Essence of efficiency

Over the past couple of years Foster’s has undertaken significant consolidation of its warehouse network and integrated its product portfolio under one roof.

General Manager, Customer Supply Chain for Foster’s in Australia, James Houston says the company has also simplified and standardised its operating process­es and IT systems.

“This now pro­vides us with a terrific platform to work from,” he tells Logistics Magazine.

“Along with that has been the introduction of technology that we believe will add value.”

As a result of integrating its warehouse network, Houston says Foster’s has taken the time to understand what it believes is the best footprint for the task in con­junction with logistics partners.

“We continue to evaluate and review our layouts as demand pro­files alter to ensure we keep our­selves current,” he says.

“The knowledge and understanding our people have of our logistics task is outstanding, as is their attention to detail and sense of urgency.”

Houston says Foster’s has also moved to utilising the services of a core group of logistics partners to undertake its warehousing activi­ties.

“Therefore the manner in which we engage with them is cru­cial, as is their ability to operate efficiently, and in particular, han­dle the throughput peaks and troughs effectively.”

“Added to that is a concerted effort not to over-complicate our activities and to introduce technol­ogy that enhances our warehousing operations and reduce costs.”

Houston points to the consolida­tion of warehousing and the emer­gence of larger scale distribution centres as a major trend in the industry over the last five years.

“Invariably this has been initiated through mergers and acquisitions, intra-business category integration or general inter-business collabora­tion and the drive to achieve ecomonies of scale,” he says.

“With fuel pricing and environmental sustainability rising in priority on corporate agendas it will be inter­esting to see how this trend evolves in the coming years.”

“Secondly, in the quest to reduce manual handling, improve efficien­cy and inventory visibility, the industry has continued to see more expansive application of technolo­gy associated with materials han­dling as well as increasing usage of inventory management systems,” he adds.

For the majority of the compa­ny’s warehouses, Houston says Foster’s utilises a warehouse man­agement system from RedPrairie as well as a routing management system from Descartes for the effi­cient allocation, routing and pick­ing of inventory.

“In our larger facilities we have also introduced voice picking tech­nology combined with the use of RF scanning units to aid the case and bottle picking task,” he explains.

While Foster’s manages ware­house resources through its WMS software and productivity report­ing using an in-house solution, it doesn’t yet use slotting software, though Houston says this is on the cards for the future.

“We have also recently intro­duced Laser Guided Vehicle (LGV) technology in one of our sites,” he affirms.

“This technology is pre­dominantly used for pallet putaway and picking of raw materials and finished goods.”

“In another of our facilities we installed an ASRS (automated storage and retrieval system) for finished goods.”

“Both are amazing pieces of tech­nology. The trick is to ensure the technology is applied to the right tasks.”

In line with the Foster’s philo­sophical approach of not over engi­neering a solution, Houston points to a range of basic materials han­dling equipment favoured by the company including single/twin tyne forklifts, various types of pal­let jacks and reach trucks and layer picking forklifts.

According to Houston, track and trace capability through to Foster’s customers and consumers is becoming increasingly important.

“The challenge is to be able to gain consistent visibility through the supply chain to all customers at an acceptable cost,” he maintains.

“Our substantive direct customer base and complex routes to store, combined particularly with RFID tagging and reading technology costs makes this all the more diffi­cult.”

“Although, our systems do allow us to track our products ade­quately at the moment – we are constantly evaluating and testing how we can improve in this area.”

In terms of technology of the future, Houston predicts the issues of manual handling and labour costs will continue to remain a core focus in improving warehous­ing operations.

“Therefore technol­ogy that helps minimise manual handling and allows activity to be levelled will have plenty of atten­tion paid to it,” he says.

“Similarly with the broad use of IT systems and the number of warehousing software applications that need to interface with each other – a fully integrated ERP/WMS/TMS suite would be great.”

Houston sees Foster’s approach to warehousing as holistic.

“It is all too easy to make one component look outstanding, however, this invariably comes at the expense of another, often at an increased total cost,” he argues.

“We prefer to see one logistics partner undertake both handling and delivery aspects of a distribution centre.”

“Furthermore, because of the increasing pressures on delivery transportation – legislative, fuel related and customer specific – and the associated costs, our preference is to limit less efficient and more complex product handling to our warehouses.”

“Neither of these basic philosophies are complex which probably summarises how we like to approach our distribution task.”

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