yearly-graph-growth-report-2017 to 2019

Accelerate your profitability – from MHD magazine

Paul Goepfert

An unprecedented demand for precision and pace has been a catalyst for change in the logistics and wholesale sector. These high customer expectations have led IDC  to predict that by 2022, digital technologies that allow for automation of repetitive tasks will streamline supply chain operations dramatically, cutting typical manual-based processes in half. Read more

Close-up Of A Business Woman Giving Cheque To Her Colleague At Workplace In Office

‘Tug of war’ erupts over logistics salaries

More logistics professionals will receive a pay rise this year than last, but it will be a less significant increase than they hoped for.
According to the FY 2019/20 Hays Salary Guide, 92% of employers will increase their transport and distribution staff salaries in their next review, up from 83% who did so in their last review.
However, the value of these increases will fall. 71% intend to raise salaries at the lower level of 3% or less, up from 63% who did so in their last review. At the other end of the scale, just 3% of employers intend to grant pay increases of more than 6%.
Professionals prioritise a salary increase
For their part, 26% of the transport and distribution professionals Hays also spoke to expect no increase whatsoever and a further 48% expect 3% or less. Yet while these professionals anticipate little or no increase, they’re not going to sit idly by and accept it.
In fact, more than half (57%) say a salary increase is their number one career priority this year. 46% intend to achieve this by asking for a pay rise, while others are looking elsewhere – 41% of jobseekers say their uncompetitive salary provoked their job search.
“Tug of war over salaries”
“Evidently, the aggregate effect of several years of sedate salary increases is taking its toll and we’re now seeing a tug of war over salaries,” said managing director of Hays Logistics Tim James.
“On the one hand, we have professionals telling us they’ve prioritised a pay rise and are prepared to enter the job market to improve their earnings. On the other, employers tell us they want to add to their headcount and are being impacted by skill shortages, yet they want to curtail salary increases.
“There are only a few exceptions. The recovery of the senior supply chain market led to demand for supply chain managers and, in turn, mid-tier demand and supply planners. In some states, salaries have increased in response to this demand.
“Tasmania’s positive economic climate led to a surge in interstate and international exports. Looking ahead, salaries are expected to increase in the state for multi-combination drivers and warehouse supervisors, who remain in short supply.
“While salaries for warehousing roles remain steady in smaller organisations nationally, larger companies are offering salaries over $90,000 for highly skilled and experienced candidates, especially those with safety qualifications and experience.
“In addition, in New South Wales and Victoria, higher vacancy activity has significantly drained the available pool of candidates and created a war for talent. As a result, employers in these states have begun to offer higher salaries for senior warehouse supervisors, operations managers, transport managers and fleet managers and controllers.”
In other key findings, the 2019/20 Hays Salary Guide found:

  • 67% of organisations offer flexible salary packaging. Of these, the most common benefit is salary sacrifice, offered by 55% of employers to all employees. This is followed by above mandatory superannuation (offered by 37% of employers to all their employees), parking (33%), bonuses (27%) and private health insurance (26%).
  • Of the benefits offered to a select few employees, private expenses tops the list, with 70% of employers offering it to a hand-picked number of employees.
  • 68% of employers said business activity had increased over the past year, with 70% expecting it to increase in the next 12 months.
  • 57% intend to increase permanent distribution staff levels over the coming year.
  • 70% say skill shortages will impact the effective operation of their business or department in either a significant (28%) or minor (42%) way, up from 67% last year.
  • 54% of employers are restructuring to keep up with changing business needs – the key driver of these restructures is a change in the required skill sets.
  • In skill-short areas, 57% of employers would consider employing or sponsoring a qualified overseas candidate.

Jungheinrich opens spare parts centre in Singapore

Jungheinrich is expanding its spare parts logistics capacities in Southeast Asia. With the opening of a spare parts centre in the Southeast Asian trade and logistics metropolis of Singapore, the company has reduced the delivery times of replacement parts by up to five days.
Jungheinrich customers all over Southeast Asia, Australia and New Zealand will benefit from the increased spare parts availability. This will enable Jungheinrich to also satisfy particularly urgent customer requests in the APAC region by providing round-the-clock access to spare parts.
“The new spare parts centre in Singapore will strengthen our position as the market leader in terms of spare parts availability by now also covering Southeast Asia and the Pacific area,” Stefan Brehm, Vice President of After Sales at Jungheinrich said.
“By bridging up to seven time zones, we will be able to react faster to the requests of our customers. For Jungheinrich customers, this represents minimal downtime and maximum productivity.”
In addition to the customer service aspect, environmental considerations at Jungheinrich also played an important role. Through the additional optimisation of the region’s transport network, CO2 emissions will be reduced by 75 per cent. Furthermore, the spare parts centre is a perfect example of efficient and intelligent warehouse management thanks to its modern lift rackings and lithium-ion powered forklift trucks.

National supply chains must be key election focus

The Australian Logistics Council (ALC) has welcomed confirmation that the federal election will be held on 18 May.
The election announcement coincided with the inaugural meeting of ALC’s Northern Australia Working Group, which took place in Darwin.
“It is fitting that the election announcement has come on the same day that ALC’s newly-formed Northern Australia Working Group meets for the first time, because so much activity in this region underpins Australia’s economic performance,” said ALC CEO Kirk Coningham.
“Our Working Group brings together freight logistics companies, infrastructure owners, local and state government representatives and other key industry organisations to advocate more effectively for investment in Northern Australia’s freight infrastructure, and work with policy makers to get regulatory settings right.”
“ALC has formed this Working Group because we recognise that Australia’s ability to take full advantage of free trade agreements recently signed with rapidly growing Asian markets rests on our ability to get our export products to market, efficiently and safely.”
“It is vital to make certain that Northern Australia has the road, rail, port and air freight infrastructure necessary to get products demanded by our trading partners to their destination as quickly as possible. This is particularly important when it comes to agricultural goods and other consumables, where freshness is highly prized by overseas customers.”
“Enhanced supply chain performance in Northern Australia is important for the entire nation, because freight does not stop at state borders. A key focus for the next Parliament must be to ensure greater national consistency in our approach to the movement of freight.”
“In the coming days, ALC will be releasing a comprehensive statement of the freight logistics industry’s policy priorities for next Parliament.”
“Chief among these will be to build on the bipartisan commitment to finalise the National Freight and Supply Chain Strategy, and work with state and territory governments to ensure its effective implementation,  so that Australians can share in the benefits that come from improved supply chain performance – wherever they live,” Mr Coningham said.
 

The automotive supply chain is about to go electric

BMW’s Mini production line in Oxfordshire, UK. Photo courtesy of the BBC.

Jess Dando

New research from Transport Intelligence (Ti) has found that automotive supply chains will undergo a radical transformation over the next decade as the internal combustion engine is phased out in favour of alternative propulsion systems.
It is clear that electric vehicles will play an important, even defining, role in the industry’s future. This will mean that the supply chain for the entire powertrain will be transformed and the types of components, the logistics processes employed to move them, the markets of origin and destination as well as the tiered character of automotive supply chains will fundamentally change.
Key findings in the new report – Ti Future Mobility: Electric Vehicle Supply Chain Architecture – include:

  • As the dominant technology in electric vehicles, battery manufacturing processes will transform the automotive supply chain.
  • Battery or battery pack producers with high volumes will drive out lower volume manufacturers, including many vehicle manufacturers’ own in-house operations.
  • Supply chain and logistics provision will adapt to the geography of battery and electric component production locations.
  • The integration of the battery-pack and associated drive-train elements will create a distinctive ‘propulsion platform’.
  • The complex and deeply integrated tier-system of suppliers feeding in the components will change fundamentally.

While batteries are complex pieces of engineering, they are much more straightforward to insert into a vehicle than an internal combustion engine. Plugging in the electric motors to the battery is a comparatively simple process. With no welding shop, no engine plant and a higher level of outsourcing to new component suppliers, the automotive assembly facility will shrink in scale along with its logistics requirements.
“Conventional vehicle manufacturers define assembly as a core-competence but with the changing nature of operations, this may no longer be the case. It may be that, in time, automotive manufacturers’ come to focus on the design and marketing of their product, in the way that Apple does,” said Nick Bailey, Ti’s Head of Research and the report’s co-author.
The impact of the reduction in parts and the elimination of tiers of suppliers in the powertrain supply chain might be considered to be traumatic enough for the automotive supply chain. However, in addition to this, the process of the manufacturing of batteries in terms of materials, skills and existing production structures has developed outside of the main automotive powerhouse economies. Japan, South Korea and China are dominant in the sector, sourcing their raw materials from Asia, Africa and Latin America. Europe and North America have, with a few exceptions, been side-lined in the development of new technologies of batteries as well as in the manufacturing know-how.
One important discrete aspect of any EV supply chain that will make it distinct from IC supply chains is the differing nature of the interconnection of components. Whereas the relationship between components in IC vehicles is predominantly kinetic, the relationship between electric and electronic components is reliant on the movement of electrons. This means that the nature of different component’s interfaces are very different. This obviously has major supply chain implications.
“Fundamentally there is a shift in the nature of the components used, from mechanical engineering to electrical and electronic engineering,” said report co-author Thomas Cullen, senior analyst at Ti.  “The economics of both designing and producing these components is very different. This has enormous implications for how the automotive supply chain is ordered.”

Chevin expands its global team with new appointments in Australia

Chevin Fleet Solutions has announced the appointment of thirteen new team members across Australia, Europe and North America.
Laura Jones, joining as financial controller, will be responsible for managing the company’s accounts across the entire global operation.
Darren Trueman, Neil Robinson, Michael Kowalewicz and Cristian Tobol have been appointed as software developers alongside product developers Arun Purewal, Sam Hufton, Athanasios Kaloudis. Bringing young talent into the team, Alex Bright and Jay Smith take on the roles of IT apprentice developers.
Chris Cooper has joined as a junior business analyst and Simon Haley as a Project Manager. Audrey Guillet joins the marketing team as Marketing Executive on a six-month internship from France. Audrey’s role will support communications activity across the company’s French operation.
“We are very fortunate in being able to bring onboard such experience to the team. The company is entering another exciting growth phase following recent contract wins and these new appointments will support the existing teams in helping drive the business forward. I am delighted to welcome them to the team,”  Ashley Sowerby, Managing Director, said.

Woolworths to spend $57m on partly solar-powered DC

Woolworths has been building on its solar power capacity with each new DC. Photo shows the Melbourne South Regional Distribution Centre under construction.

Woolworths has turned the first sod on a $57 million expansion of the existing Adelaide Regional Distribution Centre (ARDC).
The project is expected to create approximately 140 local jobs throughout construction as Woolworths and Hutchinson Builders partner with local businesses on the 14 month building works.
The expanded ARDC is designed to deliver fresher, faster and more frequent deliveries to supermarkets in South Australia and the Northern Territory by mid-2020.
On completion, the expanded centre will span 94,000 square metres – more than four times the size of Adelaide Oval – boosting the capacity of the temperature control and ambient warehouse sections of the Gepps Cross site.
These expanded operations are set to significantly strengthen Woolworths’ 7-day-a-week delivery of fresh produce to communities across South Australia as well as into the Northern Territory.
Woolworths chief supply chain officer Paul Graham said: “This $57m expansion of our Adelaide DC forms a key part of our ambition to create a best-in-class supply chain network for our customers.
“The site’s proximity to the Adelaide markets has always been a strength, but this upgrade will allow for more frequent and faster deliveries to our stores to help fulfil our fresh food promise.
“We partner with dozens of local suppliers in South Australia, connecting products from growing regions including the Northern Adelaide Plain, South Murraylands, Riverland, Mallee, the Lime Coast and Adelaide Hills, to our customers.
“We have a long and proud history in South Australia, and this investment demonstrates our commitment to continued growth in the state and local jobs.”
Sustainable energy will help power the expanded distribution centre with Woolworths to install 3,500 solar panels (1.6MVa system) across the rooftop. This is the largest solar installation in Woolworths’ Australian network, and larger than the current installation at Adelaide airport.
The $2.5 million solar installation will provide around one-fifth of the centre’s energy needs, and produce enough green energy to power the equivalent of 300 homes.
Construction of an expanded recycling facility for pallets is also part of the project, reflecting our commitment to further reducing plastics and cardboard within our supply chain.
The expansion of Adelaide Regional Distribution Centre is to be funded by landowner, Growthpoint Properties, under a new 15-year lease over the entire distribution centre.

Will a robot take your job?

Half of Australian workers have already seen their job responsibilities change as a result of automation, according to recruiting company Hays.
In an online poll of almost 2,000 (1,987) people in Australia conducted by the recruiter, 18 per cent said automation has already impacted their job ‘significantly’, with their duties changing or their role becoming redundant.
Another 32 per cent said their job has been impacted ‘partially’, with some tasks automated and non-routine duties increasing.
The final 50 per cent said automation has so far had no impact on their day-to-day job responsibilities.
“There’s no denying that robots will continue to join workplaces across the country, with professionals able to benefit if they take the appropriate action now,” said managing director of Hays in Australia & New Zealand Nick Deligiannis.
“Even if you are one of the 50 per cent of skilled professionals whose job has not yet been impacted by automation, it’s essential you don’t rest on your laurels. The automation of routine and repetitive job tasks is inevitable.
“To prepare, consider what your job would look like if all the routine and repetitive duties you perform were automated. Then determine how you could fill the time freed up by the automation of these tasks in a way that adds greater strategic value to your employer.
“Next, start to upskill in the higher-value areas you’ve identified so that you’ll be ready for the automation of your lower-value, repetitive tasks.
“But don’t just sit back and wait for automation to knock on your door. Be proactive and embrace change by exploring relevant automation tools and their practical application for your role. Set up a meeting with your boss to discuss these new tools and how they could be of use in your role. Then present your plan for how you can focus your time on higher-value tasks if your routine and repetitive job responsibilities were automated.
“Remember, constant upskilling is the key to remaining relevant and employable when lower-value tasks are automated,” Mr Deligiannis said.

Supply chain visibility and social responsibility

A new study from MIT Sloan School has found that consumers are willing to pay a premium for supply chain visibility.
Companies from Patagonia to Nike to Levi’s are leading the charge on social responsibility and supply chain transparency and they’ve encouraged their competitors to follow suit. But getting better visibility into a supply chain is an expensive and time-consuming endeavour for apparel makers. What’s more, its benefits are not entirely clear. Do customers really care? And if they do, are they willing to reward a company for its efforts?
A new study, led by two MIT Sloan School of Management professors, provides answers. The research finds that customers do indeed value information related to a company’s supply chain, and many are prepared to pay a premium for greater supply chain visibility. The study, published in Manufacturing & Service Operations Management, has implications for companies debating how transparent to make their supply chains and also how best to convey their social responsibility efforts to customers.
“Historically, many companies kept their supply chains as a closely guarded secret,” said Tim Kraft, visiting assistant professor of operations management, one of the study’s authors. “But recent events, such as the Foxconn suicides in Shenzhen in 2010 and the Rana Plaza factory collapse in 2013, have shifted the paradigm. Now, many companies realise an expectation is being set that they need to put this information out there for consumers to see. But even as they’ve increased their transparency, most weren’t sure that it made a difference to customers. Our study demonstrates that it does make a difference: Customers want to know more about where and how the products they purchase are made.”
Professor Kraft and his co-authors — Yanchong Zheng, the Sloan School Career Development Professor, associate professor of operations management at MIT Sloan, and León Valdés, assistant professor at the University of Pittsburgh’s Katz Graduate School of Business — conducted a series of laboratory experiments that mimicked the dynamics of a supply chain with a three-player game where participants played the roles of a consumer, a seller, or a worker. The experiment examined whether and how visibility into the outcome of the seller’s effort to improve the treatment of the worker impacts the price premium that consumers are willing to pay to the seller. All players’ decisions were incentivised, i.e. their actions directly impacted their payments from the experiment.
The researchers varied the extent to which the company’s social responsibility efforts were known to participants. Sometimes both the company and the consumer could see the outcome of the company’s effort to increase the worker’s pay. Other times, even the company was uncertain of the outcome of its effort. (In practice, although companies have full knowledge about their own efforts, they do not necessarily have the same level of knowledge about their suppliers’ practices.)
“Our results show that social responsibility matters to customers,” said Professor Zheng. “Yes, gaining supply chain visibility requires massive time and financial commitments. Many companies have hundreds of suppliers and those suppliers, in turn, have tens of hundreds of suppliers of their own. It is a massive undertaking to verify that everything is being done properly. And yet, our findings show that it can be worthwhile — not only for the social good, but also for a company’s market position.”
The study also highlights how a company’s messaging about its social responsibility initiatives resonates with different target customers. For instance, the researchers found that if consumers naturally care about others’ wellbeing, then they tend to be less interested in learning about the amount of effort that a company exerts and more interested in observing greater visibility into the outcomes of such effort. If instead, consumers are more driven by self-interests, then under high levels of supply chain visibility, they may be willing to reward a company for its social responsibility efforts. However, under lower levels of visibility, these same consumers may punish a company for low effort or even justify a lower willingness to pay by further shifting responsibility for the workers’ well-being onto the company.
“For companies that are trying to figure out how best to communicate their social responsibility efforts, the lesson is clear: know your customers,” said Professor Kraft. “Understanding their needs, values, attitudes, and personality traits will help companies send the right messages to the right people.”
 

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