Living Lab paves way for ‘ground-breaking’ transport and logistics technology

IN an industry that is worth more than A$150 billion and accounts for more than 14% of Australia’s GDP,  transport inefficiency and rising costs still remains a major challenge.

However, for the 1650,000 Australian businesses in the transport and logistics sector, the launch of Australia’s first high technology "living lab" could signal a new era of innovation and commercial opportunities for one of Australia’s most lucrative sectors.

Launched in February this year by German enterprise software company SAP in collaboration with Australia’s ICT research centre NICTA and Europe’s largest application-oriented research organisation, Fraunhofer, the Future Logistics Living Lab is an exhibition space to test and develop new technology.

Till Dengel, the head of SAP’s Industry, Business Unit Transport and Logistics, said the living lab was both a testing space for solutions and where researchers could work with industry to drive innovations forward for the logistics and transport industry.

The lab consists of three separate physical areas: an exhibition, event and work space and has been designed with the aim of improving the efficiency of Australia’s logistics networks by fast-tracking the adoption of emerging technologies and leading research outcomes by industry.

According to NICTA CEO Hugh Durrant-Whyte, the living lab focuses on solving challenges in an area critical to Australia’s commercial future.

“The living lab is a real opportunity for bringing together research, experience in optimisation, traffic management, and networking, and focuses on a business area which is critical to Australia’s future; infrastructure, transport and logistics,” Durrant-Whyte said.

“This lab ultimately will change the way we do things not just in Australia but globally. We will be able to do things more efficiently and able to use some of the research to address challenging problems that ultimately will deliver national benefits in this area,” he said.

The lab will achieve this by providing a means for participants to create, test and demonstrate prototype technologies prior to commitment to real products.

Technology demonstrations in the lab will also allow stakeholders and visitors to explore, interact and understand how the latest technology will work in practice.

Results from the Living Lab will be commercialised by participants and will leaded to the development of new products, process and services in logistics that will help improve the industry’s efficiency and cost-effectively address challenges such as rising fuel costs, road congestion, carbon emissions and safety.

Michael Byrne, Chief Executive Officer Linfox, Australia’s largest supply chain solution company, said sophisticated IT innovation is the key to running an efficient global supply company.

"You can’t manage moving $51 billion of inventory for customers with a bit of paper,” said Byrne.

"You can’t track 16,000 employees moving 600 million kilometers per year without sophisticated IT and at Linfox we can track every piece of equipment through SAP and Trimble where we can download information every 15 seconds.”

Byrne said Linfox’s business had trebled in size since 2003 but had 400 less managers because of heavy investment in IT with its major software partners Microsoft, Telstra and SAP.

He added that the company needs to continue to invest and experiment in IT to meet client expectations.  Linfox services over 100 customers in throughout the North American, European and Asia-Pacific region.

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Using associations to drive ALC initiatives

Bill Thompson

IT was with interest that I read Len Harper’s article in the November/ December issue of MHD. The supply chain organisations have been collaborating with each other for many years, and events such as the Smart Conference, the Certified Practicing Logistician certification and the LAA/apics mentoring programme are examples of significant sustainable activities that can be undertaken together. Despite this, there remains a distance between the organisations that is not necessary, and they have not been able to capitalise on the goodwill that exists.

On the whole, the supply chain organisations represent different sections of the industry, but sections that interface hugely and overlap to some great extent. In many businesses in Australia, each of the supply chain organisations could well represent a discipline or group within them. Working apart, this may present some confusion to the businesses. Working together, the supply chain organisations could provide strong, coordinated support to all of the industry.

The Australian Logistics Council (ALC) initiatives are drawing attention to the big strategic issues that the Australian supply chain industry faces, and the workshops run by the ALC in late 2007 to capture the needs of the supply chain industry nationally highlight a number of key issues – particularly ‘Capable People’ – that the supply chain associations can start working on immediately.

The supply chain organisations could play the role of tactical or operational partner to turn the strategic thinking and direction of ALC into reality. Where the ALC provides coordination, direction and policy, the associations have the reach into the many businesses, networks and forums across the country that need to be accessed to deliver the initiatives that drive outcomes.

We have to move beyond the dabbling we do now and build a long-term alliance that delivers real outcomes for the supply chain industry in the short and medium term. Together, we can turn whole-of-industry strategy into outcomes that affect materially and positively the operations of our businesses and that will drive the supply change industry forward.

Perhaps the umbrella organisation could be the way to coordinate an effective, efficient response to the needs – the ALC has good reach and influence into government and well represents the big end of the supply chain, while the supply chain organisations reach numerous businesses, consultancies and individuals who make the industry move.

All the supply chain organisations would benefit by being closer to policy and regulation development, by sharing information and having a common view of the big picture and by increased member engagement and participation. Further, they could benefit if we promote the whole industry in a coordinated manner to attract and develop bright and talented people into what (together) we can show as a vibrant and dynamic and real industry with scope to grow a rewarding and authentic career. Members could benefit by reducing the confusion they currently encounter with the range of organisations they see now.

Len is right: there is a great opportunity for all the supply chain organisations to truly collaborate. We know what to do and we need to make a start, and now.


Bill Thompson is the president of apics NSW and manager of product industrialisation at Cochlear.


*Excerpt from MHD Supply Chain Solutions, May/April 2008, p.14

The next step towards collaboration

Len Harper

FOLLOWING the article that appeared in the November edition of MHD regarding collaboration amongst the various professional associations, many questions have been raised.

The responses have been mixed but the issue remains that there is a myriad of professional associations working in many cases separately and in direct competition with one another.

One key question raised was “what is the benefit of having an umbrella organisation for the coordination of logistics and supply chain management?”

There isn’t any benefit if the umbrella group is set up to administer. We are not talking about a separate group here, rather, the opportunity for broader collaboration amongst the professional associations before the event.

At the present time there is no one organisation that is focusing on the development of supply chain management, and before organisations start jumping up and down and say we are doing this and we are doing that, consider this: In the past decade, the Australian logistics industry has developed to the stage that supply chain management is now considered an important process. The supply chain is not an industry in itself; it is a process to ensure that the delivery of products to the customer is of quality and the company achieves this in a cost efficient and competitive way.

At the SMART Conference in June last year, it was evident that supply chain management was important across all industries. It was not a matter of delegates coming from the transport and distribution industry or the procurement or warehousing sectors. It was a matter of representation from a broad range of industries – because all industries benefit from an efficient supply chain.

What is needed amongst the professional associations is the endeavour to work together and in the interest of the industry and the people in the industry, not in the interest of the associations.

This can be achieved by associations consulting as one on ways to improve the effectiveness and efficiency of the supply chain elements of procurement, inventory control, warehousing, transport and distribution and the handling of returns.

For instance, I would be surprised if CIPSA and APICS could not combine their efforts. Each of these associations is about procurement and inventory management.

SCLAA and LAA are similar associations yet are doing much the same thing in competition with one another.

CILTA is more transport and logistics focussed but has the chance – and in fact has taken the opportunity – of working with all other associations where the issue is of similar interest, such as the SMART Conference, the national awards and joint conferences.

In summary, there are too many professional associations doing much the same thing. The obvious answer is for the associations to merge but each time this has been raised the groups concerned have an apoplexy.

We are thinking about the achievements of the associations rather than the best way to achieve a unified and effective contribution to the industry. No association can do that in isolation.

There is the real opportunity for the associations to work as one without the option of being the one association.

For instance, it makes little sense to have so many industry awards. For a start, the associations could ‘merge’ on this issue and develop a co-ordinated industry recognition for achievements across the national supply chain. What an event that would be! And don’t begin to tell me that can’t be done. It can happen if one wants it to happen.

Industry conferences and specialised summits throughout the year are other opportunities. Here I am suggesting options in isolation. Think what chances we could develop if the associations combined thoughts and worked as one.

Disneyland? I don’t think so. All we have to do is get rid of a few egos and work together in a structured way to make it happen.

Len Harper is the executive director of CILTA.


*Excerpt from MHD Supply Chain Solutions March/April 2008, p.12

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