Turnkey solutions are best -ICA

While many companies strive to make the most efficient gains through available channels of outsourced supply chain management and logistics, it is an interesting point to note that many tend to overlook their own premises and perhaps are operating with a low level of internal handling efficiency.

Materials handling specialist, Industrial Conveying Australia (ICA), has looked across the whole materials handling spectrum and found two main areas in which transporting and handling goods can return optimum efficiency — especially when working with pallets.

Managing director of the company, Don Erskine, says that from the outset it is vital a materials handling system is completely integrated to maintain product flow.

Also, and it is something many companies don’t do, its contract transport service should be used as a de facto warehousing component.

“Plant managers are now extremely conscious of reducing the duty cycle of palletising systems and they want the best technology urgently,” says Erskine.

“By combining pallet technology with innovative engineering, Australian businesses can now be provided with what is best described as a turnkey palletising solution for any requirement.”

“One, or a combination of our multiple technologies can be integrated with a client’s sorting system so that it can operate a multiple product palletising system.”

“This process means supply can be made on an as-needs basis, a dedicated palletising system that can include anything from our fixed machines, conveyors and lifting equipment all the way through to robotic systems.”

“Furthermore, by utilising extensive range of standard dedicated palletisers our engineers are able to efficiently develop cost effective solutions to any palletising challenge.”

According to Don Erskine, smart operators are the companies that have studied the logistics market and have seen positives in utilising transport and freight services to eliminate costly warehousing and quicken truck turnaround times.

Key to this becoming a widespread reality is knowing exactly how to best set up loading and unloading systems to work in synchronicity with transport company services.

“Mainly through our work in devising solutions of this type for companies serious about cutting operating costs have we determined that this is now a reality,” Erskine says.

“Until recently, operations managers have been content to receive stock through an incoming goods dock, store it temporarily while organising transport to its client, and then eventually send it again on another truck.

“This has been occurring in virtually every industry including perishables, food and beverage, engineering, mining supply, agricultural and rural, primary industry, retail and consumer, and almost any other industry of which one can think.”

“But with an optimised materials handling system put in place, smart companies, instead of storing stock on the premises for an indefinite period, rarely have to see their goods.”

“Instead, they use a clever materials transfer system on their site that instantly moves goods from incoming to outgoing without storage, or they have equipped their transport carrier with appropriate systems to load and unload palletised or non-palletise product and transport it directly to their clients without warehousing,” he says.

“This new approach is bettering supply chain standards and eliminating double handling and storage time that costs business in so many ways.”

Firstly, with floor charges per metre continually rising, the elimination of reliance on warehousing is an automatic, and enormous, cost saving.

Reduction in multi handling of stock also reduces time and operating costs and ensures smoother movement of product from manufacturing base or bond store to the customer

In the case of perishables, reduction in supply chain steps can only be of benefit to handlers of product with limited shelf life.

“Our involvement in this type of materials handling solution was sparked by a growing call from industry that warehouse consolidation alone does not adequately reduce running costs,” Erskine says.

“It was clear a step had to be taken out of the materials handling sequence to provide a leaner level of operation for many Australian companies.

“That has allowed us to develop fixed and purpose-built systems for a demanding market serious about making transport systems a de-facto storage solution.”

Using its existing product and technologies alongside solution-specific developments, ICA is currently developing several turnkey projects for Australian companies undertaking this cultural change.

Among these technologies are:

• Automated transport loading and unloading systems including handling unit loads or complete truck loads.

• Pallet handing systems such as multi-lane palletising equipment, to organise truck loads ready for dispatch.

• Elevators and spiral conveyors for non-palletised goods transfer between different floor levels, powered roller conveyor and lift tables.

Freightscan scans cargo in seconds

FreightScan is a leader in the development and deployment of groundbreaking technology solutions for the freight and logistics industry.

The company will launch its groundbreaking FreightScan FS100 automated dimensioning system at Air Cargo Americas 2007 in Miami, Florida, November 7-9.

Its innovative FreightScan FS100 system, developed in 2006, utilises groundbreaking D.I.M.M. Tech™ (Defined Imaging and Multiple Measurement Technology), exceeds all existing standards for static dimming systems in the cargo industry.

For the first time in the United States, it enables cargo and logistics companies to collect accurate and reliable dimensions and calculate chargeable weight for multiple packages, in all configurations, with a single scan, in a matter of seconds.

This empowers companies to maximize warehouse resources by pinpointing those shipments that will generate additional revenue from dimensional weight, establish accurate billings, and significantly improve revenues and profit performance.

“Previously, dimensional data of cargo was an underdeveloped area for air cargo, trucking, freight forwarding companies and other segments of the logistics industry,” says André L. Johnson, founder and CEO of FreightScan.

“FreightScan’s new 3D imaging FS100 system, however, permits all cargo from single packages to shrink-wrapped skids to be scanned in seconds, and even scans multiple packages simultaneously.”

The system captures a digital and laser image for 100% of scanned freight, and incorporates that visual record with every waybill.”

This solution is fast, accurate, reliable and its automated data generation of correct dimensions and chargeable weight generates virtually instantaneous revenue gains for users with very little capital investment. The FS100 delivers ROI unmatched in the industry,” he says.

Delivering unprecedented ease of deployment, the FreightScan FS100 system is compact and installs virtually anywhere in a warehouse, 15 feet off the floor, to streamline the dimming process and maximize warehouse resources.

It is capable of scanning a one-lot shipment in four seconds, and a multi-lot system in 6-8 seconds, delivering individual dims for each package to within one inch of accuracy.

FreightScan recently completed a series of on-site evaluations of the FS100 with major domestic and international carriers at LAX, and is currently conducting a pilot program with a major U.S. airline at its LAX cargo facility. Permanent installations are scheduled to begin in January 2008.

“We have received outstanding results from our pilot programs to date,” Johnson says.

“We estimate that for a cargo operation that handles 200 shipments a day, FreightScan FS100 can generate additional annual revenues by as much as $1.2 million per year.”

For more information:

jim@jdmandassociates.com

www.jdmandassociates.com

Exclusive! CCA's new warehouse a world first

At 32 meters high and a storage capacity of 55,000 pallets, Coca Cola Amatil’s (CCA) new high bay warehouse at Northmead combines scale with technology in a world first, reports Anna Game-Lopata.

CCA’s premier manufacturing site at Northmead NSW is well on the way to boasting one of the country’s most advanced warehousing and distribution operations.

Just one part of the company’s Project Jupiter, the warehouse is currently under construction and is expected to go live by the end of June 2008.

With a budget of $145 million overall, the scope of Project Jupiter reflects the planet it was named for in magnitude.

It will re-engineer CCA’s NSW logistics infrastructure with a view to consolidating and optimising the distribution of stock bound for major retail customers along the current supply chain, and internally, between the company’s network of warehouses.

Project Jupiter is the culmination of many years of planning. Northmead’s state of the art high bay storage warehouse is under construction by Vaughan Constructions, with a materials handling solution designed in conjunction with Swisslog Australia.

It will cater to the bulk distribution needs of large retailers while smaller customers such as pubs and clubs will be serviced from the company’s new Distribution Centre which is about to commence construction, also as part of Project Jupiter, at CCA’s Eastern Creek site.

“The two sites will run in tandem to our customers,” Project Jupiter manager Grant McClean tells Logistics Magazine.

“Operationally, they will be slightly staggered in the implementation, with Northmead running first and Eastern Creek following within a few months. We are also buying a mobile plant in the form of truck trailers to transport stock between the two sites.”

“CCA has recognised for quite some time that the production and logistics infrastructure in NSW would eventually reach its limit,” McClean explains.

“As we approach those limits, the cost of doing business will grow exponentially, eroding our ability to serve customers. In addition, our customers’ demands are growing, so we needed a strategy to improve our performance as we expand the business.”

“Our SKU range has doubled in the last five years from 350 to 800,” adds CCA national customer Supply Chain manager Hoss Matar.

“CCA currently has multiple pick faces and seven warehouses covering over 125 thousand square meters of space scattered around Sydney. Project Jupiter will consolidate and significantly simplify the management of this process.”

According to Matar, the combined capacity of the two new facilities will reach 90,000 pallet positions, with room to expand.

“We’ve ensured that CCA will be able to store and deliver forecast volumes until 2015, but we’ve also planned for our next steps once the design capacities of the facilities have been reached,” he says.

“We’ve made sure the doors are open to keep expanding our capacity to stay competitive. There are options to build another high bay facility at Eastern Creek with a capacity of 30,000 pallets to feed in to the pick face should we need it.”

The combination of twin masted cranes at a height of 32m and technology to be implemented at the Northmead facility makes it unique in the world.

“The twin masted cranes that place pallets in the racks and retrieve them enable throughput per hour to be significantly increased,” Mclean says.

“Once Project Jupitor is complete, Northmead will be fully automated. Pallets will arrive from the production hall to the customers’ delivery dock, without manual handling by forklift trucks.”

“We’ll do some forklift truck loading of delivery vehicles, but all the pallets will be brought to the docks and presented to the forklift driver,” he explains. “Our model has people in the control tower looking at computer screens rather than lots of guys on forklifts driving around the warehouse.”

“We spent quite a bit of time investigating available technical solutions for automated warehousing over a number of years. Rather than prioritising leading edge technology, we were looking for the latest generation of proven equipment.”

“The automatic truck loading systems have been around for a while but we referenced several sites and suppliers world wide, looking for the solutions that would best fit Australian conditions.”

Australian supplier Industrial Conveying Australia, was CCA’s final choice for the provision of automatic skate truck loading systems.

“Although this system is slightly more expensive in the investment required for the docks, it’s more reliable and flexible,” Grant McLean says.

“The system also requires less investment in the delivery fleet. The actual trailers aren’t as expensive and we’ll have greater flexibility in the utilisation of our vehicles.”

CCA settled on a European style clad rack design to be constructed by Austrian company Voestalpine, as a project of this scale has never before been undertaken in Australia.

“Racking designed this way not only supports the load of the pallets but also the building loads,” McClean says. “Essentially all the wind, earthquake and rain loads have to be borne by the structural elements in the rack itself.”

“Typically a building would be designed to deflect under wind loads of 1 mm for every 250 mm of height. Because of the stringent accuracy required for the cranes to pick and place pallets within the racks at the Northmead site, the clad racking must only allow for a sway of 1mm per 2,500 mm of height. CCA’s warehouse will be ten times stiffer than the average building.”

Along with the infrastructure and equipment, equally critical is Project Jupiter’s investment in IT systems to integrate the network.

“Project Jupiter is one big part of CCA’s supply chain strategy,” says Hoss Matar. “We’re investing in WMS systems around the country that will be able to talk to each other. Through Swisslog, our manual and automated warehouses will be able to provide live information.”

“The adoption and execution of the right technologies is critical to the ongoing success of this provide as we move closer towards an information driven supply chain.”

“There’s an enormous amount of work going on involving CCA’s IT investment,” he says. “For example Project Oasis is implementing SAP at a corporate and operational level across the business. That’s a three year project which will also be rolled out in 2008.”

“In terms of logistics distribution, were also investing heavily in hand held terminals, GPRS tracking for our trucks and improving our capability throughout CCA’s supply chain IT platform,” Matar adds.

“We see ourselves at the forefront of technology and strategic development through this investment which will ensure the capacity to deliver and meet our customers’ expectations over the next decade.”

While economic and customer service drivers are paramount, both Hoss Matar and Grant McClean emphasise the high level of importance CCA places in the removal of risk to employees and the reduction of greenhouse gas emissions achieved by Project Jupiter.

“Automation and high bay racking will make a significant contribution to the reduction of risk to our employees,” says McClean.

“In addition, by reworking our network of warehouses we’ve significantly reduced total greenhouse gas emissions. Increased storage at the Northmead site, where the vast majority of our manufacturing takes place enables us to load it straight on to a truck for delivery to grocery stores,” he says.

A Greenhouse gas assessment of the Northmead site conducted by Heggies Australia finds that the reduction in double and triple handling of product prior to distri
bution will reduce emissions at the site by 973 tonnes or 56 per cent in 2008 and 1,335 tonnes or 54 per cent by 2015.

Grant McClean is proud of CCA’s Project Jupiter and believes the investment will set the company up for the future.

“We’ve put a lot of work in to projecting our business needs over the next few years; including the volumes and number of SKUs we might be carrying,” he says.

“This new network of warehouses will provide a flexible logistics infrastructure that will allow us to support high levels of customer service and help control our costs to those customers.”

“We really looked at building facilities that will grow rapidly with the company whether that growth is organic or through acquisitions.”

Growers cut transport costs

Australian vegetable growers are taking advantage of reusable and recyclable packaging to cut transport costs and packaging waste. Growers have found that these cost and waste savings can be dramatic.

Using reusable and recyclable CHEP FB2 Foldable Plastic Bins, Gazzola Farms on Victoria’s Mornington Peninsula can now load a semi-trailer with 200 empty bins, compared to just 60 with its former packaging.

Gazzola Farms’ Paul Gazzola says because the CHEP FB2s fold down, a lot more can be fitted on the truck when they’re empty.

“They’re easy to store, easy to handle and easier to load,” he says.

Featuring fold-down sizes and vented side panels for maximum air flow, the plastic FB2 cuts cardboard waste and allows for safe and efficient handling of produce.

According to Category Manager, Cubic Containers at CHEP Asia-Pacific, David Williamson, the trend to green packaging has been driving strong uptake of the reusable FB2 Foldable Bin.

“The CHEP Foldable Bin benefits the environment by promoting a sustainable culture of Reduce — Reuse — Recycle,” Williamson says.

“In addition, the Foldable Bin can be fully reground and recycled at the end of its 10-year lifecycle.”

Through CHEP’s reusable, returnable packaging service, growers receive the exact quantity of bins they need, when they need them, without the hassle or cost of their own repairs and maintenance.

With CHEP’s extensive network of regional and metropolitan service centres, a steady supply of clean bins is never far away.

Until 29 February 2008, new applicants and first time hirers of FB2 Foldable Plastic Bins are being offered a special discount*.

“Now produce growers can make even further cost reductions with no issue fees until March 2008.The offer provides an affordable, obligation-free way to assess the benefits,” williamson explains

Growers interested in finding out more can contact CHEP on 13 2437.

Plastral selects IBS Software

IBS, International Business Systems, has recently signed an agreement with Plastral Pty Ltd, an Australian-based importer, stockist and distributor of a wide range of specialty chemicals, rigid plastic sheet products, specialty polymers and plastic welding equipment.

Established in 1946, Plastral is a privately owned Australian company which merged in 1997 with another long-standing Australian business, Fidene Australia Pty Ltd.

Plastral was looking to replace its existing system with a single integrated ERP solution that would best fit its supply chain operations.

A key criterion was the ability of the ERP software to streamline product delivery and customer service at a competitive total cost of ownership.

The new system also had to be intuitive, and easy to learn and to use, in order to ensure a speedy and productive transition.

Plastral determined that IBS Enterprise provided a good fit for its business.

A supply chain management solution developed by IBS specifically for the manufacturing and wholesale/distribution industries, IBS Enterprise services industry sectors such as pharmaceutical, food, beverage, consumer durables, electrical, chemicals and industrial supplies.

“Plastral, represented in Australia and New Zealand, operates a business with multiple profit centres servicing a diverse customer base spread across many industry sectors; it is a complex business,” says John A Curtin, General Manager of Finance and Administration at Plastral.

“A replacement was needed for a very stable and low cost bespoke business system which had serviced the company reliably since 1991.”

An extensive and prolonged search produced a range of possible systems.

“No one came close to IBS Enterprise, which provided a real value-for-money, out-of-the-box solution backed by an extremely professional IBS local team and a corporate organization of international high standing,” Curtin affirms.

With the implementation of IBS Enterprise, Plastral anticipates benefits that include optimised inventory, and the streamlining of business processes resulting in greater efficiency of the back office functions.

“All this will lead to improved customer service, as well as providing the capability to effortlessly manage expected growth,” Curtin says.

“With the long-term stability and support of the system, Plastral aims to standardize business processes across all its sites.”

Exclusive! CCA’s new warehouse a world first

At 32 meters high and a storage capacity of 55,000 pallets, Coca Cola Amatil’s (CCA) new high bay warehouse at Northmead combines scale with technology in a world first, reports Anna Game-Lopata.

CCA’s premier manufacturing site at Northmead NSW is well on the way to boasting one of the country’s most advanced warehousing and distribution operations.

Just one part of the company’s Project Jupiter, the warehouse is currently under construction and is expected to go live by the end of June 2008.

With a budget of $145 million overall, the scope of Project Jupiter reflects the planet it was named for in magnitude.

It will re-engineer CCA’s NSW logistics infrastructure with a view to consolidating and optimising the distribution of stock bound for major retail customers along the current supply chain, and internally, between the company’s network of warehouses.

Project Jupiter is the culmination of many years of planning. Northmead’s state of the art high bay storage warehouse is under construction by Vaughan Constructions, with a materials handling solution designed in conjunction with Swisslog Australia.

It will cater to the bulk distribution needs of large retailers while smaller customers such as pubs and clubs will be serviced from the company’s new Distribution Centre which is about to commence construction, also as part of Project Jupiter, at CCA’s Eastern Creek site.

“The two sites will run in tandem to our customers,” Project Jupiter manager Grant McClean tells Logistics Magazine.

“Operationally, they will be slightly staggered in the implementation, with Northmead running first and Eastern Creek following within a few months. We are also buying a mobile plant in the form of truck trailers to transport stock between the two sites.”

“CCA has recognised for quite some time that the production and logistics infrastructure in NSW would eventually reach its limit,” McClean explains.

“As we approach those limits, the cost of doing business will grow exponentially, eroding our ability to serve customers. In addition, our customers’ demands are growing, so we needed a strategy to improve our performance as we expand the business.”

“Our SKU range has doubled in the last five years from 350 to 800,” adds CCA national customer Supply Chain manager Hoss Matar.

“CCA currently has multiple pick faces and seven warehouses covering over 125 thousand square meters of space scattered around Sydney. Project Jupiter will consolidate and significantly simplify the management of this process.”

According to Matar, the combined capacity of the two new facilities will reach 90,000 pallet positions, with room to expand.

“We’ve ensured that CCA will be able to store and deliver forecast volumes until 2015, but we’ve also planned for our next steps once the design capacities of the facilities have been reached,” he says.

“We’ve made sure the doors are open to keep expanding our capacity to stay competitive. There are options to build another high bay facility at Eastern Creek with a capacity of 30,000 pallets to feed in to the pick face should we need it.”

The combination of twin masted cranes at a height of 32m and technology to be implemented at the Northmead facility makes it unique in the world.

“The twin masted cranes that place pallets in the racks and retrieve them enable throughput per hour to be significantly increased,” Mclean says.

“Once Project Jupitor is complete, Northmead will be fully automated. Pallets will arrive from the production hall to the customers’ delivery dock, without manual handling by forklift trucks.”

“We’ll do some forklift truck loading of delivery vehicles, but all the pallets will be brought to the docks and presented to the forklift driver,” he explains. “Our model has people in the control tower looking at computer screens rather than lots of guys on forklifts driving around the warehouse.”

“We spent quite a bit of time investigating available technical solutions for automated warehousing over a number of years. Rather than prioritising leading edge technology, we were looking for the latest generation of proven equipment.”

“The automatic truck loading systems have been around for a while but we referenced several sites and suppliers world wide, looking for the solutions that would best fit Australian conditions.”

Australian supplier Industrial Conveying Australia, was CCA’s final choice for the provision of automatic skate truck loading systems.

“Although this system is slightly more expensive in the investment required for the docks, it’s more reliable and flexible,” Grant McLean says.

“The system also requires less investment in the delivery fleet. The actual trailers aren’t as expensive and we’ll have greater flexibility in the utilisation of our vehicles.”

CCA settled on a European style clad rack design to be constructed by Austrian company Voestalpine, as a project of this scale has never before been undertaken in Australia.

“Racking designed this way not only supports the load of the pallets but also the building loads,” McClean says. “Essentially all the wind, earthquake and rain loads have to be borne by the structural elements in the rack itself.”

“Typically a building would be designed to deflect under wind loads of 1 mm for every 250 mm of height. Because of the stringent accuracy required for the cranes to pick and place pallets within the racks at the Northmead site, the clad racking must only allow for a sway of 1mm per 2,500 mm of height. CCA’s warehouse will be ten times stiffer than the average building.”

Along with the infrastructure and equipment, equally critical is Project Jupiter’s investment in IT systems to integrate the network.

“Project Jupiter is one big part of CCA’s supply chain strategy,” says Hoss Matar. “We’re investing in WMS systems around the country that will be able to talk to each other. Through Swisslog, our manual and automated warehouses will be able to provide live information.”

“The adoption and execution of the right technologies is critical to the ongoing success of this provide as we move closer towards an information driven supply chain.”

“There’s an enormous amount of work going on involving CCA’s IT investment,” he says. “For example Project Oasis is implementing SAP at a corporate and operational level across the business. That’s a three year project which will also be rolled out in 2008.”

“In terms of logistics distribution, were also investing heavily in hand held terminals, GPRS tracking for our trucks and improving our capability throughout CCA’s supply chain IT platform,” Matar adds.

“We see ourselves at the forefront of technology and strategic development through this investment which will ensure the capacity to deliver and meet our customers’ expectations over the next decade.”

While economic and customer service drivers are paramount, both Hoss Matar and Grant McClean emphasise the high level of importance CCA places in the removal of risk to employees and the reduction of greenhouse gas emissions achieved by Project Jupiter.

“Automation and high bay racking will make a significant contribution to the reduction of risk to our employees,” says McClean.

“In addition, by reworking our network of warehouses we’ve significantly reduced total greenhouse gas emissions. Increased storage at the Northmead site, where the vast majority of our manufacturing takes place enables us to load it straight on to a truck for delivery to grocery stores,” he says.

A Greenhouse gas assessment of the Northmead site conducted by Heggies Australia finds that the reduction in double and triple handling of product prior to distribution will reduce emissions at the site by 973 tonnes or 56 per cent in 2008 and 1,335 tonnes or 54 per cent by 2015.

Grant McClean is proud of CCA’s Project Jupiter and believes the investment will set the company up for the future.

“We’ve put a lot of work in to projecting our business needs over the next few years; including the volumes and number of SKUs we might be carrying,” he says.

“This new network of warehouses will provide a flexible logistics infrastructure that will allow us to support high levels of customer service and help control our costs to those customers.”

“We really looked at building facilities that will grow rapidly with the company whether that growth is organic or through acquisitions.”

Survey finds work to be done on quality assurance

A recent US survey by leading consumer driven optimisation company RedPrairie has revealed that 63% feel their current Quality Assurance (QA) and recall processes were only “somewhat effective,” with communication gaps prevalent at store-level.

The 2007 Survey on QA and Recall Technology for Food & Beverage Companies found speed of recall was chosen as the top challenge confronting food companies with 39% of respondents feeling the biggest recall communication gap occurs at the store-level.

Recent high-profile recalls for beef, toys, spinach, peanut butter, and pet foods have raised public

consciousness about the safety of food and other consumer products.

The food & beverage industry is constantly focused on preventing recalls while working to ameliorate the operational challenges of handling recalls—namely, locating the impacted products and quickly and accurately pulling them from the store shelf.

Food & beverage companies have particularly complex supply chains. In the peanut butter example,

several entities were involved—the raw materials supplier, the factory, the stores, and the trucking

company who delivered it.

Each of these entities must have accurate records of which batches, usually referred to by lot number, they handled and what the disposition of each batch was. These sources of data then must be linked together to follow the trail of the bad ingredient batches from production through to the store shelves.

Only 22% of The RedPrairie survey respondents felt their current QA and recall processes were extremely effective. 63%, the majority of participants, felt their processes were somewhat effective, which is consistent with RedPrairie industry findings.

While food & beverage companies may have strong QA and recall processes in some areas of their supply chain, they likely don’t have the centralized database that provides visibility to all the touch points of the supply chain — including all suppliers and stores.

More prominently, most food & beverage manufacturers don’t have a clear assurance from stores that all impacted products have been pulled from the shelf.

When asked, “What are the biggest challenges confronting U.S.-based food companies in regards to recalls,” speed of recall received the highest response rate with 22% of respondents choosing it as a top concern.

When the health and safety of consumers is at stake, it is no surprise that food & beverage companies want impacted products pulled as quickly as possible.

44% cited their products can be pulled off the store shelf in a matter of days, while just over 7% indicated they have the capability to pull their products from the shelf in a matter of minutes.

12% don’t have a sense of how long it would take to pull all their items from the store shelf—which again, may indicate a lack of visibility and control across the extended supply chain.

Improving recalls at the store In looking at the entire supply chain, food & beverage companies believe the biggest recall communication gap occurs at the store with 39% citing grocers/retailers as their primary concern. While third-party logistics and pre-manufacturing suppliers also received significant response rates, linkage of recall processes and technology to the store is the biggest opportunity for improvement.

In fact, 63% of respondents indicated they would like recall technology linked to POS interfaces at stores.

Again, these results are consistent with what RedPrairie see with many food retailers and grocers.

Instead of phone calls, faxes, and e-mails to stores that may never get acted upon or acknowledged, headquarters needs the ability to systematically assign recall tasks to store and department managers, who then schedule works to complete the tasks and report compliance back to headquarters.

While concern over safety of Chinese manufactured goods has dominated the recent press coverage on recalls, respondents to this survey had a mixed opinion on the safety of food and ingredients produced outside their home country.

52% indicated the safety of non-native produced food items as excellent, very good, or good, while 39% indicated it was not good, and 10% claimed they had “no visibility” into the safety of non-native food items.

Only 34% of companies have changed their recall processes in response to the recent rash of recalls. 32% have changed their recall technology in the past few months. The survey found a wide range of technologies being used to manage and execute a recall.

“These results are consistent with what we see with many food retailers and grocers,” says Tom Kozenski, VP of Product Strategy at RedPrairie.

“Automation is the only way to really verify if recalled products have been pulled from the shelves in an efficient, accurate and timely manner.”

“While there is work to be done to improve the management and execution of recalls in this country, the processes and technology exist to create a seamless communication flow throughout the food & beverage supply chain.”

About the respondents

RedPrairie surveyed subscribers of US based Food Logistics http://www.foodlogistics.com. Companies ranged in size from just under $500 million to over $10 billion in annual revenues. The 43 respondents came from various departments/areas within the food & beverage industry including (in order of number of respondents): general management, supply chain/logistics, Operations, Quality Assurance, and IT.

Chinese cold chain potential

Australian companies with the expertise and resources needed to fill the gaps in China’s inadequate cold chain logistics stand to benefit from a projected USD$160 billion in annual cost savings that a modernised system could deliver, according to a recent study by A.T. Kearney.

The study, “China’s Cold Chain Challenges”, reveals that the country’s broken food safety process will be overwhelmingly insufficient in meeting the expected USD$650 billion (USD$150 billion in 2007) in food spending by China’s middle-class in 2017.

It also shows that ignoring China’s problematic cold chain logistics poses a significant risk to food manufacturers, with consumers ready to dump brands involved in food safety incidents.

The survey, conducted by AT Kearney canvassed the attitudes and behaviour of the Chinese middle-class towards food safety in 2005 and 2007. It then analysed the country’s embryonic cold chain supply system and provided 10-year projections of what the future holds.

Principal at A.T. Kearney, Antje Voelker says the underlying issue is the rise of the Chinese middle-classes – forecast to more than double in number from 200 million in 2007 to 518 million ten years’ time.

“The rapid growth and increasing wealth of the middle-class in China is having flow-on effects in their food choices,” Voelker says.

“The study shows a burgeoning preference by this group for safer food options, and a move away from traditional fresh food markets to modern, Western-style supermarkets and hypermarkets which they believe provide safer food.”

Survey results show 95% of the middle-classes now rank food safety as very important (compared with just 73% two years ago).

However, there is a large gap between the expectations of consumers and the food retailers’ ability to provide a high level of food safety.

The key reason is a lack of infrastructure. Comparative cold storage data between the U.S. and China indicates a staggering difference: the U.S. has 13 cubic feet of cold storage per middle-class capita while China has 1.6 cubic feet.

Similarly, there are just two refrigeration trucks per 10,000 middle-class capita, compared to nine in the US.

Ms. Voelker says Seventy-five per cent of the future food market in China will be in 2nd and 3rd tier cities dotted around the country.

“More than 50 cities, each with populations of over 1 million, require a national distribution network to efficiently cater for this market,” she says.

“However, the existing food supply chain is fragmented, still in its infancy, and unable to cope with such demands. It significantly impedes the ability to deliver safe food to customers.”

There are also issues beyond the increasing cold storage and refrigeration volumes.

“China lacks clear supply chain standards and any meaningful auditing and enforcement systems. It also has a dangerous reliance on trust and visual inspection.”

“What’s really required is third party knowledge, expertise and advice in order to facilitate a seamless flow between the farmers, the raw materials suppliers, the processors or manufacturers, and the retailers,” Voelker says.

This provides significant opportunities for foreign companies with the resources and know-how to deliver a world-class cold chain logistics framework.

“Logistics providers have the opportunity of applying the latest technology in their field to building an ideal cold chain system and extending their reach into China,” Voelker says.

“In fact, investors and operators stand to reap part of the USD $160 billion per year in projected cost savings.”

Food manufacturers and processors must also be part of the process, as the issue is integral to their risk management.

The study shows that a food safety incident would have a large impact on the market: consumers would stop purchasing a brand’s products (38%), cease to buy the brands altogether (32%) or raise complaints to authorities (21%).

“It is imperative that China’s cold chain logistics is modernised, not just for the people of China, but also for all international market entrants who want to capitalise on this market,” Voelker says.

“Otherwise, manufacturers and suppliers – both local and foreign — are exposed to potential risks and a serious backlash from consumers should a food safety incident arise.”

A.T. Kearney recommends the following key steps for improving China’s food supply system.

• Common standards must be agreed on between the food industry and government, and the latter must take responsibility to ensure enforcement for all participants.

• A high-quality, end-to-end national supply chain must be developed in collaboration with third party providers; with the advantage that there are only few legacy structures to grapple with.

• Private sector infrastructure investment of about USD $100 billion is needed, for warehousing, refrigerated truck transport, IT-systems and training.

“Safeguarding the country’s cold chain logistics will preserve and grow a large market for food manufacturers from all over the world,” Voelker says.

“And beyond that, it would mean billions of Chinese people will have access to safe and nutritious food well into the future.”

About the study

A.T. Kearney conducted a survey of over 1500 consumers and 37 industry leaders in 2005 and 2007. The consumers came from the first-tier cities of Beijing, Shanghai and Shenzen as well as Wuhan and Chongquing, which are second-tier cities. The operator survey covered different business types such as Service Providers (32%), Retailers (24%), Manufacturers (35%) and those in Food Service (8%).

Honda selects salesforce.com

Salesforce.com, the market and technology leader in on-demand business services, has announced that Honda Australia Motorcycles & Power Equipment Pty Ltd (Honda MPE) has selected salesforce.com to manage all its customer, sales and marketing information.

Honda MPE Australia is one of the 35,300 companies of all sizes, industries and geographies that comprised the salesforce.com customer base as of July 31, 2007. Revenue and subscribers will be recognised as the service is delivered.

In operation since 1991, Honda MPE imports motorcycles, power equipment and outboard engines and assembles lawnmowers and brushcutters.

With annual sales in excess of 200,000 units representing over $350million of turnover, Honda estimates that it has more than 1 million Honda products currently in active use in Australia. .

Honda MPE will use Salesforce to better communicate with its Australian customers, as well as automatically track and manage marketing campaigns. With this insight, Honda will be able to target marketing campaigns like never before.

According to Craig Bassett, IT Manager at Honda MPE Honda wasn’t looking for an on-demand solution, but chose one after discovering how cost effective and easy to use Salesforce would be.

“That we don’t need to worry about managing the system on-premise is also a huge advantage,” Bassett says. “It frees up our IT staff because they don’t need to worry about software upgrades, disaster recovery or extra security.”

With Salesforce, Honda MPE wants to drive top and bottom line growth by evolving its marketing campaigns to a new level. As such, Honda MPE will implement a two-phase business strategy.

Phase one: Cleanse data to target marketing campaigns for growth

Honda MPE has a database of approximately one million contacts, but only around 250,000 of those are qualified.

Of the remaining 750,000, Honda MPE has little insight into details like their age, gender, occupation, customer purchase history, or even if the customer still owns a Honda MPE product.

Bassett had run direct mail and email marketing campaigns in the past, but was not sure he had targeted the right demographic, and had no way to measure the campaign’s success.

“We had used another system as our contact database, which was more than seven years old and too basic to give us the customer detail we needed,” he says.

“It didn’t have a marketing function, which is an area of the business we wanted to improve. Most data was out of date, and as a result the response rates on our marketing campaigns were low.”

“With Salesforce we’ll be able to clean up the data and validate each contact,” Bassett says.

Honda MPE will transfer all customer data over to Salesforce, and qualify every contact in the process. Once contacts are transferred, Honda MPE will be able to:

– Automatically record every customer touch point to keep records up to date;

– Track customer satisfaction levels and identify gaps in service delivery to take customer service to a new level;

– Track customer complaints for prompt follow-up;

– Update customer information online anywhere, anytime, so updates are immediately available for marketing and customer service departments;

– Understand and profile customers based on spend history to offer more tailored levels of service based on the type of customer;

– Integrate with other departments including Honda Australia Rider Training, Honda MPE’s motorcycle training division, and Honda Riders Club Australia, Honda MPE’s national members association, to leverage cross-department sales opportunities;

– Track service information on Honda products for a complete customer service history.

“The end goal for us is build unprecedented understanding of our customer base so we can continuously improve the way we communicate with them,” Bassett says.

Phase two: Improve customer service experience and measure campaign success for the first time

“Once we have clean data, we can use it to better market to our customers. We’ll be able to provide a better customer experience, so when they do contact us, we’ll know exactly who they are,” says Craig Bassett.

Honda MPE will launch targeted marketing campaigns from within Salesforce, and measure their success for the first time.

Honda MPE will also implement custom applications from the AppExchange, salesforce.com’s online marketplace for business applications. Honda MPE will implement:

• Clicktools: Honda MPE will use Clicktools to create custom online forms and surveys to send to customers for feedback on service levels.

• SMS for AppExchange: Honda MPE will be able to send and receive, report and analyse SMS communication from within Salesforce. This will be a fast way to notify customers of new and relevant offers as well as deal with time-sensitive issues such as product recalls.

• Computer Telephony Interface: Honda MPE will integrate its call centre with Salesforce using a custom Computer Telephony Interface. As calls come in, the name and company of each caller will automatically be brought up so staff can prepare and greet customers personally.

Honda MPE plans to have Salesforce up and running in a matter of months, and further customise the product with multiple interfaces next year.

Sqware Peg, salesforce.com’s premier Australian implementation partner, has been engaged to support their implementation.

“The beautiful thing about the on-demand model is how quickly it can be implemented. This means that we can focus on driving innovative business strategies as opposed to simply managing infrastructure,” says Bassett.

Force.com Platform and the AppExchange

Force.com reinvents the traditional development, deployment and distribution of any business application with Platform-as-a-Service. Developers, customers and partners can use Force.com to easily create a new generation of on-demand applications and deploy them worldwide as a service. Force.com allows applications to be easily shared, exchanged and installed with a few simple clicks via salesforce.com’s AppExchange marketplace, enabling all the innovation that Force.com unleashes to be easily distributed to the entire on-demand community.

The AppExchange economy continues to expand, with thousands of customers installing thousands of applications via the AppExchange. Customers of all sizes can quickly and easily extend Salesforce with additional on-demand business applications available on the AppExchange, found at http://www.salesforce.com/appexchange.

About salesforce.com

Salesforce.com is the market and technology leader in on-demand business services. The company’s Salesforce suite of on-demand CRM applications allows customers to manage and share all of their sales, support, marketing and partner information on-demand. Force.com, the world’s first on-demand platform, enables customers, developers and partners to build powerful new on-demand applications that extend beyond CRM to deliver the benefits of multi-tenancy and The Business Web across the enterprise. Force.com allows applications to be easily shared, exchanged and installed with a few simple clicks via salesforce.com’s AppExchange marketplace, available at http://www.salesforce.com/appexchange. Customers can also take advantage of Successforce, salesforce.com’s world-class training, support, consulting and best practices offerings.

Australia set to blitz China with exports

A huge blitz to raise the profile of Australia’s food and beverages in China by Austrade, the Australian Government’s export development agency, will be boosted by representation at Food Hospitality China 2007 (FHC).

Austrade’s China Country Manager Peter Osborne says it’s wise for Australian businesses to take part in trade missions and industry events in China, like FHC that gets underway in Shanghai from 14-17 November.

“China is set to become the next economic giant and Australian businesses can help satisfy its hunger and quench its thirst,” Osborne says.

“China’s food and beverage sector was worth around $125 billion in 2006, up by over 25 per cent on the previous year. Austrade is striving hard to increase awareness of the abundant export opportunities arising from increased consumer spending,” he says.

“As demand in China grows, Austrade is extending its reach in China and now has 13 offices there.”

Sydney-based CoffeeMasters has already sent samples of its roasted coffee to China. Managing Director Geoffrey Suranyi says the samples were received very positively and now they’ll set up an office in China.

“It’s difficult to export pre-roasted coffee to China, so we’re sending a roaster over there and will set-up an office in China which will be Australian-owned.

About 20 per cent of the coffee beans used will be from Australia,” Suranyi says.

“Participating in FHC will hopefully also give us a jump-start into China to get a few more customers on board. Our main markets will be hotels and up-market restaurants — mainly four and five star where there’s a predominantly ex-pat clientele.”

“Our business is what is called ‘fair trade’ which means when we purchase coffee from places such as Honduras and Ethiopia, we pay the normal price and then 10 per cent of the profits go back into build better villages and schools.”

“Russell MacGuire is a master roaster – he created our excellent, well-balanced coffee and has achieved international recognition.”

“You can judge a good coffee using the nose, palette and throat — you have to try to hit those three sensory areas – an average coffee is like an apple pie without good crust,” he says.

Nineteen Australian organisations will showcase their Australian wine portfolios at Austrade’s Australian National Pavilion at FHC this year.

Austrade’s Shanghai-based Senior Trade Commissioner Christopher Wright says there’s been extraordinary growth in the volume and value of Australian wines exports to China over the past year.

“During September this year alone $53 million of Australian wine was exported to China, a total volume of 21 million litres — of which 95 per cent was red wine according to the latest AWBC Wine Export Approval Report,” Mr Wright says.

“In June 2007, China became the number one destination in Asia for Australian bottled wine exports. The range of Australian bottled wine available for sale in China and the number and diversity of Australian suppliers seeking Chinese partners and buyers is growing every day,” he says.

Austrade has been involved in many initiatives throughout 2007 in an effort to increase Australia’s exports of food and beverages to China.

It brought a record number of Chinese buyers to Fine Food Australia held in Sydney in September.

“Already export orders are starting to flow as a result of negotiations undertaken whilst overseas buyers were in Australia for the Fine Food exhibition,” Peter Osborne says.

“In addition, the Chinese are interested in Australia’s food safety expertise. Austrade will accompany a key Chinese delegation to Australia in late October.”

“They’re looking at Australian expertise in testing equipment and technology relating to product traceability,” he says.

“Austrade’s China team is also partnering with the Australian Wine and Brandy Corporation (AWBC) in November to launch the Chinese translation of the Wine Australia 4 Brand Strategy.”

AWBC has recognised China as a priority emerging market and is supporting Jeremy Oliver to present at the Chinese language 4 Brand Strategy launch,” he says.

FHC is for trade only. In 2006 the show attracted a total of 16,000 plus trade visitors from China and overseas.

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