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Solutions In this edition

Asia Pacific June/July 2017 Asian eCommerce and omni-channel solutions

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Out of sight? You’re out of your mind...

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Iconic Routes: Cannington Mine to Yurbi Rail

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The intelligent future

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Geared for success

SUPPLY CHAIN SOLUTIONS


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Solutions

A s i a P a c i f i c J u n e / J u l y 2 0 17

Contents FROM LINFOX LEADERS Reflections and renewal Peter Fox

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Positioning Linfox for the future Annette Carey

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New thinking Greg Thomas

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Asian eCommerce and omni-channel solutions

FEATURES Asian eCommerce and omni-channel solutions

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Reaching new heights: Avalon Airport precinct 14 Iconic Routes: Cannington Mine to Yurbi Rail

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The intelligent future

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A sound partnership

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Tough trials on testing terrain

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Out of sight? You’re out of your mind… SPECIAL 4 PAGE LIFTOUT

RESEARCH IN FOCUS Out of sight? You’re out of your mind…

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NEWS Linfox safety culture = ZERO infringements

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A smart solution

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A Linfox 1st: up and flying

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Linfox Darwin Intermodal Facility

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Iconic Routes: Cannington Mine toYurbi Rail

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The intelligent future

LINFOX PEOPLE Our history steeped in values

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EXECUTIVE CHAIRMAN

Reflections and renewal 2017 has commenced as a year of renewal and rejuvenation. Our 60th anniversary provided a time to reflect and we are now positioning ourselves for the future. Many strategic decisions have been made to ensure we have the right mix of people, skills and assets to continue our growth and development. The foundations of our organisation provide a bedrock upon which to build. Our core principles are etched in stone and our values must be adhered to by our people. To create and build a sustainable business our guiding principles must exist in balance. We recently refreshed our values and came up with the acronym ‘LIFT’. LIFT stands for loyalty, integrity, fairness and trust and these epitomise the inherent behaviours my father as our Founder stands for as an individual.

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Evolving requires leadership. As the transport industry evolves so too does the Linfox leadership team. Our recent leadership changes are testament to Linfox’s success in our own internal people development programs. The appointment of Greg Thomas as Chief Executive Officer - Linfox Asia, Mark Mazurek’s appointment as Chief Operating Officer - Linfox Australia and New Zealand, Matt Sheridan’s appointment as Chief Executive Officer - BevChain, and Kylie Fraser’s promotion to President FMCG, are all internal appointments which highlight the success of our Linfox College. I would personally like to congratulate and acknowledge all of you who have received these promotions. You all convey very high standards of personal behaviour, and characterise the value system of our company. I would also like to acknowledge the contribution Gabby Costigan has made in progressing our business in Asia. Gabby left our organisation on 30 June 2017.


Linfox Solutions

Growth requires confidence. Our financial strength provides us with a sound platform for a long term sustainable future. Customers want innovation and a high quality service, however these can only be provided if you have the wherewithal and cost effectiveness to lead the way. Our focus on operational excellence and our attention to detail enables us to provide productivity improvements, risk mitigation from a security perspective and cost efficiencies across our customers’ supply chains. Our constant expectation of operational excellence must replace our excuse mentality. Our competitive cost structure and our people have the ability to be highly innovative and lead our market. Our developments in technology and our supply chain optimisation capabilities, provide us with a competitive advantage.

The transportation industry is an extremely exciting sector to participate in. Our company will build a truly sustainable business by: 1. d  eveloping and progressing our people 2. building world class warehousing and distribution facilities 3. operating a Tier 1 technology platform, providing visibility of the inventory flows through the distribution system 4. running a modern transport fleet and operating innovative materials handling equipment inside our warehousing facilities 5. providing our customers with a cost effective, highly efficient distribution system.

Linfox has always grown with our customers. As we invest in our future, I look forward to growing our relationship with your company. Peter Fox Executive Chairman

Through our achievement of greater proficiency in maximising the collective skills of the whole organisation, the Linfox team will have long lasting and enduring success in the years ahead.

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CEO AUSTRALIA NEW ZEALAND

Positioning Linfox for the future The past year has been a time of renewal for Linfox ANZ. The logistics industry is evolving and we are positioning ourselves for future growth. This time last year we launched our company strategy and we have already taken strides to achieve our goals. Highlights from our first year include: • e  xceeding our target of 50 per cent reduction in emissions based on 2007 levels • renewing significant new contracts • making strategic investments in several key areas. We have been making important decisions to position ourselves for the future, investing in new operations in eCommerce and fulfilment. Australian businesses have been under-investing in the fulfilment of their eCommerce solutions and Linfox can help them address this gap as competition from established overseas players intensifies.

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Our solution has applications in areas that are currently underserviced including consumer health, healthcare, pet care, consumer electronics and defence logistics. We look forward to sharing more information with our customers as we build this capability. We have also continued to invest in our healthcare offering: our latest site is already full and another state-of-theart warehouse is under construction. This success has been built on our team meeting a clear need within the Australian pharmaceutical and healthcare industry and the leadership of Greg Thomas. In addition to his appointment to CEO Linfox International Group, Greg has taken on the role of Regional Director Healthcare to further grow this business within the region. We have been investing in a new generation of leaders. Most recently I have been proud to appoint Mark Mazurek to the role of Chief Operating Officer ANZ, Kylie Fraser as President FMCG, Ian Strachan as President Linfox Intermodal (formerly Linehaul) and Matt Sheridan as CEO BevChain.

Linfox is a traditional company with modern values. We have a proud record of promoting from within, which is evident with these appointments and testament to the bench strength of the Linfox team. We will continue to support the success of our customers by investing in the right assets and the best people. I look forward to celebrating our combined successes in the coming year. Annette Carey CEO Australia and New Zealand


CEO ASIA

Linfox Solutions

New thinking It is a pleasure to write my first message as CEO of Linfox International Group from our regional head office in Bangkok. My links with Asia were formed many years ago when I was responsible for managing customer logistics portfolios in Vietnam, Malaysia, Indonesia and Hong Kong. Since then, I have been fortunate to travel throughout the region and experience the many different cultures of this great continent. Since relocating to Bangkok, my wife Vanessa and I have had the pleasure of meeting many of our customers in the six countries we operate in. I look forward to meeting more in the coming months. Laos joint venture signals new beginnings In May, I attended the official signing of the joint venture between Linfox and Lao Logistics Group. The joint venture allows Linfox to provide transport services throughout Laos in partnership with local businesses and people.

Laos’s position in relation to its neighbours China, Vietnam, Cambodia, Thailand and Myanmar offers enormous potential as a land-link and location to build further international trade connections. It also opens up opportunities for Laos to increase relationships with its ASEAN trade partners. We believe this joint venture is a positive step towards achieving ASEAN’s regional economic integration agenda. Excitingly, Linfox will be the first foreign logistics company to operate in Laos. This is a very special achievement and I thank the Laos Government and the Lao Logistics Group for giving us this opportunity. We look forward to learning more about Laos, its culture and people as we grow this relationship. Regional partnership opportunities

This exciting partnership will provide Linfox with a foothold in the emerging regional economies of the Mekong Delta.

I have enjoyed many long standing relationships with our customers in Australia and I see several opportunities to expand these relationships across the Asia Pacific.

It will also generate real income for local business and promote increased investment in the region through the provision of efficient and cost-effective logistics services.

Many of our Australian customers operate in Asia. Like us, they have similar growth objectives in Asia and I see numerous opportunities to benefit from these shared goals.

Expansion into the greater Mekong Delta countries of Laos, Myanmar, Vietnam and Cambodia is a key objective of Linfox’s business strategy.

Healthcare logistics is one area that I am particularly passionate about. In Australia, I led the development of Linfox’s tier one healthcare offering - a specialised supply chain service for pharmaceuticals, biotechnology, medical equipment and nutritional products.

We see great potential in this region for Linfox, for local communities and local economies.

In my new role as Director Healthcare, I will oversee Linfox Healthcare Logistics across the Asia Pacific. In speaking to our customers, there is a clear need for a reliable, efficient and quality healthcare service and I see many opportunities for Linfox to expand our healthcare services in Asia. Linfox has built a reputation for quality and reliability. I look forward to exploring new partnership opportunities in the coming months. We continue to mourn the passing of King Bhumibol Adulyadej across our operations. Linfox, along with the people of Thailand, were buoyed by the ascension of His Majesty King Maha Vajiralongkorn Bodindradebayavarangkun to the throne in December 2016. The new King is providing the continuity of his late father’s leadership and legacy. Our preparations to honour the late King Bhumibol Adulyadej at the time of his funeral in October are already underway. Linfox continues to stand with the people of Thailand during this time. Greg Thomas CEO Linfox International Group

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FEATURE

Asian eCommerce and omni-channel solutions

eCommerce is rapidly evolving and the focus is now on logistics as a critical enabler to meet the needs of consumers. eCommerce can be a platform for service businesses to connect customers to their offerings, such as a cooking school attracting new students or Uber matching passengers and drivers. It can be a tool for large retailers to connect with their individual outlets to provide services such as automated inventory management and reordering services using point-ofsale data.

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Alternatively, it can be a platform for customers to find goods and compare prices before they physically purchase goods in-store. The applications and variations of eCommerce are endless and will grow exponentially as businesses start to use big data analytics to tailor and target solutions to end customers.

The supply chain industry has been using eCommerce in the form of electronic data interchange (EDI) to communicate with its customers for over 20 years. Supply chain partners use it to swap order information between their distribution centres and sales and customer service teams to ensure B2B deliveries occur on time and accurately. The current explosion in eCommerce is an extension of this same concept to smaller unit B2C orders, allowing businesses to communicate directly with their end customers to offer a more customised and targeted channel of supply.


Linfox Solutions

Asia leads the pack Asia is one of the largest and fastest growing eCommerce markets in the world, with Indonesia, Vietnam, and India leading the way in providing more creative and complex omnichannel distribution options to the end consumer. This trend is being driven by increasing wages and a growing middle class with more disposable income on one hand, and decreasing ‘free’ time on the other. An example of this is the swiftly declining traffic speeds in Jakarta which are directly influencing the rise of eCommerce in Indonesia simply through residents’ increasing inability to easily access shopping malls. In fact, average traffic speeds in Jakarta are regularly recorded at around 8km/h. This, combined with limited public

transport options, means the convenience offered through eCommerce from mobile devices is a logical choice, and often a necessity for many Indonesians. Smart solutions and innovative delivery methods As eCommerce becomes a natural choice, the issues of traffic congestion and last-mile deliveries are transferred to the logistics provider, driving more innovative distribution networks and the rise of omni-channel delivery solutions. In response to increased congestion, distribution companies are using smaller vehicles such as vans and motorbikes to increase speed and agility, maximise the number of small drops per load, and increase the daily number of delivery runs when compared to larger vehicles.

Innovative networks and logistics partnerships are also evolving such as the pick-up and delivery locker networks placed at existing retail outlets such as 7-Eleven, which still rely on consumers completing the last mile themselves. In some more extreme (and impressive) examples in Jakarta, some distributors are able to deliver direct to customers’ cars while they are stuck in long traffic jams. IT supporting new networks These new networks need intelligent systems to provide accessibility and visibility of transactions for distributors and consumers. For Asia, these systems need to be cost effective and ideally free to last-mile users and consumers in the supply chain, including delivery drivers.

Data source: Statista 2015 and internal analysis Some distributors are able to deliver direct to customers stuck in Jakarta traffic jams.

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FEATURE

Until recently, the high cost of devices for drivers was a considerable barrier to completing the visibility loop in the supply chain, but increasing wage rates and the availability of low cost smart phones is now solving this problem. As a result, many new Android apps are appearing in the market, replacing old and expensive enterprise track-andtrace solutions with agile and intelligent proof of delivery (ePOD) solutions. These apps allow customers to see where their goods are in real time, and allow sellers and retailers to receive instant confirmation of orders reaching their destination. This development helps to significantly speed up the order to cash cycle for many businesses from the manufacturer through to the delivery driver.

It also maximises the flexibility of delivery options by using apps such as Waze or Google Maps and the smartphone’s inbuilt GPS to adjust delivery routes on the fly based on traffic conditions or changes to customers’ requirements. Many companies are still trying to define how eCommerce and omnichannel networks will work best for them, and supply chain providers like Linfox are now working to fill this gap with one-stop eCommerce services that offer everything from the frontend website, to fulfilment, delivery, and customer service infrastructure. Many Linfox customers are adapting to meet changing consumer demands and complement their traditional bricks and mortar offering with more comprehensive omni-channel networks.

This article originally appeared in APAC CIO Outlook, April 2017 edition.

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Logistics is the critical enabler for successful omni-channel networks. Linfox is working closely with its customers to provide solutions such as greater network visibility, shorter delivery time frames, and innovation in warehouse operations to meet higher volume small order requirements. As the use and understanding of big data and analytics deepens through the expansion of the Internet of Things (IoT), the range of options for end consumers in the future will be boundless. The best is certainly yet to come.

About the Author – Carly Cummings is CIO Linfox International Group and leads all elements of the IT function that support the growth of Linfox in Asia.


RESEARCH IN FOCUS

Linfox Solutions

Out of sight? You’re out of your mind…

The ideal supply chain used to be an invisible one, where CEOs and executives only had to think about it when something went wrong. In this age of complexity, visibility across the supply chain is key. What are the skills that supply chain leaders of the future will require to make a valuable contribution to their company’s strategy? By Professor Steven A. Melnyk A recent Deloitte survey revealed that only 44 per cent of supply chain executives felt confident that their companies would have the competencies required to thrive in the industry in five years’ time. While technological savvy is an obvious essential to future-proof any supply chain, the executives surveyed demonstrated greater concern for the need for critical thinking and problem solving skills. It seems a new type of leader will be needed to manage the supply chains of the future.

How the supply chain has changed Traditionally, CEOs and other executives viewed the supply chain as a mere tactical operation; a world of boxes, trucks, factories and shipping orders. They would only need to pay attention to their supply chain if something went wrong, and then set about repairing the damage to the company’s stock price or reputation. As a result, the ideal supply chain was an “invisible” one – a supply chain running so smoothly that they never needed to think about it.

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RESEARCH IN FOCUS

Supply chains must now achieve more than efficiencies and cost reductions – they can provide value in the form of improved security, innovation, responsiveness,

Why the skills of current supply chain managers are not enough Many current supply chain managers are not suitably prepared to harness the capabilities of this new supply chain. While their functional orientation and experience gives them strong operational skills, their focus – by and large – is fixed on the short term. They have a sound understanding of the principles of cost efficiencies, however they tend to see cost as the universal benchmark of quality, while customers are demanding – and willing to pay for – other quality measures. Complexity is avoided, seen as an additional cost and drain on time, rather than as a valuable option to be offered to customers. Current supply chain managers are very good at implementing decisions made elsewhere in the company. While their traits are essential to getting things done, their short term focus is at the expense of developing capabilities to deliver the new strategic supply chain.

Supply chains are now becoming strategically important to businesses for several reasons. Advances in technology have led to higher expectations among customers for their suppliers to manage complexity. If a customer wants something done in a unique way - and is willing to pay for it then the service provider must deliver, or risk losing the customer to a competitor who can. The delivery of the emerging ‘omni-channel’ experience has fallen on supply chain leaders.

Supply chains must now achieve more than efficiencies and cost reductions – they can provide value in the form of improved security, innovation, responsiveness, sustainability, resilience and quality. Throughout each step in the supply chain, customers are demanding increased visibility. This demand is not only from retailers – end consumers are increasingly conscious of making ethical purchasing choices. They want assurance of the safety of production workers and that they are not otherwise exploiting or adversely affecting workers, particularly in countries like Bangladesh, Pakistan, Venezuela and Ecuador. The ideal supply chain has evolved from “invisible” to “visible”.

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“A problem well stated is a problem half solved.” - Charles F Ketterling, Designer and Engineer, General Motors.


Linfox Solutions

Meet Linfox’s next wave of supply chain leaders

The essential skills and capabilities of the new supply chain leader Leaders of the new supply chain require several skills and capabilities that were not considered relevant to the old, “invisible” model. The ability to engage effectively with other functions such as engineering, marketing, accounting, finance and top management is essential to understanding the needs of these groups. Such understanding enables supply chain leaders to ask the right questions, rather than focusing on the right solution – this is where critical thinking comes into play.

The new supply chain leader strives for business excellence, rather than supply chain excellence. Their perspective has shifted from a focus on supply chain capabilities (an inside-out approach) to a sound understanding of the company’s key customers and value proposition - obtained through effective engagement with other functions. Complexity is essential to servicing the unique needs of each customer, as personalisation becomes more and more of a differentiator. However the new supply chain manager also works to identify and eliminate complications.

Ultimately, the new supply chain leader recognises that the supply chain is strategic – not because it is the best practitioner of Lean or Total Quality Management, but because it supports the company’s value proposition and helps key customers succeed. The challenge for the current mentors of supply chain talent is to nurture this new wave of leaders. For organisations that can meet these challenges, the future is bright indeed!

PROFESSOR STEVEN A. MELNYK Ph.D., Western – London, Ontario, Canada – 1981 Dr. Melnyk is Professor of Operations and Supply Chain Management at Michigan State University. Renowned for his ability to bridge the gap between theory and practice, he has co-authored 18 books on operations and supply chain management. Dr. Melnyk’s research articles have appeared in over 90 international and national refereed journals and in over 200 nonrefereed journals. He sits on the editorial review board of the Journal of Business Logistics and the International Journal of Production Research. Dr. Melnyk’s current research focus is on issues such as supply chain risk and resilience, the future of supply chain management, the impact of behavioural and macro factors on supply chain performance, and certified management standards. He speaks extensively nationally and internationally at academic and practitioner meetings, including keynote addresses at the 2015 and 2017 SMART Supply Chain Management Conferences in Australia. 13


FEATURE

Reaching new heights: Avalon Airport precinct Avalon Airport has taken another step towards its goal of becoming a major freight and logistics hub with the addition of the distribution centre for international fashion giant Cotton On Group.

Located in Victoria between Australia’s fastest-growing population centres, Avalon Airport has a bold vision for a freight and logistics hub employing 750 people and capable of servicing multiple industry sectors.

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On the radar In late 2015, the Commonwealth Government approved Avalon Airport’s 20 Year Masterplan which outlines a vision for an industrial precinct with international passenger operations, retail, warehousing and office accommodation.


Linfox Solutions

“A recent survey found that passengers are coming from all over Melbourne to fly out of Avalon Airport,” says Avalon Airport CEO Justin Giddings. In August 2016, Victorian Premier Daniel Andrews announced the establishment of the Avalon Airport Industrial Precinct. Soon after, the Cotton On Group was confirmed as the first tenant, with Linfox entering a long term agreement to establish a 35,000m2 distribution centre. Cotton On’s warehouse will be the first major development at Avalon Airport since the Masterplan was approved. The new distribution centre more than doubles Cotton On’s processing capacity to 300,000 products per day. Avalon Airport Executive Chairman, David Fox said that attracting Cotton On Group is a sign of the scale at which Avalon can operate and its ideal location. “The Avalon Industrial Park provides great access to both Melbourne and Geelong. We are very happy to partner with Cotton On Group, another great family owned business and one of Geelong’s most successful companies.”

In spite of its international status, Cotton On has remained staunchly Geelong-based, and the September 2016 announcement reinforced the company’s commitment to the region. Avalon Airport – flying high The establishment of the Avalon Industrial Precinct comes on the back of the recent signing of a long term domestic passenger services deal with Jetstar and securing a number of new tenants in the existing Avalon hangars. Jetstar is in its 13th year at Avalon and has re-committed until at least 2025. The airline now operates five daily services to Sydney, a popular daily service to the Gold Coast and a number of weekly services to both Hobart and Adelaide. “A recent survey found that passengers are coming from all over Melbourne to fly out of Avalon Airport,” says Avalon Airport CEO Justin Giddings.

The Cotton On Group began back in 1988 when owner Nigel Austin began selling acid wash jackets at Beckley Market in Geelong. The first clothing store opened just a few years later, and since then it’s been a story of growth as it opened across the world, diversifying its product to include shoes and stationery.

“Because of Avalon’s lower cost operating model Jetstar is able to offer cheaper airfares which are proving very popular, particularly with leisure passengers. In February 2017 we introduced SkyBus services between Melbourne’s Southern Cross Station and Avalon, making us now even easier to use.”

The Cotton On Group has grown to over 1,500 stores in 19 countries and a global team of more than 19,000 passionate people.

Avalon Airport is curfew-free and a popular centre for freight operations. Its 3,048m runway is capable of handling the largest aircraft, and has just undergone a substantial upgrade. Last year Avalon’s airfreight operations increased by almost 50 per cent.

“The benefits of using Avalon for airfreight operations are enormous,” explains Justin. “No curfew, zero waiting times, an extremely experienced team - and again our proximity to Melbourne and Geelong is a huge bonus.” The location, operational capability, security and surrounding population growth are combining to create significant opportunity. “We’re entering a very exciting period,” says Justin. “Our hangars are now full of tenants with a range of different industries, and the construction of the Cotton On Group warehouse is about to commence. We will soon have a fully serviced industrial park with enormous capacity for new businesses.” At an event marking the beginning of construction of the Cotton On facility, Premier of Victoria, Daniel Andrews said, “We’re proud to back Avalon Airport so that it can soar to new heights and meet its true potential.”

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NEWS

Linfox safety culture = ZERO infringements

The effectiveness of Linfox’s industry-leading safety program Vision ZERO has been recognised in an investigation by the Office of the Road Safety Camera Commissioner. incorrectly, higher than expected calculated speeds would be detected. If there were any Linfox infringements alleged then that might be evidence of the inaccuracy of the road safety camera system on Peninsula Link. The full report of the investigation, published in May 2017, reveals a pervasive culture among drivers slowing down for speed cameras but speeding up in between. By contrast, Linfox drivers were recorded on 21,367 occasions on Peninsula Link in 2016 and received a total of zero infringements. In October 2016, the Mornington Peninsula Leader published an article titled ‘More than 60 drivers query same-speed fines on Peninsula Link.’ This story detailed complaints made by motorists who had received traffic infringements for driving 108 km/h or more along the Peninsula Link freeway in Victoria. A Facebook group formed to collectively protest the accuracy of the speed cameras. This, as well as a number of formal complaints, prompted an investigation by the Office of the Road Safety Camera Commissioner.

Linfox supported the investigation by giving permission for its vehicles to be studied as a discrete group. Its easily identified FOXnnn-plated vehicles enabled the vehicles to be traced for comparison to other groups in the study, including the general public and complainants. As part of Vision ZERO program, Linfox invests in safe driver training and ‘in cab’ technology to ensure driver behaviour is both compliant and consistent with legislation and the company values.

Linfox thanks all of its drivers for their exemplary driving record and for contributing to the safety of Australian roads.

The theory in using Linfox vehicles was that if the Peninsula Link point-topoint (P2P) systems were operating

FOXnnn-Plated Instantaneous Speeds, PenLink 2016

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Road Safety Camera Commissioner John Voyage commended Linfox: “We knew that Linfox places great emphasis on safety and compliance with speed limits. The company monitors their drivers, and forbids speeding. The Peninsula Link records (of 21,367 records, zero infringements) also confirm the exemplary driving of Linfox.”

FOXnnn-Plated Instantaneous and P2P Average Speeds, PenLink 2016

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“Linfox” Instantaneous & P2P average speeds histograms, 85 to 102 km/h

The two graphs above show remarkable similarity. There is no evidence that Linfox drivers slow for the cameras and no evidence of point-to-point average speed calculation errors. There are no incorrect infringement notices.

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FEATURES FEATURE

Iconic Routes:

Linfox Solutions

QLD

Cannington Mine toYurbi Rail Linfox trucks operate in some of the most stunning scenery in the world. On the South32 contract, quad road trains haul lead and zinc concentrate from Cannington Mine to the Yurbi Rail loading facility in remote Western QLD.

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South32: Cannington Mine South32’s Cannington Mine is one of the world’s largest producers of silver and lead. Approximately 3.3 million tonnes of ore is processed at Cannington each year, through a mining method known as ‘open-stoping’. The deepest section of the mine is 620 metres below the surface. The process to extract the silver, lead and zinc from the ore involves grinding, sequential flotation and leaching techniques. The end product is high-grade, marketable lead and zinc concentrates with a high silver content.

Mike Bird is a quad road train driver on the Cannington Mine to Yurbi route. The truck he drives has four trailers and is 53.5m long. The route from Cannington to Yurbi takes two hours and only has two corners.

Cannington Mine McKinlay, QLD

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“Welcome to paradise. It’s absolutely beautiful. We run 100 tonnes at a time of lead and zinc from the mine to Yurbi, where it goes on a train into Townsville.”


Iconic Routes:

Linfox Solutions QLD

Ride along with Mike watch the video here.

“I’ve worked for Linfox for 34 years. I moved out here two years ago. Best thing I’ve ever done.”

Yurbi Rail Loading Facility Cloncurry, QLD “In the summer it gets up to 46 degrees. One day in 1889, Cloncurry was recorded as high as 53.1.”

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FEATURE

The numbers: • Linfox trucks travel 1,666,000km per year on the Cannington to Yurbi route. • More than 500,000 tonnes per year of lead and zinc concentrate is transported. • 156 trains per year are loaded at the Yurbi facility. • There are 97,040 front end loader movements per year, loading the trucks and trains. • Linfox operates five road trains on the Cannington Mine to Yurbi Rail route. They run 24/7. • Each road train is 53.5m long and has 86 tyres. • Linfox has 32 employees working on the South32 contract.

• 700+ people work at the Cannington mine site. • Due to its remoteness, 97% of workers are fly in, fly out. • E  very year, more than 300 aircraft land at Cannington’s dedicated airstrip. • T  he silver medals for the Sydney 2000 Olympics were made exclusively from Cannington silver. • In October 2017, Cannington will celebrate 20 years of operation.

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FEATURES NEWS

Linfox Solutions

A smart solution

Armaguard has come a long way since 1938 when it began providing secure cash pick-up and delivery using a fleet of armoured cars in Melbourne. Now, as a national provider of state-of-the-art currency management solutions, Armaguard is providing its expertise to improve the efficiency and security of currency management throughout the region. Linfox Armaguard’s innovative Smart Safe solution has transformed 7-Eleven’s cash handling and reconciliation processes, delivering major wins for their security and efficiency. One of Australia’s largest petrol and convenience retailers, 7-Eleven has more than 600 franchise and company-owned stores nationally. “The demanding task of day-today cash collection and banking presented risks and issues for 7-Eleven, prompting them to consult us for a more effective approach,” said Linfox Armaguard General Manager Business Development, Andrew Nathan. The challenge Previously, 7-Eleven franchise operators were responsible for daily banking. This exposed staff to ongoing security risks as they physically transported cash to and from the store and took them away from day-to-day operations, increasing cost and reducing efficiency.

During busy times daily banking may have been postponed, causing reconciliation issues for head office and impacting 7-Eleven cash flow, with cash sitting idly in stores. Linfox Armaguard was tasked with developing and implementing a cash handling and reconciliation system to: • Improve service delivery • E  nsure a safer working environment with enhanced personal security and reduced risk of injury • Minimise financial loss • P  rovide a flexible, simple system for franchisees and staff • M  eet current and future business and store network needs

“This is a great example of how we can add value for our customers by utilising technology to streamline processes and remove complexity.” 7-Eleven was delighted with the result. “This outstanding team effort has delivered our business a bestin-class cash handling system and process, enhancing security, safety and efficiency,” said 7-Eleven Retail Support Manager, Tim Walter. Linfox Armaguard and 7-Eleven continue to collaborate and refine the system as business needs change and payment trends evolve.

Increasing efficiency and optimising security Linfox Armaguard and 7-Eleven collaborated to develop a fully integrated, automated software and hardware system that removed the need for physical banking activity. This resulted in Smart Safes being installed in over 600 stores nationally. “Our bespoke solution has many benefits: it revolutionised 7-Eleven’s reconciliation and cash flow processes at both store and head office level, mitigating security concerns and allowing store operators to spend more time on their business,” said Andrew. 21


FEATURE

Photo: Dematic

See how ‘each picking’ robotic arm integrates into an automated warehouse.

The intelligent future New advancements in warehouse automation are bringing a new world, where robots can see, make educated choices and act on decisions, closer to reality. Automation and robotics in warehousing isn’t new. Linfox already implements and manages automated storage and retrieval systems, including robotic arms, in a number of warehouse operations. Automation has made Linfox’s warehouses smarter, more efficient, and safer, by reducing the need for manual handling.

Photo: Intelligrated

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Linfox Solutions

Robotic arms are currently used to stack loose cartons onto pallets as products enter the warehouse. Current robotic arm technology relies on barcode scanning to identify the product. Then, depending on the size and shape of the item, the system selects one of its arms to lift and move it. For nearly a decade, companies like Dematic and SwissLog have offered solutions that can pick out a box or carton containing multiples of the same product. New ‘robotic each picking’ technology allows for a robotic arm to pick single items. Increasing consumer demand has resulted in warehouses needing to adapt. “We are evolving from large picks in pallet or carton quantities, to small individual product picks,” says Peter Deyell, Linfox’s Manager Warehousing Innovation and Advisory Services, Development Strategy and Innovation. ‘Robotic each picking’ combines advancements in both product identification and methods of picking up and moving an item. ‘I can see you’ By incorporating 3D cameras into robotic systems, manufacturers have allowed their robots to ‘see’. The limitation of previous barcode recognition systems is that the product must be presented to the scanner in the same orientation every time. With products of different shapes and sizes, this has proven tricky when items are in a carton or box. As technology has evolved, vision-based systems have adapted to better identify multiple products in multiple formats. “Systems have evolved from using barcodes to identify a product to using 3D cameras. The system compares what it is seeing to a 360° photo database of the products to verify the product,” says Peter. “A vision system can accurately identify a product that is mixed in with other products, even if it is on its side or upside down.”

Cameras placed on the gripping mechanism allow the robotic system to judge distance and understand how its arm must move in relation to other objects.

In the UK, online grocery retailer Ocado has taken it one step further, developing a soft robotic hand designed for sorting fruit. Using flexible rubber grippers, the hand can adapt to grasping different seasonal fruit and vegetables. Ocado’s goal is to have a robotic hand capable of picking every product in their catalogue of 46,000 items. “The artificial intelligence built into the robotic systems allows them to learn from their mistakes and improve their processes,” says Peter.

Photo: Bastian Solutions

‘I want that one’ Once the robotic system identifies the correct item, the next big issue is how to pick it up, no matter what shape or size it is. The traditional way of achieving this would be to have multiple robotic arms, each designed to pick up specific items that are similar shapes. Advances in warehouse automation now allow manufacturers to have a one-size-fits-all approach, allowing one arm to lift items of all shapes and sizes using a combination of suction and gripping prongs. One new gripping technology, known as ‘smart hand’, combines both vacuum and grips to adapt to the shape of the product and analyse how gentle its grasp needs to be. Learning from every pick, the system uses sensor feedback and its database to improve on its performance.

“The artificial intelligence built into the robotic systems allows them to learn from their mistakes and improve their processes,” says Peter Deyell.

Photo: SoMa / Ocado Technology

Watch how a robotic hand picks up seasonal fruit and vegetables.

Consumer demand Consumer expectations have changed. Increasingly people want to shop online and expect fast delivery. To do this, customer orders are likely to be increasingly kept as individual items rather than in pallet or carton quantities. As improved customer experience becomes a top priority for organisations, high quality customer service has become essential. In the omni-channel marketplace, online customers have ever increasing service expectations. “All steps in our supply chain are evolving to meet different demands and improve services to our customers,” says Peter. He argues the use of AI within warehouse environments can radically improve services to customers. “AI will embed consistency within omnichannels, enabling customers to access services at times that suit them while ensuring operating costs for businesses remain sustainable.”

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FEATURE

A sound partnership Linfox has established a high speed fulfilment solution incorporating e-commerce, kitting, personalisation, reverse logistics and after-sales services. This new model provides FMCG organisations a new and direct channel to market. This offer was one of the reasons that Linfox was chosen by Sennheiser when it outsourced its warehousing and fulfilment centre.

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Sennheiser is one of the world’s leading manufacturers of headphones, headsets, microphones, meeting and conference solutions, audio streaming solutions and loudspeakers. Since the late 90s the Sennheiser brand in the Australian and New Zealand market has been distributed by a third party.

In order to strengthen its position in the APAC region, Sennheiser directly entered the Australian and New Zealand market in 2013 taking back distribution and marketing rights and generating significant growth in volume. By 2016 the company had outgrown the capacity of its Sydney warehouse.


Linfox Solutions

Sennheiser decided to tender for a larger, outsourced warehouse solution in order to meet their ambitious growth targets and better service the expectations of their customers. Sennheiser Australia and New Zealand Director of Operations Markus Dreimann, acknowledges that Linfox wasn’t on Sennheiser’s radar at the time. He toured Linfox’s facilities with other senior members of the Sennheiser team and saw first hand the Linfox high-speed picking capability for fast moving and slow moving goods. “We didn’t know that Linfox was capable of assisting us to this extent. We’d just assumed Linfox was all about trucks on the road,” says Markus.

As part of this Linfox has built a technical service centre within the warehouse for equipment testing and repairs, including a soundproof chamber. Housed in the state-of-theart service facility, the service centre has been custom built to Sennheiser’s exacting standards. The site will also perform extended services such as returns processing, product evaluation, scrapping, demonstration stock management returns, kitting rework including security tagging, price labelling and stickering. These additional services will set Linfox apart from other logistics organisations by providing an end to end solution.

As the logistics partner for Sennheiser, Linfox is implementing a fully automated picking solution in a new, larger warehouse which will provide a more efficient and cost effective solution.

About Sennheiser Audio specialist Sennheiser is one of the world’s leading manufacturers of headphones, microphones and wireless transmission systems. Based in Wedemark near Hanover, Germany, Sennheiser operates its own production facilities in Germany, Ireland and the USA and is active in more than 50 countries. With 19 sales subsidiaries and long-established trading partners, the company supplies innovative products and cutting-edge audio solutions that are optimally tailored

to its customers’ needs. Sennheiser is a family-owned company that was founded in 1945 and which today has 2,750 employees around the world that share a passion for audio technology. Since 2013, Sennheiser has been managed by Daniel Sennheiser and Dr. Andreas Sennheiser, the third generation of the family to run the company. In 2015, the Sennheiser Group had sales totaling 682 million. www.sennheiser.com

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NEWS

A Linfox 1st: up and flying Linfox Property Group’s first hotel brings a new hotel concept to the Australian market. Where time is short and labour is expensive, Hyatt Place provides the perfect solution for the modern hotel guest’s needs. When Linfox Property Group and Beck Corporation were considering hotel groups for Essendon Fields, Lindsay Fox selected the Hyatt Group due to his long term and positive association with them. The new $60m Hyatt Place Melbourne, Essendon Fields is an important milestone in the development of Essendon Fields, representing its single largest investment and pushing the total number of jobs created at Essendon Fields since privatisation in 2001 to more than 6,000.

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The new Hyatt Place Melbourne, Essendon Fields complements the existing hotel offers in Melbourne’s north-west and, together with the new Australian Events Centre, generates opportunities for the region to capture a greater slice of Australia’s multi-billion dollar conference, events and hospitality market.


Linfox Solutions

Hyatt Place has no fine dining restaurant, bar, or ballroom to light, cool or heat. This lowers the operational costs of the hotel to enable a set room rate of 30 per cent below the standard for a five star hotel, but with the same comfort, quality and fundamentals.

The hotel was officially opened for business at a star-studded event featuring special guests including Victorian Premier Daniel Andrews, Federal Minister for Infrastructure and Transport Darren Chester as well as the joint owners of Essendon Fields’ Lindsay Fox and Max Beck.

The hotel is conveniently located alongside The Australian Events Centre (TAEC) which can host any indoor or outdoor event from conferences to exhibitions and weddings for up to 1,400 guests. TAEC will be profiled in the next edition of Solutions.

TV personality Richard Wilkins hosted the night and after formalities guests were entertained by award-winning artist Guy Sebastian.

About Hyatt Place Hyatt Place hotels first launched in the United States in 2006 with 350 properties. It has since doubled this number to 700 properties worldwide, well above the average industry growth rate.

Highlights from the official opening

“Hyatt Place is designed for today’s multi-tasking travellers’ 24/7 lifestyle by combining stylish design and practical amenities with forward-thinking technology and purposeful service. Hyatt Place Melbourne, Essendon Fields offers a fresh and friendly stay experience, ideal for business and leisure travellers. We are confident that travellers to Essendon Fields, a strategic gateway on the aviation corridor into Melbourne, will find the comfort they want and the service they deserve at Hyatt Place,” says Robert Dawson, Area Vice President, Pacific. While most hotels run up construction bills of $100 million or more, the Hyatt Place Hotel and the adjoining bar, restaurant and events centre were built for $60 million. 27


FEATURE

Tough trials on testing terrain

The Australian Automotive Research Centre rolls out the roughest ride for developers of the toughest military hardware.

About the AARC

The Australian Automotive Research Centre, owned by Linfox Property Group, has invested in vehicle testing facilities to meet the exacting standards of the Australian Defence Force (ADF).

The AARC is supporting Rheinmetall in the supply of 2,500 heavy vehicle combinations, while Thales is supplying 1,100 Hawkei vehicles. The vehicles are put through their paces on the various on-site terrain and facilities.

The multi-million dollar investment has resulted in a dedicated Vehicle Validation Precinct at the proving ground located in Anglesea, Victoria. The Precinct was developed with a strong focus on automotive activities for Linfox’s defence tenants, Rheinmetall MAN and Thales.

The ADF’s standards are exacting. For example, to meet the operating standards the vehicles must sit on a 30 per cent side slope, stationary. This demonstrates where the fluids of the vehicle shift and whether such a gradient compromises the vehicle’s operation. Other facilities in the Vehicle Validation Precinct include a landing craft ramp to look at the performance of a vehicle and trailer when they are being put through various acute angles.

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It also features the largest, deepest fording bath in Australia, built to test vehicles’ water wading capability and meet the test requirements of the next generation of army tanks. The AARC began to develop defence vehicle testing facilities five years ago. With uncertainty surrounding the future of the local car manufacturing industry, the AARC saw the increased investment by the Commonwealth in defence industry fleet renewal as an opportunity to expand the facilities on offer.


Linfox Solutions

The AARC is the largest proving ground in Australia and combines the needs of different clients to create a multi-user experience. This enables small companies with more isolated or specific needs to access the site. The proving ground is an isolated site with very strict rules around privacy. The site team ensures coordination for those requiring privacy, isolation or

exclusivity. It’s not unusual for the facility to have various prototype vehicles, and each tenant or user understands the protocols.

vehicles, or the defence industry sector – the team gains an understanding of sector requirements and determines the types of facilities each could use.

The AARC is now focused on bringing large scale use to its various test facilities.

With ongoing investment in specialised facilities, the AARC will continue to provide a unique, specialised testing site for the local and global vehicle development sector.

By collaborating with various automotive vehicle developers – whether passenger cars, heavy

The vehicles are put through their paces, tested against the various terrain and facilities on site.

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NEWS

Linfox Darwin Intermodal Facility

Linfox has invested in the future needs of its customers and the Northern Territory with the construction of the Linfox Darwin Intermodal Facility.

The Linfox Darwin Intermodal Facility is a short distance from the Darwin Port. Photo credit: Darwin Port.

Situated next to the Darwin railhead, the 3,000m² purpose-built facility will inject millions of dollars into the NT economy and create up to 15 ongoing local jobs. The site reflects Linfox’s commitment to investing ahead of the market to meet the needs of its customers and large industry sectors. “Each year our Intermodal team shifts more than 15 million pallets for Australia’s retailers using its multi-modal freight network,” said Linfox CEO, Annette Carey. Photo credit: Genesee & Wyoming Australia. D

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Linfox Solutions

“This new investment increases our capacity and makes it easier for customers to move inbound and outbound goods throughout the region.” “A chilled storage area enables temperature controlled products to be safely stored during transit and broadens our cold chain network.” The Linfox Darwin Intermodal Facility complements the capabilities of Linfox’s long distance road, rail and coastal shipping distribution services and follows the recent expansion of its Healthcare and Defence logistics capabilities.

On time and on budget

Sustainable initiatives

Linfox Chief Operating Officer, Mark Mazurek said that building a site in the Northern Territory had its own special challenges.

In 2016, Linfox Executive Chairman, Peter Fox declared his intention to use the roof space of Linfox sites to make Linfox operations more sustainable.

“The majority of the build was done during the wet season which meant the team from Vaughan Constructions were working in humid conditions in 35 degree plus heat, often competing with monsoonal rains and storms,” said Mark.

Many sites already harvest rainwater and feature high-efficiency LED lighting. The Darwin facility has these features and further minimises its carbon footprint with a 100kWh rooftop solar system.

“In fact, the Bureau of Meteorology recorded the Top End’s third wettest ‘wet season’ on record.”

The location provides ideal conditions for solar energy generation and Linfox is already planning similar systems for future site builds and existing site retrofits.

“Despite these challenges, the site was ready for service at the start of the dry season as planned.” The site will be used by many industry sectors including mining, FMCG, Defence logistics, primary industries and healthcare.

The Linfox Darwin Intermodal Facility will be officially opened by representatives of the Federal and Northern Territory Governments in late 2017.

Watch Linfox’s new facility being built

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LINFOX PEOPLE

Our history steeped in values

The Linfox values – LIFT – based on founder Lindsay Fox’s long held principals of trust, integrity, loyalty and fairness are being revitalised across the Linfox Group. The long-term success of a business rests on the foundation of a strong corporate culture - and a company’s culture is determined by its values.

“I’ve always trusted the good intentions of my people,” says Lindsay. “If you half trust somebody, you don’t trust them. There’s no such thing as half trust.”

As a family business, Linfox looks to founder Lindsay Fox, who has long lived by the principles he calls the ‘TIL values’.

As Linfox has grown over the past 60 years, the business has become known for working with integrity.

These TIL values have guided Lindsay’s personal and business success over six decades, and apply to all Linfox employees.

“The majority of the people that I’ve done business with, I’d look at a set of eyeballs and shake their hand. You can do that with people of integrity,” says Lindsay.

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Paul Simons, the first Chief Executive of Woolworths said of Linfox, “No matter what the deal, it was always done the same way – with a handshake. Once you shook hands, the deal was done.” Loyalty is the last element of the TIL principle. “I think loyalty is tremendously important,” says Lindsay. “And loyalty goes both ways. Linfox has a long history of celebrating milestones of people who have been with the business for 30, 40, sometimes 50 years.”


Linfox Solutions

A recent decision to refresh the Linfox values led to the inclusion of fairness, also a long held characteristic of Linfox. In Lindsay’s words, “Fairness is mutual respect and not looking at people as inferior or superior. That’s a fundamental value I’ve had all my life.” Lindsay is determined that LIFT remains a priority for the next 60 years. “The strength of our company depends on these values.” “The key is to have faith in an organisation that, in turn, has faith in you. If you do the best you can and live by your values, then you will in turn become successful.”

“It’s a people business. Personal relationships are always the key to good business. You can buy networking; you can’t buy friendships.” - Lindsay Fox

Now known by the acronym LIFT, the refreshed Linfox values are being relaunched across the businesses in 2017.

The LIFT values defined:

We’re about people and relationships. If we don’t look after one another, we can’t win. Together we find solutions and we don’t take our relationships for granted.

We do the right thing. Always. We’re transparent, honest and ethical in our interactions with our colleagues, customers, suppliers and the public. In short, we’re true to our word.

We’re all equal and we treat each other with respect. We are one team working towards a common goal. We get the best results when we cooperate and uphold our mutual responsibilities.

We trust in each other to deliver. We trust in the good intentions of each other and we’re rewarded for that. We accept that trust must be earned and can’t be taken for granted.

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PARTNERING TO DEVELOP WORLD-CLASS SOLUTIONS As a single-source supplier with more than 75 years of designing warehouse and logistics systems for a wide range of industries, SSI SCHAEFER is proud to partner with Linfox. Improving distribution centre performance with: • Innovative storage solutions • Automated order fulfilment systems • Flexible warehouse management software ssi-schaefer.com


Linfox Solutions


www.linfox.com

Solutions June/July 2017  

Linfox Solutions Magazine, June/July 2017

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