MHD-May-June-2019-Cover-Story-1-digital

Deal with demand – from MHD magazine

The impacts of digital transformation and connected commerce are resounding across industries. The roles of manufacturers, wholesalers, retailers, employees, technology and robotics are all rapidly transforming in today’s evolving e-commerce landscape. Changing consumer behaviours and new digital initiatives have also changed the game for distribution centres (DC) and supply chains, which are now expected to skilfully handle large B2B wholesale orders, retail store replenishment orders, as well as urgent, small e-commerce orders.
Some of the biggest shifts in expectations of the DC and supply chain are inline with the flexibility that consumers now expect from e-commerce. Manhattan Associates recently conducted research that revealed 56 per cent of Australian consumers would stop shopping with a retailer that doesn’t offer flexible returns options, and 71 per cent check to see if a retailer offers flexible delivery methods such as home/office delivery, parcel pickup lockers, click-and-collect and express delivery, before shopping online with them.
Today’s supply chain and warehouse need to keep up with a much more demanding omnichannel landscape, which will likely continue to grow more demanding as technology advances and competition rises.
MHD May-June 2019 Cover Story 2.-digital

Keeping up with the changing industry

Under pressure from rising consumer expectations, forward-thinking companies around the world are challenging themselves to serve more customers, more quickly, more directly and more personally. And these companies realise that omnichannel distribution projects aren’t just an issue for the consumer-facing retailer end of the business – it is also very much down to supply chains and warehouses to keep up.
In an effort to keep up with the omni-channel, distribution leaders are making unified channel fulfilment a key goal, because it delivers a holistic approach that is capable of factoring in the complexities and uniqueness associated with each individual channel.
Supply chain leaders are now taking note of the benefits other businesses have gained with this approach and are taking action. They have realised it’s no longer acceptable to operate channels with segregated warehouse space, duplicative inventories, excess labour, and redundant automation.
All of these assets are expensive and in order to improve throughput, profitability and customer satisfaction, maximum utilisation is critical. There needs to be continuous optimisation and orchestration of order fulfilment activities across all assets and all channels. That’s why advanced warehouse management systems (WMS) must now also feature an embedded Warehouse Execution System (WES) and Order Streaming capabilities.
MHD-May-June-2019-Cover-Story-3-digital

Warehouse Execution System

The trend today is that more and more organisations are going down the multi-channel fulfilment route. Tasked with handling more SKU, greater numbers of smaller, more frequent orders, across more channels – all with shorter processing times – distribution centres are under constant pressure.
Rising demand for human labour and resulting labour shortages are driving many warehouses to investigate advanced automation and robotics. The appeal is obvious: automation is not impacted by regional workforce capacity, robots do not get fatigued, injured or sick, and they can work around the clock. Robots are also safer in some cases, helping to manage large, heavy, or hazardous loads to protect both worker health and the company’s liability.
DC robotics are getting more efficient, more sophisticated and faster than ever before, with innovations coming from vendors around the world. The challenge is that different types of automation do not naturally communicate and are often not aware of each other, much less the supporting workforce. In order to get maximum throughput within the DC, the various types of automation need to work together.

“More than ever, warehouse management must be approached with a holistic perspective that considers any combination of human and automation together.”

Previously, there was no standardising of systems and no limitation to the amount of automation – when supply chain leaders introduced automation, they were forced to work with various systems: a warehouse management system (WMS), or warehouse control system (WCS), as well as a warehouse execution system (WES). The systems worked independently of each other and remained largely siloed, meaning fulfilment organisations actually had to work harder to ensure inventories were not duplicated, and resources were maximised.
These legacy WMS were never designed to continuously manage the capacity and throughput across advanced automation, robotics and humans. Now, with fulfilment across multiple channels, supply chains need a lot more flexibility.
“The challenge for the supply chain is that it has multiple flows coming from all the different channels,” said Raghav Sibal, managing director at Manhattan Associates, ANZ. “This has created a need to optimise the flow of products through different channels, as throughput needs to be measured and optimised through each area of the warehouse to be able to maximise the overall efficiency of the operation, with the WMS integrating all systems used in all areas.”
Today, the WES module needs to be built inside the WMS, rather than being patched on later from the outside. Eliminating siloed integration challenges, a WES embedded into the WMS provides a comprehensive, coordinated approach that gives complete command and control of the warehouse.

“The challenge for the supply chain is that it has multiple flows coming from all the different channels.”

Many operations have both human and automation in the warehouse, and whilst automation can be optimised at maximum capacity, a bottleneck is often created in other areas. WES inside the WMS will optimise throughput through each zone or area in the warehouse, both automation and human, in order to maximise the efficiency in each area. The system is able to take into account how long an order has been sitting, as well as orders going through goods-to-purchase, to prevent a bottleneck occurring upstream or downstream, and ensuring operations are optimised.
A fully integrated WMS should work seamlessly with any type of automation, allowing robotics providers to simply plug in to the new system and be up and running quickly.
MHD-May-June-2019-Cover-Story-4-digital

Order Streaming

In a further effort to take charge of omnichannel management and success, many supply chain leaders are looking to Order Streaming, a sophisticated approach to order fulfilment. Order Streaming helps the DC operate with increased speed and flexibility by breaking down the boundaries between wave (bulk orders) and waveless (smaller e-commerce orders continuously streamed) fulfilment. It allows warehouses to use multiple processes to efficiently fulfil orders of any size or type rapidly from a DC of any size or type — both smaller, local, quick-response facilities, as well as larger, regional, high-volume, automated e-commerce sites.
Australia Post’s 2018 E-commerce Industry Paper revealed that in 2017 online spending saw a growth of 18.7 per cent, while traditional retail saw a growth of only 2.5 per cent. Additionally, Australia Post predicts that by 2020, one in ten items will be bought online. With this growth, Order Streaming will become more important in the supply chain to keep up with the increased volume and smaller pick orders from e-commerce.
Order Streaming is a waveless approach and allows smaller orders to be incorporated into the flow without disrupting the efficiency and productivity of the warehouse. Rather than batching orders and dropping them into the DC operation in waves, which will slow down production as smaller or single-product orders have to sit and wait until they can fit into a batch, Order Streaming continuously evaluates the order pool and automatically releases work based on variables such as order priorities and facility processing capacities.
While many types of orders and operations are best served by batch-wave processing, development of a waveless approach has been necessary to respond to growing omnichannel fulfilment promises. Waveless manages every order as a discrete allocation of work, enabling fast, responsive fulfilment for smaller, more urgent orders. It is ideal for direct-to-consumer order fulfilment.
“Order Streaming gives distribution centres the ability to process urgent e-commerce orders throughout the day without disruptions, which is only going to be more important as e-commerce continues to grow and delivery timeframes shrink,” Mr Raghav said.
Another key benefit of Order Streaming is that the system allows retailers to accept online orders later in the day, while still allowing them to turn around and ship orders quickly (often in the same day).
Whether a warehouse relies on a combination of manual and partially automated processes, or a fully automated, robotic system, Order Streaming supports the requirements of adaptive, changeable fulfilment and delivery. Today’s trends toward sophisticated autonomous robotics open an exciting set of opportunities for Order Streaming and its impact on business strategies.
 

Allowing for future growth

More than ever, warehouse management must be approached with a holistic perspective that considers any combination of human and automation together. Coordination and collaboration across discrete pieces of advanced automation – as well as the human workforce – only gets more powerful when those systems are integrated with each other. The combination of an embedded WES and Order Streaming capabilities makes today’s advanced WMS one that enables total visibility across the DC, complete flexibility for automation growth, as well as continuous analysis and maximum utilisation of all resources.
As e-commerce trends continue to emerge and impact supply chains, supply chain leaders must find ways to modernise their DC operations in order to remain competitive in the face of new pure-play e-commerce start-ups, international brands, and other omnichannel enterprises. Advancements in technology, equipment, and operational best practices will certainly provide opportunities and inspiration.
MHD-May-June-2019-Cover-Story-5-digital
Achieving omni-channel success
Manhattan Associates’ customer Country Road Group completed a successful roll out of Manhattan’s WMS. The technology deployment was a key component of a business transformation project designed to deliver a unified brand experience for customers across channels and to drive ongoing business growth.
Country Road Group’s business and sales channels have evolved in complexity and scope as the company expanded its operating footprint. With over 700 stores and a growing online operation, the retailer had outgrown its outsourced logistics services model and recognised the critical need to take greater command of its supply chain. The company made the strategic decision to invest in a new DC and chose Manhattan’s system to orchestrate goods flows through the new DC.
Head of supply chain Australasia, Country Road Group/David Jones Peter Fouskarinis commented: “The Manhattan solution has enabled us to optimise our store replenishment and online order fulfilment processes, resulting in improved product availability and customer satisfaction.”
The Manhattan system’s advanced fulfilment logic for wave management, constraint-based selection and real-time replenishment has been critical in helping Country Road Group realise its omni-channel commerce goals. The system eliminates costly physical counts with auditor-approved cycle counting, and stores can now provide same day fulfilment as a result of a new cross-docking approach.
For more information contact Manhattan Associates on +61 2 9454 5438, email anzinfo@manh.com or visit www.manh.com.au.
 

MHD-robots-in-the-warehouse-DC-automation

Robots in distribution centres – from MHD magazine

Mal Walker

Don’t worry, contrary to the terrifying Daleks portrayed in the long-running Dr Who series, robots are not taking over the world or the universe! In reality, they are more analogous to the friendly droids of Star Wars’ 3-CPO R2-D2 and BB8. They are loyal and faithful servants to their human and non-human masters.
This is good news for distribution centre operators, because the Star Wars ‘droids’ have morphed into a new generation of reliable DC robots that are revolutionising the logistics world!
Research from market intelligence firm Tractica reports that the worldwide sales of warehousing and logistics robots reached USD1.9 billion in 2016, with growth in coming years its projected to reach USD22.4 billion by the end of 2021. Manufacturers of robots can therefore expect unit shipments to increase from 40,000 in 2016, to 620,000 units annually by 2021 (reference: www.tractica.com).
But who is buying robots? Traditionally, it was manufacturers with repetitive production processes, but the robotic landscape has broadened to include distribution centres, mines, hospitals, hotels, casinos, offices, mines and others. In fact, any application where a process can be automated.

Should you use them in your DC?

In this article, I will briefly touch on the 13 most common types of robots that are being used in distribution centres, along with their characteristics and uses. This is by no means a comprehensive list, but it may help in working out what robots could be beneficial in your situation.
Firstly, how do you classify robots? Particularly as there are so many variants. The Tractica report lists the following four in the context of distribution centres.

  • Mobile robot platforms: automated guided vehicles (AGV) and autonomous vehicles.
  • Shuttle automated storage and retrieval systems: ASRS, featuring in-rack robots.
  • Industrial robotic manipulators: typical robotic arms that can be applied to countless applications.
  • Gantry robots: robots that run on overhead structures.

“If you are looking at robots as a solution, be sure to do your homework in terms of analysis, application and return.”

But what do they do, and how do you know if you would benefit from one, or more? To assist, I’ve developed a table that lists the types of robots and applications in warehousing facilities. Bur first here are some definitions that may be helpful.

  1. AGV

Generally used for transport of goods within a set path or circuit. May be guided by rails, lasers and sensors. These have been around for many years, but AGV technology has advanced and is far more affordable, reliable and applicable to many types of mobile equipment.

  1. Shuttle systems

Used within racking systems to place and retrieve stock. The racking maybe serviced by automatic conveyors or AGV, or manually by an operator.

  1. Autonomous mobile robots

These are free-path robots controlled to operate on the best put-away or picking path. Using sensors and cameras, they can navigate around a DC where people are working. They are ideal for goods-to-person and task-to-person applications.

  1. Stacker cranes

These are used in automated storage and retrieval systems for pallet handling. Yes, they have been around for many years, but they are a robot, nonetheless. They typically run on fixed-path rails systems.

  1. Mini-load stacker cranes

Related to the larger stacker cranes, mini-load cranes run on fixed rails installed within racking. They can achieve high rates of replenishment and picking and are now able to pick cartons, object and eaches to totes or conveyor belts.

  1. Industrial robotic order picker

Using conventional robots with articulated arms for picking and palletising/ depalletizing etc. has become common place. In recent years, visualisation technology has enabled robots to see and pick stock in units. If the robot does not have the right gripping device to pick items up, it merely changes to the right one, and continues picking.
And now some common operating modes:

  1. Goods-to-person

Where automation or a robot brings goods to a human for order picking purposes.

  1. Task-to-person

Where a robot brings a receptacle and picking intelligence/information to a picker, so that the picker can pick the required goods to specific order bins on the receptacle. (Amazon makes use of task-to-person robots in some locations.)

  1. Goods-to-robot

Automation or robots bring goods to a robot for order picking purposes

  1. Person to robot

A person brings goods to a robot for specific orders or sortation and delivery by the robot to a consolidation or packing zone. These robots can typically include tilt-tray devices for feeding goods into staging bays or directly to cartons.
MHD-robot-in-the-warehouse-DC-automation-table
Now that you know the common types of robots and operating modes, the charts should make some sense in terms of application. What is hard to define is the cost for automation and robotics. This is complex and depends on many factors too numerous to cover here. However, the evidence suggests that robots are becoming cheaper, reliable and easier to justify than ever before.
If you are looking at robots as a solution, be sure to do your homework in terms of analysis, application and return. If you do, you may be relieved that Dalek’s will not conquer your operation. Instead, be pleasantly surprised that robots may be more economical than you realise.
Mal is manager, consulting with the Logistics Bureau, where he works with local and international organisations to guide them in specification preparation, establishment and review of outsourcing contracts. He holds qualifications in engineering, business operations and logistics. For more information contact Mal on 0412 271 503 or email mwalker@logisticsbureau.com.
You can read the rest of MHD magazine March-April issue here: 
https://issuu.com/theintermediagroup/docs/mhd_march-april_2019
 

The trouble with supply chain security – from MHD magazine

Vivek Sood

I am, of course, talking about supply chain managers. The mobile does not stop ringing from the time they take it off silent in the morning, to the time they are ready to crash. If it is not a customer calling about ‘another botched-up delivery’, it is one of the service providers calling about ‘another unpaid invoice”.
Literally, hundreds of things can go wrong as millions of things are moving around 24×7. And, sometimes they go wrong all at once. Like when a customer threatens to walk away AND a supplier takes you to court.
Nobody thinks of supply chain security until it is too late
Who has time to think of supply chain security in the midst of all this? Only those who are most serious about their careers in the supply chain.
‘Why is that the case,’ you ask? I think, by the end of this article the answer will be crystal clear to you.
I have written in many places before that the traditional supply chain model is gradually failing and will be relaced by a supply chain model that is radically different.
It is true! Think about Sears, and all the others who were blindly copying Sears in the 80’s and 90’s. It gives me no pleasure to name all the favourites of the yesteryears in this context.
Anyway, one would have to be living under a rock not to know the names I am talking about. And, by the end of 2019, there will be many more names to add to that list.
But, this article is not meant to compare and contrast the supply chain models of yesterday, today and tomorrow. I will write a different article soon to cover that important point.

Figure 1. The key areas for threats. Source: Global Supply Chain Group’s Supply chain security report 2019.

2019 is different
The point to pay attention to is that 2019 is edgy. Things move slowly, but in a ‘definitive direction’. And this is the main point: careers are more important today than in the past 20 years.
And nothing has bigger impact on a career than a major incident in the supply chain. What’s a major incident?
Let me describe a typical 1-minute video from a popular television network:
The video opens with a typical family living room scene. A woman is sitting on the couch with three very young children holding a plate of strawberries in hand. Voiceover starts describing what happened to the family as a nightmare: the 9-year-old cute boy almost swallowed a needle embedded in the strawberry. The boy describes how he pulled the needle out of his mouth.
Authorities called it a vicious sabotage. Video goes on to describe how the tampering spread from Queensland to almost every state in Australia, and how some people ended up in hospital after swallowing a needle. Police come on screen and describe their investigations, and supermarkets’ precautionary steps to remove the strawberries from stores are noted. Copycat attacks of sabotage are mentioned and damage to the economy and strawberry markets are described.
But sabotage is not the only type of potential incident that can hit your supply chain. There are many other types of potential incidents.
In fact, in a project last year we identified at least seven types of potential supply chain risks – each with very complex supply chain implications.
Threats to supply chain security
Even making a list of all the different types of potential supply chain security breaches and related incidents is difficult. Once you go past the most obvious ones, where do you stop? And, how do you neatly group them?
Take a look at Figure 1. The risk assessment and mitigation work in supply chain is extremely painstaking and thorough. All the projects we have done that involve this kind of work left me dissatisfied despite the projects being quite lucrative and enlightening.
Why do I say that?
Because no matter how much you know, you cannot make a list of everything you don’t know that can happen. And that is just the trouble with the qualitative part of supply chain security and risk management.
On the quantitative side, it is even worse.
Try multiplying infinity by infinity. How do you assess the probabilities of something that has never happened before, but is likely to happen at some point in future? And, then how do you assess the full repercussions of that event, up and down the supply chain?
Did you know that in 2000 Ericsson permanently lost its pre-eminence in mobile phones market to Nokia, mainly due to a fire in a chip factory owned by Philips. How Nokia lost its crown to Apple due to its supply chain missteps is another story worth talking about. As is the story currently underway, how Apple is losing its crown due to its supply chain missteps.
But I digress. Let’s get back to the talk of supply chain security. People ask me why supply chain security is in such a dismal state that only by sheer providence (and goodness of the population in general) we do not have more incidents.

ABC of ‘supply chain security’

The main reason is that most security professionals do not even know the ABC of supply chains, and most supply chain professionals bother only vaguely about ABC of security.
A secondary reason is that it is just too difficult to secure supply chains with the current level of resourcing in most companies.
Think about this: the truth is that there are so many moving parts in today’s supply chain that it is impossible to keep track of them all with the current level of supply chain resourcing.
And companies are always reluctant to give more resources for anything, especially something as ‘unproductive’ as security, unless justified by a bulletproof spreadsheet vetted three times over by the most painstaking auditors.
Who will cop the blame for breaches of supply chain security?
All this would not matter in the past when everyone could pretend that every security breach incident was a one-off, ‘could not be foreseen or prevented’ kind.
Today, irrespective of whether it could be prevented or not, everyone – regulators, governments and public – are hyper-vigilant, and clamour for someone to blame. And guess who is going to cop most of the blame? The person who cops most of the blame when anything goes wrong in the entire supply chain – the supply chain manager.
That trend is only going to escalate. And that is the ‘trouble with supply chain security’.
Vivek Sood is the managing director of Global Supply Chain Group (www.globalscgroup.com). For more information visit www.viveksood.com.
 
[end]
 
[PQ] “There is a tendency in our planning to confuse the unfamiliar with the improbable.” Thomas Schelling.
 
[Caption for Figure 1.:] Figure 1. The key areas for threats. Source: Global Supply Chain Group’s Supply chain security report 2019.
[Other pic – no caption:] https://www.istockphoto.com/au/photo/cctv-camera-system-gm611778490-105285787

The I-curve – from MHD magazine

The Amazon effect
Industry experts are still divided on the impact services like Amazon Prime will have on the retail sector. Many believe the behemoth doesn’t do enough to differentiate itself in Australia, and that consumers are unlikely to get on board – however Woolworths CEO, Brad Banducci, calls it out as a new benchmark in terms of consumer expectations of delivery.
“We think Amazon Prime is the key vehicle, we see them being successful with that in the US and we will simply need to be better at on-demand,” he said, in line with the news of Woolworths-owned Endeavour Drinks Group’s 4.5 percent sales increase. “F18 was the year of pick-up for us.”
In the US, more than 50% of shopping journeys start with Amazon – and there’s no reason to believe Aussies won’t follow suit.
Amazon’s logistics, product range and deep knowledge of its customers pose a significant threat to Australian retailers. The e-tailer knows everything about its customers, to the point where it can predict what they will buy based on past transactions, and what they might like to buy in the future.

“Unless you’re using data effectively, you’re fighting with one arm tied behind your back.” Jonathan Reeve.

According to speaker, author, e-commerce fulfilment consultant and General Manager of Eagle Eye ANZ, Jonathan Reeve, local businesses are too focused on selling. “What I’ve seen over the last 17 years is that 80% of everyone’s attention has been on the digital challenge of selling,” he says. “The physical challenge of actually getting the products to the consumer has been given 20% of their attention.”
This trend needs to be reversed, says Reeve, as customers are buying an experience. They want cheaper and more convenient delivery, and that is what Amazon is providing.
With the entrance of Amazon, the continued presence of eBay and local operations like Catch.com.au, e-commerce in Australia will continue to grow rapidly whether we like it or not. To survive this surge, retailers must enhance their ability to collect, analyse and store data, and collaborate with other businesses and consumers to offer better service and better delivery.

“Customers are buying an experience. They want cheaper and more convenient delivery, and that is what Amazon is providing.” Jonathan Reeve, General Manager, Eagle Eye ANZ.

The changing face of brand loyalty
According to Councillor Susan Riley, who is responsible for the City of Melbourne’s Small Business, Retail and Hospitality portfolio, “customers come back [to boutique stores] because they like you and they know they’re going to get the service they want. Online doesn’t provide that.
“Online is a real issue for Melbourne. So many customers come in to the store – look, feel, shake – and then go buy it online,” she says.
But brand loyalty looks very different than it used to. The in-store/online balance is key for small businesses – they must become more experiential, so that people will come in-store for the activities that surround the buying experience, as much as the buying itself.
Retail industry executive at Telstra Gareth Jude said: “Based on our studies, Australian retailers achieve up to 20% attachment rates on sales for click’n’collect. Customers buy online then come in-store – and because of the great service and experience they’ve received, they decide they need to purchase something else while they’re there.
“Boutique retailers can complement their physical, in-store experience with an online presence and function.”
While Councillor Riley may be concerned about the notion of a “city of empty shops”, e-commerce provides a significant value-add for physical retailers. As Localz’ CRO James Westlake explains, when you use Woolies’ click’n’collect, you go in to pick up your shopping – but you browse around and shop in-store first before picking it up. Or even if you don’t, by the time you get home, you’ve forgotten something you needed to include in your order.
“Brand heritage now is a reduced value compared to convenience,” he said. “When a retailer gives customers back the time they were going to lose [by enabling them to shop online], they reward the business by doing more shopping. Gifting customers this time is what creates brand loyalty.”
Mr Westlake refers to UK clothing company, River Island, as another example.
“River Island has repositioned itself as a tech company that sells clothes, so it can fulfil customer journeys. It realises clothes are its commodity – but its ability to form a relationship with its customers and help them with their lifestyle is what maintains brand relevance and loyalty.”
For High Street stores, brand is something that keeps their customers coming in the door. But now shoppers can come in the door, try something on, then go online to buy it – with next day delivery included and at a lower price than in-store.
Today’s retailers need to consider brand value versus convenience. If you’re relevant to your customers at this moment, they will like you. If you’re not relevant, the customer won’t be interested.
So, what is the answer for small and medium-sized retailers who can’t count on brand loyalty to get customers through the door (or clicking online?) According to Localz’ Louise Robertson, they need to become more experiential.
“Where you used to find a coffee shop on the high street, today you’d find a coffee shop in the back of a hairdresser’s, or with art on the wall,” she said. “Businesses are merging and becoming more experiential, which is critical for them to reinvent themselves. It’s not good enough to do what they did 20 years ago.”

 “We think Amazon Prime is the key vehicle, we see them being successful with that in the US, and we will simply need to be better at on-demand. Brad Banducci, CEO, Woolworths.

Data is knowledge is power
Consumers want complete control over their experience – and to provide this, businesses must know their customers intimately.
The key to getting e-commerce right comes down to data – and lots of it – about your customers and their habits, likes and preferences.
“As a retailer, you can always serve your customer better if you know more about them than the next guy,” said Telstra’s Gareth Jude.
Major e-tailers are continuing to turn data on its head, in stark contrast to the early periods of e-commerce when companies gathered plenty of information about their customers but didn’t know what to do with it. Businesses implemented complex CRM systems – only to have the data lay dormant.
“There’s a competitive imperative to get data right,” continued Mr Jude. “If you’re not doing anything with your data, Amazon, Alibaba and all the rest of them certainly are. And they’re going to eat your lunch.”
Jonathan Reeve concurred: “Unless you’re using data effectively, you’re fighting with one arm tied behind your back.”
Computing power and analysis are readily available as services – so there’s no excuse for Australian businesses not to be leveraging them. “Many technologies are converging, and there’s a lot more processing power available,” said Charles Edwards, Manager of supply chain management consultancy GRA. “This enables us to drive more insights from data with more data collection points, and we have the technology and computer power available to analyse it.
“It’s all about driving insights from consumer behaviour.”

“Boutique retailers can complement their physical, in-store experience with an online presence and function.” Gareth Jude, Retail Industry Executive, Telstra.

Over the horizon: the inevitable consumer mindset shift
The irrational, emotional, uneconomic Australian consumer is coming – and local businesses need to be ready. Although we might be reluctant now to share our data, the mindset shift is just over the horizon. It’s a journey that will organically happen.
Mr Edwards: “The first time I used an Uber, I thought – ‘I’d never get in to a stranger’s car!’” But his mindset changed as soon as he used the service and was amazed at its accuracy and cost-effectiveness.
Furthermore, there’s already a cognitive dissonance around how consumers share their data, and who they share it with. NBN Co’s Megan Park exclaimed: “Everyone’s opting out of MyHealthRecord – but they’re sharing their whole lives on Facebook!”
Pressure from consumers is also now being felt in the field services arena, with everyone wanting to know who, when and where their service will be delivered. The increased criticism and regulation of the European utilities is sector is driving a flow-on impact, and confidence in the Australian utilities sector is at an all-time low.
“Expectations of service delivery and parcel delivery are becoming converged,” said Localz’ regional sales director for A/NZ, Gareth Phillips. “Customers want more control and visibility of what they experience when they have their internet connected or their solar panels fitted. The Iconomy conversation is an important one for utilities and service companies to be involved in, as much as retailers.”

“Customers want more control and visibility of what they experience when they have their internet connected or their solar panels fitted. The Iconomy conversation is an important one for utilities and service companies to be involved in, as much as retailers.” Gareth Phillips Reg, Sales Director, Localz.

Online retail is only going to grow, and it remains an opportunity to be lost for local brands if they don’t take control of their own destinies and make the most of the data and the delivery services they have.
Australian businesses need to get their data analysis and deep learning right to give irrational, emotional and uneconomic consumers command of their delivery experience.
Localz’ Louise Robertson concluded: “It’s all about the human. Whatever technology we put around them, it’s all about emotions and data.”
Part 1. of this article appeared in the January-February issue of MHD Supply Chain Solutions magazine, which you can read here: https://bit.ly/2TZ3qnB. For more information visit www.localz.com.
 

Automation is the buzzword – from MHD magazine

Paul May

Faster, cheaper, smarter. Feeling the squeeze from international competition, a growing number of Australian businesses are investing in warehouse automation to gain an edge.
Retail giant Coles is the latest to announce it’s bringing in the robots. In a bid to lower supply chain costs and increase competitiveness, it will pour almost $1 billion into two automated distribution centres in Queensland and NSW.
It’s jumping on a bandwagon that its main rival, Woolworths, got rolling last year. Woolies’ $562 million investment in a fully automated, 40-metre-high warehouse – the largest in the country – is expected to go live within weeks.
Both businesses are under pressure. Australian sales have tripled in six years at US giant Costco, which is now in the best financial position it’s been in since arriving on our shores more than a decade ago. German grocery retailer Kaufland is expected to further shake up the market by opening up to six sites starting this year. Amazon is also making inroads into the Australian market.

“The shift to automation is all about reducing costs and time to market in a highly competitive industry. But poorly understood and managed risks threaten to send these advantages up in smoke.”

Reducing costs and time-to-market are the order of the day. Coles CEO Steve Cain cited “lower supply chain costs” and enhanced “overall business competitiveness” as the driving forces behind Coles’ big spending.
It’s not alone. Warehouse and supply chain consultancy TM Insight predicts that automation will be the buzzword for the Australian industrial property market in 2019 as manufacturers, wholesalers and retailers look for more efficient ways to deliver goods quickly to customers. The consultancy has recently designed and delivered new hi-tech warehouses for the likes of Woolworths, The Reject Shop, Bunnings and Kmart.
Amazon’s entrance into Australian retail is already credited with encouraging Coles and Woolworths to move to a same-day delivery model for those who spend more than $150 and $300 respectively. In China, the country’s leading online marketplace, Alibaba opened a warehouse late last year staffed with more than 800 ‘automated guided vehicles’. It’s been designed to deal with China’s annual ‘Singles Day’ shopping festival.
New risk profile
Those managing automated facilities must balance their business interest in greater efficiency, increased profitability and fewer human errors with minimising new risks. The scale, speed and increased use of automation inside a modern warehouse alters the risk profile. Traditional warehouse fire protection strategies including using ceiling-only sprinkler systems must be revisited.
Large numbers of expensive robots in densely stacked warehouses pose a greater fire risk and increase the likelihood of it spreading faster. The use of open-top plastic containers, rather than traditional closed-top cardboard or wooden containers, is another trend that ramps up risk. These open-top containers capture sprinkler water that’s being used to fight fires and prevents it from flowing down through to the lower levels of the warehouse.
Risk managers must strike a balance that delivers effective mitigation without unnecessarily increasing costs or limiting storage potential, as this would negate the purpose of shifting to automation in the first place.
The human element
Working with a specialist partner significantly reduces risk. For example, FM Global data shows the difference between an adequate sprinkler system and an inadequate one – either non-existent or with insufficient design – is massive. The difference over a 10-year period can be as much as fivefold, with average losses rising to almost $AU6 million within inadequately protected facilities.
In a robotic warehouse, the cost of equipment alone is enormous. The gadgetry that now goes into a modern logistics facility can be worth three times the value of the real estate, according to TM Insight.
FM Global has invested heavily in developing warehouse fire protection guidelines. Based on five years of research, these guidelines are intended to help risk managers and warehouse managers minimise the fire risk associated with automatic storage and retrieval systems (ASRS).
In designing the Protection for Automatic Storage and Retrieval Systems (ASRS) data sheet, we’ve discovered that it’s possible to:

  • Optimise fire protection through careful storage design choices.
  • Reduce the cost of fire protection systems including piping, pumps and water tanks.
  • Improve environmental sustainability by using less water.
  • Develop fire protection strategies which are based on evidence (full-scale fire testing) rather than guesswork.

Simple steps, such as having reasonable gaps between boxes, can make it so much easier and less costly to protect a facility from massive fire damage. Such gaps reduce the ability for a fire to spread horizontally and also allow sprinkler water to penetrate down to the seat of the fire.
The shift to automation is all about reducing costs and time to market in a highly competitive industry. But poorly understood and managed risks threaten to send these advantages up in smoke. As traditional distribution models are overturned by automation, it’s imperative that businesses also take a second look at how they are addressing risk.
Paul May is the operations engineering manager at FM Global. For more information visit www.fmglobal.com.
 

Hi 5 to I4.0 – from MHD magazine

Tom Rentschler

Many have written about the impact that Industry 4.0 will have on warehousing and distribution and why companies should embrace this fourth industrial revolution. But if you own or operate a small warehouse or distribution centre, you may be thinking: “How will Industry 4.0 help me?” or: “Isn’t this only for big companies?”
Yet many of the benefits of I4.0 will extend to small operations.
I4.0 includes technologies like the Internet of Things (machines talking to machines), big data, artificial intelligence, machine learning, as well as collaborative robotics. And there are five very strong reasons why they will make automation a worthwhile investment for even smaller warehouse operations.

  1. True plug & play

Traditionally, automated material handling systems required a significant amount of project-specific engineering, control coding and software. Conveyor systems, for example, often need specific PLC code to optimise behaviour, such as priorities at a merging point. These ‘traffic rules’ are different for each layout and also depend on the user’s exact processes.
The costs of customising, installing and commissioning a system do not have a linear relationship to size. While the overhead may be a small proportion for large systems, on smaller systems those costs could represent up to 40% of the total installation.
By combining IoT principles with artificial intelligence and machine learning, this problem can be overcome. Imagine that you will simply place conveyor elements (or any other automated equipment) on the floor. Each element will automatically identify itself to all others and ‘connect’ to its neighbours, allowing the system to map itself and understand how it looks.

“All of these observations show that the real growth in warehouse automation will not only be with traditional, large systems.”

Meanwhile, applying big data analytics to the current, still manual operation will provide an understanding of the warehouse user processes. This allows the establishment of a first, base-line logic for running the new automated system. Once the physical automated systems are placed and used, machine learning will quickly determine how to use the equipment better and set the right traffic rules to match the system’s layout and user processes.
All this means that no more project-specific coding of controls and software will be required, significantly reducing the overhead costs to a level where automation becomes compelling for small operations.

  1. Smart systems can adapt to warehouses built for humans

Most warehouses, and certainly small ones, have been designed to be operated by humans. They have rows of shelving and people with trolleys walking through them to collect orders.  Until recently, implementing automation would require these processes to be completely replaced.
Automated systems, such as robots, used to require a very clearly defined environment that was free of unexpected interruptions. And whilst a manual warehouse may look very organised, there are many small deviations that are easy for people to deal with; just imagine a larger product overhanging a few centimetres into the next storage location, or a worker leaving their trolley in the aisle for a few minutes to use the restroom.
Changing a warehouse like that is a big step that could easily cause disruptions and risk. Yet a new generation of collaborative robots is emerging. These robots are not only safe to work alongside humans, but also use advanced sensors and artificial intelligence to adapt to changing circumstances.
Now companies can simply deploy one or two collaborative robots within their current operation. Humans can work alongside the robots, eliminating the need for drastic changes to the warehouse or the processes.
Over time, more robots can be added to gradually increase the level of automation.

  1. Small companies don’t want to stay small

Many of the small companies in the field of logistics plan to grow, sometimes very quickly. Most early-stage e-commerce companies have big ambitions, but exactly how fast, or in what direction they will develop is uncertain. This means any automation will need to be flexible so the company can start small, but scale fast when growing.
New technology such as autonomous mobile robots are perfect for this scenario. You can start with only a few. Due to peer-to-peer communication and intelligent software these vehicles are easy to implement, providing payback even in small numbers. Still, when the time comes to expand, this is as easy as buying (or leasing) more vehicles, placing them in your warehouse and powering them up.
The new vehicles will identify themselves to the existing ones and the entire fleet will adapt and optimise itself to make best use of the new robot-colleagues.
Another example of easily designing for growth is the Hasbro distribution centre in Preston operated by Toll. The modular sorter and conveyor are easy to expand as the need for product picking and despatch grow. In the meantime, the operation benefits from reduced costs and can handle more retail fulfilment cartons than you would expect from a traditional style warehouse.

  1. Smart distribution networks will help keep warehouses small

This may seem contradictory to the previous point, and indeed it applies to a different group of companies. E-commerce is pushing the boundaries of delivery times. Same-day delivery is increasingly an expectation and offered by many companies in larger population areas. By default, this requires products to be stored close to consumers in areas where there is often little space to build a warehouse.
To help keep warehouses small and still keep service levels high, Industry 4.0-related science is being used. Predictive shipping is one example, where goods will be shipped from a central warehouse to a smaller urban warehouse even before you order it. This concept relies on big data to understand and accurately predict customer behaviour.
The other method is distributed order fulfilment. A specific product may be available within the customer’s area at any number of locations. These locations could be the seller’s urban warehouses, a third party warehouse, a store, or even awaiting pick-up at the home of a customer who wants to return it. By connecting all these sources in a real-time network, the most efficient source location for the product can be found. Again, big data and artificial intelligence will manage the complexity of this process, while blockchain technology will allow secure transfer of data and money between potentially competing providers.

  1. Small companies are entrepreneurial – but may have limited cash

Investing in automation requires a long-term vision, combined with an entrepreneurial approach. This is even more true when investing in new, ground-breaking technologies. This mindset is often found at small-to-medium size companies or founder-owned companies. Decision processes can be shorter, which can make it easier to realise a vision. This is why small start-ups are often at the forefront of adopting new technology.
Cash may be a challenge, and investing in automation typically requires serious capital investment. But here new technology may also help.
Traditional automated systems have been highly customised and demanding to install, remove or change. Uncertainty about the company’s future, linked to an asset with very little value outside of that company, will lead to expensive financing.
‘Plug & play’, self-learning and high flexibility also implies that it will be just as easy to re-use equipment somewhere else. This re-use capability will reduce financing risk, making it less expensive. It will also support different models such as rental or leasing.
All of these observations show that the real growth in warehouse automation will not only be with traditional, large systems. While those systems will always be there and also become infinitely smarter, they will be fewer in quantity compared to the thousands of small warehouses that have historically been too small to automate.
With Industry 4.0, size will not matter anymore.
Tom Rentschler is head of marketing for Swisslog WDS Americas. For more information visit www.swisslog.com.
 
 
[No captions. Don’t have to use the second pic.]

The automation intersection – from MHD magazine

Logistics in Australia and New Zealand have arrived at an automation intersection. Which way will the industry go?

We’ve reached a crossroads in Australia and New Zealand about advanced robotics technology. No longer can businesses ignore its potential or claim it’s only taking off in other markets.
Hexa Research claims the worldwide warehouse robotics market will reach USD 6 billion by 2025, off the back of 7% compound annual growth from 2017. It’s a global trend worldwide – but not one reflected down under. The Australian Centre for Robotic Vision (ACRV) shows that only 1% of robotics companies that have tried to raise research and development capital in the last decade are Australian.
This is odd when you consider the desire for robotics infrastructure close to our shores. Countries across East Asia, developed and developing, are expected to increase their robotics demand over the next three years, according to the International Federation of Robotics (IFR). From Japan to Indonesia, Australia and New Zealand’s regional trade partners are embracing supply chain automation. So why haven’t we entrenched robotics as a natural part of the Australian and New Zealand logistics sector’s evolution, too?
The rise of robotics – but why is it slow to take off in Australia and New Zealand?
IFR data shows the global average density of robots in manufacturing and the logistics supply chain reached 85 per 10,000 employees in 2018. And despite Asia-Pacific’s reputation as slow adopters of advanced robotics technology, density here is only slightly lower, at 75 units per 10,000. This is due to Asia’s interest in automation. China is the world’s largest purchaser of robotics, while Taiwan ranks sixth (IFR). Hong Kong and Singapore’s position as regional trade hubs also make them fertile ground for automation start-ups.
In Australia and New Zealand, meanwhile, interest is just picking up. Aside from major global retailers such as Amazon’s use of drones and autonomous mobile robots (AMR) to streamline supply chain efficiency, the Australian and New Zealand logistics sector is yet to really fully embrace the idea of automation as a help, not a hindrance. Much of this reluctance stems from the fact that there are not enough local suppliers who can integrate robotics into the existing framework of logistics or supply chain infrastructure.
PricewaterhouseCoopers’ analysis of automation’s potential long-term impact shows there is little risk to many transport and logistics roles over the next ten years. The report suggests that, while robotics will reduce manual picking and transport roles, automation will instead alter positions. In effect, robotics will be less about replacing human workers and more about logistics enterprises upskilling workers into value-added roles.
KPMG echoes this position, claiming the role of a joint human-robotics workforce will be with human workers monitoring and adding intuitive customer-focused skills to the data-driven role of robots. This collaboration with ‘cobots’ doesn’t mean the end of jobs. Instead, it improves the capacity of a given role with higher throughput rates stemming from streamlined physical labour processes and maximised storage space.
Taking the leap into robotics-aided logistics sector
Whilst a 2018 McKinsey study shows Asia-Pacific still leads the world in the percentage of businesses with no plans to automate in the future, the curtain is falling on that era.
So far Cohesio has helped deploy the logistics robots in two major Australian businesses. The projects:

  1. The retail conglomerate

Our first success with the Geek+ robotics was with a leading retail business. With a presence in both Australia and New Zealand, the client wanted to innovate its supply chain and logistics picking, packing and storage.
We started by consulting on the critical requirements for the robotics installation, determining how the technology would fit in with existing warehouse management infrastructure. Our engineers and technicians mapped out the existing warehousing space and developed a blueprint grid for our robots to learn.
The project was completed within five months, from first consultation to final deployment – less than half the time it takes to integrate legacy fixed logistics infrastructure

  1. The consumable goods supplier

This food supply chain enterprise experienced significant growth in the last two years and decided now was the time to get onboard with implementing robotics technology.
The supplier already had voice technology integrated into its picking and transit process and thought of robotics as a natural next step. We sat down with the logistics team to assess suitability, to see if robotics really was the logical choice. Once a comprehensive plan for the deployment and integration process was developed, we began customising the Geek+ robotics equipment to their needs. The project is expected to be completed by October 2019.
An automation culture shift: the key is change management
Change management is the most essential part of an automation roll-out. You need to get buy-in from your whole supply chain network on the amazing potential of robotics and how it will help day-to-day productivity. This helps to remove the stigma around the technology. Partnering with an enterprise that is equally committed to your business goals, including managing the evolution of your operations into future, is invaluable. Automation is as much a state of mind as it is cold hard steel.

Are you ready for robotics?
A comprehensive robotics deployment might not be ideal for every logistics enterprise. Voice technologies and legacy warehousing infrastructure have stood the test of time for a reason. But refusing to consider automation as a viable means of improving operations is no longer an option. The world is progressing, and Australia and New Zealand’s regional trading economies with it. Hexa Research shows that Asia-Pacific, perennial automation laggards, will be close to matching Europe in robotics market revenue by 2025.
We need to be part of the change and shape automation to suit the our national tastes. The ACRV Roadmap claims the missing pieces restricting national growth are knowledge about the right technology, and robotics experts to lead the integration.

Cohesio’s partnership with Geek+ is one of the first commercial robotics business tailored to the Australian and New Zealand markets to meet the needs of national organisations and customers. The diverse technology and engineering team can help companies build out and implement scalable robotics that suits their operations, now and into the future.
Are you prepared for a new mechanised world and ready to join the automation evolution with a robotics solution for your business? The time is now.
For more information call 1300 66 93 94, email info@cohesiogroup.com or visit www.cohesiogroup.com.

Health support – from MHD magazine

The pharmaceutical industry
The pharmaceutical industry is a knowledge-based, technology-intensive industry that comprises bio-medical research, biotechnology firms, originator and generic medicines companies and service-related segments, including wholesaling and distribution.
The volume of the global pharmaceutical market has more than doubled in the past ten years. By the end of 2016, the global sales volume was estimated to have risen to nearly $A1.5 trillion.
In a snapshot from the CSIRO in 2017, the Australian medical technologies and pharmaceutical sector provided 48,000 jobs in total, across 50 pharmaceutical companies, 400 biotechnology companies and 500 medical technology companies.
And the importance of this industry is growing. Australia’s pharmaceutical market is set to rise to over $A25 billion by 2020.
This industry seeks to deliver medication and related health services that meet the best possible health and economic objectives, including timely access to medicines that meet appropriate standards of quality, safety and efficacy.
The simplified logistics and shortened supply chain of the 1930s, where most pharmacists were still mixing powders and vials and making tablets in their own pharmacies for delivery to customers, made it much easier to meet these objectives.
Today, medicines are distributed through a complex supply chain, which can be disrupted anywhere along its path, from manufacturing to dispensing. The pharmaceutical supply chain is a core part of Australia’s healthcare system, making medicines readily available to all Australians, regardless of location.
SSI SCHAEFER develops and implements supply chain solutions that cater for the future growth of pharmaceutical manufacturers, wholesalers and retailers. SSI SCHAEFER order fulfilment systems support everything from traditional wholesale distribution to omni-channel logistics, including fast-paced e-commerce requirements.

Pharmaceutical wholesale
Pharmaceutical wholesalers procure, distribute and sell a wide range of pharmaceutical and medicinal products. These products include prescription medicines, pharmacy-only medicines, over-the-counter (OTC) medicines, other healthcare products and veterinary pharmaceuticals.
Pharmaceutical wholesalers in the Australian market generate $A14.6bn in annual revenue and employ around 13,000 staff.
Although the principles of a pharmaceutical supply chain are similar to other products and industries, there are very specific issues and characteristics that make it different. Within the supply chain there are a number of rigorous regulatory requirements, such as international customs and importation hurdles, complex transport and storage needs, massive SKU proliferation, and significant pressure to maintain continuity of supply.
Pharmaceutical supply chains are not only important for hospitals, practitioners and consumers, but are also important from social and political perspectives. The impacts of disrupted supply can be felt widely and quickly, and have serious ramifications. It is crucial that medicines be delivered at the right time to the right person in standard conditions. Improper distribution of medicinal products not only affects brand reputation, customer satisfaction and company profits, but can also disrupt the healing processes of patients and negatively impact public health.

“Consistent, reliable service levels are clearly paramount, as is the compliance with regulatory requirements.”

Factors that contribute to unanticipated shortages of medicines include manufacturing faults, logistical failures and unexpected or unpredictable disease outbreaks. Additionally, unexpected safety signals may require recalling of batches with a consequential scarcity of remaining supplies at short notice.
With notable unexpected shortages, the vulnerability of the supply of medicines is exposed. Supply may be restricted or delayed anywhere in the supply chain from manufacturing to the dispensary. The high margins on pharma products, coupled with the limited patent lifespans, mean pharmaceutical companies must significantly focus on maintaining supply.

The challenges
Consistency. End-user customers demand the highest standards of quality and with zero-fault tolerance. Consistent, reliable service levels are clearly paramount, as is the compliance with regulatory requirements.
Regulation. The foundations of Australia’s pharmaceutical supply chain have shifted over recent years due to global and local factors. The NMP (National Medicines Policy) commits to providing timely, Australia-wide access to affordable medicines that meet appropriate standards of quality, safety and efficacy, while maintaining a responsible and viable medicines industry.
Internationally, the industry is moving towards the new Goods Distribution Practice (GDP), which is similar to the Good Wholesaling Practice, but extends the requirements around handling, transportation and traceability. Incorporating these will add challenging logistics hurdles that demand significant investment in existing Australian infrastructure.
Pack variety. There is a significant variety of packaging in the pharmaceutical industry – a vast array of box sizes and dimensions, packets and satchels, glass vials and jars including liquid dosage, plastic bottles etc. Also, packaging must be safeguarded throughout the logistics chain to maintain perfect appearance, not only for aesthetics but also for clarity of essential identification.
The rise of generics. Over recent years, the percentage of generics in the market has been steadily increasing and they are estimated to account for about 90 percent of all prescriptions by 2020 9 This continues to significantly contributes to SKU growth with wholesalers.

“Supply chain visibility is considered of major importance and a significant challenge facing the industry.”

An increasing number of prescriptions. Alongside the rise of generics, there has been an overall rise in the number of prescriptions, in the vicinity of 6.8 per cent in 2015. As the demand for medicines continues to grow, more accurate forecasting and inventory management have become increasingly important.
The rise of cold chain logistics. With demand for cold chain logistics growing, it has become increasingly difficult for pharmaceutical companies to manage fluctuations in demand for temperature-dependent medicines, which can result in exceedingly high inventory costs due to the cooling requirements. This can be of high concern in the Australian market, particularly evident during the hottest January on record that we experienced this year.
The European GDP guidelines extend adherence to storage conditions, as indicated on the packaging, to the transportation leg of the journey. The compliance requirement has long been adhered to with cold chain products – generally anything below 8°C. However, it is new for the majority of the products found in most medicine cabinets, often labelled for 25°C. For example, in practice, the GDP guidelines now apply to about 80% of pharma products in the EU.
Supply chain visibility. Many products are highly sensitive and require end-to-end documentation. Visibility is the ability to track and trace prescription medication. It is also essential to monitor and comply with expiration dates. Supply chain visibility is considered of major importance and a significant challenge facing the industry. Management’s ability to achieve a nearly risk-free environment is primarily enabled by visibility technology that introduces intelligence into every step of the healthcare supply chain.
Storage locations. Storage and picking of pharmaceuticals dictates significant variety and different environments. There is also a need for dedicated storage areas for different types of products such as OTC medications and products, narcotics and hazardous chemicals. Some items require cooling, and others must be held in secure storage.

Order fulfilment systems
SSI SCHAEFER draws on a wealth of expertise and technologies to facilitate the continuous and efficient supply of products in the pharmaceutical industry. SSI SCHAEFER’s order fulfilment systems, whether manual, semi, or fully automated, can flexibly be adapted to the increasing requirements and demands of this industry sector, and include:

  • Carton and tote bin conveyor and handling systems for efficient material flow.
  • High productivity ‘goods-to-person’ order picking systems.
  • ‘A-frame’ fully automated product dispensers.
  • Product and order verification scanning machines.
  • Automatic storage and retrieval systems for tote bins and pallets.
  • Warehouse management software for manual or automated warehouses delivering:
    • Serial number tracking through automatic recording of data.
    • Expiry date management through stock monitoring and automatic early expiry date detection.
  • Automatic-guided transport systems.
  • Robots for both picking and pallet loading.
  • RF, voice or light directed manual picking to order cartons or pallets.
  • Plastic tote bins for product storage and order delivery.

“Synchronisation between the collector belt and the order totes ensures a continuous stream of automatically picked products, up to 10,000 items an hour.”

Goods-to-person systems

SSI SCHAEFER goods-to-person high productivity picking systems eliminate walking by automatically retrieving products from an automatic storage system and conveying them to an operator at an ergonomically designed pick station. Order totes or cartons are also automatically conveyed in and out of the pick station, allowing the operator to continually fulfil orders without moving from the station. A combination of displays and light curtains ensures high accuracy and productivity. Operators can pick individual items, shelf packs or small cartons at the station.
A-frames

SSI SCHAEFER A-frames automatically dispense pharmaceutical products onto a collector belt that runs through the centre of the A-frame and automatically delivers the collected items into an order tote or carton. Synchronisation between the collector belt and the order totes ensures a continuous stream of automatically picked products, up to 10,000 items an hour, making the A-frame ideal for dealing with fast moving small items in peak times.
Warehouse management software

SSI SCHAEFER’s warehouse management software, WAMAS, intelligently manages the end-to-end processes in both manual and automated distribution centres. WAMAS ensures tight integration between the various automated subsystems and operational processes, and is rich in the functionality required for pharmaceutical distribution, including:

  • Batch-lot & product ID tracking.
  • Check weighing.
  • Order cubing.
  • Route prioritisation.
  • Order consolidation.

WAMAS manages and controls all intralogistics processes including efficient and flexible order processing, goods movement, and resource optimisation, along with the provision and analysis of logistics performance data so critical to the supply chain visibility required by the pharmaceutical industry.
SSI SCHAEFER is a strong partner to the pharmaceutical industry, having worked with many of industry leaders over the last 20 years. Contact SSI SCHAEFER directly for case study evidence. For more information, call +61 2 8799 3600 or visit www.ssi-schaefer.com.
 
 
 
 

No sleep – from MHD

Paul Goepfert

Running a profitable wholesale business increasingly depends on how efficiently you can sell and deliver – this is perhaps more important than what you’re selling.
The adoption of e-commerce has changed not only the way retailers operate, but is having a significant impact on the way wholesalers do business. According to the NAB Online Retail Sales Index, Australians spent $24 billion online over the 12 months to November 2017, representing a year-on-year growth of 14.4 per cent. This rise in online shopping has created new service expectations around order-to-dispatch time-frames, and consumers penalise retailers who perform poorly. To build loyalty, it is also essential that retailers have sufficient stock of top-selling items, ahead of their competition.
If there were any doubt on the relevance of e-commerce habits for wholesale distributors, you need to look only at Amazon and Alibaba. Two of the largest e-commerce platforms in the world now offer similar service levels on their business-to-business (B2B) platforms as they do on the business-to-consumer (B2C) side.

“The adoption of e-commerce has changed not only the way retailers operate, but is having a significant impact on the way wholesalers do business.”

For wholesalers, this shift means that traditional supply chain methods – relying on manual processes and labour-intensive spreadsheets – are no longer good enough. Retailers now demand their wholesale partners streamline their back-end processes and help them create opportunities to win new business, based on the strength of their service standards.
Great expectations from customer to consumer
The concept of ‘just in time’ inventory was pioneered by automobile manufacturer Toyota in the 1980s and quickly spread to all areas of stock delivery. For ‘just in time’ delivery to work, the wholesaler or supplier needs to deliver stock just as it’s needed, reducing overheads for the retailer. Of course, the timeline from order to delivery has become shorter and shorter over time. While major retailers in the United States are offering two-hour delivery services, in Australia the peak delivery guarantee in the fashion space is currently a same-day service – but I am confident this will change. To help retailers achieve this, wholesaler supply chains must be finely tuned so they recognise what is needed, it is delivered when required, and to a high level of customer satisfaction.
In the world of retail, as soon as an order comes in, the clock starts ticking. Wholesalers that rely on outdated, complex manual methods for order entry and fulfilment simply won’t be able to compete and offer the same speed as a business that is fully automated.

“Wholesalers also benefit from business intelligence (BI) that helps uncover insights and drive better performance through real-time monitoring tools and historical trend analysis.”

Warehouse efficiency separates a great wholesaler from a good one
To become fully automated, a wholesaler needs an intuitive system that will calculate the quickest picking route and direct the picker, define the best order allocation and automatically print dispatch notes, barcode labels and the invoice, if required. Many retailers use enterprise resource planning (ERP) software to automate these processes and track business performance easily.
Warehouse efficiency is another key area of distinction between a highly profitable wholesaler and a mediocre one. Metrics such as order-to-delivery time and picking accuracy of the order all have an impact on customer satisfaction, as well as financial performance. A wholesale business can’t improve its delivery times if it doesn’t know what those delivery times are in the first place. It also can’t measure the time taken for pick-and-pack if it doesn’t know what steps are involved.
Returns can also have an effect on the bottom line, and goods returned through inefficient processes touch many hands and departments on the way back to the warehouse, with each step incurring an additional cost.
By pooling together business data, powerful ERP systems deliver actionable insight that businesses can leverage to identify gaps and opportunities they can take advantage of. The cumulative effect of new efficiencies at each step in the order-to-delivery process will provide significant speed and accuracy improvements, all of which are felt at the customer level and the bottom line.

The rise of e-commerce has also had an impact on the way retailers source their suppliers. If an item is out of stock at one wholesaler, a retailer is also likely to shift their business. For the wholesaler, this ‘no second chances’ environment means that they must have deep insight into inventory levels. Using an ERP system combined with intelligent forecasting based on historical sales can help a wholesaler automatically generate the appropriate purchasing prompts to maintain stock levels.
Wholesalers also benefit from business intelligence (BI) that helps uncover insights and drive better performance through real-time monitoring tools and historical trend analysis. For example, BI insights could help a sales manager realise that some markets are being underserved, or that customer appetite for express shipping is larger than anticipated at certain times.
Taken together, a combined ERP and BI can help a wholesale business better meet the needs of retail customers. It can bring efficiencies to the wholesale sector, allowing wholesalers to ditch manual methods entirely and fully automate their supply chain to offer the rapid delivery guarantees that consumers and their customers are demanding. This provides the wholesaler with a solid differentiation that allows them to service and add value to the retailer, delivering a long-term and future proof solution.
Paul Goepfert is the chief marketing officer at Pronto Software. For more information visit www.pronto.net.
 

Disrupt demand – from MHD magazine

Tom Enright

Highly predictable future demand is the dream of most supply chain executives, all striving for an effective end-to-end supply chain. Companies have long struggled with average forecast errors of more than 27 per cent, according to a Gartner survey.
This challenge will only become tougher as supply chains become increasingly disrupted by new competitors, new business models and digitalisation. Demand will also shift to parts of the world where companies don’t have mature infrastructures.
You’ll need to improve your demand-sensing, shaping and forecasting capabilities to be successful. Move away from owning assets. Instead, move toward accessing and using them through implementing more collaborative supply chain network designs.

“You’ll need to improve your demand-sensing, shaping and forecasting capabilities to be successful.”

New opportunities to better predict demand
The sheer volume of data currently available is greater than most current demand technology can absorb and use for effective insight and decision making. This data needs to be used in a different way than it is today to improve demand planning and forecasting.
Improving demand accuracy is now intrinsically linked to the use of analytics to recreate the environment in which historical demand occurred. This means including more inputs than those of sales, inventory and variable prices in statistical forecasting today, which don’t sufficiently create a comprehensive set of attributes that influence historical demand.
Instead, elements such as weather, social commentary, demand transfer, competitor pricing, and shipping and returns policies need to become inputs to demand calculations. All of these influence how customers purchase, whether in B2B or B2C environments, across multiple industries. All of these elements should be considered when predicting future demand.
This new set of data inputs need advanced machine learning algorithms to learn from richer historical data to sense demand, predict and prescribe action. Unlike statistical forecasting, a machine learning approach uses a wider variety of data inputs, which can produce a more accurate demand plan.
Viewing technology as a source of competitive advantage is critical to understand the impact of disrupting demand for people, products and services, as well as appropriately reacting to it.

“Wealth and demand for products and services will increasingly shift to parts of the world where companies lack mature infrastructure in terms of sales, supply and recruitment.”

Participate in trading partner networks
To gain new insights from the proliferation of data and increase demand management performance, you’ll increasingly need to pool resources with other partner companies in your extended supply chain.
Each company will play a role in this network of suppliers and service providers, sharing people, information and technology. Rather than extracting value from its own asset, your company will gain value and advantage using data, people, technology and services belonging to others. Isolated companies will become weaker in influence in the overall supply chain.
The need to develop multi-enterprise collaborative supply chain infrastructures will define the future of supply chains across global industries. Extracting value from information, assets and people will no longer be based on ownership, but instead on accessibility and usage.
The sharing of supply chain assets will be accelerated by the emergence of digital platforms across manufacturing, warehousing and logistics. Ecosystems as a platform have been emerging for many years.
Cars have evolved to become platforms, for example, delivering a customer experience that draws on a cross-industry ecosystem of partners, from the car manufacturer to companies that specialise in communications, entertainment and navigation.
What’s new about ecosystems today is the infusion of digital connections, combined with the fact that they’re delivering digital products.
Forces such as globalisation, government pressure, network capacity constraints, freight margin reductions and increased outsourcing will drive companies to explore how to become more efficient in using their networks and resources across their ecosystem platforms.
Most companies will need to leverage an asset-light network that enables them to be flexible and timely in a cost-effective manner. Instead of looking internally and only optimising your own assets, connect with an ecosystem of third parties to share assets. This builds more responsive supply chains.
Individual customer orders will be fulfilled by whatever combination of partners meets the demand requirements at the time of execution.
Keep ahead of market forces
A global shift in population growth, wealth and workforce resources requires better demand-sensing and shaping capabilities.
Wealth and demand for products and services will increasingly shift to parts of the world where companies lack mature infrastructure in terms of sales, supply and recruitment. It’s likely we’ll see a large increase in purchasing power in less-developed countries in the coming decades.
These shifts in economic power will change demand and potentially how customers will buy. Will they want value products, or will demand for more choice and for premium products increase? Will they buy in urban stores, rural locations or will most purchases be done online?
Companies that fail to take action will find their existing markets declining in terms of spending power and as older consumers age.
Advanced analytics technologies – spanning predictive and prescriptive analytics – are playing an important role in helping companies to keep ahead of these market forces. The impact on supply chains is significant.
Predictive analytics are undoubtedly a powerful competency that enable companies to be proactive and take advantage of a future opportunity, or mitigate or avoid a future adverse event.
Prescriptive analytics on the other hand can improve decision making in functional areas like supply chain planning, sourcing, logistics and transportation. More importantly, prescriptive analytics can be deployed to improve the supply chain performance by recommending course of action that best manages trade-offs among conflicting functional goals.
Tom Enright is a VP analyst at Gartner, specialising in supply chain strategies and operations across the retail sector. His focus areas include distributed order management, in-store logistics and last-mile fulfilment. For more information visit www.gartner.com/supplychain.
 

©2019 All Rights Reserved. MHD Magazine is a registered trademark of Prime Creative Media.