The paperless supply chain is becoming a reality

Logistics and warehousing operators are constantly on the hunt for ways to make their operations more efficient. Staff, facilities, IT and transport vehicles are always being examined to ensure they're operating at optimal levels. When you're shifting thousands of items a week, even minor changes can have a big overall impact.

One area in which many operators find they can make improvements is workflow. Often systems that were put in place years ago are still at the heart of the supply chain. They might have done the job admirably, but they're now well past their use-by date. By critically evaluating and improving each process in a workflow, massive improvements can be made both to customer service and the bottom line.

The end of paper

Just as it's been in many areas of business, paper has been part of supply chains since their inception. From customer orders and pick sheets to invoices and delivery dockets, paper has been part of every step.

But the end of paper has arrived. Technology has reached the point where 'bits' can replace 'ball points' at every point in the supply chain. As well as removing cumbersome manual processes, this shift also allows the automation (or semi-automation) of both internal and external workflows.

Until now, many supply chain operators have been hesitant to invest in the technology needed to support such automation and changes in work practices. They highlight two key reasons: initial cost and the potential for business disruption during implementation.
 

Thankfully, both these reasons are now redundant. Companies of all sizes within Australia's supply chain and logistics industry have access to mature, sector-specific software solutions at a highly cost-effective price. Where once creating such a system would have involved bolting together components from a range of vendors, a full suite can now meet requirements from end to end.

Implementation has also improved. Rather than having to awkwardly jump from existing paper-based workflows to an unfamiliar new electronic system, companies can shift gradually, thereby giving staff time to adapt and become comfortable with new ways of working. By employing industry experts who use tried-and-proven implementation methods, a project's impact on daily operations will be minimal.

Big business benefits

Once a supply chain and logistics company has shifted from paper-based to electronic workflows, the business benefits will be immediate. The new systems will remove all need for double-entry and paper-based processes, freeing up staff to focus on more value-added activities such as customer service.

Having highly automated and configurable workflow processes in place will also streamline company operations, quickly and significantly reducing costs, boosting service levels and raising customer satisfaction levels.  
 

When you consider the day-to-day processes within a supply chain and logistics company, shifting away from paper to electronic systems touches them all. As soon as a customer order is received via EDI (Electronic Data Interchange), it can be viewed and processed on screen. In the warehouse, ordered items can be picked and packed using automated systems. Rather than relying on paper pick sheets, staff can use tablet devices to check the order and match it with outgoing shipments. The time taken to get an order out the door can be slashed and errors significantly reduced.

The paperless revolution can go even further. The addition of RFID (Radio Frequency ID) chips and readers can allow the automatic tracking of cartons and pallets as they move through the supply chain. At each point, the location of the order can automatically be communicated to the customer, keeping them fully informed of its status and estimated delivery time. Indeed, throughout the entire workflow around the customer order, the only manual effort involved is the physical movement of the goods themselves.

For the supply chain operator, paperless workflows mean lower administrative overheads and reduced operating costs in the warehouse. Everything from initial order entry to delivery can be smoothly handled with only the minimal amount of manual human intervention.

There are also big benefits on the logistics front. Automated systems can significantly streamline the loading of trucks and delivery vehicles. Routes can be optimised to ensure the maximum volume of goods is delivered with the minimal amount of driving. Loads can be automatically tracked between warehouses, split and delivered in the shortest period of time possible. Upon delivery, customers can sign on screen and receive electronic delivery dockets for their internal processing.  
 

Cost-effective solutions

Just a few years ago, the costs associated with such integrated paperless supply chain and logistics systems put them well out of reach of all but the largest operators. However, constant software development and a reduction in hardware costs now put them well within the reach of all mid-sized operators.
 

Implementation is also much easier. Careful selection of a technology partner who has intimate knowledge of the supply chain and logistics industry can ensure any impact of making the shift will be minimal. Portions of the existing supply chain can be shifted to paperless operation over time, allowing staff and customers to become comfortable with the new way of operating.
 

By making the move to an automated, paperless supply chain, operators can significantly reduce their costs, boost their efficiency and provide first-class customer service. A paperless future is very enticing.

Robert Frandsen is the managing director of InfoMotion.

The rise of manufacturing warehouses

Manufacturers are seeing value in rolling out intelligent software platforms that deliver optimised visibility and control across the entire supply chain; from manufacturing right through to delivery, as David Rubie writes.

The warehouse has traditionally taken a back seat to the manufacturing operation of a business when making investments, however in recent years, manufacturers are changing their approach and seeing value in finding efficiencies and savings in their warehouses.

This alignment of the importance of both the manufacturing production and warehousing operations has led to a much higher degree of integration of technology and systems.

For instance, manufacturers are seeing value in rolling out intelligent software platforms and supporting technologies that deliver optimised visibility and control across the entire supply chain; from manufacturing right through to delivery.

There are a number of external factors encouraging this investment, with an evolving market placing strong demand on manufacturing supply chains to deliver goods more rapidly and flexibly.

Consumers and retailers now demand access to a larger range of products and they want to be able to shop through a number of channels – in-store, online, click-and-collect and more.

Manufacturers are also now competing in a global market, where retailers can more easily source products from producers world-wide.

This increasingly globalised supply chain means local manufacturers have to maintain cost competitiveness in a much larger pool of producers, that, due to differences in geography and legislative requirements, have very different space, labour and operational costs.   

Overcoming the challenges

Australian and NZ manufacturers are looking to overcome these pressures by increasingly focusing on integrating their systems, from production right through to logistics.

The greater visibility of their operations that manufacturers have, the better they are positioned to make accurate operational decisions to further optimise their supply chain.

Many manufacturers are re-shoring their logistics operations in-house, in order to have better control over inventory as retailers demand a wider array of products, as well as a higher frequency of delivery.

The priority for manufacturers is increasing efficiency, productivity and visibility, through automating more processes.

The motivation for automation has arisen because it has been proven that the more a business eliminates ‘operator touches’ within the supply chain, the more cost effective it is and the safer for staff.

Due to the nature of the Australian and NZ market, full automation isn’t always realistic, however warehouses should be using labour effectively and automating repetitive tasks, heavy manual work, or work in environments that are harsh and difficult for workers.

While in the past manufacturers had a large network of warehouses, we are now seeing many manufacturers consolidate to fewer warehouses, or a single warehouse, integrated into the manufacturing location.

This is due to the growing issue faced by manufacturers of the increasing cost and availability of land in Australia.

The trend for manufacturers to reduce their real estate and eliminate touches by fully integrating manufacturing and warehousing operations on the same site, is seeing significant operational savings in labour, rent and transport.

Larger international manufacturers are also introducing global benchmarking where they have the systems in place to measure how their business is performing in different locations, allowing them to make the biggest investments in well-performing or high-growth regions.

New technologies

There are a number of technologies that manufacturing warehouses are considering in order to reduce the amount of physical space their facility occupies, as well as to increase automation where possible.

Many manufacturers are investing in high-bay warehouses with automated storage solutions to meet both their space and automation goals.

By increasing the height of storage, high-bay warehouses reduce the size of land required, and may allow a warehouse to be constructed right next to the manufacturing operation with all the benefits this ensures.

Others manufacturers are increasing their automation with Goods-to-Person (GTP) solutions that  enable warehouse workers to build orders at an ergonomic work station in order to increase efficiency, throughput, accuracy and operator health and safety.

Warehouses are also increasing automation to maximise operational resilience, reliability and performance through automatic guided vehicles (AGVs), and palletising robotics to build complex mixed-case customer pallets

Those manufacturers that automate to drive efficiency, productivity and visibility throughout their operations will be best placed to rise to the challenge of staying competitive in a rapidly evolving global supply chain.

[David Rubie is Industry Logistics Manager with Dematic]

Nelson Pine combines control and safety to minimise production downtime

In a plant that operates 24 hours a day seven days a week, control and safety are of paramount importance. According to Ian Craw, automation engineer at Nelson Pine Industries, “The plant is aging. To upgrade the chip mill we decided to start at the whole backbone of control to take advantage of advancing technologies and meet current safety standards.”

The chip mill is a large part of the site where logs are unloaded from trucks for processing. Two pivot cranes and a drum debarker handle 300 tonnes of logs per hour. Control and safety are critically important in the chip mill so the first stage of the upgrade involved replacing the existing PLC-5® hardware platform with a GuardLogix® Integrated Safety System.

According to Sean Doherty, account manager at Rockwell Automation, “The GuardLogix provides the benefits of the standard ControlLogix® systems but also includes safety features that support Category 4/PLe safety applications. The GuardLogix also offers integrated safety, discrete motion, drive and process control.”

“Nelson Pine has been particularly innovative in their approach. We often see safety systems bolted on to the control systems that may meet safety requirements but impact other business objectives, such as production rates and downtime. This type of solution was discounted early in discussions with Nelson Pine."

To allow for zone control, the chip mill building was split into two geographical safety zones, using some of the latest safety guard locking switches with RFID technology for controlling and monitoring zones.

The first safety zone incorporates a large drum debarker, which rotates the logs, removing bark before entering the chipper. Out-dated variable speed drives were replaced with eight, 90kW PowerFlex® 753 drives in a master/slave configuration. They receive their speed/torque reference via the DLR and achieve a Stop Category 0, (via safe torque off) to Cat3/PLd.

“The integrated safety provided by zone control allows the plant to shut down one zone while the other is still operating as usual, delivering improved production rates. The goal is zero harm but we also wanted to minimise impact to production schedules so we suggested a solution that helps achieve this,” said Doherty.

The second safety zone incorporates safe speed monitoring of the main, 1.8MW chipper motor and safe position monitoring of the 11kV motor breaker, to confirm lockout/tagout (LOTO) has been performed, before access is granted into the hazard zone.

“When upgrading equipment it was a priority to meet current safety standards. We are well on the way to complying with the Machine Safety Standard, EN ISO 13849, with the goal to achieve PLd across most of the site in the coming years,” said Craw.

Connectivity and visibility

As there are many hundreds of metres between different parts of the site, an EtherNet/IP™ network was used to reduce both the amount of cabling required and the installation times, with fibre running the longest legs. 

Utilising Device Level Rings (DLRs) achieved complete integration of the control and safety system, the ring topology provides high availability of the safety network with high resiliency. Various DLRs were run to different parts of the site connecting with field safety devices, bringing the information back to one centralised safety processor that monitors the various processes.

“One of the huge benefits of the solution is being able to have visibility remotely. We use PanelView™ Plus as the operator interface for fault finding and monitoring equipment out in the field. In our previous system we had to use multiple software systems to try to diagnose an issue, but now both the control and safety code are easily accessed and visible through ControlLogix,” said Craw.

In addition to the PowerFlex 753 drives, which are used on site, Nelson Pine is also using the PowerFlex 525 drives with safe torque off and ethernet capabilities, reducing commissioning time and fault finding time.

Plug and play

According to Craw, “The advantage of using GuardLogix is that you can edit and modify code on the run. Trying to reduce production downtime during commissioning was a key outcome from my point of view because there are several aspects of the plant that run 24 hours a day, seven days a week almost every day of the year.”

“Machinery in the chip mill operates 24 hours a day, so once we had GuardLogix up and running, we were able to add hardware and edit safety code on the fly which gave us significant production advantages,” he said.

Nelson Pine also used the Safety Automation Builder tool to facilitate the planning of safety systems to achieve the required safety performance level. This tool leverages the industry's most complete offering of safety products, utilising widely accepted best practices to help companies build a complete safety solution.

“For years everyone has been saying that system control and integration is going to become more plug and play but now ControlLogix is really bringing it to that level,” Craw said.

Leading the world in wood processing

Nelson Pine Industries has adopted production processes that are both safe and environmentally sound. As a result of the success of the new control and safety solution in the chip mill, Nelson Pine is planning to roll out the solution across the entire plant.

“Ultimately I have used other safety hardware previously and because they only focus on safety it makes it difficult when you are looking at the bigger picture. Our plant involves a multitude of safety inputs/outputs and a lot of other systems aren’t built to that type of scale,” Craw said.

“Rockwell Automation have really partnered with us in providing valuable support and application knowledge that has enabled us to retrofit safety into the working plant. We have not only achieved a suitable performance level relatively easily, but also minimised production downtime which is of paramount importance to our plant."

The Rise and Rise of Terminal Operating Systems

It’s no secret vessels are getting larger, cargo is becoming more varied and complex, and throughput at ports and terminals is increasing. At the same time, competition is becoming more fierce and customers are demanding more. All of these factors are putting intense pressure on terminal operators to do more, more accurately and more efficiently.

The situation has led an increasing number of operators to seek more control over their business by deploying a terminal operating system (TOS).  A TOS sits at the operational core, allowing a port's complex mix of cargo movements to be handled and controlled more efficiently. It gives the business a competitive edge by providing increased agility along with a boost in productivity across the operator's entire organisation.

 

In-house or commercial solution?

Any organisation considering deployment of a TOS has two options: develop a solution in-house or purchase a specialised commercial system. 

One of the problems of in-house developments is the exposure to risk.  TOS solutions are often developed by just one or two individuals within the IT department.  If either individual leaves, there is a high risk that essential knowledge about the system – information necessary for its maintenance and further development – will be lost. In these circumstances, how will you deal with the need for system improvement, modifications or interfaces to future applications?

In contrast, commercial TOS vendors continually develop their products to keep pace with changes in technology, legislation and the industry, for without constant improvement, their offerings soon become uncompetitive.

 

What to consider when selecting a TOS

Just as every terminal has its own requirements, every TOS deployment is different.  The areas you give precedence to will depend on your individual situation. However, one of the best places for any organisation to start is by understanding your current landscape, particularly your business model, people and processes, as well as the part you play in the wider supply chain community.  

 

Understand your Business Model

If you want a more efficient port and a TOS is key to achieving that, you need to find a solution that really fits your business, rather than attempting to “make do” with a generic TOS.

Major considerations are likely to include the type and volume of cargo you currently handle, the type and size of ships your port can accommodate and your vision and plans for future growth.

Look for flexibility to adapt to changing circumstances. While you may be comfortable with your current situation, market and industry changes could force you to re-evaluate your goals and objectives, causing your business model to adjust accordingly.

Determine functional requirements

Having addressed macro-level business needs, it is time to think about the more functional aspects of your operation.  Consider whether other areas of the business, such as a depot or warehouse within the terminal, could benefit from the functionality provided by a TOS.  Think about the potential for any current or planned use of mobile applications, optical character recognition (OCR) and radio frequency identification (RFID). 

Understanding your business model allows to you to build a clearer picture of your organisation’s current landscape, your vision for the future, and the tools and processes required for success.

 

Supply Chain

A TOS is not just about your own organisation – it is your entry ticket for involvement in the wider supply chain. There are a variety of stakeholders and areas of interaction where your TOS needs to be the hub of activity and co-ordination. Shipping lines, transport hauliers and customs are just a few examples of the agencies and organisations reliant on clear communications and interactions with your terminal.

Therefore it is essential to check in advance that your TOS is capable of connecting to partner systems and can make the appropriate data available to the relevant decision-makers within the supply chain.

 

People and Processes

When it comes to processes, don't just think about your current situation.  Be clear about how they may change in the future.

The TOS vendor should be able to assist you with this, as well as provide guidance on the flexibility of the TOS with respect to meeting your requirements. Your aim is to strike the right balance between making changes to the process itself, or customisation of the product, whichever makes the most sense to your organisation.

Never forget that while processes are necessary to drive the business, people are the keys to your success. Any form of change can be unsettling for staff. They need to adapt to new ways of working and deal with uncertainty and disruption to ‘business as they know it’. Involving users as early as possible and providing clear communication about changes will help to mitigate any resistance and increase the likelihood of successful adoption.

 

Knowledge makes for more successful decisions

Addressing the key elements of business model, people and processes, and your supply chain in advance allows you to build a picture of your current positioning, to pinpoint where you would like to be in the future, and identify the changes you need to make to get there. Armed with this information, you'll be well-equipped to select a system that is scalable enough to grow with your business and the wider supply chain community.

Kaustubh Dalvi is the Director of Business Development for Jade Logistics.

Yellowtail’s efficiency overhaul

One of Australia’s largest beverage distributors, Cassella Family Brands, has made some unprecedented efficiency gains at their distribution centres.

Distributor of the Yellowtail wine label, Casella supplies around 27 per cent of Australia’s bottled table wine, holds a record for the fastest growing imported wine in US market history, and distributes more than 12.5 million cases of wine to 50 countries around the world each year.

Following such a sustained period of rapid growth, Casella recognised it needed new technology that could improve visibility of inventory across its two distribution centres (DCs), which could offer the required degree of scalability to improve product availability and drive future growth.

After an 18 month search for the right candidate, Casella settled on a partnership with logistics specialists Manhattan Associates, which has seen implementation of the SCALE (Supply Chain Architected for Logistics Execution) software at Casella’s distribution centres.

Casella Family Brands distribution manager Sam McLeod said the new warehousing software system has made some significant changes to their business, streamlining their old supply chain methods and increasing efficiency by 22 per cent.

“Prior to the implementation of Manhattan’s SCALE software we had something that wasn’t far off a paper based system,” McLeod said.

“We could not scan or log anything leaving the warehouse outside of that which we wrote down and then logged back in through our previous system.

“For us it’s been a big change because now we scan every single outgoing product via unique licence plate numbers (LPNs) which gives us a great degree of traceability that we certainly didn’t have before.”

With traceability being the number one concern in the wine distribution game, McLeod said the new system ensures minimum disruption in the event of a recall thanks to enhanced product monitoring.

“We could run a product, say a Shiraz 1.5L retail product, which would be about 30,000 to 40,000 cases in one hit: Under our previous system if we had a recall based around one hour’s worth of product, we would still have to recall all 40,000 cases to get the required batch, because there was no way of determining what products were processed in a given time period,” McLeod said.

“Now, in theory, we could narrow that range down to 500-600 cases.

“In the event that we had bottles chipped around the mouth due to issues with the corker, we’d be able to mitigate that problem.”

The old Casella system required manual marking of pallets on order sheets, an extensive checking process of 40 sea-containers worth of product each day.

However, now orders are picked, placed in staging areas, and then scanned back out to the containers.

“In simple terms that’s made an awfully big difference to us, this is hours each week that we’re saving because we don’t have to go back and double check.”

McLeod said the new system is anticipated to save Casella three per cent on wages in the coming financial year, a significant share in an operation of that size.

The other major benefit Casella has seen is an increase in the utilisation of warehouse space by 22 per cent.

“Being able to increase our warehousing capacity means that, as we have the fastest bottling line in the Southern Hemisphere, our warehouse is our limiting factor,” McLeod said.

“By increasing our usage of the floor space by 22 per cent, that means we can run to 22 per cent greater efficiency over the course of the year, and that’s a big saving on revenue, which is fantastic.”

McLeoud said the company previously had to employ two to five people allocating stock from different regions of the warehouse to be picked and placed in the loading bays, a task which can now be co-ordinated from a single computer.

“Before we had five people across 500 SKUs, trying to pick independently of one another, but now our system allows us to use up one row before we look at another one, then we can use that up and move on,” he said.

“As you can imagine it’s a very complex equation for individuals to handle, sitting at a computer with data entry, but for scale at the click of a button we can allocate those associated rows, and that’s where the 22 per cent comes in.

“We have the fastest bottling line in the world capable of processing 36,000 bottles an hour.

“Bottling at this speed and managing the volume of inventory associated with this scale of operation requires a strategic Supply Chain Commerce Solution.

“Simply put, thanks to the availability improvements we’ve achieved with Manhattan’s technology, our coveted Yellow Tail brand is seen on more dining tables, on more store shelves, and in more bars, pubs, clubs, hotels and restaurants around the world with every passing week and month.”

Manhattan Associates’ managing director for Australia and New Zealand Raghav Sibal said he loved being able to help Casella to improve their business.

“Seeing my favourite wine brand on the store shelf or restaurant wine list always brings a smile to my face and I get great satisfaction from knowing the role Manhattan has played in getting it there,” he said.

“With our global footprint, Manhattan enables companies like Casella Family Brands to deliver on their brand promise to customers all around the world.

“We’re delighted to see Casella Family Brands already reaping exceptional value from its investment in Manhattan’s solutions and we’re confident our solutions will ensure the business’s continued growth for many years to come.”

Why port privatisation plans are in deep water around the country

Recent plans the privatise a number of Australian ports have become very messy. In Victoria both sides of government were committed to privatising the Port of Melbourne Corporation (PoMC), intending to use the proceeds to remove a number of level crossings throughout the state and enabling it to qualify for the Treasurer Joe Hockey’s 15% recycling assets contribution scheme.

But the Opposition has now said it will oppose Labor’s legislation, which authorises the transfer of port assets to a new lease holder for 50 years, and refer it to a select committee inquiry in the Upper House, supported by the Greens. The move potentially leaves a multi-billion dollar hole in the state budget.

In an attempt to increase the sale price, the PoMC has served a rent review notice to one of the major lease holders in the port, container stevedore DP World, allegedly asking for an increase in excess of 700%. This caused a howl of protests amongst other lease holders such as QUBE Logistics, Patrick Terminals and Logistics (a division of Asciano) as well as other stakeholders in the supply chain such as Shipping Australia, Maersk Line, Mediterranean Shipping Company and numerous importer and exporters.

Even chairman of the Australian Consumer and Competition Council (ACCC) Rod Sims, an old foe of the stevedores who has accused them of running a cosy duopoly, put his hat in the ring by suggesting that oversight of port pricing might be necessary. An independent valuer has been appointed to review the proposed rent increase.

The Tasmanian government which relies heavily on the port of Melbourne for its flow of import, has struck a deal with Victoria to would protect Tasmanian port users from planned fee rises, after complaining to both the Federal and Victorian governments.

Price hike would undermine its competitiveness in local and global markets, especially since in April the state received an extra $200 million to extend freight subsidies to northbound goods from the Federal government.

Encouraged by comments from the ACCC chairman, one of the stakeholders in the Port of Newcastle in NSW, multinational Glencore, has applied to the National Competition Council to force ACCC oversight of pricing in the port. The Port of Newcastle was recently privatised under a 98 year lease. In January this year the port pushed access prices up by an average of 40%.

The Darwin Port Corporation has also been slated for privatisation with the Northern Territory government recently releasing the sale/long term lease documents to the market. In an apparent attempt to increase its sale price, the Corporation announced in December 2014 very significant increases in port fees, which include a new fee of $2,000 per ship call, an increase of 15% to daily berth rates, and a 30% increase in wharfage rates, much to the ire of John Lines, managing director of ANL Container Line, a major customer of the port. LINK?

The Western Australia government, whose revenue stream has been severely hit by the slowdown in the mining industry, announced in its recent budget that the Port of Fremantle has put out the “For Sale” sign in an attempt to raise additional funds. There is no word yet from Fremantle Ports on potential price increases, but watch this space.

Utah Point, an iron ore port facility in Port Hedland in the far north of Western Australia, which was also earmarked to be sold, has recently become less attractive due to the fact that the mining companies which ship iron ore through the port, and make up 90% of its revenue, are struggling amid a sustained low in global iron ore prices.

Overall, it’s a messy picture which, combined with plans in a number of states to open additional ports within the next 15 to 20 years, will make it hard for sellers and bidders to determine a fair price for these attractive infrastructure assets, under what conditions a competing port may be established, and whether compensation should be paid to incumbents.

Sadly all this political posturing could result in importers and exporters paying higher prices for the use of port facilities and could leave taxpayers footing the bill for potential compensation payments.

This article was originally published on The Conversation.

Supply chain and mobile warehousing in one

The challenge of loading and unloading shipping containers involves a balance of efficiency and safety.

On the one hand the container must be well-packed to maximise cargo space, but the loading crew must be mindful that at the other end of the journey another crew must unload, and this is not without its hazards.

As usual with a manual handling job, there’s 1001 ways a worker can wind up injured, all the way up to horrific and fatal crush injuries.

Quite apart from the obvious safety concerns, unloading a well packed sea container can be a very difficult job.

Using a Franna, there’s a lot of crane movements in a confined space, which burns a lot of fuel and presents challenges to the rigger and crane driver to get the job done safely and in a timely manner.

Presenting at the inaugural CeMat exhibition in Sydney last month, Australian logistics solutions company Seabox International has devised a sea-container loading system that reduces loading and unloading times, swaps the Franna crane for a forklift, and all but eliminates manual handling hazards for the crew.

Seabox International managing director Shaun Moore worked closely with representatives of resources construction contractors CBI Kentz to develop a system that would improve the productivity and safety of one of Australia’s largest offshore construction projects, the Gorgon Project.

Named the CROWS (Container Roll-Out Warehousing System), implementation of this system has resulted in massive productivity gains for the construction contractor CBI Kentz.

CROWS is a stackable, roll-out storage system designed for use in sea containers, 20 or 40 metres long.

The system allows any kind of cargo to be safely strapped down into platforms, which are stacked and rolled inside a shipping container for transport.

On arrival at the destination the container can be opened and have the platforms rolled out safely using a forklift.

Everything from large pipework to vehicles c an be transported using the CROWS.

Research and Development

With a background in designing and manufacturing purpose built logistics platforms, Seabox knew how to deal with the challenge laid down by CBI Kentz, to ensure their organisation of parts and material would not impede the progress of the job.

One of the key constraints faced by CBI Kentz was the minimnal footprint allowed for the materials laydown yard.

Gorgon Project materials and logistics manager Rob Lowe said the environmental concerns specific to Barrow Island prevented the usual approach to assigning space for a laydown yard.

“The island’s Class A Nature Reserve status had created additional challenges during construction,” he said.

“The State Agreement under which Gorgon operates limits the land available to the Project which means the total construction footprint, including laydown, is very small for a project of this scale.

“The introduction of the CROWS has increased storage space on Barrow as it allows four racks to be safely stacked on top of each other.”

The key to the success of the CROWS development was one of a collaborative effort between Seabox and CBI Kentz, one which did not fit the bill for a traditional procurement.

Andrew Constantine said the CROWS project, visualised by CBI Kentz, was one they needed to get right in a very short space of time, and for that reason necessitated finding a short cut to the process from innovation to procurement.

“First of all [in a conventional procurement] you identify the need, you develop a business case, specifications, develop and execute that tender plan, you hopefully get a contract, and that’s where the real risk starts, for the supplier and the client,” Constantine said.

“You go through a design, test, and evaluation process, and then you’ll go into that project management, fabrication delivery phase, and that’s the complex phase, that’s where you’ve got to pool your resources… and you’ve got to have your project team in there from the very start.”

Constantine knew that the constrained time frame of a construction project was not the ideal situation for procuring a new innovation, but in this case necessity had to become the mother of invention.

“What we found on this project was that we didn’t have the time to go through that full process to get this system out,” he said.

“We had to come up with an abridged process that would achieve the change during the life of the project.”

“It seemed like the materials and logistics team could be the ones to hold up the project schedule, and at the time it looked like we were going to be that team that would be the weak link.”

In order to increase the efficiency of the materials operation at Gorgon, Constantine was already familiar with a logistics platform built for military purposes by Seabox, but it needed some crucial changes made.

First of all the design needed to meet the strict quarantine requirements enforced by Chevron on Barrow Island.

“We needed to get rid of all the nooks and crannies, we needed to have that sealed up from an environmental point of view for quarantine purposes on the island, so any gaps were filled up so that every part of the CROWS could be easily inspected for contamination or vermin,” Constantine said.

In addition, the CROWS had to be stackable to be used for warehousing purposes, and at present CBI Kentz uses the CROWS system for warehousing both under cover and outdoors, with the system stackable to four high.

It also needed to be designed for more loading points, so that unusual or regular shaped items like pipework could be tied down in different ways as the load demanded.

“To achieve that we made sure it had a full bar along the side of the CROWS for tying down,” Constantine said.

“But above all things the chief concern was the safety of crews unloading the containers. Now we don’t have anyone going inside containers, and we have reduced crane movements onsite.

“This goes a long way to reducing the risk of pinch points in manual handling, the crush injuries that can be extremely damaging.”

Now the Gorgon Project boasts a world-class materials laydown and warehousing facility, all achieved through an innovative logistics platform which works within a minimal footprint, with principle focus on productivity, safety, and environmental concern.

Are you breeding customers or victims?

When was the last time something you ordered didn’t show up? Can you remember the frustration you felt?  The anger that surfaced when what was promised wasn’t delivered – made even worse if that in turn prevented you from fulfilling a promise you’ve made to someone else.  You are powerless.  A victim of someone else’s failed system.

We can talk delivery statistics all we like but at the end of the day when an order isn't delivered on time, or is wrong for whatever reason, there is a very human outcome; we turn a perfectly good customer into a victim. You are as powerless as any other victim of circumstance and feel equal measures of frustration, anger and betrayal.  And as a victim, you are very unlikely to come back for more of the same treatment. 

Inventory applications often boast about their ability to deliver a wide array of key performance indicators (KPIs), metrics or measurements.  But to the customer that is sitting waiting for a delivery that never happens, or opens a box of goods that wasn’t what was ordered, there is really only one metric that matters:  Delivered In Full and On Time (DIFOT).  

DIFOT gives a very clear indication of the quality of your service provided to customers.  It confirms whether your customer has received the right stock at the right time, in line with their expectations.  At face value, it provides a measure of wether you have the right stock on hand at levels to meet order requirements.

 But DIFOT is so much more than a measure of inventory availability, it is a measure of an organisations ability to successfully bring together all of its line functions and suppliers to meet customer demand – each and every day! Most businesses fail to achieve 100% DIFOT not because they don't care, but because they don't have the capability to ensure all the critical factors required to guarantee delivery are in place.

 

Inventory is more than counting stock

Most inventory software easily supports picking, shipping, prioritisation and visibility; many do that extremely well as it is their single purpose in life.

It's not until you get to predictability and forecasting that the options begin to narrow dramatically as it takes a really good, fully integrated inventory system to help you anticipate future inventory needs. This is where a business can obtain real cash flow and service advantages, and really make a difference to your DIFOT (Delivered In Full and On Time) statistics – but it is a far more complex task than simply knowing what's in the warehouse. 

Anticipating customer needs and order patterns requires knowledge of activity outside the warehouse including information about purchasing and future order patterns to ensure appropriate lead times for replacement stock and avoid out-of-stock disasters.

Without real-time production, ordering and sales updates from your business system, it’s difficult to achieve any real improvement in customer service. When standalone Warehouse Management or Inventory System projects are put together, much of the effort, cost and risk are associated with building these critical interfaces back to the core business system. For many such projects, this is often a point of pain, if not outright failure – with an integrated system it is simply business-as-usual functionality.

Taking an enterprise view

Customers today expect your business will understand and anticipate their demand. When they approve a quote, they expect the order will be fulfilled on time, regardless of how long they sat on the quote. This means it is imperative to ensure linkages between CRM and quoting systems, to allow the inventory management system to obtain a three-to-six month advance view of likely order requirements – right down to individual line items.

For these reasons, inventory management software must be considered an essential and imbedded component of the overall business system.  Far from simply existing in its own space, inventory software must be capable of real time data sharing with key systems across the business.  And the easiest way of achieving this is with a single, fully integrated, solution that can help you to effectively manage your business delivery against your customer’s expectations.

Most customers will accept if you can definitively tell them when an out-of-stock item can be delivered.  It is your inability to answer their questions with any certainty that raises alarm bells. I find it incredible the number of relatively large businesses still working on an end-of-day batch system environment that blindly accept that they will get a certain percentage of orders wrong.  Many of the customers we work with in a Greentree environment believe that anything less than 100% DIFOT is unacceptable, simply because they know it is achievable.

All of the systems that feed your supply chain create these inter-dependencies. It’s only when you have true intergration across your purchasing systems, production, delivery, and resourcing that you can start delivering to your customers’ expectations, with good real time forecasting being the icing on the cake.

 

But at what cost?

Collaboration and visibility at all points in the supply chain is essential to achieving dramatic improvement in efficiency and customer service. There is an increasing importance placed open real collaboration with supply chain partners. Invariably, the businesses that perform best today are those that successfully manage their role in the greater supply chain.

 Many organisations are now opening up their systems to provide critical partners with visibility into stock and forecasting to ensure that their partners are able to predict their needs.  These businesses understand that in a collaborative world, if they can add value to their suppliers business and take costs out of the supply chain, all parties stand to share in the benefits not to mention the improvement achieved in SIFOT (Supplied In Full and On Time).

But this can't come at any cost.  You still need to turn a profit, so you equally need to manage the cost of supply, production, delivery and resourcing while delivering to your customers’ expectations and service levels. Full integration gives you the reporting power to ensure you are getting your pricing and margins right.  You can test out scenarios that take into consideration shifts in the cost of raw materials, petrol, labour costs or foreign exchange and how that will play out across your business.

Stand-alone, best-of-breed inventory applications will undoubtedly deliver improvement in your warehouse. But if you are looking at implementing a profound and sustainable level of improvement to your business and customer service performance, then you need a lot more. Selecting an integrated ERP system with a very strong inventory management component, will ensure that you are not only breeding satisfied customers but continuing to build a sustainable, profitable and growing business to boot.  
 

Rob Sheldrick is the Business Development Manager at Greentree Partner, GT Business Solutions.

The Voice of Reason: Hands Free in Cold Storage

Australian 3PLs and the food retail businesses they supply are all too aware of the need to ensure in-store stock levels are maintained. However, it is not uncommon to come across an empty shelf or freezer in a supermarket. At times, this can be linked to unsupplied stock due to warehouse discrepancies and challenges presented while delivering goods through the cold supply chain.

Perishable food products must be transported and stored at chilled temperatures to ensure they meet government food standards. Within medical environments, chemicals and pharmaceutical drugs must be stored and transported within specific temperature settings to maintain quality. Therefore an unbroken cold chain, meaning an uninterrupted series of storage and distribution activities maintained at a given temperature range, is of paramount importance to many industries across Australia.

Importantly, and what some Australian 3PLs and the retailers they work with are still not fully appreciating, is that just as coats, hats and gloves are essential for workers to function in cold storage areas; it is vital that the technology being used in these challenging materials handling environments is fit for purpose and supports workers throughout the order fulfilment process.

Standard retail-grade devices don’t perform at adequate levels when confronted with cold storage situations. LCD screens can freeze up, barcode readers will not function if frost or condensation covers their optical ports, and mobile computing batteries won’t release energy when temperatures drop below certain levels. These challenges contribute to situations whereby distribution centre (DC) pickers may resort to manual data entry – which severely reduces productivity and increases error rates – just to ensure that product tracking is occurring.

The cold, hard facts

Operating in cold storage environments requires technologies that offer workers the freedom of movement needed to complete their tasks efficiently in challenging situations. Voice picking technology is ideally suited to cold storage settings because it offers a hands-free, eyes-free, rugged design for increased productivity in cold operating environments.

Many warehouses have learnt the hard way that using paper-based picking and some hand-held computer or scanning technologies can lead to inefficiencies and inaccuracies in the cold chain picking process. This is due to the specific challenges faced in common product sorting and picking tasks due to both low temperatures and the protective clothing workers are required to wear in such settings.

When using paper-based systems in a cold storage setting, workers often find that even straightforward activities like writing on a piece of paper is very awkward and slow, if not nearly impossible, given they are often required to wear bulky gloves and clothing to protect themselves from the cold conditions. This means that pickers either have to remove their gloves when writing on order forms or try to complete vital product delivery forms without a proper grip on a pen, which can lead to incomprehensible writing and result in goods being shipped to the wrong customers.

With Voice technology, workers have both hands free to make the picks. Since they are not looking down with Voice, they can also continue to move while receiving instructions. They do not have to stop their walking or driving to read from paper or a screen improving their operational efficiency.

While there are a number of handheld scanner and mobile devices designed to withstand cold temperature operating environments, these are not without their operational challenges for warehouse workers. Keying vital product and delivery information into a mobile computer wearing gloves, even if they are larger keyed devices, is an enormous challenge – along with the fact that the worker constantly has to shift their line of vision between the mobile device in their hand and the product they are looking for.

The Voice terminal is typically worn comfortably under an operator’s coat. The Voice system also has noise-cancelling features that filter out high levels of noise from the fans and compressors blowing in cold temperature buildings. As a result, workers are comfortable and extremely productive.

A cool change

Pickers are usually not solely confined to cold environments and their job often requires them to roam in and out of refrigerated environments. This worker, if equipped with a mobile computer, would need a specialised solution (i.e. a mobile computer equipped with big buttons for use with gloves) which could potentially make things difficult back on the warehouse floor. And the dramatic swings in temperatures these workers experience as they move from the warehouse to the cold storage environment can lead to standard retail grade scanners and mobile devices seizing up. 

Alternatively, a Voice solution which is specifically built to operate in cold storage environments can be used across all warehouse functions by simply capturing lot or serial information, therefore eliminating the need to have separate solutions for different areas of the warehouse. Additionally, Voice systems overcome the need for specialty attributes, such as larger buttons, on hand-held computers. 

In a difficult working environment, it is essential that cold storage operators have the best tools for the job. Voice solutions improve worker productivity in cold storage environments – improving traceability, enhancing order accuracy and speeding up shipping times – while also being adaptable and applicable to other warehouse situations. 

Frozen berries scare reminds of need for traceability

The recent 2015 frozen berries case is not the first food safety incident of its kind and it won’t be the last. According to the Australian Competition and Consumer Commission (ACCC) Product Safety Recalls Australia website there were 75 recalls of food and grocery items in 2014 alone.

The latest incident was preceded by other high profile cases including the Hepatitis A outbreak allegedly linked to semi-dried tomatoes in Australia in 2009, and the contamination scare that triggered a recall of Fonterra products that may have contained whey protein in a number of countries around the world, including China and Australia, in 2013.

Initial detection of the cause of a foodborne virus outbreak or food contamination is clearly an issue for the food regulators to review and address as part of the Food Standards Code.

According to FoodLegal, experts in Australian and international food law, “It appears that little has been done to improve the situation for preventing an outbreak of food-born Hepatitis A in foods in Australia in the period from the last major outbreak, which occurred in 2009, until the latest outbreak in 2015.” Source: “Hepatitis A and food testing: What lessons were learned by governments from last time?”, 10 March 2015.

These food safety incidents have also identified an inherent gap in the current traceability systems we have in the Australian food chain today.

To help prevent these food contamination outbreaks from reoccurring in the interests of public health and safety, we need to examine the learnings from these incidents and explore the opportunities for improving traceability and supply chain visibility.

Product visibility and traceability through the supply chain

Following the Government Inquiry into the Whey Protein Concentrate Contamination Incident involving Fonterra, The Dairy Traceability Working Group was established in New Zealand. 

Recent reports released by the Dairy Traceability Working Group outline the most appropriate regulatory provision for the traceability of dairy products and the development of a code of practice to guide the dairy industry in implementing these requirements.

It is important to note that recommendations of the working group will also be considered for all food sectors, not just dairy.

The working Group’s proposed regulatory requirements include:

·         End-to-end traceability from farm to consumer using the “one up, one down” system (tracing back where product has come from and tracking forward where product has gone), with particular reference to participants in the supply chain having access to Recallnet – the voluntary product recall online portal administered by GS1

·         Future consideration of implementing EPCIS (EPC Information Services) – a GS1 standard that enables trading partners to share information about the physical movement and status of products as they travel through the supply chain from business to business and ultimately to the consumer. EPCIS is an international tool that enables seamless end-to-end traceability.

GS1 standards to protect the Australian food chain

To protect the security of the Australian food chain and the safety of consumers, the implementation of GS1 standards will allow for better visibility of product, up and down the supply chain at all times. By using GS1 standards, the recalled products will be able to be traced quickly and efficiently back to the source of origin.

Traceability is all about tracking any food through all stages of the supply chain from the source of raw materials, additives and other ingredients through to production, processing, packaging and distribution, including importation and retail.

Effective traceability enables food businesses to specifically target the product(s) affected by a food safety problem, thereby minimising disruption to trade and reducing potential public health risks.

GS1 standards exist today to encode data such as batch/lot numbers, use-by and best before dates and other product attributes at all levels of packaging from bulk materials to single produce items and finished goods.

Recall communication plan

Traceability is an important part of an organisation’s product recall management plan.

“Not having effective traceability processes can often lead to delays in actioning a product recall. This is one of the leading causes of incidents escalating into a crisis,” said Maria Palazzolo, Chief Executive Officer at GS1 Australia.

“The ability for a company to successfully track and trace their products through their supply chain and retrieve them from the marketplace is a key component to protecting the safety of the consumer and protecting the brand.”

The speed and effectiveness with which a recall is communicated to retailers and government authorities has implications for not only consumer safety, but a firm’s business reputation.

A detailed and well thought out recall communication plan is therefore an essential business tool for any company.

With GS1 Australia’s Recallnet, issuing a recall or withdrawal notification is simple, fast and inexpensive. Recallnet is a centralised online portal designed to streamline the management of product recall and withdrawal notifications. Distribution of a recall using Recallnet facilitates significant improvement in the speed of notification to stakeholders.                                  

Based on global GS1 standards and best practices, Recallnet simplifies and automates the exchange of information between suppliers, distributors and retailers as well as government agencies such as FSANZ and the ACCC.  

Implementing GS1 standards

Technologies including barcodes capable of encoding and capturing much more than a single product identifier through all points in a supply chain, allowing for greater product traceability have been in existence since 2005 but have not been adopted by industry.

Thirty-six years ago, Australian retailers adopted the GS1 System of barcoding and numbering as their preferred standard for trade.

GS1 Australia will coordinate a working group with industry support to discuss the adoption of traceability technologies to identify the costs and benefits to brand owners and the industry, and develop a road map for implementation.

“GS1 Australia has assisted Australian food and beverage businesses in improving their ability to track and trace their products up and down their supply chains by implementing GS1 standards,” added Mrs Palazzolo.

“We work towards helping industry create a seamless supply chain, allowing Australian companies to adopt world’s best practice supply chain management techniques.”

GS1 DataBar – The one little thing that will have a BIG impact

GS1 DataBar is a new family of barcodes that are an open, global standard, just like existing EAN/UPC barcodes. They have a huge potential to transform the way retailers do business as they carry more information than the current GS1 retail Point-of-Sale (POS) barcodes. They can be used on small, hard-to-mark consumer products and fresh produce, enabling a piece of fruit to be scanned instead of being looked up on the system.

In the instance of the recent frozen berries scare – if the finished product had been barcoded with a GS1 DataBar, the product recall could have been much more efficient as it would have provided greater visibility about which consumers had purchased the product and which retail outlet had a particular batch that may have been contaminated.

For fresh produce, GS1 Australia and GS1 New Zealand are currently working with the Produce Marketing Association Australia-New Zealand (PMA A-NZ) to develop a roadmap for the implementation of a more effective produce identification and traceability system, including GS1 DataBar, for produce sold as loose or in bulk.

Australian retailers began a process of upgrading their store scanning systems to accommodate GS1 DataBar in 2006. Unfortunately, other priorities have pushed ahead of implementing this capability across their networks.

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