2015: Disruptive innovation hits process improvement

Although mentioned on the edges of business for years, the word “disruption” really came into its own in 2015, used by everyone from the CEOs of digital businesses, to Quality Managers of manufacturing companies, and even the newly-minted Australian Prime Minister.  But what exactly do these people mean when they talk about “digital disruption”, “creative disruption” or “disruptive innovation”?

When applied to businesses, industries or markets, “disruption” refers to the radical change introduced by new ideas, strategies or products.  In the last few years technology has completely changed the way several markets operate. Satellite TV services disrupted TV networks, and now digital distributors like Netflix are turning that market on its head again.

A significant disruption for organisations across all industries is occurring in the way that business processes are developed, managed, and improved.

Farewell to the encyclopaedia approach to processes

Since the 90’s the standard for sharing process knowledge and know-how hasn’t really shifted – a mixture of text and flow chart documents. New techniques for improvement have come and gone, new terms and notation styles, but process documents survived them all.

Like the volumes of encyclopaedias of old, these documents were at their most useful the moment they were printed.  Thereafter, they rapidly lose currency.  Static in nature, they failed to engage or resonate with teams. After being placed on the g:drive bookshelf, it was likely that only a few looked at them again, and certainly nobody truly owned them.  Over time processes change – but the documents that describe them, not being relevant, remained on the shelf.  Eventually, new change programmes come along to test the currency of this information, and lo and behold, it’s considered obsolete – and the process documents are rebuilt and shared… using a different document.

Process improvement goes online

Since the internet became an everyday part of business life, online tools have forced a rethink of the procedures encyclopaedia.  In fact the cloud, new collaboration tools and mobile technologies have completely disrupted old ways of sharing knowledge. Organisations have introduced company-wide intranets, and deployed dedicated online process management solutions that provide access to staff at any location, across a wide variety of mobile devices.

In terms of the technology adoption lifecycle, process management software has well and truly entered the late majority stage. Innovators and early adopters paved the way for this new approach to process management. Their successes have convinced the early majority and now the late majority to embark upon their own shift. Now, in 2015, online process management tools form the mainstream.

Why care about process knowledge?

Poor process management is a sign that knowledge is not being properly shared within the organisation. There is little collaboration within or between teams, and without a structured knowledge asset, individuals each develop their own approach to solving the same problem, time and again.

Not only is employee engagement and morale lower at organisations like this – it is widely agreed that process management directly impacts customer experience and customer satisfaction. The success or otherwise of process management flows directly through to customer retention and the bottom line.

Perhaps the greatest danger of weak process management lies in the crippling effect on efforts to rectify problems and introduce positive change. The failure rates of technology and process improvement initiatives increase significantly when built upon a shaky platform of process know-how.

How to spot a process encyclopaedia

On the surface, it’s not always immediately clear whether an organisation has embraced disruption to process management, or whether it is a laggard, clinging to old ways.

If you identify with any of the following five signs, there’s a good chance your business is being left behind.

1. You live in hope that teams will one day start reading the process encyclopaedia.

2. You’ve taken your encyclopaedia documents online, but they still seem suspiciously like the same static documents in search of an audience. Refer point (1).

3.  You hope that one or two authors will decide to maintain the encyclopaedia, heroically updating processes, keeping the document alive.

4. Every change project or technology implementation is free to write their own encyclopaedia of know-how in the format they choose.  Their work may not look the same as other process documents within the organisation, but they end up being ignored in the same way.

5.  You know that processes are changing, but none of the changes are reflected in the encyclopaedia.  Teams also know this, and don’t trust the encyclopaedia as a reflection of the way business is actually being done.

Disrupt or be disrupted  

The same disruption cycle has played out in other disciplines – it displaced the spreadsheets of customer information that were used every day by sales teams. Those documents made way for CRM (customer relationship management) solutions that offer significant advantages over the old spreadsheets for creating, sharing and managing customer contact information.

The shift occurred because the new tools are easier to use, easier to manage, and they provide far more powerful analysis. They provide a centralised source of information that protects the organisation’s process knowledge, while making that knowledge accessible and usable for teams.  The tools encourage interaction and foster improvement.

Sound familiar?

Is it any wonder that a recent study by TNS, a global market research company, found that seven in ten organisations plan to maintain or increase their level of investment in business process management over the next 3 years? The same study points to the problems experienced by laggards. Just over four in ten organisations admit that few or none of their processes are accessible or easy to find.

The old ways of managing processes were limiting and therefore ripe for disruption.  In 2015 it’s no longer acceptable to document processes and simply hope that someone will read them, or that they will meaningfully help process improvement.

Ivan Seselj is the CEO of Promapp.

Injecting data science and big data into the wireless supply chain

Data Science and machine learning algorithms are transforming the big data community. The growth in big data is well known, across all industries and business functions, in particular telecommunications. However, one of the biggest complaints from telcos is they are drowning in customer rich data and are struggling with effectively using the insights to improve day-to-day operations and their supply chains.

 

Unlike general FMCG supply chains, telco supply chains have rich datasets about customer preferences and behaviours. This means there is a huge opportunity for operators to use data science to gather, aggregate, store and analyse these trillions of bytes of customer likes and dislikes. According to IDC, improved customer experience and customer service are ranked as top business priorities in Australia. Telcos are under mounting pressure to improve their data analytics expertise and processes and actually use these insights to deliver a wireless supply chain that enhances loyalty and provides the truly tailored brand experience customers are demanding.

 

Dr Gregory Hill, Head of Business Analytics at Brightstar Australia, explores the top industry trends in big data in Australia and provides some top tips for operators to embrace the power of data science to improve their supply chains. How can they best gather business insights from the big data behemoth to enhance their operations and wireless supply chains, and most importantly their consumers’ loyalty?

 

  •         Recognise big data

Operators are a major step ahead of other retailers or FMCG companies, because they have such close relationships with their customers. They have access to some very powerful insights that are gold dust and can be used to offer a truly personalised customer service approach. Improved technology makes it possible to collect, retain and analyse data that otherwise would have been discarded. Plus, new advancements in data science allow professionals to use more sophisticated techniques to integrate big data to a level unseen before.

 

  •         Upskill in data science

According to LinkedIn, in 2014, statistical analysis and data mining was the no 1 hottest skill that got people hired. And the Harvard Business Review claimed that data scientist will be the sexiest job of the 21st century. A new approach to business management and data analysis is being seen across Australian businesses, which is based on science, mathematics and statistics. There is a growing emphasis on hypotheses, algorithms, cause and effect, and experiments to extract knowledge from large data volumes, and this is set to keep growing. These data mining techniques are used by a new breed of data scientist to interpret rich data, investigate problems and provide exact solutions. Data science is used by many retailers, for example, to pinpoint what customers want, how they buy, and what they might be interested in buying in the future. These skills are hot property and data analysts with business know-how are in such high demand and low supply that they are earning almost three times Australia’s average salary. To capitalise on this opportunity, most Australian universities are now offering graduate degrees in data science and analytics.

 

  •         Use insightful algorithms

Another hot topic is the growth in automation, and using algorithms to classify, predict and optimise customer interactions. For example, if an algorithm is being used at a retailer to predict which stores were going to run out of a popular item, it could automatically send a signal to the supply chain to push more stock to those locations. Doing this manually for all stores and products would be very time-consuming. This is fuelling much debate around the best way of combining automation and human judgement to create optimum results. For operators, automating small-scale decisions based on structured data can be a sure fire way of improving costs, quality and timeliness – and delivering a great customer experience.

 

  •         Visualise the data

Communicating all of this information clearly and efficiently is another discipline we’re seeing a big growth in. This involves building compelling visual representations of complex data. Using graphics, maps, tables, diagrams, graphs and charts are all ways of making big data more accessible and usable to non-mathematicians and non-scientists in an organisation. Well-crafted data visualisation helps uncover trends, develop insights and explore scenarios. Underpinning all of this is story-telling – working across teams to uncover the story behind all of this data and communicating it in an engaging and simple way.

 

From a business perspective, data science is an integral part of analytics that encompasses data mining and business intelligence. But what do these emerging trends and science mean for the wireless supply chain?

 

  •         Streamline omni-channel

All of this data and scientific analysis is geared to achieving the Holy Grail: a seamlessly positive customer experience. Allowing customers to interact across multiple channels is an expectation that must be met by retailers. Better knowledge of competitor pricing, demand trends and customer buying preferences (online and in-store) can initiate sales and promotions that help avoid losing business and retain customers. This also impacts customer service and enables telcos to provide a more tailored interaction, while improving supply chain efficiency and creating a “smart supply chain”. Using analytics tools, such as cloud-based platforms, enables a real-time optimised experience, which is crucial to achieving this.

 

  •         Supply chain demand

With such close relationships with customers, telcos can use rich transactional data to accurately predict supply and demand and ensure optimum supply chain efficiency. Supply chains need to move away from being product forecast driven to become customer demand driven. For example, when a new smartphone is launched, businesses can use data on who is using a similar product, what stage they are at in their contract, how much data they use, what accessories they’ve bought, and other preferences to predict peaks of demand and ensure adequate supply. So, ordering the right product, sending it to the right place, at the right time and with the right price point will help improve speed, accuracy and scalability of order fulfilment. The essence of demand shaping is knowing about your most profitable customers and products, and protecting and promoting them. Consumers will not be disappointed by an “out of stock” notice and retailers won’t have excess product piled up in their store rooms, so it’s win-win for everyone involved.

 

  •         Design a winning portfolio

Data scientists can also help with product design and ensure a portfolio meets customer requirements. For example, a retail phone store in a small country town is likely to stock different products to one in a CBD location, because customer demand will differ – features like enhanced network connectivity and being ruggedised may be more important in a rural or remote setting than colour variety. Knowing the trends and predicting behaviours based on insights means the right phones, accessories, bundles and services are all available across all channels, when the customer demands them. It’s important to use data science algorithms in customer segmentation and clustering. They can tell which customers are the lowest cost to serve and which are likely to buy the highest profit products. Creating a balanced menu of bundled offers based on data to address customer needs across brand, price, function, accessories and value-added services (e.g. insurance and upgrade programs) is key to success.

 

  •         Integrate internally

Most telcos have their own large analytics departments, working across Customer Relationship Management (CRM), Marketing, Business Intelligence and Reporting. Ensure they are feeding into the right people on the supply chain, so the company is working together end-to-end. Use data and modelling on the customer and how they are using products to tailor offerings. By working with the relevant teams, this insight can be used to drive the supply chain and ensure customers are at the heart of everything the business does. The current crop of big data and analytics tools provide a way to integrate data from sales, marketing, action of customers, product reviews, competitor information, warranty data and supplier status in real-time to make demand-driven supply chains a reality.

 

Big data is transforming all industries and business functions, including telco and supply chain, and data science is the next wave of innovation set to hit the industry. For telecommunications, harnessing this new approach will position them at the forefront. Unlike general FMCG supply chain, telco supply chain has rich datasets about customer preferences and behaviours. Harnessing this is a big opportunity and ensuring telcos are using the right technologies and platforms to manage and drive it into the supply chain to improve the telco's customer experience is imperative.

 

Dr Gregory Hill is Head of Business Analytics at Brightstar Australia and a member of the Industry Advisory Board at Melbourne Business School’s Centre for Business Analytics. Brightstar, a SoftBank Group Corp. subsidiary, is the world’s largest specialised wireless distributor and a leading provider of diversified services focussed on enhancing the performance and results of the key participants in the wireless device value chain: manufacturers, operators and retailers. In 2014, Brightstar reported global net revenues of more than US$10 billion and employs about 9,000 people on six continents. 

Pickering Transport Group and the Mobicon TF2

Roger Pickering understands that a business needs to change with the times.

With a loan of 500 pounds from his grandfather, Roger’s father and uncle, Ted and George, started the family transport business back in 1950 with a single, secondhand, fire engine-red 1942 army Dodge that they used to run local cartage around the Swan Hill region during the winter months when the family pumpkin farm was quiet. The business grew from there. They joined a local group of owner-operators at Lake Boga and started to carry produce from that region into Melbourne. Over the years, the other owner-operators dropped off and eventually Ted and George owned the business outright.

In 1977 they acquired their second transport business and, in 1979, their third.

They slowly increased their fleet, eventually handing day-to-day control over the to next generation of Pickerings.

Roger got involved in the business when he was “just a kid”.

“It was what you did back in the 1960s. I went to work with my father and just grew up in the business. By the age of thirteen I was out loading and unloading trucks. By fifteen I left home and came to work in Melbourne, having achieved all I was going to achieve in school,” he says with a sly grin.

He worked his way up through the business and today, as General Manager, he has his hands full managing a fleet of over 115 line haul truck and B-Doubles, 60 rigid traybodies doing local work and about 360 staff across 11 branches.

“We first got in touch with Mobicon because we have a growing trend in export and containers and we had to find a better method of lifting them on and off,” he explains.

“Everything you do is about reducing costs and labour costs are a very large portion of our business. In Melbourne we were lifting all our containers with a side loader which was a 24 minute process. The first Mobicon that we bought a couple of years ago halved that time. The new one has halved it again, down to a 6 minute process.”

He says they looked closely at getting a large forklift “but the footprint on the ground of a big fork is exceptionally heavy comparative to a Mobicon. The pavement we have wouldn’t be suitable to a big fork. It would have broken up very quickly.”

“The Mobicon will also work in much tighter areas – just a safer, more seamless operation,” he says.

“One of the other things I liked about the Mobicon is the entry. When you straddle the container, there are very few, if any, objects that can be hit as the driver bumps the container – and they obviously inadvertently do do that. The Mobicon to me is quite a solid, sturdy piece of equipment.”

Roger liked his original Mobicon so much that he was the first customer in Australia to purchase their latest model – the Mobicon ECO Top Lift Two High. The third Mini Straddle Carrier model in their ECO series has a top spreader that can stack containers one over one (or two high).

“The beauty of this new Mobicon, for our branch in Melbourne, is that we’re in a confined space and, if you get 25 or 30 full containers, our yard is quite congested. Now we can double stack them, which doubles the number that we can store, and reduce the space that we need. Melbourne land values are quite high and, you know, to be able to utilise it better with the double stacking is absolutely paramount.”

Tom Schults, the inventor of the Mobicon and Managing Director of Brisbane-based Mobicon Systems, says the introduction of the new model was the result of customer feedback.

“In the past we have received quite a few requests for a stacking Mini Straddle Carrier and the new model has already generated a lot of interest from around the globe,” says Tom.

He claims the Mobicon ECO Top Lift Two High Straddle Carrier Model is perfect for companies that require speed in their operation and where yard conditions may not allow the operator to exit the cabin and where space is at a premium.

The paperless supply chain is becoming a reality

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

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

The end of paper

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

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

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

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

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

Big business benefits

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

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

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

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

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

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

Cost-effective solutions

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

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

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

Robert Frandsen is the managing director of InfoMotion.

The rise of manufacturing warehouses

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

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

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

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

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

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

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

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

Overcoming the challenges

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

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

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

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

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

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

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

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

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

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

New technologies

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

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

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

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

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

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

[David Rubie is Industry Logistics Manager with Dematic]

Nelson Pine combines control and safety to minimise production downtime

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

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

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

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

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

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

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

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

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

Connectivity and visibility

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

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

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

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

Plug and play

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

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

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

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

Leading the world in wood processing

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

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

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

The Rise and Rise of Terminal Operating Systems

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

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

 

In-house or commercial solution?

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

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

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

 

What to consider when selecting a TOS

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

 

Understand your Business Model

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

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

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

Determine functional requirements

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

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

 

Supply Chain

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

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

 

People and Processes

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

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

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

 

Knowledge makes for more successful decisions

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

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

Yellowtail’s efficiency overhaul

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why port privatisation plans are in deep water around the country

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

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

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

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

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

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

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

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

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

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

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

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

This article was originally published on The Conversation.

Supply chain and mobile warehousing in one

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

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

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

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

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

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

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

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

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

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

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

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

Research and Development

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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