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N O V E M B E R / D E C E M B E R 2 017

INDUSTRY 4.0 IS SMART OPS Swisslog robotics drives smart operations

AI ON THE MOVE Transport gets a disruptive makeover


There is exciting potential for blockchain technology in Australia


Optimised warehouses

DELIVERING A STYLISH SUPPLY CHAIN SOLUTION When you purchase a new outfit, you don’t give much thought to its supply chain journey. Manufacturers, wholesalers, and retailers are all being driven by increasingly tech-savvy and demanding consumers who want the goods they’ve ordered in store or online fast, and at the best price. Toll and leading retailer Specialty Fashion Group recognised this trend and with their supply chain partner Dematic, designed and developed a facility for rapid delivery. Utilising Dematic’s flexible, scalable, integrated order fulfilment and distribution technologies and smart logistics software, Toll’s new state-of-the-art DC can respond efficiently to its customer’s customers, and deliver a stylish supply chain solution every time.

Ask us. +61 2 9486 5555 Logistics Solutions


We Optimise Your Supply Chain Storage Solutions


Software & IT


Voice Picking








Service & Support




WHAT DID YOU CLICK ON LAST MONTH? The top five stories on in October were…


n case you have missed it, that wonderfully esoteric invention called blockchain, the driving force behind that equally abstruse phenomenon called Bitcoin, has been suddenly discovered to be the unquestionable panacea for everything from fixing misbehaving supply chains to finding where you’d dropped your left sock last week when you were trying to make that all-important flight to the meeting with the CEO. The blockchain is now so perfectly mainstream that IBM and Microsoft have come together and adapted the GS1 standards. “GS1’s global standards for identification and structured data enable blockchain network users to scale enterprise adoption and maintain a single, shared version of the truth about supply chain and logistics events, increasing data integrity and trust between parties and reducing data duplication and reconciliation.” Which is a long way of saying that blockchains are good, blockchains work, and if you’re smart, you’ll start investigating the technology now. And to make your life easier, there are no fewer than four articles focused on blockchain in this issue!

TOYOTA LAUNCHES V8 AT BATHURST TMHA has launched a new show-stopper display vehicle at the Bathurst 1000 motor race. HOW SHOULD WE CHANGE LAWS FOR AUTOMATED TRUCKS? Should Australian governments amend driver laws, and how, to facilitate the introduction of automated vehicles? DON’T BAN THE ‘B’ FROM THE ‘CBD’ Increasing restrictions on trucks in CBD areas are making it difficult for transporters to serve consumers and businesses.

Robots are good, too As you can see on the cover this issue is very much focused on optimised warehouses, which, these days, feature a heavy involvement of robots, automation, and technology in general. Industry 4.0 gets a good working out, so does fitting out for e-commerce, the latest in voice picking, and, dare I say it, even the old-fashioned black art of designing a warehouse layout for maximum flow-through and productivity gets a good, thorough look-in. And in case you were uncertain about i4.0, here is a snippet from our cover story (page 14): “Industry 4.0 [is] a concept that spans a mix of technologies that constitute a fourth industrial revolution … [it] has intrigued many supply chain professionals because of its potential to address the challenges of running operations more efficiently. Industry 4.0 is about using technology to make supply chain operations more responsive and efficient.” You can read about all this, and more, in this issue. I hope you’ll enjoy.

FINALISTS ANNOUNCED FOR THE 2017 ASCL AWARDS The SCLAA and Dematic have announced the finalists for the 2017 ASCL Awards. SMART GLASSES ARRIVE Dematic is now a distributor of Vuzix Smart Glasses in Australia and New Zealand. GET YOUR TANDLNEWS FREE EVERY WEEK – SUBSCRIBE NOW AT WWW.TANDLNEWS.COM.AU!

Charles Pauka Editor

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: Managing Director: Simon Grover Editor: Charles Pauka Advertising: Ralph Merry Production Manager: Jacqui Cooper Graphic Designer: Alyssa Coundouris Head of Circulation: Chris Blacklock

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DISCLAIMER: This publication is published by The Intermedia Group Pty Ltd (the “Publisher“). Materials in this publication have been created by a variety of different entities and, to the extent permitted by law, the Publisher accepts no liability for materials created by others. All materials should be considered protected by Australian and international intellectual property laws. Unless you are authorised by law or the copyright owner to do so, you may not copy any of the materials. The mention of a product or service, person or company in this publication does not indicate the Publisher's endorsement. The views expressed in this publication do not necessarily represent the opinion of the Publisher, its agents, company officers or employees. Any use of the information contained in this publication is at the sole risk of the person using that information. The user should make independent enquiries as to the accuracy of the information before relying on that information. All express or implied terms, conditions, warranties, statements, assurances and representations in relation to the Publisher, its publications and its services are expressly excluded save for those conditions and warranties which must be implied under the laws of any State of Australia or the provisions of Division 2 of Part V of the Trade Practices Act 1974 and any statutory modification or re-enactment thereof. To the extent permitted by law, the Publisher will not be liable for any damages including special, exemplary, punitive or consequential damages (including but not limited to economic loss or loss of profit or revenue or loss of opportunity) or indirect loss or damage of any kind arising in contract, tort or otherwise, even if advised of the possibility of such loss of profits or damages. While we use our best endeavours to ensure accuracy of the materials we create, to the extent permitted by law, the Publisher excludes all liability for loss resulting from any inaccuracies or false or misleading statements that may appear in this publication. COPYRIGHT (C) 2017 - THE INTERMEDIA GROUP PTY LTD.

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DELIVERING MORE THAN JUST MARKET LEADING FORKLIFTS Trusted Toyota quality, leading safety and technological innovations, plus a commitment to outstanding customer service have made Toyota Material Handling the world leader* in forklifts today. Closer to home, Toyota Material Handling is proud to offer an unparalleled range of logistics and automation solutions to its Australian customers – including market leading counter-balance forklifts and warehouse equipment,

AGV driverless forklifts, elevated work platforms, plus a comprehensive range of warehouse racking solutions. Whether we are supplying a single spare part or helping to manage your entire forklift fleet, our objective remains the same – adding value to your operation. It’s all part of the Toyota Advantage, and another reason why Toyota Material Handling offers solutions for every pallet.

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P A L L E T®



Talking shop

14 Industry 4.0 is smart ops

What are the key themes for online retail that relate to supply chain and logistics?


Swisslog robotics drives smart operations.

The state of logistics Find out what is in the 2017 EFT Global Logistics Report. NOVEMBE R / DECEMBER 2017

10 Put e-commerce on your map When it comes to e-commerce, Australia is in the world’s sights!



R 2 017


12 Two for the future Two key ingredients for future-proofing your supply chain.

Swisslog robo tics drives smar t oper ations

TECHNOLOGY 18 Blockchain standards IBM, Microsoft to use GS1 standards in blockchain applications for supply chain clients.


Trans port gets a disrup tive make over


20 Blockchain smarts How blockchain technology could create smart supply chains.

22 Transport gets a disruptive makeover

ng poten tial for blockc hain techn ology in Austr alia SPEC IAL FEAT URE


Disruptive technologies, such as AI and machine learning, have become a key part of digital business value creation in transport.

SUPPLY CHAIN 40 How blockchain can enhance global supply chains


Supply chain management is a business discipline that can widely benefit from blockchain adoption.

24 Spotlight on distribution centre design

42 Blockchain and the supply chain

Effective distribution centre design is a complex area with scores of variables to be considered.

There is exciting potential for blockchain technology in Australia.

26 Go the distance National freight leader goes the distance with Toyota forklifts.

27 Forklift safety in an age of automation Safety remains at the heart of the material handling industry.

44 Ransom! Logistics operators find disruption from ransomware attacks a bigger issue than payment demands.



28 Long life in the cold Crown forklifts provide longevity for Blayney Cold Storage and Distribution.

45 Money for study Peak export body APSA has been awarded a government grant to deliver training on free trade agreements.

30 Smooth at Silk A fully integrated voice-directed warehousing system brings increased efficiency and safety to Silk Contract Logistics.


32 The future of e-commerce The latest trends and their impact on online and omni-channel order fulfilment.

34 Mobile robotics Forklifts will never be the same again as robotic technology transforms the forklift industry.

38 What Makes Sense?


Optim ised wareh ouses

... when selecting and implementing a warehouse management system (WMS)?

46 ASCI (formerly apicsAU) – contacts, courses, news. 49 From the Supply Chain and Logistics Association of Australia. 50 Australian Warehousing Association. 50 Chartered Institute of Logistics and Transport Australia. 50 SCLAA contact information. 51 Subscription information.






landscape, an empowered culture and people will define the success of such technology-led transformation. Amen to that! In one of my earlier pieces I wrote about the opportunity in the emergence of Virtual Reality (VR) and Augmented Reality (AR). I tended to think then that Augmented Reality, a blend of the real world with a digital overlay, would be the next big thing, and this is proving prophetic. Around the time of the conference, Tim Cook, the CEO of Apple, was travelling in Sweden and was quoted in the media as follows: “I do not think they (people) need to understand, not directly. I would like to compare it with when we opened the App Store in 2008. When the first apps came out, people were not so impressed. I remember people wrote things like "this is not so amazing" and "this will not be so important". Today, we cannot imagine a life without mobile apps, and we use them for everything.

“While the world might appear flat, so is a tyre with a puncture!”



ust back from Shoptalk Europe, a leading European retail event, with well over two thousand attendees and some outstanding panellists and keynote speakers (https:// So, what were the key themes? And, particularly, the key themes that relate to supply chain and logistics? Firstly, a significant focus on what I have termed ‘phygital’ retail. That convergent retail that finds the intersection, for the customer, between their digital connection with their retail brand of choice and the physical connection. Clearly as an industry, we now totally get that customers shop by brand, not by channel, but how are retailers adapting to this truism? Well, firstly, our pureplay retailers are connecting with their customers in the physical world in a number of ways: opening stores, opening pop-up shops, partnering with established High Street retailers, investing more in branded trucks and vans, thereby ensuring a consistent end-to-end experience. 6


And our established brick-n-mortar retailers are optimising their brand assets in a number of ways: growing their click-and-collect models, shipping more from store to door, acquiring or partnering with online retailers. The acquisition by Amazon of Wholefoods in the US, and Walmart acquiring Bonobos, ends, most likely, the channel focus that has prevailed in the industry for the last two decades or so. All of this brings challenges and opportunities to the supply chain and logistics professional, who now has to establish inventory integrity over many layers and build out the accuracy of these multi-touch opportunities with customers. The ‘Rubics Cube’ just became a brick! Predictably, technology was sold in the expo hall of Shoptalk as the solver of all of our problems, and in many ways, this is true. But of course, that led into the next big theme of the conference, that people and culture have to come before technology. While technology is most certainly the tool to connect the dots in this fast-changing and increasingly complex NOVEMBER / DECEMBER 2017

Paul Greenberg

“I think we'll see a similar curve that we saw with the usual apps. After a first phase, the curve of use will point straight up. AR is fundamentally different to VR because AR can be a part of everything you do, every day.” I would encourage logistics professionals to continue exploring this emergent opportunity; it will be on us, quicker than we all realise, of that I am certain. Lastly, the dominance of marketplaces around the world was showcased. Alibaba in China, Amazon in America, eBay in Europe. And many South American, African and Asian countries, marketplaces are driving ecommerce. Again, this will be a challenge and opportunity for logistics professional in the retail supply chain. While the world might appear flat, so is a tyre with a puncture! Paul Greenberg is the founder and executive director of

Contact us:

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Tech-driven LSP are the future of business



hile 2016 was a year of opportunity, 2017 is setting up to be a defining year for shippers and logistics service providers (LSP). New industry research from Eye for Transport (EFT) shows that despite the rapid pace of change in the market, shippers and LSP continue to improve the nature of their strategic relationships, recognise the value of technology and innovation and anticipate growth outside their traditional businesses. This year’s EFT 2017 Global Logistics Report also shows that the industry seems to be reaching the consensus that the tech-driven LSP are the future of business.

Innovation is a key driver for business growth Logistics providers identified similar threats in 2016 as 2017 to their growth in 2017, however, the number of respondents reporting each of the top threats (competition, stagnant growth and commoditisation) diminished by up to 6.5 per cent. This year, 26.9 per cent of survey respondents said competitors are the biggest threat to their business growth, 21.2 per cent said it’s stagnant global growth, and 19.2 per cent reported it being commoditisation. About 28 per cent of survey respondents also revealed that innovating to create new business areas was how they gained most of their new business over the past 12 months. There’s a clear shift taking place in 2017 where innovation is now a key driver for new business. This is happening both in terms of using pure innovation to gain new business, as well as working with existing customers to create business in new areas. However, it’s important to note that innovation as a percentage of areas logistics providers are gaining business dropped between 2016 to 2017. This suggests that logistics 8


businesses are diversifying their new business acquisitions across several different areas.

Logistics providers continue to struggle with innovation Between 2016 and 2017 there was a drop in confidence for logistics providers in terms of their adopting cutting-edge technologies. Given the prioritisation of technology as a defining characteristic of logistics companies, LSP are going to have to work hard to ensure they stay ahead of the curve. This is especially important given the disruptive nature of tech-driven logistics companies. In fact, 48.1 per cent of respondents felt that such companies were the future of the industry and an additional 31.7 per cent of logistics respondents reported that such tech-driven companies were a threat to replace traditional business logistics businesses. Logistics companies that are going to successfully stave off the threat of technologydriven competitors are going to have to become technology leaders themselves.

Customer service in favour of innovation Historically, logistics providers and their customers have had difficulties with innovation – assigning responsibility and ultimately driving it. Innovation continues to be the top choice for where shipper customers found their LSP to come up short, but it’s important to point out that compared to 2016, this choice has dropped in popularity. On the other hand, customer service has risen significantly since 2016. Customer centricity has become a significant priority for many businesses in recent years on the back of new technology, enabling customers more visibility over the services they use. NOVEMBER / DECEMBER 2017

The data revealed that 47.6 per cent of logistics respondents felt tech-driven LSP were the future of the industry. Based on the response shippers have given on the companies, this number will most likely increase. Shippers overwhelmingly classified tech-driven LSP as an opportunity to cut costs and drive efficiencies. This could have a transformation effect on logistics businesses with the abilities shippers have at driving the industry.

Commoditisation is evolving The shipper response to tech-driven LSP suggests that this industry shift might have a commoditising effect on the industry. However, it’s only part of the commoditisation picture, which is in a state of flux. Warehousing, for example, has dropped as a service considered commoditised, whereas forwarding has jumped.

Logistics providers are starting to catch up After years of slow technology and innovation developments, logistics providers are starting to catch up. And after years of investments and process changes, shippers are starting to slowly recognise LSP for their technology and innovation abilities. However, one of the key changes also seems to be the success of technology-driven logistics providers. That is, asset-light logistics companies that utilise technology as the central offering of their business are gaining noticeable traction within the industry. However, a conundrum is quickly developing. For years, from the perspective of logistics providers, commoditisation has been one of the biggest challenges they face. Logistics services have increasingly been squeezed as supply chains look to cut costs. The technological advancements and automation of logistics has played a role to help businesses differentiate themselves. However, as automation becomes standard across logistics businesses, it translates into both cost savings and cost cutting, resulting in increased commoditisation pressure on the industry. But, unlike in previous years, logistics providers appear to be on top of it. So, while technology might facilitate commoditisation, logistics providers are turning to non-traditional areas of their businesses to differentiate themselves. One area gaining early momentum is in terms of customer service, emphasising the personal nature of the business. Andrew Kirkwood is senior vice president of sales, global logistics & supply chain execution, at JDA Software. You can access the full report here.

IMPROVING YOUR DISTRIBUTION CENTRE‘S PERFORMANCE Goods to Person order picking systems provide very high productivity and space efficiency. Flexible warehouse management software gives you visibility of performance, and puts you in control.






-commerce is the biggest game changer for trade. Its accelerated development means rapid growth, huge opportunities and of course, with that, comes a few challenges. But there’s nothing I love quite as much as a challenge. It was back in 2014 when Deutsche Post DHL Group launched Strategy 2020 that got me really excited about e-commerce. As I listened to our top managers talk about the rich opportunities ahead, I was inspired. I knew it was something I wanted to be a part of. It’s the future of our group, and represents a huge and evolving opportunity. Because it is fledgling – and therefore, incredibly exciting — the e-commerce rule book is largely unwritten: there’s still a certain amount of trial and error involved in finding the right solutions for each and every market. Currently, we’re testing different business models in each market. In Chile, Thailand, Malaysia and Vietnam, we have an ‘asset heavy’ model for domestic delivery, going with our owned ‘yellow’ vans and facilities. In Chicago, on the other hand, we are testing an asset-light model, investing more heavily in technology. Delivery in such markets becomes ‘elastic,’ and the delivery driver could be anyone from a mother picking her kids to and from school, an off-duty Uber driver, to a small and local courier company. While these models are doing well in their respective markets, the question begs: which is the right one for the long term? Honestly, we do not have the answer to that just yet. But what we do know is wherever you operate, it pays to be incredibly agile, fast and one must be prepared to keep testing one’s methods. After all, this is an ever-evolving industry and one size never fits all. Innovation is also extremely important to compete in the e-commerce space. And innovation has to feed in the mantra of making delivery as breezy for the customers as possible. We use drones for the most part of that and soon, it is no longer a question of ‘if’ but ‘when’ drones will become fully commercialised as part of delivery options. 10


In the short term, alternate delivery is on the rise. For example, click-and-collect in stores will offer people greater convenience and control. Even today, most consumers feel that delivery options are not flexible enough, and over 60% are not satisfied with the service they are getting. For instance, consumers are often given a wide delivery window of one to two days or between 8:00 a.m. and 6:00 p.m. Yet, when is the delivery man most likely to arrive? When you are not home, of course. Today, people want their parcels delivered to the boot of their cars, to a parcel locker, to the parcel shop around the corner – or to wherever they happen to be at that time. Consumers want to take control and have choice and convenience.

“Australia represents a gold mine for cross-border e-commerce business.”

For this reason, short-term changes in last-mile delivery will be centred on how technology can be tapped for convenience, choice, and user predictability. Today, alternate delivery methods represent about 6% of all deliveries globally, but that will change fast in the next few years. The network is continually expanding as we experiment with different models to suit the different locations on our map, and Australia is a key market in the network. Australia has a vibrant and entrepreneurial marketplace and it helps that Aussies love to shop online — and these factors fuel the e-commerce engine Down Under. Nearly 75% of total online spending by Australians goes to domestic retailers, with the value of e-commerce purchases expected to grow by nearly 50% between now and 2020. Some 13 million (66.2% of them aged 15 and above) Australians are predicted to be shopping online within the next four years. M-commerce is also taking off like the Atlas V. According to eMarketer, there are currently about 19.4 million mobile phone users in Australia, which has a population of 24 million. NOVEMBER / DECEMBER 2017

In 2015, some 35% of e-commerce transactions were made on smartphones and 27% of consumers are buying products via mobile devices on a weekly basis. These numbers are only going increase. A recent report from the Ecommerce Foundation showed 65% of Australians are already shopping online, and 79.4% of internet users said they prefer shopping online over brick-andmortar stores. But it’s not just domestic e-commerce that’s picking up. Australian shoppers are also keen to shop overseas. The under 35s were responsible for 40.2% of international purchases in 2016 alone. Australia represents a gold mine for cross-border e-commerce business. And being a doorstep to Asia means many Australian businesses have already hedged their bets on emerging Asian markets. According to the 2016 DHL Export Barometer, 60% of Australian exporters expect orders from China to increase in 2017. Other markets that are buoying the Aussie export confidence include South East Asia, Japan, South Asia, Indonesia, South Korea, and Hong Kong. However, many Australian SME remain unsure of how to operate in different markets and find it hard to understand some barriers of cross-border trade and country-specific customs processes. This is where carriers can help. Now that e-commerce has gone borderless, order fulfilment needs to reflect the same. Carriers’ global fulfilment networks across the world eliminate the need for e-commerce merchants to hunt for overseas logistics partners as they look to expand their global reach. It’s an exciting time for e-commerce, especially in Australia, thanks to its entrepreneurial e-tailers and consumers with huge appetites for online shopping. The weaker Aussie dollar is also contributing to this upward trend as local goods appear more attractive to international customers, with e-commerce continuing to lower the barriers for business owners to enter overseas markets. I can’t wait to see how this market will develop over the next few years. Charles Brewer is CEO of DHL eCommerce, a division of Deutsche Post DHL Group. For more information visit





nnovate or get lost in the crowd. That is the harsh reality facing materials handling and supply chain businesses in this era of digitisation, where the management of costs and efficiencies needs to be carefully balanced with innovation and new ways of thinking. This was a theme stressed by Gartner vice president and analyst Debra Hofman earlier this year. According to Ms Hofman, traditional supply chain strategies that focused on incremental change, being risk-averse, and that are measured mostly on cost-saving and efficiencies, will no longer win. She highlighted that new customer experiences and virtual ecosystems are two key areas on which supply chain leaders should be focused to drive continual improvement.


Digital systems that hum together as one As supply chains build in digital maturity and capability for automated management, the operation’s use of varying technologies is continually evolving and changing. Supply chain businesses need to embrace virtual ecosystems and technologies that offer flexibility; modular enough to integrate with third-party technology, so back-of-house inventory systems and accounting can seamlessly ‘talk’ to consumer-facing apps or robotic materials handling software.

Customer experience that’s above and beyond

A business peddling premium customer service

Customer experience has become a defining factor for companies when it comes to delivering value, and in the ‘instant age’, the supply chain is an important cog in the wheel. It’s the new competitive differentiator where companies that are leading the race in customer experience are those that have a real understanding of what customers want, before they even request it. They are sharing information on products customers didn’t realise they’d need and are solving problems they didn’t know they had. Creating personalised customer service – including immediate ordering and information access and is key to driving customer loyalty and ongoing success. The rise of ‘Click and Collect’ for online retailing (even at e-Bay) is a testament to this fact.

Shimano, a global manufacturer and distributor of cycling components and fishing equipment is a great example of a company championing personalised customer service through a consolidated virtual ecosystem. Shimano Oceania recently invested in a new state-of-the-art development centre (DC) in the NSW Sutherland Shire that boasted a Dematic Multishuttle GTP order fulfilment system. The best-in-class robotic operation automates the picking, packing and dispatching of stock as goods and orders arrive. The company sought a digital platform that would match its nextgeneration Dematic system, allowing distributors to place orders via an intuitive B2B website. At the time, distributors were placing orders over the phone, via fax or in person, making the ordering process cumbersome and inconvenient.




After researching multiple software systems, Shimano Oceania chose to work with Pronto Woven, the digital creative consultancy at Pronto Software. Pronto Woven developed an online sales platform, an online B2B site that houses stock availability, instant ordering capability and technical information. It also shows in real-time the status of orders, so the distributors can check at any moment the status of the order – from when it’s ready for picking to when its been dispatched – helping the company manage their expectations and also better service customers. The online site is highly customised to various user levels, showing relevant levels of information and pricing for multiple profiles – from distributor, internal staff, sales representatives, and sales agents. Since deploying the B2B site, Shimano Oceania’s inquiry calls have dramatically reduced, freeing up the sales team to proactively outreach to customers once their orders are being dispatched. With the B2B site easily available via desktop, mobile or tablet, the sales team is better equipped to answer various technical questions, with the key information, specs and FAQ they need on one of 15,000 products always just a couple of clicks away. Businesses in the supply chain sector must seek competitive edge in a growing and increasingly fast-paced sector. It’s clear that those businesses that thrive on superior customer service and embrace a digital ecosystem that sings as one, are taking the right steps in future-proofing the operation’s existence. Chad Gates is the managing director of Pronto Software. For more information visit

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Robotic-based automated case picking and mixed palletising as core technology for Swisslog’s ACPaQ.




ow is the time to start applying Industry 4.0 concepts to the pressures and constraints of operations. For the last several years, Industry 4.0 — a concept that spans a mix of technologies that constitute a fourth industrial revolution — has intrigued many supply chain professionals because of its potential to address the challenges of running operations more efficiently. Industry 4.0 is about using technology to make supply chain operations more responsive and efficient. The first big shifts in manufacturing were around once revolutionary approaches, like assembly lines and the first 14


wave of computerisation. Now Industry 4.0 posits that by having digital, near real-time knowledge over resources, constraints and workflows, and by applying data-driven insights to systems on the floor, you can run operations much more efficiently whilst adapting to consumer demand. Industry 4.0 spans multiple technologies, but at a high level, it means that via digitalisation we can respond to customers in an accurate, cost-efficient way. While these ideas are compelling, the next step is to figure out how to apply them to environments such as factories, supply chains, distribution centres (DC), and the ‘intralogistics’ processes within the four walls that are so vital to order fulfillment. In short, how do we take Industry 4.0 building blocks such as robotics, Big Data, sensors, and Internet of Things (IoT) connectivity, and turn them into smarter, datadriven operations? NOVEMBER / DECEMBER 2017

Flexible, smart response In Swisslog’s approach to Industry 4.0, software plays a key role in achieving data-driven operations that can instantly adapt to changing customer requirements, while taking out costs and being far more flexible than previous generations of automation, explains Francis Meier, managing director for Swisslog ANZ. “The need to respond very quickly to order fulfillment requirements and rapidly changing consumer demand is driving up labour costs at many facilities, which increases the need to automate,” said Mr Meier. “However, the challenge is that automation needs to be flexible to accommodate today’s pattern of smaller, more frequent orders and sudden shifts in demand. This means that automation needs to be data-driven, and in synch with all resources and existing systems.” The resources in warehouses and plants include human labour. The idea of a completely automated facility that doesn’t need workers — a so-called ‘lights out” approach in which everything is automated — has been around for decades, but has proven elusive, in part because past generations of robotics weren’t very flexible. However, now companies can deploy a new generation of robotics that are smart, meaning


SynQ Cockpit: a clear and dynamic real-time overview of warehouse operations.

HALLMARKS OF INDUSTRY 4.0 ERA INTRALOGISTICS SOLUTIONS There are no hard and fast rules about what constitutes an Industry 4.0 solution, as it’s more of a concept spanning multiple technologies rather than a single one. However, there are certain characteristics of intralogistics consistent with Industry 4.0. • Robotics that are flexible and data driven. With older generation robots, the units were custom-programmed to execute a discrete task and had to be reprogrammed to handle new or different tasks. Newer robotics leverage sensors and software to enable a set of skills that can be adapted to a much broader range of tasks, such as the ability to pick/place different products in a warehouse. The new generation of robotics also have real-time interfaces to material flow control software to coordinate with other systems and changing order requirements, based on real-time monitoring of the process and related analytics. • Automation that collaborates with humans. Collaborative picking robots leverage their sensors to safely work alongside humans without the need to be fenced off by barriers. The human labour can

they know the status of other systems, and can work safely alongside humans. While human-like robots that can think and talk tend to capture our collective vision of ‘advanced’ robotics, in industry the real advance is the availability of collaborative and mobile robots. They might not look like a Star Wars’ ‘droid’, but they can sense and learn from their environments, make decisions, and be either mobile or easy to configure in a modular fashion. This new breed of intralogistics robots make use of vision-based navigation, sensors, and machine learning to allow them to do things like work safely alongside humans and move through warehouses in efficient, safe patterns. They are also synchronised via software with demand requirements coming down from enterprise-level systems, and with other automated systems within the four walls. Swisslog’s solution set exemplifies this new breed of robotics that can collaborate with humans and synchronises with both enterprise- and control-level processes. The


make use of light-assisted ergonomic work centres to pick orders in concert with the robots. This makes robotics more scalable by adding more human labour to a picking station or opening up another picking cell. • Modular automation that scales easily. By adding components such as picking cells/robotic arms, and workstations in a modular fashion, or by incrementally increasing the size of a shuttle, automation is easier to phase in at lower cost than under a ‘Big Bang’ approach to fixed automation systems. • Systems that are smart and learn from operations. Automation providers today can leverage machine learning to constantly improve how robotic arms or mobile robots perform. Look for vendors who are not only providers of high quality equipment, but can apply data science and machine learning to their solutions.

warehouse software layer is important, because it coordinates real time automation processes with enterprise management systems, including traditional warehouse management system (WMS) and enterprise resource planning (ERP) systems that companies typically used to manage orders and other transactions. For example, Swisslog’s advanced warehouse software, called SynQ, spans automation control, material flow control and warehouse management functions to handle the coordination role. Additionally, robotics from Swisslog’s parent company KUKA, as part of its AutoPiQ solution, are smaller, collaborative robots or ‘co-bots’ that can work safely alongside humans. To accomplish this, co-bots use sensors to instantly stop movement if something enters its path. The result is that companies can leverage picking robots alongside workers for intralogistics processes, using warehouse software such as SynQ to intelligently coordinate the automation with available resources and incoming order details.

Swisslog’s AutoPiQ for single item picking.






The robots of the past, while perhaps good at handling the same part or executing the same assembly process repeatedly, aren’t suited to today’s requirements that typically involve a complex, high velocity order mix, explained Mr Meier. “To achieve the speed, accuracy and throughput needed today, more facilities need to automate, but the automation they install must be flexible and smart in the way it uses software to coordinate with the demand side, and other systems, within the four walls,” said Meier. Other types of automation, such as goodsto-person robots (carts that tow goods to an ergonomic, light-assisted picking stations) or modular robotic systems that build mixed pallets, are part of the shift to flexible automation made possible via Industry 4.0 technologies, according to Sean Ryan, head of sales Swisslog ANZ. “There is more than one type of robot that exemplifies how Industry 4.0 can improve intralogistics,” said Mr Ryan. “What these robotics have in common is that they are smart in terms of being able to handle different goods and tasks, and they are synchronised via software with the demand stream and with other automation. They are also more modular and easier to scale to an operation’s needs than solutions of the past. As a result, you can gain new capabilities like collaborative robotic picking, or automated building of mixed pallets, at a price/ performance level that is much more attractive than what could be achieved in the past.”

FLEXIBLE INTRALOGISTICS ON TAP TODAY Industry 4.0 elements including robotics may seem theoretical, but the fact is that systems that embody this revolutionary technology are available today for intralogistics operations. Here are a few examples. Automated Item Picking. Swisslog’s AutoPiQ is a robotic-based application for picking single items from source bins and placing them into order bins. It uses the lightweight LBR iiwa robot from Swisslog’s parent company KUKA. The robot is equipped with state-ofthe-art sensor technology and a 7-axis arm. A multifunctional gripper, an intelligent vision system and a moveable platform complete the flexible robot application. The robots, which can work safely alongside human pickers without a barrier or fence, can be networked with automated goods-to-person warehouse systems. A single AutoPiQ robot application can pick at a rate of up 600 items per hour, depending on item characteristics.



Robotic-based automated case picking and mixed palletising: ACPaQ is a flexible solution for fully automated order picking of mixed-case pallets based on customers‘ requirements. It combines best-in-class KUKA robotics and Swisslog technology such as the light goods shuttle system CycloneCarrier and conveyor systems. It’s flexible due to its software integration, a unique 4-finger gripper for the robot that can gently handle a wide range of products, as


well as the various dimension and expansion possibilities of the shuttle system. Row grouping of products by the palletising robot allows for increased throughput up to 1,000 units per hour, two to three times more than traditional systems. Software to orchestrate robotics with other systems and overall material flow. Industry 4.0 initiatives not only involve automation such as collaborative robots, but software to coordinate the robotics and with other systems. This software must be able to take into account current machine status, labour resources, and constraints like shipment exceptions or equipment downtime. Swisslog’s SynQ is flexible and adaptable software that intelligently connects and synchronises automation equipment, robotics, people and processes, serving this orchestration role.



Modularity achieves goals Building mixed pallets quickly and accurately is a common challenge in DCs. It can be done with human labour and lift equipment, but that grows costs for higher volume operations. Robotic arms can build mixed/layered pallets, but in the past, this tended to carry a high price tag, especially if paired with fixed conveyor system and/or large shuttle systems to buffer and move goods to the palletising arm. Today, newer, more modular approaches are possible. Under Swisslog’s ACPaQ, robotic systems for de-palletising and palletising can be paired with CycloneCarrier shuttle technology to enable a fully automated process controlled by the SynQ software. The shuttle system is modular, meaning it is available in different dimensions and can be expanded to add capacity. The core of the system is a palletising robot from KUKA called RowPaQ that has a unique 4-finger gripper that gives it the versatility to gently handle a wide range of products. A RowPaQ cell is capable of setting down up to 1,000 cartons per hour in the exact location predefined by the palletising software. To scale up, additional RowPaQ cells can be added. Robot-based palletising builds on an intelligently organized process. Before cartons can be palletised in sequence, they are first separated, loaded into trays and stored temporarily in the shuttle system. Even before a WMS issues the palletising order, Swisslog’s software autonomously performs a complex calculation process based on product parameters to determine the best way to load the pallet. Based on this intelligence, the cartons are transported in the exact sequence from storage to the palletising cell. After palletising is complete, it is shrink-wrapped and transported via conveyor to the right shipping station. According to Mr Meier, this mixed palletising cell is another example of how flexible automation can improve intralogistics, while having a system that can be expanded upon as requirements grow. “ACPaQ significantly outperforms manual palletising processes not only in terms of packing density and dimensional stability, but also in terms of cost effectiveness and ergonomics,” Mr Meier said. “Importantly, unlike previous generations of automation, the robotic technology itself and software that coordinates the process makes for a versatile, scalable solution that can handle diverse products.” A step change for intralogistics Industry analysts predict the new robotics will catch on. IDC Manufacturing Insights forecasts that by 2018, 30% of all new robotic deployments will be collaborative robots and 45% of the top 200 global ecommerce and omnichannel commerce companies will deploy robotics in their order fulfillment, warehousing, or delivery operations.

“The future for intralogistics isn’t from a single technology like robotics, or sensors, or even Big Data, but rather how these elements can be tied together with software to drive operational improvements like fulfilling orders with lower labour costs.” Other technology elements that fit with the Industry 4.0 concept are Big Data and digital representation of physical processes, also known as the concept of a ‘digital shadow’ of an operation. The benefit of this latter technology is that by digitalising the resources, constraints and workflows in a warehouse, assembly line or a supply chain, a company can more easily adjust its processes to reduce costs and meet demand. “Analysis of Big Data and access to an accurate digital representation of your operations turn Big Data into Smart Data,” summed up Mr Meier. “Automation needs to be scalable and versatile, but ultimately, you need intelligent software at the warehouse level that

lets you synchronise resources with demand, to get the right goods to market on time, and reduce costs to stay competitive.” The key with Industry 4.0 and related technologies such as Big Data is to examine how they can support intelligent decisions for specific operational goals, according to Dr Kerstin Höfle, IP and strategy manager for Swisslog Warehouse & Distribution Solutions (WDS). “We already have huge amounts of data from operations,” Mr Höfle said. “The idea isn’t necessarily to get more data, but rather to connect to and integrate the data we already have, analyse it, and use it to make better decisions. In the end, the idea is to make Big Data smart.” Common areas to improve via analysis include throughput of orders, optimisation of labour and material flow, inventory replenishment levels, as well as predictive maintenance. “The future for intralogistics isn’t from a single technology like robotics, or sensors, or even Big Data, but rather how these elements can be tied together with software to drive operational improvements like fulfilling orders with lower labour costs,” Mr Meier concluded. “In this continuously changing world, we believe Industry 4.0 can bring revolutionary improvements to intralogistics,” he said. “Flexible robotics and data-driven solutions are the direction we see, with the end goals being cost-competitiveness for operations and a higher level of responsiveness and product availability for end customers.” Martina Suter is the head of marketing APAC. For more information call (02) 9869 5900 or email








S1 has recently announced a collaboration with IBM and Microsoft to leverage GS1 standards in their enterprise blockchain applications for supply chain clients.

Blockchain for digital supply chains GS1’s global standards for identification and structured data enable blockchain network users to scale enterprise adoption and maintain a single, shared version of the truth about supply chain and logistics events, increasing data integrity and trust between parties and reducing data duplication and reconciliation. GS1 Australia’s executive director and chief executive officer Maria Palazzolo said: “Blockchain, like any other technology designed to exchange data across organisations, must be established on strong foundations. At its core, any supply chain implementation needs to be based on all involved parties agreeing on a common way to uniquely identify any item, location, shipment, consignment, asset or any other ‘thing’ to which blockchain transactions relate. “Trading partners must also adhere to common data definitions to ensure all parties in the chain can correctly interpret, and integrate, the ‘meaning’ of data in the blockchain. This is what GS1 has been doing for over 40 years across the globe.”

Interoperability and sharing data across border boundaries Data stored or referenced by blockchain networks can be structured for shared communications and interoperability through the use of standards. For example, the GS1 and ISO open standards of Electronic Product Code Information Services (EPCIS) and Core Business Vocabulary (CBV) enable standardised exchange of data and item-level tracking. Peter Carter from Data61 (CSIRO) said: “A blockchain is a generic technology platform. The data we store in the blockchain still needs 18


to follow supply chain data standards, and integrate with existing systems that use those standards. We have already started research into the use of GS1 EPCIS standards on blockchain, and we are exploring how we can integrate smart sensors and packaging into the supply chain on blockchain.” “What attracts many organisations to blockchain technology is the possibility of sharing data across corporate boundaries while maintaining a high degree of rigour and accuracy,” said Robert Beideman, vice president of retail at GS1. “We hope to make this possibility a reality for businesses by working with dedicated technology and industry partners, and, together, promoting a common business language.”

"Using blockchain, we were able to track a product from retail shelf back through every stage of the supply chain." Global businesses use standards in the supply chain GS1 standards offer global businesses like Walmart the ability to expand blockchain networks to suppliers, distributors and other ecosystem partners, unlocking the business value of data sharing, transparency, visibility and trust. IBM and Walmart have successfully used blockchain technology in a pilot test to enhance the traceability of two food commodities in two different countries: mangoes in the US and pork in China. “Our pilot projects in the US and China demonstrated that blockchain can strengthen existing food system safeguards by improving traceability. Using blockchain, we were able to track a product from retail shelf back through every stage of the supply chain, right to the farm gate, in seconds instead of days or weeks,” said Frank Yiannas, vice president of food safety at Walmart. “Building blockchain traceability on NOVEMBER / DECEMBER 2017

a common set of standards can help us scale across our complex, global supply chain and build networks based on transparency and trust.”

Blockchain benefits: data integrity and verifiable trust “One of the key benefits to blockchain in the enterprise is the trust it delivers, which enables more efficient and complete sharing of the critical data that drives enterprise transactions. By removing the barriers that can be caused from disparate entry systems, that trust is solidified even further,” said Brigid McDermott, vice president of blockchain business development at IBM. “That’s why we are working with clients like Walmart and collaborating with other industry leaders to implement GS1 open standards into the work that we do.” “The challenge with trade finance and supply chain today is that participants are forced to use disparate digital systems bridged by paperbased processes, with little or no common standards. These digital ‘islands’ work well when everyone is on the same network, but as soon as there is a lack of connectivity with certain participants using different solutions, things quickly revert to paper and manual processing,” said David E. Rutter, CEO of R3. “We see distributed ledgers as the means to provide that connectivity between participants across business networks.”

Collaboration to leverage GS1 standards “Leveraging existing GS1 standards to structure event information will enable blockchain-based supply chain implementations to be more interoperable and will simplify the capture and description of events that are written against smart contracts,” said Yorke Rhodes III, global business strategist for Blockchain at Microsoft. “Collaborating with partners to implement solutions on blockchain using standards already in place for item-level tracking is the quickest path to production.” “We look forward to close collaboration with Microsoft and IBM, and will also engage with other blockchain technology companies for the adoption of GS1 standards to enable interoperability and decrease adoption barriers”, added Ms Palazzolo. For more information visit

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Someone wants to register a transaction


The transaction is represented as a block in the shared ledger


The block is broadcast to all participants


The participants approve the transaction is valid, providing consensus


The block is added to the chain


A single picture of the chain and actual state is available to all authorized participants



lockchain technology was created to provide legitimacy to the pioneering crypto-currency Bitcoin after the financial cataclysm of 2008. At its heart is a disdain for central authoritative control, offering instead a decentralised network of self-compliance and regulation. But the servant has become the master, offering business benefits not envisaged during its conception. In fact, it’s nothing short of a game changer for those who can master it. While originally created as a system for running cryptocurrencies, Blockchain’s uses extend much further today, with applications being developed in secure asset tracking and smart contracts. For example, assessing the environmental footprint of a product throughout the supply chain requires carbon footprint data to be collected at each stage of transition and summed at its final point. As there can be multiple transition points, companies and international borders, the auditability of the data can get lost. If the good was tracked using a Blockchain, the tonnes of CO2 equivalent (tCO2e) at each stage could be calculated or recorded and summed at the final point with full auditability. Before drilling down into how that would work, let’s understand a bit more about the 20

Blockchain, known as the technology behind Bitcoin, is one of the most talked-about and intriguing technologies at the moment. Blockchain, similar to the rising of the internet, has the potential to disrupt business. IFS Labs is researching the potential use-cases for business and their impact on business applications.


HOW BLOCKCHAIN TECHNOLOGY COULD CREATE SMART SUPPLY CHAINS technology. Blockchain is a secure distributed electronic ledger, connecting multiple parties in a network of trust and integrity, facilitating the transfer of assets and the information pertaining to those assets. It does this by securely recording digital transactions in a sequential chain using cryptographic digital keys, which are verified by the network as authentic. Duplication, editing or removal of transactions is prevented by the chain, which is held on everyone’s devices on the network and open to anyone within the Blockchain.

Business benefits of Blockchain Utilising this new platform can bring many business benefits, but most are centred on delivering one or more of six competencies: 1. Efficiency. As transactions are completed directly between the relevant parties with no intermediary and with digitised information, settling the transaction can be quick. Added to this is the ability to operate smart contracts that automatically trigger commercial actions based on satisfying specified criteria. This can dramatically streamline processes and remove time and cost from transacting. NOVEMBER / DECEMBER 2017

2. Auditability. As each transaction is recorded sequentially and indefinitely, it provides an indelible audit trail for the life of an asset as it passes between different parties. This is especially important if source data is essential in verifying an asset’s authenticity. 3. Traceability. Tracking goods in a supply chain can be advantageous when seeking to trace where components are currently residing. Information relating to the component can then be relayed to or from the new owner for possible action. 4. Transparency. Lack of commercial transparency can sometimes lead to delays and a breakdown in relations. By providing details of transactions against the commercial construct, further trust can be enlisted within the process and so provide a more stable relationship based on transparency rather than negotiation. 5. Security. As each transaction is verified within the network using independently verified cryptography, the authenticity of the information can be assured. Assured information is one of the fundamental keys to unlocking the benefits of the Internet of Things, which is a closed loop cyber


autonomous process linking assets to actions. 6. Feedback. With full traceability throughout the lifecycle of an asset, the asset designers and manufacturers can accommodate throughlife asset management into their products to make them more effective. This can allow for information returning from shipping, installation, maintenance and decommissioning. So far, most use cases for Blockchain technology have been focused on the financial sector, including transaction management. Be it reducing costs by keeping property ownership and records on Blockchain or using it to track high-value goods such as diamonds, all these cases are about creating secure, verifiable and traceable storage of information. Looking beyond the more obvious financial applications, however, IFS Labs is researching the benefits and impacts it might have on other business applications. But what challenges do we need to solve in the implementation of Blockchain technology before these benefits can be achieved?

Blockchain in smart supply chains Let’s highlight the application of Blockchain with a supply chain example.

Think about the current situation where a commodity is grown, packed and shipped from India to Australia for processing into a sellable good where it is distributed to the buyer directly. During each phase of the process the commodity ‘attracts’ a carbon footprint. The total footprint of the sold good is the accumulation of all the tCO2e along the supply chain. Estimations are formed on separate systems as to the footprint at each stage and this number recorded for internal and external reporting and decision making. To demonstrate environmental, social and governance (ESG) or corporate social responsibility (CSR), the auditability of tCO2e data is key. If each stage of the process was handled within a Blockchain, a manual or calculated value could be registered against the commodity regardless of the company or location or the stage or transaction. How would this make the supply chain smarter? Activities at each stage could be measured and decisions made on alternatives and options to the process. Data could be recorded, audited and verified simply, quickly and accurately. Calculations could be performed instantaneously based on algorithms,


which may also impact contractual terms. Measurement of the activities could lead to a reduction in the carbon footprint of the good throughout the supply chain.

Integration of information is key So how can we achieve these benefits in reality? There are several players that need to work together to make this happen: technology providers like Microsoft (with Azure Blockchain as a Service) must work together with companies at each stage of the supply chain, as well as with application software vendors. We all need to work together and be willing to share information to integrate with the Blockchain. We’re not there yet, as there are still several challenges to overcome. Things like technical performance need to be thought about as transaction delays and the availability of computing power could stand in the way for achieving consensus within a chain. Data ownership, privacy and security must also be addressed. Director of IFS Labs Bas de Vos is responsible for innovation projects that illustrate the future of enterprise software. For more information visit

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TRANSPORT GETS A DISRUPTIVE MAKEOVER D isruptive technologies, particularly artificial Intelligence (AI) and machine learning, have become a key part of digital business value creation in transport. At more than $10 trillion, transport is a massive industry globally that these technologies can transform. As a supply chain leader, you need to prepare yourself and your organisation to leverage these new capabilities for strategic advantage. While AI has been used in transport for a long time, its use has been catapulted to the next level by new technical capabilities brought on by the huge increase in real-time processing power, the tremendous advancement of AI algorithms, and the accessibility of cloud computing. AI is technology that appears to emulate human performance typically by learning, coming to its own conclusions, appearing to understand complex content, engaging in natural dialogues with people, enhancing human cognitive performance, or replacing people on execution of non-routine tasks. AI now plays a role in an increasing number of uses in transport, such as predictive analytics and iterative planning, as well as intelligent things – physical things that exploit applied AI and machine learning. Recent advancements have made it possible for computers to perform several tasks, like recognising objects in pictures, faster than humans. Gartner anticipates that adoption will increase over the next five years through innovations such as autonomous vehicles, delivery robots and drones. As a core component of AI, machine learning is helping these innovations get into a mode of self-learning – to learn, grow, change and develop by themselves – without being explicitly programmed. This greatly impacts the way companies execute transport. Interestingly, transport is likely to be one of the first domains in which the general public will be asked to trust the reliability and safety of an AI system for a critical task. Autonomous vehicles, in particular, have the potential to reduce accidents, improve the productivity of trucking and taxi services, and enable new mobility services.

Future of autonomous vehicles For the near future, AI technologies will act as a ‘co-pilot’ to truck drivers. With the current and growing shortage of truck drivers, complimentary resources are needed to 22



increase the availability of capacity and provide more efficient ways of running trucking assets. Autonomous trucking technology will make it possible for trucks to travel for many additional hours in a safer way than when only operated by humans. Forty-five thousand cans of Budweiser beer became the first revenue-generating load to be transported by a driverless truck early last year. In a pilot operated by Uber subsidiary Otto, the truck travelled over 190 kilometres along a US highway to its Colorado destination, with the driver monitoring the two hour journey from the truck’s sleeper berth. The airline industry has adopted autopilot systems for many years. The autopilot hasn't replaced the pilot; it's created an additional layer of safety, as well as increased flying hours in the cockpit.

Machine learning’s changing the landscape Machine learning is changing the way traditional optimisation engines plan transport. It’s evolving into software-based systems that are programmed to learn and adapt, rather than programmed only for a finite set of prescribed actions. This provides companies with a new set of capabilities never available before. Transport is an area where the Internet of Things (IoT) is heavily used, either in autonomous trucks or in the more traditional telematics in conventional trucks. These IoT devices provide millions of data points per day and enable predictive analytics that can be used to prevent accidents, lower driver fatigue, signal vehicle failures, and update late deliveries. The list of uses keeps growing. The availability of large-scale data has also made transport an ideal domain for machine learning applications. Since 2006, applications such as MapQuest, Google Maps and Bing Maps have been widely used by the public for routing trips, using public transport, receiving real-time information and predictions about traffic conditions and finding services around a location. This has evolved to usage in commercial trucking for real-time visibility using telematics data, traffic data, weather data and even news and social media to predict at-risk deliveries NOVEMBER / DECEMBER 2017

A number of companies are already applying AI and ML to predict occurrences of failures in transport resulting in late deliveries or at-risk shipments. In the future, these systems will not just predict outcomes, but even prescribe certain actions to be taken. From there, the next step leads to automation of those prescribed tasks where a planning system can automatically replan the route or shipment and direct an autonomous truck to go execute that shipment or route.

Striving for smarter planning There’s currently a big transformation toward ‘smarter planning’ in transport software. As order lead times and delivery lead times have shrunk, companies need to go from more static and fixed planning to dynamic and reactive planning, or what could be called iterative planning. Technology vendors are incorporating AI to make optimisation engines smarter and selflearning so that every time an order is executed, you can learn from it and improve the way you plan the next one. With cloud platforms, these systems have evolved to more performing transport systems that can use almost unlimited amounts of processing speeds and CPU. This allows you to plan in a way you never were able to. The advancement of AI and sophisticated algorithm techniques means that for the first time computer systems can do a better job than a human. Although AI has been around for some time, few systems have been used for day-to-day planning and execution. The new breed of systems can work with all the variables and respond instantly.

Where to start • Learn if new AI and machine learning breakthroughs in transport can bring about greater value to your company, or whether traditional data analytics and rule-based systems are adequate. • Create a strategy and plan for deployment of these AI and advanced machine learning systems for transport in your company. • Identify the relevant AI and advanced machine learning uses for transport based on existing uses and examples. Bart De Muynck is a research director at Gartner, focused on supply chain delivery processes. For more information visit

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any logisticians are keen to understand the basics behind effective distribution centre design. This is a complex area as there are scores of variables that have to be considered. So to help you along, without getting into tedious details, here are some proven rules of thumb that you can apply if you are designing a new warehouse or making changes to an existing facility.

Critical design template options I-shaped design Warehouses that receive at one end and dispatch from the opposite end are flow-through or ‘I’ shape layouts. These are commonly used for high-volume operations, or where complete separation of receiving and dispatch operations is required. While I designs are widely used, these designs required greater hardstand areas than the alternative ‘L’ or ‘U’ shape designs.

U-shaped design Receiving and dispatch operations that are adjacent, on the same side of a warehouse are known as ‘U’ shape designs. The majority of distribution centres are designed as U-shaped. This is because they offer the best ratio of building-to-land use and minimise the amount of hardstand required for receiving and dispatch vehicle movements. 24


L-shaped design ‘L’ shape designed warehouses typically receive on one side and dispatch on an adjacent side at 90 degrees from the receiving side. Many crossdocking operations employ an L-shaped design, along with organisations that receive goods in large trailers but dispatch in smaller vehicles. In some cases, modern distributions may include two or all three of I, U and L designs. Particularly where a number of methods to market are required, e.g. direct to store deliveries, business to distributor, business to consumer, and business to route. They may also be used where facilities need multiple chambers to store temperature sensitive or dangerous goods. In all cases the key design drivers are spatial planning, vehicle types accessing the site, flow, and volume.

Racking orientation For conventional warehouses the most efficient method of operation occurs when racking runs in the same direction as incoming materials. This allows forklift operators free access from receiving and to dispatch docks. Placing the racking at 90 degrees to incoming materials is not recommend as funnelling and bottlenecks can occur, as forklifts are forced to use central aisles to put-away and retrieve stock. NOVEMBER / DECEMBER 2017

What level of mechanisation should be applied? The simple answer to this is only what is necessary to optimise capital investment against ongoing operational expenditure. Spending a little more capital may actually reduce ongoing operational cost, but spending far too much may send you broke. Conversely, spending too little on capital equipment may cause high operating costs in the ensuing years of operation. So what is the right mix of mechanisation? While there are a number of factors that drive mechanisation decisions, there are two common drivers: • Number of stock keeping units (SKU) or products handled. • Volume of picks per day, week or month.


You may ask why picking is a point of focus. This because order picking can absorb up to 80% or resources within distribution centres, so every effort to reduce time and resources to fulfil orders will mean savings to your business. Conceptually, the matrix shows how SKU and picking volume form the basis for justifying mechanisation.

Dock and loading bay design Providing the right docks and loading bays in a distribution centre should be straightforward, but sadly it’s not, as many warehouse operators can testify. Consider the variety of vehicles that may visit your warehouse, and the numbers of each. E.g. pantechnicons, rigid vehicles, temperature controlled end-loading trailers and B-Doubles, ground delivery sideor end-loaded vehicles, utilities, side-loaded trailers and B-Doubles and rigids, courier vans, motor bikes and push bikes. Ignoring or overlooking any one or more of these groups, can cause deficiency in dock, loading bay and hard stand design. As a general rule, if a dock or loading bay is 75% utilised, you should provide an additional one.

rectangle. Over the years, I’ve found it to be the most efficient shape for distribution centre design. Ideally at a ratio of length = 1.7 x width.

Usable land for buildings and hardstand Rules differ across states and councils on the allowable building size as a proportion of land size.In many instances, 50% of the land space can be planned for buildings. An additional consideration is the recent spatial rules applied by some councils to alleviate floods and to promote greater green space. In effect, they dictate a greater percentage of permeable land, which may in turn restrict the amount of non-porous hardstand that can be laid.

Amount of room planned for receiving and dispatch Many completed warehouses can suffer from an over-concentration of materials handling and storage equipment. This can have a drastic impact on the operation of a facility. As a guide, for most warehouses, from 20 to 25%


Vehicle flow around warehouse It’s best, in Australia, for vehicles to flow in a clockwise direction, to allow for driver side reversing. While this is not always achievable, its preferable over anticlockwise operation, as driver visibility is better.

Sqm per pallet in a conventional warehouse (quick rule of thumb) Allow for 1.2 sqm per pallet for conventional selective racking systems. Push up to 1.4 for narrow aisle or double deep systems.

More pallets or more forklift room to manoeuvre? What is best? More pallet racking with narrower aisles, or less pallet racking and wider aisles for fork lifts to manoeuvre in? In my view the priority should always be ‘operation’ over ‘capacity’. The building will be set up once, but operations will continue year after year, so wise planners give manoeuvrability the priority.

How tall should my building be? Over the decades building roofs have progressively been getting higher. In Australia’s manufacturing past, pre- and post-WWII industrial facilities were 5.5 to 6m high. Many were of saw tooth design with lots of columns throughout. Fortunately, these have largely been demolished and replaced with portal frame buildings as high as 11 or 12m at the springing line. The portal frames allow much longer spans across the warehouse and minimise internal rows of column to only one or two. This provides designers with freedom to install many varieties of equipment to a height of 10m to 11m. However, where high-bay warehouses (for automatic retrieval systems) are considered, there are limited developers willing to take them on. This is because history reveals that it’s hard to lease specialised high buildings after the first user has exited, compared to lower height facilities. This trend is changing though, due to increased urbanisation, so more high-bay warehouse are tipped to be constructed in coming years. (See my previous article ‘Spotlight on ASRS’, MHD July/ August 2017 – available at

What are the rules of thumb for planning and design? Warehouse aspect ratio Never design your building to be circular, triangular, or square! Avoid trapezoids and parallelograms if you can. Why? Despite whatever architectural licence is used to make warehouses look great, the best shape is the humble

of the available warehouse floor space should be allocated to receiving and dispatching operations. The balance of 75% is usable for storage equipment and picking systems.

Truck turning / reversing space For semi-trailers’ movement, in and out of facility and reversing into docks, allow 37 to 40m. For B-Doubles, allow 50 to 55m. However, where B-Doubles drive through and do not reverse in, 37 to 40m is sufficient.

Hopefully the rules of thumb will help you be effective in your design quest, but please remember that there are many other aspects that are relevant. Perhaps you have learned from your own experience and have a few tips of your own. Drop me a line if you do, as I am always interested in hearing what others have faced during the design process. Mal Walker is the manager, consulting, at the Logistics Bureau. For more information contact Mal on 0412 271 503 or email






Northline CEO Craige Whitton in the company's new Adelaide warehouse.



he durability and reliability of Toyota forklifts has led a major national freight and logistics company to renew its partnership with Toyota, signing an extended rental arrangement for 135 Toyota forklifts and reach trucks. The 135 forklifts and reach trucks will be put to work at Northline's nine warehouses and distribution centres located around the Australian mainland. The bulk of the new fleet is made of up over 90 new Toyota 8FG25 2.5tonne gas-powered counterbalance forklifts. "The 2.5-tonne 8-Series forklifts are very well built and reliable and are the mainstay of our forklift fleet," Northline's chief executive officer Craige Whitton said. "We've never had a Toyota forklift down for a long period. In this industry, we need to know that our equipment will be ready to meet demand at peak periods, and having a fleet of Toyota forklifts gives us the confidence we need." Northline's new Toyota fleet also includes more than 30 Toyota reach trucks and order picker forklifts plus four heavy-duty 15 to 20-tonne engine-powered forklifts. Mr Whitton said the quality of service and strength of the support received from Toyota was a key factor in Northline renewing its relationship with Toyota. 26


"If an issue arises we know a Toyota technician will be on site within a few hours, and if the problem can't be fixed then and there, a replacement forklift will be provided, so there's no loss of productivity. All of Northline's forklifts and reach trucks are serviced by factory-trained Toyota technicians at regular intervals. They also undergo a weekly 'start-up' check where minor problems are dealt with on site and potential future issues can be flagged for later attention. Another plus for Northline is the consistency of personnel that comes with dealing with an organisation like Toyota that has a large, highly trained team of technicians and branch support staff spread right around the country. "The consistency that comes from the one technician visiting the same depot each time is a real benefit to us," Mr Whitton said. "They get to know our staff and our business, so they are familiar with the way we operate and our unique needs, and they know who to speak to." Toyota's I-Site online fleet management tool was another key factor in Northline's decision to renew with Toyota. Mr Whitton said the Toyota I-Site technology fitted to its new fleet of Toyota forklifts NOVEMBER / DECEMBER 2017

and reach trucks offered greatly improved functionality and insights. "The Toyota I-Site software is fully integrated and all our managers have access to it," he said. "We just downloaded the mobile app that provides us with alerts and reports - it's very user friendly and makes the task of managing a large fleet of forklifts much easier. We're already getting a much greater benefit out of it." Established in 1983, Northline is a privately owned and managed Australian company specialising in four major areas of service provision: road and rail freight management services; warehousing and distribution; global freight forwarding; and mining, construction, oil & gas logistics. With 13 branches across the nation, the company's extensive operation employs a diverse team of professional staff, as well as dedicated full-time pick-up and delivery subcontractor partners in all mainland capitals and many key regional centres. For more information call 1800 425 438 or visit




afety remains at the heart of the material handling industry. Even in 2017, accidents and fatalities involving material handling equipment are commonplace. Accidents in the workplace cost money and worse, can cost lives. Statistics indicate that lift truck accidents cause at least one fatality every six weeks, giving forklift operators one of the most dangerous jobs in the UK. In the US it’s thought that forklifts cause around 85 fatal accidents a year. But thanks to the latest innovations in lift truck design, attachments and procedures, warehouses are becoming safer every day.

Forklift innovations

fork levels ensures a stable lift surface for your material even if the contents move during transit.

Forklift Cushions Forklift cushions are not designed for the comfort of your operators. For delicate loads such as glass objects, forklift cushion attachments provide a cushioned barrier between the load and the back of the forks. This absorbs the impact when the forklift connects with the load, protecting the load from sudden impact. Then, as the pallet is picked up, the cushion prevents the load from hitting the truck’s forks or the fork carriage with sufficient force to cause damage to the load.

Blue LED directional lights In a world where 1 in 6 forklift truck accidents involve a pedestrian, efforts to keep passers-by alerted to the intentions of a forklift help to keep warehouses safer places. Blue LED directional lights not only indicate the presence of a forklift, but can be directed at the floor ahead of a forklift to alert people around corners. This is particularly useful for the quieter-running electric forklift trucks. Forklift level indicators Forklift level indicators show the operator a digital reading of each fork, allowing them to know when to adjust the forks to maintain level balance. This up-to-the-second reading of

Impact sensors Just like parking sensors on cars, forklift impact sensors give operators advanced warning of obstacles in their path. This includes racking when turning corners (a common collision point) and alerting the operator to unexpected obstacles in their path.

Automation in material handling As such, it stands to reason that separating humans and manual handling equipment reduces the potential for accidents, especially when you consider that driver error is the primary cause of forklift accidents.


In addition to preventing driver error, driverless forklifts allow for the unmanned lifting of extreme loads - a dangerous operation for any operator, or those nearby.

The human factor Forklift truck innovations are not enough to ensure forklift truck safety. The human factor can also catch you out, sooner or later. To combat this, equipment and procedures must be as secure as possible. Proper warehouse operation requires knowledge, training, skill, and attitude. Developing policies to ensure a culture of forklift safety is just as important as splashing out on the latest safety tech. In an increasingly automated world, it's important not to become complacent when it comes to safety.

VR training To ensure maximum safety and realistic training, Virtual Reality training simulations are being rolled out to warehouses. These realistic training simulations allow all your operators to practice and train on forklift trucks without endangering themselves or others by driving the real thing. Today, the quality of the virtual simulations is such that they provide valuable experience for operators before they even get into the cab. For training to have the greatest beneficial impact, operators and fleet managers should make it a practice to continuously observe and evaluate how operators perform. A critical eye and regular refresher training will help operators keep the safety essentials at the front of their minds and keep them proactively developing their skills. For more information visit

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Brett Tanos (centre) and staff at Barrett's Wholesale Foods in Orange, NSW.



ustralia’s biggest regional cold storage and food distribution company has doubled the life expectancy of its lift truck fleet since switching to Crown. Blayney Cold Storage and Distribution – a family owned business that incorporates SeaLink, Blayney Wholesale Foods and the Barrett’s Wholesale Foods in Orange – supplies a range of food products to over 2,000 trade customers every day throughout central western NSW. Its facilities include a minus 23°C, 65,000pallet space warehouse, as well as retail and wholesale operations and the SeaLink rail siding. After using a wide range of forklift brands since the company’s incorporation, Blayney Cold Storage and Distribution is now using a line-up of Crown lift trucks including CG Series internal combustion forklifts, FC and SC Series counterbalance electric forklifts, and PE Series rider pallet trucks. Managing director George Tanos said the demands of his business present significant challenges in material handling and he is always looking for the best equipment. “We move a lot of stock every day and unless we’ve got the latest and greatest, it’s not going to work for us,” Mr Tanos said. “We started working with Crown in 2009 but before that we tried all other makes and models of forklifts. “Prior to Crown, a forklift would usually last two to three years and that was it, they were shot. They’d barely last through the warranty period. “We’ve used some of our forklifts for eight years and they’ve done a massive amount of work. “I’ve got to say, if it was any other brand I would have needed to replace the whole fleet by now. 28


“We’re definitely getting twice the life compared to any other forklift we’ve had, and we’ve had a lot over the 40 years we’ve been in business. “Whether that’s a good thing for Crown or not I’m not sure, they’re making them too good!” Mr Tanos said his fleet of Crown lift trucks also perform better in daily operations. “It’s not just about how long they last, it’s also how they perform while you’re using them,” he said. “The Crowns are not only a better sized forklift for our business, but they’ve got the capacity. “Quite a few competitors we’ve tried don’t have the capacity that our Crown forklifts truly offer, and you don’t want to have operators tipping and tilting their forklifts. “Our racking isn’t excessively high, it reaches up to six metres, and the Crowns do the job quite comfortably. “We don’t get product damage thanks to our forklift fleet, so I’m very happy with them.” Mr Tanos also mentioned service as a highlight. NOVEMBER / DECEMBER 2017

“The Crown technicians in Orange come and service the forklift fleet frequently,” he said. “We’ve got good, reliable contacts with our crew in Orange and nothing is ever a problem.” Mr Tanos founded Blayney Cold Storage and Distribution in the late 1970s as a one-truck business servicing 30 customers. The company now employs 200 staff to run its storage and retail sites, refrigerated truck fleet, third-party cold storage, rail operations and primary agriculture. As well as its ability to supply fresh seafood, poultry, cakes, and frozen products such as chips, take-away foods and prawns, the company is also able to set up complete restaurant facilities. Blayney Cold Storage and Distribution has recently taken over a linehaul business to expand to national distribution, and will soon open the largest goat export operation in the world. For more information visit

every second counts

Voice-driven workers aren’t just faster: they’re focused on what counts. Building voice into your distribution centre is one of the most effective ways to speed up operations. But your workers aren’t just faster – voice also enables you to rapidly scale your operations and redistribute labour where you need it most, giving you critical workflow agility. Find out what workflows look like when every second counts for more: Honeywell.


© 2015 Honeywell International Inc.



“It has the capability to combine functionalities of a camera, display screen, location services and RFID, which also opens up applications in areas outside the warehouse.”



aving installed a fully integrated voicedirected warehousing system, Silk Contract Logistics found increased efficiency and safety and enhanced its worker productivity and competitive advantage. Silk Contract Logistics operates across a range of sectors, including retail and fast-moving consumer goods (FMCG), light industrial and food and dairy, providing a tailored approach to wharf cartage, warehousing and distribution. With 21 warehouses spread across Australia, Silk Contract Logistics has deployed a suite of warehousing innovations, to both futureproof its business and establish itself as an innovator in the Australian warehousing industry. “We’re always looking at ways to lean on technology to enhance warehouse service, particularly for staff and clients,” chief information officer at Silk Contract Logistics Matt Hannah said. “With Zebra’s wearable technology and voice-directed TekSpeech Pro software, our staff are now able to adopt a ‘hands-free’ approach on the warehouse floor – increasing accuracy and improving safety during the picking process.” The Enterprise Asset Intelligence applications that the third-party logistics company deploys include Zebra mobile printers and wearable

computers equipped with the voice-directed picking software TekSpeech Pro, making it the first enterprise in Australia to fully harness Zebra’s multi-modal voice range. With these visibility systems, Silk Contract Logistics aims to increase offerings to its customers, provide better safety to staff, improve functionality and efficiency, and enhance its service profile for its clients’ future use. “Zebra has worked with Silk Contract Logistics for a number of years,” regional director for ANZ at Zebra Technologies Asia Pacific Tom Christodoulou said. “As a forward-thinking logistics provider, Silk has now moved to a fully integrated system. Silk is the first business to implement TekSpeech Pro in Australia so we are looking forward to seeing Silk and its clients gain financial and operational efficiencies from this voice-directed warehousing system.”

What was installed? Silk Contract Logistics has deployed many products from Zebra’s wearable range, including the WT41N0 wearable computer, the Bluetoothenabled RS507 ring scanner, and TekSpeech Pro voice-directed picking software.

The WT41N0 wearable computer screen can be used to display images of goods or complex identifiers such as serial numbers (in non-barcode format) that are not efficiently conveyed in a voice-only system, while ring scanners allow workers to handle material with both hands. TekSpeech Pro has the capability to combine functionalities of a camera, display screen, location services and RFID, which also opens up applications in areas outside the warehouse, such as retail and field service. Silk Contract Logistics is the first enterprise in Australia to deploy this range. “The multimodal wearables allow pickers on the floor to access and verify information – swiftly and accurately – improving operational visibility” said CEO of Skywire Australia James Shepherd. “Skywire is proud to have partnered Zebra in delivering a robust system that has built Silk Contract Logistic’s status as an innovator in the warehousing space.” Silk Contract Logistics has also deployed the QLn-series direct thermal mobile printers that are able to produce labels on-demand at the point of activity. These printers are built to be tough, yet small enough to be used on the move. The QLn420 is able to withstand the rigors of the warehouse and is proven to have drop-resistant durability. Its ease of use also enables increased worker productivity. For more information visit

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we are innovation



Voice-directed zone skipping pick module.



he rise of e-commerce has seen shopping coming full circle – from the milk delivery man, to the grocery store, to the mega mall, and now back to the online shopping delivery service. Australians spent a record $21.65 billion online in the year to December 2016, up 10.4% year-on-year, according to National Australia Bank’s (NAB) Online Retail Sales Index. Local sales continue to dominate, with 81% of the total spending online controlled by domestic retailers , though this is likely to change sharply once Amazon arrives on these shores as confirmed recently. As a result of the rise of e-commerce a consumer is in control of the retail world, all from their smartphone or watch. With the mall in the palm of their hand, all today’s consumers need are finger strokes, rather than footsteps, to access better product and pricing information and to compare a range of stores. Despite the increasing popularity of online shopping, retail stores are still important in Australia, creating a shift to omni-channel 32


behaviour. This follows in the footsteps of consumers in the US who say they research online and purchase in-store (88%), browse products in stores before buying online (73%), and find it very useful to be able to return goods to a physical location, access retailer stock information online, and get a text message saying goods are about to be delivered in X minutes. It is clear to retailers in Australia that they must adapt to increasing consumer expectations. Forty nine per cent of executives believe customers will switch brands due to poor customer service. And this is supported by figures showing 89 per cent of customers have actually switched brands due to a bad customer service. Retailers must service the engaged consumer and develop the capabilities to meet their demands for what they want, where they want it, when they want it, and at a price they are willing to pay.

The omni-channel challenge for supply chains As a result of the growth and increasing importance of e-commerce, businesses have had to review their approach to order fulfilment. With the majority of online purchases being for small quantities of goods – often single items – a cost and time-efficient approach to picking individual items is required to cost-effectively NOVEMBER / DECEMBER 2017


process orders and meet demanding delivery windows. High service level expectations and the high cost of rectifying errors and processing returns means fast and accurate order fulfilment is critical. For retail supply chains, the main challenges of supporting omni-channel retailing include order fulfilment costs, margin pressure, SKU proliferation, returns, order processing speed, order processing accuracy, available network, and inventory visibility. These challenges are driving the development of innovative new flexible, scalable, modular materials handling and order fulfilment equipment that enables fast, accurate and costeffective order processing, which is critically important in the highly competitive retail sector.

Omni-channel solutions Person-to-goods. This is discrete order fulfilment picking to totes, cartons or other shippers on a trolley or pallet. Depending on the volumes involved, picking can be directed by RF, voice or via pick-to-light displays, with product and order scanning minimising the potential for errors. PTG is a cost-effective solution for picking relatively small quantities of discrete orders, and


can be easily scaled up. It provides reasonable picker productivity levels, typically around 80-120 items per hour. Person-to-goods with batch picking. Productivity levels can be significantly increased by batch picking the individual products required for multiple orders, concurrently to a trolley or pallet. The batch-picked items can then be efficiently sorted to their respective orders in a variety of manual processes directed by RF or voice, before packing and shipping. Or, depending on the physical characteristics of the products and volumes involved, via a put wall or an automated conveyor sorting system. Put walls. Put walls optimise the processing and shipping of orders for single or small quantities of items. Serving as an order consolidation and packing hub, they deliver high productivity and order accuracy. After all of the goods required for a batch of orders have been picked, typically into totes, they are delivered to the Put Wall on a pallet, by trolley, or conveyor sorting system. Put walls are a double-sided wall of shelving with individual compartments, each representing a single customer order. The front of the Put Wall is for ‘putting’ items to orders, while the rear is for packing and shipping. The order compartments can be configured in a range of sizes to suit the user’s product range, with individual compartments also capable of being used for multiple orders through the use of dividers or small tote bins. Put walls can be utilised manually using printed pick lists and alpha-numeric location labelling, or used in conjunction with technologies including barcode scanning and RF terminals, put-to-light (PTL) or ‘cubby light’ displays, or voice-directed picking and putting to further increase accuracy, productivity and throughput.


Put-to-light directed put wall.

“As a result of the growth and increasing importance of e-commerce, businesses have had to review their approach to order fulfilment.” Automated conveyor sorting systems. Automated conveyor sorting system options range from pop-up wheel, pivot arm and sliding shoe sorters for throughputs of up to 6,000-8,000 packages per hour, to cross-belt sorting systems, which can process up to 20,000 items per hour. A key benefit of crossbelt sorting systems is their ability to handle a wide range of products from books, magazines and flat pack apparel through to large goods weighing up to 50 kg.

Goods-to-person (GTP). With GTP, stock is automatically delivered to picking stations in the precise sequence required for order assembly: heavy items first, fragile items last, by family group or in whatever sequence needs dictate, ensuring rapid order fulfilment with high productivity, accuracy and throughput rates. Light-directed, one-to-one or one-to-many pick station configurations – for example, one-to-two, in which a single stock tote and two order totes are presented to the operator – eliminate time wasted waiting for stock and enable multiple orders to be fulfilled concurrently. Totes containing stock for orders are delivered to pick stations by an automated inventory buffer store, typically an automated storage and retrieval system (ASRS) like the Dematic Multishuttle. A single GTP system operator can achieve very high pick rates of up to 1,000 items per hour.

The future of e-commerce The rapid growth of online shopping with its high service level expectations, competitive pricing and constantly evolving IT requirements, make it a very demanding market, but one in which traditional bricks and mortar retailers must engage to defend their market share in an increasingly crowded global marketplace. While both clicks and mortar and pure play online distributors put lots of effort into meeting or exceeding the front end of a customer’s online shopping expectations, the hard work really starts in the DC where the perfect order must be picked, packed and despatched in increasingly smaller timeframes. To do so requires flexible, scalable, modular materials handling equipment and processes, along with smart order fulfilment software, which are fully integrated with the online ordering platform. Pas Tomasiello is Dematic’s director of integrated systems. For more information visit






Toyota’s ‘Autopilot’ range of driverless forklifts was designed for driverless operation for transporting, stacking or picking, and can function independently, alongside existing equipment or even operated manually if required.




obotic technology will transform the forklift industry, causing a colossal transfer of value from humanprovided driving services, towards spending on autonomous industrial material handling machines, thus fuelling an industry revenue boom far exceeding recent growth trends. Robotic technology will also transfigure this industry, slowly but surely, enabling the rise of new types of autonomous mobile material handling units that will permeate into all aspects of our daily lives over the coming two decades. The new IDTechEx Research report Mobile Robots and Drones in Material Handling and Logistics 2017-2037 provides a comprehensive and in-depth analysis of this transformation. Indeed, it provides technology and market assessments for all aspects of mobile robotics material handling and logistics. It shows, quantitatively, how some technologies will rise to transform industries whilst others will face becoming obsolete. Uniquely, this report takes a 20-year view of the future. This is essential 34


because of the time scales on which these changes are likely to operate. More specifically, this report provides the full picture, including technology assessment, detailed twenty-year market forecasts clearly explaining/justifying the different phases of market evolution, and company overviews/ profiles/interviews. It covers AGV/AGC, autonomous mobile material handling carts/ units and vehicles, mobile picking robots, autonomous light vans and trucks, last mile delivery drones, ground-based last mile delivery droids and so on.

Background Autonomous cars are the subject of a lot of hype and the media attention. Yet, despite being the largest prize, they will be amongst the last vehicle types to go fully autonomous. This is because their environment is poorly structured, and they are thus hard to autonomise. The current models of ownership and usage also provide a weak motivation NOVEMBER / DECEMBER 2017

for the general public to pay for autonomous driving, constricting adoption to high-end cars until long-term technology learning curves bring prices sufficiently down. A drastically different picture is found when one looks beyond passenger cars: all manners of commercial vehicles operate in a variety of semi-structured and controlled indoor and outdoor environments. In such cases, the technology barrier to autonomy is lower whilst a pricing system already exists that values the provision of driving services. Warehouses and factories are examples of such environments, and are thus an appealing target for autonomous mobility technology.

Incumbent automated technology to go obsolete Indeed, automated guided vehicles (AGV) have been around since the 1950s, essentially acting as long-range distributed conveyor systems. This technology itself has matured: sales have diversified beyond just automotive factories







– – – – – – – – – – – – – – – – – – – – –

#1 company 8000 #1 company



Unit sales (in thousands)

6000 USD million revenue

Other Paletrans Equipment Godrej & Boyce Manufacturing Hytsao Hubtex Combilift Tailift Lonking Forklift Hyundai Heavy Industries Doosan Industrial Vehicles Clark Material Handling International Komatsu Hangcha Group Anhui Forklift Truck Group UniCarriers Americas Mitsubishi Michiyu Forklift Crown Equipment Hyster-Yale Materials Handling Inc. Jungheinrich AG KION Group Toyota Industries Corp.


5000 4000 3000



#20 company

#20 company



1000 0 2000



8000 10000

Million USD annual income

and assembly lines, the onus has shifted onto suppliers to spend effort in developing customer specifications, and price pressures are increasingly intense. The latter is critical in this highly fragmented business landscape where suppliers offer comparable levels of competency. We find that it is likely that companies with partnerships with major forklift players will command a competitive advantage via the removal of margin stacking. This partially explains the recent activities by forklift players to acquire, or partner with, AGV companies. AGV, and in recent years AGC (carts), are enjoying healthy, albeit slow, growth. Yet, the industry is on shaky ground. Indeed, we assess that AGV will face a slow journey towards technology obsolescence in the next 15 years. The current positive growth rates, we find, give a false sense of long-term security, and companies will increasingly face an adaptor-die situation. Indeed, the IDTechEx Research report Mobile Robots and Drones in Material Handling and Logistics 2017-2037 will provide an assessment of why this technology will lose in the long-term. We will also provide a quantitative picture of its modest growth in the near future and its slow decay in the long term.

Rise of independent mobility The challenge to the incumbent AGV technology comes from the next generation of navigational autonomy technology. Current AGV systems are rigid and require infrastructure modifications, i.e., the placement of references points or lines to guide the vehicles. These

0 0



Company number

Above: These figures paint a picture of the forklift industry today. Our report provides twenty-year market forecasts, showing how industry revenues will change over the coming decades with the rise of autonomous mobility. Here, the figure on the left shows the revenues of top 20 companies for 2014 and 2015, while the ones on the right show how industry revenue is distributed amongst the players. Some interesting news from the past few years: in 2014 Toyota acquired Tailift; KION acquired automation specialists Egemin and Dematic; Mitsubishi Nichiyu took over UniCarriers in 2016. In case you are unfamiliar with the industry, note that Toyota owns the Raymond, Toyota, BT and CESAB brands, whilst KION Group operates the Linde, STILL, Baoli, Fenwick, DM, and Voltas brands.

systems safely work across all payload ranges. They are, however, difficult to tweak, require advanced full system planning, and involve a large onsite installation time that represents a major manpower overhead. Fully autonomous systems will do away with such shortcomings. They offer flexibility in that routes can be changed via a software interface and updated via the cloud, and benefit from short installation time involving the CAD model of the facility and/or the walking around of one robot for ‘training’ it. Current models all have limited payloads, partially because safety is not yet fully trusted. The robots and software are also still somewhat expensive, limiting applicability to less costsensitive sectors. Human workers may also put a resistance to wide-scale adoption, seeing them as more of a threat.




Company number

None of this, however, is a showstopper. This transition towards infrastructure-free and independent autonomous navigation technology will take place. The payloads will increasingly rise to cover the full spectrum, and hardware costs will fall thanks to major investment in other autonomous driving industries. In fact, we assess that very soon costs across the board will fall below the level of AGV since they save on installation and infrastructure modification costs. This story can be contextualised as part of a slow change in the navigation technology for AGV moving from low-cost wire or magnetic tape guidance to laser localisation and now to natural feature recognition and SLAM. This technology evolution, however, increasingly necessitates a transformation in the nature of the companies towards software and algorithm plays. Indeed, it is the importance of software (autonomy algorithms, fleet/inventory management systems, user interfaces) that explains why California has emerged as a hotspot for investment and startups in this arena. Luckily, many of the major changes will arrive in small evolutionary steps, giving the wise incumbents the chance to go with the flow and exploit their customer relationship and application know-how to stay in the warehouse/ factory mobility automation game. They will, however, have to fundamentally alter their engineering skillset.

Colossal value transfer towards vehicle suppliers? Independent autonomous navigation enables the mobile material handling vehicle industry (e.g., forklifts, tugs, etc) to generate far more






Left: Market forecasts for autonomous mobile vehicles in material handling and logistics showing the different phases of growth. Our report provided detailed quantitative twenty-year forecasts, both in revenue and unit numbers, for AGVs, AGCs, AMVs and AMCs (autonomous mobile vehicles and carts in material handling and logistics), autonomous trucks, autonomous light vans, mobile picking robots, last mile delivery ground robots (driods) or drones. The inset shows the projected decline of automated vehicle systems: the path towards technology obsolescence. Below left: The schematic shows a structure gradient. There are numerous more structured indoor (e.g. warehouse) and outdoor environments (e.g. agriculture) that will be easier targets for autonomous mobility technology than homes or general driving. Mobile robots will penetrate these first.

For details see Mobile Robots and Drones in Material Handling and Logistics 2017-2037.

revenue than would have been the case without autonomous mobility. Indeed, vehicle suppliers will increasingly capture the value that currently goes to the wage bill spent on human-provided driving services. As quantitatively demonstrated in our twentyyear forecasts, this will represent a major sum despite the fact that our projected figures for future autonomous mobility hardware costs suggest a long-term devaluation of driving services in high-wage regions. Our technology roadmaps also suggest that autonomous forklifts will soon become a major feature of the industry, despite them not even being mentioned in major forklift companies’ investor presentations today. Indeed, our forecast model suggests that nearly 70% of all forklift sold in 2038 will be autonomous. This transformation will of course not take place overnight. Indeed, the timescales of adoption will be long, explaining why in our study we have chosen to build 20-year models where different phases of growth are clearly marked and underlying assumptions/conditions explained. In our forecast model for autonomous mobile industrial material handling vehicles, we project that annual sales of autonomous versions will steady rise but remain a tiny share of the global addressable market until around 2023. We will then enter the rapid growth phase soon after, 36


causing a transformation of the industry and dramatically raising adoption levels. Note that the forklift industry is open to innovation. It embraced electric powertrains in the past, particularly for indoor environments and in Europe. It will also adopt autonomous navigation. In fact, merger and acquisition between forklift and automation (also AGV) companies is already a noteworthy trend.

“A long-term re-thinking of business models will be required with emphasis shifting from the robot onto data-based or delivery services.” Beyond the confines of factories and warehouses Interestingly, new types of mobile robots are emerging. Here, the rise of navigational autonomy will enable mobile material handling units (robots) to enter new walks of life. This is because mobile robots will become increasingly able and authorised to share spaces with humans, intelligently navigating their way and NOVEMBER / DECEMBER 2017

avoiding objects. They will therefore enter new spaces to ferry items around, diffusing from highly controlled and structured environments towards increasingly less structured ones. These technologies will share a common technology platform with other autonomous material handling units, although each application will need to be adapted to each environment, and this ability to customise (or initiate) will remain a source of value for startups and SME for years to come. Here, currently, the hardware is often an integral part of the software which is customised to each environment. This prevents commoditisation in the short- to medium-term, but will not manage to prevent in the long term. Consequently, such mobile robotic companies will inevitably have to seek new sources of revenue. Therefore, a long-term re-thinking of business models will be required with emphasis shifting from the robot onto data-based or delivery services. Our contacts tell us that this re-thinking too has already begun. Dr Khasha Ghaffarzadeh is research director at IDTechEx. For more information email or visit The IDTechEx Research report Mobile Robots and Drones in Material Handling and Logistics 2017-2037 can be viewed here:


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ust like when a fighter steps into the ring or the horse bolts from the starting gate, proper preparation can be the deciding factor that ensures success and prevents poor performance. In the case of WMS needs assessment, the selection process, the comparison of options, and the installation of your choice of warehouse management system, this also holds true. Preparation is key. Your company’s specific needs should always drive your choice. But, sometimes, you don’t know what you don’t know. So, if you’re reading this article because you’re approaching the WMS installation or upgrading decision, ‘good on ya’. It’s wise to do your research, speak with your industry peers, consult with experts, and determine the needs you’ll have of the WMS in the immediate, short and longer terms. When SELECTING a WMS, think about these five considerations at the very least.

1. Think about your needs The decision to investigate a new warehouse management system usually comes from a variety of points of pain. What are the key challenges that are driving this decision for you – inventory accuracy, errors, accidents, productivity, resources, labour, timing, costs, integration, technology evolution? 38


Think about your organisation’s short- and longer-term strategies and goals. Is growth, expansion, geographic diversification on the company’s radar? What about mergers, acquisitions, downsizing? What demands will these strategies put on your warehouse management system? Will it need to be faster, more secure, easier to use, capable of handling more SKU, different systems, RFID or voice technology? If you’re going to make a sizable investment like this, invest in systems and partners that will be able to accompany you on the journey, both in the short and longer terms.

successful installation and ‘go live’. You’re not just buying hardware and software, you’re shopping for the expertise and support to go along with it. Ask yourself, is the provider’s expertise in-house, under their control, or is it outsourced? Do they offer 24/7 support? Is true problem resolution available at any time? Your warehouse operations depend on it. Modifications – costs (do they offer fixed-price quotes?) and what is their speed to market? Does the provider offer retrofits into your existing version, rather than forced upgrades?

2. Consider the functionality and evolution of the system you choose

4. Make sure you do site and reference checks

What processes/tools do you think you will need to accurately pick, pack, move, count, and ship your merchandise? Consider if you will need the functionality that differentiates systems between being high-end and low-end WMS. Will you require voice or RF, or some combination? What are the pros/cons of each? What is the functionality you’re after and how will it fit with your existing systems and your future needs? Automation is always a key driver. Manpower costs are huge, people are prone to errors, and automation may be the answer you’ve been looking for. Learn about and then think about server selection. Would you prefer: on-premise servers? Data centres? Cloud servers?

Get demos, do reference checks, and go on as many site visits as you can to observe different systems in action. Ask heaps of questions, learn from your peers – their selection, implementation and usage experiences can teach you so much and save you from making rookie blunders. Talk to the existing customers of your shortlist and ask pointed questions about their experiences. This is one area where your peers and those organisations leading the industry can literally save you money and prevent operational obstacles, helping you get more from your system, sooner.

3. Think about the all-important elements of service and support The timely, responsive expertise of your provider can make all the difference in ensuring a NOVEMBER / DECEMBER 2017

5. Budgets are always a key consideration Let’s face it, budgets often decide the what and when, while the previous considerations answer the other questions of who, how, and where. More research will be required here. You will need to think about what you should budget for hardware, software, and implementation?


A worth-their-weight supplier will help you break their costs into these buckets. They will also help you calculate the ROI that can be associated with your new WMS – a solid ROI calculation goes a long way in gaining approval from the financial forces that be. A good WMS will save time, improve efficiency, increase accuracy, and reduce manpower requirements, manual errors – all of which can be factored into your ROI calculations. The proper preparation when selecting the WMS will pay big benefits in both the short and long terms. Once you’ve decided the answers to the why, who, what, and when questions, it’s time to think about the how! So, what should you consider when implementing a WMS?

1. Managing your expectations will help ensure WMS success When implementing a new WMS, I highly recommend the ‘walk before you run’ approach. There are a multitude of WMS features to consider with your purchase. And they’ll still be there to add when you are ready. Just because it can, doesn’t mean it should, at least at the beginning. Prioritise your choice of additional functionality and be wary of the possibility of creating an overwhelming environment if your choice and expectations of additional features is too extensive. In short, don’t take on too much too soon, or too fast. Be measured in your approach and create an environment where you get some immediate wins on the board, then think about how you might upgrade.

2. Trust in your provider’s expertise (with some caveats) Implementing a new WMS is something most of you in the industry do maybe once, twice, or three times during your career. WMS providers implement systems and upgrades just about every week and some of us have been doing this for decades. So, just as you would with anyone else with this extensive amount of expertise, listen to them, especially IF: • You’ve chosen true warehousing experts whose staff have actually worked in warehousing. • You are supported by passionate operations employees who are committed to their company, not just contractors whose loyalties may be fleeting. • Their people have years of hands on expertise that they bring to your job.

3. Practice proper change management Installing or upgrading a WMS is a big change. And change can be hard for staff. This is why it’s important to get it right, so that a great system doesn’t suffer because it’s not understood or used correctly. Start thinking about change during the selection process – it’s key to involve the right people in the change. Look to people who will be affected and gather their thoughts and opinions.

“When a provider can also give you ongoing responsive support from experts that extends beyond implementation, then that’s a provider worth considering.”


Identify the naysayers, listen to their concerns and address them whenever you can. Bring the users with you throughout the journey, not just at the implementation stage. People need to feel like they are involved in the change and not simply having it thrust upon them. Ensure people are trained, supported, and ready for ‘go live’ BEFORE you actually do.

4. Ensure the integrity of your data All systems rely on the data within them, so make sure yours is as complete, clean and accurate as it can be. Ensure that your SKU masterfile data is accurate and complete and reflects your current inventory. Think about your physical warehousing characteristics and ensure that they are planned for and included. And make sure that all orders are up to date and processed to reflect the most current reality.

5. Focus on the provision of ‘go live’ support – or ‘hypercare’ The last point I’ll make here is that WMS implementation is not a ‘set it and forget’ event, but it’s a process. Key users need training, support, and time to adopt, manage, and get comfortable with the change. And, you can’t do that all on your own. This is the real distinction of a provider worthy of your attention or not. Find a provider who will be there with you over the long haul, not just in the implementation, but alongside you when you encounter hiccups, require additional training, or simply need a reminder of the features you now have available to you. When a provider can also give you ongoing responsive support from experts that extends beyond implementation, then that’s a provider worth considering. I hope these tips, hints and recommendations are helpful to you as you move from considering the possibility of a new warehouse management system, to defining your needs, selecting your provider, implementing it, and then actually using it in your business. With a few decades invested in this industry already, these are a few of the things I think make sense when selecting and implementing a WMS. Remember, that just like it is for the champion boxer and the prize-winning racehorse, proper preparation prevents poor performance. Groundwork and research are vital in ensuring the success of your new system. Scott Symons is the general manager of the Paperless Warehousing Group. For more information email or visit









n 2008, anonymous developer(s) using the pseudonym Satoshi Nakamoto introduced Bitcoin to the world as a global, borderless virtual currency. As the currency grew in popularity, so too did its underpinning technology: blockchain. Blockchain is an encrypted digital ledger that records all activity that occurs over it, both publicly and chronologically. Many people have begun to whistle-blow on its ability to transform financial transactions; however, various industries are looking into other innovative ways to apply the technology aside from peer-to-peer monetary exchanges. To date, companies across a broad range of industries are working to apply the technology to simplify business processes, in fields from education to voting to land records. Large corporations like Microsoft, Intel, and JPMorgan have even teamed up to collaborate on open blockchain frameworks, which could increase speed and efficiency in nearly any business. Supply chain management is a business discipline that can widely benefit from blockchain adoption. Transactions within supply chains are significantly more complex than most financial exchanges. They involve asynchronous processes, much more data, and can include potentially hundreds of companies in just a single chain. In fact, supply chains should more accurately be described as networks. The networks consist of companies and service providers that all circle back into one another, with each produced item being consumed by another supply chain that serves as an input to the next supply chain’s product. Currently, there is no single system in place that can manage all supply chain transactions and processes, which has led to significant issues in terms of data latency and accuracy. The global nature of supply chains makes them subject to uncontrollable factors like natural disasters or political and social conflict. Due to this volatility, managers worldwide continue increasingly to face day-to-day issues 40


of customer service, risk management, cost control, and talent supply. The record-keeping systems in many of these supply chains are held both in paper and digital formats, which makes it difficult when trying to synchronise among the numerous players in the system. Blockchain technology offers a viable solution to many issues that occur in supply chains. A decentralised digital ledger that cannot be altered would eliminate the need for central or third-party authorities to verify the legitimacy of a transaction. Blockchains have smart contract capabilities that enable legal agreements to be enforced automatically and digitally. Another benefit to using blockchain technology is the transparency that it offers. Accuracy, clarity, and compliance can be improved tremendously through immutable shared contracts, documents and transactions. In addition, the shared data encourages asset sharing and discourages organisational siloes that often form within supply chains. Through product visibility, provenance and fraud detection, blockchain can also increase consumer security and trust. If customers know a product's origin, they can start to develop more trust within the supply chain. Blockchain allows players within the chain to know the provenance of a product, as well as other valuable information such as landed cost and arrival times. With real-time feedback and responses provided by blockchain-based supply systems, managers, customers and companies can enhance communications between one another. This can help companies more accurately forecast production and make adjustments. Scalability can also be improved by real-time information. For example, customer trends can be identified by suppliers who in turn can grow and scale an operation accordingly. As relationships between companies, suppliers, and customers become more transparent, supply chain managers will better NOVEMBER / DECEMBER 2017

utilise both talent and capital assets. Due to friction caused by out-of-date and incomplete information between players in supply chains, assets often remain locked within a company. By utilising advancements in blockchain, big data, and machine learning, supply chains will be able to match talent and capital assets within and between companies, Uber-like, in order to create more valuable efficient supply networks. Financial liquidity and working capital within supply chains will improve with faster payments between buyers and sellers, as blockchains efficiently validate transactions and provide almost instant liquidity to suppliers, allowing increased capital flows throughout the network. This will spur a higher amount of industry activity and trade, and ultimately, increase economic value for all participants. Blockchain offers potentially unprecedented levels of transparency, cost-efficiency, and speed and promises solid business benefits. Global supply chains account for approximately two-thirds of the world’s GDP. The largest impact of this revolutionary technology will be fully realised when our global supply chains are able to free their capital, assets and human resources to achieve their most efficient uses, and provide customers with products at a fair and honest price. Harry Goodnight is an executive advisor to the Sweetbridge Foundation. Harry previously led supply chain software company i2 Technologies. He has also designed the go-to-market strategies for more than a dozen of the world’s most successful supply chain technology companies. Harry brings more than 32 years of global supply chain consulting and sales experience for companies such as Samsung, Toshiba, Frito-Lay, SONY, Intel, and Siemens. The Sweetbridge Blockchain Alliance aims to build a value network that leverages blockchain technology to enable solutions for global industries. For more information visit

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isruption in a rapidly-changing economic environment has become ‘the new normal’. Against this volatile operating backdrop, to gain a foothold or advantage in increasingly competitive and challenging marketplaces, your business needs to leverage smart opportunities and side-step potential threats. Over the past two years and for its previous early adopters, the emerging blockchain industry is building a foundation for industry, business, governments and professional service firms for future survival and success. Despite vested interests that present significant hurdles ahead, worldwide in 2017 organisations are analysing how blockchain technology can transform their existing processes, cut out intermediaries and substantially lower costs. The supply chain sector set to be a big winner from the blockchain’s disruption.

Australia’s potential For Australia’s supply chain sector, blockchain presents multiple benefits, spearheaded by increased transaction transparency and accuracy. Blockchain technology is increasingly mainstream. There are so many advantages, starting with immediate and transparent payments in real time as goods physically change ownership, since deliveries occur and payments are automatically triggered in a tamper-proof process. 42


The increased accuracy and instant recording reduces lead times and minimises fraud. This will be of particular benefit in international supply chains, such as the Australian agribusiness export sector, which operate in countries with less sophisticated supply chains where data entries need to ‘catch up’ with the movement of physical goods. In many current instances, although the delivery is made, the recorded transaction may be delayed, or shipping documents not signed, paper work misplaced, or data keying errors are made in the system. For Australian businesses currently trying to digitise their supply chains, blockchain is already demonstrating value for payment senders and recipients, eliminating papertransactions and decentralising financial processes. The technology’s benefits will appeal to organisations and industries that until now have needed to operate strict document audit trails across their procurement and transportation processes. It’s faster and more cost-effective, with lowered fees and expenses via bypassing payment delays and transaction fees. This presents a major threat to traditional banking’s near-monopoly, particularly as an alternative to international payment systems such as SWIFT. Once the physical goods arrive you automatically get paid, which is a win for all parties involved. NOVEMBER / DECEMBER 2017

Australian agribusiness first to benefit Stephen Rowlison, a blockchain technology expert and CEO of the Australian-based bBiller supply chain commerce platform built on the Ethereum blockchain, believes the technology is the way of the future. An Initial Chain Offering (ICO) project for bBiller (see was launched in August 2017. One application of the bBiller blockchain under consideration is a supply chain system from Australian livestock breeders for selected Asian customers. Mr Rowlison is confident that many other Australian companies will also want to invest in this ICO to create their own blockchain-enabled supply chains. Also the editor for UBL Ethereum Smart Contracts at, Mr Rowlison says blockchain technology is already here and will have a huge impact on Australia’s economy. “Whether it takes up to 1-2 decades to become mainstream, blockchain is an inescapable disruptive force. It is evolution and it will be transformational for international businesses and economies. For Australia, agriculture is a good entry point, while the food and manufacturing industries are looking at blockchain’s potential to automate and track supply chain processes. “There are vested interests and competitive head-winds ahead and many professions from


different strategic perspective and new ways of connecting with international partners and handling global logistics, whilst automating back-end processes and payment systems.”

Australia aims for blockchain leadership

“When there is a need for total transparency from the supplier’s supplier right through to the customer’s customer, then a blockchainenabled supply chain will be appropriate.” auditors, bankers, solicitors, bookkeepers and regulatory bodies that will have to change their model. But there are exciting developments and benefits ahead across the board. “There are so many benefits, starting with the tiny transactional cost for a direct and instant peer-to-peer transfer, with those funds already held in escrow. Business and supply chains can say goodbye to the high costs of preparing and sending an invoice, or paying bank transfer fees, lower costs and see higher value from direct and instance transactions, often getting better products at a lower price,” Mr Rowlison said. “Transparency is a huge advantage. As well as being able to accurately plan, businesses will also be able to see a problem and immediately fix it, ‘pay-as-you-go’ for government fees and taxes, automate back-end processes and payment systems. For both large and small organisations, it offers an entirely new

Our government's leading research agency, the CSIRO’s innovation arm Data61, has recently released not one but two blockchain reports aimed at public and private sector organisations learning about or trying out the technology. Stating that Australia must be at the forefront of the emerging technology, the first report focuses on four possible scenarios for Australian blockchain adoption, with the second looking at opportunities and risks in the example areas of government data registries, agricultural supply chains and remittance payments. Data61’s chief Adrian Turner said: “It has potential to reframe existing industries like financial services and seed new ones like food provenance and personalised health.” Australian treasurer Scott Morrison also commented: " The reports demonstrate the benefits of this technology could be profound – delivering productivity, security and efficiency gains." Data61’s key recommendations to policymakers and regulators echo Australian industry’s endorsement of implementing technologically-neutral regulation and policy, calling for expanded research and development into blockchain and regulatory acceptance of blockchain-based systems. In March, Australia’s industry body Standards Australia issued its Roadmap for Blockchain Standards report, outlining how it will support blockchain systems’ privacy, security and interoperability within its broader initiative addressing the development of international blockchain standards, with Australian government backing. After many years of consideration into the evolution or replacement of its 20-yearold CHESS clearing system, the Australian Securities Exchange is examining blockchain’s use in clearance and settlement, collaborating since 2016 with external blockchain experts on its potential way forward. Other major Australian organisations exploring blockchain technologies include our big banks, Australia Post and AGL. Around the country, new conferences have sprung up including the now-annual Blockchain Summit Australia first hosted by Digital Disruption X in 2016, Flinders University’s 2017 Current Directions Blockchain Conference, and Sydney’s APAC Blockchain Conference in March this year run in association with the Australian Digital Currency Commerce Association (‘ADCCA’).


Will blockchain be a worldwide payment revolution? Locally and internationally over the next 1-2 decades, can blockchain technology revolutionise the world’s inflexible and centralised banking and payment model? The answer definitely seems to be yes. Our current centralised money supply system significantly escalates the delayed confirmation and cost of financial and business transactions. Paperless transactions are still not universal, while transactions still need to be expedited, authenticated and verified by third-parties – at your organisation’s expense. In contrast, blockchain technology leverages an anonymous public ledger route to record transactions, side-stepping the need for third party involvement. Blockchain’s algorithms and miners authenticate transactions by ‘chaining’ the various processes together via a cryptographic signature. Centralised blockchain technology costeffectively utilises smart contracts and selfexecuting cryptocurrency contracts that are kept, replicated and administered within the blockchain network for transactions including property, insurance premiums, legal situations, financial services and more.

Conclusion Blockchain is the future for Australia and its supply chain sector. Its potential for both our industry and others is massive, leveraging its capability to eliminate intermediaries, provide transparency for real-time transactions and securely hold and record these instant transactions in digitally shared ledgers. Worldwide and in Australia, interest in blockchain technology is exploding, with government and private sector research, testing and implementation expanding exponentially since 2016. The potential is huge - a 2016 World Economic Forum report states that over $1.4 billion was invested in the technology in just the past three years. It won’t be suitable for everyone, as each company’s supply chain is different, but when there is a need for total transparency from the supplier’s supplier right through to the customer’s customer, then a blockchainenabled supply chain will be appropriate. The next 2-3 years will certainly be intriguing for both participants and curious market watchers. Timothy Dowsett is a partner at ChangeLogic. He has over 25 years experience in consulting and line management roles across the entire supply chain function. For more information call (+61 2 9401 9152), email or visit








he importance of having well-functioning IT systems that support business processes has pushed cybersecurity up the priority lists of freight and logistics companies around the world. They realise the impact of technology outages can be significant financial and reputational loss. Whilst attention has traditionally focused on blocking threats such as viruses and worms, it's now shifting to the rapidly evolving area of ransomware. These attacks involve the infection of a firm's key IT systems by malicious code that encrypts data files, making them unusable. The criminals responsible then demand payment in exchange for the key needed to decrypt the data. Ransomware can be delivered in a variety of ways. The code might arrive in an email attachment, or be inadvertently downloaded from an infected website. Some users fall victim to a phishing attack, where an email message looks to have come from a legitimate source but has in fact come from a criminal. It's a very real and growing problem. According to a survey ( by US-based Osterman Research of companies in Australia, the United States, Canada, Germany and the United Kingdom, 73 per cent of those surveyed admitted they had fallen victim to a cyberattack during the previous 12 months. Alarmingly, 39 per cent of respondents confirmed they had been the victim of a ransomware attack in the same period.

The impact of ransomware For a freight and logistics company, a ransomware attack can have a significant impact on operations. Customer records and manifests needed for day-to-day activities may suddenly become unavailable. Databases supporting warehouse inventory systems could be inaccessible, making order fulfilment all 44


but impossible. Driver scheduling and routing applications can be taken off line, meaning fleets cannot be managed or delivery schedules met. As a result, the disruption caused can be much more of an issue than any demands made by the criminals for payment. The Osterman survey found 81 per cent of companies that had experienced a ransomware attack, faced payment demands of $1,000 or less. Just four per cent faced demands for more than $10,000, and none had demands for payments of more than $50,000. Compare these amounts with the cost to your organisation if regular operations had to be halted for 24 hours. What if that time pushed out to a week? The survey found 22 per cent of Australian businesses that suffered a

However, it should also be recognised that making payment to the criminals does not guarantee access to data will be restored. There have been cases where the provided decryption keys have not worked, or no response has been forthcoming after the demanded amount has been provided.

Pre-emptive action is key Clearly, it's far better for a business to avoid a ransomware attack than have to deal with the resulting fallout. This is certainly the case in the logistics sector where disruptions and downtime quickly have a flow-on impact for staff, partners and customers. The Osterman research found Australian businesses are using a range of strategies, both

“Another important step is to educate all staff about the risks associated with ransomware attacks.” ransomware attack had to cease their operations immediately. Of those, 71 per cent confirmed the infection caused nine or more hours of downtime, with 20 per cent admitting their systems had been down for up to 100 hours.

The decision to pay When a company is hit with a ransomware attack, a decision must quickly be made as to whether the ransom demand should be paid or ignored. Among Australian respondents to the survey who had experienced an attack, 55 per cent confirmed they did not make any payment. Of those opting not to pay, 40 per cent confirmed they lost data as a result of the decision. Asked broadly whether any organisations should pay the criminal's demands, 58 per cent of Australian respondents said this should never be done. A further 40 per cent felt the decision to make payment should be based on what had been encrypted and its value to the business. Just two per cent thought payments should always be made. In the end, the decision will have to be made by every business that suffers a ransomware attack. The amount demanded has to be weighed against the financial impact the organisation will suffer from losing access to core data. NOVEMBER / DECEMBER 2017

to minimise their chances of falling victim and to ensure they can quickly respond if attacked. Strategies include ensuring regular backups are made of critical data and those backups are stored separately from production systems. There's little point having a backup if it too can be accessed by the malware and encrypted. Firms are also putting in place traditional email security precautions and implementing network segmentation to stop the spread of malicious code should it enter the firm's infrastructure. Another important step is to educate all staff about the risks associated with ransomware attacks and the potential ways in which they can occur. By ensuring they are aware of the risks of suspicious email attachments and visiting unusual websites, the chance of an attack taking place can be reduced. The ransomware threat shows no sign of abating, and so Australian companies must give more attention to their preparation and response capabilities. Through deploying appropriate tools, undertaking regular backups, and educating staff, they can ensure they are best placed to withstand an attack if it occurs. Jim Cook is the ANZ Country Manager for Malwarebytes. For more information email or visit






he Federal Minister for Trade, Tourism and Investment the Hon. Steve Ciobo MP has announced the Australian Peak Shippers Association (APSA), the peak body for Australia’s ocean freight exporters as designated under the Competition and Consumer Act 2010, as a recipient of the Austrade Free Trade Agreement Training Provider Grant. The Coalition has invested $2.145 million over two years in the training provider grants program, which is part of the government’s strategy to help businesses adapt and diversify as the economy transitions from the mining investment boom. The Coalition’s free trade agreements with China, Japan and Korea, in particular, are believed to be delivering significant economic benefits. Exports to these key markets have risen 140 per cent since 2014, a surge that is driving economic growth and creating jobs as Australian exporters take advantage of lower tariffs and expanded market access.

Benefits of FTA Importantly, FTA open opportunities for Australian exporters and investors to expand their businesses into key overseas markets. FTA can improve market access across all areas of trade - goods, services and investment - and help to maintain and stimulate the competitiveness of Australian businesses by: • Creating freer trade flows and stronger ties with our trading partners; • eliminating tariffs. • Addressing behind-the-border barriers that impede the flow of goods and services between parties. • Increasing Australia's productivity by allowing domestic businesses access to cheaper inputs, introducing new technologies, and fostering competition and innovation.

• Encouraging regional economic integration and build shared approaches to trade and investment, including through the adoption of common Rules of Origin and through broader acceptance of product standards. • Enhancing the competitiveness of Australian exports in the partner market, and add to the attractiveness of Australia as an investment destination.

The pathway to preferential tariff treatment The tariff-cutting benefits of FTA, which result in lower landed costs, do not automatically happen. If you want to get these benefits, there are steps you must actively take. The basic idea of an FTA is to provide a tariff preference to the FTA partner country - and only to them. So, countries want to confirm the good being exported or imported genuinely originates from the FTA partner. This is why North Asia FTA, like most other FTA, establish 'Rules of Origin' requirements. The 'Rules of Origin' set out the level of connection a good must have with a country to receive preferential treatment. On top of meeting the relevant 'Rules of Origin', each FTA has requirements regarding documentation required to certify the meeting of the 'Rules of Origin'.

E-Learning for beginners An e-learning course titled ‘North Asia Free Trade Agreement Guide for Importers and Exporters’ is the centre-piece of the training program developed by APSA. The course is structured as a self-paced e-learning course incorporating audio, text and reference materials. The course provides fundamental knowledge on FTA compliance requirements. The following modules in this course explain what's involved in determining if your product benefits from the North Asia FTA tariff cuts on offer, whether your product is likely to meet the rules of origin requirements of the FTA and the steps required to provide the associated regulatory compliance. Including the optional online assessment, the course takes approximately two (2) hours to complete covering the following key areas: • Understand what are FTA's and how business can benefit from them. • Know the importance of North Asian FTA tariff arrangements.

• Be able to identify the customs tariff code for goods. • Understand how imported and exported goods will be treated by either country by reading their tariff schedules. • Know how the steps required to determine whether your goods meet Rules of Origin requirements. • Know the Certificate of Origin documentation requirements for your goods. • Understand the consequences of not completing Certificate of Origin documentation correctly.

Webinars for professionals As a part of the Austrade grant, APSA has also commenced delivery of a series of training events to industry, including webinars and face-to-face sessions. This training is freely available to members and non-members of the association and is suitable for export operators, freight forwarders, and any employee involved in export supply chain operations. Content also attracts CPD points for licensed customs brokers. • Export trade compliance / ChAFTA declarations of origin. • Non-tariff barriers to trade. • Introduction to ChAFTA / tax considerations specific to the Chinese market. • Introduction to JAEPA / tax considerations specific to the Japanese market. • Introduction to KAFTA / tax considerations specific to the Korean market. • FTA and other issues for agriculture exporters. • Scams, bribery and corruption - managing risks in a dishonest world • Selling into China. Content has been developed in partnership with Hunt & Hunt Lawyers, Australia’s leading international trade law specialist, and Crowe Howarth, a major global accounting firm with expertise in international tax. The e-learning content and recorded webinars are currently freely available at with scheduled live webinars available at Check them out today! Paul Zalai is the director and co-founder of the Freight & Trade Alliance and the Secretariat of the Australian Peak Shippers Association.







Tiers allowing corporates to choose packages for their entire operations, logistics and supply teams Flexibility allowing corporates to add/subtract staff to their package Upgrades for either higher tiers or ASCI Plus membership Surveys to provide employee satisfaction with membership at three, nine and 12 months Corporate benefits from branding, awareness, professional development VIP discounts, executive programs, industry surveys, and more.

Thank you to ASCI corporate Members for your ongoing support throughout 2017 • Ansaldo STS • Beak & Johnston • Bega Cheese • Campbell Arnott’s

ASCI corporate membership packages

• Cement Australia • Cochlear • Commonwealth Bank • D&D Technologies Pty Ltd • Doric • Eaton Industries • Gilbarco Veeder-Root • Hella • Liberty OneSteel • Ligentia Australia Pty Ltd • Martin Brower Australia Pty Ltd • Michael Page • nbn co • Nufarm • Oliver Wight • Philip Morris • PPG Industries Pty Ltd • Prophit Systems • Pronto • Resmed • Styker • Sullair Australia • Sunrice • Sydney Institute of TAFE • Toyota Motor Corporation Australia

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GOLD CORPORATE MEMBER PROFILE: NBN CO On Wednesday, 11 October 2017 ASCI put together another successful networking breakfast for Corporate Member, nbn co, sponsored by Logility. This event was for demand planners in Victoria and attendees discussed some pressures and challenges they face as demand planners and shared innovative ways to tackle these with other people in their field of work.

NBN Co nbn (the company) was established on 9 April, 2009 to design, build and operate Australia's new broadband network. nbn is a wholly-owned Commonwealth company - a Government Business Enterprise - and is represented by Shareholder Ministers; the Minister for Communications and the Minister of Finance.

NBN Co staff were able to: • Meet other demand planners in the area • Be part of a discussion on the current pressures and challenges you are facing • Join an industry experienced moderators • Have their say on topics you want hear about

Our purpose

We are one team

At nbn, our goal is simple: deliver Australia's first national wholesale-only, open access broadband network to all Australians. *The speeds actually experienced by endusers via fibre, fixed wireless or satellite will depend on a number of factors including the retail broadband plan they choose, their equipment and their in premises connection.

• Actively engages & values input from others • Focuses on & prioritises the common goal • Actively supports team decisions

Our values Our values underpin the way in which we act and behave at nbn. They describe what is important to us and guide our thinking and interactions with our customers, each other and the community.

We are fearless • Transparent & speaks up to improve the outcome • Seeks new & better ways and takes informed risks • Decisive & acts with a sense of urgency

“Through the ASCI Corporate Membership, we’re making connections with best practice thinking from thought leaders and peers across a range of different industries and sectors. We particularly like the ASCI approach to global certi cation and professional pathways for operations, logistics and procurement and plan to develop our people to stay ahead of today’s ever changing supply chain domain. We look forward to meeting other ASCI Members and sharing our knowledge and insights with the community.” Ryan Jones, Manager, Integrated Demand Planning, nbn co

We deliver • Sets clear goals, plans & measures progress • Takes accountability & owns actions • Focuses on & prioritises the right things MHD SUPPLY CHAIN SOLUTIONS —




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here are only a few weeks left until Christmas! and the Supply Chain & Logistics Association of Australia is working on several events in the lead-up. It has been a very busy period for the board and its committees. The association continues to strive ahead with its new strategic vision, which ensures we drive competitive advantage to both our valued members and the wider industry. One of the events that have been followed by the market place is the Women in Logistics event, last held on 20 October. What made this different is that men were collaborating with us and attending this event in their droves. There can be no change in diversity if there is no collaboration with what has been a male-dominated space, particularly in transport and logistics. It is remarkable that in 2017, the wage gap is still 16.1% in this industry, and there is a growing consensus that this is still an issue that needs further focus on from government and industry. In other news I attended the Australasia China Cities Summit & Business Forum as a guest at Victoria Parliament House. In attendance were over 200 major Chinese businesses, industry associations, mayors and ministers. SME, economic trade departments, trade representative, and industry professionals from 40 Chinese organisations, cities and provinces were present. Australia China Cities Summit & Business Forum was opened on 21 September

and received support from governments, associations and enterprises in China, Australia, New Zealand, the South Pacific area, and it attracted culture exchanges as well as economic and trade cooperation between China and South Pacific countries. This event was a major platform between Australasia and China to promote multilateral communication, cultural exchange, sister-city relationships and business cooperation at all levels. It was interesting to see that the regional cities are taking up this alliance with aplomb and the Mayor of Shepparton signed an MOU with China to develop the growing trade between cities, particularly in the agriculture sector. Over the last decade the importance of trade between China and Australia has grown fourfold. Australia now buys more manufactured goods from China, while we also export much larger volumes of raw materials. This has had a big benefit for our resource companies, and it has been one factor in the rise of the Australian dollar China has developed very quickly. Urbanisation and industrialisation have seen millions of workers leave rural areas and move to jobs in the fast-growing cities. This has propelled demand for steel to build houses, factories and infrastructure. This development is likely to continue at pace for some time, as living standards continue to increase and the Chinese government invests heavily in infrastructure projects such as railways. In the next four years,

advantages, and the likely course of economic development in China, it is clear that China will remain a very important trading partner for Australia in the coming decades. Continued strong demand for resources is good news for Australia’s resource companies. Resource and energy companies make up 38% of the S&P/ASX 300 Index. Income produced by these companies trickles down into the rest of the economy and benefits other sectors. The stronger Australian dollar makes our imports cheaper. This puts downward pressure on inflation, allowing the Reserve Bank of Australia more leeway with how they manage interest rates. A lower interest rate benefits households with mortgages and reduces companies’ interest payments. These strong linkages between China and Australia explain the strong investor focus on policy developments in China. The Chinese government still exerts a considerable degree of control over the economy. Policy decisions aim to ensure growth is sustainable and inflation manageable. So far, they have managed this task quite successfully.

Attend! There are many upcoming events including the Webinar: Robotic Process Automation in Shared Services with the reputed Global Payroll Association (GPA), a central hub for ‘allthings payroll’. Joining us will be our esteemed customer and global specialist in energy

“There can be no change in diversity if there is no collaboration with what has been a male-dominated space, particularly in transport and logistics.” for example, China plans to build a further 35,000 kilometres of high-speed railway. There are two key reasons why China’s development has had such a powerful impact on Australia. The first is distance. In the global iron ore market, Brazil is the world’s other major supplier. Australia is closer to China and can deliver iron ore more quickly and more cheaply. Australia enjoys a price advantage estimated at $12 USD per tonne. The second reason is that Australia’s coking coal (the type of coal used to make steel) is of a very high and desirable grade, and substitution is not easy. (That said, this is gradually changing with the development of high-grade deposits in Africa.) Based on these

management and automation, Schneider Electric. Robotic Process Automation (RPA) is the current reigning champion of simplifying structured data with the level of perfection and consistency comparable to the most efficient of humans. Given that GIC’s are looking to reduce spends but increase productivity & performance through ingenious means, how does RPA come to the rescue? This much anticipated webinar will explore this and other issues. Visit the SCLAA website for more information: Amanda O’Brien is the national chairwoman of the Supply Chain and Logistics Association of Australia. Email








career in Supply Chain and Logistics in Australia, now more than ever, knows no limits. With the right knowledge, attitude and skills, Supply Chain and Logistics professionals and practitioners have no career ceiling. However, it is competitive out there. More and more employers rightly expect professionalism. Professions have a number of common attributes. These include a commitment to ongoing education, compliance with a code of conduct, performance consistent with a generally agreed body of knowledge or set of rules and membership of a professional body. The Supply Chain and Logistics Association of Australia (SCLAA) is Australia’s largest association for supply chain and logistics professionals and practitioners. The SCLAA has the proven

history, governance framework, established representation, value for money and strategic reach to make it the right choice for you.

Our Vision SCLAA delivers value to member supply chain and logistics (SCL) professionals and practitioners, and prosperity and competitive advantage to Australia through development of the profession and practice of SCL, collaboration with industry stakeholders and promotion and recognition of world’s best practice.

NATIONAL Suite 154, 4/16 Beenleigh Redland Bay Road, Loganholme QLD 4129 Phone: (07) 3102 4093 Tollfree: 1300 364 160 Fax: 1300 364 145 Email:

Our Mission To serve and advance the interests of supply chain and logistics professionals and practitioners in Australia.



he Chartered Institute of Logistics and Transport (CILTA) is the national professional institute representing people and corporations related to the logistics and supply chain industry. The Chartered Institute is represented in 29 countries around the World and consists of more than 30,000 individual members and more than 200 key corporations. The primary objective of the Chartered Institute is the professional development of people in the logistics and

supply chain industry. The fundamental doctrine of the Institute is that better people make for better business. The Chartered Institute provides a number of educational programs ranging from Certificate to Advanced Diploma levels. Moreover, the Institute offers professional accreditations for Certified Professional Logistician (CPL) and Certified Transport Planner (CTP). Enquiries are encouraged to au or please call 1300 681 134.

PO Box 4594 Robina QLD 4230 1300 68 11 34



he aim of Australian Warehousing Association (AusWA) is to offer a platform for members to freely exchange ideas and challenge old concepts in the ever-changing dynamic of the warehousing and distribution industry in Australia. AusWA will advocate for higher recognition and standardisation of the industry within government, business and community sectors. Key speakers will be invited to deliver industry relevant topics to promote lateral thinking and produce innovative solutions to sometimes difficult issues. MHD SUPPLY CHAIN SOLUTIONS —

Education both formal and informal will be a key objective of AusWA to encourage all sectors both government and industry to improve knowledge and skill levels amongst members and their employees. Networking and social interaction is where many exchanges of views and ideas occur. AusWA will assist in providing this forum. Contact: Australian Warehousing Association (AusWA) T: (07) 3375 9933 F: (07) 3375 9944 E: W: NOVEMBER / DECEMBER 2017

The aim of Australian Warehousing Association (AusWA) is to offer a platform for members to freely exchange ideas and challenge old concepts...

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MHD Supply Chain Solutions NOV-DEC 2017  

For over 40 years, MHD Supply Chain Solutions magazine has been bringing its readers leading-edge supply chain management information from t...

MHD Supply Chain Solutions NOV-DEC 2017  

For over 40 years, MHD Supply Chain Solutions magazine has been bringing its readers leading-edge supply chain management information from t...