FEBRUARY 2022 COVER STORY
THE FUTURE OF THE INDUSTRIAL & LOGISTICS SECTOR Colliers experts share their thoughts on the future of industrial property in 2022 and beyond
AUTOMATION AND SUPPLY CHAIN REVOLUTION
An internationally acclaimed consultant and author discusses automation and the supply chain future
AN UNTAPPED RENEWABLE OPPORTUNITY
Prological supports new research to uncover the right time to choose renewable energy
SUCCESS THROUGH SAFETY
Fuzzy LogX shares the important safety priorities for 2022
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MHD FROM THE EDITOR
MHD Supply Chain Solutions CONTACT MHD Supply Chain Solutions is published by Prime Creative Media 11-15 Buckhurst Street, South Melbourne VIC 3205 Telephone: (+61) 03 9690 8766 Website: www.primecreative.com.au
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ACKNOWLEDGEMENT MHD Supply Chain Solutions magazine is recognised by the Australian Supply Chain Institute, the Chartered Institute of Logistics and Transport Australia, the Supply Chain and Logistics Association of Australia and the Singapore Logistics and Supply Chain Management Society.
A NEW YEAR
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t’s a new year, and our February edition is the perfect place to help you get up to date on the new ideas, trends, and solutions bubbling up through the supply chain industry. It seems to me that “supply chain” is a term that has steadily been gaining currency as a hot topic in the mainstream media. It’s hard to leaf through the Sunday paper without eyeing a prominent story on “supply chain woes”. And while even supply-chain boosters like us will admit that the last year or two has thrown up some obstacles, more impressive to my mind has been the resiliency of the sector. It has shown a remarkable capacity to tack with strong and unexpected winds, buffeted by the pandemic as well as international trade disputes and rising geopolitical tensions. But if supply chain continues to grow in the public consciousness, then that can only be a good thing. A common refrain over the past year from experts we’ve spoken with is that supply chain has often been giving short shrift at a business strategy level – something that the recent turbulence and its mainstream media coverage might help turn around. International supply chain consultant and acclaimed author, Suman Sarkar, says that while there has been slightly more attention paid by corporation boards to supply chain within organisations – there’s a long way to go. In a wide-ranging interview he talks about the need for a “supply chain revolution,” as well as the possibilities and limits of new waves of automation. Elsewhere, in a new monthly column, supply chain consultancy Prological discusses new research – conducted with the University of Wollongong Sustainable Buildings Research Centre – that reveals how businesses can quantitatively decide when is the right time to turn to renewable energy for their warehouse operations. And on the industrial property front, Port Adelaide is set to be home to a new flexible warehouse facility – at what might well be the city’s premier distribution centre. MHD talks with Quintessential Equity and Leedwell about how intelligent warehouse development can help solve the lack of available space in the industrial and logistics market.
ARTICLES All articles submitted for publication become the property of the publisher. The Editor reserves the right to adjust any article to conform with the magazine format. COPYRIGHT MHD magazine is owned by Prime Creative Media. All material in MHD is copyright and no part may be reproduced or copied in any form or by any means (graphic, electronic or mechanical including information and retrieval systems) without written permission of the publisher. The Editor welcomes contributions but reserves the right to accept or reject any material. While every effort has been made to ensure the accuracy of information Prime Creative Media will not accept responsibility for errors or omissions or for any consequences arising from reliance on information published. The opinions expressed in MHD are not necessarily the opinions of, or endorsed by the publisher unless otherwise stated.
Edward Cranswick Editor edward.cranswick@primecreative.com.au
MHD Supply Chain
MHD FEBRUARY 2022 | 3
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FEBRUARY 2022
ISSUE #12 VOLUME 52
THIS ISSUE 14
COVER STORY
14 The future of the industrial and logistics sector
SUPPLY CHAIN 21 Diverseco on weighing up the options 24 IoT meets parcel delivery excellence 29 Envista’s fully integrated order management 37 Körber’s 2022 supply chain predictions 44 The importance of traceability
COVER STORY
INDUSTRIAL PROPERTY
18
26 Lowest vacancy rates in history 33 A new wave of development opportunities
MATERIALS HANDLING 46 The cross-docking X-Factor 48 TMHA setting the sustainability agenda
WAREHOUSING 18 Feeding a nation 40 Automation and the supply chain revolution 42 Fuzzy LogX success through safety
DEPARTMENTS & REGULARS 06 Industry news 52 Prological’s Logical Outlook 54 SCLAA 57 Products 58 People on the move
ON THE COVER Off the back of a strong year in 2021, Colliers discusses the future of industrial property in 2022 and beyond.
46 MHD FEBRUARY 2022 | 5
MHD NEWS
LOGOS settles Moorebank Logistics Park and Qantas deals Moorebank Logistics Park has an end value of $4.2 billion.
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OGOS Consortium has confirmed $2.47 billion of deals, acquiring Moorebank Logistics Park and Qantas’s Mascot site. The historic acquisition of MLP will lead to the development of Australia’s largest logistics and warehousing infrastructure project, aiming to transform e-commerce capabilities in NSW and Australia. LOGOS, together with Consortium partners, AustralianSuper, Ivanhoé Cambridge, TCorp (NSW Treasury Corporation) and AXA IM Alts, announced their entry into a binding agreement with Qube to acquire the MLP site in July 2021. With an end value of $4.2 billion, MLP is Australia’s largest intermodal freight facility, offering industrial warehousing opportunities and rail-to-port connectivity. The site includes around 243 hectares of land which will be developed into high quality industrial property and infrastructure. Darren Searle, LOGOS Head of
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Australia & New Zealand says the scale and technology of this project makes it one of the most exciting within the group’s $22 billion portfolio. “Together with the LOGOS Consortium, we are thrilled to be moving forward with our collective vision for MLP, which is a fully automated port-to- site rail link and world-leading industrial and warehousing site,” he says. “We are passionate about providing a logistics site of this scale, with this immense range of benefits, within a mere 30-minute drive of a major global CBD, as an Australian-first.” LOGOS and its partners AustralianSuper and Abu Dhabi Investment Authority have also settled their acquisition of a 14ha Qantas site in Mascot for $802 million. The logistics investor acquired the landmark deal in October, with intentions to develop a world class, multi-level logistics and office park development, changing the landscape
of the Mascot precinct. “The site offers unparalleled connectivity as a critical link to supply chains around the country given its central location and proximity as a key freight gateway for Sydney airport,” Darren says. “Together with our partners AustralianSuper and the Abu Dhabi Investment Authority we look forward to activating our plans to develop a leading logistics estate on the site, improving the e-commerce and distribution opportunities in Sydney and creating thousands of jobs for the local community.” “The settlement of both MLP and Qantas transactions today further expands our shared portfolio of logistics and last mile investments made jointly with AustralianSuper, and we are proud to work together with such established partners to further our shared commitment to advancing the logistics and distribution landscape in Australia.”
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MHD NEWS
Government launches national freight location registry
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ruckies and businesses will be able to use a new digital tool with pick-up and delivery location information to transport Australian products more efficiently. The registry contains operating hours, weight and height restrictions for vehicles, entry points, driver amenities and safety requirements for each site. Barnaby Joyce, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development says the tool will make it easier and quicker for freight operators to pick-up and deliver goods and take some of the stress out of their day-to-day work. “Every Australian, everywhere, every day relies on freight. The National Location Registry will benefit us all by backing a more efficient supply chain for our businesses and truckies,” he says. Industry participants include Woolworths, Coles, Sanitarium, PepsiCo,
Toll, Linfox and Australia Post. “For farmers, manufacturers and distributors, the Registry will reduce some of the hassle and time it takes to get their products to where they need to go,” Baranaby adds. “This will make life easier for the more than 50,000 small businesses involved in Australia’s road freight sector. These businesses can now encourage location owners to list their pick-up spots and other important information on this one Registry, saving time and effort.” Scott Buchholz, Assistant Minister for Road Safety and Freight Transport says the Registry was kick-started by industry and for industry, with the support of the Government, to deliver the data the freight industry needs. “A farmer that diversifies their plots to different crops and sets up a new processing shed can put this shed on the Registry so transport operators know
exactly how to get in and pick up the produce to haul to markets,” he says. “This will take some of the stress off our transport operators to find the new shed, ensure the produce is picked up quickly and smoothly, and means the farmer doesn’t have to give this information each and every trip.” The Registry is a key element of the Australian Government’s broader National Freight Data Hub project, a $16.5 million investment to make a range of data available to support the freight industry. This includes the recently launched Supply Chain Benchmarking Dashboard, which is providing detailed and interactive modelling of Australian transport and logistics supply chains across 130 commodities. The National Location Registry is managed by not-for-profit standards organisation, GS1 Australia.
Woolworths starts construction on first online fulfilment centre
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orks have begun in the heart of Western Sydney on the supermarket Group’s first ever automated customer fulfilment centre. Set to open in 2024, Woolworths’ Auburn Customer Fulfilment Centre (CFC) is being built by Vaughan Constructions and will be equipped with Knapp’s automation technology. The technology will allow the hundreds of personal shoppers employed at the 22,000 sqm site to pick and dispatch up to 50,000 home deliveries a week across Western Sydney. Annette Karantoni, Woolworths Director of e-commerce, says online grocery shopping is booming in Western Sydney as more and more customers look to reclaim time in their busy lives. “Over the past two years alone, we’ve seen the demand for online groceries in Western Sydney more than triple. We need to continue
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investing in new capacity to keep pace with demand and rising customer expectations,” Annette says. “The development of Auburn will provide a major boost to our same day delivery capacity in Western Sydney – unlocking faster and more flexible online shopping options for our customers. For added convenience, we’ll also offer pick up bays with a direct to boot service for local customers.” The NSW Planning Department approved the State Significant development in June 2021. Stuart Ayres, NSW Minister for Jobs, Investment, Tourism and Western Sydney, says the facility is testament to businesses evolving to meet the changing demands of a busy population. “Investing in facilities like this creates quality jobs closer to where people’s homes are as we reshape the way we shop in a 24-hour economy,” he says.
The Auburn CFC is targeting a 5-Star Green Star Rating from the Green Building Council of Australia, with plans for rainwater harvesting, solar panels and electric vehicle charging facilities for delivery trucks. Woolworths stores remain a key part of the e-commerce network, with investments continuing in Direct to Boot, in-store fulfilment and on-demand delivery. More than 80 per cent of online orders are fulfilled by stores. The development of the Auburn CFC builds on recent Woolworths investments in micro-fulfilment technology at its Carrum Downs, Victoria and Maroochydore, Queensland supermarkets. Woolworths reported a 53 percent increase in e-commerce sales in the quarter ended September 2021 and they now account for more than 11 percent of all sales.
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MHD NEWS
Omicron variant prolongs container logistics delays Container transport operators are experiencing between a five per cent to 20 per cent reduction in available staff.
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he Container Transport Alliance Australia (CTAA) Director says industry players are facing the hardest conditions ever, with the Omicron variant adding to supply chain disruptions. Staff shortages, terminal congestion and significant competition to secure vehicle booking slots are combining to create the difficult conditions, according to Neil Chambers from the CTAA. “Container transport operators across Australia have reported to CTAA that they are experiencing between a 5 per cent to 20 per cent reduction in available staff, including heavy vehicle drivers, warehouse staff, forklift drivers, container unpack crews and administration, due to COVID infections and isolation requirements,” Neil explains.
“Compounding this are staff shortages at customers’ premises, as well as at international container stevedore terminals and at empty container parks across Australia, significantly delaying the movement of containers through the supply chain. “As a result, transport operators are reporting operational capacity constraints, with transport yards operating between 70 per cent to over 130 per cent capacity.” Neil says the reduction in capacity is because of delays in customer deliveries, and the need to stage empty import containers through transport yards while trying to secure de-hire slots at clogged empty container parks or container terminals that have reached capacity to receive returns. “The current supply chain delays
and the severe impact of COVID infections seem set to continue well into 2022,” he says. “DP World Australia has notified industry that approximately 10 per cent of its workforce are impacted through either having contracted COVID-19 or are isolating at home with a positive case in their household. DP World says these numbers may increase as Australia works through the current COVID-19 wave. “Vessel berthing delays at container terminals across Australia are still of significant concern, impacting all of the major stevedore companies. These delays are being felt most acutely in Sydney and Melbourne, with delays of between 2 up to 9 days, while a heat wave in WA is now affecting terminal productivity in Fremantle.” MHD FEBRUARY 2022 | 11
MHD NEWS
Taskforce set up to tackle AdBlue shortage
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cott Morrison gave the green light in December for a specialist taskforce to ensure the reliable and ongoing supply of diesel exhaust fluid AdBlue. The announcement followed the Australian Trucking Association’s calls for a specialised effort to solve the supply shortage after talks broke down at a round-table discussion in early December 2021. That month the federal government said multiple shipments of refined urea were on their way to Australia to provide two weeks’ cover for the market. Advice provided to the Department of Industry, Science, Energy and Resources from AdBlue manufacturers is that this is within range of normal stockholding levels. Industry is also reporting that other international supply chains are open and operating, a positive indication of ongoing supply options in the medium term.
ATA Chair, David Smith says the decision to establish the taskforce shows the AdBlue issue is now at the top of the government’s agenda. “We’re think this is a good outcome. We have been calling for government to make resolving this issue a priority,” he says. “It appears that Minister Taylor has listened to our calls and is putting the AdBlue shortage at the top of government’s priority list.” Angus Taylor, Minister for Industry, Energy and Emissions Reduction says businesses and consumers buying additional stocks is unnecessary and unhelpful, and urged industry to continue operating as per usual and maintain normal levels of AdBlue. “Global supply pressures, stemming from increased domestic use in China, have led to international issues in securing refined urea, which is key to producing AdBlue. This is exacerbated by the global shortage of natural
gas, the essential ingredient used to make urea,” he says. “I can assure Australians that the Government is working to ensure we do not face any shortages. We are pursuing a range of measures to address global pressures in the urea market. We will keep our trucks running and Australian motorists on the road.” The taskforce will work across government and with industry to develop solutions to any potential future supply constraints. Options being explored include alternative international supply options for refined urea, bolstering local manufacturing capabilities and technical options at the vehicle level. The Government is working with the Australian Competition and Consumer Commission (ACCC) and industry on whether an authorisation is needed to allow Australian diesel exhaust fluid producers to share information.
Testing waits halting supply chain
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ndustry bodies have called on governments to make rapid antigen tests available for the logistics sector, after some transport companies reported up to half of their staff are unable to work. Freight & Trade Alliance (FTA), the Australian Peak Shippers Association (APSA) and the Container Transport Alliance Australia (CTAA) have noted instances whereby members (including freight forwarders, warehouse and depot operators) have received alerts from health regulators regarding people who have checked in at their premises testing positive. Industry says many members are facing the predicament of having significant numbers of staff in isolation requiring tests to determine if they are safe to return to work. Arthur Tzaneros, CEO of Australian Container Freight Services (ACFS), one of the largest trucking companies for the
The supply chain industry is calling for free rapid antigen tests for workers.
country’s major ports and whose clients include Coles, Aldi, Kmart and Bunnings, says there had been a 25-50 per cent shortage of drivers across the east coast during the past two January weeks. The FTA hopes the genuine threat of grocery store shelves being empty will prompt faster resolution. TWU national secretary Michael Kaine told Business Insider Australia that if the Morrison government doesn’t make rapid antigen tests free and widely
available, Australia’s supply chain can be expected to buckle. “Supply chains are starting to grind to a halt because of the virus. Now, these RATs are needed to clearly manage the spread of the virus because we need transport supply chains to be safe,” he said. “And for so long as free and readily available testing isn’t there, then we’re going to continue to maximise the spread of the virus.” MHD FEBRUARY 2022 | 13
MHD STRAP LINE
THE FUTURE OF THE INDUSTRIAL AND LOGISTICS SECTOR Off the back of a strong year in 2021, Colliers Industrial property experts share their thoughts with MHD on the future of industrial property in 2022 and beyond.
Fab Dalfonso, National Director of Sydney South West Industrial, Catherine Allotta, Associate Director of Colliers Valuation and Advisory Services, and David Hall, National Director of Colliers Sydney West Industrial.
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he fundamentals within the industrial and logistics sector in 2022 will remain supportive of strong market conditions. E-commerce is forecasted to continue to provide the backbone of tenant demand, while we are currently undergoing an era of transformation and renewal as a result of the significant investment in infrastructure. which will support new development. It’s Colliers’ view that we see the future of the Industrial and Logistics sector looking bright. Our Colliers Industrial experts have explored the underlying factors within 14 | MHD FEBRUARY 2022
each area of our service expertise that we know to be shaping the Industrial and logistics landscape. Our experts discuss factors impacting demand, growth of the Western Sydney market, the rise of the truck driver, NABERS (National Australian Built Environment Rating System) in industrial and making your warehouse space count.
FACTORS IMPACTING DEMAND Catherine Allotta, Associate Director of Colliers Valuation and Advisory Services, believes from a valuation perspective,
prime industrial grade assets with strong tenant covenants and lengthy WALEs that are situated in good locations are in high demand by investors in today’s market. Similarly, for the occupier market, demand is being led from the e-commerce, transport and logistics, manufacturing, pharmaceutical and cold store sectors. “Since Q1 2021, we have witnessed yield compression of up to 100 basis points (bps),” Catherine says. “For the East Coast capital cities, prime yields currently average 3.91 per cent while selected submarkets sit closer
BROUGHT TO YOU BY to the 3.25-3.50 per cent range.” Internal rates of return (IRRs) have also compressed from 25bps to 50bps to now average 5.25-5.50 per cent. This in turn has created a significant uplift in adopted values from circa 10.00 per cent to 20.00 per cent. Scarcity of industrial zoned land has seen rates for greenfield sites escalate to above $1000 per square metre. The need for last mile logistics facilities located in proximity to the end consumer created a flurry of activity in the second half of 2021 and we expect to see this trend continue in 2022 with rates increasing to over $1200 per square metre for one-to-fivehectare land parcels in central locations. “We witnessed an increase on net face rents in 2021 with an average growth of 4.3 per cent recorded in the prime market,” Catherine notes. “Incentives have remained tight at circa 8.0 per cent to 15.0 per cent. Underpinning compression is the government’s continued investment in infrastructure development coupled with lack of supply and strong demand from multiple consumers. Due to supply chain disruptions, we have also seen an increase in the local manufacturing of recycling, packaging and construction materials.” Looking forward, despite low levels of population growth, inflation and rises in interest rates – which could impact consumer spending and demand for warehouse space – we anticipate the demand for the industrial and logistics sector to remain strong.
GROWTH OF THE WESTERN SYDNEY MARKET The Western Sydney market is experiencing record levels of demand that will remain for some time. In 2021, we saw $600 million deployed on land transactions in the Mamre Road Precinct alone. “The rise in the e-commerce sector is one of the major drivers causing these record highs in Western Sydney, as it leverages the rapid growth of online consumer spending,” says David Hall, National Director of Colliers Sydney West Industrial. Alongside the expanding e-commerce market, the trend of growth and demand in Western Sydney for occupiers and investors has been largely driven by the expected delivery of key infrastructure, such as the Western Sydney Airport and major road networks. Broad trends of larger facilities, the shift towards improved automation and efficiency, and growth experienced last year for the precinct are expected to follow much the same patterns in 2022. David notes that this trend will present the opportunity for businesses to move quickly and take advantage of the
“
The pandemic may have accelerated a trend that was already brewing in the background. With consumer trends shifting, the ripples are flowing through the supply chain like never before. Customer service is no longer just the in-store experience, nowadays it is quite simply, ‘How quickly will my online purchase arrive?’
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pre-lease market Western Sydney has to offer. The market will be able to accommodate occupiers seeking the larger, latest generation facilities in strategic locations, ultimately allowing groups to maximise their own business growth potential. It is important to consider that the rapid growth of the Western Sydney market has also been driven by the change in market conditions experienced over the last two years. “Business owners have fortified themselves in the event any further changes to the market occur,” says Fab Dalfonso, National Director of Sydney South West Industrial. Fab highlights occupiers have chosen to de-risk their businesses by ensuring they have a national footprint, and Western Sydney as the geographic center of Sydney’s population has benefited from this. Additionally, the reopening of borders and expected influx of migrants will provide further opportunity for growth within the popular Western Sydney market. In this current environment, the opportunity for occupiers is to act now. Starting property discussions as soon as possible gives occupiers more time leading to the opportunity to take advantage of the infrastructure on the horizon. Our Colliers experts can help secure the right outcome for your business both commercially and operationally.
THE RISE OF THE TRUCK DRIVER Industrial property specialists at Colliers, and the supply chain and operations experts at Pollen, announced their strategic partnership in 2021, providing a full end-to-end industrial advisory service. This new partnership will see leading real estate professionals at Colliers working collaboratively with Pollen to provide expert advice to maximise the value of supply chains, technology, automation and the resultant property for occupiers and owners. Peter Evans, National Director of Colliers Industrial Advisory, and Sean Mitchell, Partner at Pollen Consulting Group, believe businesses must recognise the growing importance of the logistics and supply chain function for overall organisation performance. “The pandemic may have accelerated a trend that was already brewing in the background,” Peter says. “With consumer trends shifting, the ripples are flowing through the supply chain like never before. Customer service is no longer just the in-store experience, nowadays it is quite simply, ‘How quickly will my online purchase arrive?’” Sean Mitchell adds to Peter’s point: “Often, the quick response to this market trend is to increase stock levels and fill local warehouses, close to the customer, with stock the business MHD FEBRUARY 2022 | 15
NABERS IN INDUSTRIAL Starting property discussions as soon as possible gives occupiers more time leading to the opportunity to take advantage of the infrastructure on the horizon.
thinks they might want, tag on a good outbound partner, and the supply chain people are done, right? “Well, not if you want to still be around in 12 months.” Logistics and supply chain are truly becoming a competitive advantage for businesses. Smart, forward thinking logistics personnel are finding themselves a seat at the boardroom table, and they are focused on four key areas:
1. CIRCULAR SUPPLY CHAIN MANAGEMENT Logistics are not at the end of the process, they’re not even end-to-end; logistics need to be considered as a circular process. Thinking about the entire footprint of the supply chain process allows optimisation within a business both internally and externally.
2. RECRUITING THE ‘QUANTS’ No longer is having years of experience in logistics the only way to succeed. Quantitative, analytical people who can set up data-driven and connected 16 | MHD FEBRUARY 2022
systems are making a name for themselves. Successful businesses are using smart insights to drive replenishment strategies that are segmented by channel, optimized, and connected to the data points that truly influence demand.
3. ON THE PULSE Continual balance of costs, working capital, and service are imperative to understand the optimal position.
4. CONNECTED LEADERS OPERATING OUTSIDE OF THEIR COMFORT ZONE Executive levels have functional expertise combined with overall business insights and strategic direction. The importance of this balance is growing, the leaders of today need to get out of their areas of comfort to truly influence the business’s strategic direction. Our expert team can offer advice to maximise your businesses needs and ensure you have the right expertise driving your supply chain future.
Originating in Australia, National Australian Built Environment Rating System (NABERS) has established performance benchmarks for various asset classes to support property owners and occupiers in assessing their environmental performance against peers for energy, water, waste, and indoor environment. NABERS employs a ‘nowhere to hide’ approach to performance where each building or tenancy is supplying the same type of data and documentation as their peers to achieve a consistent rating outcome. Previously covering office and retail assets, NABERS will be launching certification for industrial assets in early 2022. Colliers’ Daniel Shafferman, National Director, Industrial Real Estate Management Services (REMS), and Lisa Hinde, Head of Sustainability | REMS, will be working with the NABERS Accelerate program to help guide their approach in defining energy and water benchmarks for the industrial sector. “The result of our advice will inform the first industrial ratings in Australia, and not only upskill our teams to handle requests from our existing and future clients to facilitate these ratings, but also allow us to extend the opportunity to be the first rated under this new benchmark,” Lisa explains. “Alongside this, we will support our clients to receive a 20 per cent discount from NABERS when they participate in this first cohort.” Once formally launched in 2022, the mass adoption of NABERS ratings for the Industrial sector is expected on the basis of a growing push for landlords and occupiers to understand their performance and carbon footprint against peers. Colliers is anticipating the introduction of this framework will encourage a new collaborative model between landlords and occupiers in achieving joint ESG targets as well as support the necessary metering and monitoring configuration to facilitate data collection. Early intervention at the design stage will be recommended to ensure a smooth transition to an operational rating. If you’re looking to better understand what sustainability means within your warehouse, our experts can provide advice to maximise the potential of your property.
BROUGHT TO YOU BY
MAKE SURE YOUR WAREHOUSE SPACE COUNTS As businesses adapt to their new postCOVID-19 operating environments, we are noticing changing business models and ongoing disruptions to global supply chains. Property occupiers are being forced to deep dive or reassess the underlying fundamentals that support their existing warehousing needs. Tim Edwards, National Director of Colliers Project Leaders, says, “We have noticed that the increase in land values and rising construction costs – together with historical demand – are driving rental growth.” The peak in rental costs is driving property occupiers to administer a more detailed analysis around balancing their optimum warehousing and storage needs in addition to maximising operational flexibility and efficiencies. The ability to make a short-term property decision, that will defer the implementation of a more strategic long-term property solution in the right location, is fast becoming a reality check in the new
post-COVID operating environment. Increasing energy costs and labour shortages are placing pressure on overall occupancy costs. For property occupiers, this identifies the necessity to ensure their warehousing needs have sustainability credentials, embedded networks or services for emerging technologies, and the ability to deliver efficient solutions for their physical staffing needs. “The power of maximising geographical attributes and characteristics of your warehouse’s location is becoming increasing cost efficient, readily available, and easily adaptable,” Tim says. Disruptions to global supply chains and delivery timeframes continue to impact current storage solutions, operational flexibility, and long-term growth strategies. As a result, property occupiers should consistently review their traditional supply chain strategies and storage solutions. “To positively adapt to the ongoing disruptions and changing
Colliers’ team of Industrial real estate experts at the IFC Global Logistics and Warehousing facility in Prestons.
business models, property occupiers should transition or implement new mechanisation systems or technologies, and automation solutions,” Tim adds. Ensuring your current warehousing space is “the right fit”, while delivering operational efficiencies and reduced occupancy costs, is now more important than ever. So … how prepared is your current warehousing space to encounter these challenges? We recommend exploring these questions when selecting your next warehouse or reviewing your current space: 1. Does your warehouse space accommodate your required operational needs and business model? 2. Are the building services and high energy usage elements within your warehouse adaptable to support the implementation of emerging technologies and sustainability initiatives/enhancements? 3. Does the current design of your warehouse enable fast, efficient, and optimised movements of your products and goods? 4. Can your current warehouse space incorporate alternative storage solutions or automation? Our expert advice to property occupiers can help lead your business into the future. Make your warehousing space count. Working with occupiers, developers, and investors, our team of Industrial real estate experts offers industry leading advice and delivers enterprising solutions. Our strength lies in providing national expertise – with a focus on detailed local knowledge – and our ability to collaborate with our experts globally. In this current environment now is the time to act. Contact one of our Colliers experts to see how we can accelerate the success of your business and maximise the potential of your property. ■ For more information on the future of the Industrial and Logistics sector and how we can maximise the potential of property for your business, contact one of our Colliers experts today. MHD FEBRUARY 2022 | 17
MHD SUPPLY CHAIN
FEEDING A NATION
Dematic’s Michael Bradshaw (left) with Gerald Glauerdt, Co-Founder & Chief Logistics Officer at RedMart and Lazada.
To meet surging demand and growth in online orders, RedMart – the online grocery service of e-commerce giant, Lazada – has automated operations at one of the largest logistics facilities in Singapore. Implementing Dematic’s automated solutions, the upgrades are improving productivity, speed, accuracy, and space efficiency, plus safety and social distancing across multiple temperature zones.
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ingapore has been experiencing strong growth in online grocery shopping in recent years. To meet this increased demand, RedMart adopted a range of automated solutions from Dematic at its RedMart West Fulfilment Centre, including robotic shuttles, ergonomic high-speed pick stations, an intelligent conveying system, and a high-rate sortation system. The operation is integrated and managed by a sophisticated software platform to make processes easy and efficient for pickers, packers, and management staff. With space being a premium in Singapore, the complete solution had to be compact and provide high capacity with a minimum footprint. While Redmart’s decision to install automation was made well before the onset of COVID-19, its importance was quickly underscored by the pandemic and the exponential rate at which 18 | MHD FEBRUARY 2022
“
We knew we needed to scale our model of operations up, and we needed to find a solutions provider who was highly experienced in warehouse and logistics automation. Dematic was chosen as they were able to provide us with highly customisable solutions that would bring us the productivity increases that we were looking for.
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consumers turned to online platforms to purchase their groceries. Gerald Glauerdt, Co-Founder & Chief Logistics Officer at RedMart and Lazada says online sales jumped by more than four times over, with unique visitors to the website rising by more than 11 times. “To meet the demand of consumers when it comes to online grocery shopping, the old method of manually hand-picking an order to pack and sending it to customers was too timeconsuming, inefficient, and low in productivity,” Gerald says. “We knew we needed to scale our model of operations up, and we needed to find a solutions provider who was highly experienced in warehouse and logistics automation. Dematic was chosen as they were able to provide us with highly customisable solutions that would bring us the productivity increases that we were looking for.” One of the solutions Dematic has
MHD SUPPLY CHAIN
The Dematic Multishuttle system automatically retrieves totes containing required items.
provided is goods-to-person (GTP) picking with Dematic Multishuttle. With this system, products are automatically stored in high-density racks by robotic shuttles, which automatically transport totes between storage locations and operator pick stations, eliminating the need for operators to travel and preventing them from picking the wrong product. Whenever there is an order to be fulfilled from the GTP area, the Dematic Multishuttle system automatically retrieves totes containing the required items. Totes are retrieved in the required sequence and conveyed to the GTP pick stations where they are picked and placed into order containers. Operators stay in one place while items are delivered to their pick station automatically, increasing picking speeds and productivity. “This example of the GTP brings a highly productive solution in terms of processes, where a picker can now pick and pack 500 items in the same time that it used to take them to pick and pack 100 items in the past using the manual process,” Gerald adds. “Dematic was able to offer this customised solution to help reduce the burden on our pickers, whilst boosting productivity and efficiency, helping us
to meet the growing demand for online grocery shopping.” The Dematic solution also includes the order fulfilment of fresh produce in multiple temperature zones, including a freezer pick area. Customer orders are transported through the various picking areas of the facility by an intelligent routing conveying system
and are consolidated at ergonomic packing stations in preparation for despatch. Once packed, orders are conveyed and automatically sorted to specific delivery vehicles by a Dematic high rate sliding shoe sorter. By limiting order touch points the solution improves speed, productivity and hygiene. ■
Dematic high-rate Goods-to-Person picking.
MHD FEBURARY 2022 | 19
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MHD SUPPLY CHAIN
WEIGHING UP THE OPTIONS Diverseco has been manufacturing and delivering weighing and measuring solutions for more than 150 years. With chain of responsibility growing in importance, MHD talks to Diverseco’s Bill Ambrose and Gregor MacNamara about the company’s holistic solutions.
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iverseco has two basic lines of solutions to help companies with chain of responsibility (CoR) concerns, says Bill Ambrose, Executive General Manager for Measurement at Diverseco. The first are drive-on vehicle weighing solutions, and the second are onboard vehicle weighing solutions. Both are getting – and should get – more and more relevant as requirements and expectations around CoR evolve, he says. While Bill notes that recent changes to national laws and regulations have “solidified” CoR requirements in greater detail, the thrust towards greater CoR accountability is being driven by the industry. “Clients of ours want to be compliant for a multitude of reasons,” Bill says. “But the main three are, firstly, to be compliant against the letter of the law; secondly, both to be and be seen to be a good corporate citizen who is looking out for workers and for others throughout the supply chain network; and third, to avail themselves of the greater efficiencies and returns on investment that you get with CoR compliance.” One factor that Bill says is sometimes overlooked is that proper CoR compliance actually delivers positive benefits other than simple risk mitigation. “One of the things that our solutions for CoR delivers is greater carrying
capacity,” he says. “If a customer is utilising a CoR solution, some states will actually allow them greater carrying capacity. So, if they’re using a tradeapproved weighbridge or if they’ve got an approved or recognised measurement device on board, it will allow them to have higher actual group loads depending on the scheme. It also gives the client the ability to be able to load to capacity as well. Rather than running around at 85 per cent load – because they’re worried about being tested and fined or being overloaded and a vehicle having an accident – with our CoR solutions it allows those companies to be able to run much closer to capacity because they know that they’re just safely under capacity.” This can make a literal truck-load’s worth of difference. “When transporting goods from A to B, some clients have realised they can get away with 10 rather than 11 trucks – because the space on board is being utilised optimally as well as safely,” he says. In keeping with this move to greater emphasis on CoR, there are growing greater pressures – both on the legal enforcement end as well as from supply chain partners – to ensure standards are met. “I’ve definitely seen a move on the east coast towards state roads authorities becoming more proactive,” Bill says.
“Whether it be in fixed locations or visiting remote areas – roads authorities are doing a lot more vehicle testing. “And on the other side, suppliers are finding that they can’t keep going to sites and meeting their contractual obligations if they’re constantly delivering overloaded trucks. Take, for example, a big supermarket retailer. They get a multitude of suppliers coming to their stores. If a supplier isn’t delivering within the bounds of the legislation, that supermarket can turn around and say, ‘We’re not accepting your product on site anymore.’”
THE RIGHT CHOICE Gregor MacNamara, National Product Manager for Weighbridges at Diverseco, says that customers will consider getting a weighbridge for one of two reasons. The first reason is measuring for trade – a customer is trading based on the value of what they’re measuring. The second is for CoR compliance. But Gregor notes that Diverseco is interested primarily in ensuring that the customer gets the right product – whether weighbridge or otherwise – for their purposes. “We have a range of products when we talk about weighbridges,” Gregor says. “The weighbridge is a great product, and the right type of weighbridge can meet both trade and CoR requirements. But
Pit and semi-pit weighbridges are designed for use in narrow spaces.
MHD FEBRUARY 2022 | 21
MHD SUPPLY CHAIN
Above-ground weighbridges are a commonly sourced solution for accurate truck weighing.
it’s not the only solution and may not necessarily be the right solution for a given application.” He notes that weighbridges – essentially large scales for weighing trucks – have not changed fundamentally over the last 100 years, but what has changed are the “smart” capacities attached to them. “The electronics, the smarts, the data you can get from weighbridges – that has changed,” Gregor says. “And Diverseco is a leader in that regard.” But while Diverseco can build extremely sophisticated weighbridges for complex operations and their high data requirements – Gregor cautions that they’re not necessary for everyone. “If your only requirement is checking axle group weights, there might be better solutions, such as our weighin-motion scales – where you drive your vehicle over the scale at a slow speed and it measures the weight. It’s not trade-approved, but it’s accurate enough for CoR,” he says. “Or you might use axle scales – which are essentially weighbridges, but they weigh only one axle group at a time.” To install a weighbridge, Gregor says, customers need space enough for three times the length of the weighbridge. “If you’ve got 40-metre B-doubles or B-triples, that means you need 120 metres of space – and not everybody has that,” he says. “So, what we offer is the best solution for the customer. When someone comes to us and says, ‘I need a weighbridge for COR’, our first question is, ‘That’s great that you’re thinking about the issue, but first let’s see if there are other ways of solving your unique challenge before we consider the weighbridge option.’” Bill Ambrose notes that Diverseco has a competitive advantage in the field 22 | MHD FEBRUARY 2022
“
We are a genuine integrator and solution provider,” Bill says. “We run the full gamut of project management. We look upon understanding what the application is and what is the best solution we can deliver for a client so they can realise success. We have a holistic approach and can tailor and customise precisely because we design and manufacture ourselves.
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because, while it is proudly an Australian owned and operated manufacturer, it can also import solutions from around the world. “We are a genuine integrator and solution provider,” Bill says. “We run the full gamut of project management.
We look upon understanding what the application is and what is the best solution we can deliver for a client so they can realise success. We have a holistic approach and can tailor and customise precisely because we design and manufacture ourselves. We’re in the luxurious position of having every major weighing company supplier around the world wanting to supply us equipment. If we believe something is best for the Australian market, it’ll be on our shelf within about six weeks.” Both Bill and Gregor agree that whether it’s a weighbridge or something smaller, it’s important to talk to the right people, as it’s an area where “off the shelf” solutions can easily be oversold. Indeed, Bill points out that weighbridges are not the only chain of responsibility solution, and that Diverseco is interested in assessing which weighing and measuring solution is appropriate for the business now and in the future. “A scale that weighs a pallet is still a chain of responsibility solution,” he says. “A forklift that has a weighing system on it is still a chain of responsibility solution. Sure, we would love to supply a quarter-milliondollar weighbridge to somebody. But the reality is, if they’re packing the same thing day-in, day-out, then maybe all they need is to weigh the pallet correctly.” “We’ve been in the business for about 150 years,” Gregor concludes. “We have a lot of experience in a lot of industries across different jurisdictions. Diverseco has really carved out a name as a company that builds great products and that you can trust to provide the best unique solution with the backing of a wealth of experience.” ■
Diversco can tailor weighbridge solutions because of its manufacturing capability.
Demand for Industrial & Logistics Space Continues to Climb. Australia’s I&L sector continues on an upward trajectory as national vacancy rates hit a historic low. Scan the QR code to unlock the latest insights in CBRE’s Industrial & Logistics H2 2021 Vacancy Report.
MHD SUPPLY CHAIN
IoT MEETS PARCEL DELIVERY EXCELLENCE Nation-wide small parcel delivery specialist, CouriersPlease, recently solved the problem of lost and underutilised delivery cages during a crucial period of rapid growth. MHD speaks to Phil Reid, Chief Operating Officer at CouriersPlease, and Zorawar Singh, Head of Core Product at Optus Enterprise, to discover why Thinxtra’s Internet of Things offering was not only the best – but the only – solution on offer capable of achieving this result.
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ouriersPlease (CP), founded nearly four decades ago, is in the midst of an exciting new period of growth in Australia. The metropolitan small parcel delivery specialist has continually grown and thrived over the decades since its inception – today boasting a network that provides nationwide coverage. The company services Australians through its independently owned franchisee fleet of couriers, with more than 750 franchisees and 300 delivery partners across Australia. “I think a major reason we’ve been so fortunate in the success we’ve enjoyed is our franchisees,” says Phil Reid, Chief Operating Officer, Couriers Please. “Our franchisees own their businesses, bring on local customers, and know the people, geographies, and cultures in which they operate.” Recently, CP was awarded the number one ranking in the prestigious Canstar Blue 2021 Most Satisfied Customers rankings in the small business courier services category.
WHAT WAS CP’S NEW CHALLENGE? The company utilises parcel cages to hold freight – and has roughly 3500 of them in constant movement across the country. Rapidly growing demand for its service meant it also had to rapidly acquire more cages. The problem that accompanied this development was that CP was simply losing too many of these cage assets. While losing cages was not a new phenomenon, the costs of solving this problem had previously outweighed the 24 | MHD FEBRUARY 2022
(L–R) Nick Lambrou, CEO, Thinxtra; Phil Reid, Chief Operating Officer, CouriersPlease; and Taba Managheb, Optus Enterprise.
costs of such asset losses. But with each cage costing $1000, such losses would become increasingly unsustainable. This is why fixing the lost-cages problem was imperative. Lost cages not only drain financial resources but create inefficiencies and knock-on effects that could negatively impact customers in future. “We’ve lost literally hundreds of these cages over the years,” says Phil Reid, Chief Operating Officer at CouriersPlease. “Whether that’s due to theft, or cages left unaccounted for.” To solve this problem, three companies – CouriersPlease, Optus Enterprise, and Thinxtra, Australia’s only Internet of Things (IoT) telco and enabler of Massive IoT– came together and were able to solve CP’s cage-loss problem with a cost-effective and
sustainable long-term IoT solution, utilising fit-for-purpose tracking devices, which are securely attached to the parcel cages and connect to Thinxtra’s pathbreaking 0G network. The result? No more lost cages.
A NEW SOLUTION FOR A NEW SITUATION Zorawar Singh, Head of Core Product at Optus Enterprise, says that CouriersPlease approached Optus for consultation and advice on how CP could put an end to its increasingly detrimental asset losses. “Optus Enterprise and CouriersPlease already had a well-established relationship,” says Zorawar. “But we pride ourselves on our flexibility in helping clients solve new problems. We don’t take them for granted. At a high
MHD SUPPLY CHAIN
level of analysis, the solution would be some form of asset tracking. But the challenge is making it cost effective and – moreover – cost effective with respect to the precise asset you’re tracking and the precise purposes for which it is used.” Zorawar notes that tracking devices come in myriad varieties and fall within a broad price range. For example, some sophisticated tracking devices might cost $400-$500. “Paying $500 for a tracking device on an asset that’s valued at $1000 doesn’t make sense – the cost is not justified by the asset’s tracking requirements,” Zorawar says. “When conceptualising a sustainable solution, you must zoom out to the big picture to grasp what information you need on or from your asset – and whether those needs are likely to change or remain stable as you advance-plan for the next five or 10 years. We then asked the question: ‘What information do we want about these assets, and what information do we want from them?’ For parcel cages, the primary objective was to track their locations and communicate that information back to user dashboards. To provide the right IoT solution, Optus Enterprise partnered with Thinxtra, operator of the 0G network which – powered by Sigfox technology and dedicated to the IoT – is designed to transmit small amounts of information from connected IoT devices across vast distances. Since only small amounts of data were to be transmitted – simply the location of a cage – this was an elegant solution that provided CP with country-wide coverage with low energy consumption and at low cost. The battery powered IoT location tracking device lasts up to five years, while maintaining the perfect data update frequency for CP’s needs, Zorawar says. As the only national, public 0G network operator in Australia, Thinxtra provides a unique service by connecting large volumes of distributed, non-powered physical assets to a low power, low-cost, long-range network. “There is no need to build and maintain network infrastructure, he says. “Thinxtra has it ready to go.”
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People forget how quickly technology improves and prices drop. IoT tech is getting better and better and more cost-effective. We’re only scraping the surface of its future potential. To be the only IoT 0G telco in Australia tells you something important about Thinxtra’s culture. They’re looking way ahead over the horizon – and that’s exactly the kind of company you want to be working with.
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Zorawar says that collaboration with valuable partners is indispensable: “Optus offers a strong value-add range of services on top of our basic network assets. That’s why collaboration is indispensable. It isn’t a simple vendorbuyer binary relationship anymore. Optus’s priority is flexibility and delivery, so we’ve built an amazing partnership ecosystem – partnering with those offering the most unique, innovative solutions on the market. “If we didn’t have this partnership with Thinxtra, our team could not have solved CouriersPlease’s problem in a cost effective manner. The alternatives would have been more expensive, less flexible, less scalable, less user friendly, more difficult to implement. Our partnership ecosystem is something Optus firmly believes in, and we are always seeking out the best players in its space.”
MISSION ACCOMPLISHED Phil seconds Zorawar’s point about the primacy of collaboration. “Working with Optus means you can work with and through their teams, their expertise, and their relationships. “I don’t think it’s an accident that companies like Thinxtra are simultaneously highly collaborative in their culture – always attending to our
needs, not foisting a one-size-fitsall solution on us – as well as highly creative, technologically speaking. Openness and attention to new fixes for new client problems breeds innovation. That’s why Optus partners with them. Off the strength of the pilot’s success, CouriersPlease is now rolling out the IoT solution” “We actually expect to lose zero cages going forward,” Phil continues. “From hundreds lost over recent years to losing zero in a matter of months. That’s the difference we’re looking at. The savings from not losing those cages easily outweigh the cost of implementing Thinxtra’s solution. But on top of loss reduction, it optimises our processes because we can take a proactive approach to cage retrieval and targeted deployment. As we scale up, we’ll add more cages, get more use out of them – because they won’t be lost somewhere, unused – and we’ll lose none of them.” While IoT implementation is different for every company, Phil is eager to dispel the notion that it’s unnecessary or too expensive, as many assume given its scale and relative novelty in the Australian context. “People forget how quickly technology improves and prices drop. IoT tech is getting better and better and more cost-effective. We’re only scraping the surface of its future potential. To be the only IoT 0G telco in Australia tells you something important about Thinxtra’s culture. They’re looking way ahead over the horizon – and that’s exactly the kind of company you want to be working with.” Nick Lambrou, CEO, Thinxtra adds that Thinxtra’s IoT solution in this case is one of many examples of the company’s passion for creating efficiencies that enable greater sustainability, too. “We are passionate about green tech creating a more sustainable world,” Nick says. “Partnering with leaders such Optus Enterprise and Couriers Please, who share the same values and practise true collaboration, allows us to achieve this. Working together we created a shared outcome that truly supports ESG goals while delivering economic and customer service benefits.” ■ MHD FEBRUARY 2022 | 25
MHD INDUSTRIAL PROPERTY
LOWEST I&L VACANCY RATES IN MODERN HISTORY Australia’s Industrial & Logistics vacancy rate has dropped to its lowest point in the modern era. CBRE I&L experts explore this phenomenon affecting all major markets across Australia.
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otal I&L vacancy rate across Australia’s five major cities has dropped to a historic low of 1.3 per cent as national net absorption surpasses 2 million sqm, new CBRE research shows. Since the second half of 2019 (prepandemic) the national vacancy rate has been trending down, from 6.3 per cent in the second half of 2019 to a record low 1.3 per cent as at second half of 2021 (data up to and including December 1, 2021), demonstrating strong occupier growth and activity within the sector. Through the six-month period across 1H2021 and 2H2021 the national net absorption of 4000 sqm-plus industrial assets was up 30 per cent to 2.38 million sqm when compared to the first half of the year. The Sydney was the exception: experiencing a decline in net absorption due to lack of stock availability. “Demand for industrial and logistics space continues on its upward trajectory, with the national vacancy rate sitting at a historic low, underpinned by stable, long-term factors, which is driving significant rental value uplifts across Australia,” says Sass J-Baleh, CBRE’s Head of Industrial & Logistics Research. “The Sydney and Melbourne markets are leading the country with respect to occupier activity and have recorded year-on-year rental growth of six per cent and four per cent, respectively, for super prime grade assets. “The significant growth comes as Australia’s e-commerce penetration rate hits a record 14 per cent. This mirrors US market conditions, which experienced strong rental growth for industrial and logistics assets when 26 | MHD FEBRUARY 2022
their e-commerce penetration rate reached 14 per cent.” CBRE’s Industrial & Logistics Vacancy Report for the second half of 2021 highlights that 90 per cent of national occupier movements are due to tenant expansion and new space requirements – not simply due to relocation purposes. Occupier activity in Melbourne remains the strongest in the country, representing 50 per cent of national total gross take-up over the past 12 months. Even though new supply in 2021 is just over double the longterm average (at 481,600 sqm), net absorption of space has been positive – totalling 860,000 sqm for 2H21 alone. As a result, vacancy across most Melbourne precincts has fallen. Sydney’s strong occupier demand and limited supply of new developments has led to significant rental value uplift of 5.7 per cent over the past 12 months and lowering incentive levels (now averaging 13 per cent). While below 2019 levels, Brisbane’s tenant demand over the past 12 months remains robust with around 560,000 sqm of positive net absorption recorded, with demand driven primarily by wholesale/retail trade occupiers, transport operators and manufacturers. Sydney has the lowest vacancy rate in the country, falling by a full percentage point to 0.4 per cent, with net absorption over 2H21 remaining strong at around 548,000 sqm, while Perth recorded the largest decline in vacancy rates (-2.5 per cent) to 1.8 per cent – just above the national average. The vacancy rates in Sydney, Brisbane and Perth are 0.4 per cent, 2.30 per cent and 1.80 per cent respectively, with Adelaide’s dropping just below 2.0 per
Cameron Grier, Regional Director Industrial & Logistics Advisory and Transactions Services, CBRE.
Sass J-Baleh, Head of Industrial & Logistics Research, CBRE.
cent – almost half that reported in 2H21. “Tightening vacancy has seen many occupiers fighting it out to secure the last remaining warehouses to secure their supply chains,” says Cameron Grier, Regional Director Industrial & Logistics Advisory and Transactions Services. “This competition has meant strong net effective rental growth for owners in the most tightly held submarkets, with many recent deals negotiated with no incentives. 12 months ago incentives in such buildings would have been 15-20 per cent. “With occupiers looking to grow their omni-channel offering, we’ve seen a surge in enquiry outside the major markets. With retailers wanting to have both a geographic presence and the
MHD INDUSTRIAL PROPERTY
Source: CBRE Research
Figure 5: Net Face Rental Growth, Super Prime (year-on-year).
ability to control their own warehouses, vacancy fell in Queensland, South Australia, and dramatically in Western Australia during 2H21. “The supply/demand equation means 2022 could be a great rental growth year for landlords that own assets in these tightly held markets.” “E-commerce continues to be transformational across all Australian markets,” Sass J-Baleh adds. “While warehousing continues to have the biggest up-take of space, the retail sector has climbed to be the third highest industry sector driving demand for industrial space in Australia.” ■
due to an insufficient supply of building materials. “Occupiers are committing to speculative stock sooner, and over 100ha of pre-lease stock in Kemps Creek region has now been committed to. Land rates have also strengthened in all markets by as much as five to six per cent within six months in some markets, primarily due to underlying leasing demand. “Benchmark rates are being achieved in all precincts, and several recent transactions are likely to facilitate new multi-level sites in South Sydney, the Central West, and South West precincts.”
CITY OVERVIEWS SYDNEY
Vacancy: 0.4% Net Absorption: 548,000 sqm “The NSW leasing market has continued to tighten with sustained e-commerce demand, as well as retailers and 3PLs needing to accommodate buffer stock due to supply chain constraints,” says Michael O’Neill, Managing Director, Western Sydney, Advisory & Transaction Services – Industrial & Logistics. “Supply has been unable to keep pace with demand given a lack of speculative stock which was also delayed due to the most recent COVID lockdown. Insufficient speculative stock and an increasing rate of renewal has seen vacancy rates fall and will continue to decrease into 1H22. Some developers are also expecting further upward pressure on rents given the increasing costs of construction
MELBOURNE
Vacancy: 1.3% Net Absorption: 860,000 sqm “Vacancy rates continued to fall, which resulted in some effective rental growth across all precincts, while most pronounced in the South East,” says James Jorgensen, State Director, Victoria, Advisory & Transaction Services – Industrial & Logistics. “There is a significant amount of speculative development supply due to be delivered across Victoria from 2H22, however occupier requirements continue to surge meaning we expect this speculative supply to be absorbed without impacting market rates. “A continuing market trend is the appetite of institutional investors who are now buying speculative developments, off the plan, via fund through structures with vacant possession.”
ADELAIDE
Vacancy: 1.64% Net Absorption: 200,000 sqm “The SA Industrial & Logistics market continues to push ahead with elevated demand from tenants, occupiers, developers, and investors,” says Jordan Kies, State Director, South Australia, Advisory & Transactions Services – Industrial & Logistics. “The SA statistics continue to show a decreasing vacancy rate and we therefore expect to see more speculative build activity throughout 2022, capitalising on the elevated levels of demand. “During 2021 we have seen the smaller infill unit developments come out of the ground and on the back of their successes, as well as the low vacancy, we are now expecting to see larger format warehouse developments come to fruition during 2022 and beyond.”
PERTH
Vacancy: 1.80% Net Absorption: 400,000 sqm “Continued tenant demand has seen the Perth vacancy rate drop to a historical low of 1.8 per cent, resulting in an increase in rental rates for super prime and prime assets,” says Jarrad Grierson, State Director, Western Australia, Advisory & Transactions Services – Industrial & Logistics. “Tenants are being driven by continued confidence and activity in the state’s resource and mining sector, as well as demand from e-commerce tenants. Current pre-lease metrics are placing upward pressure on both pre-lease and existing market rents, with incentives continuing to tighten.”
BRISBANE
Vacancy: 2.3% Net Absorption: 560,000 sqm “Leasing has been strong with take up of speculative developments continuing, seeing circa 326,000 sqm of take-up in 2021 YTD across the industrial leasing market,” says Peter Turnbull, State Director, Queensland, Advisory & Transactions Services – Industrial & Logistics. “Highlights would include Dexus at its Freeman Central estate, Capitaland at its Green Road, Crestmead development and GPT at Wembley Business Park estate. All these developments were leased close to practical completion.”
MHD FEBRUARY 2022 | 27
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MHD SUPPLY CHAIN
FULLY INTEGRATED ORDER MANAGEMENT enVista CEO Jim Barnes discusses the company’s development from supply chain integrator to technological innovator, and the benefits that accrue from enVista’s unified commerce platform and its well-integrated OMS microservice. Enspire Commerce has the requisite solutions omnichannel organisations need to unify commerce across their enterprise.
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nVista has come a long way since it was founded in 2002 by Jim Barnes (enVista CEO) and John Stitz (enVista Chief Revenue Officer) as a consultancy and systems integrator. Jim says enVista’s guiding principle has always been “delighting the consumer and improving customer experience,” and in practice, that has meant enVista has grown in ways that couldn’t have been anticipated two decades ago. As new challenges emerge, enVista has navigated its clients towards new solutions. Perhaps the signal achievement in the company’s development – the key turning point – was the creation of its unified commerce platform, Enspire Commerce. “After serving supply chain clients and watching them struggle with order management integrations that were
costly and took years to integrate, I knew there had to be a better way,” Jim says. “And that’s how we launched our Unified Commerce Platform – the first in the industry strategically built from the ground up through microservices and with multi-tenant capability to rapidly integrate. Our first client was a multibillion-dollar global retailer that understood and bought into the vision and still uses our platform today.” Enspire Commerce includes the requisite solutions omnichannel organisations need to unify commerce across the enterprise and enables buy, fulfill, track and return anywhere commerce [allowing customers to return a product the way they choose], says Jim. “Its potential integrations – which can be leveraged as point solutions or in combination – include order orchestration, inventory availability,
omnichannel fulfillment, customer care, dropship [where a store doesn’t keep a product instore but rather purchases it from a third-party and has it shipped directly to customer], marketplaces, subscriptions, point of sale/mobile point of sale, product information management, shipment experience management, business intelligence, and artificial intelligence and machine learning.”
THE BEST IN ORDER MANAGEMENT Jim says that enVista’s Order Management System (OMS) – a microservice that can sit inside of the Enspire Commerce Platform – is a cloud-native, highly extensible OMS that rapidly integrates to improve the customer experience and omnichannel profitability. MHD FEBRUARY 2022 | 29
MHD SUPPLY CHAIN The key behind our OMS is to think of it as an ATM – an integrated system that deals with multifarious variables and conditions – connected to a bank,” he says. “It doesn’t matter what ATM you use, or what bank you use. The piping and the data flow behind the scenes are very important. The translation of the data, the routing of the data, the type of data, the file format, the communication protocols, the security of the data – all of this is extremely important because speed and ease of integration impacts time to value.” The four pillars of enVista’s OMS – inventory availability, order orchestration, omnichannel fulfillment, and customer care – integrated into Enspire Commerce allow for an agile tech stack that expedites the time taken from customer purchase to customer enjoyment of the product, Jim says. By partnering with enVista, companies can avail themselves of the this seamless integrative capacity as well as the knowhow that comes from 20 years of firsthand experience. “The OMS really saved the day for some of our retail customers during lockdown,” Jim says. “Because of its ability to scale buy-online-pick-up-instore and ship-from-store functions, its quick integration, its focus on order profitability, and the capacity for dropship to expand item assortment without added inventory carrying costs, it had the structural flexibility to deal with the sudden shock of the pandemic.” With enVista’s cloud-native OMS, Jim says, users can connect to downstream data inputs. “So, what you now have is knowledge of where inventory is sitting in the network,” he says. “Our OMS takes an order and asks, ‘How best to allocate, fulfill, and orchestrate it across all the inventory we have? Do I ship it from a store? Do I ship it from a 3PL? Do I split the order? How do I provide lead times and inventory availability back to an e-commerce platform?’” Broadly speaking, enVista’s OMS provides visibility on inventory available-to-promise across the enterprise and how that inventory can be deployed to accurately promise and deliver on time to the consumer from a transit time perspective. Building a sophisticated OMS is a feat in itself, but Jim says the real achievement was to build an OMS platform as a micro-service that fits into 30 | MHD FEBRUARY 2022
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The OMS really saved the day for some of our retail customers during lockdown. Because of its ability to scale buy-onlinepick-up-in-store and ship from store functions, its quick integration, its focus on order profitability, and the capacity for dropship to expand item assortment without added inventory carrying costs – it had the structural flexibility to deal with the sudden shock of the pandemic.
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the broader Enspire Commerce Platform. “That integration framework allows us to decrease time and add a lot more value and ultimately strengthen the governance and broad-view oversight controls around those previously segregated or disparate systems without incurring additional costs. To return to my ATM example – we figured out how to connect all the ATMs to all the banks.” Order management integration is a “heavy lift”, according to Jim, because most retailers and distributors are already using a network of applications. “Think of all of the systems required to run a retail enterprise. They include finance, point of sale, warehouse management, tax payment, store fulfillment, 3PL connections, EDI [Electronic Data Interchange], product information management tools, pricing engines, promotions engines – the list goes on,” he says. “What we’ve accomplished with enVista’s Enspire Commerce is to use an integration framework as the API layer – but more than just an API layer. We can use it to move data across the network and then build micro-services – like OMS – on top of that.” The API layer is different insofar as – far from being simply a user-friendly point-of-contact portal – it actually integrates and allows the
Jim Barnes, enVista CEO.
easy transfer of data across various connected systems in a way that few competitors offer. Jim believes that enVista’s Enspire Commerce Platform and its OMS have great potential in the APAC market. “We go beyond what’s currently in the market because of the extensibility we have; but more importantly – the level of complexity we can deal with beyond just retail. We can handle direct consumer commerce as well as wholesale B2B and we have a level of sophistication in our OMS that is unrivalled. For example, we are highest rated for order orchestration, data analytics and reporting and our delivery model. And we are the only OMS that natively includes all of the capabilities required for dropshipping. “From our research and conversations with companies in APAC, the market is largely untapped and is desperately looking for ways to drive a better customer experience through a next-generation, cloud-native order management system as part of an agile Unified Commerce Platform – like Enspire Commerce. Our team at enVista is excited to fill this market gap and to help omnichannel organisations rapidly accelerate omnichannel transformation and drive customer experiences that foster brand loyalty and competitive advantage. We have built out an entire team in APAC with local resources dedicated to helping solve the unique and complex omnichannel challenges for companies in APAC, and we look forward to helping our clients achieve their target business outcomes with the software and expertise they need.” ■
FASTPICK High operator efficiency and easily scalable for unpredictable growth Through multidirectional movement and sequencing, Vanderlande’s shuttle-based automated storage and retrieval system (AS/RS), ADAPTO, delivers goods in the appropriate order to the correct picking station. This makes order fulfilment fast and accurate, enabling same-day deliveries. Do you want to know more about our FASTPICK solutions? Contact our Australian office at sales.au@vanderlande.com or call +61 1300375028
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MHD INDUSTRIAL PROPERTY
A NEW WAVE OF DEVELOPMENT OPPORTUNITIES A new flexible warehouse facility is set to become available in Port Adelaide’s premier distribution centre. MHD talks with Quintessential Equity and Leedwell about how intelligent warehouse development can help solve the lack of available space on the market.
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eedwell has been a major player in the South Australian Industrial and Logistics market for over ten years. Under the guidance of Partner Steve Smith, the same four-agent industrial team has been closing deals together for eight years – a testament to their synergy as a team, according to Henry Treloar, Leedwell Director – Industrial. “We cover all sectors of the market in terms of industrial size range,” Henry says. “We’re an established team. Instead of being competitive with each other we are out on the ground, focusing on deals. It’s something that we pride ourselves on, and we have a strong market share in Adelaide.” Recently, supply has struggled to keep up with demand for warehouse space in the South Australian market, especially within 10 kilometres of the Adelaide CBD. A myriad of recent studies indicates the e-commerce shift continues to gather steam, suggesting the demand for automated fit-outs won’t dry up any time soon – if ever. Henry notes property developers like Quintessential Equity are beginning to read this trend in the market, making their own room for warehouse operations. “It’s something we haven’t seen in our market for close to seven years now,” he says. “The groups who are speculating buildings is exciting because we do have a shortage of quality facilities in our market.”
PORT ADELAIDE DISTRIBUTION CENTRE Since acquiring the logistics estate in 2019, Quintessential Equity has
An outdoor café outside Warehouse M will be the first in the estate.
With 12 separate buildings, PADC occupies 319,300 sqm of land.
retained and brought on a number of major logistics players. Julian McVilly, General Manager - Asset Management of Quintessential Equity, says through working with Leedwell and CBRE as leasing agents, the available properties on site are now 100 per cent occupied. “We initially had an expectation we were going to have large vacancy,” he says. “But Leedwell’s relationships and experience have been fundamental with shoring up any vacancy.”
The estate includes a series of office warehouse buildings, providing a variety of applications to suit the needs of medium to large tenancy requirements. With areas ranging from 2516 sqm to 20,770 sqm, some of the estate’s features include: • Multiple at-grade loading access points • Generous internal road networks and multiple road crossovers MHD FEBRUARY 2022 | 33
MHD INDUSTRIAL PROPERTY
Located alongside the Port River Expressway, PADC is superbly positioned for efficient distribution.
• Bedford St gazetted for B-double and road-train (36.5m) truck movement • Comprehensive traffic management for safe movement and loading/unloading • Fully fenced with CCTV security cameras to common areas in the estate • Security patrols are also undertaken overnight • Significant truck parking and loading areas Quintessential Equity signed its biggest ever industrial deal in January last year, securing a deal with VISY Logistics for 44,000 sqm inside the centre. Steve Smith, Partner at Leedwell, says the agency knows PADC like its own backyard after 13 years of leasing deals. “Having established a relationship with Visy and some of its consultants over a number of years and transactions, we were made aware of a warehousing requirement one of Visy’s business lines needed,” he says. “Various discussions and options were presented, and as negotiations progressed, other Visy businesses were brought into the equation. Leedwell coordinated the negotiations and added value through its understanding of the forthcoming vacancies at the estate and relationships with the key stakeholders.” The deal was one of the biggest lease transactions in the Adelaide market for an existing building. “Significantly, it soaked up a large amount of space that would potentially come available and therefore didn’t oversupply the market,” Steve adds. “If that had happened, we may have been in 34 | MHD FEBRUARY 2022
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We cover all sectors of the market in terms of industrial size range. We’re an established team. Instead of being competitive with each other we are out on the ground, focusing on deals. It’s something that we pride ourselves on, and we have a strong market share in Adelaide.
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a position where rentals declined until the space was taken up again.” Quintessential Equity is looking at enhancing its existing industrial asset holdings to meet the current market demand and endurance. The expansion of a new warehouse – “Warehouse M” – and accompanying amenities and infrastructure networks will allow the Group to increase the gross lettable area of the facility.
WAREHOUSE M Warehouse M is a new facility offering highly functional and flexible spaces, with construction set to finish by the end of this year. The site offers flexible warehouse sizes from 1540 sqm to 4900 sqm, with the property able to be
divided into three tenancies. One constant over the COVID-19 pandemic has been that location is king for a logistics and trade hub. Warehouse M gives easy access to container facilities, general freight, bulk handling and rail intermodal infrastructure. “The location is a big part of why it is Adelaide’s primary logistics centre,” Julian McVilly says. “The estate offers direct access to the Port River Expressway and connects you to South Australia’s major arterial road network, while only being seven kilometres from the Port of Adelaide.” The space offers drive around access for B-Doubles, ESFR sprinklers, eight metre minimum clearance, 10 auto roller shutters, 890 sqm of canopy, 2090 sqm of hardstand, secure and ample parking, as well as industry zoning – permitting a wide variety of uses. “Having more of a retail potential is a difference maker for the estate,” Julian adds. “Without amenities and shops close by, having a new café and retail ability will add to the centre and appeal to different users within the logistics and e-commerce space.” Henry Treloar says the Adelaide market can expect more industrial developments going forward. “Some of the biggest institutions have come back to our Adelaide market,” he says. “Smart organisations like Quintessential Equity have experienced what’s happening interstate and are adapting accordingly to the Adelaide market.” ■
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MHD SUPPLY CHAIN
2022 PREDICTIONS: KÖRBER SUPPLY CHAIN LOOKS AHEAD L
Tech experts from leading global technology provider Körber share their predictions for this year.
ast year was one of the most challenging on record for the global supply chain. As the pandemic continued to disrupt operations and supply chains throughout the world, there was no relief or return to normal as predicted. In many ways, 2021 was more challenging than 2020. We had to learn to live with the virus and try to keep industries and people moving and productive while we faced disruption and turmoil like we’ve never seen before. The global chip shortage has challenged some of the world’s largest car manufacturers and tech providers – including Tesla, Apple and Toyota – and it continues to wreak havoc in the automotive industry. Research conducted by Alix Partners has revealed the ongoing global shortage in semiconductors is on track cost the world’s automakers US$210bn – and counting. As consumers, we’ve found ourselves getting used to empty supermarket shelves and delivery delays, and as professionals we’ve had to grapple with ongoing shipping container shortage and labour availability challenges. As a result, supply chain organisations are turning to technology at rapid pace, and as an organisation 2021 was a record year of investment and development for Körber. At the end of 2021, the leading tech provider announced a strategic partnership with KKR, a leading global investment firm. The partnership will see the two companies build a global supply chain software champion as KKR acquired a significant stake in Körber’s supply chain software business. As structural trends and market forces have amplified the need for digital solutions to handle increased volume and overcome greater supply chain complexity, this
As organisations look to reduce operational costs amid labour challenges, agile automation can boost efficiency and resilience.
investment will assist Körber in its growth plan to build a global champion in supply chain software. Development, innovation, and growth are core values for Körber Supply Chain, as Chief Technology Officer Sean Elliot said at Körber’s Elevate APAC Conference last year: “We’re constantly looking at all our products and services and asking ourselves: ‘What are we doing well and how can we help our customers in the future?’”
WHAT WILL 2022 LOOK LIKE? Leaders from across Körber Supply Chain Software’s team have shared their predictions for what opportunities and challenges supply chain organisations will face this year. MHD summarises the key supply chain trends from Nishan Wijemanne, Managing Director APAC; Sean Elliot, Chief Technology Officer; Tim Harris, Head of Project Management Office; Anthony Beavis, General Manager; Darren O’Connor, Director of Operations; Tarryn Edelstein, Client Manager and Claudia Ford, Client Manager at Körber Supply Chain and learns more about what they think 2022 will look like.
PEOPLE The pandemic has enhanced the squeeze the industry was already feeling around labour availability. As the Omicron variant continues to disrupt the retail and supply chain labour force, consumers are getting used to limited stock availability and delivery delays which are putting increased pressure on supply chains. All of this is happening alongside what commentators are calling the “great resignation” – where workers are quitting their jobs at historic rates due to a competitive labour market for candidates. Attracting and retaining great people within retail and supply chain will continue to be a challenge, but having the right team is critical to develop, manage and support these rapidly evolving industries. Technology can play a huge role in mitigating this challenge. Whether it be to enhance and speed up onboarding processes so the workforce can adapt to address shortages and particular peaks in demand, or to utilise robotic technology to maintain or MHD FEBRUARY 2022 | 37
MHD SUPPLY CHAIN increase throughputs when labour availability is low. Having access to a global network of talent is also becoming increasingly important in leadership roles and tech such as cloud infrastructure is playing a significant role in ensuring an organisation has a strong culture regardless of whether it’s a physical or virtual environment.
ARTIFICIAL INTELLIGENCE One of the standout tech developments for 2022 will be Artificial Intelligence (AI). As capabilities continue to develop in this space, having the ability to utilise machine learning to adapt to trends, peaks and challenges will be critical to success. As the technology has developed, AI can learn and respond to changes in the environment without any intervention at all. At Körber Supply Chain, we have vast amounts of data we can access in our systems and products. We can use this data to find patterns and make predictions on the future so we can be smarter, we can also use AI to facilitate real-time supply chain decision making. Another key area for AI is in helping Körber customers simulate and plan future operation – by utilising AI to create different scenarios based on the different technology options. Körber also continues to challenge the status quo with the development of gamification and AI powered support solutions, which are set to benefit user advocacy and also address maintenance and triage requirements on a real-time basis.
Having access to a global network of talent is also becoming increasingly important in leadership roles and technology solutions.
ROBOTICS AND ANDROID VOICE Mobile and agile robotics and Androidbased voice technology continues to play a critical role in a successful supply chain operation and the Körber team predicts that this will continue in 2022. As organisations focus on reducing operational costs and grapple with labour challenges, agile and mobile automation boost efficiency and resilience in an increasingly challenging environment. Android-based Voice technology continues to develop, and we will see more innovation in this product. More than 10,000 users leverage Körber’s Voice and Android-based voice technology on a daily basis, and it continues to gain popularity. This year will see more users migrate to Android as organisations also recognise they need multimodal devices to support efficient and adaptable workflows. As labour availability is scarce, Android voice technology can help attract and retain talent by ensuring that warehouse operators have the tools
Sean Elliott says development, innovation and growth are core values for Körber Supply Chain. to carry out their roles effectively and productively. Furthermore, training timelines for operations using voice technologies are a fraction of the time compared with traditional operational processes, and when a warehouse operator needs to interact with a robot, they can utilise voice to transition that workflow with little disruption to their day or throughput.
SECURITY AND THE CLOUD As more and more operations leverage cloud technology, Körber is developing its offering in this space – with three principles in mind. Firstly, speed – the team has been developing the solution to ensure that a customer’s time to value is immediate. Secondly, resilience and reliability. And thirdly, security: supply chains are an important but fragile element of overall business security, with particular reference to digital security. With this in mind, Körber has recently appointed a Chief Information Security Officer to support developments in cyber security and continues to enhance security in its cloud offerings.
UNIVERSAL CONTROL SYSTEM FOR ROBOTICS
Supply chain organisations are turning to technology at rapid pace.
38 | MHD FEBRUARY 2022
Demand from the market for more layers of workflow efficiency enablers in a single deployment has been growing at rapid speed. Based on years of in-house experience of warehouse digitisation, from basic Level 1 to fully automated Level 5 facilities, Körber is currently developing a RaaS (Robot as a Service) as well as a next-generation UCS (Unified Control System) strategy to optimise and manage humans, robots, and traditional automated MHE via a single unified software layer to further support our AMR capabilities globally. ■
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MHD SUPPLY CHAIN
AUTOMATION AND SUPPLY CHAIN REVOLUTION Internationally acclaimed supply chain consultant and author, Suman Sarkar, talks to MHD about his perspective on supply chain thinking and the proper role of automation.
“I
n supply chain, most things are relatively simple,” says Suman Sarkar, internationally renowned supply chain consultant, Founder and Partner at Three S Consulting, and author of the much-acclaimed 2017 book The Supply Chain Revolution. “We make it complex. And the same goes for automation – when it helps it can be useful, but if it doesn’t help the world will still go around.” Suman says that his training as an engineer has informed his perspective as a supply chain consultant – namely to distrust “assumptions” and to search for the “root cause” of problems before contemplating solutions. This carries over into his views on automation. “Everybody likes to hear about automation because there’s always a shiny new object that will get everybody’s attention,” he says. “But it isn’t always necessary.” This is because automation only addresses one of Suman’s two fundamental supply chain elements: effectiveness and efficiency. “People tend to confuse the two. Effectiveness is all about how well you’re doing your job – how well a supply chain can address customer needs. You can’t automate that. That depends on what unique customers you have, what the demand is, what unique supply situations you have, and how you plan to address it. Once a company or a business figures out how to be effective – how they can address customer needs – then efficiency comes into play. Automation has a role to play in efficiency – warehouse automation, finding in real time where your inventory is. But people tend to think that by doing automation in one place they will solve all their problems. It won’t. The fundamentals of supply
40 | MHD FEBRUARY 2022
The Supply Chain Revolution, by Suman Sarkar. chain must first be sorted, otherwise you’ll only be attempting to make an ineffective system more efficient. And it’s important to remember that automation doesn’t pay for itself when it’s not effective.”
THE SUPPLY CHAIN REVOLUTION Suman’s book The Supply Chain Revolution was written, he says, out of a sense of frustration. “We are not heading in the right direction with supply chain,” he says. “The book was a call for people to turn things around. That’s why I chose the word ‘revolution’. Were we heading in the right direction I might instead have used ‘evolution’.” The revolution Suman calls for is about getting back to fundamentals:
better connecting with and delivering service to customers. He says that a lot of supply chain thinking has been driven by complexity and a tendency to go for shiny add-ons while ignoring how companies can be more effective in getting goods and services to customers. In the upper ranks of companies, supply chain has often been “topdown” by catering to novel ideas for potential investors, at the expense of “bottom-up” consideration of what the actual customer is demanding. And imposing “solutions” from the top can lead to unnecessary use of automation technology. “Because automation is a tool for improving efficiency, not underlying effectiveness, it’s implementation is akin to using a hammer,” he says. “If you use the hammer for the right purposes, it will do good. If you use it for the wrong purposes, it can do a lot of damage.” He illustrates his point with reference to a client-discussion he once had around using Enterprise Resource Planning (ERP) systems. “In the late 1990s and 2000s all companies implemented ERP – it was a big deal,” he says. “ERPs were implemented to simplify the process, but mostly for financial controls. They lay down certain rules by which supply chain sourcing and procurement organisations should do things. But in the world of COVID – when we have significant problems with supplies – what we were finding is that all the rules and processes with the ERP were stopping the company from doing an effective job with their suppliers and building supply assurance. “We were saying, ‘Hey, you need to build up some inventory because you have no inventory in these areas,’ and the reply was, ‘But the ERP
MHD SUPPLY CHAIN system doesn’t allow us.’ My suggestion to them was, ‘Then throw away your ERP! Use Excel instead!’ “You cannot allow a tool to be the excuse for not having the right amount of supplies and shutting down because you can’t deliver products to your customers. By all means use automation – but strip back to the essentials and get those right first before re-introducing automation for greater efficiency.”
THE NEAR FUTURE IN AUTOMATION Suman notes that the most revolutionary gains automation has brought have come in the area that optimises the last mile of supply chain – in particular, advances in GPS technology and route optimisation. And it is in the field of the last mile that he predicts the take-up of one especially exciting new technology: flying cars. “One thing I don’t often hear people talking about is flying cars,” he says. “We hear a lot about self-driving cars, and about drones, but not flying cars. But it’s a great solution that will make things very easy to deliver in person in highly congested areas.” He notes that experimentation with flying cars is already taking place across the world – more or less leveraging drone technology on a larger scale. “These flying cars are somewhere between a helicopter and a car, where you can levitate, and go up as well as horizontal,” he says. “They can carry a lot, and they stop your dependence on roads.” The primary obstacle facing flying cars will be regulatory challenges across different jurisdictions, but ultimately Suman thinks the technology will win out because their underlying economics make sense. “I think the most exciting and rewarding application will be delivery in the last mile to consumers – because they can carry a lot of packages and because you retain the human element, the driver, that can navigate trickier delivery scenarios, like when a person isn’t home. A drone can’t do that. “We’re a few years out, but the technology is there. The main barrier will be regulatory approval. But once a technology has proven itself, everybody in industry falls in line pretty quickly.” By contrast, Suman is far less optimistic about the potential of driverless cars. It’s an effienciency play to replace driver with automation. There are multiple paths to efficiency, automating current mode of transportation is just one path. “The history of autonomous cars goes back to the early 2000s, especially the work sponsored by DARPA [the United States’
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Automation has a role to play in efficiency – warehouse automation, finding in real time where your inventory is. But people tend to think that by doing automation in one place they will solve all their problems. It won’t. The fundamentals of supply chain must first be sorted, otherwise you’ll only be attempting to make an ineffective system more efficient. And it’s important to remember that automation doesn’t pay for itself when it’s not effective.
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Suman Sarkar, Founder and Partner at Three S Consulting.
Defense Advanced Research Projects Agency] and done by Google. Google has spent a lot of money on it for a long time and is still struggling to make it commercially viable. The main problem is that the technology you’re using still goes on a road – with every imaginable type of obstacle that roads can throw up.” The computing power that is needed to help driverless cars navigate is extreme, and in the supply chain context the only real payoff is saving on labour expense – a delivery driver – while possibly incurring far greater expenses in terms of behind-the-scenes navigational technology and higher cost knowledge-intensive labour. “And what happens if the car breaks down?” Suman asks. “And what about the human function of delivering a product into a person’s hands? Or dealing with a more complicated hand-off? Or when a person isn’t home?” Suman thinks that the focus on driverless vehicles in supply chain again gives short shrift to what should be the ultimate focus: catering to customer needs. “From a customer perspective, with a driverless car you not only have to be home, but you actually have to go out to the car to pick up your groceries or food. How does that help from a customer perspective? That’s always where the question should come from. How is it helping the customer? The solution is burdening customers with more work and the financial benefits from customer perspective are questionable. If the customer is not seeing benefits, forget about it. They’re not going to buy it and the road to success is that much more difficult. However, if customer sees benefits with automation – i.e., it’s effective – then it has a better chance of success.” ■ MHD FEBRUARY 2022 | 41
MHD WAREHOUSING
SUCCESS THROUGH SAFETY
Jeffrey Triantafilo, Director of Systems & DC Design at Fuzzy LogX.
Warehouse designs and operations continue to change, but worker safety is as important as ever. MHD talks to Fuzzy LogX Principal Consultant Bas Schilders about current and future safety priorities for vendors, designers and warehouse managers.
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ix years ago, Principal Consultant Bas Schilders launched a new consultancy after years of working for some of the world’s largest automation vendors. He has since been able to build a team of “warehouse wizards” with an intimate knowledge of the solutions on the market. Fuzzy LogX puts extra effort into staying informed about the latest developments and works with complete independence from any vendor or property company. This freedom allows the team to focus in on the specificities of a project, make the most of relationships across the entire automation spectrum and as a result, provide solutions solely benefitting the customer’s needs and wants. Within that spectrum, safety is the cornerstone of everything Fuzzy LogX does. Fuzzy LogX consultants initially perform a walk-through of a warehouse site to gauge a business’s processes at a higher level, even 42 | MHD FEBRUARY 2022
before they sign as a customer. “Regardless of whether a business is already a customer of us or not, we will walk into any warehouse and look at it from a completely independent viewpoint and highlight anything we see that’s unsafe,” Bas says. “The most important thing is for all warehouses to be safe.” “We never want to hear in the news about a safety incident in a warehouse we visited that could have been prevented by highlighting unsafe situations.”
AUSTRALIAN STANDARDS Australia has a very high safety rating and there are many standards for almost every solution found in Australian warehouses. These standards apply across design, implementation, auditing, operating, and maintenance of a facility and form the basis for the Fuzzy LogX team to help keep facilities safe across the country. Bas notes that it’s often small details which are overlooked in operations.
“It can be anything – as simple as not maintaining sufficient space between a person and a forklift in an aisle, operators being exposed to a rack baseplate that’s missing a bolt or a beam missing a safety pin,” he says. “We are trained on what to look out for from a safety point of view in line with the Australian Standards.” After a mad rush to the end of the peak holiday season last year, Bas counsels warehouse managers to avoid any complacency entering a new year. As e-commerce continues to drive businesses, he adds the onus should be on taking regular safety checks. “A lot if it isn’t rocket science, Warehouse Managers can start by organising a weekly or fortnightly walk-through of their sites,” he says. “In the morning when people start working, have a simple safety checklist to check for any rack damages, or if any workers look like they are over-exerting themselves. If you’ve got obstructions in aisles leaving too little space for people,
MHD WAREHOUSING
it creates a safety hazard if you can’t get to the emergency exit. All these little things come into play. We can help set up checklists so it’s simple to keep on top of everything.”
SAFETY WITHIN THE TRADITIONAL AND AUTOMATED WAREHOUSE Within a more traditional warehouse environment, the most common safety risks are associated with materials handling equipment (MHE) which can result in someone being hurt by a moving object, according to Bas. This could be a carton falling down from height or someone being struck by a moving forklift, for example. The chances of racking system damage also increases exponentially when MHE is involved. Everyone is familiar with the blue light proximity lights but they don’t prevent operators from interacting with MHE. There are active proximity solutions from Europe and the US that signal a forklift operator when they are moving too close to workers, while vision camera systems can actually detect pedestrians in real-time and stop forklifts altogether. One system from Blaxtair has a response time of 300 milliseconds, stopping the vehicle when it detects a pedestrian. Bas says such technology is available on the Australian market, but uptake is slow. “It’s not as common here to adopt the technology because many businesses are leasing forklifts,” he says. “Unless the rental provider has the capability or is willing to invest in technology and modify the equipment, you’re stuck with what you have. If you don’t have the technology, you rely on your processes to be absolutely safe.” Entering a modern automated environment, there are more moving parts in different areas to consider. You have conveyors running at the same time as shuttles and ancillary equipment operating – machines all have to work in harmony with humans. This creates a different kind of safety issue, says Bas. “Automation creates lots of “pinching” hazards. When something goes wrong with automation, the consequences are usually significant. Fingers can be crushed in conveyor systems from workers trying to fix stoppages themselves to meet KPIs,” he says. “Simple process rules like
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Regardless of whether a business is already a customer of us or not, we will walk into any warehouse and look at it from a completely independent viewpoint and highlight anything we see that’s unsafe. The most important thing is for all warehouses to be safe.
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putting long hair up in a bun and not wearing a tie or loose jewellery around the warehouse can help prevent people getting caught in conveyors.” With more unsafe areas scattered around the warehouse in an automated environment, Bas has seen customers – and the industry as a whole – emphasise safety precautions. “It’s not just for when you design something, safety has to go across the design, the implementation of the system itself, then the operational side of running the system,” he says. “If you read the letter of the law and the standard as a designer, consultant or customer, you’re responsible for making sure that even at the end of the of the useful life of the solution, the equipment is designed to be safe to dismantle. So, you have to think 15 or 20 years into
the future and make sure that nothing will be built on top or around a system, making it unsafe to remove at the end of its life cycle.”
ERGONOMICS IN THE E-COMMERCE ERA Safety expands beyond physical threats caused by automation and MHE. Especially as e-commerce operations continue to thrive, businesses are having to design and arrange workplaces to fit different body types. A standard goods-to-person (GTP) picking station might be fine for an average body type, but adjustments for people’s height, arm length, weight and pre-existing injuries will help reduce the strain on workers’ bodies over time. Provisions like lift platforms can help staff adjust their working height at a GTP station, for example. “Standing at a station for seven and a half hours every day or carrying heavy objects overhead can be physically detrimental to people,” Bas says. “There’s a whole new level of business solutions that will have to cater for the whole spectrum of workers. The Australian standard requires solutions to be designed to cater for at least the 5th to 95th percentiles of the Australian population, which, if you think about this for a moment, are a lot of people, and all with different sizes and traits.” “Most people don’t read the standards, so Fuzzy LogX pride ourselves in understanding the parameters and consequences. We want to take it to the next level because we don’t want people to get hurt in any situation.” ■
A standard conveyor safety sign.
MHD FEBRUARY 2022 | 43
MHD SUPPLY CHAIN
THE IMPORTANCE OF TRACEABILITY John Szabo, Manager at GS1 Australia Advisory Services, explains how GS1’s Traceability standard builds on the non-profit’s pathbreaking work in developing universal barcodes and a shared language of commerce, and how the organisation can assist companies taking up and implementing traceability solutions through advice and assessment services.
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he name ‘GS1’ is iconic in international commerce. With a history stretching back almost half a century and a presence across more than 155 countries, the not-for-profit organisation has been indispensable in creating a world of uniform and robust barcodes and barcoding standards. While GS1 barcodes are the organisation’s foundational and most recognisable standard, the organisation has continued developing new standards with the ambition of becoming – as it says – “the global language of business”. Visibility of inventory and chainof-custody considerations have become more important in modern supply chains, says John Szabo, Manager, GS1 Advisory Services. That means proper traceability standards are vital to supporting supply chain integrity, whether assessed in terms of commercial efficiencies, ethical sourcing, combating counterfeit and substandard goods, or ensuring best sustainability practices. That’s why John is passionate and engaged in advocating for GS1’s Traceability standard. But what precisely is the GS1 Traceability standard, and how does it operate? “The traceability standard outlines the key pieces of information required to be captured and shared to enable enhanced end-to-end supply chain traceability,” John says. “Information such as the product, the associated batch code, manufacture dates and so on. The standard also sets out a framework for identifying ‘Critical Tracking Events’ and ‘Key Data Elements’. For example, I 44 | MHD FEBRUARY 2022
might be receiving products – a critical tracking event – and I capture the key data elements, or ‘KDE’ – of what I received, where I received it, from whom, when, and the process by which it was received.”
DEVELOPING THE GS1 TRACEABILITY STANDARD John says that the tools and concepts behind the traceability standard have existed since GS1 introduced the first barcode more than 45 years ago. Although GS1 has established a myriad of standards – global languages each tailored for the evergrowing sub-domains of practice, process and methodology affecting international commerce – John notes that the organisation’s standards can be separated into three basic components: ‘Identify’, ‘Capture’ and ‘Share’. Respectively, these standards govern firstly, the unique identification of products, places, and things; secondly, capturing identity and other information encoded into barcodes or RFID tags; and finally, how such data is shared with trading partners, consumers, and patients (in healthcare contexts). “The traceability standard brings the three components together and is sometimes referred to as the fourth component – the ‘Use’ component,” John says. “It was developed to assist businesses implement end to end traceability, incorporating the GS1 standards that were already in use by the company. “The first version of the standard had a strong focus on the food sector, with implementation guides developed for meat and poultry, fish and seafood, wine and fresh fruits and vegetables,”
John Szabo, Manager at GS1 Australia Advisory Services.
he says. “GS1 works with industry – while remaining industry neutral – to develop standards. Our work program is driven by user demand and so new versions of the traceability standards have been released to keep up with new developments, such as incorporating the use of Critical Tracking Events and Key Data Elements, for example.”
IMPLEMENTING GS1 TRACEABILITY 2.0 The GS1 standards are of course voluntary – indeed, voluntary uptake and feedback by industry with respect to standards is why GS1 has done so well. But the more organisations that implement traceability systems based on GS1 standards, the better, John says. “Our role is to provide a set of standards that will, if implemented, assist organisations in improving their traceability capabilities, help them comply with regulations and enable
MHD SUPPLY CHAIN traceability information to be shared across the full supply chain,” John says. “So many companies have wanted to implement traceability throughout their supply chain processes but didn’t know where to start. Now we have a standard which they can simply roll out without having to start from scratch and re-address all the problems that we have already addressed.” Although GS1 relies on third parties – consultancies or solution providers – to carry out implementation, it does provide a helping hand to both the end-user and those implementing traceability solutions. For instance, GS1 now offers those responsible for implementing GS1standard-based traceability systems an easy way to check and self-assess that their solution is meeting guidelines. “We have recently created a voluntary service for our Traceability solution providers to complete self-assessments of their solutions,” John says. “This service allows the solution provider to check if they have implemented the GS1 standards correctly. If they desire,
they can also have their solution claims validated by GS1, which involves a deepdive review of their solution.” For those organisations that would like to implement a traceability system that meets GS1 guidelines, GS1 offers advice that helps orient them in the right direction. “One of the biggest challenges with organisations is knowledge,” he says. “We can provide knowledge of the standards and how best to go about implementing them to improve traceability systems. Our team can assist organisations, whether it be simple training or running collaborative discovery sessions, where we unpack the challenges and issues and work to develop a roadmap and recommendations for implementation.” Because the idea of traceability covers everything in the supply chain, successful implementation will necessarily be different for unique organisations dealing with unique goods, John says. The key question to ask, he notes, is ‘What is most suitable for the organisation’s needs?’
“Identifying the core issues and what the business is trying to overcome should be the main driver,” he says. “This may be related to how product recalls are managed or improving food safety, through to being able to prove specific claims – for instance that a product is gluten-free or adheres to sustainable farming practices.” John and the GS1 team are ready, able, and willing to help organisations get into the GS1 Traceability framework, because the benefits to individual companies – and industries as a whole – are so clear. “An effective traceability solution using GS1 standards is an enabler for a business to make better decisions,” John says. “Traceability systems can lead to improved stock visibility and accuracy down to batch level with greater visibility of use by and best before dates. This can also lead to reduced wastage of stock due to expiry dates. Better traceability is good for the users, good for customers, good for sustainability – because of reduced wastage and more economical movement of goods – and good for the industry.” ■
Cubiscans & DWS Systems Supercharge your Warehouse Management System with accurate SKU dimensional master data Cubiscans Automate the capture and export to your host WMS, TMS, or FMS precise SKU, partcel, or pallet cubic and weight in real time. Systems Integration is a standard value offer from Diverseco.
In-Motion Dimension-Weigh-Scan (DWS) Systems Capture legal-for-trade weight and dimensions of outbound parcels in a DC or express freight facility.
Dimensioning Automation For scanning items into custody and determining sortation lane destinations from information embedded in parcel item barcode data. Diverseco: Weighing, Dimensioning, Robotics, Packaging, and Inspection.
MHD FEBRUARY 2022 | 45
MHD SUPPLY CHAIN
THE X-FACTOR Cross-docking solutions are nothing new in the food sector. However, João Marinho, Senior Sales Consultant Warehouse Solutions for Vanderlande ANZ, explains why the strategy is becoming an increasingly attractive option for retailers considering their first steps towards automation – and how the company’s XDOCK solution can help businesses after an unprecedented period of market turbulence.
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abour scarcity, an increasing shift to online ordering and delivery models and a global pandemic have all significantly impacted the grocery and food retail sector. João Marinho, Senior Sales Consultant Warehouse Solutions for Vanderlande ANZ says Australian and New Zealand retailers are needing to respond to a market that continues to grow year on year and is changing beyond all recognition. The pivot to online sales has accelerated the demand for technology and innovation within distribution centres, with increased automation the key to maximising future opportunities in food retail. While Vanderlande was established in Australia in 2012, it has over seven decades of experience in moving its customers’ businesses forward in the airports, warehousing and parcel markets. João says the company is therefore perfectly placed to help food retailers who are looking more closely at the efficiency of their current operations and searching for the ideal platform for growth. “The pandemic has had an undoubted effect on food retail and there’s now a real appetite for cross-docking solutions in the market,” he says. “Due to the unique labour situation in Australia, there was a significant lack of available people once borders closed. That shortage of manual labour has really driven the need for automation and many customers are contacting us with concerns about their ability to deal with the spikes in demand.” Vanderlande has a long track record of supplying warehousing process automation systems for many major retailers, including some of the largest distribution centres in the Southern Hemisphere. But it’s not 46 | MHD FEBRUARY 2022
XDOCK is used in many sites worldwide.
limited to the biggest players. João believes that Vanderlande’s XDOCK is designed to help retailers taking their first steps in search of greater control of their DC processes as they begin the move from manual to automated logistic operations. Scaleability is one of the biggest advantages of such a system, allowing retailers to overcome the challenges of labour scarcity with a material handling system that can be easily scaled up to match the growth of their business. “We’ve installed systems in various countries in Europe, as well as in many other countries in the world,” João notes. “XDOCK is a really flexible solution that provides food retailers with the perfect platform for growth.” Vanderlande’s XDOCK combines ergonomically designed infeed stations with its high-capacity POSISORTER sliding shoe sorter, and VISION
(Vanderlande’s Warehouse Control System) software. It can handle a wide range of case types and is known for its high availability and reliable operation. An XDOCK system provides a wide range of benefits, including less dependency on labour, reliable delivery times to stores, more accurate deliveries, and enhanced tracking and tracing. “This kind of solution is really flexible, and the core POSISORTER system can sort almost any size and shape of case,” he adds. “With a capacity over 6,000 cases per hour, it’s higher than what most cross-docking operations require. It also has a high sort accuracy, relatively low noise levels and gentle product handling, thanks to its closed deck, which allows such a wide variety of goods to be handled via its smooth sorting action.” A common barrier to investment in automation is the concern over
MHD SUPPLY CHAIN
XDOCK is a cross-dock solution that facilitates the automation of stockless operations. the payback time, but the return on investment for XDOCK can be rapid. Initial installation allows retailers to maximise their current infrastructure, and it is easy to extend or adapt to increase capacity when growth allows. It’s therefore unsurprising that XDOCK is a proven solution at many sites worldwide, notes João. “Two to five years is an easy ROI for a system like this, although it depends on the customer’s picking solutions and layout efficiency,” he says. “Installation times are relatively fast too and can often take place while operations are running. It requires close cooperation with the customer, but it’s possible and we’ve done it many times before.” As XDOCK is modular and flexible, it supports a retailer’s agility from the outset, ultimately enhancing service levels to stores and consumers. And as the POSISORTER has such a high capacity, when a business grows it’s easy to install more chutes and inducts, or even increase the speed of the sorter. An initial investment in a core sorter can later be merged with an AS/RS solution if required, to successfully manage high operational peaks. However, even in times of increased mechanisation the human factor shouldn’t be overlooked, says João. “In these times of labour scarcity, one of the big advantages of
automation is that you are able to offer your workers solutions that are designed with ergonomic and health and safety benefits,” he adds. “For example, our induction stations and lifting tables enable operators to minimise manual effort while lifting products and reduce excessive body movement while loading products. These solutions help to save the considerable effort of physically picking millions of
kilogrammes of cases in a large DC.” “A solution such as XDOCK helps retailers to achieve the desired throughput in their DCs, while creating the extra capacity required to match growth. By improving the quality and completeness of orders, it guarantees more accurate deliveries. The system can be adapted long into the future and quickly scaled up to support a growing operation, allowing the retailer to remain competitive.” ■
XDOCK can be easily scaled to support a growing operation.
MHD FEBRUARY 2022 | 47
MHD MATERIALS HANDLING
SETTING THE SUSTAINABILITY AGENDA Toyota has for three decades been pursuing ambitious sustainability goals. MHD explores the history of the company’s environmental commitments, and the latest products in sustainable materials handling.
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n 1992 the Toyota Motor Corporation announced the introduction of ‘A Comprehensive Approach to Global Environmental Issues: Earth Charter’ – setting out the modern framework that Toyota companies would take with respect to environmental objectives. Although Toyota Motor Corporation had already been an innovator with commitments to greater efficiency using fewer resources, the futureforward “A Comprehensive Approach to Global Environmental Issues: Earth Charter” from 1992 set a new – and from the standpoint of three decades later, impressively early – agenda with respect to environmental sustainability, including identification of climate change as a key issue. “Finding ways to preserve an abundant natural environment to pass on to future generations is the most pressing issue for people on earth today,” the 1992 Earth Charter says. “It is an issue that demands the attention of each and every individual. And it is an issue that transcends borders – as in problems like global warming – and thus demands a global response.” The “Comprehensive Approach” set out in the 1992 Earth Charter included developing technologies to minimise the environmental impact of automobiles and automobile plants, implementing environmental programs through Toyota’s production and marketing operations worldwide as well as through parts suppliers and through vehicle distributors and dealers. The original commitments of the 1992 Earth Charter have been 48 | MHD FEBRUARY 2022
The Toyota 9FBMT 7.0 tonne forklift. repeatedly bolstered and elaborated upon by Toyota companies over the years. Just last year the Toyota Industries Corporation outlined its “Basic Stance” on environmental commitments, with “prevention of global warming” as its highest priority for the environment. And in 2015 Toyota Motor Corporation announced the ‘Toyota Environmental Challenge 2050’ – setting challenges for all Toyota subsidiaries globally: • Reduce CO2 emissions from new vehicles by 90 per cent (2010 baseline) • Eliminate CO2 emissions from operations • Eliminate CO2 emissions from suppliers and dealers • Conserve water and protect water resources • Support a recycling-based society • Conserve biodiversity, protect species, and restore habitats.
Toyota Material Handling Australia (TMHA) is meeting and exceeding its ambitious objectives. Indeed, for its own operations the Toyota Industries Corporation set as its target a reduction of 26 per cent of emissions (from fiscal year 2012 baseline) by 2021. Toyota’s European factories – which manufacture some of TMHA’s equipment – well exceeded that goal, achieving a reduction of 31 per cent. So, in the Australian context, what are some of the latest sustainable products Toyota is creating for the materials handling market?
NEW DEVELOPMENTS IN SUSTAINABLE MATERIALS HANDLING Glen Ryan, Product Manager – Toyota at TMHA, says that in terms of traditional counterbalance forklifts, it used to be the case that more than 3.5tonne forklifts generally had to run
MHD MATERIALS HANDLING on an internal combustion (IC) engine rather than electric. “However, at the start of 2019 we launched in Australia our 8 FBMT and 9 FBMT range,” says Glen. “These encompass our 3.5 to 8.0 tonne battery electric range. Previously, such tonnage required an IC forklift, which was not only less sustainable but less pleasant for workers – who in confined spaces had to deal with exhaust fumes. Now we can eliminate that with this new range of machines with no operating emissions. It’s better for the operator, better for people working nearby, and better for the environment.” Michael Marks, Product Manager – Warehouse MHE at TMHA, says that over the past decade Toyota’s R&D has predominantly focused on improving its battery-electric range, in keeping with Toyota’s overall philosophy of continuous improvement. “Toyota equipment has continuously evolved in terms of the efficiency of the machine, and now we’re seeing evolution in terms of electric batteries themselves,” Michael says. For example, the difference between lithium-ion electric batteries and traditional lead-acid batteries is not limited to sustainability criteria. “A key difference between a lead acid battery and a lithium-ion is that the former should only be charged from 20 per cent to full, which takes about eight hours,” Michael says. “With lithium-ion batteries you can plug them in whenever you like, and it doesn’t affect the lifespan of the battery. This makes a significant difference to cost, as customers can charge their batteries when they need to rather than having to wait for an
The Toyota LWI160 Pallet Truck.
The Toyota Reflex Reach Forklift.
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We predict that switching to a lithium-ion solution could reduce your CO2 emissions by as much as 20 per cent across your operations.
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eight-hour window – usually overnight – to charge their forklifts.” Because many larger companies operate two or three shifts a day, there isn’t necessarily an eight-hour window to charge, which means that they used to have to bring in additional machines or shift batteries to compensate while one is being charged. This is no longer the case with lithiumion batteries, which can be charged quicker and more flexibly – whenever a forklift is not in use.
“Lithium-ion batteries give more consistent and efficient power delivery and allows for faster charging which leads to reduced energy costs,” Michael says. “We have partnered with a major OEM to produce our lithium-ion cells – and they share the same environmental values as Toyota. We are committed to helping the customer achieve their own sustainability objectives within their operations. We predict that switching to a lithium-ion solution could reduce your CO2 emissions by as much as 20 per cent across your operations.” Glen notes that these and other improvements to battery electric machines – such as the fact that TMHA’s battery electric counterbalance forklift range is now IPX4-rated (splash resistant, such that it can drive in the rain) – have effected a cultural change in customers that leans increasingly towards electric batteries. Today, he says, battery electric products take up roughly 60 per cent of the market. The Toyota philosophy of continuous, incremental improvement is sure to keep tipping the market further towards battery electric products. Indeed, Glen and Michael are both excited about the new Toyota Reflex reach forklift range, as well as the new LWI160 pallet truck – the first Toyota pedestrian-operated pallet truck that has been designed around a modular lithium-ion battery concept. Three decades on from the 1992 Earth Charter, it’s clear that Toyota’s commitment to serving the customer at the same time as it sustains the environment is only getting deeper. ■ MHD FEBRUARY 2022 | 49
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MHD OCTOBER 2021 | 51
AN UNTAPPED RENEWABLE ENERGY OPPORTUNITY In partnership with Prological, the University of Wollongong Sustainable Buildings Research Centre’s new research reveals shrinking ROI periods for renewable generation can provide cost savings for businesses in brownfield and greenfield environments.
Australia receives an average of 58 million petajoules of solar radiation per year.
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ccording to the Department of Industry, Science, Energy and Resources, over the next ten years, solar photovoltaic (PV) – solar energy which directly converts sunlight into electricity – is expected to grow at a rate of 58.7 per cent annually, with small scale rooftop solar to make up 90 per cent of that growth. The push towards solar energy is happening, and its acceleration is imminent. Peter Jones, Founder and Managing Director at Prological, says that despite the overall trend in favour of sustainability technologies – particularly in residential environments – the industrial market remains the unloved child in this connection. Having seen his own son complete a Master of Research with Wollongong University’s Sustainable Building Research Centre (SBRC) – studying sustainability technologies in people’s homes – Peter wanted to further investigate how new energy opportunities might be applied in his 52 | MHD FEBRUARY 2022
world of manufacturing and warehouses. “Australia is a global leader in a lot of sustainability parameters, but it isn’t translating to the industrial market,” Peter says. “Through an innovative research approach, we wanted to develop a sustainability tool for clients to add to our design capability.” To conduct this research, Peter describes his search for an industrial unicorn: someone with the right background knowledge and expertise – but more importantly, the passion to uncover the cost parameters of the integration of renewable energy and storage technology for the Australian warehousing and industrial manufacturing sector. Craig Pickup, Research Lead for the project, possesses these attributes, and has used his detailed findings to create real-world applications for businesses around the country. “We placed emphasis on economics from capital expenditure, OPEX [operating expenses] costs, replacement
costs, determination of levelised cost of electricity (LOCE), simple and discounted payback, net present cost, and the future costs of renewable energy,” Craig says. “These elements combine to form a cost evaluation for a particular business, so they can more precisely determine the right time to make the switch to renewable energy.” To be finalised in March 2022, the research has lead to the creation of an assessment tool that will allow businesses to evaluate commercial opportunities for improving energy efficiency through the application of various technologies. “We are analysing the economic side of the installation versus the cost of energy from the grid,” Craig says. “Our expectation is that over time the battery and installation costs associated with solar will decrease, and the cost of energy from the grid will increase. Through our research we will be able to inform a company what will be the optimal year for investment in solar
solutions depending on their energy usage – this could be anywhere between 2021 and 2030.” The right time for investment depends on the size of the solar system needed and cost of the grid power, as well as available rebates. Craig says a reduction in Solar PV installation costs is driving the uptake of renewable generation, with payback periods (ROI) for systems plummeting from 10-15 years to as little as two years in 2021/22 with typical financial ROI’s of between 2.5 and 4 years on large commercial systems; systems that will perform and deliver for 25 years plus. The goal of the assessment tool is to allow a business to easily understand the financial costs and opportunities associated with investing in solar. Using national metering data from Australian Energy Regulator Smart meters, an entire year of metering is put into the analysis software. “With metering data from the site, billing information and a general understanding of how their energy is used, we can do an analysis on a ‘typical’ day as well as the peaks and troughs throughout an entire year,” Craig notes. “From this data, we can assert what the best and most costefficient renewable energy system is. Businesses will not need to go into the technical side of things, this tool will simply communicate whether it’s a better financial decision to invest now, or later.” To capture a rounded view of the
industry, the research has looked at small to medium sized sites with 40 kilowatt systems, as well as larger 2500 kilowatt operations. Because a warehouse fluctuates in energy usage throughout the 24 hour cycle, Craig says different solar battery combinations can take advantage of excess solar generation for smaller warehouses. Batteries store unused energy from solar panels to use later, which is helpful in some warehouse contexts where operations can often run early in the morning and later in the afternoon, when the energy generation capability is lower than the middle of the day. “You want to try and harness these variances through battery technology,” he says. “So, we also do an assessment based on the different battery chemistries as well as the maintenance and installation costs to determine which year would also be a good investment for batteries to go with the solar panels.” Craig says the findings uncovered a flaw in government restrictions on the amount of solar energy businesses can export to a grid. The export limits change from state to state, but range from 15 to 30 kilowatts, meaning the solar PV systems can’t export more than that amount back to the electricity grid. In some instances, the facilities in the study’s solar capability had to be less than requirements because of such restraints. “Curtailed energy is lost energy which translates to lost profits,” he notes.
Australian electricity generation fuel mix, calendar year 2020.
“Ultimately, you’ve got to design the energy system to your minimum peak of energy consumption, which means you’re pulling power out of the grid for every day of the year a business is over its minimum. People are using sub-optimal systems on their roof or burning coal when there is a more efficient solution.” Geoscience Australia recently found that Australia has the highest solar radiation per square metre of any continent and consequently some of the best solar energy resources in the world. After a review of all the renewable energy solutions available, Craig’s research revealed that solar is the most viable option for renewable energy technology for medium-scale industrial and commercial facilities. “We carried out a mass canvass on all the tech available in the renewable space but many of the solutions are not in the right market location,” he says. “Through our process we narrowed it down to something that is market-ready – and landed on solar.” While large-scale commercial and residential properties have started to explore solar power as a sustainable solution, medium-sized sites are yet to tap into these solutions, according to Craig. “This is an under-researched and under-utilised area in Australia. There is lots of information on the (large) commercial side and the residential side, but for medium-scale facilities – solar is an opportunity,” he adds. “Commercial warehousing and distribution sites offer the perfect opportunity to utilise solarpowered energy, as they feature large flat surface areas on their rooftops and the operating times of these types of businesses are perfect to take advantage of the generation period of solar PV.” Peter Jones notes that Prological, through this research and the securing of Craig within their team, have some of the most advanced sustainable energy assessment tools available. “This combined with 25 years of consulting experience enables Prological to support energy sustainability strategies,” he says. “This is about making a difference while creating advantages for those we work for.” ■ For more information, visit www. prologicalconsulting.com MHD FEBRUARY 2022 | 53
MHD SCLAA
WHAT A START TO 2022! T
Sue Tomic of SCLAA reflects on the importance of resilience in supply chain as we head into 2022.
he current climate of the supply chain can be likened to a tornado, showing that while intricate, it can also be so extremely fragile. Reflecting on the last few years, the start of the year has brought many firsts – unexpected and, in some cases, catastrophic events. • 2021 – The US symbol of Democracy, Capitol Hill, was overrun and vandalised. • 2020 – The year began with raging bushfires – labelled Australia’s biggest natural disaster. • 2019 – Millions of women create a 300 mile ‘Women’s Wall’ across the state of Kerala, India, in support of women’s access to the temple of Sabarimala. The entry of two women in the temple led to mass protests. News in Australia was dominated by the Cricket scores as we were all blissfully unaware of the global upheaval that was to follow in the years ahead. At the centre of each event highlighted above, there are two key things at play – people and resilience These are some examples where people have rallied on a mass scale to make a difference, assist in the hardest of times, stand up for beliefs, or tear them down. During this January in Australia, the current shortage of people able to work in the supply chain and logistics industry has visually hit every Australian through empty shelves at the supermarket. Hopefully, the current situation is an anomaly despite the shortage of human resources in supply chain over many years. The importance of people in any organisation, business, or industry – not just supply chain – is the key to success rather than chaos. The biggest asset continues to be the one that remains off the balance sheet. Ironically, it has taken a virus to bring 54 | MHD FEBRUARY 2022
this into sharp focus, as businesses have been forced to re-evaluate how to keep people working, motivated and productive. In turn, people having been separated from co-workers, family, and friends, has lead to their own re-evaluation on priorities, career satisfaction and their workplace (leading to many articles on the “Great Resignation” or the “Great Reset”). The driving force of employee motivation continues to be acknowledgment of achievement – be it group or individual. This is important. Acknowledging achievement is a passion builder and motivator. With people at the centre of any business or industry, success is a natural outcome of passionate people coming together to achieve a common goal. Whether it’s stocking shelves or fighting a raging fire. Recognition and acknowledgment of Industry achievements and its outstanding Individuals will once again be celebrated at the 60th Australian Supply Chain & Logistics Awards to be held 18 March 2022. (www.ascla.com.au) The industry holds very few National awards ceremonies, and having been on various judging panels, the calibre of what has been achieved continues to inspire. There should be respect and celebration for those that not only achieved success, but for their courage in showcasing it and wanting to share with others. Supply Chain and logistics is not all about big successes. It is an intricate web dominated at its most basic level by a core consideration: people getting things from A to B. Those involved at this physical and most critical level of the process have seen the least changes in the workplace. There is no ability for hybrid or remote working when a container needs to be unpacked or goods delivered to a warehouse or retail delivery dock.
The challenge currently faced by industry is in direct proportion to measures implemented during prior lockdowns: company investment into workplace resilience and risk mitigation at the base level. How do you keep a business running if you have to shut down a whole warehouse, food processing plant, or lose a shift or multiple shifts of workers due to the pandemic? The proactive have taken up the challenge and invested in “divide and conquer” technology that allows quick identification, segregation of workplaces to minimise the footprint of business shutdown, and monitoring of people/personnel outbreaks to mitigate the subsequent fallout. Dare I say it … they have taken the steps to manage their assets and haven’t forgotten that people are the most important asset they have. More on that later. Resilience. This has been the foremost issue at many Board tables, and in strategic plans and processes. Resilience is the ability to adapt, and bounce back from setbacks and misfortunes. It is categorised as a noun but I personally see it as a doing word. It takes action to become resilient. In the aftermath of the bushfires, the state government formed Resilience NSW. During unprecedented disruption to container trade, Transport for NSW and NSW Ports formed the Empty Container Park Working Group. Action out of crisis. People and organisations coming together. The supply chain is particularly good at that. There is recognition at all levels of government and business that resilience is an important factor in any country, organisation or individual. It’s the difference between survive, thrive or perish. But it has a connotation of finality, conclusion and having reached a pinnacle. There is of course no such thing –
MHD SCLAA
Sue Tomic, Chair of the SCLAA and Managing Director of Chain Consulting.
especially in supply chain, which is ever changing and challenging. ‘Resiliency’ is a word less used, but it should be – as a measure or level reached on the resilience spectrum. Resiliency is future focused and creates new ways of thinking and doing based on avoiding past crises. Back to the current issue in our industry, it would appear that we have not moved very far on the scale of resiliency when it comes to warehouse and distribution workers. Could resiliency have been increased through technology? Yes and no. The only real mitigation would have been a mass effort by society, government and business to protect the workforce. Swift action of detecting and isolating the sick, when the scales are tipped, to ensure there are enough healthy to keep the wheels of the industry turning. Where we have come unstuck – locally and globally – is we were unprepared with what came after the magic number of 80 per cent, 90 per cent (or whatever it may be) vaccinated eventuated. Closer to home, was also
the swifter change management of the pandemic from government to individuals and business. Any business not monitoring the movement and health of its workforce and doing predictive analysis based on that data, including vaccination status and test results really doesn’t know what it will be doing in coming weeks and possibly months if this pandemic continues to evolve and recur. The “divide and conquer” technology already being deployed by businesses is prioritising their most fundamental asset – people. Already a leader in the field in mining, resources, travel and other industries and deployed by government departments as well for the public sector, is a quiet Australian achiever, the Comply Group with its CovidComply software. Having mastered contact tracing for business purposes, this innovative company has for seen the impacts of time delays and consequences of delayed communication of test results on organisations. It has “cut out the middle man” by partnering directly with pathology labs to provide test results, in line with privacy protocols, direct to employers. This was seven months ago. Once again having foresight, Comply Group is also exploring partnerships directly with Biotech companies like ThermoFisher Scientific , which will add another level of resiliency to enable businesses to supply their workforce with testing products directly. Founder and CEO, Ben Richardson, states, “In addition to being a tool for rapidly determining close contact
transmissibility after the fact, this tool can also be used for COVIDsafe planning to monitor the risk of transmissibility by determining the percentage of your workforce at risk in any given time period as they traverse across multiple zones as part of their work.” Having real time and immediate data on your cleared and available for work personnel, at any given time on any given day, has increased resiliency for those companies who have already deployed and integrated the solution within their own systems and processes. The bonus is, the software takes care of the “compliance requirements and health orders [as they] evolve over time, our software is designed to rapidly allow for changes of any level of complexity.” Currently focusing on the supply and logistics sector, the solution can be deployed quickly and integrated into existing HR/OH&S, shift and payroll software. (www.covidcomply.org) The Supply Chain and Logistics Association of Australia (www.sclaa. com.au) is highlighting resiliency in the industry at its next event to be held 08 March at NSW Parliament House. With guest speakers highlighting resiliency in the ports sector, in the workplace, and on an individual level, SCLAA is taking the opportunity of supporting WAGEC (www.wagec.org. au),a Sydney based charity facilitating emergency accommodation for women subjected to domestic violence. SCLAA is proud to support this very worthy cause on International Women’s Day 2022, with all sponsorship proceeds fully tax deductable. ■
MHD FEBRUARY 2022 | 55
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MHD PRODUCT SHOWCASE
O2D500 PRODUCT FILLER Would you like to check several different objects for their correct position and object properties with just one vision sensor? Whether it is a contour detection or a BLOB analysis, the O2D500 Vision Sensor from ifm can solve a variety of error-proofing and inspection applications throughout the manufacturing process in just one device. The new O2D Vision Sensor is ten times faster with a four times higher resolution and lots of illumination features, making complex applications remarkably easy to solve. Using 2D inspections of surfaces and contours, this vision sensor is able to detect missing retaining clips, threads that have not been milled properly, too much adhesive or incorrectly shaped components. A huge upgrade of the O2D500 is the integration of the complex image processing algorithms into the award-winning software environment, the “ifm Vision Assistant”. Application wizards guide users through the parameterisation process and make it easy for vision system beginners – as well as experts – who want to solve simple applications really fast.
IMPROVING PICKING PRODUCTIVITY, ACCURACY, AND SAFETY WITH VISION PICKING FROM DEMATIC Dematic’s wearable vision picking technology features headsup-display (HUD) devices and projects information workers need right into their real-time field of view. This allows them to operate completely paperless and hands-free while carrying out order fulfilment tasks in the warehouse. The technology provides similar benefits in warehousing to voice picking systems, including greatly improved picking accuracy. This reduces the number of human errors that occur during warehouse product picking. Vision picking technology provides operators with relevant information for the duration of each task, including an image display, which helps identify and pick the correct product every time. For more information, visit www.realtimelogistics.com.au
This is how ifm combines the power of vision systems with the simplicity of a sensor. For more information, visit ifm.com/au/en/product/O2D500
GEOTAB’S GO9 DEVICE QUICKTRON LEADS INTELLIGENT WAREHOUSE LOGISTICS REVOLUTION The state-of-the-art AGV and AMR vehicles with a complete range of products for intelligent intralogistics solutions are based on proven Quicktron technology. These mobile robots include automated solutions for the handling of shelves, mobile devices, pallets and baskets of work without an operator. In suitable projects, this new product range will be combined with Ferag products (Denisort, Deniway, Easychain and Skyfall) into fully integrated solutions. For more information, contact Philip Batty at Ferag Australia on 0434 305 906, email info-australia@ferag.com or visit www.ferag.com/en/
Completely redesigned and enhanced, the Geotab GO9 device is optimised for the collection and analysis of near real-time vehicle data. The GO9 features a faster processor, more memory, and a gyroscope. Expanded capacity allows even more and ongoing vehicle support, including better fuel usage support, and increased electric vehicle compatibility. Using Geotab’s patented tracking algorithm, the GO9 accurately recreates vehicle trips and analyses incidents. The GO9 also offers in-vehicle alerts to instantly notify drivers of infractions and – with hardware Add-Ons – provides live coaching for driver’s on-road performance. To find out more, visit www.geotab.com/au/vehicle-tracking-device
MHD FEBRUARY 2022 | 57
MHD PEOPLE ON THE MOVE
BROUGHT TO YOU BY
PEOPLE ON THE MOVE A monthly wrap up of the latest appointments in the supply chain, materials handling and logistics industry.
ENVISTA’S APAC PROGRAM DIRECTOR
COLLIERS PROMOTES FROM WITHIN
enVista has appointed Chris Linden as its APAC Program Director. Chris brings 20-plus years’ experience in IT, Logistics and Supply Chain environments to lead the team as
Taylor Bass has recently moved into the role of Executive, Marketing & Communications for the Industrial team at Colliers. Taylor will work to lead
enVista grows in the APAC region.
and innovate within Colliers’ marketing and accelerate client success.
ENVISTA’S NEW APAC VICE PRESIDENT Paul Bernhardt, who most recently worked in the telco space, has joined enVista as it officially launches in the APAC region. Paul brings significant experience and expertise in multi-discipline transformation experiences, digital journeys, customer facing activations, and large format multi-site retail and will head up the retail solutions element of the business as Vice President, Retail Solutions APAC.
Do you have career news to share? Email Edward Cranswick at Edward.Cranswick@primecreative.com.au to be featured.
58 | MHD FEBRUARY 2022
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