3PL overhaul gives Lion’s Dairy & Drinks division a competitive edge

LION (formerly Lion Nathan National Foods) is a leading beverage and food company with a portfolio that includes many of Australia and New Zealand’s favourite brands. Last year, Lion engaged Linfox to manage the majority of its Australian distribution requirements.

[Image right: Custom job: Dematic’s Joe Carmody and Linfox’s Travis Small.]

The Dairy & Drinks division (formerly National Foods) produces household name brands of milk and dairy beverages, juice, dairy, cheese and soy products. The Dairy & Drinks footprint includes production facilities and sales offices in all Australian states, as well as New Zealand, Singapore, Malaysia and Indonesia. 

In addition to consolidating linehaul and transport operations for Lion, a key feature of the massive 3PL contract was the establishment of two new national distribution centres (DCs) in Sydney and Melbourne. 

The Sydney NDC was up and running in January 2009, with the new Melbourne NDC at Laverton now fully operational as of June 2011. 

With a storage capacity of more than 26,000 pallets, the new 28,600m2, temperature-controlled Laverton NDC is a high velocity operation, distributing over 100,000 cases per day. 

Meeting demanding project milestones

Linfox’s NDC operations manager, Travis Small, said: "Many of the SKUs (stock keeping units) we distribute for Lion have a limited shelf life.

"Stock turns over very quickly. Storing and distributing such SKUs efficiently requires a smart DC layout and storage systems, and that’s exactly what Dematic delivered.

"The use of drive-in or double deep storage racks would have improved the site’s total storage capacity. But, given the high turnover of the products we are distributing, Linfox opted for single deep selective racking to provide safer, faster, unrestricted access to every product line," he said.

"It also gives us total storage flexibility, with just about every product capable of being slotted in every location.

"Dematic didn’t just meet our demanding project deadlines; they exceeded expectations at every phase of the project," added Linfox’s Travis Small.

"We basically took possession of a massive empty shed in October 2010 and had to bring the first phase of the NDC with over 20,000 pallet locations online before Christmas. 

"Fitting out a DC with over 20,000 pallet locations in such a short timeframe is no small task, and installation of the storage system was very much on our critical path.

"Dematic’s ability to complete the installation of more than 26,000 pallet storage locations ahead of time across all four implementation phases contributed greatly to our meeting critical project delivery milestones."

Project management the key

Dematic’s Project Engineer, Joe Carmody, said implementing the short two-month installation schedule required all of Dematic’s extensive project management experience.

"It was essential we had all of the storage equipment in place prior to each phase going live, which meant working around the clock, seven days a week when necessary," he said. 

The installation of such a large storage system in under two months was only made possible through Dematic’s ISO9001 Certified Quality System-accredited project management and implementation methodology, said Mr Carmody. Initiatives included:

  • Setting up a steering committee comprising senior Linfox and Dematic managers to facilitate open communications at a high level.
  • Project planning and scheduling, including a detailed program of works covering all major implementation tasks from site establishment and installation to commissioning and acceptance
  • Development and implementation of risk management. 
  • Regular site meetings, detailed weekly progress and monthly reporting.

The Laverton NDC is currently configured with two separate chambers – one providing storage for over 21,000 pallets, and the other more than 5,000. 

Splitting the NDC into separate chambers gives Linfox the flexibility to run different zones at different temperatures if required. The NDC and storage system layout make it easy for walls to be added to create further separate chambers if required. 

High order safety

About half of the NDC’s orders are despatched as full pallets. Split case orders are picked from Colby Cartonflo carton live storage and packed into shippers and palletised for local direct to store delivery through Linfox’s route trade distribution network.

All order picking is RF-directed, with both Linfox and Lion running SAP IT. 

Through its Vision Zero program, Linfox is totally committed to ensuring occupational health and safety (OH&S). To that end, the NDC’s storage systems incorporate a number of safety initiatives including Dematic’s ColbyRACK Protect-a-Rack.

Dematic designed the 26,000 pallet capacity storage system to suit Lion’s requirements, which includes not storing products on the ground for hygiene reasons. A first storage beam level 300mm above ground keeps all pallets clear of contamination or pests, and provides sufficient access for regular cleaning.

To help prevent rack damage during pallet put-away and retrieval, the storage system incorporates modified Colby Protect-a-Racks to suit the 300mm high first beam level on all rack uprights, together with end-of-aisle protection.

The new baseplate protector is mounted to the base of front uprights providing protection at ground level against minor collisions with forklifts and pallets. It features an angled front face, which curves and wraps around the whole upright to eliminate any catch points when pallets are being placed or removed. 

Colby Protect-a-Rack upright protectors interlock with the Protect-a-Base, forming a highly robust member. Protect-a-Rack upright protectors not only deflect impacts away from the upright, they also absorb them and transfer inertia to the strongest part of the rack – the bracing nodes. They also include a rear flange protector to ensure the entire upright is shielded from direct impact damage from the rear. 

"Safety is obviously our number one concern. Preventing storage systems from getting damaged in the first place not only provides a much safer workplace, it will also reduce operating costs over the life of the DC," said Linfox’s Operations Manager Travis Small.

[Carole McCormick is Dematic marketing manager.]


Lean Manufacturing: What it means for the shop floor

Automation of processes to improve productivity and operational effectiveness is a major key to success for Australian manufacturers in 2012 and beyond writes Tony Repaci*.

Driving innovation on the shop floor in 2012 and beyond for the local manufacturing sector will be new technologies that automate a number of processes that have been problematic in the past, and feed into lean manufacturing – a concept which will no doubt trouble the sleep of many local manufacturers in the future.

Lean manufacturing is defined by The Lean Manufacturing Guide as: "A systematic approach to identifying and eliminating waste through continuous improvement by flowing the product at the demand of the customer".

This has significant implications for local manufacturers, who are being pressured to streamline their processes, often through automation, and minimise their overall operating costs.

While responsible manufacturers will always look to minimising their outgoings, there are a number of technology trends that local operators should be aware of that can greatly enhance overall productivity and operational effectiveness of a manufacturing organisation.

As local manufacturers move towards the concept of lean manufacturing, wireless technologies such as mobile printers will be a focal point of future warehouse fit-outs and critical to on the shop floor operations, as these devices can contribute to the productivity of a warehouse by fitting easily into existing work spaces and processes.

For repetitive, high-volume tasks such as applying labels, saving just a few seconds per operation can translate into meaningful efficiency gains and can go a long way towards a local manufacturing becoming ‘lean.’

Wireless printers give Australian warehouse operators a lot of flexibility on where printers can be positioned and by printing at the point of activity; workers are much less likely to apply the wrong label to an item or package.

In the case where a mobile printer isn’t feasible or possible, positioning printers closer to areas where the work actually gets done also eliminates unnecessary trips back and forth from the workstation to the centralised printer.

These walks to the printer may take only a few minutes, but multiplied across dozens of workers on multiple shifts, they represent an opportunity for tremendous time savings and productivity improvements. Eliminating unnecessary walking also helps eliminate distractions that lead to labelling errors and lost productivity.

To help achieve greater levels of productivity, local manufacturers should also be looking to integrate voice activated solutions into their operations.

An advanced voice activated kit can allow personnel to efficiently handle tasks like production line management, equipment replenishment, shipping and truck loading, which allows the shop floor to become a well-oiled machine at all stages of the manufacturing and distribution process.

The benefits of a voice solution can be attributed to the fact that it leaves the operator wholly hands free. Whereas in the past workers would be effectively chained to their paper order form and pen, the voice-directed system speaks to its operator via a headset, meaning that both hands and eyes are at liberty to accurately and safely complete any task at hand.

Manufacturing environments are also rich with technology and high value equipment these days. Many key pieces of equipment used on the shop floor can also be small and hard to trace.

Utilising an advanced asset tracking solution allows managers to keep a record of their equipment, thus ensuring greater organisational inventory control and ensuring that the production line is not halted of slowed by key equipment going missing.

The application of serial numbered tracking labels to all piece of key equipment allows employees to sign out equipment or enter them back into the inventory by scanning the tag followed by their own personal identification badge, which is also coded.

The manufacturing industry is at a tipping point. Warehouse and manufacturing operations in Australia are facing more pressure from a competitively strong Australian dollar and cheap imports to come up with solutions that ensure they will remain competitive in the long term.

Any investments in new technology that will help drive innovation and increase efficiencies should therefore focus on providing strong ROI, tangible efficiency gains and a noticeable reduction in error rates.

* Tony Repaci is Intermec’s Managing Director for Australia and New Zealand.

Image: from the Intermec website

Industry experience gets students careers moving

A hands-on Challenger Institute of Technology training course has seen a group of Safety Bay Senior High School students get a taste for working life in the Transport and Logistics industry.

The course was designed to engage year eleven and twelve students and encourage them to consider the industry as a possible career path by attending class based on-campus activities and then undertaking industry placement in local businesses in the Rockingham area.

Students were allocated placements at The Good Guys, Blackwoods, Covs, Rockingham Hyundai/Suzuki, Toll Ipec and Veale Auto Parts.

Sherrell Crisp, a Program Manager at Challenger Institute said that the feedback and support that the students received from local industry has been overwhelmingly positive.

“Some employers were a little nervous at the tasks required by student placements. However, once the students came on board they were set very clear tasks with defined outcomes. The students stepped up to the plate very quickly,” Crisp said.

Local retailer Gino Cafini from The Good Guys in Rockingham said that they would like to take part again next year. He said it was rewarding seeing their student placement Sarah Murphy come out of her shell and develop her confidence in the workplace.

“Sarah was initially quite shy when she started but quickly integrated into the role, developing both practical warehousing skills as well as life skills,” Cafini said.

Cafini said the program also had a beneficial impact on the employees at The Good Guys. “There was a sense of camaraderie amongst the team as they showed Sarah the ropes. You could really notice the team lifted and they were genuinely proud to teach and show her what the Transport & Logistics industry is all about,” he said.

Due to the success of the course Challenger Institute is looking to expand the course to also take in businesses from the Mandurah area.

The students now hold a Certificate I in Transport and Logistics.


Photo: Sarah Murphy holds her certificate, with Dave Noota (left) and Gino Cafini (right) from The Good Guys.

Mercury Awards winners revealed!

The winners of the 6th annual Logistics & Materials Handling Mercury Awards, hosted by Logistics & Materials Handling magazine, rewarded and recognised Australia’s very best in the logistics, supply chain and materials handling sectors at Waters Edge in Sydney last night.

With double the amount of finalists (more than 40!) than last year and an overwhelming attendance of 150 people last night, this year’s Mercury Awards was by far the biggest ever!

Thank you to all our sponsors, judges and RBI events team for making the night possible. 

Congratulations to the winners:

Supply Chain Innovation                                                                                                       Sponsored by Cornerstone Automation System Inc


Product name: Westfield Dock Appointment Scheduler

Warehousing and/or Storage Solution


Project name: Project Refresh – Mulgrave NDC upgrade

Technology Application                                                                                                         Sponsored by Century Yuasa Batteries 

Robotic Automation & Amcor Cartons

Project name: Robotic End-of-Line Solution

Logistics Leader                                                                                                                 Sponsored by CEVA Logistics 

DHL Supply Chain

Project name: DHL Supply Chain’s Pfizer Direct Distribution Model

Materials Handling Solution                                                                                                         Sponsored by Linde Material Handling

Robotic Automation & Amcor Cartons

Project name: Robotic End-of-Line Solution

Best Green Initiative                                                                                                           Sponsored by Century Yuasa Batteries 

Schenker Australia (DB Schenker)

Project name: Green Logistics Solutions

Young Professional of the Year                                                                                                     Sponsored by SSI Schaefer

Daniel Castle from BlueScope Steel

Top Third Party Logistics Provider (3PL)

DHL Supply Chain

Project name: DHL Supply Chain’s Pfizer Direct Distribution Model

Best of the Best of 2011                                                                                                                Sponsored by Loscam

Robotic Automation & Amcor Cartons

Project name: Robotic End-of-Line Solution

Congratulations again to all our winners and we hope to see you all again next year! 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For more information, visit www.futurelogisticslivinglab.com.au

Comment on this article below or on Twitter @logistics_au


Using associations to drive ALC initiatives

Bill Thompson

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

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

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

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

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

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

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

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


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

Visit www.apics.org.au.

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

The next step towards collaboration

Len Harper

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Len Harper is the executive director of CILTA.

Visit www.cilta.com.au.

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

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