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S E P T E M B E R / O C T O B E R 2 017

ENTER THE ROBOT

KNAPP’s intelligent intralogistics system

3RD PARTY WAREHOUSING Insource or outsource your warehousing?

AT THE CROSSROADS Utilising advanced mobile technology platforms SPECIAL FEATURE

Freight, distribution and 3PL, plus online retail


ON DEMAND ON TIME ON THE MONEY The modern consumer’s desire for on-demand access to the products they want, when they want them, and at the right price, is driving supply chain innovation across the globe. The availability of stock, and speed and accuracy of delivery, will determine which companies succeed and fail in retail markets. Dematic’s omni-channel supply chain solutions have made success a reality for companies around the globe using innovative software and flexible, scalable robotic solutions to enhance order fulfilment and distribution. Now more than ever, the first to deliver wins.

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MHD

EDITORIAL ACRONYMS, NUMBERS… TAKE YOUR PICK

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WHAT DID YOU CLICK ON LAST MONTH? The top five stories on TandLnews.com.au in August were…

I

n this age of abbreviations, acronyms and new ‘versions’, you may well be wondering what is happening to the English language and ‘what the hell’ people are often talking about. With the English language being my ‘tool of the trade’ and, indeed, livelihood, I note with sadness the laziness and ‘hip new things’ that are bastardising our communication. Whatever happened to ‘-ation’ (as in ‘invitation’), for example? Whenever I get an ‘invite’ to an event I politely refuse and remind the sender that ‘invite’ is a verb and I would be happy to accept if they sent me an ‘invitation’, but I usually don’t get a reply. Similarly, ‘-ing’ is on the way out and people are now holding ‘meets’… and the list goes on. I guess language is a forever evolving beast, but so often, my ear hurts.

Technology revolution I’ll get off my high horse now and get back to our real topic, that of the supply chain. The supply chain is also a forever evolving beast and if possible, it is evolving faster than the language, so much so that we may need to call it a revolution, rather than evolution. Technology in its many (relevant to the supply chain) forms, from ERP and other software systems through ASRS and robots to automated guided vehicles replacing forklifts, is progressing at a pace with which it is nigh on impossible to keep up. And then there is the Internet of Things (is it still only 1.0?), Industry 4.0, and we are now up to Supply Chain 3.0, as you will read in this issue… the mind boggles.

But you’ve got to keep up… …especially if you are operating in the 3PL and online retail spaces. After all, the attraction of outsourcing in the first place is the client seeking a partner who can look after its supply chain more efficiently, productively. But it’s all too easy to take it back in-house if the contractor’s productivity falls behind what the client could easily achieve (spending a few million $$) employing the latest technology. Similarly, the online retailers ‘disrupting’ the traditional trade must be ever so vigilant and stay on the leading edge of the possible. You can read about all this, and more, in this issue. I hope you’ll enjoy.

AMAZON SETTLES ON FIRST AUSTRALIAN DC Amazon will lease the 24,387sqm former Bunnings distribution centre in Melbourne’s Dandenong South. CAROMA TO REORGANISE ITS SUPPLY CHAIN Caroma / GWA Group is repositioning to an Australian designed, engineered, and outsourced manufacturing model. NYK FOUND GUILTY, FINED $25M NYK Line has been convicted of criminal cartel conduct and fined $25 million by the ACCC. OOCL TO BE SOLD TO COSCO The move towards a container shipping oligopoly continues with the proposed sale of OOCL to Cosco. LINFOX LOGISTICS, PACIFIC NATIONAL EXPAND CAPABILITY Linfox has entered into a consortium with Pacific National to purchase some of Aurizon’s intermodal assets. GET YOUR TANDLNEWS FREE EVERY WEEK – SUBSCRIBE NOW AT WWW.TANDLNEWS.COM.AU!

Charles Pauka Editor charles@intermedia.com.au

MHD Supply Chain Solutions is published by The Intermedia Group Pty Ltd ABN 940 025 836 82 41 Bridge Road, Glebe NSW 2037 Telephone: (+61) 02 9660 2113 Fax: (+61) 02 9660 4419 Email: mhd@intermedia.com.au Managing Director: Simon Grover Editor: Charles Pauka Advertising: Ralph Merry rmerry@intermedia.com.au Production Manager: Jacqui Cooper Head of Circulation: Chris Blacklock

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MHD Supply Chain Solutions magazine is recognised by the Australian Production and Inventory Control Society, the Chartered Institute of Logistics and Transport Australia, the Supply Chain and Logistics Association of Australia and the Singapore Logistics and Supply Chain Management Society.

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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.


*Source: DHF Intralogistik Magazine 2016

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SEPTEMBER-OCTOBER ‘17 VOLUME 47 – NUMBER 5 ANNUAL SUBSCRIPTION $75.00 COMMENT 6

Leadership ranks swell the supply chain sector

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ON THE COVER 14 Enter the robot

The calibre of leadership this sector is attracting is exciting.

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KNAPP’s robot technology is a core component of Logistics 4.0.

Sustainable procurement Sustainable procurement presents an opportunity for organisations to develop balanced systems.

10 Changes to the HVNL Major changes are coming to the Heavy Vehicle National Law (HVNL).

TECHNOLOGY 12 Build the tracks… And the train will come. An investment in GS1 standards will also help.

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24 Line ’em up 38 5E

Getting aligned with business goals for successful logistics outsourcing.

Take these essential steps to revolutionise your supply chain.

26 The e-commerce phenomenon

40 At the crossroads

e-Commerce is not just a market opportunity for businesses, it is a phenomenon.

Workers today are utilising increasingly advanced mobile technology platforms as we head into Industry 4.0.

28 Time to deliver A recent survey shows delivery transport has a major impact on consumer decisions.

SPECIAL FEATURE: FREIGHT, DISTRIBUTION AND 3PL, PLUS ONLINE RETAIL

42 Avoid the new product blues Integrated product portfolio and project management, or ‘the art of new product demand planning’ – Part 2.

SUPPLY CHAIN

THE LAST WORD

32 Go SC3.0

46 Homeland Affairs

How Supply Chain3.0 can lead to successful business transformations – Part 2.

Homeland Affairs aims to balance trade facilitation and supply chain security compliance.

18 Spotlight on: 3rd party warehousing logistics

DEPARTMENTS AND REGULARS

Insource or outsource your warehousing? What’s your choice?

20 AGV: safe + cost-effective AGV are delivering safe, cost-effective logistics for Bickford’s.

22 A wearable revolution New technologies are freeing up workers’ hands and connecting them to data more fluidly.

23 IoT can deliver The Internet of Things (IoT) promises to deliver big benefits to organisations of all sizes.

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48 Materials handling and management 54 ASCI (formerly apicsAU) – contacts, courses, news. 57 From the Supply Chain and Logistics Association of Australia. 58 Australian Warehousing Association. 58 Chartered Institute of Logistics and Transport Australia. 58 SCLAA contact information. 59 Subscription information.

MHD SUPPLY CHAIN SOLUTIONS —

SEPTEMBER / OCTOBER 2017

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6

COMMENT

LEADERSHIP RANKS SWELL THE SUPPLY CHAIN SECTOR PAUL GREENBERG

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s the founder of the NORA Network, I get to meet a lot of people in this very ‘broad church’ of retail. Retailers, technology providers, payment companies, professional services, shopping centres, marketplace executives, cybersecurity professionals, to name a few, and of course, last but not least, practitioners in the supply chain and logistics sector. I have been struck by the calibre of leadership this exciting sector is attracting, and I thought I would, well name some names, and shout out a few. Why not. First up, I was delighted to meet with Christine Holgate, the new CEO of Australia Post Group, at the recent Online Industry Awards night in Sydney. Christine only takes up the role in October so it was very generous of her to attend, and arrived unannounced and understated. Of course we should note that Christine, in her current role as CEO of Blackmores, is one of Australia’s leading proponents of cross-border eCommerce, selling millions of dollars of Blackmores products into China, using global platforms like TMall Global. I was also delighted to see one of our digital pioneers, Jeremy Crooks, take up the role as country MD for Pitney Bowes/Borderfree. Jeremy has held digital leadership roles with businesses like Yahoo and Google, and has proudly jumped the fence to lead a logistics company, Borderfree. Of course, he would rightly argue that they see themselves more as a technology company. 6

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The lines are blurring. Ruslan Kogan has also just announced his first full-year profit as an ASX-listed company, Kogan. And the numbers were terrific. A lesser-known fact is that Ruslan holds a minority stake in eStore Logistics, whose clients include of course Kogan, Temple & Webster, and Patagonia, to name a few. They are currently tendering for a new 15-17,000sq m warehouse in Sydney and a new 10-12,000sq m warehouse in Melbourne to complement their existing facilities. A wise investment. I continue to marvel at the younger technology-led entrepreneurs in the space. A

I would like to make. That is, this is one of the most exciting times to be in the supply chain and logistics industry. Innovation in cross border trade, last-mile delivery, and sizeable mergers and acquisitions are reshaping the landscape. Not everyone shares my enthusiasm. I had a coffee last week with an older industry stalwart (I mean, a guy my age!), and he was bemoaning the pace of change and how it was accelerating in the sector. My sense from the conversation was that he was yearning for, well, ‘the good old days.’ I can’t say I blame him – I understand

“Innovation in cross border trade, last-mile delivery, and sizeable mergers and acquisitions are reshaping the landscape.” big shout out to a good friend Carl Hartmann who co-founded Temando a few short years ago, and led its expansion and subsequent full sale to the mighty Neopost of France. Also to Sagi Simchon of iCumulus, who has just re-signed the technology and distribution functions of one of Australia’s leading eCommerce businesses. High-five to Rob Hango-Zada, co founder of Shippit, who has just raised a series A funding round of $2.2 million. I could go on and showcase many more exciting announcements in the space, but the summary above serves to illustrate the key point SEPTEMBER / OCTOBER 2017

how confronting it can be dealing with the compression of time in the new, digital-driven economy. But what I am keen to convey is that history has shown that disruption and opportunity go hand-in-hand. Hand-in-hand. It is very hard in stable times to both innovate and find gaps opening up for entrepreneurs to stake their claims. It is only in these sorts of times that, despite the challenges, opportunity is dropping off the trees. My question is: what are you looking to catch? Paul Greenberg is the founder and executive director of NORA.org.au.


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COMMENT

SUSTAINABLE PROCUREMENT SCOTT ALDEN AND GEORGIA APPLEBY

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rocurement plays an important role in all organisations, having farreaching environmental, social and economic impacts. In the public sector alone, procurement comprises approximately 12% of GDP and 29% of government expenditure in OECD countries. Sustainable procurement presents an opportunity for organisations to develop systems that allow for the prioritisation of growth while balancing this against the needs of society, the economy and the environment. It also recognises that progression towards a sustainable world will involve the full participation of diverse stakeholders and consideration of diverse issues. ISO 20400, Sustainable procurement – Guidance is the world’s first international standard for sustainable procurement and aims to assist organisations in meeting their sustainability responsibilities by providing guidance as to the effective implementation of sustainable purchasing practices and policies.

What is sustainable procurement? Under the ISO, sustainable procurement is defined as “procurement that has the most positive environmental, social and economic impacts possible across the entire life cycle and that strives to minimise adverse impacts”. ISO 20400 also lists a range of principles to be upheld if an organisation is to embrace sustainable procurement, including accountability, transparency, ethical behaviour, respect for human rights and a focus on innovation and improvement. In integrating these principles, organisations must balance the following issues: 1. The triple bottom line – development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland report, 1978); and 2. Social Responsibility – responsibility of an organisation for its impact on society and the environment through transparent and ethical behaviour that: a. contributes to sustainable development, including the health and welfare of society; b. considers the interests of stakeholders impacted by procurement practices; 8

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mandating sustainability objectives within the organisation at all levels and in particular, stresses the importance of accountability and sustainable supply chains. Clause 6 Organising the Procurement Function towards Sustainability is most applicable for people engaged in procurement management and outlines the techniques to be employed to enable successful implementation, Sustainable development and the triple bottom line. namely enabling people, engaging Diagram courtesy of www.planetprocurement.com.au. stakeholders, setting priorities and measuring performance. Clause 7 Integrating Sustainability c. is compliant with the rule of law and into the Procurement Process is directed towards international norms; and individuals managing sourcing activities and d. is integrated at all levels. contracts. It provides practical guidance regarding implementing sustainable procurement at each The interplay between stage of the process including planning, supplier selection and contract management and review. sustainable procurement

and social responsibility

Sustainable procurement is a central tenet of social responsibility and it is envisaged that ISO 20400 will complement ISO 26000:2010, Guidance on social responsibility. This is because ISO 20400 directs organisations to minimise their environmental footprint, review their impact on human rights and act to positively contribute to society and the economy. To this end, important practices explored in ISO 26000 such as due diligence, analysing the sphere of influence, setting priorities and avoiding complicity are all practices encouraged in ISO 20400.

What does the new standard provide? The ISO is divided into four clauses that provide guidance applicable for different levels of management. Integration between these diverse industry players is critical to the ISO’s ability to achieve its sustainability objectives. Clause 4 Understanding the Fundamentals is a generalist clause that discusses what sustainable procurement involves and its strategic goals. It also outlines fundamental practices such as due diligence, risk management and priority setting. Clause 5 Integrating Sustainability into the Organisation’s Procurement Policy and Strategy provides guidance to top-tier management on bridging the gap between sustainable procurement strategy and organisational policy. This clause clarifies the importance of SEPTEMBER / OCTOBER 2017

More than just a valuable guide? Unlike other international standards such as ISO 14001:2016 Environment Management Systems, ISO 20400 is merely an advisory document and does not provide an objective certifiable standard. Consequently, ISO 20400 may echo the weaknesses of ISO 26000 in that it is insufficiently attractive to businesses that capitalise less on communicating compliance with a guidance standard than with a certification. It is also unclear how ISO 20400 will be recognised within available rating systems used to evaluate organisational sustainability standards. Therefore, the acceptance of ISO 20400 within corporate circles will be critical in determining whether the international standard will be of practical relevance or whether it will merely be a valuable guide for organisations seeking to improve their engagement with sustainability standards. Scott Alden and Georgia Appleby, partners in Holding Redlich, practice in both the private and public sector, working on large strategic projects and infrastructure projects, and advise clients in relation to commercial contracts, procurement and probity. Scott has specific expertise in government and commercial law, infrastructure projects, general contractual and legislative advice and the tendering process and commercial contracts of all kinds and sizes and for all industries. For more information visit www.holdingredlich.com.


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COMMENT

CHANGES TO THE HEAVY VEHICLE NATIONAL LAW M

ajor changes are coming to the Heavy Vehicle National Law (HVNL), ramping up the law’s Chain of Responsibility (CoR) provisions, and increasing authorities’ enforcement powers. The Chain of Responsibility concept requires all parties in the road transport supply chain to take steps to prevent an HVNL breach, namely a breach of speed, fatigue, mass, dimension and load restraint rules, including to act safely. In May, the federal and state transport ministers also agreed to increase investigation and enforcement powers for police and other authorities under the HVNL, with a draft Bill due for ministerial consideration in November. Key powers include issuing prohibition notices to address an immediate risk, inspecting an entire fleet or class of vehicles, publishing outcomes of successful prosecutionsm and issuing injunctions to address ongoing risks. The changes follow a review by the National Transport Commission, which examined whether investigative and enforcement powers of police and other authorities align with the proposed amendments to the CoR provisions in the HVNL. In December 2016, the Queensland Parliament passed legislation amending existing CoR provisions, with most HVNL participating jurisdictions expected to follow suit and the reforms expected to come into effect mid-2018. The reforms introduce a concept of ‘primary duty of care’ that applies to everyone in the supply chain. Previously, this ‘duty’ did not exist within the HVNL and it brings the law inline with other national safety legislation. The amendments are to ensure everyone in the supply chain shares equal responsibility for,

10

MHD SUPPLY CHAIN SOLUTIONS —

ELIZABETH GUERRA-STOLFA

so far as reasonably practicable, the safety of transport operations. Under the amended provisions, consignors, consignees, packers, loaders, loading managers, drivers and operators of heavy vehicles, indeed everyone in the supply chain, has a primary duty of care to ensure road safety. This also means people within the supply chain have a duty to report safety issues if they encounter them, and their employers have a duty to provide the mechanisms to report those issues. The primary duty of care means everyone in the supply chain, as far as reasonably practicable, has a duty including but not limited to:

“Executives must also ensure their company complies with its obligations under the HVNL.” • Provide a safe working environment without risks to health and safety. • Ensure the maintenance of all machinery, equipment and structures. • Ensure supply chain systems and processes are safe. • Provide the information, training, instruction or supervision necessary to protect everyone in the supply chain from risks to their health and safety. • Ensuring the health and environmental conditions of those workers in the supply

SEPTEMBER / OCTOBER 2017

chain are monitored to prevent risks to health and safety. Executives must also ensure their company complies with its obligations under the HVNL; meaning a failure to exercise due diligence can result in an executive being fined, even if the company does not first breach the HVNL. Fines under the reforms will be increased to up to $3 million for companies and $300,000 for individuals, as well as up to five years prison. What practical steps can be taken to ensure a company meets its obligations? • Review policies on all parts of the transport task involving the business. • Assess current procedures against the new requirements and update as necessary. • Ensure there is an easily accessible reporting system for transport safety issues that is investigated immediately. • Train staff in their obligations under the new laws in both their daily tasks as well as their obligation to report issues. • Educate all staff to the importance of safety, including transport safety and its benefits to themselves, the company and the community. • Document all safety processes so if an action is brought, evidence of reasonable attempts to comply with the laws exists. Elizabeth Guerra-Stolfa has 30 years of experience as a legal practitioner. She is the Practice Lead for Rigby Cooke’s Transport & Logistics and Commercial Litigation & Dispute Resolution practice areas, offering advice on all legal, regulatory and compliance issues relating to transport and logistics operations. For more information visit www.rigbycooke.com.au.


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TECHNOLOGY

BUILD THE TRACKS … AND THE TRAIN WILL COME

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he story of rail transport since its inception in industrial England in the early 1800s to modern times is a fascinating one with many milestones to look back on. Over the last ten years, the Australian railway industry has played a major role in this story, with many significant rail innovations. However, the Australian rail network still has many unread chapters to unravel as it works toward the next major milestone.

Milestone station: GS1 standards and new technologies The landscape in which our rail industry operates today is large and complex, causing challenges with cost, safety, visibility, logistics, efficiency and customer service. To alleviate these, the industry is at an important crossover point on the tracks to set the direction it needs to take. The direction in focus is an investment in GS1 standards and new technologies to improve reliability and quality across the value chain. This industry initiative is currently underway, is slowly gaining pace and will be ready for

some common problems relating to inventory management and maintenance repair and overhaul (MRO) processes. In March 2017, the ARA Board recognised the need to set an industry standard and announced its support for the adoption of GS1 open global standards for identifying and marking (barcoding and/or tagging) parts and components used across the Australian rail industry. Chief operating officer at the Australasian Railway Association Phil Allan said: “The Australian rail industry has been called on to adopt GS1 global standards to identify materials used across the industry. The Call to Action that was released earlier this year is the first major step towards standardising the way materials are identified to support supply chain best practice and effective asset management.” This initiative is aligned with a parallel EU program involving rail operators and network managers. The rail industry in Europe is already

“The Australian rail industry has been called on to adopt GS1 global standards to identify materials used across the industry.” implementation as soon as we all get on the train to the next milestone station. The context of this story is like the Semmering railway track, which was built before a train had been engineered to traverse over the Alps to connect Vienna and Venice. Eventually the train did come and today, this achievement is recognised as an outstanding technological solution. In the case of the Australian railway industry, GS1 standards and the complementary technologies have been ‘built’ and are ready to go. The next step is to get industry passengers on the ‘train’ by responding to the Call to Action to implement GS1 standards by 1 January 2019.

What’s been happening so far? Since January 2015, the Australasian Railway Association (ARA) has been driving the industrywide Parts and Components Identification Project in rail with GS1 Australia to confront 12

MHD SUPPLY CHAIN SOLUTIONS —

using and developing a common standard, therefore global GS1 standards will be a critical enabler for the effective implementation of ISO 55000 Asset Management Standards.

Next stop: workshops To prepare the industry for the adoption of GS1 standards, suppliers across the Australian rail industry were invited to attend a Rail Industry Supplier Workshop in their capital city to learn about the Call to Action initiative. Operators and suppliers also shared insights as they explained the benefits of the new rail requirements. Senior manager, trade, transport & heavy industry, at GS1 Australia Bonnie Ryan said: “The workshops conducted in Perth, Melbourne, Sydney and Brisbane from May through to early August were well attended and a terrific success. “Discussions at the workshops generated many interesting questions about the benefits SEPTEMBER / OCTOBER 2017

GS1 standards can deliver to stakeholders in the rail industry, the integration of open standards with other technologies, and the process for marking and identifying parts and components.” Here’s a snapshot of some of the organisations that were represented by attendees at the workshops: Australian Rail Technology, Austbreck, Bombardier, Cold Forge, Knorr-Bremse, Gemco, Pandrol, Siemens, Timken, UGL, and many more. “If you didn’t make the first series of workshops, the second series is in the pipeline for early 2018. Keep an eye out for communication about the workshops in the coming months to secure a seat to learn about the range of tools available to assist you with the implementation of GS1 standards,” added Ms Ryan.

GS1 Australia on board at AusRAIL PLUS 2017 GS1 Australia is participating in the three-day conference and exhibition at AusRAIL PLUS 2017 in Brisbane from the 21 to 23 November. “If you want to find out more about the Call to Action to implement GS1 standards across the industry by 1 January 2019 or register for one of the 2018 workshops, come and meet the team at Stand No 378,” Ms Ryan said. Ms Ryan is also speaking on Day 1 at AusRAIL PLUS 2017 in the Rail Suppliers Stream at 2:30pm. The presentation will be focused on the benefits of standards for identification of parts and components across the Australian rail industry. For more information download a copy of the Call to action http://bit.ly/2sqR90d or contact Bonnie Ryan, Senior Manager – Trade, Transport & Heavy Industry, GS1 Australia at bonnie.ryan@gs1au.org.


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14

COVER STORY

Pick-it-Easy Robot picks fashion articles fully automatically.

ENTER THE ROBOT KNAPP’S ROBOT TECHNOLOGY IS A CORE COMPONENT OF LOGISTICS 4.0

T

he age of cyber-physical systems and the Internet of Things has begun. In production and logistics this means interaction between humans and machines with the ultimate aim of an intelligent, networked factory. Or, in KNAPP’s case, an intelligent, networked intralogistics system. One aspect is the use of industrial robots. Robotics is still an emerging field in intralogistics, with tremendous potential for growth, but one that also poses significant challenges. For years it was believed that the reliable process of bin picking could not be automated. The demands on the robots and sensors are extremely high, object recognition and the pick process are highly complex, and many components must coordinate with each other harmoniously for these processes to be successfully implemented. Why rely at all on robots? The potential into which these technologies tap is tremendous. Where humans reach the limit of their 14

MHD SUPPLY CHAIN SOLUTIONS —

capacity, robots can take over; for example, a robot can perform monotonous and strenuous actions over a long period, with unchanging quality and performance. As a result, robots are ideal for use in shift operations with high throughput and low tolerance for error. Robots can be used to implement quality assurance measures and article tracking along the supply chain, particularly with respect to current and future legal requirements. The Pick-it-Easy Robot represents an important step into the Industry 4.0 era: the picking robot combines high performance with maximum flexibility and error-free picking in one system. The robot has developed into a co-worker for humans; thanks to the Pick-it-Easy Robot, the workload can be better distributed and productivity can be increased by up to four times. The robot’s great advantage is that it can be retroactively integrated into existing intralogistics systems. KNAPP has not only reached an SEPTEMBER / OCTOBER 2017

Interacting with Pick-it-Easy Robot allows a modern manmachine user interface.


COVER STORY

important milestone in intralogistics with the development of the Pick-it-Easy Robot, but has also added a valuable solution for the zero defect warehouse – KNAPP’s interpretation of an intelligent and networked factory.

Pick-it-Easy Robot In picking areas that demand continuous high performance and quality for long periods of time, people reach their performance limits. One approach to solve this issue is to use industrial robots. Reliable ‘bin picking’, however, has long been considered an almost insurmountable task in intralogistics. With the Pick-it-Easy Robot, KNAPP has developed a fresh solution for industrial robot picking that opens up a new dimension in intralogistics. The Pick-it-Easy Robot is particularly wellsuited to slow- and medium-moving articles and is the ideal tool for the following cases: • Regions with high salaries and salary incidentals. • Sectors with sensitive, expensive or luxurious article ranges. • Companies striving to reduce errors and error costs. • Companies operating or wishing to operate with multiple shifts. • Warehouse areas in which a constantly high throughput is demanded. The Pick-it-Easy Robot is a fully-automatic picking station well-suited to processing slow- to medium-moving articles that normally comprise a large proportion of the stock units in a warehouse. Despite slow or medium turnover rates, the multitude of articles translates into a high number of order lines for processing. The Pick-it-Easy Robot is a robot cell particularly suitable for this purpose, because it combines flexibility and reliability with the necessary level of performance.

point. The articulated arm robot can position the gripper precisely above the gripping point. The gripper picks the article and transfers it safely to the target container. The Pick-it-Easy Robot is equipped with a comprehensive safety concept – the robot cell is completely enclosed in a safeguard and has its own access concept.

Consistently high performance In continuous use, the Pick-it-Easy Robot attains a significant increase in productivity, while maintaining the same high quality in comparison to manual picking. An ideally designed goods-to-person workstation makes 1,000 picks per hour possible – but over a longer period, such performance is hardly achievable for a human workforce. The Pickit-Easy Robot is an advantageous alternative to the human workforce in warehouse areas that demand continuous high throughput; depending on order structure and capacity peaks, a robot cell can replace one or more

Zero-defect warehouse

Vision technology The image recognition and processing software identifies the article to be picked in the source container and calculates the ideal gripping

Flexible solution The Pick-it-Easy Robot is distinguished by the highest flexibility and simple integration into existing systems. Various types of containers can be processed and the arrangement of the articles in the container is flexible. Both chaotic articles and stacked articles can be picked without problem – Pick-it-Easy Robot always finds the ideal gripping point for each article.

Who is KNAPP? Innovative system solutions and the right feel for trends and new market demands have led KNAPP to position themselves strategically in the global market. Besides it core business in the healthcare and cosmetics industries, KNAPP is also capitalising on the e-commerce boom. Online commerce is showing extremely strong growth across all business areas, comprising more than 70 per cent in certain sectors. KNAPP is well-positioned in the Australian market with its subsidiary in Melbourne.

KNAPP Zero Defect Warehouse Concept with Pick-it-Easy Robot.

manual work stations. For example, replacing two workstations with a robot cell where two shifts are operated results in an amortisation period of just 1.5 years.

Scan this code to watch the Pick-it-Easy Robot in action.

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The zero-defect philosophy based on modern image processing and recognition technologies also flowed into the development of the Pick-it-Easy Robot. The picking process is monitored by several sensor systems. Any errors are detected and the affected container is diverted to a manual station. The cost of errors is considerably reduced and the delivery quality is improved. A comprehensive safety concept with defined safety devices, an access concept, as well as measures to prevent collisions, guarantee the safety of personnel and prevent material damage.

Customers benefit from the local service structure that enables KNAPP to provide its customers with fast and direct support on site. Over the past several years, KNAPP Australia implemented numerous successful projects with customers across a wide range of sectors. The cosmetics giants Avon and L’Oreal, one of Australia’s leading pharmaceutical distributor Sigma, Metcash in the food retail sector and the e-commerce and fashion logistics specialist Fastline are just a few examples. KNAPP is a proud sponsor of the ‘FTF Car Club of NSW Fords in the Park 2017 Charity Car Show’ for the Children’s Hospital at Westmead (http://www.ftf.org.au/ fordsinthepark2017). For more information Contact Michael Kemeny at KNAPP Australia Pty Ltd on +61 428 884 177, email sales.au@knapp.com or visit www.knapp.com.

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COVER STORY

Automatic picking with Pick-itEasy Robot at Basiq Dental.

BASIQ DENTAL FACTS Sector: Pharmaceutical wholesale, dental supplies Location: Oisterwijk Warehouse size: 1,485 m2 picking and packaging; 3,130 m2 pallet storage area Deliveries: up to 13,000 order lines and 2,400 containers per day Technologies: OSR Shuttle, Pick-it-Easy Health & Pick-it-Easy Robot workstations

The Pick-it-Easy Robot in use Basiq Dental, based in the Netherlands, supplies dentists throughout Europe with its comprehensive range of high-quality dental equipment. As a customer-orientated company, Basiq Dental always strives to better provide for its customers through innovative services, and is always one step ahead of the competition. This is why outstanding customer service and superior quality are priorities for Basiq Dental. In KNAPP, Basiq Dental has found a partner to support the company on its path to success with innovative, high-performance automation technology. KNAPP equipped the Oisterwijk distribution centre with a combination of the tried-and-tested shuttle technology and the brand-new robot technology.

Flexibility as the key to success Growth is a clear objective for Basiq Dental. In order to be adequately equipped for future growth, scalability and flexibility were two of the main requirements for the new storage and picking system. Furthermore, the comprehensive and constantly growing product range needed to be stored safely in a space-saving manner. Another requirement was to reduce staff costs and increase quality and efficiency. The modular OSR Shuttle, which is scalable in size and function, offers Basiq Dental the desired flexibility and storage density. As the inventor of shuttle technology, and with more than 10 years of experience and expertise, KNAPP offers the best of both worlds with the OSR Shuttle efficiency and flexibility combined with quality and safety. Thanks to the innovative picking robot Pick-it-Easy Robot, Basiq Dental is breaking new ground in intralogistics and is investing in a reliable, high-performance and economic picking system. 16

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“We decided on KNAPP because for us, this was the most modern and practical solution, which still involved an attractive level of investment. The workload is better distributed and this has helped to significantly reduce the time pressure.” We were able to decrease staff working hours while at the same time improving quality. Bart van Eijndhoven, Basiq Dental. Keeping a finger on the pulse with the latest technology In the Oisterwijk distribution centre, manual and automatic processes blend together seamlessly: the dispatch cartons, available in two sizes, are channelled through the warehouse on the shortest path, depending on the content of the order. For picking, three manual workspaces are available with paperless RF picking, as well as the ergonomic Pick-it-Easy work station for the OSR Shuttle and the picking robot Pick-itEasy Robot. Once the order is processed, the cartons are closed and sealed using a SEPTEMBER / OCTOBER 2017

semi-automatic carton sealer, and loaded directly onto the transport vehicles via two dispatch ramps. A key element of the Basiq Dental automation system is the combination of the OSR Shuttle, Pick-it-Easy Health and the Pick-it-Easy Robot. The shuttle system is composed of four aisles and, due to the use of subdivided containers, it offers the greatest possible storage density, with around 12,800 storage locations, thus meeting the requirement to make the best possible use of the available space. The special design of the Pick-it-Easy Health goods-to-person workstation enables efficient, error-free and ergonomic manual working processes, thus contributing to improved quality and efficient use of resources. Around 1,200 order lines are processed per hour during peak periods. One particular highlight of the solution is the newly-developed Pick-itEasy Robot picking robot, which is used for the first time at Basiq Dental. The picking robot is able to work over a long period of time while still maintaining a consistently high throughput rate and a high level of quality and, therefore, helps reduce staff costs despite growing order numbers, and improves delivery quality. The collaboration between Basiq Dental and KNAPP was friendly and highly professional throughout the entire course of the project. The use of state-of-the art automation technology, like the Pick-it-Easy Robot, immediately convinced Basiq Dental that, in KNAPP, they had found the innovative and reliable partner the company had been looking for in order to attain its objective. Further automation of the distribution centre in Oisterwijk is currently being planned in collaboration with KNAPP.


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.

CHANGE YOUR PERSPECTIVE Look closer at www.honeywellaidc.com/vocollect

© 2015 Honeywell International Inc.


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SPOTLIGHT ON: 3RD PARTY WAREHOUSING LOGISTICS INSOURCE OR OUTSOURCE YOUR WAREHOUSING? WHAT’S YOUR CHOICE? MAL WALKER

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urely this is the age of third-party logistics! Some of the world’s largest and fastest growing companies are major third party logistics firms. (3PL). Many started as transport or shipping companies, but have diversified into offering a full range of contract warehousing services. Indeed, they have been exponents at selling their services to would be customers who decide to outsource. But what are the reasons for outsourcing, and for that matter, why has outsourcing been so popular, while insourcing has slipped behind?

Issue

Although outsourcing is still strongly supported by many firms, a new trend is evident. A growing number of firms are emphatically keeping operations in house and/or terminating or pulling back from outsourcing, preferring to revert to running their own in-house warehousing logistics. Reasons for this can vary across a range of cost, service, relationship and strategic imperatives. The chart lists some of the perspectives that may sway a decision either way. There will be more issues than I have listed here, but you may want to check your own circumstances

against these as a starting point. If at the end of the table you can count more reasons to insource or outsource, there’s your answer. How did you go? Is your firm leaning to insourcing or outsourcing your warehousing? Drop me a line if you wish to challenge the trend, debate or debunk the mystique of choosing either strategy. Mal Walker is the manager, consulting, at the Logistics Bureau. For more information contact Mal on 0412 271 503 or email mwalker@ logisticsbureau.com.

Reasons to outsource

Reasons to insource

Organisations that judge themselves as poor at warehousing management and operation are likely to see 3PL as a solution. In many cases they may not want to deal with the ‘logistics’ of getting their products to market, and are happy to outsource to a 3PL with a network of DC.

Where complexity of operations, goods or value-adding activities require significant attention and care, companies may opt to keep their operations under their direct stewardship. They will choose to be less than productive in some areas, for the sake of privacy, and having direct and unfettered control over their own operation.

Organisations that have property and equipment assets may elect to remove these from the balance sheet, obtain the cash injection into their business, and then lease both buildings and equipment.

Apart from obtaining profits from their products, some firms see property assets as a critical component of their business and invest accordingly. Typically these firms take a long-term view and may invest in their own operation in one territory whilst using a 3PL in another

Human resource management can be an Achilles-heel for some companies, which for years may have suffered heavy industrial issues. So they choose to outsource to dispense with the hassle of handling industrial relations and enterprise bargaining. In effect, they prefer to leave it to another (3PL) to do this.

Companies that are effective at human resource management can benefit from maintaining their workforce, at rates and conditions that are comparable or better than a 3PL, without paying an extra labour margin.

Scalability

3PL will typically have a network of DC that offer expansion options to firms as their business grows. This is advantageous to companies that are growing or seeking to establish localised facilities across the country.

Companies that are willing to invest in technology are finding materials handling equipment that give greater storage utility and performance on smaller footprints. Where necessary, they outsource part of their logistics in some sectors.

Cost

Firms will often hope for cost savings from outsourcing and approach 3PL expecting handsome returns. However, the reality is that they can pay from 5 to 20% more for the service. When margins are tight, this can be an added impost on struggling businesses.

If margins are slim, keeping warehousing in-house can save the company from 5 to 20% that they would otherwise pay in the market place. In recent years this difference seems to matter and firms are increasingly pulling warehousing back in-house.

3PL offer a structured way of managing logistics, with reporting systems, KPI and contract agreements. Companies that outsource will benefit from this.

With structure, systems, reporting and KPI, some companies find that 3PL are too rigid and inflexible in their operation. This can stifle a company’s ability to be flexible on a day-to-day basis, therefore they choose to retain their own operation so that don’t have to pay for every task that occurs each day.

3PL can provide specialised facilities that comply with requisite fire, health, food, safety and dangerous and hazardous goods standards. This is helpful when companies are faced with compliance to multiple standards across their range.

Firms will pay a premium for specialised 3PL facilities, which over the medium to long term may exceed what they would otherwise spend to develop their own.

Special handling

Companies that have specific materials handling systems are attractive to organisations perceiving that efficiencies can be made with such systems

Some companies are not able to find 3PL with specialised equipment to handle their product range at an economic cost e.g. heavy-lift items requiring

Head office policy

For many international companies there is a policy to outsource across different markets. For this reason alone, all other issues may be subservient.

Some international companies choose to insource in every market, mainly for reasons of complexity, or privacy. For this reason alone, all other issues may be subservient

Warehousing is a core skill – yes or no?

Asset capital

Industrial relations

Control

Facility compliance to industry standards

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gantry cranes , bulk items, use of ASRS, automated picking systems, etc.

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transfer of finished goods from Bickford’s manufacturing operation to the nearby DC, which is located 50m from production. In the DC, the AGV block-stack pallets of finished goods up to three high in preparation for despatch. They also pick pallets out of standard selective racking. The only manual task is the actual loading of pallets onto delivery trucks, which is done by forklifts. Stock is located based on velocity, with faster moving SKU stored near the front of the DC and slower moving SKU to the rear. This minimises overall AGV travel time, with the average transfer from production to the DC taking around five minutes. At around midday, the AGV begin picking and consolidating all of Bickford’s orders that need to be despatched the following day, and they continue consolidating orders right through the afternoon and evening, long after everyone has gone home. They also consolidate different production batches so that they are in LIFO or FIFO order, depending on what is required. Another task the AGV handle is consolidation. This is important to optimise space efficiency in the DC and to ensure Bickford’s always has sufficient storage space for new pallets from production.

Bickford’s warehouse manager Rhett Glanville.

AGV = SAFE +COSTEFFECTIVE AGV ARE DELIVERING SAFE, COST-EFFECTIVE LOGISTICS FOR BICKFORD’S

A

ustralian beverage manufacturer Bickford’s is one of the country’s oldest and most respected brands. Established in 1839, its global head office and operations centre is located in Adelaide, South Australia. Bickford’s distributes its iconic products to thousands of customers ranging from small convenience stores to Australia’s largest retailers, and it also exports to 34 countries around the world. The business has a reputation for innovation in manufacturing and logistics, with the majority of pallet handling at its 20,000 m2 distribution centre (DC) in Salisbury 20

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South carried out by a fleet of five Dematic Automated Guided Vehicles (AGV).

AGV at Bickford’s Bickford’s fleet of AGV typically operate over two shifts, commencing operations at 3am, though they can also operate around the clock during peak periods. They start by fulfilling all of the DC’s replenishment requests, before consolidating rows of finished goods, in preparation for despatch. During the day when production is running, the AGV’s primary function is automating the SEPTEMBER / OCTOBER 2017

AGV reduce whole of supply chain costs Bickford’s warehouse manager Rhett Glanville said the main reason for implementing AGV was to reduce whole of supply chain costs. “Our AGV don’t make mistakes, are very reliable, and have significantly transformed the efficiency of our manufacturing logistics operations,” said Mr Glanville. “When an AGV transports and puts a pallet somewhere, it constantly updates our WMS so all materials handling is conducted in real time. “The great thing about the AGVs is that they communicate with each other,” he added. “The control system for the AGV is also very smart. If one AGV is closer to a task than another, they'll swap tasks. I can even remotely program them from home.” Since Bickford’s introduced AGV, it doesn't need to do stocktakes any more. “We now have a rolling stocktake, which constantly updates our WMS system,” he said.

Reduced damage, improved reliability Another benefit of AGV at Bickford’s is that they have virtually eliminated stock damage due to manual handling. Product damage during forklift operations was costing the business around $30-40,000 every year. Since the introduction of AGV, this had dropped to around $1-2,000 per annum.


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“Like any vehicle they require servicing, but they are remarkably reliable,” added Mr Glanville. “They don’t call in sick, they don’t take holidays, they don’t pick the wrong item or number of pallets, or put-away stock in the wrong location, and they also continue to work after everyone has gone home.”

and within 10 minutes they have enough power to continue operating for another hour.

AGV operation A scanner mounted to the AGV uses a combination X, Y and Z coordinates to constantly work out where they are and where they are going.

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“If I was to walk in front of an AGV while it is traveling between locations, it would detect my presence and automatically stop. When it detects the obstruction has gone, it will resume the task it was doing,” said Mr Glanville. “I can send orders to them and they will just go along and do those tasks without any fuss. I

Rapid ROI The savings Bickford’s AGV deliver meant the return on investment (ROI) for its fleet of five AGV was just two-and-a-half years. “Of course, a manually-operated forklift can complete more tasks in the same time as an AGV, however, forklift drivers have lunch breaks, they can call in sick, and they can make mistakes. AGVs on the other hand can basically work around the clock, and they are incredibly accurate and reliable,” said Mr Glanville. When fully charged, an AGV will typically operate from around six to eight hours. When the charge in their battery is starting to get low, or whenever there is a break in the workflow and they are not required, the AGV take advantage of opportunity charging. They simply drive on to a charging plate, of which there are several located throughout the site,

“The return on investment for five AGV was just two-and-a-half years.” They continually update their position utilising hundreds of reflectors located throughout the warehouse, and their positioning at all times is as accurate to 10mm. They're also very reliable, but Bickford’s makes sure it carries out regular preventive maintenance to keep them operating at maximum efficiency.

Improved OH&S Workplace safety has also been significantly improved. Each AGV is equipped with an array of sensors that automatically detects any object in their path.

can do other work, come back, and all the tasks are complete. I don't have to worry. I know that they'll get done,” he said. The transition from forklifts to AGV was very straightforward and took less than three months. Bickford’s forklift drivers were redeployed to other tasks. “We’re also very happy with how reliable the AGV have been,” added Mr Glanville. “After all this time, I wouldn't know what to do without AGV.” For more information call +61 2 9486 5555 or visit dematic.com.au.

More endurance. More perforMance. 16 hours with one single battery charge

Learn more now at: www.ntpforklifts.com.au 131 687

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A WEARABLE REVOLUTION TONY REPACI

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s smart watches, fitness trackers and other wearable technologies become more common in our daily lives, distribution centre employees are beginning to expect the same type of seamless usability and performance from the technology they use on the job. Just as we no longer need to hold a device in our hand to receive a call, track steps or monitor social media, distribution centre employees are looking for ways to free up their hands to be more productive and efficient in their daily tasks. And with over 60% of Australian consumers encountering problems with online shopping (JDA Research 2017), business owners are looking to new ‘connected worker’ ways that help improve efficiency and accuracy. Indeed, many distribution centres are still using handheld scanners, paper-based picking methods and mobile computers to move and track goods as they make their way from one location to the other. Although handheld scanners have moved on from the early wired iterations, which restricted motion and became a nuisance when wires got in the way, the wireless versions of today are not conducive to the goal of a hands-free environment. The use of paper- or even mobile-based picking methods still require the use of one’s hands, further compounding the lack of hands-free. But change is now occurring in distribution centres. From software that offers workers voice-based prompts to wearable barcode 22

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scanners connected via wireless communication standards like Bluetooth, new technologies are freeing up workers’ hands and connecting them to data more fluidly, helping to move the industry toward the next era of efficiency in data acquisition and order fulfilment. We can see this change through the increase in adoption rates for voice-based systems. Voice-based systems instruct distribution centre employees through their picking methods in real-time and enable them to input data verbally. This eliminates the need for physical picking lists and labels that must be carried around and updated manually. However, this does not completely address the issue of distribution centres not being a hands-free environment, as data capture via printed barcodes is also a necessity in many of these environments. For that, wearable barcode scanners have been introduced to enable workers to do more with their hands while still being able to easily scan a barcode as they move through the steps in a distribution centre process. Together, voice-based guidance and wearable barcode scanners create a completely hands-free environment that provides major advantages for businesses looking to improve worker comfort and stamina, along with overall accuracy, productivity and efficiency. Moreover, interest in smart glasses has grown in recent years, but this technology is still in its infancy. Many companies are starting to bring different variations to SEPTEMBER / OCTOBER 2017

market for industrial purposes, and some have started piloting programs to test the potential benefits this technology might bring to distribution centres. As we see more mainstream adoption of augmented reality devices in the consumer world, it’s expected that more beneficial use cases for the industrial sector will begin to emerge. In the meantime, early adopters should begin to make the transition toward wearable technology through the adoption of handsfree scanners and voice-directed software that immediately eliminate the need for handheld devices and paper picking methods. As the expectations of similar easy-to-use, consumer-like technology in industrial settings continue to grow among manufacturing and distribution centre employees, many organisations want flexibility in their mobile computing options. Having a range of device options poses significant advantages for supply chain firms, which is why it’s now essential for wearable barcode scanners to be Bluetooth-enabled and compatible with a range of host-computing devices, including smartphones, vehicle-mounted computers, or other devices. Through Bluetooth connectivity, a wearable barcode scanner resembling a ‘ring’ is not limited to one particular host device. It can be connected to a PC for stationary scanning tasks, or a variety of mobile devices for tasks that require movement throughout the facility. At Honeywell, we expect to see this become an even more important capability as different types of connected devices continue to infiltrate the distribution centre and interoperability becomes crucial to the process flow. In addition to interoperability and seamless wireless connectivity, ergonomics are very important when it comes to wearable devices. For example, wearable barcode scanners must be small enough to fit comfortably on the user’s finger without getting in the way or moving around, while the rest of the unit rests sturdily on the user’s wrist. In the distribution centre environment, wearable devices that are not designed with the appropriate durability and ergonomics in mind will make tasks more cumbersome. Today, improved efficiency in picking is the main driver of the wearable revolution. As these benefits continue to be realised, expect to see widespread adoption of wearable devices throughout the distribution centre and elsewhere. Anywhere a handheld device is used – from receiving to sorting to packing – companies will be able to increase productivity by replacing it with a wearable device instead. Tony Repaci is the managing director ANZ of Honeywell Safety & Productivity Solutions. For more information visit www.honeywellaidc.com.


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IOT CAN DELIVER DANIEL CHURCHES

T

he Internet of Things (IoT) promises to deliver big benefits to organisations of all sizes, and it’s capturing growing levels of attention in the transport and logistics sector. Attracted by the prospect of streamlined processes and reduced costs, companies are exploring how this rapidly evolving area can be put to work. It’s hard to dismiss the potential IoT has to offer and how quickly it is being adopted. Major technology firms have issued predictions that the market for connected devices could grow to be worth more than $14 trillion by 2030. Here are three steps that are key to delivering a satisfactory return on investment from an IoT deployment.

1. Analyse the impact It might be the latest hot thing in the technology space, however, IoT won’t always be the best solution to every problem. For example, an organisation that’s still struggling to integrate legacy systems with cloud platforms may find that the addition of internet-connected devices adds complexity rather than streamlining business processes. For this reason, it’s important to consider the business impact of adopting IoT against the market opportunity it will deliver. An organisation’s readiness should be checked, both from business and technical perspectives. In order to avoid the issue of premature adoption and before making any investments,

prepare a high-level business case defining an end result and assessing your company’s readiness to undertake an IoT project leveraging existing investments and projects.

2. Undertake thorough planning If preliminary evaluation suggests an IoT deployment will deliver significant value, take time to drill down and map out specific, practical outcomes. This will further clarify exactly what a planned project is likely to deliver. For example, TIBCO has been working with Melbourne Airport to develop an IoT infrastructure that provides unprecedented insights into operations across the massive transport facility. The result is a new situation awareness platform that ties together distributed platforms and provides operators and mangers with information on everything from cargo movements to the status of aircraft and support equipment.

3. Adjust your technology Once the potential impact has been analysed and detailed plans put in place, it’s time to take a thorough examination of the technology that already exists and the new components that will have to be added. An effective IoT deployment requires two key components: improved devices and a better way to handle the data they generate. Improved devices make existing

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equipment smart, and continue to make them smarter. For example, growing numbers of pharmaceutical and food-shipment companies now use on-board sensors to detect not just temperature variations in stock, but also when they occurred and for how long. When it comes to transportation drivers, systems are being developed that use a combination of cameras, radar and laser scanners to boost driver response times and even allow remote vehicle control. On the data management front, improvements are likely to be needed to ensure flows can be captured and analysed to deliver business value. At Melbourne Airport, this has allowed the creation of a real-time dashboard view of the entire airport. This is used to track shipments and predict issues before they occur, significantly improving operational efficiencies. Traditional big data analysis is good at helping an organisation to understand what has happened, how, and why. It can identify predictive patterns based on the data at rest. However, IoT-based infrastructures can go much further. They add value by providing the ability to see what’s happening in real time and allow opportunities and threats to be spotted and acted upon immediately. This is particularly relevant in the transport and logistics sector where re-routing, re-scheduling, and re-staffing have to happen in real time to achieve the best productivity and efficiency. Daniel Churches is the regional vice president ANZ of TIBCO. For more information call +61 2 9458 2124 or visit www.tibco.com.

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USES: • Small Item Distribution • 3rd Party Logistics and Inhouse Facilities • Work In Progress and Buffer Storage

• Maintenance Spares • Tool Storage

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LINE ’EM UP GETTING ALIGNED WITH BUSINESS GOALS FOR SUCCESSFUL LOGISTICS OUTSOURCING ROB O’BYRNE

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n today’s fast-moving logistics environment, the pressure is often on to achieve lower costs, faster delivery, and operational flexibility. Logistics outsourcing is frequently ‘sold’ on the dollars and hours it saves a business compared to its in-house operations. Third-party logistics providers (3PL) invest in technology, like cloud-based transport management and robotoperated warehousing, so that client enterprises pay less to reap the benefits of efficiency and speed. Clients can then use the extra time and effort they no longer need to spend on logistics to focus on their strategic business goals. Yet those business goals are also a key consideration in logistics and logistics outsourcing. The 2017 Global State of Logistics Outsourcing Study from Capgemini Consulting indicates 3PL now want to become “collaborative partners that take on greater accountability and control”. 3PL should then make sure they also know about – and align with – their clients’ business objectives. But how many of them can claim to integrate their clients’ business goals into the initial outsourcing agreement – and from then on, into their daily operations? 24

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The need to keep the end in mind When the outsourcer does not know what the client’s business goals are, it cannot shape its services and operations accordingly. Neither the client nor the logistics services provider make the most of the logistics outsourcing agreement. The relationship is fragile. The client is more likely to shop around and switch to another provider for lower costs, better delivery performance, or additional services. Whether this brings any deeper business benefit is another matter. On the other hand, a step back by the 3PL to understand each client’s business goals and then embed those goals in its operations can improve matters significantly.

Beyond the table stakes of trust But suppose a 3PL already reliably and honestly executes according to an outsourcing contract: is that enough for successful logistics outsourcing? Trustworthiness and trust are indeed huge factors in outsourcing relationships. Clients understandably feel nervous about handing over critically important logistics operations to an entity SEPTEMBER / OCTOBER 2017

outside their control. A relation of trust is essential in the transfer of goods to another organisation’s depot and in giving instructions for a third party to make shipments on the client’s behalf to the client’s own valued customers. A logistics outsourcing relationship plagued by mistrust or an absence of trust will founder. Trust is, however, table stakes. It is necessary for a logistics outsourcing relationship to work, but does not propel it to a higher level.

The technology trap Technology is only valuable to a business if it helps the business meet its objectives. This does not prevent some clients and logistics outsourcers from believing that better technical specifications automatically mean greater business advantage. However, doing something useless a hundred times as fast still produces the same useless result. Instead, the starting point must be the client’s business goals. Any technology offered by a logistics outsourcer must then increase the chances of, or performance in, reaching those goals. Confusion between the power of technology


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and business results required may well be a factor influencing the ‘IT Gap’ that is tracked in the study by Capgemini Consulting (see above). The IT Gap is defined to be the difference between the percentage of 3PL users confirming that 3PL should have IT capabilities and the percentage of the same users indicating they are satisfied with 3PL IT capabilities. For 2017, the scores were 91% and 65%, respectively, with a large proportion of 3PL possibly in an information technology trap of their own making, rather than in a state of enlightenment driven by their clients’ business requirements. Logistics outsourcing and business goals Confusing a logistics outsourcing agreement with a business goal can also undermine a relationship. Logistics outsourcing is not a business goal. It is a means to an end or part of an overall business strategy to achieve a business goal. The client must therefore define its business goals and communicate them (possibly under non-disclosure) to its logistics provider, if the provider is to take those goals into account. Business objectives will vary from one client to another, so 3PL need to avoid any unjustified assumptions. For instance, even if cost reduction is a common motivation for moving logistics operations out to a third party, some clients will see increased delivery quality, improved timeliness, or access to new markets as more important goals.

Client, first know thyself Enterprises may have a less than perfect understanding about why they want to go the outsourcing route. They may not understand their logistics operations or expenditure, and hope somebody else can shed light on the matter. In other cases, they may seek to avoid the effects of logistics problems they have already met in their business activity by handing off the responsibility for their logistics to a third party. Trying to outsource logistics on this basis alone means that business goals are ignored. Such enterprises would do better to address their questions or issues, possibly with the help of independent consultants, before entering discussions with a 3PL. They will then know how to compare the outsourcing services on offer with what they currently have and see how problems can be solved, to then move up a level to investigating how they could also better meet their business goals.

Company forgetfulness, the problem every 3PL faces At the beginning of a logistics outsourcing relationship, there should be management agreement between a 3PL and its client about the business advantage to be gained by the client. Unfortunately, this knowledge may

evaporate rapidly in a 3PL at the operations level. Metrics, indicators, and technology become the be-all and end-all. Opportunities for better business collaboration remain unidentified or unexploited. Those present at the start of the outsourcing agreement, whether from the client or the 3PL organisation, may move on and those who replace them may know nothing of the previous goals. While they may still know what to do, as per the contract, logistics outsourcers may end up no longer remembering why they do the things they do for their clients.

Improvements through keeping client business goals in mind Given the importance of a client’s business goals to optimising the results of logistics outsourcing, these goals must be integrated into the 3PL’s operations in a way that makes them easy to remember and work with. The 3PL can then accomplish several things. It can check that its services and activities are aligned with the client’s goals. It can make recommendations for changes or problem resolution in the light of the client’s goals.

“The more a logistics outsourcer knows about the business priorities of its client, the better it will be able to collaborate.” Finally, by keeping the client’s business goals in mind, it can better identify opportunities to improve service and performance, thus increasing client loyalty and protecting its own margins into the bargain. It is important to remember that 3PL staff ‘at the sharp end’ in warehousing and shipping may have excellent feedback to offer about how the 3PL’s activities and the client’s business objectives stack up. They see many of the situations, issues, and opportunities involved at first hand.

Practical ideas for embedding client goals in 3PL activities Pragmatism rules. If a client and its 3PL already have a simple, effective way to keep the client’s business goals top of mind in the 3PL’s daily operations, that is what counts. Otherwise, whether you are a client or a 3PL, the following pointers may help to get you started. • Make clear information about the client’s business goals flow from the client to the 3PL. Sometimes this seems so obvious that it never happens. Make it into an action item that

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must be addressed, with follow-on checks for updates. • Hold regular review meetings between the client and the 3PL, with ‘Contribution to client business goals for this week (month, other)’ as a standing item on the meeting agenda. • Integrate client business objectives in quality improvement loops a 3PL may already be using: for example, the PDCA (plan–do– check–adjust) cycle. • Deploy a mobile app to send reminders and surveys about client business goals to 3PL employees in warehouses, loading bays, and so on. If an operations team has decisionmaking autonomy about changes to client services, the mobile app can also be the way to send information on changes back up the management tree. • Use a process management software application, in which routines and processes are defined with steps, handoff checkpoints from one employee or team to another, and comparison with client business goals included in those steps and checkpoints. If current IT deployment allows client business goals to be included or emphasised without additional software or systems being required, so much the better. Alternatively, cloud-based process management software is both available and affordable, while a mobile app is likely to work best when it is clear and simple, helping to keep investments in any specific development efforts moderate too.

Conclusion Sound business reasons are fundamental to logistics outsourcing success, but further than this, client business goals should be embedded into the 3PL operations too. This is for everybody’s sake. The more a logistics outsourcer knows about the business priorities of its client, the better it will be able to collaborate and the more it will become an extension of the client’s organisation for the client’s logistics. Technology is a means and not an end, to be applied after the business goals and strategy have been properly defined and communicated. However, it also offers a way to reinforce 3PL knowledge of clients’ business objectives at a company level, for example, through process management applications that record information and ensure continuity of awareness of a client’s business goals, no matter how 3PL teams change or evolve. Rob O’Byrne is a consultant, coach and author in the field of supply chain and logistics. He publishes regularly at www.logisticsbureau.com/blog/. The topic of Logistics Outsourcing is covered at www.supplychainleadersinsights.com.au/. Use promo code MHD for tickets at only $47.

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THE E-COMMERCE PHENOMENON E-COMMERCE IS NOT JUST A MARKET OPPORTUNITY FOR BUSINESSES, IT IS A PHENOMENON, WRITES RAGHAV SIBAL

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oday just about anything, from books and software to groceries and medication, can be purchased without ever entering a store. e-Commerce is not just a market opportunity for businesses; it is a phenomenon that defines a customer’s experience with a brand. With global e-commerce retail sales projected to reach $3.5 trillion by 2019, there is a lot more at stake than just fulfilling orders. The immediacy and increasing personalisation offered online has raised the bar. The real opportunity for retailers is to reshape the retail experience to support and enhance this new, digitally inspired, customer who expects a unified and seamless shopping experience across all channels.

Rethinking bricks and mortar stores As e-commerce continues to grow at a rapid rate, the growth of bricks and mortar stores has slowed significantly. This has meant that retailers are having to think of new ways to make their stores more meaningful to consumers, such as investing in mobile point of sale technology for sales staff or stocking only limited SKU in store. The role of the store worker is also changing rapidly, expanding from pure merchandise transactions towards a focus on engagement, customer experience, micro-marketing, fulfilment of online purchases, pick-up in store orders and direct shipping. 26

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Today, the store is an extension of the digital experience, and, in our omni-channel retail culture, the concept of the point of sale as a standalone idea or technology is dead. In our view, a transaction is universal, and users should have the ability to initiate or modify a transaction anywhere in the enterprise. In-store salespeople need a single view of stock across the entire logistics network and also the ability to transfer that stock on the fly to meet customer demands. They require a customer’s complete online and offline transaction history plus a quick view of product recommendations to support a meaningful and timely engagement and enable up- and cross-selling opportunities. For example, enabling a customer to buy an item in store, return an item purchased online and have another item from a nearby store delivered to their home in a single transaction, with a single payment taken in store. It is this seamless, high-quality interaction that must underpin the new in-store experience.

Real time visibility e-Commerce and the emergence of the omni-channel has had a huge impact on the operations and business models of many businesses. But it has also had a tremendous impact on the need for supply chain visibility. Often retailers have a very clear picture of their online inventory, but visibility of store stock isn’t always as clear. However, the omni-channel SEPTEMBER / OCTOBER 2017

requires visibility of all facets of the supply chain from the distribution centre, to transport to store, because this is the way to deliver a seamless customer experience that gains their loyalty. When a company has a more granular understanding of its inventory, it has far more ability to take advantage of that information. Visibility into inventory allows a company to do a better job accessing that inventory to fulfil a customer order, change transport routes and balance supply and demand using market conditions. But before that can happen, a business needs data from a number of different channels and processes: from its warehouses, its stores, and its finished goods supplier or manufacturer, as well as from freight forwarders, 3PL and local carriers. If this data cannot be consolidated and rationalised, a company is failing to exploit significant business value. With data as a primary resource, the architecture — how one collects and aggregates the data to make sense of it — becomes critical. The back-end systems that support and maintain the data must be open and able to accept input from different sources and in different formats.

The evolving supply chain For years, warehouses have driven order processing efficiency by using a wavebased processing methodology that aggregates order volume and submits it to the warehouse in organised batches. Unfortunately, in environments where


T H I R D - PA R T Y L O G I S T I C S

demand can be unpredictable and volatile, this approach can lead to peaks and valleys of activity, as waves are passed from warehouse function to function. The continued growth of e-commerce has dramatically changed how distribution centres operate. One example of this can be found in the way that orders are processed and shipping is handled. Long gone are the times of shipping in five to seven business days; delivery expectations have changed, and distribution centres are feeling the pressure. They’re expected to take action on an order within minutes of when it’s received and complete processing within a couple of hours. While this does not necessarily result in same-day delivery, the customer expects that it should result in same day shipping. Consumer demands have changed to a point where all standard shipping orders are expected to arrive in two or three days, or even sooner, regardless of where the distribution centre is located. As e-commerce continues to grow, ensuring distribution centre efficiency must be a top priority. This can be achieved with help from a warehouse management system (WMS) whose algorithms can ensure that processing a number of the same simple orders at once is handled as efficiently as if you were processing just one single order. Additionally, dealing with reverse logistics is complicated — it requires specific logic and returns processing operations. Most importantly, in order for companies to handle returns, they must have interconnectivity and a strong set of policies and followup capabilities.

The eStore Logistics story

retailers are placing greater importance on the fulfilment side of their operations and the role it plays in improving customer satisfaction. A few years ago, e-commerce businesses and omnichannel retailers directed more attention to web design, store layout, merchandising and front-end systems, but today their commerce strategies are increasingly focused around seamless order execution and the supporting fulfilment processes.” From the ground up, eStore Logistics has been built to service complex e-commerce order fulfilment profiles and volumes. To achieve costeffective order fulfilment while maintaining a high level of accuracy and speed of fulfilment, eStore Logistics relies on Manhattan SCALE to support all of its systems, processes and teams. The system supports eStore Logistics in servicing the specific needs of e-commerce clients and helping them handle the peaks and troughs in volume that they typically experience. eStore Logistics fulfils up to 30,000 orders per day with an average of 1.4 units per order with multiple pick and pack processes according to the suitability for an order profile. On any given day across its three sites, eStore Logistics might have between 110 and 175 staff working, depending on demand. Mr Williams said: “When you look at a traditional inbound receipting flow, whether you’re fulfilling online orders or if you’re fulfilling B2B orders, the flows are very similar. When it comes to outbound fulfilment, the Manhattan system is key in making sure that orders are being fulfilled accurately, orders have been fulfilled in time, and orders are also being fulfilled in a costeffective manner.” Since the deployment of the new system, eStore Logistics has experienced growth to ten times its original size.

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The technology investment challenge Compared to the global retail giants, Australia’s retailers are at the mid- to low-end of supply chain fulfilment levels. This means that they tend to invest in multi-channel fulfilment centres or outsource to a 3PL such as eStore Logistics. These retailers are facing unprecedented market pressures. The business environment is changing rapidly, and updating complex, highly-customised enterprise software can be both costly and time consuming. While new software releases that improve both the effectiveness and efficiency of store, warehouse, transportation and inventory management are frequently introduced, adoption of the latest technologies is often slowed by the need for significant capital investment or change management requirements. Manhattan addresses technology investment challenges, with products and services that are always current and automatically include the customer’s latest extensions and modifications, reducing or eliminating both downtime needed for upgrades and additional fees. The system can run in Manhattan’s cloud or in the customer’s choice of a public or private cloud environment. These next generation of DC operations, inventory management, ordering and storebased systems enable warehouse managers to quickly and easily scale distribution to take on the $3.5 trillion market opportunity. Raghav Sibal is the managing director, Australia and New Zealand, of Manhattan Associates. For more information call +61 (0) 2 9454 5400, email Anzinfo@manh.com or visit www.manh.com/en-au.

In response to the continued growth of e-commerce over the past decade, eStore Logistics was founded in 2008 and has grown to become Australia’s largest e-commerce third-party logistics provider (3PL) specialising in providing warehousing, order fulfilment, distribution, inventory management, reverse logistics, and logistics consulting services for retailers. eStore Logistics’ clients range from e-commerce businesses that process 50 orders per day up to some of Australia’s e-commerce and omni-channel retailers that process many thousands of orders per day. Leigh Williams, founder and CEO of eStore Logistics, said: “We knew we wanted to make our mark and grow to become Australia’s premier logistics provider for e-commerce and omnichannel retail. We also know that as e-commerce and omni-channel growth continues to drive innovation and new options for consumers, MHD SUPPLY CHAIN SOLUTIONS —

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TIME TO DELIVER

A RECENT SURVEY SHOWS DELIVERY TRANSPORT HAS A MAJOR IMPACT ON CONSUMER DECISIONS, WRITES WALTER SCREMIN

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id you know, most customers would choose a different supplier or product based purely on the delivery options available? A recent survey could be considered a ‘wake-up call’ for all in transport and logistics to improve parcel delivery capabilities. The survey was conducted by IT firm, Localz, which questioned consumers across Australia, the UK and USA on last-mile delivery. The survey found that 94 per cent of customers would choose a different shop or brand based on different delivery options. Survey respondents targeted some annoying aspects of parcel deliveries: long delivery windows (for example, delivery expected between 9am and 4pm), and ‘we missed you’ cards. 77% of respondents considered an acceptable delivery ‘window’ to be two hours or less. Receiving an accurate ‘estimated time of delivery’ (ETA) was shown to be a big deal, rated ‘very important’ by 47% of customers, and ‘important’ by another 36% (only 1% of respondents said an accurate ETA was ‘not important’). If this isn’t enough, another, separate survey found similar conclusions: the JDA/Centiro Customer Pulse 2017 Report conducted by YouGov and co-sponsored by Honeywell found that 70% of Australian online shoppers would likely switch to an alternative retailer when next shopping for products online, if they had a poor outcome with ordering an item online.

Most of the problems with online purchases revolve around deliveries: of the respondents who experienced problems with online purchases in the last 12 months, 50% had experienced late delivery, 41% had missed a delivery despite being at home, 28% never received an item, and 23% received incorrect items, according to the survey. The evidence is mounting – parcel delivery

Expect more from outsourcing. Outsourcing makes sense for cost management, risk management, and service efficiencies – but only if you have the correct company supporting you. You must challenge your outsourced suppliers. Expect a reduction in costs compared to doing it yourself. And expect more control over your delivery transport, including the ability to increase or reduce resources at short notice.

Review your options. The survey findings above show how marketplace and customer expectations have changed. If you have not reviewed your transport method or considered alternatives, do it now before it’s too late. For example, if your business is managing large numbers of regular orders, or needs to ship large, unusual or fragile parcels, it may be crazy to use a courier company – regardless of how cheap they are. Couriers are not set up to focus on a unique business, making it incredibly difficult to

“There are ways available that provide the benefits of having your own fleet at lower cost, while also eliminating risk and personnel issues.” is not only important to your customers, it’s a potential deal-breaker. How can the transport and logistics industry ensure happy, loyal customers?

The steps to take Review structures. Many businesses are structured in a way that makes their delivery transport inefficient – usually ‘because we’ve always done it this way’. They are structured around what’s most convenient for them, rather than what’s best for the customer. This was acceptable in the past, but customers are no longer restricted to their local shopping centre or home town, thanks to online shopping. If your potential clients can have items delivered quicker from elsewhere, you need to make a change.

achieve consistent, high-performing deliveries. They are best at small, ad-hoc orders only. If using your own vehicles and drivers for deliveries, you are generally locked into a high fixed cost arrangement. Yet there are ways available that provide the benefits of having your own fleet at lower cost, while also eliminating risk and personnel issues. This could be your competitive edge.

Inform customers. Remember, your customers can now track everything from pizza deliveries to taxis – it’s now a basic expectation. Can you afford to keep them uninformed? Walter Scremin is general manager of national transport firm Ontime Delivery Solutions. For more information visit www.ontimegroup.com.au.

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LINDE MATERIAL HANDLING

Sharing a commitment to forklift safety Workplace safety improvement is on the right trajectory in Australia, but progress in several areas has been slow and sometimes patchy. Unfortunately forklift safety is still one of the problem areas.

Finally, injuries and fatalities continue to occur in forklift tip-overs, because drivers were not wearing seatbelts. These tip-over incidents usually occur when operators are turning on uneven or sloping ground.

Check the workplace safety websites for each state and you’ll find a common history of forklift safety issues. The records show there are three main causes of injuries and fatalities involving forklifts. Heading the list are fatalities and injuries which can be attributed to driver error, workers too close to the forklift, or inadequate traffic management.

There is good news however. Remedies to significantly reduce these seemingly intractable issues are readily available and, given what is at stake, can be implemented quite cost effectively. And while some of the technologically based solutions must typically wait on a fleet upgrade, others simply “bolt on” easily to existing forklifts.

Forklift loads also feature prominently in the statistics, principally when bystanders are hit by a forklift load because the driver did not use an appropriate attachment when one was needed. Assisting to adjust or steady loads has been the cause of multiple accidents.

With its long-term commitment to safety and technological innovation, Linde Material Handling unsurprisingly offers a full suite of safety solutions ranging from those engineered into its forklifts from the outset to those which can be specified by the customer at the time of purchase and those which can be retrofitted at any stage.

To assist drivers and combat issues caused by driver error Linde’s solutions include its powerful Safety Pilot system, a Reverse Proximity Alarm and Automatic Travel Speed Control.

Linde Safety Pilot Linde’s Safety Pilot driver assistance system helps forklift drivers operate their equipment safely and efficiently while also making forklift trucks more comfortable and easier to drive. It does this by displaying a visual and acoustic warning when truck parameters are reaching their limit. This is breakthrough accident avoidance technology which allows the truck control unit to intervene and regulate truck functions to eliminate accidents.


To minimise and prevent potential accidents, injuries and collateral damage, a comprehensive and critical examination of the various logistical processes will often identify areas where safety standards could be enhanced. The operator uses a lift height preselector for precise control of lift height and can set lifting limits for preventing collision damage to ceilings or gates. Linde Safety Pilot ensures automatic truck deactivation in dangerous situations by disabling safety-critical lifting and tilting functions when a truck reaches maximum lifting capacity. It prevents operators exceeding permissible load weight by using instinct instead of the residual capacity diagram and eliminates accidents and damage due to excessive travel speed. The system supports the operator when handling loads at maximum rated weight range and provides lift-height dependent speed reduction as well as automatic load weighing and travel speed adjustment according to the load weight.

Reverse Proximity Alarm Linde’s Reverse Proximity Alarm is an acknowledgment of the restricted view to the rear in confined or obscured areas and of the driver’s often twisted posture when reversing, which can in turn lead to repetitive strain injuries. These issues can in turn result in less efficient work cycles, the risk of collisions, injuries and collateral damage. Advanced sensors and electronics in Linde’s Reverse Proximity Alarm combine to create an acoustic and visual operator warning system for the rear and sides of the truck. This triggers an automatic speed reduction response when an obstacle is detected and can be implemented to respond to predetermined speed zones via individually adjustable speed reduction settings. Experience has shown the system can minimize risk of accidents and injuries

as well as potential damage to racks and handling equipment. A strain-free, ergonomic working environment which optimises productivity and cost efficiency is an additional benefit.

Automatic Travel Speed Control Inappropriate speed is a safety concern wherever it occurs. Too high travel speed in a forklift environment increases the risk of accidents, particularly in high traffic volume and unsighted areas. Sharp braking can cause loads to be shed and damaged while in severe instances there is the potential for the truck to tip over. Linde’s answer to this issue is implemented through two systems. Its Speed Assist system provides automatic speed limitation which is customer-adjustable for indoor and outdoor driving environments.

With its long-term commitment to safety and technological innovation, Linde Material Handling unsurprisingly offers a full suite of safety solutions ranging from those engineered into its forklifts from the outset to those which can be specified and those which can be retrofitted at any stage.


The advanced Linde Curve Assist system provides automatic, proportional speed adjustment when cornering to create a safer working environment for the operator and other personnel working nearby. Curve Assist automatically reduces the speed of the truck on corners in accordance with the steering angle, providing additional protection for the driver. For forklift safety issues related to loads, Linde has developed a two-pronged approach through its advanced Safety Pilot system and the equally effective Linde Load Management system.

Linde Load Management An effective forklift load management system promotes safer working by protecting the operator, the load and the working environment. It is particularly effective in the prevention of tip-overs caused by excessive loading.

The Linde Load Management system automatically calculates residual capacity based on the height of the forks and the weight they are carrying. Visual and audible warning are provided in safety-critical conditions and speed reduction is applied in relation to the residual value and as the steering angle increases.

And if operator behaviour is still an issue, the Linde Safety Pilot and Load Management systems mentioned earlier prevent any forklift from tipping over no matter how sharp the driver turns or uneven/sloping ground.

BlueSpot Tip-overs All of these technologies and systems bring the discussion to one of the most overlooked yet simple safety challenges – that of operators being killed or injured in a forklift tip-over. Once again Linde’s approach is multi-faceted and highly effective. The Linde FleetFOCUS fleet management system has workplace health and safety at its very core. An electronic interlock prevents the driver starting the forklift without his or her seat belt on. It couldn’t be more simple.

Although Linde has a long established reputation for innovation and clever implementation of technology, its true strength has always been its ability to select the appropriate, user friendly solution for any challenge. There is no better example of this than Linde’s simple BlueSpot solution for pedestrian and vehicle workplace safety. This high-intensity, low-consumption BlueSpot LED light warning system is available in two versions for pedestrian and

With its long-term commitment to safety and technological innovation, Linde Material Handling offers a full suite of safety solutions ranging from those engineered into its forklifts from the outset to those which can be specified by the customer and those which can be retrofitted at any stage.


vehicle workplace safety on driving paths and at junctions where visibility is poor. BlueSpot consists of just two energyefficient LED lights attached to the top of the driver’s protective roof frame, projecting a large, bright blue spot onto the floor several metres ahead of the vehicle in the direction of travel. Their LED technology is not susceptible to shocks or vibrations, and enables a long service life for the lights which are also dustproof and waterproof. A BlueSpot “directional” variant which projects a blue arrow onto the floor, indicating the drive direction of the approaching truck, is also available and either alternative can be fitted or retrofitted to narrow aisle trucks and reach trucks as well as counterbalance forklifts. No additional infrastructure is required, so the need to install sensors, dedicated cabling or lights and the complications of retrofitting in existing facilities are all avoided. Pedestrians or other forklift operators can quickly identify the direction of approaching vehicles, ensuring safety in aisles as well as in unclear cross-over areas. The Linde BlueSpot system’s very bright and longlasting LED lights can be lit up constantly or can be set to flash in order to attract attention.

Throughout Australia an increasing number of business are finding the system ideal for use around doors, exits, crossings and blind corners where forklifts, warehouse trucks and pedestrians share common work spaces in storage, incoming goods, dispatch or manufacturing areas. Of course the safety issue focus inevitably returns to the driver, a situation which has prompted Linde to source and co-ordinate a full suite of best-practice Operator Training / Assessments which are currently subject to a 100% government rebate for eligible customers*. * As there is no expiry date for this government rebate it could be discontinued at any time, without notice. Businesses intending to take advantage of the current incentive are urged to act promptly. For more information call 1300 135 463

Linde Material Handling is a major participant in Australia’s material handling equipment industry, with a client list that includes small, medium and large businesses and some of the best known companies in Australia. Linde safety solutions have been developed to ensure they address the specific safety requirements of individual businesses: This includes potential risks to the operator(s) and personnel working in the surrounding environment; as well as damage to the handling equipment, the loads being handled and the warehouse structures. Linde offers numerous safety solutions to minimise potential risks. Some of these are standard, with others available as an option or as a retrofit to meet unique demands.


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GO SC3.0 VIVEK SOOD

HOW SUPPLY CHAIN 3.0 CAN LEAD TO SUCCESSFUL BUSINESS TRANSFORMATIONS – PART 2.

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hope by now you have grasped the business model in which Supply Chain 3.0 resides. Before we examine all the concrete benefits of Supply Chain 3.0, let us briefly differentiate it from its predecessors. Table 1. sets out to do that.

situations for every company, Supply Chain 3.0 provides outstanding benefits over and above its predecessors. Why? Because it helps leverage the power of business networks with external partners. Let me explain further.

tight-lose supply chain relationships with other, more nimble companies. This is not restricted to business process outsourcing arrangements, or Japanese-style Kieretsu structures. Almost all companies try and keep their labour force numbers flexible by using some form of subcontracting, for example. At a higher level of value added, collaboration between entities for research, new product development and customer service creation increases the nimbleness and responsiveness of old-age corporations.

“Small companies can have a much larger impact with Supply Chain 3.0.”

Table 1. Supply chain metaphors. I must add here that this is yet a preliminary table; many of the concepts being presented here are still being explored. To the best of my knowledge they are articulated for the first time in the book The 5-STAR Business Network. I am leaving the full discussion of this table to future articles, because it will take a lot of time to explore the fundamental differences between each generation of supply chain and the triggers that launched the next generation. Whether you are a small, mid-market or large corporation, whether the economic volatility is high or low, whether the economic growth environment is high or low – in almost all

Large businesses are notorious for moving too slowly and being less nimble than their smaller counterparts. Layers of management, volumes of policy and procedures, risk management protocols are all designed with good intent. However, over a period of time as the intention becomes blurred, the link between the purpose and edict becomes more and more tenuous. In other words, old companies just get old and sclerotic, and lose their suppleness. Dozens of large companies are discovering that the best way of retaining nimbleness in face of the above situation is to formulate

If the impression so far is that Supply Chain 3.0 is only for larger, more established companies, it could not be more wrong. In fact, Supply Chain 3.0 is even more useful for smaller companies that can project their strengths and best attributes on a far wider scale using their 5-STAR Business Network. Now Red Bull is a large company, but cast your mind back a few decades when it was a small start-up competing in the global beverages industry against much larger giants. Gaining traction in more than 100 markets in a matter of two decades against the formidable competition, which took nearly seven decades to do that was no small feat. It would have been next to impossible without due regard to a close network of business partners and service providers. But Red Bull is not the only example of a smaller player running rings around their much larger competition by configuring their 5-STAR Business Network. We have helped a number of our client corporations achieve similar results in industries as diverse as solar energy, retail, chemicals, heavy engineering, machine tools and FMCG. As you can see, Supply Chain 3.0 is for everyone, small and big companies. Now let me demonstrate the concrete benefits of having Supply Chain 3.0.

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Photo courtesy of Boeing.

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Supply Chain 3.0 helps leverage your business infrastructure Over the past several decades, both the global economy as well as the business structures have evolved dramatically to such an extent that now most businesses have no recourse but to strive and create business networks using unique custom-designed Supply Chain 3.0. No company – not even a company as big as Boeing – has all the resources necessary to create next-generation products in shortening product development cycle times. Faced with competition from A380 and the next-generation Airbus planes, Boeing set out to reconfigure a business network of infrastructure to develop, design and build the 787 in record time. Despite the usual development hiccups, trials and tribulations, this drive towards Supply Chain

combined with the devastation caused by the tsunami disrupted businesses around the world. The Japanese economy sits right in the middle of the global business network and it was natural for businesses as diverse as auto manufacturing, electronics, chemicals, petroleum products, computers, metals and others to experience the disruptive shock. For example, the price of the Toyota Prius went up by nearly $2,400 due to rumours of shortages. Whilst it is natural for a variety of businesses to experience the disruption, it was remarkable to note that those businesses that had the most responsive and resilient supply chains were the ones to recover from this catastrophe the quickest. Another stark example of the power of Supply Chain 3.0 is that of the fire which tipped the

“No company – not even a company as big as Boeing – has all the resources necessary to create next generation products in shortening product development cycle times.” 3.0 saved tremendous infrastructure costs for Boeing and created goodwill around the world.

Supply Chain 3.0 helps create resilient and responsive businesses In my book The 5-STAR Business Network I quote the incident that when the Tsunami flooded the eastern coastal stretch of Japan in March 2011, the ensuing nuclear disaster 34

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balance within an industry. Two stalwarts in the mobile phone industry in March 2000 were equally impacted by the same event - a lightening fire in the chip manufacturing plant of their common supplier, Philips, in New Mexico. Both Nokia and Ericsson experienced the business disruption to an equal extent as a result. Fire damage to the stocks was extensive. More importantly, the manufacturing capacity SEPTEMBER / OCTOBER 2017

was damaged and it was difficult to estimate the time for repairs. Nokia had invested months, if not years, in creating and perfecting a robust and responsive supply chain, while Ericsson’s supply chain was relatively a middle-of-the-line affair that worked well when things were good. After the fire, Nokia was able to see the full impact of the chip shortage on its own business, as well as the entire industry, with a lot more clarity than Ericsson, and even Philips. Moving quickly, it activated other parts of its supply chain to shore up supplies, to redesign some of the chips to manufacture them in other plants, and to take other pre-emptive steps. Ericsson let the situation evolve at its own pace and made decisions more reactively. The resulting gain in profitability and market share for Nokia, and the loss of these for Ericsson tipped the balance of the industry to an extent where within a few years Nokia pulled far ahead of the Ericsson, which never caught up with its erstwhile equal rival.

By definition, Supply Chain 3.0 improves your cash position One important measure of success in Supply Chain 3.0 is the $eed-to-$tore Efficiency. This is also the darling of the supply chain crowd, especially those coming out of a logistics background. Right product, in the right place, in the right quantity, at the right time (there are many other Rs that people add on, but we will stay simple here) – is the catchphrase. The aim is to churn the cash faster so that more of it sticks around for longer.


Contact us: anzinfo@manh.com

(02) 9454 5400


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“The potential of your company’s capabilities is multiplied many times over, by a factor of as much as 100 or more, by the leverage effect provided by your Supply Chain 3.0.” LEFT: Figure 1. BELOW: Figure 2. Working capital optimisation. Aberdeen Group, June 2007.

In fact, the data from a systematic study carried out by the Aberdeen Group reveals two critical insights. Firstly, the companies with more robust business networks have a far superior cash conversion cycle - nearly six times better. Secondly, and more importantly, their cash conversion cycle actually improved during the two years of testing times leading up to the global financial crisis, while the rest of the industry went backwards. As you can see in Figure 1., 92% of business network masters have improved their cash-to-cash cycle over the two years leading up to the global financial crisis, whilst only 18% of business network laggards have improved it, and for 29% of them it became worse. Is the result shown in Figure 2. surprising? Hardly, if you reconsider the story of Nokia vs. Ericsson mentioned earlier. Same catastrophic fire nearly decimated one company while left the other one even stronger to later face onslaught of another Supply Chain 3.0 hero - that of iPhones. In economic boom times, whether accompanied by economic volatility or economic stability, Supply Chain 3.0 allows you to realise higher profits, quickly. In fact, the potential of your company’s capabilities is multiplied many times over, perhaps by a factor of as much as 100 or more, by the leverage effect provided by your Supply Chain 3.0. In this scenario, to build a large iron-ore producer and exporter from scratch took Andrew Forrest of Fortescue Metals the full extent of Supply Chain 3.0. To raise finances, to build mining infrastructure, to build and gain access to the logistics infrastructure and to market the product in the international commodities trade, Fortescue Metals built the capacity in three years that many of its much bigger rivals would

have taken more than 30 years to build. This was only possible through extensive utilisation of business networks that the company built, nurtured and managed effectively into creating a Supply Chain 3.0. Let us consider an example - the booming commodities industry. In the last 10 years to 2012, no other industry has boomed as much as the commodities industry. Prices of iron ore, copper, coal, gold etc. have gone up exceptionally during this period. Within this industry, iron ore is one of the largest and most capital-intensive operations – dominated by three global giants BHP Billiton and Rio Tinto of Australia, and Vale of Brazil.

Supply Chain 3.0 helps smooth out the volatility Recall my earlier example of companies using Supply Chain 3.0 to configure a more flexible labour force through the use of sub-contractors and outsourcing. In volatile times, this is essential to smooth out the earnings.

Now let us look at a more concrete example, in a highly volatile industry. Global bulk shipping is one of the most volatile industries, with the shipping rates falling as much as 94% within a period of four weeks, or rising up to 400% within a period of a few months. In such a volatile business environment, budgeting and planning can become a nerve-racking exercise for all companies except those that use their supplier networks to cushion the lean periods with long-term contracts and find scarce capacity during the boom periods. We have only seen a few examples of benefits that Supply Chain 3.0 – a business network of collaborating entities – can create for business transformations. Once a company has the right backbone, which is a supply chain functioning at an optimal level, they are already sailing strong against the wind. Vivek Sood is the co-founder and managing director of the Global Supply Chain Group. For more information email v.sood@globalscgroup. com or visit www.globalscgroup.com.

“Free report for logistics and supply chain managers reveals secrets of how to prevent missed deliveries and high costs, and how not to get unnecessary blame for these. This 42-page free report is only available for a limited time by requesting it by email from freefreightreport@globalscgroup.com.” 36

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To ensure that innovative opportunities are selected based on value to your business and its customers, you must formalise innovation management activities. This safeguards investment decisions by providing fertile ground for new ideas to unfold and progress. Without a process for innovation, supply chains run the risk of falling behind by taking a reactive ‘as needed’ approach to changes in technology, business models, products and customer requirements, rather than making strategic investment decisions cascade from corporate goals and strategies.

Establish an innovation process Establishing an innovation process will help you become both selectively aggressive and predictably advantaged — capturing, promoting and implementing key initiatives in a repeatable way rather than in an ad hoc fashion. Blindly following process, however, can drive down the level of innovation rather than increase it, so a careful balance of process, governance and agility is needed. Adopt or adapt Gartner’s 5E process — explore, evaluate, evangelise, execute and exploit —to form your organisation’s own process.

Explore

5E

TAKE THESE ESSENTIAL STEPS TO REVOLUTIONISE YOUR SUPPLY CHAIN VIRGINIA HOWARD

T

he most successful innovators define and follow a process to avoid being pulled into the latest hyped trend because of the sense that ‘everyone is doing it’. With growth a top priority for CEO, supply chain leaders are under added pressure to harness digital technologies to deliver not only cost savings and greater efficiency, but new services, customers, and revenue, too. Bold changes, however, can create big problems, especially for an area as integral to a business as the supply chain. Turning great ideas into tangible value without running unacceptable risks requires leaders to be skilled at supply chain innovation, driving the way that products, information, work and funds flow throughout the supply network. 38

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Creating competitive advantage Supply chain innovation has the potential to create competitive advantage through processes and tools that can enable growth and revolutionise the performance of the supply chain. This is fundamentally different from improving the reliability and scalability of existing processes. It requires both a competency in disrupting the status quo, as well as the capability to fully exploit value from disruptive trends. It also entails a higher level of risk. As a supply chain leader, you need to be clear when you’re dealing with processes and/or tools that are new within your organisation — which may involve a moderate amount of risk — or whether they’re also new or immature in the overall industry — which may entail a higher level of risk. SEPTEMBER / OCTOBER 2017

Innovation starts with good ideas — but where do these come from? The main purpose of the exploration stage is to safeguard investments in innovation by identifying and ranking ideas in alignment with how well they fit organisational goals, existing supply chain strategies and broad industry directions. A great idea to improve delivery times to customers is useful only if it addresses a shift in customer expectations or business needs. In an online retail setting, for example, supply chain automation that speeds up delivery may be a key differentiator that could grow a company’s market share. In the case of a power station, however, faster-than-expected delivery of coal may cause storage problems. The new idea may be extremely innovative in both situations, but its value depends on how well it fits the business strategy, organisational capabilities and the needs of the customer.

Evaluate Evaluation begins the process of determining whether there is a business case for the innovation. Determining the benefits and risks of a new idea can be very challenging because there’s often little evidence available about the real value until the idea is put into practice. At this stage, there’s no substitute for hands-on evaluation activities such as experiments, pilots and trials, which build practical evidence of both risks and benefits. Estimating costs is also a key aspect of evaluation.


CTHUARI N W A R E H O U S E S OS F UTPHPELY FU E

It’s best to assume that the ROI will be lower and later than initially expected, because some risks and costs become clear only in hindsight. Having the discipline to start small, to scale up successful ideas, and to stop failures quickly will contain risks and keep innovation moving forward.

Exploit

recruit the advocates and partners needed to make adoption successful. Creating a ‘buzz’ around a new idea is also likely to garner more feedback, which can help guide the execution phase and highlight pitfalls that had not been identified.

As your supply chain organisation becomes proficient in deploying innovation, it will need continuous improvement projects to fully scale and capture the benefits. While it’s important to have the skills, teams and approaches to drive an initiative to the point where it no longer requires special attention as a risky or uncertain proposition, it’s equally important to take on the responsibility for maintaining and continuing to exploit the potential.

Execute Evangelise Once a promising innovation has been identified, vetted and funded, you must gain

Execution is about getting people to adopt and own the new processes and tools. No matter how well innovative ideas are screened, funded

Achieving great innovation

“It’s critical to ensure that the innovation process is divergent enough to deliver high-quality ideas, yet convergent enough to be grounded in business strategies and formal process steps.” support within your supply chain organisation, from the supply network and customers, as well as internal stakeholders. Spread the word. Marketing, education and networking should be ongoing activities, but they’re most useful after the evaluation phase, when it’s time to overcome resistance and

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or supported, they must still become selfsustaining within normal day-to-day activities to achieve full benefit. Making it happen seamlessly requires multiple activities and wide engagement — training, official changes to processes and procedures, and possibly new roles and responsibilities, or even new recruits.

To derive the greatest benefit, it’s critical to ensure that the innovation process is divergent enough to deliver high-quality ideas, yet convergent enough to be grounded in business strategies and formal process steps. This will reduce uncertainties and speed great ideas into the fabric of the supply chain. Virginia Howard is a research director at Gartner. She is focused on the design of supply chain networks, building sustainable innovative competencies in supply chain organisations, industry trends and best practices of leading high-tech supply chains. For more information, visit www.gartner.com/supplychain.

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AT THE CROSSROADS WAYNE HARPER

ENTERPRISES ARE AT THE MOBILE OS CROSSROADS

W

orkers today are utilising increasingly advanced mobile technology platforms as we head into Industry 4.0, spurred on by the confluence of cyberphysical systems, the Internet of Things and Cloud Computing. Today, much of the global population has access to a mobile device. According to the 2015-2020 Global Mobile Workforce Forecast by Strategy Analytics, “the global mobile workforce is set to increase from 1.32 billion in 2014, accounting for 37.4% of the global workforce, to 1.75 billion in 2020, representing 42% of the global workforce”. To harness workforce mobility fully, enterprises need to assess their mobility requirements and redefine their strategies. Following the massive adoption of enterprisegrade mobile devices and wearables for the workplace, devices that have been deployed for over a decade are fast reaching their end-of-life (EOL) and new options are emerging. A critical deadline looms – and that is the life expectancy of core OS of certain devices.

Enterprise mobile OS – at the crossroads To achieve greater productivity, efficiency and accuracy in their operations, organisations need to determine their mobile operating system 40

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(OS), app migration and device strategies. As workforce mobility is on the rise, a major shift is occurring in the mobile OS landscape. Enterprises are at a crossroads where they will have to decide what OS they want when refreshing their fleets of mobile devices. Over the last decade, the most popular and widely deployed OS for enterprise mobile devices have been Microsoft’s Windows CE and Windows Embedded Handheld (WEH) 6.5. Microsoft will end mainstream support for these embedded OS by 2020. In addition, migrating to the next-generation platform will require significant lead time to ensure smooth migration without disruptions to operations, as Microsoft will not offer backward compatibility for its earlier mobile OS . It is more critical than ever for decisionmakers to make a choice that will shape the way their organisations will operate in the next three to five years. They could stay with Windows, migrate to Android, or look to Apple and its iOS. But whichever they choose, the new generation OS has to be flexible, intuitive and adaptable. At this turning point, a relatively new player has clearly made inroads in the enterprise space. According to IDC, Google’s Android OS is gaining ground, dominating the smartphone OS market with an 87.6% share. Currently there are over SEPTEMBER / OCTOBER 2017

74 enterprise Android devices available from 22 manufacturers, and that includes 40 products that have come to market within the past year. Having just shipped Zebra’s millionth Androidbased mobile enterprise device recently, it is clear that the market is witnessing a steady growth in Android-based enterprise devices. Whilst every OS has its unique strengths and weaknesses, the rising prominence of the Android OS can be attributed to factors such as its openness, flexibility, compatibility with Microsoft, and ability to offer the kind of control IT managers demand. Be it purchasing a fresh fleet of enterprise mobile devices or refreshing an old one, the right choice of OS can yield a multitude of benefits, from operational gains to lower IT administration costs to improved employee satisfaction. Despite this, many customers have been slow to transition for various reasons, from the perceived complexity of app migration to a general lack of understanding around the cost of maintaining aged devices. Instead of dealing with uncertainty later rather than sooner, organisations should take time to understand the choices ahead of them. Preparation and planning are critical to reduce risk and ensure a smooth transition of businesscritical apps. In view of this, organisations need to start evaluating their options today.


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Choosing the right OS for your business When choosing a mobile OS, it is important to consider the needs of IT, finance, and those who will be using the devices in the field. Besides compiling a list of must-have features, it may be helpful to also identify the issues currently faced by employees. Understanding both the pros and cons of an existing solution will help prioritise your overall feature list. Here are some tips to help kick-start the decisionmaking process:

Security What are the risks and implications of a potential security breach stemming from your mobility deployment? Securing a mobility deployment is a multi-faceted effort: from mobile device management (MDM) tools selection and configuration, to policy definition, enforcement and training, and ultimately, to the capabilities of the device you select. With mobility extensions (Mx) from Zebra, enterprises are able to transform Android from a consumer OS to a true enterprise-class OS with a series of additional features and options that improve security and device management.

App procurement and OS updates Think about how you would like to get applications on the device – whether your IT team would want to rely on the user downloading the app, or would they rather have control to push the application out? The former can be accomplished through a public app store such as Apple’s App Store, Google’s Play Store, or through a private app store like Zebra’s App Gallery where you control which applications are available for your devices through blacklists and whitelists. When a critical upgrade or patch is required, ‘closed’ systems like Zebra’s Mobility DNA allow administrators to push mandatory and non-customisable updates to Android devices.

Manageability Consider whether devices lighten or add more load onto IT. Setting up devices can be extremely taxing on administrators, especially when many units require deployment of identical configurations. Instead of setting up each device individually, ensure that the OS you select supports MDM tools that help you effectively stage multiple devices at one time.

Total cost of ownership The true costs of mobility go far beyond the device’s initial purchase price. In evaluating the cost of maintaining the OS for the life of the device, factor in the potential costs of worker downtime, accelerated replacement cycles,

“The shift towards a new OS will be an eventual reality for many.” additional accessories and support needed for a successful implementation. Another aspect to think about is licensing fees. Some vendors traditionally require per-seat licensing fees for their products. As a result, costs can quickly escalate if you are deploying multiple devices. In addition, an extra level of maintenance is needed to ensure that the licenses are current. If you opt for an OS that requires a licensing fee, consider a device provider that includes that cost in the total cost of ownership (TCO). Lastly, standardising an OS across devices can eliminate much of the complexities of running a fleet of mobile devices, further reducing TCO.

User friendliness The familiarity of an OS determines the speed at which users learn the functions of the devices they are using. Mainstream OS (such as Android) have a clear benefit in this aspect, being similar to what is already being used daily on consumer devices. As a result, devices on mainstream OS require less training on the basics, which leads to efficiency gains. In contrast, specialist training on a less-thanfriendly interface can take time, and can only be effective to a limited extent – especially if users are not comfortable with the way a device works.

Time to look at the options The lack of certainty on the future of OS has seen organisations postpone their upgrade decisions. As a result, the average age of the installed base of mobile devices has increased. According to a VDC whitepaper, while devices four years or older took up 36% of the

installed base of rugged handheld devices in 2010, this figure increased to 42% of the same in 2014. The increase in age of devices also means an increase in failure rate, which then translates into significantly higher costs of support and ownership. The same study also found that, whilst annual return rates for rugged handheld devices during the first year of operation is approximately 1%, the rate rises to 8% for devices in their fourth year of operation. The potential for disruptions to operations and customer service can be substantial, given the business-critical function of enterprise devices. Any device failure leads to a loss in productivity of up to 65 minutes. In fact, every percentage point increase in mobile device failure leads to a 5% increase in TCO. Moreover, it has become increasingly evident that customer satisfaction with legacy enterprise mobility applications is waning. Besides a dated look-and-feel, legacy solutions do not take full advantage of the capabilities afforded by modern technology. The shift towards a new OS will be an eventual reality for many, as Windows prepares to end its support for existing Windows mobile OS devices. The right choice of platform can determine how quickly your organisation responds to challenges within the fourth industrial revolution. New technologies make assets more durable and resilient, while data and analytics are transforming how they are maintained. Now is the time to refresh your mobility strategy. Wayne Harper is the senior technical director at Zebra Technologies APAC. For more information visit http://bit.ly/2xb3ohu.

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INTEGRATED PRODUCT PORTFOLIO AND PROJECT MANAGEMENT, OR ‘THE ART OF NEW PRODUCT DEMAND PLANNING’ – PART 2. TIMM REIHER AND JERRY SHANAHAN

So how do we avoid the temptation to rob the future for short-term gain?

W

e link new product development with demand. When that project is placed on hold, killed or pushed out, a corresponding adjustment in our revenue plan must be included. It is a reasonable assumption... we are not going to launch Product X as originally planned and because Product X was part of our strategic plan and our growth assumptions, it is reasonable to assume we will no longer achieve those objectives as a result of our decision. The decision a business needs to make is linked to its consequence. For example, If we kill Product X today, we will gain a 0.5% reduction in cost immediately, but 12 months from now we will lose a projected 10% growth in gross revenue. The corresponding impact on margin can similarly be modelled. Ultimately, the revenue, volume, margin, cost etc. impacts need to be captured clearly in the new product master plan (NPMP). In practical terms, the NPMP is essentially a database of information that is relevant to all product portfolio-related projects. The definition of this NPMP database is done in conjunction with understanding the expectations of demand, supply and integrated reconciliation steps to enable the truly integrated view of the future. We may replace it with something else, but without a clear understanding of what that something else is, we are missing the opportunity to fully understand the impact of our decisions. If the anticipated impact on the demand plan is far enough into the future, that we can task the product and portfolio team to come up with a suitable replacement, and if that is indeed the plan, we can save turmoil on the business and not lower the plan for one or two IBP cycles. But clearly defined deadlines must be understood and set when that happens. A replacement project will become part of the new product master plan, vetted through business filtering criteria and the planning process underway, along with the reallocation of resources by a specific date. It should be made clear to all stakeholders that if these tasks are not completed by 42

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AVOID THE NEW PRODUCT BLUES that deadline, the demand plan is coming down and the business will face the reality of a gap to target and/or strategic plan. Conversely, the upside is similarly modelled and included in the demand plan. When a go decision is made for a new product project not previously assumed, we should then be able to recognise the upside in volume, revenue and margin. The improvement in these areas is recognised by the business and is now planned for. This also reinforces the value behind planning the future over sacrificing it for short-term

those projects exceed our resource capacity. By including the revenue impact into the demand plan, we now have the parameters in place to make a smart and well-vetted decision.

Example: increasing resources by X% and adding 5 R&D people no later than 10 months from now will net us an increase of Y% in gross revenue. Because we have modelled this scenario by engaging our partners in demand planning, we can be confident we are making a better informed decision about the future that will

“In practical terms, the new product master plan (NPMP) is essentially a database of information that is relevant to all product portfolio-related projects.” perceived gains. Demand management is the need to plan true unconstrained demand (see Demand Management Best Practices: Process, Principles and Collaboration, Collen Crum with George E. Palmatier, page 38-39). In the context of new product demand, this is not possible if the project plan is constrained. For this reason, it is critical that we model what a new product demand plan might look like if we allow additional projects to enter the project plan and then assume we will add additional resources to support them, if SEPTEMBER / OCTOBER 2017

help drive us forward in exciting ways. Notice as well, the timing of the decision required. We are not asking for additional resources or headcount for today or in crisis mode for yesterday. This is a decision about the future. We have time to make it, ask questions, and be comfortable all aspects have been evaluated. And because we have connected it to demand, we have engaged both sales and marketing, and have gained consensus about what we can achieve.


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Challenges when estimating new product demand When working with a major consumer packaged goods company, we observed that they maintained virtually no new products assumed in their demand plan beyond 12

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and the numbers contained in the demand plan align with those assumptions, the plan is valid. In many cases, we may not know who the customer is or even what the product will be called, much less a SKU to forecast against. This is where both the skill

• Do product launches hold their estimate of projected revenue impact? • Do projects typically launch on time? If the business demonstrates through the tracking of perfect project performance (see The Oliver Wight ‘Class A’ Checklist for

of the demand manager and integration with the product planning manager are critical. A methodology must be in place to assume this demand and then sales have the opportunity to approve it. The new product master plan provides a terrific integration point. When reviewing the NPMP (See Figure 2.), the following checklist should be applied: • Are any projected new product launches delayed? • Are any projected new product launches accelerated? • Are any new product projects put on hold or killed? • Are there any changes in the Portfolio – End of Life Plans for the existing Portfolio? • What is our demonstrated success rate in launching new products and is the • Demand Plan aligned?

Business Excellence – Sixth Edition, Chapter 5, page 121) that products typically launch late, that not all projects make it to launch, and that we recognise only half the volume we originally scoped, then these factors should be assumed in the demand plan. If the demand plan is more optimistic, then the question must be asked, ‘what are we doing differently today that would cause us to assume improved perfect project performance?’. At the very least, it is important for the demand manager to expect perfect project performance to be tracked through the PMR and reported. If it is not, then the demand manager should ask for it!

Figure 2.

months. This violation of demand planning best practice was problematic, leaving a 24-month demand plan that did not align with the organisations strategic objectives. It was leaving other departments with this challenging task (such as finance), who had no choice but to make the assumptions despite being further away from both the customers and the projects themselves. Meanwhile, sales were washing their hands of the plan altogether, as the newly created numbers had no credibility and they had no role in approving them. When asked why this critical demand planning function was not occurring, the explanation was offered, “we do not have enough information to forecast it.” Indeed, the further out you plan, the more ambiguous the assumptions become, but as long as the assumptions are documented

Achieving true product integration Achieving true integration is fundamental to enabling the key decisions that need to be made in the IBP process. For the demand step within IBP, the enabling of the key

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Figure 6.

Figure 7. decisions come from having a clear view of any gaps in the future plans versus top-down expectations coming from the business (budget) plans and longer term strategic plans – see Figure 6. Having clarity on the bottomup perspective, over the IBP horizon (24-36 months), is critical in highlighting the key decisions that need to be made if the bottom up plan is not aligned with the top down expectations. In the context of the demand plan, the key comparison top down versus bottom up, relates to the revenue, margin and profitability that have been set out in the strategic plan for the business. The supply and financial plans are derived from the demand plan. These plans will also be faulty when the impact of planned launches of new products is not communicated via the output of the product management review and as a result is not incorporated into the demand plan. However, if the impact of new products that are going to be launched within the IBP horizon are not taken into account, then the difference between the top down and bottom up cannot be represented correctly, which can lead to much time wasting in trying to come up with decisions to align them, when a piece of the puzzle is actually missing. The scope and content of the new product master plan (NPMP) needs to be such that it provides all the information required to allow a truly integrated view for the demand 44

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plan. Only then can there be a clear perspective on the type of decisions that need to be considered in the IBP process. This point is shown in Figure 7. There are many examples across the industry sectors where this concept is not fully appreciated. An example this year from a large pharmaceutical organisation demonstrated that once they got their NPMP correct and were able to flow realistic information into the demand plan over the IBP horizon, they were able to redeploy millions of dollars towards accelerating products at early stages of clinical trials, versus trying to target their commercial organisation to launch existing products in risky markets that had no guarantee of a solid return on investment. Decisions such as this can have significant contribution on companies realising their Strategy through IBP. Therefore a

The consequences of such increases may be unattainable by the business or the risk may be too high to ultimately implement. However, this should be a decision the business makes through thoughtful leadership as part of the integrated business planning process. This is not possible without proper linkage to the demand plan that reflects those assumed changes in revenue, margin and cost. Even if we decide not to implement all aspects of what we might refer to as an ‘unconstrained project plan’ we may learn something new about our business. There may be opportunities for growth and success that were not recognised prior to the exercise. Ultimately, it is this type of activity that can be very rewarding to the team or group of people modelling such a scenario and ultimately the decision makers themselves. Another interesting observation is that the people working those processes are more energised and tend to enjoy the strategic nature of the discussions when exploring new product demand scenarios out into the future. When problem-solving involves people from other functional areas, including the demand, supply, and financial organisations, greater teamwork develops. As people become more comfortable and skilled at collaboration, a culture of transparent decision making also develops.

“Those [companies] that successfully integrate new product demand into their NPMP will have a distinct competitive advantage in the market place.” key consideration for the product management step in IBP is to ensure that regardless of what stage of development a product project may be at, if it is due to enter or impact on the product portfolio, at any point in the IBP rolling horizon, then it has to be factored into the bottom-up plans. Without this, the leadership will be faced with a suite of decisions that are not realistic and apart from wasting time, can seriously impact on the credibility of the IBP process.

Conclusion To ensure companies achieve the most value possible from their IBP process, a key consideration is to ensure that there is effective integration between the product management review (PMR) and the demand review (the next step in the IBP process). When making decisions that increase or add products to the product portfolio, the impact of the choices taken, when properly modelled will likely reflect an increase in gross revenue and margin, as well as an associated increase in cost. SEPTEMBER / OCTOBER 2017

Two fundamental concepts of IBP are transparency and integration across the entire business. When done correctly, the NPMP will contain all the required information to drive true integration over the entire IBP planning horizon. This in turn will guarantee that the bottom up demand plan contains all the key elements to ensure a true top down versus bottom up analysis enabling the decisions to address any gaps highlighted as a result. More importantly, because so many businesses do this poorly, those that successfully integrate new product demand into their NPMP, by successfully navigating the ambiguity which often accompanies such forward looking plans, those companies will have a distinct competitive advantage in the market place. Timm Reiher is with Oliver Wight Americas and Jerry Shanahan is with Oliver Wight EAME. For more information visit www.oliverwight-eame.com.


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THE LAST WORD

HOMELAND AFFAIRS HOMELAND AFFAIRS TO BALANCE TRADE FACILITATION AND SUPPLY CHAIN SECURITY COMPLIANCE PAUL ZALAI

D

uring July 2017, the federal government declared that the new Department of Homeland Affairs (DHA) will be established and will be similar to the Home Office of the United Kingdom: a central department providing strategic planning, coordination and other support to a 'federation' of independent security and law enforcement agencies including the Australian Security Intelligence Organisation, the Australian Federal Police, the Australian Border Force (ABF) / the Department of Immigration and Border Protection (DIBP) and the Australian Criminal Intelligence Commission. Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) representatives had the privilege of participating in the DIBP-hosted industry summit on 31 July 2017 and meeting with the A/g Commissioner and departmental executives. This was followed by a meeting with Alex Hawke (Assistant Minister for Immigration and Border Protection) and a site visit of the automated VICT terminal, Webb Dock on 2 August 2017. The focus of discussions centred around utilisation of new technology for the physical examination / screening of cargo and emerging reforms including duty deferral, streamlined cargo reporting, and Mutual Recognition Agreements (MRA). Importantly, the Minister also confirmed that the traditional customs responsibilities of trade facilitation and supply chain security compliance will remain with DHA.

Section 77G Depot Compliance Licenced depots are regulated to safely store and deal with goods under Customs' control. As a part of the ABF ‘compliance continuum’ the Infringement Notice Scheme (INS) is available to officers as an alternative to prosecutions allowing for ‘on the spot fines’. Regulations prescribe the maximum fine being 25% of a court penalty (cap of 15 units for an individual and 75 units for a company). It is important to note that effective from 1 July 2017, a penalty unit has increased from $180 to $210, this being a 15%+ increase in the quantum of fines that can be issued by the ABF. 46

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Deliveries without authority It is staggering to note that during the reported year to date, in excess of $1.5 million in fines have been issued for breaches of Sec 33 of the Customs Act. Officers generate a report from the Integrated Cargo System (ICS) that shows all cargo reported to be at an establishment that remains uncleared. Therefore all of that cargo listed should be safely secured and shown to the officer upon request. If the cargo is not there, then we have what is referred to as a “Delivery Without Authority” and a possible infringement notice of 45 penalty units equating to $9,450 fine.

Other breaches The horror story does not end there. 64 infringement notices were also issued during the period against Sec 77R(1) of the Customs Act, being other depot licence breaches, totalling another $517,950 in fines. The report also notes that in an extreme case, the ABF cancelled the depot licence of a Victorian company for repeatedly breaching its licence conditions.

Mandatory training As well as making good business sense, it is also important to note that training depot staff is mandatory as outlined in ABF notice 2013/56 clause 28 "The holder of a licence must provide adequate training to make staff aware of their legal obligations in dealing with goods subject to the control of Customs". In supporting this need and in response to member feedback, Freight & Trade Alliance (FTA) has enhanced its e-Learning course titled “Sec 77G DEPOTS – Obligations dealing with goods subject to ABF control”. www.ComplianceNetFTA.com. The most recent enhancement to the training package includes the revised Infringement Notice penalty arrangements and the above referenced depot cancellation case study. Members will

Trade facilitation ATT promises to deliver streamlined cargo reporting and duty deferral benefits to importers during the 2017 / 2018 financial year. While we await further detail on specific functionality and implementation timeframes, the following immediate benefits are available to exporters and Australian businesses.

Reciprocal benefits through MRA In July 2017, DIBP signed Mutual Recognition Agreements (MRA) with Korea Customs Service, Canada Border Services Agency, and Hong Kong Customs and Excise Department at the World Customs Organisation’s council sessions in Brussels. MRA are a formal arrangement between customs agencies that recognise supply chain security programmes and provide reciprocal benefits to the other country's trusted partners. MRA also provide border agencies with greater end-to-end assurance over imports and exports. The arrangements will ensure that Trusted Traders and members of partner countries’ Trusted Trader equivalent programmes receive differentiated border treatment when conducting trade with these countries.

Monthly reports benefit All businesses can currently request import and export reports from DIBP for a fee. Now, accredited Trusted Traders will be sent these reports for free each month, with no need to contact DIBP, reducing financial and administrative burden on Trusted Traders. The monthly reports will help Trusted Traders manage their supply chain and improve the integrity of their transactions, by giving them an overview of all transactions made in the previous month.

Temporary work (skilled) visa benefit The new benefit enables Trusted Traders to increase their international competitiveness by addressing labour shortages—bringing in genuinely skilled workers where they cannot find an appropriately skilled Australian. Accredited Sponsor benefits include sponsorship validity for six years, priority

“The new Department of Homeland Affairs (DHA) will be... a central department providing strategic planning [and] coordination.” also be provided with a certificate of completion and online history maintained to demonstrate completion of the accredited course. A word of warning … this is not your ‘get out of jail free’ card and the onus clearly remains on depot management to ensure that comprehensive standard operating procedures are in place and that staff know and can follow instructions to ensure the safekeeping of goods under Customs’ control. SEPTEMBER / OCTOBER 2017

processing of all nomination and visa applications, and additional streamlined processing of certain low-risk nominations. These benefits will reduce the administrative burden on Trusted Traders when applying to become Accredited Sponsors. Paul Zalai is the director of the Freight & Trade Alliance and of the Secretariat of the Australian Peak Shippers Association www.FTAlliance.com.au.


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impressive,” Mr Dunlop said. “It showed a day and a week in the life of PharmaCare logistics, based on the data we had provided. “It also highlighted in a flyover-view all the congestion issues which were going to occur in various areas of our warehouses and at

make that possible. We have now been given some insights into what we can do to further maximise use of our facilities. “We also have a materials handling process plan to take us through the next five years,” Mr Dunlop said. “It was a plan hatched as a result of the initial Linde warehouse simulation input. “As we went through the process, and especially the simulation exercise, we realised that all things being equal, it would be the best outcome for PharmaCare if we could strike a deal with Linde. “We were renting Linde equipment to meet our needs. It soon became obvious the warehouse team members were very much in favour of the Linde equipment. They kept jumping on it in preference to the other brands we had on site. Following a final assessment and further negotiations, PharmaCare purchased a 26-truck fleet of new Linde equipment. “Crucially, Linde saw the whole exercise as much more than being just about selling us more forklifts. They made certain they absolutely understood our business without making any assumptions. They went away and did their homework, came back and provided options. “Their Stratos warehouse simulation software let us explore many different logistics options. You can play a lot of what-if games. It might be about storage in general, or more specifically about how you store goods.

what time of the day as we grew by various percentages over time. “The Linde program also suggested what we could do to avoid those issues in terms of reorganising shifts, for instance. “As a company we are very determined to remain at Warriewood, and this simulation process indicated everything we could do to

“In our case, our issues arose from a combination of the way we store product as well as the way we pick it. We can’t change our product range, but we can change the way we store it and manage it. That will allow us to stay at Warriewood.” For more information call 1300 135 463 or visit lindemh.com.au.

PHARMACARE STAYS ON THE BEACHES

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ajor Northern Beaches (Sydney) employer PharmaCare Laboratories has used the latest technology to ensure its operations remain locally based for the foreseeable future. PharmaCare is one of Australia’s fastest growing companies in the health, beauty and lifestyle products sector, with brands including household names such as Brut, Norsca, Nature’s Way, Bioglan, Ease-a-Cold, Rosken and Redwin. Operating from headquarters and adjacent warehouses in Jubilee Avenue, Warriewood, its products can be found in more than 5,200 pharmacies, 3,000 supermarket outlets, department and variety stores nationwide and hundreds of overseas outlets in Asia, America and Europe. Many of the company’s workforce and management are Northern Beaches residents, adding extra incentive to stay in the area despite space constraints highlighted by continuing strong business growth. “From a material handling equipment perspective, the challenge has simply been to keep up with the growth of the business. We were dealing with immediate growth challenges and trying to plan strategically,” said PharmaCare Laboratories operations manager Craig Dunlop. The company began discussions with material handling experts Linde two years ago, resulting in the use of advanced Stratos warehouse simulation software. “The presentation of a Stratos computer simulation of our facilities was really 48

MHD SUPPLY CHAIN SOLUTIONS —

SEPTEMBER / OCTOBER 2017


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be leaders, not followers, in industry. To stay leaders we cannot wait to be forced by circumstances to do whatever has to be done: we must learn to look deeply into what is happening and do things and make changes well before we are forced to make them.” Dexion has always been renown for providing new and innovative solutions to its clients’ storage and logistics requirements and continues to transform real-time distribution, materials handling and warehousing, through engineering excellence and the passion of its people to tailor make solutions for its diverse client base. For its 80th jubilee, the company and staff are proudly looking back at some of the milestones that have made Dexion the warehousing powerhouse it is today.

80 YEARS STRONG S

oon after founding Dexion in 1937, Demetrius Comino singlehandedly reimagined the materials handling and logistics industry by inventing slotted angle – an ingenious storage innovation that offered complete shelving flexibility and could be stored in a fraction of the space. And so the first adjustable storage system was created.

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From the smallest corner shop to the largest international company, every manufacturing and distributing organisation needs to both store and move materials. His ideas not only shaped an entire industry but founded what has become the largest manufacturer of pallet racking in the Asia Pacific over the 80 years. Even in the 1930’s, Demetrius had a strong vision for the future of Dexion: “Dexion will

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From hardware to high-tech and partnering with the best Fast forward 80 years, and Dexion was recently acquired by Tech-Link, a long held dream of its founder Mr Tan Hock Seng, who himself started his career selling pallet racking almost 40 years ago. And the synergies between the two companies couldn’t be stronger. Tech-Link started out as an importer and distributor of storage equipment, growing into an international storage equipment manufacturer and provider, and today boasts two key divisions: SSinolog Properties and the Dexion Group. SSinolog Properties is a real estate platform focused on logistics and industrial property development in Singapore and China, with a portfolio of over 10million sq ft of properties. In acquiring Dexion, Mr Tan Hock Seng commented: “In the tradition of its


M AT E R I A L S H A N D L I N G & M A N A G E M E N T

ABOUT DEXION Headquartered in Australia, Dexion is a leading global storage equipment provider with operations throughout Australia, New Zealand and Asia. With a tradition of over 80 years of excellence and innovation, Dexion solves the materials handling challenges for a diverse range of customers from the office through to the warehouse. Dexion employs over 500 highly skilled staff and operates a global network of over 70 independently owned franchises and supply centres, providing a seamless integration of the world’s best practice products and management systems to reflect the best in safety, space optimisation, security, and profitability. Dexion prides itself on customised training, state-of-the-art design tools, active research, engineering & development, rigorous product testing and after sales service and support.

All Dexion products adhere to or surpass Australian and international steel storage racking standards. A number of Dexion products have been unsuccessfully copied, as the copiers do not have the underlying knowledge of the engineering and steel properties involved in producing these products. This has led to

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very dangerous environments being built and companies being forced to dismantle and rebuild entire storage systems due to the safety risk of these copied components not complying with the AS4084:2012 and EN15512:2009 standards. These situations create very risky outcomes for all individuals involved.

entrepreneurial founder Mr Comino, Dexion continues to put engineering innovation at the centre of its business. The Dexion / Tech-Link family now provides its clients with a truly complete range, from property development to smarter thinking logistics and commercial storage. “Dexion is the pinnacle of quality, innovation and safety within this industry, which is why I wanted it so much. Dexion clients will benefit from the collective strength of the two organisations. We are stronger than ever before and there is much more to come.”

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Disc Brakes Australia is using a range of Crown lift trucks including RR Series reach trucks, a CG Series LPG counterbalance forklift, Wave Work Assist Vehicles and WP Series power pallet trucks.

DISC BRAKES

AUSTRALIA CROWN IS IN FOR THE LONG HAUL WITH DISC BRAKES AUSTRALIA

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ustralia’s most awarded disc brake rotor manufacturer is relying on Crown material handling equipment to help it keep up with the strong global demand for its products. Disc Brakes Australia (DBA), which distributes its high quality, patented design disc rotors to Australia and the world from its busy Sydney factory and warehouse, is using a range of Crown lift trucks including RR Series reach trucks, a CG Series LPG counterbalance forklift, Wave Work Assist Vehicles, and WP Series power pallet trucks. The company has been using Crown products for over 16 years in Sydney and other locations around Australia because of their functionality, durability and reliability in difficult conditions, and a strong relationship with Crown’s sales and service staff. In addition to warehousing and despatch, DBA’s Crown fleet helps transport large quantities of product around its busy workshop through different stages of manufacturing. 52

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DBA managing director Phillip Joseph said Crown has remained a strong business partner thanks to its combination of products and service. “Disc Brakes Australia started in the early ’70s when we used to make just one disc for the HD/HR Holden. From that time, on we’ve been manufacturing in excess of 30,000 disc rotors a month,” Mr Joseph said. “During that time we’ve been very happy to have Crown supply us with material handling equipment. “Our operations start at six in the morning and run until 10 at night. Every day, we have

DBA warehouse manager Mark Sutch said Crown equipment measures up to the demands of warehousing and manufacturing at DBA and has added capacity to the operation. “Each day, we have roughly 10 to 15 pallets coming in and anything from 10 to 30 pallets going out, which is around 2,000 rotors,” Mr Sutch said. “The biggest challenges we have are the available space and the weight of our product – everything here is quite heavy. “We have everything from your basic pallet jack to electric pallet jacks, Wave pickers and high-reach lift trucks, and we’ve also got a counterbalance forklift. “Our high-reach is used to make the most out of the space above us so we go five bays high and, in some places in the warehouse, it’s double deep. “The Wave has enabled us to grow the warehouse capacity. We’re able to use some high-pick locations whereas in the past we haven’t been able to do that. “We can now pick around twice as high as what we used to be able to do, which has allowed us to put some shelves up high and put full pallet picks up there. “Crown equipment is reliable and we don’t have much downtime with Crown. They also get here pretty quickly if we need a technician. “It’s all positive feedback from the operators regarding Crown equipment. It’s easy to use, very comfortable. “Crown equipment helps us maximise our space in here and the number of picks we can do per day. “We’re all very happy with Crown equipment – have been for many years now – and we’ll continue to be partners for many years to come.” DBA was founded over 40 years ago with two product lines. It now produces over 30,000 disc rotors per month for a wide range of vehicle brands, and also supplies brake pads and fluid. The company has gained global recognition for its quality products for both street and motor racing applications as well as for its patented

“We can now pick around twice as high as what we used to be able to do.” raw castings coming in and finished product going out. “We’re located in Melbourne, Brisbane, Adelaide, Perth and Townsville and at all locations we are using Crown forklifts. “Price is not what determines the purchase of a product at Disc Brakes Australia. We want service, and we get service with Crown equipment.” SEPTEMBER / OCTOBER 2017

technology for disc brake ventilation and proprietary cast iron formulation. DBA has won numerous industry awards including multiple product awards from the Australian Automotive Aftermarket Association and Gold Manufacturer of the Year Award for Excellence in Manufacturing. For more information visit www.crownforklifts.com.au.


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TMHA Melbourne branch manager Matt Godfrey (centre) receives his Tier 1 (Metropolitan) Branch Of The Year Award Left: Toshi (Tom) Nakazawa TMHA President and CEO Right: Steve Takacs TMHA Executive Vice President & Chief Operating Officer.

THE BEST OF THE BEST TOYOTA REWARDS ITS SALES STARS, TOP TECHNICIANS

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oyota Material Handling Australia's (TMHA) Melbourne branch was the major winner in the company's 2016 National Sales and Service awards, announced at a gala dinner on the Gold Coast. The dinner highlighted Toyota Material Handling Australia's continual dedication and service to business partners and customers. TMHA executive vice president and COO Steve Takacs congratulated the winning branches on their solid performances in a competitive and strong year for the brand, nationally. "The results reflect the growth and confidence from the entire TMHA network," Mr Takacs said. "We believe awards and recognition of our staff highlight the importance of the customer experience in TMHA's complete service offering. "Seeing many deserving winners and some very close competition between branches is a reassurance that our determination to remain a strong number-one position is driven from within." TMHA Melbourne was named as winner, Metropolitan (Tier 1) Branch of the Year award. TMHA Melbourne was also awarded Best Service Department of the Year with Tony Brandon from that branch named Service Manager of the Year. Melbourne team member Darren Smit, won both the Sales Champion of the Year (Top Gun) award, and also the prestigious Major Account Manager of the Year. TMHA's progressive Albury branch won the Regional (Tier 2) Branch of the Year award. TMHA's Adelaide branch claimed the 2016 Best Sales Department trophy, with team member Peter Oates as the Sales Manager of the Year.

Neil Nand from the TMHA's corporate accounts team was the 2016 Corporate Account Manager of the Year for 2016, an award he also won for 2015.

Who are the top technicians? Toyota Material Handling Australia (TMHA) has confirmed its commitment to training and service standards with the annual National Skills Contest. Mr Takacs said the contest, which Toyota has held in Australia for a quarter of a century, was an important investment in its technicians and just reward for their efforts in continually up-skilling. The Master Technician and Apprentice of the Year will make an educational visit to one of Toyota’s global forklift production plants. “As someone who came into this industry as a technician, it is always an important event for me and especially pleasing to see our branches around the country represented on the list of winners,” Mr Takacs said. “The results and the closeness of the contest show off our technicians’ high levels of product knowledge and in turn supports our position as the number one forklift brand. “The National Skills Contest has been proven over many years to support high customer satisfaction rates, with less downtime and increased efficiency for all our business partners. “The Apprentice of the Year component in particular provides an opportunity for budding technicians to test themselves against the country’s best, and allows us to invest in their future and that of the entire TMHA business. “Toyota pioneered specialised TAFE-level training for forklift technicians in Australia and we aim to maintain that edge,” he said.

TMHA invited 15 forklift specialists (nine technicians and six apprentices) to a two-day skills contest final at its Moorebank (Sydney) headquarters, based on written tests from approximately 160 entrants nationally. The event included a series of practicaland theory-based exercises across the three brands of TMHA equipment: Toyota, BT Lift Truck and Raymond. Competing technicians chose a brand in which to specialise for the practical component, and sat an exam encompassing all three brands to determine the winner of the Master Technician award.

And the winners were: • The Master Technician of the Year award went to Matthew White from TMHA’s Melbourne branch and he also received the award for Raymond Technician of the Year. • The 2017 Apprentice of the Year is Richard Maitland-Smith, from TMHA’s Perth branch. • Paul Pritchard from TMHA’s Sydney branch is the Technician of the Year for BT products and Adrian Sruhan from TMHA’s Brisbane branch is the Technician of the Year for Toyota products. This year’s TMHA National Skills Contest marked the tenth anniversary of adding the Apprentice award. It was introduced when TMHA’s Moorebank national headquarters opened in 2007. Since 2007, the contest has attracted 2,369 technician entries and 639 apprentice entries, including one female winner. For more information call 1800 425 438 or visit www.toyotamaterialhandling.com.au.

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ASCI

ASCI CORPORATE MEMBERSHIP A

SCI Corporate Membership allows your organisation to demonstrate your commitment to best practice and excellence whilst expanding your team’s proficiency in supply chain. ASCI Corporate Membership is vital to supply chains as organisations embark on

the digital revolution journey. Make that trek together with your fellow executive peers and become an ASCI Corporate Member today by contacting our National Office at enquiries@asci.org.au / 1300 557 173 or visiting our website at www.asci.org.au/membership.

Join our newest ASCI Corporate Members:

Thank you to ASCI Corporate Members for your ongoing support throughout 2017 ActronAir

Cement Australia

Knorr-Bremse

Pronto Software

Air Radiators

Cincom

KPMG

QAD

Alchin & Long Group

Cochlear

Life Health Foods

ResMed

Allightsykes

Danone

Logility

Schneider Electric

Alspec

D&D Technologies Pty Ltd

Martin Brower

Sigma

Amcor

Department of Industry,

Massel

St Barbara

Ansaldo STS

Innovation & Science

Multotech

Stryker

Arrium

Dexion

Mrs Mac's

Sullair Australia

Atlas Copco

Doric

nbn Co

SunRice

Aurizon

Eaton Industries

Nestlé Australia Limited

Super Retail Group

Beak & Johnson

Ferrero

Newell Australia

TAFE NSW

Bega Cheese

Foxtel

Nover

Woolworths Limited

Blackmores

Hella

Nufarm

Xylem

Brown & Watson International

Incitec Pivot

Orora Group

Zimmer Biomet

Campbell Arnott's

Johnson & Johnson

Philips Dynalite

Carman's

Pacific Pty Ltd

PPG Industries Pty Ltd

ASCI Corporate Membership demonstrates your commitment to best practice and excellence whilst expanding your team’s proficiency in supply chain. 1300 557 175 | enquiries@ASCI.org.au | www.ASCI.org.au

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ASCI

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Site visit – RAAF Richmond Air Base Our August site visit was one of the most interesting and insightful we have had to date. This is ASCI’s first step as we change the format of our site visits and ramp up the learning experience to new heights and what better way to start this take off than with the RAAF Base Richmond. The day started off with ASCI staff and members meeting up on a crisp Richmond morning at 8:30, where we were lead into the base and given our safety briefing. The first session provided an outline of the Australian Defence Organisation’s supply chain, including the role of Capability Acquisition and Sustainment Group (CASG) in supporting the C130J and C27J aircraft based at RAAF Richmond. Now we come to the exciting part, we got to go inside the C27J Spartan, a battlefield airlift transport aircraft operated by Number 35 Squadron. This particular aircraft is able to move people, equipment and supplies in Australia and the surrounding area. Inside, we got to see how everything is packed in and all the different facilities they have to get their goods from point A to point B. The aircraft is able to take a wide variety of tasks including being able to support humanitarian missions in remote areas, delivering ammunition to front line troops and also undertake aero-medical evacuation of casualties. This aircraft

is able to carry a significant amount of weight and land on airstrips that are not suited to some of their other aircraft, providing additional capability especially on humanitarian disaster relief missions. Some of the C27J’s missions include air drops, this means they cannot land due to the damage or limited capacity of an airstrip however supplies are still able to be delivered. Our next stop was 176 Air Dispatch Squadron, where the parachutes used for the air drops are cleaned, repaired, packed and stored. These parachutes go through a whole production line to make sure they are suitable for both trained personnel and supplies, which can include supplies as large as tractors.

Our day ended with a chat about the storage of inventory in the Australian Defence Force including the use of a national network of warehouses and storage sites. This allowed for question time, where members were able to better understand concepts used at the RAAF Base Richmond and take these notes back to their own daily job. The whole experience was thought-provoking and shows the steps ASCI is taking to make these experiences more exciting and interesting for members to benefit. One member stated, it was a “great lifetime experience… thanks for organising it.” We are eager to see what our next site visit will entail!

Exclusive round table On Tuesday, 15 August 2017, a core group of executives representing ASCI Corporate Members met to discuss digital disruption in a private round table luncheon event. This event is part of the ASCI Leadership & Innovation Program for ASCI Corporate Members. Some of the questions explored included: • Is the emergence of digital a recognised change agent for your business? • What works as a structured method to identify and action digital initiatives?

• Is the collaborative sharing of information – both within your organisation and externally – a reality? Are you achieving the expected benefits from collaboration and mobility initiatives? • How much are you able to leverage big data through networked analytics? Is Business Intelligence still a financedriven function? • Is the world evolving through the Internet of Things – an influencer, an enabler, or a distraction today? Will it or can it be more in the future?

• What known disruptive actions do you embrace or fear the most? How can you adopt or mitigate these?

And our takeaway key learnings: • Information flow is the next focus for supply chains as they determine how to open up communication with third parties. • Continuous improvement is about set reset mentality constantly relying on new tools and technologies at hand. • Visibility and transparency across the supply chain is required. • Customer facing is important for longevity and/or survival. • Big Data analytics imperative. A big thanks to Infor, ASCI’s Premium Sponsor, for sponsoring the luncheon and Russell Reynolds Associates for providing their stunning boardroom overlooking Sydney Harbour. For more information about ASCI Leadership & Innovation Corporate Members, please contact enquiries@asci.org.au.

Thank you to ASCI’s Premium Sponsors MHD SUPPLY CHAIN SOLUTIONS —

SEPTEMBER / OCTOBER 2017

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THE PLACE TO GO FOR YOUR DAILY NEWS ON TRANSPORT & LOGISTICS www.TandLnews.com.au

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Ralph Merry T: 02 8586 6109 | E: rmerry@intermedia.com.au


NEWS FROM SCLAA

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CHAIRWOMAN’S REPORT

AMANDA O’BRIEN

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ver the last few months I have attended several briefings on the National Freight and Supply Chain Strategy. The Australian Government is developing a national freight and supply chain strategy to increase the productivity and efficiency of Australia's freight supply chain. It requires not one body but all associated bodies to come together to discuss initiatives that will increase our opportunities in Australia’s freight and logistics industry. The commencement by the Australian Government to consult with the industry is encouraging and will help to enhance the efficiency of supply chains. This active consultation assessing all modes of transport will assist in improving the strategies the government will no doubt implement in the future. Australia’s freight task is expected to grow significantly in the next few years and it will undoubtedly have implications for the performance of our national economy. Our nation’s freight logistics industry represents 8.9% of Australia’s GDP and employs 1.2 million Australians. A 1% increase in supply chain efficiency will deliver a $2bn benefit to the national economy. Associations across Australia should be working together to drive improvements in this sector this is not a time for isolation of ideas but a managed collaborative approach to inclusion of all sectors stakeholders and individuals who are currently working and will work in this sector for decades to come. There is no doubt that supply chain industry is experiencing increased volatility and the economic outlook enforces the need for organisations to be prepared and vigilant in 2017. A challenging year is ahead, the rising inbound and service costs

mean that multinationals will survive but evolution and innovation will become even more important to SME working in the same economic space. Strategies for the future will entail tactical procurement challenges and predictably continued global trade uncertainty. One of the most significant challenges is developing and filling talent gaps in the industry. Experienced professionals in the supply chain are in short supply. Training in this space is becoming more important than ever before but there is a significant gap between senior management and on the ground operators. Industry supply chain networks are under scrutiny and there will be continuous analysis over the next decade. Again turbulence in the transportation industry in the domestic market is apparent and with change accelerating it is likely to incur more challenge. Only this week part of the former McAleese transport group, including Perth-based Australian Road Express was put into receivership. Australian Road Express employed 180 people at its headquarters in Perth and depots in Adelaide, Melbourne, Sydney and Brisbane. Founded in 1991, it was formerly known as WA Freight Group and covered WA Freightlines, Jolly’s Transport and Jetstyle Express. Its collapse again underlines

to take more opportunity to pick up the online marketing dollars and revenue. This brings me to South Australia, which has also had its fair share of economic instability, but there is Government investment there with a $50m upgrade to Adelaide Airport. The Supply Chain & Logistics Association is partnering with the 10th Annual South Australian Major Projects Conference as the state invests in key infrastructure projects in the education, defence and transport sectors. Alongside traditional major projects such as the Northern Connector Project and the Adelaide Festival Plaza Redevelopment, the conference will also profile smart ICT in Infrastructure, smart city initiatives and driverless car technology. With budgets tight at a federal, state and local level, strategic procurement has never been more important and this Summit will bring together some of the most exciting and innovative case studies – locally and internationally – with keynote presentations from leading public sector CPO’s and interactive panel discussions to address the most significant challenges procurement managers face today. Also coming up is the Axis Melbourne Breakfast Seminar at Sofitel Melbourne on Collins, where

“Investment in technology will be fundamental to stay viable and to improve processes and efficiencies in order to increase profit margins for already dissipated margins.” the tough times being experienced by transport companies, particularly in WA where the softer economy is adding extra stress. In the current environment it is not only the larger companies feeling the winds of change in the market-place so appraisals of business will continue to be assessed in the domestic and global supply chain arenas. Investment in technology will be fundamental to stay viable and to improve processes and efficiencies in order to increase profit margins for already dissipated margins. Automation is required as analytical driven decision making methods come under scrutiny in the internet of things particularly in a management decision support vendor community. The end-to-end supply chain means that business intelligence in B2B networks is being used to fuel the speed at which decision making and business intelligence engines are working. Amazon and Alibaba will continue to strive for dominance in a global online retail environment, and try to adapt to local markets

Virgin Australia will present its experience implementing an Early Intervention and Onsite Physiotherapy program. You will also hear how highly performing workplaces manage workrelated injuries. And make sure you mark the 2017 ASCLA awards in your calendar to be held on 17 November at the iconic Luna Park. We are now calling for nominations for the Prestigious ASCLA Awards. It is time to become involved and nominate and individual or company in the supply chain field to be recognised at our event of the year. Please head to our website for more exciting developments or contact our National Secretariat on 1300 364 160 for further information on how you can become involved or join our professional association, the only association to offer national coverage and events all year round! Amanda O’Brien is the national chairwoman of the Supply Chain and Logistics Association of Australia. Email amandao@xtremefreight. com.au.

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SCLAA NATIONAL CONTACT DETAILS

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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: secretary@sclaa.com.au

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

THE CHARTERED INSTITUTE OF LOGISTICS AND TRANSPORT IN AUSTRALIA (CILTA)

T

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 admin@cilta.com. au or please call 1300 681 134.

PO Box 4594 Robina QLD 4230 1300 68 11 34 admin@cilta.com.au www.cilta.com.au

THE VOICE OF THE WAREHOUSING INDUSTRY

T

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. 58

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: bhenman@colofwhousing.com.au W: www.auswa.asn.au JULY / AUGUST 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 SEP-OCT 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 SEP-OCT 2017  

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