Ross v Beaulieu.”

Lessons learned Never underestimate the importance of a welldrafted bill of lading, which—minus compelling reasons againt it—will ordinarily prevail. If the parties wish to include special agreements, or to limit or alter the liability of a party, they should clearly and expressly do so after obtaining competent legal and other professional advice. Otherwise, the bill of lading will likely prevail.

MM&D Marvin Huberman, LLM, is a Toronto lawyer, mediator and arbitrator. www.marvinhuberman.com

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