MHD March-April 2019

MHD Supply Chain Solutions MARCH / APRIL 2019

COVER STORY

Health support

How SSI SCHAEFER caters for the future of pharmaceutical supply

GREEN FREIGHT

How to pursue green freight options

THE I-CURVE

The irrational, emotional, uneconomic consumer

IN FOCUS

WAREHOUSE & DC EQUIPMENT, AUTOMATION AND SYSTEMS INTEGRATION

MHD FROM THE EDITOR

MHD Supply Chain Solutions CONTACT MHD Supply Chain Solutions is published by The Intermedia Group Pty Ltd ABN 940 025 836 82 41 Bridge Road, Glebe NSW 2037 Telephone: (+61) 02 9660 2113 Fax: (+61) 02 9660 4419 Email: mhd@intermedia.com.au

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TO YOUR HEALTH

T

he incredible changes in logistics technology and delivery (‘order fulfilment’, if you prefer) means that today, you can have a selection of sizes, colours and styles of clothing delivered to you within two hours, so you can select your favourite and return the rest. This means that you can leave your choice of dress for that special evening to the very last minute.

My personal opinion is that this level of ‘convenience’ has lead to a lot of negatives: retail stores closing, increased pollution owing to lots of small deliveries, and that you’re never sure how many people have tried on (and perhaps worn) those clothes.

One area of course where the boost to the ease and speed of order picking (=automation) and the resulting accuracy and speed of deliveries cannot be faulted is the case of pharmaceuticals. Going to the chemist when you’re unwell and finding that they are awaiting a late delivery, or that your prescription will take a day to arrive, is a most unpleasant experience and one that hopefully has been, for many, consigned to the past.

As this issue’s cover story demonstrates, the task itself has been getting more complex, but the solutions are more than up to it: “Today, medicines are distributed through a complex supply chain, which can be disrupted anywhere along its path, from manufacturing to dispensing.”

“SSI SCHAEFER order fulfilment systems support everything from traditional wholesale distribution to omnichannel logistics, including fast-paced e-commerce requirements.”

Robots, automation and technological advancements in general dominate this issue’s Warehouse equipment feature. Take your time to read through the articles and no doubt you will find many, many new ideas, products and ways of getting the job done better.

As always, I hope you will enjoy reading through your MHD magazine.

Charles Pauka Editor charles@intermedia.com.au

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MHD MARCH / APRIL 2019 | 3

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BURDEN CARRIERS

SWEEPERS AND SCRUBBERS

MARCH / APRIL 2019

ISSUE #2 VOLUME 49

THIS ISSUE COMMENT

COVER STORY

06 CPTPP: the evolution of globalisation 08 Drive the plan to achieve supply chain finance transformation 10 How to pursue green freight options 12 The future made real

IN FOCUS: WAREHOUSE & DC EQUIPMENT, AUTOMATION AND SYSTEMS INTEGRATION

14 30

18 Spotlight on: robots in distribution centres 20 Get smarter: why smarter warehouses demand smarter risk strategies 22 Automated pharmaceuticals 26 HI5 to I4.0: Five reasons why Industry 4.0 will boost automation 30 The automation intersection 32 A cool choice 34 Crown partners with Lift’n’Rack 36 It’s new! Finally, there’s something new in the forklift market

SUPPLY CHAIN 38 The ICurve – Part 2.

42 The trouble with supply chain security 44 Software success – Part 2.

47 Catch that bug! The case of the Brown Marmorated Stink Bug

MHD Supply Chain Solutions MARCH / APRIL 2019

DEPARTMENTS AND REGULARS

COVER STORY

Health support

48 ASCI – contacts, courses, news 50 From the Supply Chain and Logistics Association of Australia 51 Subscription information

How SSI SCHAEFER caters for the future of pharmaceutical supply

GREEN FREIGHT

How to pursue green freight options

THE I-CURVE

The irrational, emotional, uneconomic consumer

IN FOCUS

WAREHOUSE & DC EQUIPMENT, AUTOMATION AND SYSTEMS INTEGRATION

ON THE COVER SSI SCHAEFER order fulfilment systems provide vital intralogistics support to help keep the pharma industry fulfil its mission. See page 14

36 MHD MARCH / APRIL 2019 | 5

MHD COMMENT

CPTPP

DR RAYMON KRISHNAN

“

The effects on logistics markets within and between the economies involved are likely to be dramatic.

”

6 | MHD MARCH / APRIL 2019

W

e have seen a number of LinkedIn posts and press coverage that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP has entered into force. Still called TPP or TPP-11 by some, it commenced in a fairly low-key manner over the new year. Much of the hyperbole and enthusiasm around the agreement was dampened by Donald Trump who withdrew the US from the agreement on his first day in office in 2017.

This move by the leader of the preeminent global power in relative decline but refusing to admit it, should not disguise the importance of the CPTPP for dynamics of supply chains and wider global trade.

The agreement brings together a string of economies in Eastern Asia and the Pacific rim: Australia, New Zealand, Canada, Japan, Malaysia, Chile, Peru, Mexico, Brunei, Singapore and Vietnam. Originally, the agreement would have covered around 40% of world trade but as it is, it is still an important agreement. Aside from the size of the economies it covers, the effect it is likely to have on others could be fairly significant.

One benefit could be the stimulus it could give to ASEAN actually concluding Regional Comprehensive Economic Partnership (RCEP) in 2019. RCEP is a proposed FTA between the ten- member states of and the six Asia Pacific states with which ASEAN has existing free trade agreements.

Additionally, ASEAN economies that are not in the CPTPP are drawn by the prospect of closer trade relations. Thailand and Indonesia are still struggling with the problem of opening-up their economies to greater external investment whilst managing their political situations. South Korea and the UK amongst others have expressed interest in joining and may do so at some stage. If such economies were drawn into the agreement it would dominate the world’s trade regulatory structure. It would also be one that implicitly excluded China and that could perhaps in itself be reason to seek inclusion.

Japan’s position and role in the CPTPP and on global trade has been very interesting.

Formerly both dependent on, yet fearful of, free trade, it has performed an about-face to become an evangelist of open markets.

Japan stepped up to fill the gap after the US departed. This reflects a fundamental re-orientation of the Japanese economy

The evolution of globalisation

reflected in a new approach to supply chain management by many Japanese companies and illustrated by their expansion into South East Asia over the past decade. As logisticians, one example we have of this is the acquisition of Toll and APL Logistics in the last few years.

Although Trump is not supportive of the TPP, the example of NAFTA and the USMCA agreement that superseded it illustrates that even he does not preclude big free trade deals.

Also, no one knows for sure what will happen after 2020 – or the very latest after 2024.

The agreement sweeps away tariffs on whole categories of goods including most agricultural products and along with new customs processes, we envisage many companies will be looking at how their supply chains should be leveraged to capitalize on this into 2019 - especially given the fact that many companies are already looking at supply chain re-design as a result of the US-China trade war. As a result of the latter, Taiwanese companies are looking at re-shoring production to Taiwan as a result of the trade dispute. The CPTPP also introduces a new arbitration mechanism for trade disputes and rules on labour regulations.

The effects on logistics markets within and between the economies involved are likely to be dramatic. Not only are agricultural trade routes between Australasia or South America and North and South Asia likely to grow rapidly but investment in assembly operations in an economy such as Vietnam are likely to benefit from easier movements not just between it and Japan but also between Australia, Chile, Mexico, Peru and Canada.

The CPTPP, and RCEP when it eventuates, is a strong indication that globalisation is still the order of the day. Although the US may not yet be in this agreement, the prospect is one of the CPTPP laying the foundations of a huge free trade structure including much of the developed world but pivoting around Asia.

An opportunity even for a free trade structure that could supersede the floundering WTO? Interesting times ahead and certainly opportunities abound for those with the expertise and fortitude to act.

Dr Raymon Krishnan currently serves as president of the Logistics & Supply Chain Management Society of Singapore. ■

EFFICIENT GOODS-TO-PERSON PICKING Goods to Person order picking systems provide high productivity and space efficiency.

Flexible warehouse management software gives you visibility of performance, and puts you in control. ssi-schaefer.com

DRIVE THE PLAN Achieving transformation through a driver-based planning approach

I

t’s no secret that many supply chain organisations struggle to bring together finance and operations departments effectively. Supply chain professionals are battling constant changes in supply and demand, requiring continuous adjustments to production schedules and logistics, which is at odds with the longer-term business planning approach of finance teams, who typically take a monthly, quarterly, or annual view of the business for planning and reporting.

Closing the gap between finance and operations is a key factor in increasing efficiency, effectiveness, and ultimately profitability, but how can organisations achieve this unified approach?

The good news is that a driver-based planning approach can create synergy between departments.

WHAT IS DRIVERBASED PLANNING? Driver-based planning is an approach in which the key business variables that 8 | MHD MARCH / APRIL 2019

drive a company’s success are identified and used to forecast where the company is heading, with the results being used to produce plans and budgets.

Essentially, it involves the linking of analytics data to the financial planning and budgeting process.

In a supply chain context this might be, for example, the use of output and productivity data for a production line to inform the budgeting of salaries, electricity, maintenance, and more.

This is in contrast to traditional planning and budgeting activities in which finance teams produce overall budgets for costs and attempt to tweak them monthly in line with how the department as a whole is performing.

The business drivers used in the driver-based planning approach are usually factors that may have an impact on the bottom line of the business, such as key performance indicators (KPI) or key business indicators (KBI).

WHAT IS THE DIFFERENCE BETWEEN KPI AND KBI? Key performance indicators (KPI) are measures used by organisations to assess the performance of the business by identifying improvements or decreases in areas considered to have an impact on overall success. Typical KPI examples include profitability, the volume of backlogged work, the utilisation rate of staff, or costs.

KPI are typically used by senior management teams to monitor overall success but they are not always relevant to frontline staff. Those on the production line, for example, may not see the impact of their daily tasks on the profitability of the company.

As a result, recent years have seen the rise of key business indicators (KBI): measures that have an impact on KPI but are more tangible to those on the frontline and more related to process output. In the case of operations, measures such as production volume, productivity, and FTE. Both KPI and KBI can be used in the driver-based planning approach as factors that will have an impact on planning and budgeting.

WHAT ARE THE BENEFITS OF DRIVER-BASED PLANNING? If organisations have been functioning for years with traditional approaches to planning and maintaining profitability, why should they change? Here are some of the benefits of taking a more integrated approach: • Better, more-informed decisions: with the most up-to-date information visible across the business, and different departments able to see the impact of their activities on the bottom line, decisions can be made based on a much more robust foundation. In the case of Supply Chain vs Finance, operational KPI like productivity, production volume, and line speed can be linked to financial profitability or growth, giving a clear indication of the impact any changes will have on the achievement of financial goals.

• Increased efficiency: Removing the need to compare outputs from multiple planning systems, manually cross-examine multitudes of spreadsheets, and find common ground for evaluation can save a lot of time. The use of a single, unified planning system can enable information to be reviewed in real time. Analyses and decisions can be made faster thanks to the link between analytical data and planning, and the potential for future activity can be predicted in seconds. This increases the responsiveness of the business, gives it a more competitive edge, and ensures decisions are made using a solid foundation.

MHD COMMENT • Business modelling, simulation, and forecasting: driver-based forecasting pushes organisations to translate their business into measurable indicators (KPI and KBI), identify the most important and most changeable factors, and gain a clear understanding (through simulation) of the extent they’ll have on the bottom line. This process focuses the attention and efforts of the entire organisation on the most relevant areas for improving performance.

• Increased collaboration (closing the gap between finance and operations): instead of working towards departmental goals, driver-based planning encourages a unified approach. All teams can work towards one vision and see the impact that their activities are having on that vision. Supply chain professionals can be clear about the impact that changes in factors such as productivity and output have on the financial success of the business, and Finance can understand the needs of the Operations department and budget accordingly.

Bringing finance and operations together such a transformative way requires other considerations to ensure success:

“

Overcoming the traditional ways of working and closing the gap between supply chain and finance requires a significant change in approach and mindset.

”

• Strategic alignment: are the relevant stakeholders on the same page about the reason for the change, and supportive of it? Without this unified understanding, projects are set to fail at the first hurdle.

• Communication: vital for ensuring that everyone understands the purpose of the change and the benefits it will bring.

• Data: is it available, accurate and up-todate? A tool is only as good as the data that’s been inputted.

• Change management: is a ‘big bang’ approach best suited to the change? The chances are that you’re asking people to change habits they have gained throughout their careers, so a more considered approach is more than likely required.

The process of transforming your supply chain finance processes isn’t simple, but the implementation of the right tools, combined with a willingness to change and the backing of the business, can set you on the right track.

Mark Sands is the general manager – Asia Pacific at BOARD International. For more information call +61 2 8904 9777 or visit www.board.com. ■

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MHD MARCH / APRIL 2019 | 9

MHD COMMENT

GREEN FREIGHT How to pursue green freight options

BART DE MUYNCK

R

egulators, consumers and investors increasingly expect organisations to reduce their carbon footprint, leading many companies to seek greener freight methods. There are numerous ways to achieve this, but limiting harmful emissions from diesel trucks provides the most immediate opportunity.

Growing global sentiment to reduce the use of trucks that run on diesel fuel puts a stronger focus on the use of alternative-fuel vehicles. Volvo introduced its first electric truck in April of 2018 and Mitsubishi Fuso Trucks launched its first seriesproduction electric truck in September of the same year. Tesla is also working on battery-electric vehicles that can haul heavy loads.

Trucks aren’t the only focus. In the absence of national standards for non-road diesel emissions in Australia, despite non-road plant and equipment being the fourth largest human-made source of fine particle pollution in Sydney’s Greater Metropolitan Region, the NSW EPA has initiated state-based actions to reduce these emissions. This applies to construction and mining equipment, rail locomotives, ports equipment and ships.

There are a few ways to stay on top of the regulatory climate and to turn tougher standards into competitive advantage. Start by collaborating with your regulatory compliance, risk and legal teams to track pending diesel bans around the globe and how they might impact your market area.

Also investigate the ROI of converting part of your fleet to electric and/or other alternative fuels by taking into consideration total cost of ownership factors, in addition to lower fuel costs.

Although reducing kilometres and emissions are becoming major parts of most corporate social responsibility (CSR) initiatives, the challenge is examining trade-offs between capital investment to obtain operational savings.

10 | MHD MARCH / APRIL 2019

Another option is to introduce alternative fuels as a talking point within your company’s CSR strategy. It’s easier for supply chain leaders to drive CSR measures proactively, as opposed to responding to mandates and regulations.

REDUCING CARBON FOOTPRINTS Many shippers are beginning to rank carbon reduction from freight on equal ground with pricing and quality metrics when it comes to dealing with thirdparty haulers. For those shippers, it’s important to enquire about the overall sustainability culture with the carriers you partner with — some have invested very little in technology to make fleets more efficient.

When conducting due diligence, consider checking if the freight provider is a member of any government environmental programs. This provides an early indicator of their sustainability commitment, although dig deeper and request actual proof of sustainability measures in place.

Alternative fuel trucks are becoming a viable solution for organisations

looking to reduce their carbon footprint in freight. There’s already lots of activity in this area, such as electric and hydrogen-electric.

While reducing carbon footprints and saving money on fuel are the primary drivers for alternative fuel fleets, organisations have varying goals. In the UK, for example, UPS can avoid the fees that London levies on diesel vehicles that enter the city for deliveries. In the US, electric trucks enable Walmart to do night time deliveries when there’s less traffic. Currently, government noise regulations prohibit the retailer from doing so in most regions.

Aside from investing in new trucks, there are retrofits that private fleets and 3PL can take advantage of. Add-ons like trailer skirts, automatic tyre inflation and low-rolling resistance tyres, for example, can deliver valuable increases in mileage, often adding a few kilometres per hour or more to fuel efficiency.

Across a big fleet, that adds up.

Research continues on truck platooning, where trucks drive closely together to reduce the drag for the trucks behind the lead truck. As a result,

fuel consumption can be reduced by up to 10 percent. The networked vehicles can function without driver reaction times.

When it comes to fully autonomous trucks, the fuel savings can be enormous. Aside from the gains in safety, removing drivers from behind the wheel, even partially, can save billions. Morgan Stanley says the industry could save US$168 billion, with US$36 billion in improved fuel efficiency alone.

REVISIT FREIGHT STRATEGIES As a supply chain leader, you need to revisit your freight strategies to become more efficient. There are several simple steps to take to ensure that your freight network is operating at high efficiency, thereby saving on fuel costs and reducing your carbon footprint.

First, research the adoption or improved usage of freight management systems and vehicle routing and scheduling to improve routing. This increases load factors and decreases kilometres driven.

Next step is to model the freight networks and look into using other modes or changing the location of plants or distribution centres. In some cases, companies collaborate with other shippers to share third-party carrier assets, which improves their available capacity, truck loading factors and freight costs.

The more optimised assets are within the freight network, the lower the overall emissions for the same volume of cargo.

Collaboration with other shippers can decrease empty mileage and increase load fill rates. A few shippers already do so, mainly to increase capacity use and reduce freight costs in markets where freight capacity is limited and expensive

WHAT INDUSTRIES ARE DOING TO HELP The warehousing and logistics sector is also ripe for improvements in freight. Organisations

with many DC should research the ROI for automation and robotics for reducing carbon footprint within their DC network.

When it comes to the retail industry, many retailers look for ways to offset the carbon footprint from online order deliveries.

Many shipping options contain excessive packaging, for example, which is not recyclable. Often, a small order arrives in a large package, which creates waste during the shipping process, as more packages could be included on a truck when sized correctly.

Some retailers are experimenting with unmanned delivery trucks for last-mile delivery. In the future, this has the potential to not only cut the cost of last mile delivery, but to make it more sustainable.

Autonomous delivery robots, for example, represent a new class of device that could provide a combination of low cost and convenience with less congested streets and zero emissions. Consumers can track the progress of the machines through an app and unlock them to retrieve their package when it arrives via a password sent to their mobile device.

It’s important to remain current on rapidly developing autonomous delivery options, even though most autonomous offerings are in their infancy and delivery options like drones are expected to see even more regulations going forward.

In addition, identify opportunities that embrace the power of automation while maximising the value of human-based intelligence and activity as supply chains continue to automate.

“

Identify opportunities that embrace the power of automation while maximising the value of human-based intelligence and activity as supply chains continue to automate.

”

Bart De Muynck is a VP analyst at Gartner, specialising in supply chain delivery processes such as freight planning and execution, freight payment, analytics, visibility, yard management, vehicle routing and scheduling.

Visit www.gartner.com/supplychain. ■

MHD MARCH / APRIL 2019 | 11

MHD COMMENT

THE FUTURE MADE REAL

KAREN REDDINGTON

I

n almost every industry and every region, disruptive technologies such as artificial intelligence (AI), robotics and blockchain are being hailed as game changers.

Organisations, both big and small, are asking themselves about the opportunities, and the risks.

Latest forecasts expect digital transformation will add an estimated US$1.16 trillion to Asia Pacific’s GDP by 2021. But relatively few consumers – despite being on the receiving end of these technologies – have grasped many of the changes that are happening now. The benefits are real and being realised today and every day.

INTUITIVE CONVENIENCE At the most human level, technology promises and is delivering convenience, whether it’s to send or receive a package.

Paperwork can be time-consuming and tedious and we’re constantly looking at how to cut it down. We’re developing the AI-enabled Alexa app to initiate shipments so that customers can talk their way through the process, hands-free, paper-free, with the digital assistant asking the right questions to help them complete the job. Already, our online virtual assistant is replying to FedEx-based questions instantly on our website. And it’ll only get smarter as more people use it.

12 | MHD MARCH / APRIL 2019

How do you make sure you are the disruptor, not the disrupted

AUTOMATION FOR EFFICIENCY AND SAFETY Every day, we handle an average of over 14 million shipments, which means millions of opportunities to do it faster, better and more safely.

Boxes as large as refrigerators simply do not fit on the conveyor belt in our warehouses. So we get a team of mobile robots, nicknamed Lucky, Dusty and Ned – after the Three Amigos movie – to move these unwieldy items around the facility. Unloading shipments off trucks and onto the conveyor belts for sorting can be mundane, so we’re testing robotic automation to do this tedious job. This way, our people can be freed up to do work that requires human dexterity, such as fitting oddshaped items into tight spaces. And we are investing in courier robots that can carry heavier loads and travel further.

It’s a very real possibility that these robots will be making deliveries to homes and offices in the years ahead.

With over 180,000 vehicles on the roads every day, the logical next step is autonomous vehicles. Leveraging big data and AI technologies will make our operations significantly safer and more efficient, particularly for heavy longhaul trucks.

BUILDING TRUST AND TRANSPARENCY Great logistics has always been as much about information as it is about

shipments and packages themselves.

So it’s not surprising that perhaps the most far-reaching impact of technology will be felt in the virtual world, with the Internet of Things and blockchain as the key enabling technologies.

Sometimes, for example, it’s not just about knowing where the package is, it’s also about knowing how it is.

Medicines, life-saving human organs, fresh food and flowers, and other perishables all need to be shipped at strictly regulated temperatures and conditions. We developed a device that provides near-real time monitoring from inside the package. SenseAware can alert shippers whether the cargo is staying within prescribed temperature and humidity limits or has been exposed to excessive light or other factors that might compromise shipment quality.

Blockchain, meanwhile, offers a new level of transparency that can mitigate some of the most common disputes between customers sending and receiving goods involving time stamps, payments and damages.

Blockchain uses computer code to record every step of a transaction and delivery in a permanent digital ledger, which cannot be changed unless all involved agree. It even has the potential for the first time ever to make that information available to anybody, pushing new levels of trust and transparency for cross-border logistics.

We are already testing the blockchain to track large, higher-value cargo, and working closely with the Blockchain in Transport Alliance or BiTA to ensure that every player in the logistics ecosystem can gain from this technology.

IoT, AI, automated transport and other technological advances have been offering the promise of disruption for a while. While we have a clear vision of what lies ahead, we are also in many ways living out that future by developing innovations today.

Karen Reddington is the president, Asia Pacific, at FedEx Express. ■

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HEALTH SUPPORT SSI SCHAEFER order fulfilment systems provide vital intralogistics support for many in the pharma industry

THE PHARMACEUTICAL INDUSTRY The pharmaceutical industry is a knowledge-based, technologyintensive industry that comprises bio-medical research, biotechnology firms, originator and generic medicines companies and service-related segments, including wholesaling and distribution.

The volume of the global pharmaceutical market has more than doubled in the past ten years.

By the end of 2016, the global sales volume was estimated to have risen to nearly $A1.5 trillion.

In a snapshot from the CSIRO in 2017, the Australian medical technologies and pharmaceutical sector provided 48,000 jobs in total, across 50 pharmaceutical companies, 400 biotechnology companies and 500 medical technology companies.

And the importance of this industry is growing. Australia’s pharmaceutical market is set to rise to over $A25 billion by 2020.

This industry seeks to deliver medication and related health services that deliver the best possible health 14 | MHD MARCH / APRIL 2019

and economic objectives, including timely access to medicines that meet appropriate standards of quality, safety and efficacy.

The simplified logistics and shortened supply chain of the 1930s, where most pharmacists were still mixing powders and vials and making tablets in their own pharmacies for delivery to customers, made it much easier to meet these objectives.

Today, medicines are distributed through a complex supply chain, which can be disrupted anywhere along its path, from manufacturing to dispensing. The pharmaceutical supply chain is a core part of Australia’s healthcare system, making medicines readily available to all Australians, regardless of location.

SSI SCHAEFER develops and implements supply chain solutions that cater for the future growth of pharmaceutical manufacturers, wholesalers and retailers. SSI SCHAEFER order fulfilment systems support everything from traditional wholesale distribution to omni-channel logistics, including fast-paced e-commerce requirements.

PHARMACEUTICAL WHOLESALE Pharmaceutical wholesalers procure, distribute and sell a wide range of pharmaceutical and medicinal products.

These products include prescription medicines, pharmacy-only medicines, over-the-counter (OTC) medicines, other healthcare products and veterinary pharmaceuticals.

Pharmaceutical wholesalers in the Australian market generate $A14.6bn in annual revenue and employ around 13,000 staff.

Although the principles of a pharmaceutical supply chain are similar to other products and industries, there are very specific issues and characteristics that make it different.

Within the supply chain there are a number of rigorous regulatory requirements, such as international customs and importation hurdles, complex transport and storage needs, massive SKU proliferation, and significant pressure to maintain continuity of supply.

Pharmaceutical supply chains are not only important for hospitals, practitioners and consumers, but are

MHD COVER STORY also important from social and political perspectives. The impacts of disrupted supply can be felt widely and quickly, and have serious ramifications. It is crucial that medicines be delivered at the right time to the right person in standard conditions.

Improper distribution of medicinal products not only affects brand reputation, customer satisfaction and company profits, but can also disrupt the healing processes of patients and negatively impact public health.

Factors that contribute to unanticipated shortages of medicines include manufacturing faults, logistical failures and unexpected or unpredictable disease outbreaks. Additionally, unexpected safety signals may require recalling of batches with a consequential scarcity of remaining supplies at short notice.

With notable unexpected shortages, the vulnerability of the supply of medicines is exposed. Supply may be restricted or delayed anywhere in the supply chain from manufacturing to the dispensary. The high margins on pharma products, coupled with the limited patent lifespans, mean pharmaceutical companies must significantly focus on maintaining supply.

THE CHALLENGES Consistency. End-user customers demand the highest standards of quality and with zero-fault tolerance. Consistent, reliable service levels are clearly paramount, as is the compliance with regulatory requirements.

Regulation. The foundations of Australia’s pharmaceutical supply chain have shifted over recent years due to global and local factors. The NMP (National Medicines Policy) commits to providing timely, Australia-wide

“

Consistent, reliable service levels are clearly paramount, as is the compliance with regulatory requirements.

”

access to affordable medicines that meet appropriate standards of quality, safety and efficacy, while maintaining a responsible and viable medicines industry.

Internationally, the industry is moving towards the new Goods Distribution Practice (GDP), which is similar to the Good Wholesaling Practice, but extends the requirements around handling, transportation and traceability. Incorporating these will add challenging logistics hurdles that demand significant investment in existing Australian infrastructure.

Pack variety. There is a significant variety of packaging in the pharmaceutical industry – a vast array of box sizes and dimensions, packets and satchels, glass vials and jars including liquid dosage, plastic bottles etc. Also, packaging must be safeguarded throughout the logistics chain to maintain perfect appearance, not only for aesthetics but also for clarity of essential identification.

The rise of generics. Over recent years, the percentage of generics in the market has been steadily increasing and they are estimated to account for about 90 percent of all prescriptions by 2020 This continues to significantly contributes to SKU growth with wholesalers.

An increasing number of prescriptions.

Alongside the rise of generics, there has been an overall rise in the number of prescriptions, in the vicinity of 6.8 per cent in 2015. As the demand for medicines continues to grow, more accurate forecasting and inventory management have become increasingly important.

The rise of cold chain logistics. With demand for cold chain logistics growing, it has become increasingly difficult for MHD MARCH / APRIL 2019 | 15

“

Supply chain visibility is considered of major importance and a significant challenge facing the industry.

”

Order fulfilment systems can be flexibly adapted to changing requirements.

16 | MHD MARCH / APRIL 2019

pharmaceutical companies to manage fluctuations in demand for temperaturedependent medicines, which can result in exceedingly high inventory costs due to the cooling requirements. This can be of high concern in the Australian market, particularly evident during the hottest January on record that we experienced this year.

The European GDP guidelines extend adherence to storage conditions, as indicated on the packaging, to the transportation leg of the journey. The compliance requirement has long been adhered to with cold chain products – generally anything below 8°C. However, it is new for the majority of the products found in most medicine cabinets, often labelled for 25°C. For example, in practice, the GDP guidelines now apply to about 80% of pharma products in the EU. Supply chain visibility. Many products are highly sensitive and require end-to-end documentation. Visibility is the ability to track and trace prescription medication.

It is also essential to monitor and comply with expiration dates. Supply chain visibility is considered of major importance and a significant challenge facing the industry.

Management’s ability to achieve a nearly risk-free environment is primarily enabled by visibility technology that introduces intelligence into every step of the healthcare supply chain.

Storage locations. Storage and picking of pharmaceuticals dictates significant variety and different environments. There is also a need for dedicated storage areas for different types of products such as OTC medications and products, narcotics and hazardous chemicals. Some items require cooling, and others must be held in secure storage.

ORDER FULFILMENT SYSTEMS SSI SCHAEFER draws on a wealth of expertise and technologies to facilitate the continuous and efficient supply of products in the pharmaceutical industry. SSI SCHAEFER’s order fulfilment systems, whether manual, semi, or fully automated, can flexibly be adapted to the increasing requirements and demands of this industry sector, and include: • Carton and tote bin conveyor and handling systems for efficient material flow.

• High productivity ‘goods-to-person’ order picking systems.

• ‘A-frame’ fully automated product dispensers.

• Product and order verification scanning machines.

• Automatic storage and retrieval systems for tote bins and pallets.

• Warehouse management software for manual or automated warehouses delivering: -- Serial number tracking through automatic recording of data.

-- Expiry date management through stock monitoring and automatic early expiry date detection.

• Automatic-guided transport systems.

• Robots for both picking and pallet loading.

• RF, voice or light directed manual picking to order cartons or pallets.

• Plastic tote bins for product storage and order delivery.

MHD COVER STORY

LEFT: The goods-to-person system brings products to the operator.

BELOW: The A-frame drops picked items into the conveyor.

ABOVE: SSI SCHAEFER’s warehouse management system, WAMAS.

A-frames SSI SCHAEFER A-frames automatically dispense pharmaceutical products onto a collector belt that runs through the centre of the A-frame and automatically delivers the collected items into an order tote or carton.

Synchronisation between the collector belt and the order totes ensures a continuous stream of automatically picked products, up to 10,000 items an hour, making the A-frame ideal for handling fast moving small items in peak times.

Warehouse management software

Goods-to-person systems SSI SCHAEFER goods-to-person high productivity picking systems eliminate walking by automatically retrieving products from an automatic storage system and conveying them to an operator at an ergonomically designed pick station. Order totes or cartons are also automatically conveyed in and out of the pick station, allowing the operator to continually fulfil orders without moving from the station. A combination of displays and light curtains ensures high accuracy and productivity.

Operators can pick individual items, shelf packs or small cartons at the station.

“

Synchronisation between the collector belt and the order totes ensures a continuous stream of automatically picked products, up to 10,000 items an hour.

”

SSI SCHAEFER’s warehouse management software, WAMAS, intelligently manages the end-to-end processes in both manual and automated distribution centres.

WAMAS ensures tight integration between the various automated subsystems and operational processes, and is rich in the functionality required for pharmaceutical distribution, including: • Batch-lot & product ID tracking.

• Check weighing.

• Order cubing.

• Route prioritisation.

• Order consolidation.

WAMAS manages and controls all intralogistics processes including efficient and flexible order processing, goods movement, and resource optimisation, along with the provision and analysis of logistics performance data so critical to the supply chain visibility required by the pharmaceutical industry.

SSI SCHAEFER is a strong partner to the pharmaceutical industry, having worked with many industry leaders over the last 20 years.

Contact SSI SCHAEFER directly for case study evidence. For more information, call +61 2 8799 3600 or visit www.ssi-schaefer.com. ■ MHD MARCH / APRIL 2019 | 17

SPOTLIGHT ON: ROBOTS IN DISTRIBUTION CENTRES

MAL WALKER

What robots are available and should you use them in your DC?

D

on’t worry, contrary to the terrifying Daleks portrayed in the long-running Dr Who series, robots are not taking over the world or the universe! In reality, they are more analogous to the friendly droids of Star Wars’ 3-CPO R2-D2 and BB8, who are loyal and faithful servants to their human and non-human masters.

This is good news for distribution centre operators, because the Star Wars ‘droids’ have morphed into a new generation of reliable DC robots that are revolutionising the logistics world!

Research from market intelligence firm Tractica reports that the worldwide sales of warehousing and logistics robots reached USD1.9 billion in 2016, with growth in coming years its projected to reach USD22.4 billion by the end of 2021. Manufacturers of robots can therefore expect unit shipments to increase from 40,000 in 2016, to 620,000 units annually by 2021 (reference: www.tractica.com).

But who is buying robots?

Traditionally, it was manufacturers with repetitive production processes, but the robotic landscape has broadened to include distribution centres, mines, hospitals, hotels, casinos, offices, mines and others. In fact, any application where a process can be automated.

18 | MHD MARCH / APRIL 2019

SHOULD YOU USE THEM IN YOUR DC? In this article, I will briefly touch on the 13 most common types of robots that are being used in distribution centres, along with their characteristics and uses. This is by no means a comprehensive list, but it may help in working out what robots could be beneficial in your situation.

Firstly, how do you classify robots?

Particularly as there are so many variants. The Tractica report lists the following four in the context of distribution centres.

• Mobile robot platforms: automated guided vehicles (AGV) and autonomous vehicles.

• Shuttle automated storage and retrieval systems: ASRS, featuring in-rack robots.

• Industrial robotic manipulators: typical robotic arms that can be applied to countless applications.

• Gantry robots: robots that run on overhead structures.

But what do they do, and how do you know if you would benefit from one, or more? To assist, I’ve developed a table that lists the types of robots and applications in warehousing facilities.

Bur first here are some definitions.

1. AGV: Generally used for transport of goods within a set path or circuit.

May be guided by rails, lasers and sensors. These have been around for many years, but AGV technology has advanced and is far more affordable,

reliable and applicable to many types of mobile equipment.

2. Shuttle systems: Used within racking systems to place and retrieve stock.

The racking maybe serviced by automatic conveyors or AGV, or manually by an operator.

3. Autonomous mobile robots: These are free-path robots controlled to operate on the best put-away or picking path. Using sensors and cameras, they can navigate around a DC where people are working. They are ideal for goods-to-person and task-to-person applications.

4. Stacker cranes are used in automated storage and retrieval systems for pallet handling. Yes, they have been around for many years, but they are a robot, nonetheless. They typically run on fixed-path rails systems.

5. Mini-load stacker cranes: Related to the larger stacker cranes, mini-load cranes run on fixed rails installed within racking. They can achieve high rates of replenishment and picking and are now able to pick cartons, object and eaches to totes or conveyor belts.

6. Industrial robotic order picker: Using conventional robots with articulated arms for picking and palletising/ depalletizing etc. has become common place. In recent years, visualisation technology has enabled robots to see and pick stock in units. If the robot does not have the right gripping device to pick items up, it merely changes to the right one, and continues picking.

MHD FEATURE And now some common operating modes: 1. Goods-to-person: Where a robot brings goods to a human for order picking purposes.

2. Task-to-person: Where a robot brings a receptacle and picking intelligence/ information to a picker, so that the picker can pick the required goods to specific order bins on the receptacle. (Amazon makes use of task-to-person robots in some locations.)

3. Goods-to-robot: Automation or robots bring goods to a robot for order picking purposes 4. Person to robot: A person brings goods to a robot for specific orders or sortation and delivery by the robot to a consolidation or packing zone. These robots can typically include tilt-tray devices for feeding goods into staging bays or directly to cartons.

Now that you know the common types of robots and operating modes, the charts

No.

Robot Type

Application

Where used?

Fixed or free path

1

ASRS

Stacker crane

Within racking

2

ASRS

Mini load stacker crane

3

“

If you are looking at robots as a solution, be sure to do your homework in terms of analysis, application and return.

”

Mal Walker is manager, consulting, with the Logistics Bureau, where he works with local and international organisations to guide them in specification preparation, establishment and review of outsourcing contracts. He holds qualifications in engineering, business operations and logistics. For more information contact Mal on 0412 271 503 or email mwalker@logisticsbureau.com. ■

Below: The 12 most common robots in distribution centres.

Examples

Captive

Fixed path

Reciprocating crane in ASRS

Within racking

Fixed path on rails

ASRS

Mini load stacker crane order picker

Within racking

4

ASRS

In-rack shuttles

5

Mobile robot

6

7

should make some sense in terms of application. What is hard to define is the cost for automation and robotics. This is complex and depends on many factors too numerous to cover here. However, the evidence suggests that robots are becoming cheaper, reliable and easier to justify than ever before.

If you are looking at robots as a solution, be sure to do your homework in terms of analysis, application and return.

Operating mode

Handles pallets?

Handles cartons/ totes/ objects?

Handles units (eaches)?

Typical cycles or picks per hour

Yes

Goods to robot/ conveyor

Yes

No

No

30-40

Receiprocating crane

Yes

Goods to person

No

Yes

No

40-50

Fixed path on rails

Receiprocating crane

Yes

Goods to person

No

Yes

Yes

60-70

Within racking

Fixed path within racking

Multi Shuttle, satellites running within racking

Yes

Goods to person

Yes

Yes

No

40-50

Transport robot

Fixed paths on floor

AGV

Tuggers, forklifts and reach trucks

No

Transport

Yes

Yes

No

20-25

Mobile robot

Transport robot

Fixed paths on floor

AGV

Automated order picker with mounted robot

No

Auto picking to AGV

No

Yes, some

Yes

50-60

Mobile robot

Mounted robot on a mobile

Free path on floor

Autonomus mobile robots

Automated order picker with mounted robot

No

Auto picking by AMR

No

Yes, some

Yes

50-60

No

Task to person

No

Yes, some

Yes

20-25

8

Mobile robot

Transport robot

Free path on floor

Autonomus mobile robots

Robot brings receptacle to the picker, picker places goods in designated tote on the robot

9

Industrial robot

Industrial robotic order picker

Fixed location

Fixed position

Standard industrial robots integrated into conveyor system

Yes

Goods to robot

Yes

Yes

Yes

50-60

10

ASRS

A-frame

Fixed location

Fixed position

Used for high-volume eaches picking

Yes

Goods to robot

No

No

Yes

2000-3000

11

ASRS

Carousels vertical and horizontal

Fixed location

Fixed position

Used for storing a high number of SKU in restriced space

Yes

Goods to person/ robot

No

Some

Yes

50-60

12

Ganrty robot

Ganrty robot

Free path above floor

Fixed position

Overhead carton and tote picking and/or layer picking and/or palletising

Yes

Goods to robot

Yes

Yes

Yes

60-80

MHD MARCH / APRIL 2019 | 19

GET SMARTER Why smarter warehouses demand smarter risk strategies

PAUL MAY

F

aster, cheaper, smarter. Feeling the squeeze from international competition, a growing number of Australian businesses are investing in warehouse automation to gain an edge.

Retail giant Coles is the latest to announce it’s bringing in the robots.

In a bid to lower supply chain costs and increase competitiveness, it will pour almost $1 billion into two automated distribution centres in Queensland and NSW. It’s jumping on a bandwagon that its main rival, Woolworths, got rolling last year. Woolies’ $562 million investment in a fully automated, 40-metre-high warehouse – the largest in the country – is expected to go live within weeks.

Both businesses are under pressure.

Australian sales have tripled in six years at US giant Costco, which is now in the best financial position it’s been in since arriving on our shores more than a decade ago. German grocery retailer Kaufland is expected to further shake up the market by opening up to six sites starting this year. Amazon is also making inroads into the Australian market.

20 | MHD MARCH / APRIL 2019

Reducing costs and time-to-market are the order of the day. Coles CEO Steve Cain cited “lower supply chain costs” and enhanced “overall business competitiveness” as the driving forces behind Coles’ big spending.

It’s not alone. Warehouse and supply chain consultancy TM Insight predicts that automation will be the buzzword for the Australian industrial property market in 2019 as manufacturers, wholesalers and retailers look for more efficient ways to deliver goods quickly to customers. The consultancy has recently designed and delivered new hi-tech warehouses for the likes of Woolworths, The Reject Shop, Bunnings and Kmart.

Amazon’s entrance into Australian retail is already credited with encouraging Coles and Woolworths to move to a same-day delivery model for those who spend more than $150 and $300 respectively. In China, the country’s leading online marketplace, Alibaba opened a warehouse late last year staffed with more than 800 ‘automated guided vehicles’. It’s been designed to deal with China’s annual ‘Singles Day’ shopping festival.

NEW RISK PROFILE Those managing automated facilities must balance their business interest in greater efficiency, increased profitability and fewer human errors with minimising new risks. The scale, speed and increased use of automation inside a modern warehouse alters the risk profile. Traditional warehouse fire protection strategies including using ceiling-only sprinkler systems must be revisited.

Large numbers of expensive robots in densely stacked warehouses pose a greater fire risk and increase the likelihood of it spreading faster. The use of open-top plastic containers, rather than traditional closed-top cardboard or wooden containers, is another trend that ramps up risk. These open-top containers capture sprinkler water that’s being used to fight fires and prevents it from flowing down through to the lower levels of the warehouse.

Risk managers must strike a balance that delivers effective mitigation without unnecessarily increasing costs or limiting storage potential, as this would negate the purpose of shifting to automation in the first place.

MHD FEATURE THE HUMAN ELEMENT Working with a specialist partner significantly reduces risk. For example, FM Global data shows the difference between an adequate sprinkler system and an inadequate one – either non-existent or with insufficient design – is massive. The difference over a 10-year period can be as much as fivefold, with average losses rising to almost $AU6 million within inadequately protected facilities.

In a robotic warehouse, the cost of equipment alone is enormous. The gadgetry that now goes into a modern logistics facility can be worth three times the value of the real estate, according to TM Insight.

FM Global has invested heavily in developing warehouse fire protection guidelines. Based on five years of research, these guidelines are intended to help risk managers and warehouse managers minimise the fire risk associated with automatic storage and retrieval systems (ASRS).

In designing the Protection for Automatic Storage and Retrieval Systems (ASRS) data sheet, we’ve discovered that it’s possible to: • Optimise fire protection through careful storage design choices.

“

The shift to automation is all about reducing costs and time to market in a highly competitive industry. But poorly understood and managed risks threaten to send these advantages up in smoke.

”

GO GREEN

• Reduce the cost of fire protection systems including piping, pumps and water tanks.

• Improve environmental sustainability by using less water.

• Develop fire protection strategies which are based on evidence (full-scale fire testing) rather than guesswork.

Simple steps, such as having reasonable gaps between boxes, can make it so much easier and less costly to protect a facility from massive fire damage. Such gaps reduce the ability for a fire to spread horizontally and also allow sprinkler water to penetrate down to the seat of the fire.

The shift to automation is all about reducing costs and time to market in a highly competitive industry. But poorly understood and managed risks threaten to send these advantages up in smoke. As traditional distribution models are overturned by automation, it’s imperative that businesses also take a second look at how they are addressing risk.

Paul May is the operations engineering manager at FM Global. For more information visit www.fmglobal.com. ■

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MHD FEATURE

AUTOMATED PHARMACEUTICALS How technological advances in automation and robotics are benefitting the pharmaceutical industry of today FILLING, INSPECTION AND PACKAGING

JONATHAN WILKINS

“

Robotics technology is also becoming more accessible for smaller businesses as the cost is decreasing and they are becoming easier to use.

”

22 | MHD MARCH / APRIL 2019

T

he modern pharmaceutical industry can be traced back to local apothecaries that distributed botanical drugs to local communities.

The apothecaries expanded to wholesale manufacture in the mid 1800s. During this time, all of the manufacturing processes were manual and it often took several people to manufacture one bottle of medicine.

A recent study by the Association for Packaging and Processing technologies (PMMI) has predicted that robots will handle 34 per cent of primary pharmaceutical packaging operations in North America by 2018. An increase in the use of robots is particularly significant in dispensing, sorting, kit assembly and light machine-tending.

The advantages include greater speed and accuracy, more flexibility and more reliability.

As the use of the robotics in the pharmaceutical industry increases rapidly, it’s important to consider the benefits of the latest technologies for manufacturers, researchers and scientists.

The pharmaceutical industry produces millions of tablets each week, all of which must be carefully scrutinised before being packed and shipped to distributors. During this inspection, drug manufacturers must ensure that the correct amount of medication, with the exact chemical composition and weight, are precisely packed into the appropriate containers.

Most pharmaceutical packaging systems use automation to manage bottle orientation, capping, labelling, and collation systems.

Automation of packaging also requires a system that monitors the operation on a supervisory level, checking for low hopper levels, fallen bottles, and low-level supplies.

Until recently, Raman spectroscopy was not widely applied in the pharmaceutical industry. However, in the last few years, developments within the industry coupled with improvements in Raman instrumentation have generated increasing interest in the technology. Raman spectroscopy measures the molecular vibration and rotational energy changes of each tablet, ensuring their chemical compounds are correct before distribution.

This is just one stage of pharmaceutical inspection — automation and machine learning are also applied to ensure that products are packed in the correct bottles and boxes with the correct labelling affixed.

PERSONALISED MEDICINES Despite differences in genetics, age and gender, most people receive identical medical treatment when diagnosed with the same condition. This is because even the world’s best scientists and doctors don’t fully understand how individuals develop diseases and respond to treatments. This has resulted in a one-size-fits-all approach to medicine that is based on broad population averages.

More recently, the pharmaceutical industry has seen the advent of personalised medicine, bringing the industry closer to more precise, predictable healthcare that is customised to the individual patient. Powered by our

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increased understanding of genetics and genomics, more doctors are providing better disease prevention, more accurate diagnoses, safer drug prescriptions and more effective treatments.

Personalised medicines need automation to reach their full potential.

Automation and around-the-clock processing have already contributed towards an environment where personalised medicine is becoming commercially viable. Broader use of genome sequencing for individuals and continued development of drugs proven effective for particular genetic dispositions will continue to accelerate this trend.

Without automation and robotics, scientists often become hampered by the manual testing of individuals’ genomes.

Today’s automated, high-throughput screening is allowing scientists to access a huge amount of data with little manual interaction. This keeps costs low and increases the speed at which the system can analyse gene sequences.

Automated systems also have the capability to analyse information including patient medical histories, genotype data, familial inheritance and biomedical research. With this in-depth automated data analysis and intelligent interpretation, it is possible to build individual clinical and molecular profiles of each patient and use this to personalise medicine and care. This is particularly important for rare diseases, where individual patient profiles can be assembled and compared with similar cases around the world.

24 | MHD MARCH / APRIL 2019

ROBOTICS IN THE LABORATORY The pharmaceutical industry is increasingly making use of robotics to automate specific processes in drug development, including drug screening, anti-counterfeiting and manufacturing tasks. Today, processes such as nuclear magnetic resonance (NMR) and high performance liquid chromatography (HPLC) can have sample preparation carried out by robotic arms.

Additionally, structural protein analysis can be done by automatically using a combination of NMR and X-ray crystallography. X-ray crystallography is an important technique used in drug discovery and involves the detailed analysis of crystal structures of proteinligand complexes. This allows for the study of specific interactions between a particular drug and its protein target at the atomic level. This process often takes hundreds to thousands of experiments to create a protein crystal suitable for X-ray crystallography. An automated micropipette machine can allow nearly a million different crystals to be created at once and analysed using X-ray crystallography.

Despite these benefits, many pharmaceutical manufacturers are still wary of robotics, seeing it as a new technology that is too complex to implement. Worries relating to cost, ease of use and acceptance by staff often discourage companies from adopting the technology, especially small and medium enterprises (SME) that believe only large manufacturers can afford it.

In reality, robotics technology can be a great investment. Return on investment often comes in the form of energy savings, flexibility, high-speed production and increased quality. More recently, robotics technology is also becoming more accessible for smaller businesses as the cost is decreasing and they are becoming easier to use.

The pharmaceutical industry has come a long way since the manual processes used in the 1800s. Companies rely on automated processes and machinery running precisely, around the clock in order to meet distributors’ deadlines and produce medicine on time. However, the pharmaceutical industry is no different to any others in the sense that machinery sometimes breaks.

Whether it’s the programmable logic controller (PLC) that has shut down the entire system, or the human machine interface (HMI) that is preventing staff from accessing the production line, pharmaceutical manufacturers often need replacement parts fast.

In some industries, it’s as easy as contacting the original equipment manufacturer and ordering a replacement part. However, more commonly in the pharmaceutical industry, companies have legacy systems due to the need to comply with strict machinery regulations and register all new parts as safe for use.

When these parts break, pharmaceutical manufacturers often find that they have in fact become obsolete since their last purchase and are much more difficult to get hold of. This is where working with a specialised obsolete parts supplier comes in particularly handy, especially if they are already on your approved supplier list.

Jonathan Wilkins is the marketing director of obsolete industrial automation parts supplier EU Automation.

For more information email jonathan. wilkins@euautomation.com or visit www.euautomation.com. ■

Autonomous Mobile Robots f for Logistics.

We deliver Automation.

Cohesio Group delivers Robotics for Logistics in partnership with Geek+ Robotics for logistics has huge implications for the Australian and New Zealand distribution centres, with robotic assistance undoubtedly able to help streamline logistics operations. A traditional goods-to-person (GTP) deployment system would cost $15-20 million. By introducing the power of GTP with autonomous mobile robots (AMR), this could drop to anywhere from $1 - $3 million, making the commercial supply chain more efficient. Chat to us about our live sites using this automated GTP system.

E: info@cohesiogroup.com P: AU 1300 66 93 94

cohesiogroup.com/robotics

MHD FEATURE

HI5 TO I4.0

Five reasons why Industry 4.0 will permit even small warehouses to adopt automation TOM RENTSCHLER

M

any have written about the impact that Industry 4.0 will have on warehousing and distribution and why companies should embrace this fourth industrial revolution. But if you own or operate a small warehouse or distribution centre, you may be thinking: “How will Industry 4.0 help me?” or: “Isn’t this only for big companies?”

Yet many of the benefits of I4.0 will extend to small operations.

I4.0 includes technologies like the Internet of Things (machines talking to machines), big data, artificial intelligence, machine learning, as well as collaborative robotics. And there are five very strong reasons why they will make automation a worthwhile investment for even smaller warehouse operations.

1/ TRUE PLUG & PLAY Traditionally, automated material handling systems required a significant amount of project-specific engineering, control coding and software. Conveyor systems, for example, often need specific PLC code to optimise behaviour, 26 | MHD MARCH / APRIL 2019

such as priorities at a merging point.

These ‘traffic rules’ are different for each layout and also depend on the user’s exact processes.

The costs of customising, installing and commissioning a system do not have a linear relationship to size. While the overhead may be a small proportion for large systems, on smaller systems those costs could represent up to 40% of the total installation.

By combining IoT principles with artificial intelligence and machine learning, this problem can be overcome.

Imagine that you will simply place conveyor elements (or any other automated equipment) on the floor.

Each element will automatically identify itself to all others and ‘connect’ to its neighbours, allowing the system to map itself and understand how it looks.

Meanwhile, applying big data analytics to the current, still manual operation will provide an understanding of the warehouse user processes. This allows the establishment of a first, base-line logic for running the new automated system. Once the physical automated systems are placed and used, machine learning will quickly determine

how to use the equipment better and set the right traffic rules to match the system’s layout and user processes.

2/ SMART SYSTEMS CAN ADAPT TO WAREHOUSES BUILT FOR HUMANS Most warehouses, and certainly small ones, have been designed to be operated by humans. They have rows of shelving and people with trolleys walking through them to collect orders. Until recently, implementing automation would require these processes to be completely replaced.

Automated systems, such as robots, used to require a very clearly defined environment that was free of unexpected interruptions. And whilst a manual warehouse may look very organised, there are many small deviations that are easy for people to deal with; just imagine a larger product overhanging a few centimetres into the next storage location, or a worker leaving their trolley in the aisle for a few minutes to use the restroom.

Changing a warehouse like that is a big step that could easily cause disruptions and risk. Yet a new

MHD FEATURE

“

All of these observations show that the real growth in warehouse automation will not only be with traditional, large systems.

”

generation of collaborative robots is emerging. These robots are not only safe to work alongside humans, but also use advanced sensors and artificial intelligence to adapt to changing circumstances.

Now companies can simply deploy one or two collaborative robots within their current operation. Humans can work alongside the robots, eliminating the need for drastic changes to the warehouse or the processes.

3/ SMALL COMPANIES DON’T WANT TO STAY SMALL Many of the small companies in the field of logistics plan to grow, sometimes very quickly.

Most early-stage e-commerce companies have big ambitions, but exactly how fast, or in what direction they will develop is uncertain.

This means any automation will need to be flexible so the company can start small, but scale fast when growing.

New technology such as autonomous mobile robots are perfect for this scenario.

You can start with only a few. Due to peer-topeer communication and intelligent software these vehicles are easy to implement, providing payback even in small numbers.

Still, when the time comes to expand, this is as easy as buying (or leasing) more vehicles, placing them in your warehouse and powering them up.

The new vehicles will identify themselves to the existing ones and the entire fleet will adapt and optimise itself to make best use of the new robot-colleagues.

An example of easily designing for growth is the Hasbro distribution centre in Preston operated by Toll. The modular sorter and conveyor, designed and installed by Swisslog, are easy to expand as the need for product picking and despatch grow. In the meantime, the operation benefits from reduced costs and can handle more retail fulfilment cartons than you would expect from a traditional style warehouse.

4/ SMART DISTRIBUTION NETWORKS WILL HELP KEEP WAREHOUSES SMALL This may seem contradictory to the previous point, and indeed it applies to a different group of companies. E-commerce is pushing the boundaries of delivery times. Same-day delivery is increasingly an expectation and offered by many companies in larger population areas. By default, this requires products to be stored close to consumers in areas where there is often little space to build a warehouse.

To help keep warehouses small and still keep service levels high, Industry 4.0-related 28 | MHD MARCH / APRIL 2019

science is being used. Predictive shipping is one example, where goods will be shipped from a central warehouse to a smaller urban warehouse even before you order it. This concept relies on big data to understand and accurately predict customer behaviour.

The other method is distributed order fulfillment. A specific product may be available within the customer’s area at any number of locations. These locations could be the seller’s urban warehouses, a third party warehouse, a store, or even awaiting pick-up at the home of a customer who wants to return it. By connecting all these sources in a real-time network, the most efficient source location for the product can be found.

Again, big data and artificial intelligence will manage the complexity of this process, while blockchain technology will allow secure transfer of data and money between potentially competing providers.

5/ SMALL COMPANIES ARE ENTREPRENEURIAL – BUT MAY HAVE LIMITED CASH Investing in automation requires a long-term vision, combined with an entrepreneurial approach. This is even more true when investing in new, ground-breaking technologies. This mindset is often found at small-to-medium size companies or founder-owned companies. Decision processes can be shorter, which can make it easier to realise a vision. This is why small start-ups are often at the forefront of adopting new technology.

Traditional automated systems have been highly customised and demanding to install, remove or change. Uncertainty about the company’s future, linked to an asset with very little value outside of that company, will lead to expensive financing.

‘Plug & play’, self-learning and high flexibility also implies that it will be just as easy to re-use equipment somewhere else. This re-use capability will reduce financing risk, making it less expensive. It will also support different models such as rental or leasing.

All of these observations show that the real growth in warehouse automation will not only be with traditional, large systems. While those systems will always be there and also become infinitely smarter, they will be fewer in quantity compared to the thousands of small warehouses that have historically been too small to automate.

With I4.0, size will not matter any more.

Tom Rentschler is head of marketing for Swisslog WDS Americas. For more information visit www.swisslog.com. ■

KEEP YOUR GLOBAL SUPPLY CHAIN MOVING

When it comes to sea, air and customs services, trust C.H. Robinson.

Take control of your global supply chain with our industry-leading technology and local experts around the world.

Discover the power of C.H. Robinson at www.chrobinson.com

Š 2019 C.H. Robinson Worldwide, Inc. All rights reserved.

THE AUTOMATION INTERSECTION Logistics in Australia and New Zealand have arrived at an automation intersection. Which way will the industry go?

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e've reached a crossroads in Australia and New Zealand about advanced robotics technology. No longer can businesses ignore its potential or claim it's only taking off in other markets.

Hexa Research claims the worldwide warehouse robotics market will reach USD 6 billion by 2025, off the back of 7% compound annual growth from 2017. It's a global trend worldwide but not one reflected down under. The Australian Centre for Robotic Vision (ACRV) shows that only 1% of robotics companies that have tried to raise research and development capital in the last decade are Australian.

This is odd when you consider the desire for robotics infrastructure close to our shores. Countries across East Asia, developed and developing, are expected to increase their robotics demand over the next three years, according to the International Federation of Robotics (IFR). From Japan to Indonesia, Australia and New Zealand's regional trade partners are embracing supply chain automation. So why haven’t we entrenched robotics as a natural part of the Australian and New Zealand logistics sector's evolution, too?

THE RISE OF ROBOTICS BUT WHY IS IT SLOW TO TAKE OFF IN AUSTRALIA AND NEW ZEALAND? IFR data shows the global average density of robots in manufacturing and the logistics supply chain reached 30 | MHD MARCH / APRIL 2019

85 per 10,000 employees in 2018. And despite Asia-Pacific’s reputation as slow adopters of advanced robotics technology, density here is only slightly lower, at 75 units per 10,000. This is due to Asia’s interest in automation.

China is the world's largest purchaser of robotics, while Taiwan ranks sixth (IFR).

Hong Kong and Singapore's position as regional trade hubs also make them fertile ground for automation start-ups.

In Australia and New Zealand, meanwhile, interest is just picking up.

Aside from major global retailers such as Amazon's use of drones and autonomous mobile robots (AMR) to streamline supply chain efficiency, the Australian and New Zealand logistics sector is yet to really fully embrace the idea of automation as a help, not a hindrance.

Much of this reluctance stems from the fact that there are not enough local suppliers who can integrate robotics into the existing framework of logistics or supply chain infrastructure.

PricewaterhouseCoopers' analysis of automation's potential long-term impact shows there is little risk to many transport and logistics roles over the next ten years. The report suggests that, while robotics will reduce manual picking and transport roles, automation will instead alter positions. In effect, robotics will be less about replacing human workers and more about logistics enterprises upskilling workers into value-added roles.

KPMG echoes this position, claiming the role of a joint human-robotics

workforce will be with human workers monitoring and adding intuitive customer-focused skills to the datadriven role of robots. This collaboration with ‘cobots’ doesn’t mean the end of jobs. Instead, it improves the capacity of a given role with higher throughput rates stemming from streamlined physical labour processes and maximised storage space.

TAKING THE LEAP INTO ROBOTICS-AIDED LOGISTICS SECTOR Whilst a 2018 McKinsey study shows Asia-Pacific still leads the world in the percentage of businesses with no plans to automate in the future, the curtain is falling on that era.

So far Cohesio has helped deploy the logistics robots in two major Australian businesses. The projects:

1. The retail conglomerate Our first success with the Geek+ robotics was with a leading retail business. With a presence in both Australia and New Zealand, the client wanted to innovate its supply chain and logistics picking, packing and storage.

We started by consulting on the critical requirements for the robotics installation, determining how the technology would fit in with existing warehouse management infrastructure.

Our engineers and technicians mapped out the existing warehousing space and developed a blueprint grid for our robots to learn.

MHD FEATURE The project was completed within five months, from first consultation to final deployment - less than half the time it takes to integrate legacy fixed logistics infrastructure

2. The consumable goods supplier This food supply chain enterprise experienced significant growth in the last two years and decided now was the time to get onboard with implementing robotics technology.

The supplier already had voice technology integrated into its picking and transit process and thought of robotics as a natural next step.

We sat down with the logistics team to assess suitability, to see if robotics really was the logical choice. Once a comprehensive plan for the deployment and integration process was developed, we began customising the Geek+ robotics equipment to their needs.

The project is expected to be completed by October 2019.

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Change management is the most essential part of an automation roll-out.

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AN AUTOMATION CULTURE SHIFT: THE KEY IS CHANGE MANAGEMENT Change management is the most essential part of an automation roll-out. You need to get buy-in from your whole supply chain network on the amazing potential of robotics and how it will help day-to-day productivity. This helps to remove the stigma around the technology.

Partnering with an enterprise that is equally committed to your business goals, including managing the evolution of your operations into future, is invaluable.

Automation is as much a state of mind as it is cold hard steel.

ARE YOU READY FOR ROBOTICS? A comprehensive robotics deployment might not be ideal for every logistics enterprise.

Voice technologies and legacy warehousing infrastructure have stood the test of time

for a reason. But refusing to consider automation as a viable means of improving operations is no longer an option. The world is progressing, and Australia and New Zealand's regional trading economies with it. Hexa Research shows that Asia-Pacific, perennial automation laggards, will be close to matching Europe in robotics market revenue by 2025.

We need to be part of the change and shape automation to suit the our national tastes.

The ACRV Roadmap claims the missing pieces restricting national growth are knowledge about the right technology, and robotics experts to lead the integration.

Cohesio's partnership with Geek+ is one of the first commercial robotics business tailored to the Australian and New Zealand markets to meet the needs of national organisations and customers. The diverse technology and engineering team can help companies build out and implement scalable robotics that suits their operations, now and into the future.

Are you prepared for a new mechanised world and ready to join the automation evolution with a robotics solution for your business? The time is now.

For more information call 1300 66 93 94, email info@cohesiogroup.com or visit www.cohesiogroup.com. ■ MHD MARCH / APRIL 2019 | 31

A COOL CHOICE

Toyota turret trucks were a cool choice for this air-con maker

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oyota Material Handling Australia (TMHA) partnered with National air-conditioning manufacturer ActronAir to help plan the material handling requirements and provide equipment for its new Marsden Park NSW warehouse.

A pair of Toyota BT Vector VCE150A turret trucks are at the heart of a new 21-strong all-electric fleet of Toyota Material Handling equipment chosen

by ActronAir for the new expanded warehouse and distribution facility.

Renowned for its energy-efficient products, ActronAir started as a family business in a garage in Winston Hills 34 years ago and has grown to have branches throughout Australia. It remains 100 per cent Australian-owned.

ActronAir national warehouse and logistics manager Mark Horan said the need for new headquarters and 32 | MHD MARCH / APRIL 2019

accompanying equipment rose from the business’s constant growth.

“Our old site was opened at Bella Vista 15 years ago. “With double-digit growth in manufacturing over six of the past eight years, we have grown quickly and remain focused on being a superior heating and cooling equipment brand.

“Our new warehouse at Marsden Park is 2.5 times the size of our old one, but even with the new 25,000 square-metre facility we still needed to use the space as efficiently and productively as possible.

“We knew of course that to squeeze out every bit of usable warehousing space we needed very narrow aisles and to rack as highly – and as safely – possible. However, our business is quite unique in that a lot of our airconditioning equipment is custommade and requires non-standard pallet sizes and storage racks.”

Accordingly, ActronAir sought a material handling partner with reputation and credentials to advise on the specialised equipment required to meet its goals. “One of our key values is ease-of doing business, it’s in our mission statement and one of the things we hang our hat on,” he said.

“We found with Toyota there was a meeting of minds. Nothing was a problem, they are easy to deal with and we had good, clear communication both ways. It was important to have a likeminded partner with similar values.”

Unusually, the Toyota BT turret trucks and other Toyota Material Handling equipment was specified and optioned before any ground was broken to build the warehouse.

“Unlike other places where you design and build your storage system and then put in your material handling

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equipment, we went the other way around,” said Mr Horan. “The detailed design for the warehouse was set around the capabilities of the equipment. So the Toyota turret trucks did help optimise the warehouse design.”

With tight and accurate turning between aisles, the Toyota BT Vector VCE150A turret trucks bring full very narrow aisle (VNA) functionality in an extremely compact footprint, and have a choice of chassis and cab widths.

Toyota Material Handling Australia major account manager Michael Marks, said the collaborative process with ActronAir is an excellent example of a key pillar of the Toyota Advantage – Tailored Business Solutions – being put into practice. “We pride ourselves on the flexibility we can provide our customers and in the case of ActronAir many things were highly specific to its business,” said Mr Marks. “The individual approach we take to providing tailored business solutions

“

Our guys love them. They appreciate their ease-of-use and efficiency, they think they’re really stylish and sophisticated.

”

equates to substantial reductions in operating costs through greater efficiencies. We're actually very proud of being able increase productivity for our customers.”

Putting the Tailored Business Solutions Toyota Advantage into effect in this instance required a considerable amount of data capture, analysis and technical programming.

“Ensuring the most appropriate and efficient specifications for ActronAir’s warehousing needs required a lot of data collection,” Mr Marks said. We had multiple technicians on site on many occasions – and our programmers working behind the scenes to ensure the dimensions were down to the millimetre.”

Another example of TMHA’s Tailored Business Solutions in practice included arrangements for ActronAir to experience its turret trucks operating first-hand at another Toyota BT turret truck customer’s site.

Oz Design Furniture granted ActronAir a visit to its nearby Rouse Hill site. “That was especially useful because, given the varied nature of their products, they also used nonstandardised sizes,” said Mr Horan.

“Their operation was quite similar to what we had in mind in terms of a VNA distribution centre. Experiencing that first-hand and seeing how it could practically benefit our business was pretty cool and very generous of Oz Design. It was a big plus for us.”

In another display of putting the Toyota Advantage of Tailored Business Solutions to work, Michael Marks said TMHA also departed with convention to assist ActronAir in meeting the warehouse’s go-live date.

“The Toyota turret trucks were already on order but the roll-out was tight, so rather than take delivery of them at our Moorebank headquarters, we assembled and configured them on site to get them operational as quickly as possible,” said Mr Marks.

Now that the Toyota turret trucks are running, Mr Horan said his operators enjoy driving them. “Our guys love them.

They appreciate their ease-of-use and efficiency, they think they’re really stylish and sophisticated.

“They also know that every time they need one it’s going to be ready for work. The value of reliability can’t be underestimated in our business.”

Other Toyota Material handling equipment specified by ActronAir includes: 12 x Toyota BT Reflex RRE160H high reach forklift trucks; five x OSE120CB low-level ride-on palletrunner/order-picker; one x 8FBJ35 and one x 8FBN30 counterbalance 4-wheel forklifts.

For more information call 1800 425 438 or visit www.toyotamaterialhandling.com.au. ■ MHD MARCH / APRIL 2019 | 33

MHD FEATURE

CROWN PARTNERS WITH LIFT’N’RACK Lift’n’Rack features a new showroom stocked with Crown lift trucks

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rown Equipment has expanded its Australian sales and service network with the addition of a new lift truck reseller in Port Macquarie NSW. Lift’n’Rack, which was established with over 30 years’ lift truck sales and automotive dealership experience behind it, has joined Crown’s global service and distribution network, a network that exceeds 500 locations in more than 80 countries.

Located at 22 Merrigal Road, Port Macquarie, the newly authorised Crown reseller will meet the growing material handling technology and equipment needs of customers on the MidNorth Coast and beyond.

Lift’n’Rack features a new showroom stocked with Crown lift trucks and will offer customers a complete selection of Crown’s material handling technologies, products and services including new and refurbished forklifts, warehouse solutions, Crown servicing and parts.

Crown Equipment director of sales Craig Kenchington said he is excited to welcome Lift’n’Rack into the company’s network of branches.

“Lift’n’Rack is a professionally run organisation and we’re pleased to authorise it as a Crown reseller,” Mr Kenchington said.

“Principal Adam McGilvray understands the material handling needs of forklift owners and operators in industries ranging from large and small-scale farming and manufacturing, through to logistics and storage operations.

“Crown is committed to being number one in customer service and Lift’n’Rack, with its ability to look after customers across the region with high-quality equipment and servicing, is an important part of consistently achieving that goal.”

Lift’n’Rack joins Crown’s nationwide service and distribution network, which also includes 17 company-owned branches in all metropolitan areas as well as numerous regional locations in every state.

To contact Lift’n’Rack call 0425 308 720, email adam.mcgilvray@crown.com or visit crown.com ■ 34 | MHD MARCH / APRIL 2019

Lift’n’Rack principal Adam McGilvray and Crown’s director of sales Craig Kenchington at the launch of the new Crown reseller.

Lift and Rack Principal Adam McGilvray with a customer near Port Macquarie, New South Wales.

STILL PICKIN’ IT UP AND PUTTIN’ IT DOWN AT 45

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rown Equipment’s legendary reputation for reliability and longevity has been highlighted by an elderly 30WTF154 walkie stacker that is still working hard after 45 years of service.

Not only is the walkie stacker the country’s oldest known Crown lift truck, it is still in top shape, in full working order and in use with Melbourne-based outdoor sign company Jamco Sign Services.

Named ‘The Old Girl’ by the staff, the walkie stacker has been kicking goals for more than 40 years and is about to be retired.

Before that, the walkie stacker started its working life in the warehouse of a small Sydney food importer not far from where it was manufactured in Smithfield NSW. Still in good health in 2002, Crown bought it back from its original owner for use in its rental fleet. After serving an array of Crown customers, Jamco then bought it in 2003, used but in perfect working order and it has stayed that way ever since.

Jamco warehouse manager Petar Gajica said the only thing he really knows about the walkie stacker is its age, because its build year – 1973 – is visible on its identification plate.

“It’s been with us for goodness knows how long and I think it’s preceded most of us who are working here. It’s funny though, none of us knew of its historical significance until it came time to replace it,” Mr Gajica said.

“It’s been super reliable and does exactly what it was built to do. It picks up pallets, moves them around the warehouse, puts them down and then does it all over again, day in and day out, all of it reliably and without any complaints from anyone using it.

“It works from 7am until 4pm five days a week and even gets public holidays. It

“

Jamco’s new Crown is already in service and has been nicknamed ‘Richo’ in honour of the Richmond Football Club.

”

ABOVE: ‘Richo’ the Crown SHR Series stacker is replacing Jamco’s elderly Crown walkie stacker.

BELOW: Jamco’s 45-yearold Crown 30WTF154 walkie stacker, known as ‘The Old Girl’, in use at the company’s Melbourne warehouse.

will be kind of sad to see it go but things have changed a lot here since Jamco started in business and it no longer meets our operational requirements.”

Warehouse space constraints mean Jamco needs a more versatile walkie stacker so the company is steppingup to a new Crown SHR Series lift truck – with reach capability – for better pallet handling and fewer movements through narrow, often congested, aisles.

Jamco is extremely happy with Crown, not just for the sturdiness and longevity of its equipment, nor for the impressive aftersales service but for the bond that has grown between the two companies.

“A good relationship has built-up between us over the years. Sure, we looked at other brands when we started thinking about replacing the walkie stacker but we came back to Crown, no problems.

“We are absolutely happy with our new Crown SHR Series walkie stacker and also with Crown’s sales and service. They were great at helping us find the piece of equipment that was just right for us.

“There’s never been an issue and Crown’s service technicians are always there if we need them. It all comes down to service and they are very capable guys.”

Jamco’s new Crown is already in service and has been nicknamed ‘Richo’ in honour of the Richmond Football Club.

“It’s black and yellow, Richmond’s colours, and Jamco owner and manager Steve James was a senior player for the club back in the day so it works,” Mr Gajica said.

As for the old walkie stacker, the 30WTF154 will be fully refurbished and see out its days in Crown Equipment’s Australian head office where it will be used for promotional duties.

Started by Steve James, Jamco Sign Services is a sign installation company specialising in large-format outdoor signs and employing more than 50 people in Victoria and SA. Recognised for its quality work, Jamco has been a ‘super supplier’ for APN Outdoor for the past 20 years, installing advertising on large format sites across Melbourne and Adelaide. Since 2009 it has also been the sign installer for APN Outdoor on the Melbourne and Adelaide public transport networks.

Jamco is also the Victorian Transport Accident Commission’s preferred banner installer for that state’s highways.

For more information call 131 604 or visit www.crown.com. ■ MHD MARCH / APRIL 2019 | 35

IT’S NEW! Finally, there’s something new in the forklift market

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Jungheinrich has introduced another semi-automated vehicle, the ECE225 low-level order picker with EASYPILOT remote operation.

”

36 | MHD MARCH / APRIL 2019

ringing with it new technology like lithium-ion batteries and state-ofthe-art automation, Jungheinrich Australia is ready to make a lasting impact on the Australian forklift market.

Over the past 35 years not a lot has changed here. There has been gradual technological tweaks over that time, but in general, everything has followed a marketdriven standard that is as simple as asking customers what type of units they would like and how many.

Internationally, however, things have moved on. In Europe, Asia and elsewhere, rather than simply selling forklifts, suppliers offer complete warehousing ‘solutions’.

“The Australian market has now reached something in the order of 20,000 units and is ready for a change. It’s time for Australia to catch up with the rest of the world,” said sales and marketing director of Jungheinrich Australia Grant Stewart.

JUNGHEINRICH AUSTRALIA As Mr Stewart explained, the company began life three years ago when its Germanbased parent company Jungheinrich Group purchased a local dealership.

“After three years of strategy and planning we are now ready to change the face of the Australian materials handling sector,” said Mr Stewart.

With 30 years’ experience in the industry, Mr Stewart has held senior positions with international responsibilities within the material handling industry in Australia. His most recent role was director of this country’s largest forklift company in Australia.

“I was actually retired, but the opportunity to come on board with Jungheinrich was enough to make me change my plans. The game-changing potential of its technology was something I couldn’t resist,” he said.

As sales director, Mr Stewart oversees a team of five state-based sales managers who together boast in excess of 200 years’ experience in the electric forklift market.

In addition, the company recently welcomed David Calleia – who previously headed operations at one of SE Asia’s largest OEM, and himself has more than 30 years’ experience, as its key account manager. In turn, Mr Calleia has put together arguably the most experienced team of industry professionals available. They include Michael Harris, Chris Burns, Luis Astudillo, Johan Nieuwland and Brian Power, and Mr Calleia is still looking to employ more industry leaders.

With the majority of his team now in place, the company is ready to go to market.

NEW TECHNOLOGIES Jungheinrich Australia’s plan to bring Australia’s materials handling market into the 21st century rests on three key factors: lithium-ion battery technology, automation and intralogistics.

The example of a major Australian retailer, which used to run forklifts equipped with traditional lead-acid batteries but recently converted to Jungheinrich lithium-ion battery powered units, illustrates the benefits of this battery technology.

Before the change, the operation required three batteries per truck to get through each

MHD FEATURE shift. To do that, they needed to store two batteries while the units were in use. With more than 100 units on site, they needed enough storage space for 400 batteries, as well as enough (skilled) labour to charge them.

“On the three-shift operation it would take half an hour to 40 minutes to change a battery and set it up to get charged. That’s two and a half hours non-recoverable labour before anything starts,” said Stewart.

After changing to lithium-ion batteries, they could actually run three shifts on one battery. Unheard of in this country, this made it possible for the customer to immediately cut those extra labour hours.

ADD AUTOMATION Automation is another key development that Jungheinrich Australia brings to the market.

For example, the company’s automated guided vehicles (AGV), available in either full or semi-automated models, can eliminate the need for an operator for the vehicle for those very repetitive tasks of moving product in a production or warehouse facility over the same path.

These AGV could be seen as the way of the future of MHE. Jungheinrich has introduced another semi-automated vehicle, the ECE225 low-level order picker with EASYPILOT remote operation. This order picker will follow the picker around the warehouse aisles, therefore eliminating the need for the operator to jump on and off to move the vehicle to the next picking spot. Like lithium-ion batteries, they offer impressive efficiency improvements in terms of picking items, labour cost etc.

Then the company’s warehouse management system, which enables communication between trucks, allows companies to fully integrate their operations.

With automation, a staged introduction is also possible. Customers can purchase a standard truck, then it can be semi-automated, and then that same unit can be later fully automated.

“A staged introduction means less disruption to a business in terms of things like cutting half an existing workforce overnight. It allows for more gradual change,” said Stewart.

THE JUNGHEINRICH GROUP

Jungheinrich sales and marketing director of Australia Grant Stewart. and equip them with everything from racking, forklifts and cranes to software.

“Unlike the rest of the market, Jungheinreich Australia offers integrated solutions. It’s not about the forklift. It’s about the solution, the service, and the consulting,” said Mr Stewart.

Rather than delivering a single quote, the company works with each new customer to provide the best possible solution. Because their portfolio includes manual, semi-automatic and fully automatic forklifts, they have no bias for any of these options.

“If the right truck is an internal combustion model, we’ll use our internal combustion model, but if the right truck is a very narrow-aisle turrow truck, that’s the way that we’ll go,” said Mr Stewart.

Jungheinrich employs 18,000 people in 40 countries and sold 154,000 forklifts worldwide last year.

The company is able to negotiate contracts that cover the entire global operations of large organisations. In other words, they can service the needs of these customers in Europe, Asia, the US – and wherever else they operate – under the one umbrella agreement.

Now, Jungheinrich Australia’s introduction brings this capacity to the Australian market, and with this in mind, the company is particularly targeting larger ‘key accounts’ across all industries. Indeed, according to Mr Stewart, the company has already had some major wins in this area.

However, as he was quick to add that this focus in no way diminishes the company’s dedication to its smaller customers.

“Our commitment to all customers, regardless of their size, is one of the main reasons we are a global market leader,” Mr Stewart said.

For more information call 131 687, email enquiries@jungheinrich.com.au or visit www.jungheinrich.com.au. ■

ONE-STOP MATERIALS HANDLING PROVIDER Jungheinrich Australia’s upcoming introduction of an intralogistics department is set to transform it into Australia’s first one-stop materials handling provider.

Far from a simple forklift supplier, it will become an intralogistics provider with the capacity to find greenfield sites for clients, then build, automate MHD MARCH / APRIL 2019 | 37

THE I-CURVE On-demand and in control: the irrational, emotional, uneconomic consumer – Part 2.

THE AMAZON EFFECT Industry experts are still divided on the impact services like Amazon Prime will have on the retail sector. Many believe the behemoth doesn’t do enough to differentiate itself in Australia, and that consumers are unlikely to get on board – however Woolworths CEO, Brad Banducci, calls it out as a new benchmark in terms of consumer expectations of delivery.

“We think Amazon Prime is the key vehicle, we see them being successful with that in the US and we will simply need to be better at on-demand,” he said, in line with the news of Woolworths-owned Endeavour Drinks Group’s 4.5 percent sales increase. “F18 was the year of pick-up for us.”

In the US, more than 50% of shopping journeys start with Amazon – and there’s no reason to believe Aussies won’t follow suit.

Amazon’s logistics, product range and deep knowledge of its customers pose a significant threat to Australian 38 | MHD MARCH / APRIL 2019

retailers. The e-tailer knows everything about its customers, to the point where it can predict what they will buy based on past transactions, and what they might like to buy in the future.

According to speaker, author, e-commerce fulfilment consultant and General Manager of Eagle Eye ANZ, Jonathan Reeve, local businesses are too focused on selling. “What I’ve seen over the last 17 years is that 80% of everyone’s attention has been on the digital challenge of selling,” he says.

“The physical challenge of actually getting the products to the consumer has been given 20% of their attention.”

This trend needs to be reversed, says Reeve, as customers are buying an experience. They want cheaper and more convenient delivery, and that is what Amazon is providing.

With the entrance of Amazon, the continued presence of eBay and local operations like Catch.com.au, e-commerce in Australia will continue

to grow rapidly whether we like it or not. To survive this surge, retailers must enhance their ability to collect, analyse and store data, and collaborate with other businesses and consumers to offer better service and better delivery.

THE CHANGING FACE OF BRAND LOYALTY According to Councillor Susan Riley, who is responsible for the City of Melbourne’s Small Business, Retail and Hospitality portfolio, “customers come back [to boutique stores] because they like you and they know they’re going to get the service they want. Online doesn’t provide that.

“Online is a real issue for Melbourne.

So many customers come in to the store – look, feel, shake – and then go buy it online,” she says.

But brand loyalty looks very different than it used to. The in-store/online balance is key for small businesses – they must become more experiential,

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so that people will come in-store for the activities that surround the buying experience, as much as the buying itself.

Retail industry executive at Telstra Gareth Jude said: “Based on our studies, Australian retailers achieve up to 20% attachment rates on sales for click’n’collect. Customers buy online then come in-store – and because of the great service and experience they’ve received, they decide they need to purchase something else while they’re there.

“Boutique retailers can complement their physical, in-store experience with an online presence and function.”

While Councillor Riley may be concerned about the notion of a “city of empty shops”, e-commerce provides a significant valueadd for physical retailers. As Localz’ CRO James Westlake explains, when you use Woolies’ click’n’collect, you go in to pick up your shopping – but you browse around and shop in-store first before picking it up. Or even if you don’t, by the time you get home, you’ve forgotten something you needed to include in your order.

“

We think Amazon Prime is the key vehicle, we see them being successful with that in the US, and we will simply need to be better at on-demand.

Brad Banducci, CEO, Woolworths.

”

“Brand heritage now is a reduced value compared to convenience,” he said. “When a retailer gives customers back the time they were going to lose [by enabling them to shop online], they reward the business by doing more shopping. Gifting customers this time is what creates brand loyalty.”

Mr Westlake refers to UK clothing company, River Island, as another example.

“River Island has repositioned itself as a tech company that sells clothes, so it can fulfil customer journeys. It realises clothes are its commodity – but its ability to form a relationship with its customers and help them with their lifestyle is what maintains brand relevance and loyalty.”

For High Street stores, brand is something that keeps their customers coming in the door. But now shoppers can come in the door, try something on, then go online to buy it – with next day delivery included and at a lower price than in-store.

Today’s retailers need to consider brand value versus convenience. If you’re relevant to your customers at this moment, they will like you. If you’re not relevant, the customer won’t be interested.

So, what is the answer for small and medium-sized retailers who can’t count on brand loyalty to get customers through the door (or clicking online?) According to Localz’ Louise Robertson, they need to become more experiential.

“Where you used to find a coffee shop on the high street, today you’d find a coffee shop in the back of a hairdresser’s, or with art on the wall,” she said. “Businesses are merging and becoming more experiential, which is critical for them to reinvent themselves. It’s not good enough to do what they did 20 years ago.”

DATA IS KNOWLEDGE IS POWER Consumers want complete control over their experience – and to provide this, businesses must know their customers intimately.

The key to getting e-commerce right comes down to data – and lots of it – about your customers and their habits, likes and preferences.

“As a retailer, you can always serve your customer better if you know more about them than the next guy,” said Telstra’s Gareth Jude.

Major e-tailers are continuing to turn data on its head, in stark contrast to the early periods of e-commerce when companies gathered plenty of information about their customers but didn’t know what to do with it. Businesses implemented complex CRM systems – only to have the data lay dormant.

“There’s a competitive imperative to get data right,” continued Mr Jude. “If you’re MHD MARCH / APRIL 2019 | 39

MHD SUPPLY CHAIN

“

Customers want more control and visibility of what they experience when they have their internet connected or their solar panels fitted. The Iconomy conversation is an important one for utilities and service companies to be involved in, as much as retailers.

Gareth Phillips Reg, Sales Director, Localz.

”

40 | MHD MARCH / APRIL 2019

not doing anything with your data, Amazon, Alibaba and all the rest of them certainly are.

And they’re going to eat your lunch.”

Jonathan Reeve concurred: “Unless you’re using data effectively, you’re fighting with one arm tied behind your back.”

Computing power and analysis are readily available as services – so there’s no excuse for Australian businesses not to be leveraging them. “Many technologies are converging, and there’s a lot more processing power available,” said Charles Edwards, Manager of supply chain management consultancy GRA. “This enables us to drive more insights from data with more data collection points, and we have the technology and computer power available to analyse it.

“It’s all about driving insights from consumer behaviour.”

OVER THE HORIZON: THE INEVITABLE CONSUMER MINDSET SHIFT The irrational, emotional, uneconomic Australian consumer is coming – and local businesses need to be ready. Although we might be reluctant now to share our data, the mindset shift is just over the horizon. It’s a journey that will organically happen.

Mr Edwards: “The first time I used an Uber, I thought – ‘I’d never get in to a stranger’s car!’” But his mindset changed as soon as he used the service and was amazed at its accuracy and cost-effectiveness.

Furthermore, there’s already a cognitive dissonance around how consumers share their data, and who they share it with. NBN Co’s Megan Park exclaimed: “Everyone’s

opting out of MyHealthRecord – but they’re sharing their whole lives on Facebook!”

Pressure from consumers is also now being felt in the field services arena, with everyone wanting to know who, when and where their service will be delivered. The increased criticism and regulation of the European utilities is sector is driving a flow-on impact, and confidence in the Australian utilities sector is at an all-time low.

“Expectations of service delivery and parcel delivery are becoming converged,” said Localz’ regional sales director for A/ NZ, Gareth Phillips. “Customers want more control and visibility of what they experience when they have their internet connected or their solar panels fitted. The Iconomy conversation is an important one for utilities and service companies to be involved in, as much as retailers.”

Online retail is only going to grow, and it remains an opportunity to be lost for local brands if they don’t take control of their own destinies and make the most of the data and the delivery services they have.

Businesses need to get their data analysis and deep learning right to give irrational, emotional and uneconomic consumers command of their delivery experience.

Localz’ Louise Robertson: “It’s all about the human. Whatever the technology, it’s all about emotions and data.”

Part 1. of this article appeared in the January-February issue of MHD Supply Chain Solutions magazine, which you can read here: https://bit.ly/2TZ3qnB. For more information visit www.localz.com. ■

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THE TROUBLE WITH SUPPLY CHAIN SECURITY

Supply chain security is not the top of mind of anyone, least of all for people who are so busy all day, every day that they barely have time to take a meal break VIVEK SOOD

42 | MHD MARCH / APRIL 2019

I

am, of course, talking about supply chain managers. The mobile does not stop ringing from the time they take it off silent in the morning, to the time they are ready to crash. If it is not a customer calling about ‘another botched-up delivery’, it is one of the service providers calling about ‘another unpaid invoice”.

Literally, hundreds of things can go wrong as millions of things are moving around 24x7.

And, sometimes they go wrong all at once.

Like when a customer threatens to walk away AND a supplier takes you to court.

Nobody thinks of supply chain security until it is too late Who has time to think of supply chain security in the midst of all this? Only those who are most serious about their careers in the supply chain.

‘Why is that the case,’ you ask? I think, by the end of this article the answer will be crystal clear to you.

I have written in many places before that the traditional supply chain model is gradually failing and will be relaced by a supply chain model that is radically different.

It is true! Think about Sears, and all the others who were blindly copying Sears in the 80’s and 90’s. It gives me no pleasure to name all the favourites of the yesteryears in this context.

Anyway, one would have to be living under a rock not to know the names I am talking about. And, by the end of 2019, there will be many more names to add to that list.

But, this article is not meant to compare and contrast the supply chain models of yesterday, today and tomorrow. I will write a different article soon to cover that important point.

2019 IS DIFFERENT The point to pay attention to is that 2019 is edgy. Things move slowly, but in a ‘definitive direction’. And this is the main point: careers are more important today than in the past 20 years.

And nothing has bigger impact on a career than a major incident in the supply chain.

What’s a major incident?

Let me describe a typical 1-minute video from a popular television network: The video opens with a typical family living room scene. A woman is sitting on the couch with three very young children holding a plate of strawberries in hand. Voiceover starts describing what happened to the family as a nightmare: the 9-year-old cute boy almost swallowed a needle embedded in the strawberry. The boy describes how he pulled the needle out of his mouth.

Authorities called it a vicious sabotage.

Video goes on to describe how the tampering

MHD SUPPLY CHAIN spread from Queensland to almost every state in Australia, and how some people ended up in hospital after swallowing a needle. Police come on screen and describe their investigations, and supermarkets’ precautionary steps to remove the strawberries from stores are noted. Copycat attacks of sabotage are mentioned and damage to the economy and strawberry markets are described.

But sabotage is not the only type of potential incident that can hit your supply chain. There are many other types of potential incidents.

In fact, in a project last year we identified at least seven types of potential supply chain risks – each with very complex supply chain implications.

“

There is a tendency in our planning to confuse the unfamiliar with the improbable.”

Thomas Schelling.

”

THREATS TO SUPPLY CHAIN SECURITY Even making a list of all the different types of potential supply chain security breaches and related incidents is difficult. Once you go past the most obvious ones, where do you stop?

And, how do you neatly group them?

Take a look at Figure 1. The risk assessment and mitigation work in supply chain is extremely painstaking and thorough. All the projects we have done that involve this kind of work left me dissatisfied despite the projects being quite lucrative and enlightening.

Why do I say that?

Because no matter how much you know, you cannot make a list of everything you don’t know that can happen. And that is just the trouble with the qualitative part of supply chain security and risk management.

On the quantitative side, it is even worse.

Try multiplying infinity by infinity. How do you assess the probabilities of something that has never happened before, but is likely to happen at some point in future? And, then how do you assess the full repercussions of that event, up and down the supply chain?

Did you know that in 2000 Ericsson permanently lost its pre-eminence in mobile phones market to Nokia, mainly due to a fire in a chip factory owned by Philips.

How Nokia lost its crown to Apple due to its supply chain missteps is another story worth talking about. As is the story currently underway, how Apple is losing its crown due to its supply chain missteps.

But I digress. Let’s get back to the talk of supply chain security. People ask me why supply chain security is in such a dismal state that only by sheer providence (and goodness of the population in general) we do not have more incidents.

Figure 1. The key areas for threats. Source: Global Supply Chain Group’s Supply chain security report 2019.

ABC OF ‘SUPPLY CHAIN SECURITY’ The main reason is that most security professionals do not even know the ABC of supply chains, and most supply chain professionals bother only vaguely about ABC of security.

A secondary reason is that it is just too difficult to secure supply chains with the current level of resourcing in most companies.

Think about this: the truth is that there are so many moving parts in today’s supply chain that it is impossible to keep track of them all with the current level of supply chain resourcing.

And companies are always reluctant to give more resources for anything, especially something as ‘unproductive’ as security, unless justified by a bulletproof spreadsheet vetted three times over by the most painstaking auditors.

Who will cop the blame for breaches of supply chain security?

All this would not matter in the past when everyone could pretend that every security breach incident was a one-off, ‘could not be foreseen or prevented’ kind.

Today, irrespective of whether it could be prevented or not, everyone – regulators, governments and public – are hyper-vigilant, and clamour for someone to blame. And guess who is going to cop most of the blame? The person who cops most of the blame when anything goes wrong in the entire supply chain – the supply chain manager.

That trend is only going to escalate. And that is the ‘trouble with supply chain security’.

Vivek Sood is the managing director of Global Supply Chain Group (www.globalscgroup.com).

For more information visit www.viveksood.com. ■

MHD MARCH / APRIL 2019 | 43

MHD SUPPLY CHAIN

SOFTWARE SUCCESS

Giving your software implementation the best chance to succeed – Part 2.

NATHAN SINGHAVONG

“

Remember that project success is never dependent on the person leading the project, nor does it depend on the project management philosophy adopted.

”

Figure 5. Key peripheal documents and outputs revolve around three scoping documents.

44 | MHD MARCH / APRIL 2019

5. LOCK DOWN ARCHITECTURE AND PROCESSES The importance of stable infrastructure throughout the project cannot be underestimated. Key to establishing a stable baseline are well-defined requirements and processes. Without adequately managing both, two dreaded words will begin to be uttered: scope creep, which is attributed to 41% of project delays.

I. Requirements definition Time invested up front in defining requirements and communicating the outcomes with project stakeholders is essential to minimising the risk of scope creep. At the very minimum, the following documents should be established and referred to as the baseline.

• • • •

Project charter Who are the key stakeholders?

What is the strategic intent and rationale?

What are the goals and success criteria?

What are the assumptions and broad approach?

Functional specifications • How the user will interact with the system, and what tasks they expected to undertake and expected outputs?

• What data feeds are required to support reporting requirements?

Technical specifications • How will the functional specifications be achieved?

• What software/system requirements are required to support this?

Of course, these are not the only documents required—but baselines will act as inputs to all others, i.e. budgeting and schedule, risks, UAT, etc.

II. Process design Equally important in being able to lock down architecture is understanding the interactions between users and systems, systems and systems, sequencing of events and the flow of data.

A nice method to discerning what the future state should look like is to model the as-is state — and then overlaying requirements on top to create the to-be state. Not only will this provide the delta between the states, but it will provide a holistic view which can then be re-sequenced or optimised. This then provides the base to review and refresh business processes, procedures and policies. Be prepared to develop and look at many process maps.

III. Establish architecture With baselines on user, system and data flow requirements, architectural design can take place. A sufficient arrangement consists of three isolated and identical configurations.

• Production – the environment where dayto-day business processes are operated on.

• Test – an environment reserved for test datasets, and verification of developments; ideally set up with the same frequency of operation as the Production environment.

• Development – for on-going development work, with the ability to synchronise from either the production or test environments for impact assessment and outcome analysis; ad-hoc run.

A stable base across environments will provide the ability to conduct like-for-like stress testing and outcome expectation. The rebuilding of environments is often a time-consuming and expensive exercise — hence the importance of design and process baselines.

The execution After all the preparation and planning, the amount of resource investment extrapolates — making it all the more important to adhere to baselines and keep configuration tidy. Ongoing unit testing and larger testing milestones also become critical to the success of the project.

6. TEST PLANS Test plans and specification documents go hand-in-hand. Every requirement needs to be testable. Every test needs to cover a series of scenarios. And every scenario needs instructions detailed, datasets prepared and expected outcomes defined. Of course, we don’t know what we don’t know, so not every single scenario and outcome can be tested for — but the risk to the project is most definitely minimised by consistently asking: “How do I test this?”

Equally as important as UAT documents is the owner. The owner must be able to drive developers and users alike to cover off all test levels, and act as the medium to escalate risks and issues.

ABOVE: Figure 6. Potential workflow utilising three environments to minimise disruption to end-users.

BELOW: Figure 7. V-model: linking requirements to tests.

From experience, in instances where dedicated rooms and sessions were established for testers, and fill-ins used to take over their daily duties, testers not only achieved a higher UAT completion rate, but their understanding of functionality and aptitude of the new tool(s) was significantly higher than those who were still tied to their day-to-day tasks. Not only that, but being away from all other distractions allowed the testers to bounce questions and ideas off each other — and a sense camaraderie is built.

Moreover, testing can never be rushed — and should take as long as it takes. The last thing you need is a live product with defects, due to inadequate testing.

This same approach is not only restricted to UAT, but also applies to brainstorming, requirements definition and user training sessions.

Remember that distractions and focus share an inverse relationship.

7. DEDICATED TESTING/ TRAINING SESSIONS Testing is important, it can often occupy up to 10–15% of a project’s schedule. As such, one of the difficulties faced lies in freeing up resources to dedicate periods of time to UAT. A survey had found that two-thirds of UAT testers found time to be a pressure point within projects , often because day-to-day duties could not be left alone.

MHD MARCH / APRIL 2019 | 45

MHD SUPPLY CHAIN

“

Allow others to be creative, and don’t be afraid to challenge, or to be challenged.

”

8. KEEP THE ENVIRONMENT OPEN AND INCLUSIVE Project fatigue is real. As the project runs, team members can lose their enthusiasm. However, there are always opportunities to keep the environment feeling less pressured and more upbeat.

Communication plays such an important role, not only for project updates, but to build a connection with project team members on a more personal level.

Try to keep large meetings to a minimum and keep invitations strictly to those who need to be present to make some form of decision. Aside from the scheduled project meetings, having an open environment and providing team members with opportunities to speak up will result in a more productive and cohesive unit.

Often times, doing the small things will reap large returns.

I. Reminder of the (grand) future state During periods where enthusiasm slows, it’s always a good move to remind the project team of what the future state is, and how far it is from the current state. Recapping the benefits will reinvigorate the team.

II. Celebrate milestones

Figure 8. UAT testers point out that time pressures often lead to poor UAT outcomes.

Milestones are to be celebrated! It provides all those involved with a ‘thank you’, and energises the team to get to that next milestone. It also can have the effect on those on the outside looking in to want to be a part of the team.

III. Acknowledge personal efforts Aside from team successes, personal efforts are not be forgotten. From public acknowledgement to physical gifts (i.e. gift cards), any form of recognition is always well received.

IV. Talk to team members Another effective medium is a quick catch-up outside of the work environment. Taking away the sounds and sights of the office is a reliever—often leading to concerns being aired, new insights developed and more importantly, it makes team members feel valued.

The learning Success is not just about completing the project or task— it is taking something out of it and being applying it to the next one.

9. KNOWLEDGE TRANSFER Prior to the project, business and process champions will have been identified. During the project, these nominated champions will have been up-skilled to become SME. But what happens after the project? Their roles should never end.

Your champions should be responsible for the up-skilling of the members in their respective departments and need to lead by example. Additionally, your champions need to be on point to evolve the processes and tools as the business evolves.

From a project management perspective, taking the time to reflect and conduct (and document) a Lessons Learnt session before beginning a new project/task is important.

Not only will it allow for some much needed downtime after the project completion, it allows the senior project team to gather their experiences, and ask “how could we do it better next time?”

Remember that project success is never dependent on the person leading the project, nor does it depend on the project management philosophy adopted.

Rather, it is a mix of learning from prior experiences, from each other and being open to collaboration. Sometimes, the best idea in the room is not your own.

Allow others to be creative, and don’t be afraid to challenge, or to be challenged.

Part 1. of this article appeared in the JanuaryFebruary issue of MHD Supply Chain Solutions magazine, which you can read here: https://bit. ly/2Gyx3c9. Nathan Singhavong is a manager at GRA. Nathan has delivered supply chain process and software solutions across commercial, defence and government spaces, specialising in software process design and analysis. For more information call +61 3 9421 4611 or visit www.gra.net.au. ■

46 | MHD MARCH / APRIL 2019

MHD SUPPLY CHAIN

CATCH THAT BUG! The Brown Marmorated Stink Bug (BMSB) is causing chaos for Australia’s import supply chains

T

he Brown Marmorated Stink Bug (BMSB) has caused a trail of destruction as it spreads across Europe, Asia and North America, damaging billiondollar horticultural industries in its wake.

The threat of BMSB-infestation has forced governments around the world to introduce drastic emergency biosecurity measures at the border, particularly in respect to sea freight pathways. Australia, as a country that prides itself on its biosecurity regime, was one of those countries, introducing emergency measures applying to certain goods from target countries for the BMSB season from 1 September 2018 through to 30 April 2019.

BMSB target country list: • United States of America • Italy • Germany • France • Russia • Greece • Hungary • Romania • Georgia • Japan (heightened vessel surveillance will be the only measure applied).

Whilst essential in safeguarding Australia from a major biosecurity threat, international trade has been adversely impacted by the Brown Marmorated Stink Bug (BMSB) measures with importers reporting

The brown marmorated stink bug (Halyomorpha halys).

Photo by Hectonichus - Own work, CC BY-SA 4.0, https:// commons.wikimedia.org/w/ index.php?curid=63056893.

“

Next season we will be talking about treatment of goods from highrisk continents rather than high-risk countries, such is the spread of the pest throughout Europe, Asia and other parts of the world.

”

significant disruptions to their international supply chain operations, as well as increased costs of importing essential consumer goods.

In extreme instances, total cargo vessels and their loads are being turned away from Australian shores due to detection of the pest.

Paul Zalai, director of the Freight & Trade Alliance (FTA) said for those who have been fortunate to have their cargo arrive, many have been adversely affected by the onshore delays caused by inadequate offshore treatment, failure in government systems and processes, and a local industry inadequately prepared to deal with the growing onshore treatment task.

“The direct costs to importers imposed by stevedores for storage and in detention fees imposed by shipping lines for the late return of unpacked empty containers are rapidly escalating, adding to the costs associated with failure to meet supply demands,” Mr Zalai said.

Some freight forwarders have resorted to desperate and expensive measures such as using a combination of sea cargo movements from origin and transhipping cargo at intermediary ports, using airfreight to land goods into Australia. Whilst a legitimate practice, it is anticipated that it will only be a matter of time before cargo arriving by air faces similar biosecurity scrutiny as that by sea with the potential threat of choking major Australian international airports.

“The problem is not going to go away.

Indications from the department is that by next season (September to April), we will be talking about treatment of goods from high-risk continents rather than high-risk countries, such is the spread of the pest throughout Europe, Asia and other parts of the world,” Mr Zalai said.

The FTA has been calling for the Minister for Agriculture and Water Resources to commission a comprehensive independent review. As a result of our advocacy, an independent review was announced on Thursday 24 January 2019. The review will be conducted by the Inspection-General of Biosecurity Dr. Helen Scott-Orr. Travis Brooks-Garrett is a director of the Freight & Trade Alliance (FTA). The FTA’s full submission can be accessed www.ftalliance.com.au. ■ MHD MARCH / APRIL 2019 | 47

MHD ASCI

IVAN IMPARATO APPOINTED CEO

Ivan Imparato.

T

he Australasian Supply Chain Institute (ASCI) is continuing its strategy to bring professionalisation to the supply chain domain and has appointed Ivan Imparato as its chief executive officer (CEO).

ASCI president Henry Brunekreef said: “Ivan’s appointment demonstrates the board’s commitment to deliver our

vision, mission and strategy, that is, to elevate the supply chain management field as a profession and a professional community in Australasia.

“As the representative of the board, I am pleased with Ivan’s appointment and am looking forward to working with him and the team on fulfilling our promise to our members, to our employees, and to our volunteers,” he said.

Due to this change, Ivan has officially stepped down as ASCI vice president, but will remain on the board as a director.

The board will shortly assign a new vice president.

In addition to his credentials as having held the role of ASCI vice president, Ivan Imparato is a registered operations practitioner (RegPracOps) and a senior executive in the supply chain industry who brings 30 years of experience in a corporate setting. He is most experienced in driving efficiencies in a BAU environment, managing strategic transformational change in high-profile, diverse, complex and quality-driven

environments, and applying a customer service mindset.

Ivan has had a comprehensive career with Toyota, where he has held senior roles and an outstanding reputation for delivering sustainable customer service models underpinned by inventory optimisation, program and project management, financial management, developing high-performance teams with a strong cultural mindset of continuous improvement.

Ivan said there is an enormous amount of work to be done to strive towards the ASCI vision.

“I am excited to see the vision of supply chain management becoming a formal profession in Australia getting closer to reality. This will be a first in Australian history, shaping the cornerstone of our industry and continuing the legacy and rich history of our Institution when our predecessors brought APICS to Australia in the 1970s to set best practice standards for inventory management,” he said.

ASCI GUIDED LEARNING SESSIONS TERM 2

TERM 3

Certified in Production and Inventory Management (CPIM) Part 1 7 weekly Thursday 1-3pm/7- 9pm AEST

Certified in Production and Inventory Management (CPIM) Part 1 7 weekly Thursday 1-3pm/7- 9pm AEST

Commencing 2 May until 13 June 2019

Commencing 18 July until 29 August 2019

Certified in Production and Inventory Management (CPIM) Part 2 13 weekly Tuesday 1-3pm/7- 9pm AEST

Certified in Production and Inventory Management (CPIM) Part 2 13 weekly Tuesday 1-3pm/7- 9pm AEST

Commencing 9 April until 2 July 2019

Commencing 9 July until 1 October 2019

Certified Supply Chain Professional (CSCP) 13 weekly Wednesday 1-3pm/7- 9pm AEST

Certified Supply Chain Professional (CSCP) 13 weekly Wednesday 1-3pm/7- 9pm AEST

Commencing 10 April until 3 July 2019

Commencing 10 July until 2 October 2019

Certified in Logistics, Transport & Distribution (CLTD) 13 weekly Thursdays 9.30-11.30 AEST

Certified in Logistics, Transport & Distribution (CLTD) 13 weekly Thursdays 9.30-11.30 AEST

Commencing 2 May till 25 July 2019

Commencing 9 July until 1 October 2018

Registration: events@asci.org.au 48 | MHD MARCH / APRIL 2019

ASCI NETWORKING BREAKFAST SERIES 2019 NEW SOUTH WALES 19 MARCH How technology is enabling the new retail New advances in machine learning and artificial intelligence are helping retailers optimise their operations and provide new experiences to customers and employees, in the store, head office, warehouse and throughout the supply chain.

scenarios and drive smart business decisions can be the difference between success and failure. Find out how to harness new data sources to boost business planning.

28 MAY Importing and supplying pharma goods into Australia Round table discussion on compliance, GxP, QC, R&D, QA and Packaging for our pharma members

16 APRIL Advanced Analytics Workshop In today’s fast paced world, the ability to rapidly evaluate multiple

Address: Michael Page; Level 32, Grosvenor Place, 225 George Street, Sydney Cost: Free for ASCI’s Members and their guests $25 for Non Members per event

VICTORIA 20 MARCH Supply Chain’s Role in the S&OP Process Keynote ASCI’s Corporate member, Oliver Wight, addresses how supply chain can participate in a mature S&OP process to drive competitive advantage for an organisation.

experts under the pump to contain costs on their cost to serve. Hear our panel of experts offer some solutions and predictions that will help you prepare for the future.

26 JUNE Demand Driven Supply Chains (DDMRP) Round Table 22 MAY Expert Panel: e-Commerce and its effect on logistics Industrial property trends; Amazon; last mile delivery; reverse logistics; consumer buyer behaviour are all drivers putting logistics

Corporate Members will form a panel this month and share their challenges and successes in their demand driven projects.

Address: Michael Page; 19/600 Bourke Street, Melbourne.

Cost: Free for ASCI’s Members and their guests Free for Michael Page guests $25 for Non Members.

QUEENSLAND 27 MARCH Practitioner Registrations Workshop

23 MAY Keynote Presentation

This session allows for you to realise the benefits of Registration; identify your preferred area of specialty (procurement, logistics or operations management) and understand the requirements of the CPD program to maintain registration.

The Queensland Chapter will invite a special guest to this month’s keynote presentation.

28 JUNE Round Table Discussion A procurement white paper will be tabled and discussed within the group.

Address: Michael Page; Level 17, 100 Creek St, Brisbane City.

Cost: Free for ASCI’s Members and their guests $25 for Non Members per event.

WESTERN AUSTRALIA 28 MARCH Supply Chain & Network Design

30 MAY Practitioner Registration Workshop

Following on from last month, we dig deeper into the various ways to cut the data and design the very best solution for your supply chain.

This session allows for you to realise the benefits of Registration; identify your preferred area of specialty (procurement, logistics or operations management) and understand the requirements of the CPD program to maintain registration.

2 MAY International Keynote We test the power of Skype this month and invite an international keynote of your choice to our timezone for a meet and greet briefing and an insight into their day-to-day supply chain challenges and opportunities.

27 JUNE Panel Discussion on Business Acumen This panel discussion brings together experts in identifying and building business acumen and why its essential for a supply chain professional.

Address: Michael Page; Level 6, Westralia Plaza, 167, Saint Georges Terrace, Perth.

Cost: Free for ASCI’s Members and their guests $25 for Non Members per event.

MHD MARCH / APRIL 2019 | 49

MHD NEWS FROM SCLAA

COME TO CHINA

I

AMANDA O’BRIEN

“

This will be combined with a Logistics & Supply Chain Conference, networking dinners, forums and business meetings in each city.

”

50 | MHD MARCH / APRIL 2019

t is remarkable that the first two months of the year are over and we are well and truly into 2019. With all the changes in the supply chain and more to come, it is evident that the speed of information and technology required will pose a potential threat to the companies unable to implement effective solutions to drive growth in this challenging economic climate.

With an economic downturn looming, there are concerns in the wider supply chain community that businesses will be unable to absorb the increase in regulatory charges from ports, and that the trade war between China and the USA will affect not only our dollar, but the ability to compete with lower commodity trade. As China is Australia’s biggest export market, the impact on the local economy could be serious. Any widespread slowdown in China would reduce demand for Australian industrial commodities such as iron ore and coal, and could also hurt exports of food and services to the country’s middle class. The US and China provided almost 30% of the current stock of direct investment in Australia, meaning that if the superpowers started to pull back from global agreements, it would affect Australia’s open economy.

As the SCLAA understands the importance of global supply chain news, we are pleased to announce that with the Supply Chain and Logistics Association of Australia and the Australian International Trade Association alliance, set up on 23 November 2019, will undertake the alliance’s first trade visit to China in April. This will enhance the relationships our association has with other constituents, provide our members and colleagues with the opportunity to join the trade visit, and keep our members updated and informed.

The alliance aims to promote the cooperation in supply chain and logistics between Australia and China, and to provide a series of services including exhibitions, conferences, forums and training programs.

This will be combined with a Logistics & Supply Chain Conference, networking dinners, forums and business meetings in each city. Our association and trade visit delegates will be meeting with mayors of cities, ministers of trade, chambers of commerce and leading companies in China.

There will be key organisations such as the China e-Commerce Association, whose members are multinational companies such

as Alibaba, JD and an additional 20 to 30 companies, who are interested in meeting with Australian manufacturers, producers and exporters to utilise their platform to sell to the Chinese market. The state governments in New South Wales, Queensland and Victoria are eager to assist their business communities to take advantage of this opportunity.

The 2019 Australia-China Supply Chain & Logistics Alliance China Forum is the first China event for the alliance set up by SCLAA & AITA. With the perspective of the alliance to promote sector cooperation and joint development and facilitate trade and business, AITA and SCLAA have organised this special event to provide the latest China and global logistics development information for those working in logistics enterprises and manufacturing and exporting units.

It also provides a chance for those leading enterprises to display, promote and integrate market opportunities. Further details on the visit and how key industry can get involved will be published on the SCLAA website www.sclaa.com.au – check it out.

OTHER EVENTS A recent event of note was the business forum at the Queensland Parliament. It generated many opportunities with one Australia business, CertMark, signing an MOU with the China Building Materials Certification centre to jointly provide certification services for Australian companies that want to break into the Chinese market and Chinese companies who want to break into the Australian market.

The SCLAA’s Women in Logistics Luncheon will be held on Friday, 2 August 2019 at Leonda by the Yarra in Melbourne from 12 noon to 4pm. A report of the 2018 luncheon can be viewed on the SCLAA website and contains links to photographs and video highlights of the 2018 event. This is the fourth year in which this event has been held. Once the program for the event is finalised, the information will be uploaded onto the SCLAA Calendar of Events and registrations opened.

On behalf of SCLAA I wish the supply chain community a successful, stimulating and eventful year full of opportunity for 2019.

Amanda O’Brien is the national chairwoman of the Supply Chain and Logistics Association of Australia. For more information contact the national secretariat at secretary@sclaa.com.au or call 1300 364 160. ■

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MARCH / APRIL 2019 COVER STORY

HealthNormally suppor t $78 How SSI SCHAEFER caters for the future of pharmaceutical supply

GREEN FREIGHT

How to pursue green freight options

THE I-CURVE

nal, The irrational, emotio uneconomic consumer

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