A DC for efficiency – from MHD magazine

Vivin Imports is one of Australia’s largest furniture wholesalers supplying major furniture retailers and independents. With recent growth in residential home construction and renovations, Vivin has experienced increased demand for its products across the country.
To accommodate this business growth, the company had to elevate its logistics capability to retain and build on its competitive advantage. The distribution centre was identified as a crucial contributor to supply chain efficiency and effectiveness. The Vivin management felt a critical change was required and committed to a new purpose-built 23,300m² distribution centre.
The next step was to decide how this distribution centre should be fitted out.
Vivin knew that it had capacity constraints in the existing warehouse, and adding to the complication was the regulatory compliance for fire safety coverage, particularly for foam products and mattresses. The new warehouse required a storage fitout to accommodate oversized products and ensure appropriate safety compliance.
The initial layout
Dexion Solutions was invited to put forward a proposal for the new distribution centre based on an existing pallet racking configuration supplied. This consisted of standard selective pallet racking with 2,600mm clear entry bays arranged to 3,420mm aisles throughout the warehouse. Half of this layout was to be fitted with in-rack fire sprinklers.
Experience has shown that this was an industry that adopted a ‘default’ layout, where there was no in-depth operational qualification of client operations undertaken. Based on the understanding that not all products have the same dimensional characteristics and demand profile, it is questionable why many businesses accept this ‘uniform’ arrangement.
It could be that there is a lack of understanding of warehouse operations among many suppliers. This results in them often taking a lowest ‘cost-only’ approach, which drives the design to what is often seen – a ‘default selective rack layout’. Likewise, many clients have a very good understanding of the price and product specifications, but not the value of the total fitout. That’s because this value can be difficult to explain in sufficient detail by those selling the equipment and as a result, both supplier and customer often agree on a ‘default’ layout.
To demonstrate the limitations of this default layout, the supplied 2D drawing was turned it into a 3D render. This gave Vivin a better perspective and understanding of the system with which they would end up, and also allowed the supplier team to highlight any potential shortfalls of the design.
Dexion Solutions go the extra mile to fully analyse the space and develop 3D renders where appropriate to ensure the customer has a thorough understanding of what can be achieved – adding so much more value and insight to the project. This additional stage in planning can also be recognised in ROI well into the future.
Developing a complete system
The team requested design-relevant data, which included a snapshot of inventory, transaction table and the item master. This was then backed up with operational site observation and development of a process logic to support the design. The purpose of this study was to retain what was being done well, as well as engineer out any existing limitations, risks and difficulties where possible.
This is what was found:

  • Standard 2,600mm clear entry bays did not provide optimised storage density for the range of products, so the design was altered to include a calculated combination of 2,600mm and 3,850mm clear entry bays.
  • To account for product overhang and a 100mm longitudinal flue in accordance with fire engineering and AS 4084:2012, this directed the design towards the specification of customised double entry frame depths of 2,106mm and 2,303mm respectively. The basic design only had a single double entry 2,106mm arrangement, which would have restricted the storage of oversized products like sofas.
  • Finally, no elevations were provided in the original design so these had to be calculated. Twelve (12) differing elevations were designed to accommodate the 100mm transverse flue space as per criteria specified in FM8-9.

Now that the storage profiles had been determined, it was time to develop a fully optimised warehouse layout. The storage system had to accommodate non-standard product sizes, all the while balancing productivity with storage.
To achieve this, the layout developed by Dexion Solutions comprised of 1,500 bays of selective Speedlock racking, with different frame depths and bay widths to accommodate variations in product dimensions.

Aisle widths
The original default design had 3,420mm aisles rack to rack, but was this adequate? Let’s consider how the space will be used.
2,100mm width pallets are put away and retrieved at ground level and at height. While the aisles are certainly wider than the pallet, the space doesn’t consider the materials handling equipment that will be used to manoeuvre the pallets. As shown in the diagram, the resulting sweep arc of a forklift turning towards the racking is not considered in the conforming design.
Adhering to a 3,420mm aisle would have resulted in a 343mm aisle width deficit! Aisle widths had to be increased to 3,850mm for operational viability, which was independently verified by the MHE provider. With larger aisle widths, the rack orientation was required to change from North to South to East to West due to the building column grid.
This flagged a significant change to the initial layout and it marked a fundamental change from being a storage-centric design to one that was operationally focused.
In-rack fire sprinklers
The initial layout directed that half the site be fitted with in-rack sprinklers. For this qualification, Dexion Solutions used inventory data and item master lookups to identify all the items that needed additional fire coverage. A line-by-line slotting calculation was applied. This was not as easy task!
From this exercise, it was determined that just over a quarter of the site required in-rack sprinkler coverage, quite a difference from half the site. This area allocation also accounted for likely and predicted storage variations. With a reduced area for in-rack sprinkler coverage, a significant cost saving was instantly realised. Combined with all the previous qualifications, this verification just added another layer to the optimised layout that could not be ignored.
Furniture repair zones
To complete the design, a concept of operations was developed, with staging areas and furniture repair zones laid out. The material flow was calculated along with the operational task sequences. This ensured that both the physical and logical designs were complementary to each other.
Warehouse management system integration
The system logic threads that were recommended could be applied to the warehouse management system (WMS) for configuration to achieve balanced task flows. The pertinent points about the operational sequences were the inclusion of batch and discrete order picking based on order profile waving, pick and drop locations for intermediary task staging, and task interleaving. With both the physical and logical designs undertaken in tandem rather than in isolation, a verifiable, auditable and clearly specified result was planned and achieved.
Labels and end-of-aisle signs
The design of the warehouse location map and the subsequent location labelling specification can be crucial to a project’s success. For Vivin, the Dexion Solutions team used 3,850mm beam lengths, which were mapped out and labelled for three locations per bay instead of the average of two locations across a shorter beam length. This will allow for the storage of one OR two non-standard product sizes whilst also allowing for flexibility to use each level for up to three standard pallets.
The labels are made of polyester with a long-term adhesive, making them ultra-durable and resistant to liquids. A unique feature of these labels is that they can be removed and relocated without tearing, offering even further flexibility for the customer.
End-of-aisle signs were also installed as an identification tool to clearly define the aisles amongst the racking bays.
Safety and compliance
Bay profiles were configured to conform with FM Global Fire Engineering transverse flue requirements. 100mm longitudinal flue space maintained between products for oversized products to conform with fire regulations (FM global requirement) and AS 4084: 2012.

“The material flow was calculated along with the operational task sequences.”

To further enhance the safety of the warehouse, Dexion Solutions also provided the following:

  1. Rack protection

The warehouse storage fitout was further enhanced with rack protection, including specially designed baseplates with heavy duty fixings, front and rear deflection guards, and upright protection. All upright protection used is in safety yellow, as this stands out most prominently against the racking creating a much safer warehouse environment.

  1. Safe working load signs

Safe working load signs were installed for each bay of racking. This ensures the storage systems does not get overloaded by warehouse operators, and meets Australian Safety Standards.

  1. Traffic management plan and line markings

A traffic management plan is crucial to creating optimal traffic flow throughout the warehouse and to minimising any risk of collisions. As part of a good traffic management plan, line markings can effectively segregate pedestrian and materials handling equipment, reducing the potential for accident or injury and ultimately improving overall workplace safety.
The design concentrated on the principle of balancing productivity with storage. All the work done was qualified by analysis, observation and logic, all of which are fundamental in any system design. The client’s interests were always in the equation and Dexion Solutions provided a value proposition, not just materials. This is added value that will be realised every day, year on year.
“The Dexion Solutions team really stood out from the start with their knowledge and comprehensive approach to storage systems, said Vivin Imports national logistics manager Mark Redman.
“Not willing to settle for the standard approach, James Hardy and the Dexion Solutions team analysed our operational data and business goals to completely optimise the warehouse space.
“The team was great to work with and through this experience we have gained insights that will be used to enhance our day-to-day warehouse functions. We’re confident this warehouse fitout will provide the business with a competitive advantage well into the future.”
For more information contact info@dexionsolutions.com.au or visit www.dexionsolutions.com.au. You can also view a video of this project here: https://youtu.be/_wQtCjPAybs.

Still Working – ifm cables

ifm takes pride in how robust and reliable its sensors are. In this video Glenn Thornton and Roland Denholm from ifm Australia test the products in some fun but challenging ways, all the while showing that their products are still working.


Future skills in focus

With advancements in technology re-shaping the logistics industry, L&MH looks at the affect this is having on the workforce and what skills the logistics manager of the future will need to succeed.
The logistics sector has already started embracing emerging trends such as autonomous vehicles, Internet of Things, robotics and the overarching use of big data.
Tomorrow’s warehouses will look increasingly different to how they look today and the digital transformation across many industries has already started to take place. Coles recently announced plans to build two new heavily automated distribution centres over the next five years, an investment the company believes will deliver lower supply chain costs and higher service levels, improved efficiency and stock availability in stores, safer working environments, and enhanced business competitiveness.
Toll, Coles, Linde, Australia Post and many others are also investing heavily in new automated facilities. With this rate of technological advancement, the skills needed to manage and run these facilities are rapidly changing.
According to the Transport & Logistics Industry Skills Council, the logistics industry is expected to show strong growth over the next 20 years. The Council projects a 50 per cent increase in truck traffic, 90 per cent increase in rail freight and 150 per cent increase in containers crossing the nation’s wharves.
An astonishing 48 per cent of workers in the logistics industry in Australia are aged 45 years or older and 12 per cent of the transport and logistics workforce is 60 years or older, and looking to retire in the next five years.
The combination of an ageing and retiring workforce as well as projected growth in the sector, joined with a rapidly changing industry, could present the logistics industry in Australia with significant challenges through what is project to be a period of exponential growth.
For Dr John Hopkins, Programme Director for the Master of Supply Chain Innovation at Swinburne University of Technology, there is an increased need in more diverse skills, involving entrepreneurial thinking, data and automation. “The supply chain or logistics manager of today has a high-level view of business. In the future they will increasingly need to combine that with an ability to recognise opportunities more quickly, and know how best to act on them,” John says.
Data and automation
For John, there are two fundamental areas that skills need to be developed in. These are data and automation. “We are in an era where things are changing very quickly ­– people in the logistics industry need increasingly different skills. They need to know how to collect data, what data to collect, how to analyse it and how to make meaningful decisions based on that data.”
Additionally, with the increased use of data and automation across logistics, there may even be a need for logistics and supply chain managers to learn more programming skills.
“Supply chain professionals are aware of what new technologies are out there, and what potential they might have, but are often too busy with other things to have time to think of new ways in which they might be utilised to drive improvement,” John says.
Being based in Australia has the added advantage of utilising skills and experience from throughout the world, John says.  “We have 18 students on our new course, and 16 different countries. It’s very diverse.”
In addition, John thinks that the logistics industry in Australia is unique. John is originally from the UK, and has worked extensively in industry and academic institutions in the UK, USA, Ireland and Australia.
“There is a big difference in Australia, compared with Europe. Geography is a big part of that. There is a relatively small population, on a large island, with a strong economy. In addition, whereas currently there is a lot of uncertainty in Britain and the EU around Brexit, there isn’t so much here.”
According to John, even though Australia’s geography is challenging, there is a distinct concentration of population and infrastructure in one area. “There is a clear population density in the Southeast so we should, in theory, so we should be able to be as advanced in that area as certain networks in Europe.”
However, there are some really strong examples of logistics companies in Australia leading the way, John says. “If you look at a model like Catch of the day, you can see state-of-the-art logistics and automation in action in Australia.”
John attributes much of the success in the logistics industry to the fact that Australia is not a manufacturing hub and has therefore been adapted to meet the unique demands. “If you look at how supply chain and logistics is taught in say Germany, it’s from a completely different perspective. We don’t really manufacture a great deal of products here here, by comparison, we import a lot of our products from overseas. It’s a different way of working and different kinds of knowledge and skills required.”
Lean and agility
With tech moving at a fast pace, product life cycles are now shorter, John says. “The shorter product life cycles mean that organisations need to be more reactive, they need to have a start-up mentality and a lean mindset.”
John kept all of this in mind when designing this new course and made sure that the course content included lean six sigma methodologies. “We have created a unit of study that equates the lean six sigma training, this gives students the practical elements as well as an industry accreditation.”
Soft skills
While many of the new skills needed are around automation and data, for John the importance of soft skills should never be dismissed. “Certain skills will always be valued: communication, leadership, problem solving – these will always be needed.”
Within this area, John believes there should be a focus on networking. “Networking is a great tool, both digital and offline. I use LinkedIn a lot to gather for content for my lectures. I have a global network of industry and academic content and case studies at my fingertips and I can use my digital professional profile to utilise that and communicate directly with thought leaders worldwide. The logistics professional of the future must too.”
Masters of innovation
 This change in skills and shift in the industry has motivated John to set up a new postgraduate programme at Swinburne University of Technology. “Students can go to many different institutions and do supply chain management courses, but we wanted to do something different. We wanted to add a greater technology and innovation aspect to our course, as well as increase engagement with industry.”
The course launched earlier this year and, according to John, it invites students to think innovatively and creatively about supply chain management, to improve today’s supply chains, and equip them for the changing needs of the industry.
“As competition continues between global supply chains in response to customer demand volatility and increasing customer expectations, supply chain managers need to be increasingly innovative in order to gain competitive advantage. Having appropriately skilled people, who are equipped to make the right decisions, is essential, this is why we have designed this course,” John says.
A key aspect of the course is the industry-focused teaching and industry partnership. Every unit is linked with an industry partner. These include GS1, CILTA, CEVA Logistics and Coca-Cola Amatil. Students work with each of the companies on real-world projects and produce practical solutions for the organisation. “It’s very industry focused, there is a meaningful end-point for all students,” John explains.
The first cycle of entrants on the course will graduate in July 2019 and the course is aimed at working professionals. “We have based this course on skills that may not be available to businesses in-house. Many people in logistics and supply chain organisations need to keep pace with change and upgrade their skills regularly. We have an ageing workforce, and the industry is now almost unrecognisable to how it was when some professionals started out in their career in logistics,” John says.
For John, while the skills required are developing and diversifying, it’s an exciting time to be in logistics and he is looking forward to seeing how the young professionals of today will grow, develop and shape the future of the industry.

Supply chain skills for the future – from MHD magazine

Patrick Van Hull

The supply chain team of the future will look very different from the one we’re familiar with today. In some cases, the team will need radically different skills and capabilities. Many of these skills fall outside the traditional realms of functional supply chain expertise.
It almost goes without saying that people are one of a supply chain organisation’s biggest assets. Although investment in talent is a top priority today for many supply chain leaders, this hasn’t always been the case.
Rewind just a couple of years ago. A 2016 Gartner survey of 261 supply chain leaders revealed that talent development was a top investment priority for only 28 per cent of respondents, a mere 12th on the list of other competing investment buckets.
Supply chain has been, and always will be, an ongoing balancing act of competing priorities. Can supply chain leaders really afford to continue to devalue talent in favour of the functions they serve? In the many conversations Gartner has had with the supply chain community over recent months, the answer is increasingly a resounding “No!”
What’s changed?
A number of external factors have contributed to this urgent realignment and prioritisation of expertise and capability development. First is the growing complexity of business and the level of agility required to meet increasing customer demands, which requires increasing excellence in execution.
Then there’s the elevated role of supply chain within the wider organisation as a creator of value, rather than just a service function or cost centre. This demands a broader understanding of the business through all levels of the supply chain.
Acting as the ‘glue’ between multiple parts of the business — as well as with customers, suppliers and other external partners — requires a shift in skills beyond pure functional supply chain expertise to less tangible social skills around communication and influence. This draws on analytically minded, problem-solving skills to make more effective business decisions, as well as keeping assembly lines running and delivery promises to customers.
Finally, the explosion of new technologies enabling the automation of previously manual activities and the augmentation of other human-led capabilities, have given rise to a new of era of digitalisation requiring new levels of skills and new ways of working.
Once harnessed, digital technologies provide opportunities to deliver innovation in both product and process for the benefit of the customer. They’re also putting pressure on organisations to develop new capabilities and lead the existing workforce through a period of uncertainty.
Now’s the time
These demand drivers for talent realignment and prioritisation are being met with pressures from the supply side of the equation. Supply chain leaders are challenged to develop their existing talent to align with the changes in competency profile. Where gaps on their benches are identified, they must bring in the expertise required.
The speed of change within the business, coupled with the explosion in the need for expertise in digital technologies, is met with the reality that those skills take time to develop and aren’t always readily available from the marketplace. At the same time, a strong competitive market for supply chain talent prevails.
Now’s the time for supply chain leaders to lead the charge on talent strategy and execution by developing winning talent strategies and innovative battle plans. Companies already taking the lead on this are developing strategies that embrace the entire supply chain organisation, from hourly associate to the most senior level executive.
The goal is to build an agile team equipped to face the challenges of tomorrow, starting today. The good news is that Australia has a relative abundance of supply at all hiring levels, indicating a healthy talent pool countered by a tightening of suitable employment opportunities.
Agility is the new watchword for talent
Building out organisations requires a balance of planning for long-term requirements and change management processes, at the same time responding to more short-term needs, such as emerging digital technologies.
A one-size-fits-all approach to strategic workforce planning will no longer work. Develop a talent roadmap for the future.

“Develop connections, both formal and informal, between different parts of your organisation to enable broader exposure to the business and facilitate collaboration across functional teams.”

With a clear business strategy in place, harness this to develop career pathways and roadmaps for existing employees who may need to alter their skill sets with your support to meet the future needs of the business.
Take care to minimise any change-related anxiety that may lead to decreased levels of motivation and workforce effectiveness or even loss of key talent. Where appropriate, consider working with outside providers to fill in capabilities in key areas — blockchain is a good example.
Don’t compete with the ‘cool’ brands – build your own
Competition for talented supply chain professionals is on the rise, with high-profile brands like Amazon, Google and Apple with ‘cool’ value propositions posing a real threat to other companies offering more traditional career pathways. Moving forward, companies will be compelled to sell themselves more overtly as ‘destination employers’ to attract top talent their way.
Create a unique talent brand that establishes clear on-boarding and development paths for new employees, as well as programs to develop existing employees at all levels. Building expertise internally will likely be much more cost-effective than buying new skills.
Take a global view of the talent market landscape
Talent has become an increasingly critical component of overall supply network planning. Take into account the differences in the talent supply market across geographies, when considering where to position teams that require colocation. Could global centres of excellence be located in markets with a richer seam of qualified supply chain talent?
Equally, be prepared to embrace a flexible approach to remotely based employees where supplies of local talent are in short supply.
Develop strong internal ‘glue’ to keep your supply chain organisation integrated and robust
The connections developed between people in your organisation create a glue that holds the parts together. Develop connections, both formal and informal, between different parts of your organisation to enable broader exposure to the business and facilitate collaboration across functional teams.
Likewise, building connections between different levels of the organisation through initiatives such as mentoring, can connect less experienced people with those more tenured and facilitate successful knowledge transfer in both directions.
Similarly, although diversity initiatives may run the risk of neglect during challenging times, they can prove a useful tool for both filling talent gaps and enabling a more inclusive and cohesive workforce.
Patrick Van Hull is a research vice president at Gartner. He provides insights into the key challenges and trends affecting global supply chains, across industries. For more information, visit www.gartner.com/supplychain.

Logistics Outlook

As we move towards the end of 2018, Logistics & Materials Handling looks further into the future at the trends and issues set to shape the sector.
Artificial intelligence
The Queensland Government recently announced that it will build a cutting-edge artificial intelligence (AI) hub as part of a plan to upskill more local workers to take jobs in the sector.
Forbes Insights research, Logistics, Supply Chain and Transportation 2023: Change at Breakneck Speed, shows that 65 per cent of senior transportation-focused executives believe logistics, supply chain and transportation are in the midst of a renaissance, with the most visible forces of change being the evolution of artificial intelligence and machine learning.
From refilling inventory to augmentation and automation to self-driving vehicles, there are a variety of practical applications where AI and machine learning can benefit the logistics sector.
Earlier this year, DHL and IBM evaluated the potential of AI in logistics and found that supply chain leaders can take advantage of the key benefits and opportunities now that performance, accessibility as well as costs are more favourable than ever before.
The subsequent report found that AI technologies are maturing at great pace, allowing for additional application for the logistics industry. These can help logistics providers enrich customer experiences through conversational engagement.
“Today’s current technology, business and societal conditions favour a paradigm shift to proactive and predictive logistics operations more than any previous time in history,” Matthias Heutger, Senior Vice President and Global Head of Innovation at DHL says.
3D Printing
Earlier this year, Melbourne-based additive manufacturer Titomic unveiled the world’s largest and fastest 3D printer. This was met with great interest in the great interest in the global logistics sector.
As logistics is primarily an industry about moving goods from one place to another, developments in 3D printing will change the way the industry has to think and function.
According to Transport Intelligence, a research and analysis company, the logistics company of the future will operate as a 4PL ­– a service management company. Their businesses will compromise a mix of software development, delivery services, partner relationship management, contract management and brainpower.
The service parts logistics industry will be transformed by 3D printing, according to Transport Intelligence’s report The Implications of 3D Printing for the Global Logistics Industry.
With 3D printing machines available, operations in remote locations will only need electronic libraries of designs available on a computer and spare parts can be printed immediately. By 2020, up to 80 per cent of finished products will have involved some kind of 3D printing, according to Transport Intelligence.
Sustainable supply chains
The need to remain competitive while increasing sustainability has triggered growth in ‘fair and responsible logistics’, according to the DHL Global Logistics Trend Report. As consumers became increasingly engaged with the source of a product ­– where it is manufactured, sourced and transported ­–  they are more concerned with whether all of these steps are carried out in a fair and responsible manner.
In Australia, many businesses are beginning to place sustainability at the core of their business and logistics departments will play a key role in this transition to a more fair and responsible operation.
According to DHL, there are a number of key opportunities in this area. The concept of circular logistics focuses on the development of new logistics services and infrastructure solutions that enable a circular economy. One example could be delivery trucks picking up recycling goods on their route and dropping these off at warehouses.
Innovations in this area could lead to sustainable revenue streams for future growth as well as social and environmental value, DHL claims.
Talent and recruitment
The recent World Bank Logistics Competencies, Skills and Training: A Global Overview report stressed a short supply in qualified labour across global supply chains. The report highlighted that shortages will range from all occupational levels, from truck drivers to filling senior supply chain management positions.
Hiring intentions in the transport and logistics sector will be the strongest they have been in seven years, according to the Manpower Group Employment Survey. The survey revealed a 23 per cent increase for the final quarter of 2018, nearly double that seen during the same period last year.
The World Bank report states that to curb the shortage there needs to be a substantial increase in the amount of resources devoted to logistics training at all levels.
As growth in the logistics industry that does not show any signs of slowing down, there is likely to be a focus on training and development. This will be for those already in the industry looking to upskill and take on senior director positions, as well as investments in how to attract and retain new talent in the industry.
Changing customer expectations
 Customers are now expecting shipments to arrive quicker than ever before, with more flexible options and at a lower price. This is putting a significant amount of pressure on logistics models and operations.
Consumers went digital a long time ago, and their expectations are getting higher and higher in terms of delivery options and times. Much of the retail sector is struggling to keep up and logistics operations are now more important than ever.
According to Price Waterhouse Coopers Future of Logistics report, shoppers weren’t traditionally part of a branded retail experience. However, as consumers expect more flexibility, they are more engaged with how and when they get their goods.
Customers are increasingly tracking their order at every step of the process, putting the logistics carrier in the spotlight. Logistics businesses will need to be more customer-focused as their reputations are more on the line than ever before. It’s now more important than ever before for logistics suppliers and distributors to be innovative and on top of every step in the process to meet the demands of the consumer. 

Hype or reality?

Drones, driverless trucks and robots are commonly discussed in the logistics sector as game-changing factors, but are these concepts largely hype? LMH finds out.
When Amazon made its first-ever public Prime Air drone delivery in the US last year, people in the logistics sector started to consider and ask questions around whether this would be something that the industry would adopt in the near future.
Many of the tech giants, including Google, Apple, Microsoft and Uber, are investing in and testing drones, but is there really a place for drones in large-scale distribution?
The Amazon test that took place in 2017, saw a drone drop off some bottles of sunscreen for attendees at the company’s conference in California. While this grabbed the headlines globally, is this practical in terms of commercial and large-scale delivery?
According to Andrew Clark, Managing Director at Logistics Help, a lot of the technology that is gripping the media is a long way of from actual practical implementation. “Some of this technology is looking further and further into the future, this all may be coming, it’s definitely not in the near future.”
Andrew points out that, according to current Australian legislation, drones deliveries are prohibited in cities due to the 30 metre no fly radius from people. He then asks, whether we even want a world where there are thousands of drones flying around and delivering packages all the time?
While some do argue that these disruptive technologies will shape the future of logistics, Andrew refers to the Gartner Hype Cycle, to try to understand the implications of these advancements in technology.
The Gartner Hype Cycle was established to provide a graphic representation of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploring opportunities.
The methodology aims to give a view of how a new technology or application will evolve over time, providing a sound source of insight to manage its deployment within the context of specific business goals.
The hype cycle is broken down into five phases of a technology’s life cycle. According to Gartner, first there is the innovation trigger, this is the technology which kicks things off. There will be early proof-of-concept stories and media interest that trigger publicity, but often no usable products exist and commercial viability is unproven.
Next in the cycle is the peak of inflated expectations. At this stage, there are a number of success stories, much like Amazon’s sunscreen delivery. Here some companies start to take action and invest in the technology.
After this, Gartner describes what happens as a trough of disillusionment. The interest has faded as experiments and practical implementations fail to deliver. Producers of the technology fail and investments continue only if the surviving providers improve their products to the satisfaction of early adopters.
Andrew offers the example of Rethink Robotics, a robotics company that launched in 2008 and closed in October this year. Rethink Robotics was a US-based company that pioneered the development of cobots ­– collaborative robots designed to work alongside humans.
“This concept was all over the news, it was impressive technology but we are at least five and probably ten of more years away from a robot that replaces a storeman or a worker. The Rethink Robotics just weren’t a product that people needed to buy,” Andrew says.
The final stage in the Gartner Hype Cycle is the plateau of productivity. This is when mainstream adoption starts to take off. Criteria for assessing viability is more clearly defined and the technology’s application and relevance starts to pay off.
For Andrew, some of the technologies that are currently in the early stages of the hype cycle are a long way from reality, especially for the small to medium enterprise market. “If a lot of these technologies get used at all, they will be largely for the big companies to live with the costs. At the moment, there is marginal or zero return on investment.”
Using drones as an example, Andrew says that if they do have a place in logistics it is most likely for remote deliveries. “With drones, there are issues around risk, loss of asset, damaged asset etc. If you were going to lose say 10 per cent of your drone fleet a year, you might just decide to put the parcel in a truck and drive it.”
Back to basics
Andrew argues that many businesses are yet to take advantage of technology that is already widely available. Warehouse Management Systems, for instance, have been on the market and transforming logistics operations for nearly 30 years. But according to Andrew, most are smaller and medium sized businesses are yet to take advantage of the technology.
“It’s all well and good talking about drones, robotics, Industry 4.0, but in many warehouses the most advanced technology used to assist order picking ia a piece of paper.”
Part of the slow deployment of technology is down to the perception of cost, but Andrew says the cost of logistics software and technology has fallen significantly over the last few years and it’s not more affordable than ever.
“The small businesses have the same problems as the big businesses. A small e-commerce business needs a very sophisticated warehouse system to run it. They can have 1000’s of orders a day, that are being processed entirely on a paper-based system. This could take 20-30 people to process, but with the right systems they could do it with half that number,” Andrew says.
As businesses start to scale up and grow, if they cannot fulfil orders accurately and on time, they won’t survive, he says. “There are two main problems that SMEs face with regards to logistics. They struggle to manage their inventory well and their warehouses are run with old and inefficient practices and little or no technology support.”
Sophisticated inventory planning is key in the e-commerce world. “You can easily have several million dollars of inventory and not be a big business. But if you are not buying and selling correctly you will over buy things that don’t sell and under buy things that do. Businesses end up losing sales because they can’t keep up with demand and have to discount, or discard underperforming stock,” Andrew says.
Many of the big corporations are doing all of the right things with regard to warehouse management, but Andrew believes that it’s the SMEs that are getting left behind. “When they start looking to improve their logistics operations they are often struggling to find the skills and knowledge needed to implement these systems.”
Andrew believes that SMEs should have access to the same advanced logistics practice and technology that are common practice in the corporate world, but the SMEs may be unaware of the many benefits they could realise. “SMEs would be far better off implementing better inventory management and warehouse management systems, before investing in over-hyped technology such as drones and robotics.”

The Coca-Cola Amatil Way

Delivering Australia’s most popular refreshments is a challenging job. Carly Cummings, Coca-Cola Amatil’s National Linehaul and Network Optimisation Manager presents her experience and advice for success.
Globally recognised soft drink, Coca-Cola, first appeared on Australia’s shores in the early 1900s. Initially the drink was imported to Australia from the United States, but in 1938 The Coca-Cola Company began producing the drink locally in a small building on the corner of Crescent and Downing Street in Waterloo, Sydney.
What started off as one production line, 10 staff and four trucks, has now become an international production and logistics powerhouse, run by Australian-based manufacturer Coca-Cola Amatil. The company makes and distributes bottled water, juice, tea, sports and energy drinks as well as sparkling beverages, and boasts more than 30 production lines in Australia, six distribution centres and 700 trucks delivering to Australian postcodes every day.
“We deliver to 75 per cent of Australian postcodes every week, and 96 per cent every fortnight,” Carly Cummings, National Linehaul and Network Optimisation Manager – Supply Chain at Coca-Cola Amatil, says.
Impressively Coca-Cola Amatil manages its entire logistics operation internally. “We operate one of the biggest networks in Australia. We work with our transport partners to make sure all our drivers are focused on safety and presenting a positive and engaging face for Coca-Cola Amatil,” Carly says.
Plan for success
Coca-Cola Amatil’s supply chain and logistics operation has undergone recent transformation. “As a result, the logistics arm of the business is highly advanced, due to a recent strategic transformation and establishment of a Supply Chain 2020 vision.”
The transformation strategy was part of a business-wide cost optimisation program which aimed to save $100 million, including $70 million from supply chain. To realise this vision, the company put together an advanced strategy.
“Success had to be based on planning and resourcing. You need a vision and you need to stick to it,” Carly says.
The cost optimisation target for the supply chain division meant that the logistics aspect of the business had a huge responsibility in contributing to the company’s overall success, Carly says. “Through our BEx (Lean Business Excellence) program we established that there were more than 100 different projects across the business that had to be completed to reach our goal. That’s a big responsibility.”
“We also knew we needed to have a number of major projects running simultaneously, so we used a ‘Pain and gain’ matrix to categorise the projects based on our BEx program, classifying and prioritising projects into ‘loss and waste hoppers’ based on their size and impact. A combination of value stream mapping and input from our finance team on the commercial impact of each project enabled us to identify which projects were our big “rocks”.”
Nine projects were identified as critical business priority “rocks”, of which seven fell within the supply chain, Carly says.
The first four were logistics optimisation, customer flexibility and enabler of future strategy; ICP as the single rhythm for a system view of commercial performance; an engaged workforce with a focus on standardisation; and consistency and leveraging of technology and operational automation. The final three were new automated distribution centre; major infrastructure changes to simplify network and work force of the future.
Coca-Cola Amatil’s brand-new Richlands Distribution Centre in Queensland was officially opened in October this year and delivers against several of these key “rocks”.
“At Amatil we have done a lot of work on the soft side of the supply chain. Sales and logistics work closely together so that we can help each other,” Carly says.
Integrating departments allowed the sales team to have better visibility across the supply chain. Carly says this gives them the ability to offer better deals and deliver a more-informed service. “We also have many ex-sales and ex-customer service employees in our logistics team, which allows us to better understand the needs of our sales teams and customers.”
Digital journey
At Coca-Cola Amatil, the digital opportunity has been broken down into five disruptive technologies. These are analytics, internet of things, process digitisation, tobotics and automation and business model innovation
The new distribution centre in Richlands is already utilising many of these technologies. With an investment of $165m, the centre is heavily automated and features an Automated Storage and Retrieval System, Automated Guided Vehicles, an advanced Warehouse Management System and Automated Case Picking.
Amatil Logistics
Carly says Coca-Cola Amatil is responsive to adopting innovative ideas and is great at change management. Her key focus is finding and implementing opportunities across the Australian supply chain marketplace where logistics networks can be shared and optimised collaboratively between companies.
“I want to find and minimise empty space and empty trucks on the road and build genuine partnerships where everyone benefits. We need to share our networks, fill our trucks and ultimately reduce costs and emissions,” she says.
For Carly, this is where the industry needs to go. “We need to share resources and consequently make our networks perform better and more efficiently. Let’s form partnerships and share our trucks and warehouses.”

Rethinking safety and wellbeing

Logistics & Materials Handling recently spoke with Paul Graham, Chief Supply Chain Officer at Woolworths Group and others about the initiatives that are changing the way the industry approaches the safety and well-being challenge. 
A recent Monash University study has revealed that transport workers are up to five times more likely to be injured at work than any other Australian worker.
According to the National Transport and Logistics Industry Health and Wellbeing Study, the transport and logistics industry is one of the highest risk industries for work-related injury and disease in Australia.
This is a concern that is echoed among many employees working in the logistics industry, with a recent Westfield Health study revealing that 52 per cent of working adults in the travel, transport and logistics industry believe that businesses are not doing enough to support the physical and mental wellbeing of their employees.
The Australian transport and logistics industry is a diverse one, encompassing drivers, logistics, storage and warehousing workers, managers and executives. These workers are subject to a unique set of risks in their working environment, including long working hours and shift work, isolation, fatigue and sleep deprivation, among others.
While there are many reports that highlight the issues in the industry, there are also many great initiatives and businesses looking at new and innovative ways to improve the working environment for employees and to improve the perception of the industry at large.
Melissa Strong, Safety, People and Culture Manager at Lindsay Australia, believes that communication is king when it comes to improving attitudes to safety. “Never underestimate the impact of a face-to-face conversation,” she says.
For Melissa, by talking to drivers and workers individuals can show that they are passionate about safety. “When looking for a change in the business, it’s important to communicate how passionate you are and that it’s not just lip service.”
Melissa was the first-ever HR manager at Lindsay Australia. In recent years the HR department has merged with the safety department, to ensure that it’s not just about physical safety but overall wellbeing.
At Lindsay Australia communications about safety are sent to the family home. “We want children to understand what their mother or father does every day. We involve the family so that support is also there at home,” Melissa says.
According to Ed Napiorkowsli, Head of Workplace Health and Safety at Metcash, any safety campaign must be simple.
“People take the shortest path to get the job done. So if a safety management system says to fill out this paperwork, talk to this person and then send an email – it won’t happen. For that reason we are all about simplifying safety. If part of the process doesn’t have a purpose and isn’t a regulation, then cut it out,” Ed says.
At QHDC, an industry supplier of wheels, trolleys and mobility equipment, the safety department is now linked together with the HR department. “Our HR and safety policies and procedures are linked together, so we decided to integrate the two departments,” Andrew Middleton, National HR and WHS Manager, says.
Andrew’s background is in architecture, specifically ergonomic architecture. “Ergonomics is a huge part of safety at QHDC. We make sure that work design areas are ergonomically designed and that the design of the working environment means that employees aren’t sitting down all day,” Andrew says. In addition, when any aspect of manual handling can be done by a machine or a tool this is encouraged at QHDC.
For Andrew, a significant aspect of safety is change management. “People ordinarily don’t like change. We ensure that we consult everyone, so that they feel comfortable that they can talk to me and give feedback or request change. We want to know what people are doing, why they are doing it and understand why they work in certain ways.”
Additionally, when it comes to mental health QHDC make sure that all employees feel valued and able to speak up when things are not 100 per cent. “You don’t want to delve into people’s lives but if you need to know something about it so that you can provide the right support. We want people to know they are looked after and ensure that they feel cared for,” Andrew says.
Healthy Heads in Trucks and Sheds
Many organisations promote a value of zero harm, and have safety at the core of the organisations values and identity. However, while there are many processes and initiatives already in place to protect workers physical wellbeing, according to Paul Graham, Chief Supply Chain Officer at Woolworths Group, the mental health of team members has in the past been overlooked.
The National Health Commission believes that there is a link between the mental wellbeing of Australians and the economic growth of the nation. The Commission released data that revealed the cost of mental ill-health in Australia is around four per cent of GDP and costs the nation more than $60 billion.
In addition, a Davidson Trahaire Corpsych research report found that investing in employee wellbeing provides a direct cost benefit to transport and logistics employers of more than $13,000 annually per employee. While looking after employees’ mental health is the right thing to do, it is also makes financial sense.
Keeping workers minds healthy and safe as well as their bodies is an initiative that Paul is passionate about.
“Seventy per cent of a truck drivers’ role is in a truck all day. Our transport providers and drivers spend more time in our working environment than they do in their own business,” Paul says.
With so many different deliveries to a Woolworths store or warehouse a day, a driver will often have not seen another person for hours until they arrive at a Woolworths facility. “Being on the road is often an isolated existence, and we want to improve that environment. In the logistics and transport industry we have a disproportionate amount of mental health problems,” Paul says.
And it’s not just the environment inside the truck it’s also the dietary habits. “A diet of high-caffeine and high-sugar will not help stress levels and anxiety.”
“What we want to do is to get people together to agree that it is an issue and to acknowledge that many of the environments that we work in are not creating the right atmosphere for someone who may be suffering from anxiety or mental health issues.”
If people come off the road, and they are not feeling 100 per cent, there should be trained personnel onsite to help and support each other, Paul says.
“One of the biggest issues in safety is distraction. That could be a mobile phone, or people’s minds being distracted because there is something going on at home, it could be short-term anxiety, financial issues, or deeper seated mental health illness but if this is left uncovered then there are serious safety issues.”
For Paul, talking about mental health is still taboo in many areas. “We don’t talk enough about wellbeing. It shouldn’t be about processes and paper work. It should be people asking: Are you here? Are you 100 per cent? If not, there is a risk and it’s okay to say you are not feeling 100 per cent.”
When this is the case, he believes that there should be options in place to consider other alternatives. “If driving isn’t the right one for the day, then there should be support for that person to look at what else could be done.”
In order to tackle the negative perception that logistics often has as unhealthy and unattractive, the industry needs to focus more on standardisation.
“We need to deal with this collectively as an industry, we can do good word in our individual companies but there is so much inconsistency and protocol that it can sometimes do more to hinder than help. We believe that we should focus on standardisation around paperwork, process and regulation, and that we all need to adopt or commit to a structured process.”
According to Paul it’s not about ticking boxes and paper work, it’s about working together to do good in the industry. Paul wants to see an industry that is based around trust and enables people to speak up if they are not feeling 100 per cent and consequently improve the perception of the industry as healthier, supportive and more attractive. However, he acknowledges it will be a long journey but having a collective industry approach will certainly go a long way in helping those in need feel supported.

Logistics and data: It's a match!

At a recent logistics roundtable discussion, Louise Robertson from Australian last-mile solutions provider Localz declared that tech in the logistics industry’s should be more like Tinder. Logistics & Materials Handling finds out why.
Consumer behaviour is changing drastically. The taxi and hotel industry, the music industry and the media industry have all experienced significant disruption through digital concepts and have had to adapt accordingly.
One particular industry that has seen disruption on a large-scale is the dating industry, namely through Tinder, one of the world’s most popular apps for meeting new people. Tinder has been ranked by Apple as the most downloaded lifestyle app in America for nearly two years. According to data released by Tinder, 15 per cent of the population are using the app, equating to more than 3.5 million people.
Launched in 2012, Tinder is a free app and works by users swiping right if they like the look of someone, or swiping left to pass. The app uses a double-opt in method, only allowing two users to chat online when they mutually match. Tinder has made over 1 billion matches to date and more than 26 million matches take place on the app every day, according to data revealed by the company.
Louise Robertson, Chief Marketing Officer at Localz ­– a global last-mile solution specialist – thinks that the logistics industry needs to be more like Tinder. “Modern consumers are well informed. They are more engaged, connected and educated than ever before and carry real-time information with them in their pockets.”
The popularity of Tinder, and other similar apps, is largely attributed to its ease of use and simple mechanism. It’s a simple concept, with an intuitive menu and convenience that allows to users to access on the go.
The individual economy
According to Tim Andrew, Co-Founder and CEO of Localz, the changing behaviour of the consumer is presenting the logistics industry with a number of challenges.
“The on-demand economy is interpreted by most people as instant fulfilment. It’s all about what I want, when I want and how I want. That heightened consumer expectation and demand of being able to dictate the hour at which a delivery will turn up, we call the individual economy or Iconomy,” Tim says.
We now live in a connected digital age that redefines the way we live, the way we connect with each other and the way we consume. This has allowed an app like Tinder to change the norms around how people date and meet potential romantic interests. This same change in consumer mindset has increased the delivery expectations of consumers and placed increase pressure on logistics companies and retailers, Tim says.
Recent research carried out by Localz revealed that 94 per cent of consumers would choose a different shop or brand based on delivery or collection options alone. The researchers found that customers want to define the time and place that their delivery or service will occur and at a very minimum know when their delivery or service is coming. They also want to be able to change those details to suit their needs.
According to Tim, companies must offer flexible delivery services that are relevant to their customers, as individuals with specific needs, or they are at risk of seeing customer move their loyalties. “This is the behaviour of the individual economy,” Tim says.
The irrational, emotional, uneconomic consumer
Localz recently organised a roundtable event in Melbourne. The event was an opportunity to exchange ideas and information among executives and representatives from associations and local government on the challenges currently being faced by the retail and logistics industry. With a particular focus on meeting the demands of consumers who are irrational, emotion and uneconomic – but in control.
“Aussie retailers are under increased pressure to let go of the old processes, operations and logical order that optimise their efficiencies to deliver these discerning consumers,” Louise says.
James Westlake, Chief Revenue Officer at Localz, presented on the importance of data in providing the modern consumer with what they want. “You can always serve your customer better if you know them. We have had an explosion in the ability to collect data. But in Australia we are a bit behind. Often on an order there is no email, no phone number, no ID etc. If you compare this to a logistics provider in the EU, they wouldn’t touch without this kind of data,” James says.
The importance of data was echoed around the room, regardless of sector or role. Jonathan Reeve, E-commerce Fulfilment Consultant, said that it’s not that consumer motivation has changed. For him, people are still motivated by tangible things like convenience. “We’re motivated by a mix of tangible things, like convenience, and psychological and social aspects. All of these have remained largely the same over the years. It’s the context that has changed, we now have so much choice. The array of choices is now enormous for a consumer, that’s the big difference,” Jonathan says.
Jonathan attributes much of the success of Amazon to its ability to offer cheap and convenient delivery. He elaborates and argues that where Amazon already operates almost everyone has an amazon success story to share ­– and the hero of the story is the delivery experience. Having the ability to offer same day or, at the least, next day deliver is what has given Amazon the competitive edge, Jonathan says. According to him, it is the company’s collection of consumers’ data that will take Amazon’s success to the next level.
“The more data you have, the better you can run your supply chain. Humans are largely habitual, often ordering the same things in a cycle. If you look at Amazon, it is likely that in the future customers will receive deliveries containing products that Amazon predicts they will need, based on the data it has about their usage and past purchases. And if they get it wrong, there will be a box to send back what you don’t need,” Jonathan says.
The future of the high street
As consumers move more towards online shopping and digital-only outlets, Jonathan believes the high street has to adapt. “High street stores will have to change, but the retailers that give the customer every option are going to be the performers,” Jonathan says.
The omni-channel shopping experience changed everything – people want the same seamless service and experience that they have online, instore, Jonathan says. “This will have an impact on the physical store and tech can benefit the high street experience too. People need a reason to come to the store, it needs to become more of an experience than just buying something that could easily be ordered from home. Only 10 per cent of purchases are made online, that still leaves 90 per cent of purchases in Australia as face-to-face,” he says.
Jonathan believes that if businesses are timely and relevant in their communications and offers, consumers will be less cautious about data and start to volunteer information. He thinks that with this, retailers will be able to do more with the data and create a more competitive product.
Enticing the customers instore also presents benefits for the retailer, so long as the consumer has a good experience. Localz research found that 69 per cent of customers who collect a delivery in-store are likely to make an additional purchase when collecting that item. Retailers with brick and mortar stores are able to provide a mixed channel experience that increases their sales.
Why “Sorry, we missed you.” isn’t good enough
When asked what customers found the most frustrating about their recent delivery experiences, the Localz survey results revealed that 40 per cent rated receiving a “we missed you” card as the most annoying.
Getting delivery right the first time is not just good for the customer, but also cheaper for the logistics provider. “Increased first time delivery rates reduces the cost of delivering, so it doesn’t just have benefits for the consumer,” Louise says.
The second most annoying aspect for survey respondents was having no visibility of when the delivery was arriving. “It’s clear that control of when something gets delivered and visibility of what is happening through that process is key in logistics,” James says.
According to James, this has led to an increase in customers demanding ever smaller delivery windows. “When asked what was considered a reasonable delivery window, 30 per cent stated one hour and 47 per cent stated two hours. That’s 77 per cent of people believing an acceptable delivery window is under two hours or less. That’s a big challenge for logistics.”
In addition, receiving an accurate and up-to-date estimated time of arrival was stated as being very important to 47 per cent of customers and important to 36 per cent of customers. Much like Tinder, having information about potential love interests in real-time at the touch of a button is what many users like about the app.
The ability to communicate with a driver was less important than receiving an accurate estimated time of arrival, supporting the idea that many consumers are happy to manage their purchases online via a smart phone or PC, rather than an in-person service.
“There are clearly some challenges for retailers and delivery providers to meet the expectations of the on-demand consumer,” James says.
“Customers want simple, fast delivery with short delivery windows and transparency of what is happening through the process. They are also saying that the cost of delivery and collection services is still very important to their purchase decision. Reducing the cost of collection and delivery services, while still maintaining a high-quality service, is key to success for retailers and delivery providers.”

Meet the experts – Darryl Blackeby

Meet Product Sales Manager Darryl Blackeby – an expert in the vision and identification product range of ifm (such as sensor cameras). Darryl is inspired by how customers use ifm sensors and is always interested in finding new applications for sensors that can help businesses improve and increase their efficiency.

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