Wal-Mart questions RFID strategy

The news from Wal-Mart chief executive Lee Scott in August was not what the radio frequency identification (RFID) sector wanted to hear.

The retail giant’s second-quarter sales, while up 8.8 percent, had once again fallen short of expectations. Worse, because of a need to lower prices, the company was reducing its forecast for year-end earnings from continuing operations by 10 cents per share.

The tepid earnings report came at a time when the RFID industry was desperately hoping for a clear signal from Wal- Mart that the technology could produce benefits.

It had been four years since the largest US retailer embarked on an ambitious program to implement RFID technology throughout its operations, and so far there was seemingly little to show for it.

By placing RFID tags with embedded circuits and radio antennas on pallets, cases and even individual packages, Wal- Mart was supposed to be able to wring out inefficiencies in its massive logistics operations and slash out-of-stock incidents, thus boosting same-store sales.

Instead, Wal-Mart turned in a string of disappointing quarters, cost savings failed to materialize, and inventory levels rose rather than fell.

Inventory was up 4.8 % against a 6.5% growth in sales in the second quarter and an even worse 9% against a first-quarter 5.6% rise in sales. Those results fell far short of a corporate goal of keeping inventory growth to half that of sales, according to Eduardo Castro-Wright, head of Wal-Mart Stores USA.

Similarly, operating costs continued to climb, particularly in comparison with major rivals Target and Costco. General and administrative expenses rose to 18.4% of sales in 2006, compared with 17.9% in 2005.

The lack of any obvious concrete gains has raised questions as to whether Wal-Mart should delay or freeze its RFID plans.

For now, however, Wal-Mart says it will stay the course. At an RFID conference in May, CIO Rollin Ford insisted the technology is producing solid results in the company’s supply chain operations, including a 30% improvement in out-of-stock rates at stores where RFID has been deployed.

“I read we’re slowing down on RFID,” Ford said at the conference. “I can tell you nothing could be further from the truth.” Wal-Mart will RFID-enable another 400 stores this year, according to Ford.

Despite some support for the technology from consumers and key suppliers such as Procter & Gamble, Kimberly-Clark and Unilever, Wal-Mart is in the midst of dramatically reshaping its RFID strategy.

By January 2006 the company hoped to have as many as 12 of its roughly 130 distribution centers fully outfitted with RFID.

That effort stalled at just five distribution centers. Instead, the company is now focusing on implementing RFID in stores fed by those five distribution centers so it can gain a bigger window into its supply chain.

Suppliers have also been slow to jump on board. Four years after Wal-Mart announced its RFID plans, only about 600 of Wal-Mart’s 60,000-odd nationwide suppliers have gotten involved in the project.

Without widespread adoption, the cost of RFID tags, readers and supporting systems remains a barrier.

“We haven’t lost faith in the potential of the technology,” says Simon Langford, head of Wal-Mart’s RFID initiative. “But we have had to change our strategy to provide more benefits to our suppliers.”

Wal-Mart’s change of plan demonstrates the need for retailers and suppliers alike to tread carefully with RFID. As retailers such as Best Buy have observed, widespread adoption is still years, not months, away.

At the same time, some of the greatest benefits may not be in applications first thought to be ripe for the technology, such as automating distribution centers.

Instead, retailers are finding early gains closer to the sales floor, where they are using RFID to track consumer buying patterns and ensure products are on shelves in time for promotions.

Source: http://www.baselinemag.com

More port operators for Babcock and Brown

Babcock & Brown Infrastructure (BBI) has spent $144 million buying another two European concession port operators, this time in Finland, adding to four similar purchases in Italy, Belgium and Spain.

Concession ports sit on land leased from other owners and make up the bulk of port operations in Europe.

BBI has now spent about $1 billion on them in the last 12 months and says it is likely to buy more.

“To some extent this might have snuck up on people,” says BBI chief operating officer, transport Jeff Pollock.

“There’s actually quite a lot invested in this strategy now and hopefully people will start to see that there are real opportunities for us.”

BBI now controls five European concession port companies with operating concessions in eleven ports throughout Europe.

They are forecast to produce combined pre-tax earnings in fiscal 2008 of euro 62.4 million ($A98.6 million).

As with its previous purchases, BBI said on Friday that the acquisitions of Finnish operators Oy Rauma Stevedoring and Oy Botnia Shipping would be immediately yield accretive.

Their combined 2007 pre-tax earnings were EUR8.5 million ($A13.4 million).

Rauma is the third largest container terminal in Finland and both ports handle over 10 per cent of Finnish maritime trades.

Most of the material loaded at them is forestry related because BBI bought the ports from forestry company UPM, which has promised to keep moving its paper, label materials and wood products through the ports.

Pollock says the lastest deal was one of “several” port acqusition opportunities in a pipeline being considered by BBI.

BBI is managed by Australia’s second biggest investment bank Babcock & Brown Ltd.

Source: Industry Search

Performance Management for Food operators

Consumer driven optimisation company RedPrairie has unveiled its Retail Performance Management™ [RPM] for Food Service.

Built on Microsoft® Office PerformancePoint Server 2007, RPM is a web-based analytic reporting solution that leverages the wealth of existing information from RedPrairie’s restaurant operations applications and seamlessly synchronises it with warehouse data, internal KPI’s as well as industry benchmarks. All of which are displayed in an intuitive, user friendly interface.

RPM provides inherent integration with Microsoft Office PerformancePoint Server 2007 offering RedPrairie customers enhanced business intelligence tools to analyse restaurant operations data.

“Microsoft continues to expand its partnerships with retail and hospitality solution providers, such as RedPrairie, which bridge the gap between people and the information needed to drive business success,” says Bill Gonzalez, general manager of worldwide retail and hospitality industry solutions, Microsoft Corp.

“Today’s announcement brings us one step closer to our goal of enabling facts-based decision support and superior performance across the retail enterprise.”

According to Joe Koss, CFO for Culver Franchising System, Inc using RedPrairie’s RPM has enabled Culvers to bring together the KPI’s that it uses to monitor and drive its business into a single easy to use interface.

“We have even been able to gain new insights into a key corporate service levels strategy by analysing information coming from our point-of-sale system,” Koss says.

“Looking into the future, we plan to deploy RPM into our corporate SharePoint extranet site which will allow us to share pertinent information with even more of our employees and franchisees.”

Retail Performance Management Solution Details and Benefits

Developed for business decision makers, field operations and marketing personnel, RPM for Food Service integrated with Microsoft Office PerformancePoint Server 2007 puts the data and business rules for business intelligence on a centrally managed server and makes scorecarding, analytics and the entire performance management cycle much easier and less time-consuming. Retail Performance Management offers many unique advantages:

Interactive dashboards that zero-in on relevant data – Retail Performance Management uses powerful Web-based visual dashboards that can be delivered to individuals based on their organizational role and location. The embedded Scorecards can contain KPI’s and links to charts, tables and reports, allowing the business user to easily navigate to the relevant information.

Based on a strong analytical foundation – Retail Performance Management includes OLAP analysis that integrates with Microsoft Excel 2007 for fast, easy to use, ad hoc reporting. In addition, it provides visibility into business operations and factors impacting the business that allow for more flexibility and timely decision making.

Low total cost of ownership – Retail Performance Management can be deployed as a secure, Hosted/SaaS solution that allows for rapid implementation. RedPrairie’s hosted services have a proven 99.9% historical total system availability.

New electric locomotives for Queensland Rail

Siemens in Australia and New Zealand has been awarded a A$170 million contract by Queensland Rail (QR) to supply 25 Class 3800 heavy haul electric locomotives.

The contract comes as an extension to an existing order placed last year for 20 new locomotives. It is also in addition to the contract with QR to upgrade 63 Class 3700 locomotives.

The additional 25 Class 3800 heavy haul electric locomotives will be delivered over a period of 12 months commencing at the end of 2009.

The upgraded Class 3700 locomotives have commenced revenue operation in Queensland, delivering improved productivity with more coal being hauled by fewer locomotives.

The first 20 locomotives already on order are now under construction in Siemens main locomotive factory in Munich and are due to be delivered and placed into service in Queensland during 2008.

Siemens Transportation Systems Executive General Manager, Paul Bennett, says the new locomotives will expand QR’s locomotive fleet in the Goonyella Coal Systems and provide increased haulage capacity.

“The new, state of the art Siemens Class 3800 electric locomotives will provide improved performance to the upgraded Class 3700 locomotives, allowing QR to increase the payload of each train, improve cycle times and lower operating costs,” he says.

All locomotives are equipped with Siemens locomotive ac traction technology, which has been proven in Queensland to exhibit high reliability in harsh operating conditions.

“Siemens is pleased to have again been entrusted to deliver this prestigious project and we are delighted to be continuing our valued relationship with QR,“ Bennett says.

The Siemens locomotive factory in Munich is the centre of competence for construction and produces approximately 150 electric and diesel locomotives per year.

Operators welcome Pacific Highway committment

NSW trucking operators have welcomed the Prime Minister’s recent announcement

that an additional $2.4 billion will be allocated by the Australian Government to facilitate

completion of duplication of the Pacific Highway by 2016.

ATA NSW Manager, Hugh McMaster says the Pacific Highway is the second most

important freight corridor in Australia.

“With a growing population along the eastern seaboard north of Sydney and increased

industry and community dependence on the trucking industry, the road freight task

along this corridor will continue to grow substantially,” McMaster says.

McMaster says a divided carriageway comprising at least four lanes between Sydney

and Brisbane would deliver significant safety, economic and environmental benefits for

all road users and for local residents.

“Recent years have seen bipartisan support for more funding for the Pacific Highway,”

he says.

“It is important that this co-operation continues with whoever is in government during the

duplication of the highway and we welcome the project’s completion in 2016.”

New CSIRO division serves manufacturers

CSIRO’s newest Division, CSIRO Materials Science and Engineering (CMSE), has been formed to support Australia’s manufacturing industry.

The result of the amalgamation of Melbourne-based Manufacturing and Materials Technology and Sydney-based Industrial Physics, CMSE exists to transform segments of the Australian manufacturing sector into sustainable and globally competitive industries.

Spread across six sites in Victoria, Queensland, NSW and ACT, CMSE is CSIRO’s fourth-largest Division with 310 research staff.

“Our goal is to be the provider of choice for innovative research and development in materials science and engineering to Australia’s manufacturing industry,” says new Division head Dr Calum Drummond.

“CMSE provides a coordinated approach to materials design, creation, characterisation and application, particularly for the manufacturing industry.”

CMSE’s ancestors have a long track-record in applying world-class science to benefit local industry. For example:

CSIRO’s lightweight concrete, HySSIL, creates building panels that are half the weight of conventional material but just as strong.

Under a joint venture between CSIRO spin-off company HySSIL Pty Ltd and Westkon, one of Australia’s premier precast concrete companies, a pilot plant is being constructed in Sunshine, Victoria, to complete large-scale process development and supply panels to projects earmarked to use HySSIL.

CSIRO’s magnesium casting technology, T-Mag, is also about to go full-scale under a joint venture with spin-off T-Mag Pty Ltd and three Adelaide-based companies.

Source: Industry Search

On Demand and RFID takes industry by storm

The introduction of On Demand technology and the move to Radio Frequency ID tags (RFID) is rapidly changing the face of the Australian b2b e-commerce sector, according to industry expert and Leadtec Managing Director Scott Needham.

The b2b e-commerce industry is moving away from the traditional client side electronic data interchange (EDI) translation software to On Demand or Software as a Service (SaaS), providing more scope for smaller Australian companies to compete on a national and international level using b2b technology.

“Translation software is no longer required because it is now often provided as a service in the network, allowing for massive cost reduction for trading communities,” Needham says.

“However, the huge uptake in internet communication means smaller companies are capable of e-trading, creating huge disparity in the quality of the software and messages that are being sent.”

“Supply chain companies like Leadtec have become fundamental in the b2b process to enable the big retailers to engage with these companies,” he says.

Scott Needham believes the main challenges facing e-trading in Australia include the increasing number of trading partners, Global Data Synchronisation (GDS) and the introduction of Radio Frequency ID tag technology (RFID) in supply chains.

“With an increase in the number of companies e-trading our challenge is to be able to communicate these messages while maintaining industry standards,” he says.

“Our alliance partner GS1 supports Leadtec with standards implementation.”

“Great opportunities will come with RFID, which will enable retailers to pass stock through a scanner, removing the need for line of sight barcodes.”

“Basically it means one day a shopper will be able to push their supermarket trolley through a gate and each item will be automatically scanned,” Needham says.

“Realistically this technology is about 10 years away from being used at the consumer level.”

RFID coupled with On Demand services will bring Australia in line with global standards for b2b e-commerce, particularly within grocery supply chains.

“This new technology will provide Australian retailers, logistics organisations and suppliers with real-time, anywhere access to information about a shipment’s contents and destination by simply scanning the RFID tag,” Needham explains.

He says the new technology will benefit major retailers in Australia’s retail, health and automotive sectors, by giving them easy access to transactional, product and shipping information.

“Leadtec’s eTrading platform will provide all of these new technologies to our clients through one integrated On Demand platform.”

GS1 Australia COO Mark Fuller says On Demand technologies have transformed supply chain systems, by improving the way they share information.

GS1 is responsible for administering the global multi-industry system of identification and communication for products, services, assets and locations in Australia.

“Over the next few years, the need for unique identification of products will become increasingly important, and companies such as Coles, Woolworths, Bunnings and others will start using GS1net, an On Demand platform, in their supply chain systems,” Fuller says.

“We’re also starting to see a greater uptake in RFID technology in Australia, and we will need dynamic technology enablers and communications companies such as Leadtec to provide effective data solutions for Australian retailers who want to take on this new technology.”

Sterling Commerce delivers again

Sterling Commerce, an AT&T Inc. subsidiary, has announced the availability of the Sterling Selling and Fulfillment Suite.

The industry’s most comprehensive solution for managing the entire inquiry-to-cash cycle in the manufacturing, retail, distribution and communications sectors, this Suite removes the barriers to successful customer and supplier interactions.

The Sterling Selling and Fulfillment Suite provides a single end-to-end view of marketing, lead management, selling, orders, inventory, delivery and supply — plus returns, repairs and settlement across the supply chain.

“The Sterling Selling and Fulfillment Suite represents an innovative approach to addressing complex problems found outside the four walls of a company — problems with meeting customer, supplier and business partner demands,” says managing director, Sterling Commerce Australia & New ZealandMichael Vulcan.

“Sterling Commerce is uniquely positioned to deliver on this solution with our expertise in integration, e-commerce, distributed order management and supply chain execution.”

“More important, our experience with more than 30,000 customers will ensure that these solutions deliver real benefits and fit today and tomorrow’s business needs,” Vulcan says.

Sterling Selling and Fulfillment Suite provides unlimited visibility and control across an organisation’s sales and fulfillment operations and enables companies to create a superior buying experience for their customers while shielding them from the complexities of the companies’ organisation, channels and supply chain.

The Selling and Fulfillment Suite simplifies the complex inquiry-to-cash cycle by delivering the applications and technology to manage any demand, across any channel, for any mix of product and services, for any supply base.

It is a unique set of applications for managing the entire process of inquiry to cash that consists of seven solutions:


eCatalog and Offer Management

Configure, Price, Quote

Order Management

Warehouse Management

Transportation Management

Supply Chain Visibility

Along with the introduction of the suite, Sterling Commerce also introduced new capabilities in both the selling and fulfillment solution bundles, including:

· The availability of Sterling Inventory Replenishment, a new product in the Sterling Multi-Channel Fulfillment solution that enables companies to create a truly collaborative replenishment process with its customers and suppliers that is a critical component of lean-inventory strategies.

· The availability of new merchandising and marketing capabilities in its Sterling Multi-Channel Selling solution that will drive profitable growth for businesses while optimising the consumer experience.

Pool Systems grows with Advanta

Advanta Software, specialist software solutions provider to the 3PL and logistics markets, says its long term client Pool Systems has chosen to upgrade to Advanta’s ATLAS logistics software suite.

Pool Systems manufacture and distribute swimming pool, spa equipment, accessories and leisure products to the wholesale and retail swimming pool market.

The company’s innovative products are available to all pool and spa owners from retail pool shops and chain stores through out Australia, New Zealand, North America and Europe

Pool Systems has a history of success since entering the swimming pool distribution market in 1983. The company has grown from a small distribution company servicing the Queensland swimming pool trade into a major manufacturing organisation with sales around Australia and selected international swimming pool markets.

In October 2000, Pool Systems experienced strong business growth and developed strategic plans to expand their business into a variety of international markets.

Pool Systems acknowledged the need for a new software platform to support the future growth of the company. They did not want to be restricted by their IT system and therefore required a logistics software solution capable of supporting the increasing demands of the business.

With this concern in mind, Pool Systems decided to shop for a new software platform by evaluating the logistics software solution market.

Tom Gorman, financial controller of Pool Systems says at the time of evaluation, the company demanded a customised software solution for our unique business requirements.

“This lead to our search for an Australian logistics software provider as regular contact and ongoing support became a priority for our customised software solution requirement,” Gorman explains.

“We then analysed the functional features and benefits of the remaining Australian logistics software providers and a final decision was made.”

“Pool Systems decided to choose the BILS product provided by Advanta as the product proved to be functionally rich in comparison to its competitors and was the most suitable solution for Pool System’s business requirements.”

Since the implementation of the BILS logistics software solution from Advanta, Pool System’s has continued establishing export markets in the Middle East, South East Asia, Europe and the US pool distribution markets.

With a competitive advantage of product innovation and superior customer service, it was only a matter of time for Pool Systems to upgrade their BILS software solution to Advanta’s ATLAS logistics suite.

The suite comprises over 30 modules and covers all aspects of Supply Chain Management and Supply Chain Execution.

More specifically, Advanta Software is providing Pool Systems with modules including, warehouse management, freight management, EDI, order management, sales analysis, scan packing and purchasing.

Commenting on the upgrade, Tom Gorman says by upgrading from the BILS platform to the ATLAS platform, Pool Systems will benefit from the additional modules such as the freight management module which now comes standard with the ATLAS logistics software suite.

“The BILS system has provided excellent support for the growing business demands for Pool Systems over the past 7 years, but by upgrading to ATLAS we will have a more user friendly system and simultaneously leverage the benefits from the extensive research and development that Advanta has contributed to the ATLAS product,” he says.

Following the implementation, with the support of Advanta and the ATLAS logistics solution, Pool Systems expects to improve their customer service and continue to expand their international export business.

Cool Chain Solutions from Ahmedabad

Would you ever guess that vaccines, bulk drugs, liquid syrups, insulin, and bio-technological products are some of the many goods eagerly awaiting the arrival of Emirates’ inaugural flight EK 538 from Dubai to Ahmedabad — the capital city of the Indian state of Gujarat?

Emirates six-flights-a-week service to Ahmedabad, effective 29th October, heralds the introduction of Emirates SkyCargo’s Cool Chain Solutions to the state’s pharmaceutical industry.

From Ahmedabad, Emirates SkyCargo, the cargo arm of the Dubai-based airline will offer over 110 tonnes of capacity per week per direction, together with its specially-designed temperature-controlled air cargo containers that maintain stable interior temperatures throughout the journey.

Featuring active temperature control systems that range from -20C to +20C, Emirates SkyCargo’s containers keep product temperature stable despite fluctuations in ambient temperatures.

Home to over 3000 pharmaceutical industrial units, and investing over USD 1.6 billion in the industry, Gujarat contributes 28 percent to the production and export basket of India’s drug sector.

As a result of a global network spanning 94 gateways in 60 countries and a seamless transportation chain using the latest technologies in air cargo containers, life-saving medicines from Ahmedabad will make their way to pharmacies in the Middle East, Europe, United States of America, Far East, and Africa.

During this long journey, the cool chain has to be maintained. To ensure this, the award-winning cargo division will use a combination of temperature-controlled containers, Cool Dollies and warehouses at its Dubai hub so that the cargo arrives in the same condition it took off.

Peter Sedgley, Senior Vice President, Emirates SkyCargo Commercial Operations says as global focus on medical services increases, it becomes crucial that innovative life saving drugs reach needy patients in time and in perfect condition.

“Our Cool Chain Solutions counter hostile temperatures to preserve the efficiency of medicines,” he says.

“Temperature-controlled containers can also be used to transport fruits and vegetables from Ahmedabad to local supermarkets around the world and throughout the year.”

Furthermore, Gujarat is the largest supplier of denim in Asia, a benefit it has reaped after setting up apparel parks in Surat and Ahmedabad, and textile parks in Palsana, Udhna, Navapura, Mangrol, and Kheda.

Supported by a growing international network and having invested in the latest information technology, finest ground handling equipment, most advanced aircraft, and highly-qualified staff, Emirates SkyCargo can promise an efficient service that takes the state’s textiles products to new global markets.

Emirates SkyCargo will also move intricate, ethnic and contemporary gold ornaments from Ahmedabad to jewellery buyers in North America, South Africa, and the world-famous Gold Souq in Dubai.

Gujarat State Export Corporation Ltd. estimates that Ahmedabad presently utilises a cargo capacity of 1,100 tonnes to support its exports.

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