Get your FACT right – from MHD magazine

Mal Walker

People often ask me: what is the secret to distribution centre (DC) design? I’m not sure that I have a secret to share, just logic, common sense, and experience (including a lot of mistakes on the way). However, I will share four design tenets that I’ve found useful and formed into the acronym FACT.

  1. Flow.
  2. Accessibility.
  3. Capacity.
  4. Traceability.
  1. Flow

– is about ensuring that goods can be moved around the DC in an efficient manner. Easy? Not so!
For your facility to flow properly, there are six critical processes to cover:

  1. Receiving.
  2. Inwards goods staging.
  3. Storage.
  4. Picking and packing.
  5. Outwards goods staging.
  6. Dispatch.

Depending on your business, there maybe two additional ones: returns and value-adding tasks.
Bottlenecks and double handling can occur at any one of these points, if flow has not been correctly addressed. How do you know if your flow is suspect? Symptoms include multiple handling of goods, waiting time, pedestrians mixing with forklifts, long travel distances to goods, and accidents.
In planning for optimal flow, it is useful to think ‘one way’, and to allow plenty of room for movement. Avoid giving in to the temptation of jamming storage into a building. If you do, you will more than likely suffer from excessive operating costs. 

  1. Accessibility

This is related to flow. It is critical that all products, in their various forms, e.g. pallets, UBC, cartons, units, litres, etc. are available when they are required. The rule here is: unfettered access to your stock. No blockages, hinderances or bottlenecks. Easy? Not so!

“Avoid giving in to the temptation of jamming storage into a building.”

Too often, operators find that the stock they need to pick is hidden behind banks of other items. Recently I was asked to review a timber yard that specialised in various sizes of timber beams. I noticed that all the same profiles were stored together, regardless of length (which were in 0.3m increments). So, when it came to picking two beams of 5.7m long for an order, the operator spent 42 minutes to complete the pick: 40 minutes to travel to the pick face, move all the other goods, and put them back, and only 2 minutes to pick the required two beams.
In terms of the pick to total time ratio, it is 2/40 or 5%. Only 5% when it should be 90%. In this operation, if we can improve accessibility of stock by providing more pick faces for the range of sizes, we have the potential to improve the ratio by 85%. That’s worth going for.

  1. Capacity

– is about providing enough space within storage modes, for current and future operations. Capacity is related to flow and accessibility – you might have guessed that by now. But here’s a mandate for you. Always provide for enough capacity to satisfy your storage and operational needs. Easy? Not so!
Consider an example that I came across recently. I was asked to review a DC that had outgrown its capacity, to the extent that stock was being stored in aisles and staging areas. This badly affected flow and accessibility. I was told that the DC had 10,000 pallets in capacity. To be sure, I checked, and counted all the locations. Yes, there was indeed 10,000 pallet storage locations!
But something disturbed me. This warehouse was in ‘gridlock’. They could barely operate, and moving pallets in and out required multiple movements. But there was something else: 250 pallets were stored in aisles and staging zones, and 9,000 saleable pallets were recorded as ‘in stock’.
My survey revealed a combination of storage modes, i.e. block stacking, drive-in racking and selective racking. Also, I noticed 150 pallets of returns, and 500 pallets of obsolete stock awaiting write-off by the accountant.
What is the capacity of this warehouse, and what would I advise my customer? Before I cover the maths, here a few truisms to consider:

  1. All storage modes have different utilisation factors.
  2. A warehouse cannot operate at gross capacity.
  3. Obsolete stock and returns take up valuable storage locations and detract from overall efficiency.

So, what is the capacity of this warehouse. My survey of the facility revealed:

  • 1500 pallet spaces (gross) of block-stacking in 5 deep x 3 high configuration.
  • 1000 pallets of drive-in racking in 3 pallets deep x 5 high configuration.
  • 7,500 pallets of selective racking including ground-level pick faces in 5-high configuration.

Now for the maths. To determine capacity, we must consider utilisation factors associated with the use of specific storage modes. Then, we must discount gross capacity to net capacity – net capacity being the maximum that I would recommend to avoid gridlocked operations. Once we have done that, we deduct the non-saleable stock since these pallets are taking up valuable locations for saleable stock.
In this case, my customer has 1,525 more pallets in the facility than it can feasibly operate with. That’s what is causing gridlock, bad flow, lack of access, multiple handling and a capacity crisis.
What should be done to improve the situation?
Firstly, speak to the accountant and purge returns stock and obsolete stock as much as possible, redesign the facility considering alternative storage modes, and if necessary, move excess reserve stock off-site to an alternative facility.
Finally, never forget this truth: never, ever plan your warehouse operations on gross capacity. Only its net capacity.

  1. Traceability

Supposing we have flow, accessibility and capacity nailed. Our next focus is traceability. We must make sure that when stock is moved in, out and around the facility, that it is correctly traced. Easy? Not so!

“Logisticians, please do not forsake the physical, for expediency in recording electronic data.”

With volume increases, expanded ranges of SKU, batch management and use-by-date sequencing, stock management has progressively become more complex. To the point that without sophisticated management and recording systems, operators cannot guarantee accuracy of their operations.
Thus, it’s imperative that distribution centre operators invest in appropriate systems to trace and control stock.
These include radio frequency (RF) scanning equipment and/or voice and visual technologies.
Logistics processes will be different for each DC, but all processes should have a check and confirm transaction sequence tuned to the physical movement of goods. That brings me to the physical vs. electronic rule: physical processes have priority over electronic processes. In other words, design the electronic recording of stock movements to suit the physical process, not the other way around. Sadly, many systems are implemented by well-meaning, but often misguided IT people who do not understand physical logistics. Are you with me? Physical movement is where you burn your costs. Logisticians, please do not forsake the physical, for expediency in recording electronic data.
To recap, applying the FACT tenets, Flow, Accessibility, Capacity and Traceability, is useful to guide one’s thinking in reviewing, designing and running a DC. The outcome of good planning around each of these is reduced risk of gridlock, design flaws and excessive operating costs.
Mal is manager, consulting with the Logistics Bureau, where he works with local and international organisations to guide them in specification preparation, establishment and review of outsourcing contracts. He holds qualifications in engineering, business operations and logistics. For more information contact Mal on 0412 271 503 or email mwalker@logisticsbureau.com.

Emergent Cold acquires Melbourne-based Montague Cold Storage

Texas-based Emergent Cold has announced the acquisition of the Montague Cold Storage facilities in Melbourne.
According to Emergent Gold, this acquisition complements its broader strategy of acquiring and developing a global network of cold chain businesses.
Montagues was founded in 1948, by William (Bill) Montague OAM by purchasing a carting operation that turned the Montague name into a fresh food provider. The first orchard was planted at Narre warren, Victoria in 1950. Innovation continued with the introduction of Controlled Atmosphere storage to Australia in 1967, followed by their first cold storage facility at Allansford in 1989.
“We want to thank all the executives and staff who have contributed to this wonderful business over 60 years.  The Montague family and management team will be focussing our energy and future endeavours in the horticultural industry, where there are many exciting opportunities both nationally and internationally,” Ray Montague, Chairman of Montague Group said.
Emergent Cold was founded in 2017 with the vision to build a global cold chain solution for multinational customers.  Emergent Cold has grown through a combination of business acquisitions and greenfield developments in emerging and developing markets.
“We are delighted to welcome the Montague Cold Storage team to the Emergent Cold network.  Combining Montague’s assets with our national service capability will further strengthen our offering to the Australian and International market,” Neal Rider, CEO of Emergent Cold said.

Ground improvement works complete for new Steelforce warehouse at Port of Brisbane

Design and construction geotechnical specialist Menard Oceania has announced completion of major ground improvement works on behalf of its client, FKG.
With ground improvement works completed ahead of schedule, the Brisbane site, once built, will be a new warehouse for Steelforce, a major distributor of steel products in Australia.
The 25,000m² warehouse project, located in Port West – a rapidly developing industrial estate at the Port of Brisbane – required detailed ground improvement works, as it had been previously subjected to varying levels of surcharging to provide for a 20Kpa loading condition.
Geotechnical conditions encountered on site included a variable profile which was comprised of dense sand, soft to firm Holocene alluvium, and stiff Pleistocene alluvium.
“We established to site in early July 2018 to perform the design and construction of the ground improvement works on behalf of Port of Brisbane Limited (PBPL) and the main contractor FKG Group. Although the site had been previously surcharged, the project loading requirements increased in capacity to meet the needs of Steelforce, which required the entire ground improvement / slab package to be redesigned. We are delighted that Menard’s expertise was considered by the client for the successful and timely delivery of the early foundation works package,” Geoffrey Holding, Northern Region Manager for Menard Oceania said.

A DC for efficiency – from MHD magazine

Vivin Imports is one of Australia’s largest furniture wholesalers supplying major furniture retailers and independents. With recent growth in residential home construction and renovations, Vivin has experienced increased demand for its products across the country.
To accommodate this business growth, the company had to elevate its logistics capability to retain and build on its competitive advantage. The distribution centre was identified as a crucial contributor to supply chain efficiency and effectiveness. The Vivin management felt a critical change was required and committed to a new purpose-built 23,300m² distribution centre.
The next step was to decide how this distribution centre should be fitted out.
Vivin knew that it had capacity constraints in the existing warehouse, and adding to the complication was the regulatory compliance for fire safety coverage, particularly for foam products and mattresses. The new warehouse required a storage fitout to accommodate oversized products and ensure appropriate safety compliance.
The initial layout
Dexion Solutions was invited to put forward a proposal for the new distribution centre based on an existing pallet racking configuration supplied. This consisted of standard selective pallet racking with 2,600mm clear entry bays arranged to 3,420mm aisles throughout the warehouse. Half of this layout was to be fitted with in-rack fire sprinklers.
Experience has shown that this was an industry that adopted a ‘default’ layout, where there was no in-depth operational qualification of client operations undertaken. Based on the understanding that not all products have the same dimensional characteristics and demand profile, it is questionable why many businesses accept this ‘uniform’ arrangement.
It could be that there is a lack of understanding of warehouse operations among many suppliers. This results in them often taking a lowest ‘cost-only’ approach, which drives the design to what is often seen – a ‘default selective rack layout’. Likewise, many clients have a very good understanding of the price and product specifications, but not the value of the total fitout. That’s because this value can be difficult to explain in sufficient detail by those selling the equipment and as a result, both supplier and customer often agree on a ‘default’ layout.
To demonstrate the limitations of this default layout, the supplied 2D drawing was turned it into a 3D render. This gave Vivin a better perspective and understanding of the system with which they would end up, and also allowed the supplier team to highlight any potential shortfalls of the design.
Dexion Solutions go the extra mile to fully analyse the space and develop 3D renders where appropriate to ensure the customer has a thorough understanding of what can be achieved – adding so much more value and insight to the project. This additional stage in planning can also be recognised in ROI well into the future.
Developing a complete system
The team requested design-relevant data, which included a snapshot of inventory, transaction table and the item master. This was then backed up with operational site observation and development of a process logic to support the design. The purpose of this study was to retain what was being done well, as well as engineer out any existing limitations, risks and difficulties where possible.
This is what was found:

  • Standard 2,600mm clear entry bays did not provide optimised storage density for the range of products, so the design was altered to include a calculated combination of 2,600mm and 3,850mm clear entry bays.
  • To account for product overhang and a 100mm longitudinal flue in accordance with fire engineering and AS 4084:2012, this directed the design towards the specification of customised double entry frame depths of 2,106mm and 2,303mm respectively. The basic design only had a single double entry 2,106mm arrangement, which would have restricted the storage of oversized products like sofas.
  • Finally, no elevations were provided in the original design so these had to be calculated. Twelve (12) differing elevations were designed to accommodate the 100mm transverse flue space as per criteria specified in FM8-9.

Now that the storage profiles had been determined, it was time to develop a fully optimised warehouse layout. The storage system had to accommodate non-standard product sizes, all the while balancing productivity with storage.
To achieve this, the layout developed by Dexion Solutions comprised of 1,500 bays of selective Speedlock racking, with different frame depths and bay widths to accommodate variations in product dimensions.

Aisle widths
The original default design had 3,420mm aisles rack to rack, but was this adequate? Let’s consider how the space will be used.
2,100mm width pallets are put away and retrieved at ground level and at height. While the aisles are certainly wider than the pallet, the space doesn’t consider the materials handling equipment that will be used to manoeuvre the pallets. As shown in the diagram, the resulting sweep arc of a forklift turning towards the racking is not considered in the conforming design.
Adhering to a 3,420mm aisle would have resulted in a 343mm aisle width deficit! Aisle widths had to be increased to 3,850mm for operational viability, which was independently verified by the MHE provider. With larger aisle widths, the rack orientation was required to change from North to South to East to West due to the building column grid.
This flagged a significant change to the initial layout and it marked a fundamental change from being a storage-centric design to one that was operationally focused.
In-rack fire sprinklers
The initial layout directed that half the site be fitted with in-rack sprinklers. For this qualification, Dexion Solutions used inventory data and item master lookups to identify all the items that needed additional fire coverage. A line-by-line slotting calculation was applied. This was not as easy task!
From this exercise, it was determined that just over a quarter of the site required in-rack sprinkler coverage, quite a difference from half the site. This area allocation also accounted for likely and predicted storage variations. With a reduced area for in-rack sprinkler coverage, a significant cost saving was instantly realised. Combined with all the previous qualifications, this verification just added another layer to the optimised layout that could not be ignored.
Furniture repair zones
To complete the design, a concept of operations was developed, with staging areas and furniture repair zones laid out. The material flow was calculated along with the operational task sequences. This ensured that both the physical and logical designs were complementary to each other.
Warehouse management system integration
The system logic threads that were recommended could be applied to the warehouse management system (WMS) for configuration to achieve balanced task flows. The pertinent points about the operational sequences were the inclusion of batch and discrete order picking based on order profile waving, pick and drop locations for intermediary task staging, and task interleaving. With both the physical and logical designs undertaken in tandem rather than in isolation, a verifiable, auditable and clearly specified result was planned and achieved.
Labels and end-of-aisle signs
The design of the warehouse location map and the subsequent location labelling specification can be crucial to a project’s success. For Vivin, the Dexion Solutions team used 3,850mm beam lengths, which were mapped out and labelled for three locations per bay instead of the average of two locations across a shorter beam length. This will allow for the storage of one OR two non-standard product sizes whilst also allowing for flexibility to use each level for up to three standard pallets.
The labels are made of polyester with a long-term adhesive, making them ultra-durable and resistant to liquids. A unique feature of these labels is that they can be removed and relocated without tearing, offering even further flexibility for the customer.
End-of-aisle signs were also installed as an identification tool to clearly define the aisles amongst the racking bays.
Safety and compliance
Bay profiles were configured to conform with FM Global Fire Engineering transverse flue requirements. 100mm longitudinal flue space maintained between products for oversized products to conform with fire regulations (FM global requirement) and AS 4084: 2012.

“The material flow was calculated along with the operational task sequences.”

To further enhance the safety of the warehouse, Dexion Solutions also provided the following:

  1. Rack protection

The warehouse storage fitout was further enhanced with rack protection, including specially designed baseplates with heavy duty fixings, front and rear deflection guards, and upright protection. All upright protection used is in safety yellow, as this stands out most prominently against the racking creating a much safer warehouse environment.

  1. Safe working load signs

Safe working load signs were installed for each bay of racking. This ensures the storage systems does not get overloaded by warehouse operators, and meets Australian Safety Standards.

  1. Traffic management plan and line markings

A traffic management plan is crucial to creating optimal traffic flow throughout the warehouse and to minimising any risk of collisions. As part of a good traffic management plan, line markings can effectively segregate pedestrian and materials handling equipment, reducing the potential for accident or injury and ultimately improving overall workplace safety.
Conclusion
The design concentrated on the principle of balancing productivity with storage. All the work done was qualified by analysis, observation and logic, all of which are fundamental in any system design. The client’s interests were always in the equation and Dexion Solutions provided a value proposition, not just materials. This is added value that will be realised every day, year on year.
“The Dexion Solutions team really stood out from the start with their knowledge and comprehensive approach to storage systems, said Vivin Imports national logistics manager Mark Redman.
“Not willing to settle for the standard approach, James Hardy and the Dexion Solutions team analysed our operational data and business goals to completely optimise the warehouse space.
“The team was great to work with and through this experience we have gained insights that will be used to enhance our day-to-day warehouse functions. We’re confident this warehouse fitout will provide the business with a competitive advantage well into the future.”
For more information contact info@dexionsolutions.com.au or visit www.dexionsolutions.com.au. You can also view a video of this project here: https://youtu.be/_wQtCjPAybs.
 
 

Welcome to the future – from MHD magazine

Michiel Veenman

What will the warehouse of 2030 look like? 12 years may not sound like a long time, but with the pace of change being faster than ever before, companies need to start planning now, in order to keep up with ever-increasing market demands.
As people begin to have more disposable income and higher expectations for fast delivery, existing distribution networks may be stretched beyond their capacity to adapt.
E-commerce is a key driver for logistics and warehousing technology as consumers expect rapid responses to order placement. Technology is being driven to pick smaller quantities at an increasing rate.
It’s crucial for the supply chain, logistics and warehousing industries to examine current trends and see how they can best adapt to the changing needs of the market.
Trends in society
The goods that make their way through supply chains ultimately end up with consumers, and consumers not only drive demand, but set expectations for delivery. That makes it valuable to quickly review the macro changes occurring in society as we consider the warehouse of the future. Major trends include:

  1. Aging population

In the coming years, global demographics will change due to increasing life expectancy, declining fertility rates and rising levels of education. The number of people older than 65 is expected to double in the next 25 years, reaching 13 per cent of the global population. This will impact global productivity, personal savings and the labour force. It will also change consumption and spending behaviour on a global scale, impacting production, logistics, warehousing and retailing.

  1. Expanding middle class

The global middle class is projected to more than double between 2009 and 2030, rising from less than 2 billion to nearly 5 billion people. The middle class will then account for 60 per cent of the world’s population (ESPAS, 2015, p.19). Formerly poor populations, while still lagging behind developed countries, will have more purchasing power and greater access to information and communication technologies, and enjoy greater mobility (ESPAS, 2015, p.20).

  1. Urbanisation

Urban population is expected to pass 6 billion by 2045. In 2015, 54 per cent of the world’s population was living in cities; by 2050, that will reach 66 per cent. It is predicted that by 2030, the world will have 41 mega-cities with 10 million inhabitants or more. These developments will impact where goods are produced and consumed.

  1. Growth of the sharing economy

Uber, Airbnb and TaskRabbit are examples of the rapid emergence of the sharing economy. According to PwC, the five key sharing sectors — travel, car-sharing, finance, staffing and music/video streaming — have a potential to generate global revenues of $335 billion by 2025 (PwC, 2015). The concept is already being extended to the construction industry and sharing will eventually come to logistics with its heavy assets and infrastructure.

  1. Globalisation and de-globalisation

Globalisation is the increased movement of goods, capital and workers across national boundaries. Today it is common for companies to develop a product in the United States, manufacture it in China and sell it in Europe or Africa. Some experts also note the value created by the global flow of data and communication, which is often referred to as globalisation 2.0. According to McKinsey, “data flows enable the movement of goods, services, finance, and people. Virtually every type of cross-border transaction now has a digital component.”
While globalisation continues to advance, a counter-movement is also emerging as nationalism and the desire to source products locally, particularly food, grows. This de-globalisation is already impacting the decisions consumers in some markets are making about the products they purchase.

  1. Increased connectivity

The increasing connectedness of people and information is creating greater transparency, better information provision, more critical thinking and more creative and dynamic individuals. It is assumed that pressure for greater accountability and transparency at the different levels of governance — and within industry — will increase.

  1. Changing labour market

With global population growth in developing countries and population aging in developed countries, the demographic landscape is changing at the international level. The projected change in working-age population predicts an explosive workforce growth of nearly 1 billion in the developing countries, mainly driven by high fertility rates. The opposite trend is predicted for the most advanced economies, with a future decline in the working age population (Rand, 2015, p.15). In the short term, this is increasing the value placed on ergonomics and other factors that increase worker satisfaction in developed countries where the labour force is shrinking. In the longer term, China and India may gain importance, whereas Europe may lose traction in global governance and economy (Rand, 2015, p.16).

“It’s crucial for the supply chain, logistics and warehousing industries to examine current trends and see how they can best adapt to the changing needs of the market.”

Trends in logistics
The supply chain is being impacted by a number of trends resulting both from the broader changes in society and advances in technology. These include:

  1. E-commerce

One of the biggest current trends already creating significant disruption in the supply chain is the continued growth in e-commerce. In Europe, the average share of e-commerce in retail was 7 per cent in 2015, 8 per cent in 2016 and projected to reach 8.8 per cent in 2017. Globally, retail e-commerce is expected to increase to 14.6 per cent of total retail, with a market volume of more than $4 trillion (eMarketer, 2016).

E-commerce has continued to experience high growth rates, in part by shrinking the time between order and delivery. Early in its development, consumers often waited a week or more to receive their orders. While this may still be the case in some specialty categories, major e-commerce players now routinely offer two-day delivery on many orders, while next-day and even same-day delivery is increasingly common. This is creating higher expectations among consumers and, as e-commerce expands to new categories such as food, delivery times are continuing to be compressed and e-tailers are exploring multiple options to consistently achieve next day or same day delivery.

  1. Anticipatory logistics

Anticipatory logistics is a process that foresees which logistic services will be needed in the future and in which region. The area where anticipatory logistics has already developed is anticipatory shipping. This allows online retailers to predict orders before they have occurred, based on previous customer behaviour data. This information is then used to ship or move goods closer to the potential customer to enable faster delivery. In the future, we will see anticipatory logistics extend across the value chain.

  1. Customer-centric production/batch size of one

In the future, the customer will increasingly become the centre of production. The result will likely be more localised production, as customers do not want to wait for their individualised product. The trend of 3D printing will drive both the individualisation and the localisation of production. The Adidas Speed Factory in Germany, which allows customers to customise their shoes, is an early example of this trend. (Adidas Group 2015).
The impact on warehousing and logistics are significant: these customised shoes never see a warehouse; they are shipped directly from the factory to the customer, reducing the need for warehouse space. However, the logistics required to support individualised production increase.
Even if we are not yet at a point where ‘batch-size-one’ production is feasible for most products, it seems likely that as this trend develops, companies will move production closer to their customers, and focus on next-shoring and near-shoring.

  1. Omni-channel logistics

Consumers are already using multiple channels for their shopping. They start and end their buying journey at different points and expect lots of information, a certain delivery speed and personalised experiences. This is creating opportunities for retailers to merge the different channels and optimise the whole journey for a customer, rather than optimising each channel separately (DHL Trend Research, 2015).
From the retailers’ perspective, omni-channel logistics can achieve an increase in customer base and loyalty, and also improve profitability. Shoppers using multiple channels for their shopping spend 15-30 per cent more than traditional shoppers.

By 2030, the omni-channel journey of a customer will move further, and the channels might be even more diverse than today. Home delivery is currently the most preferred mode of delivery — nearly 70 per cent of all online shoppers make use of it. Yet around 50 per cent of them have already experimented with buying online and picking up in a store. In a survey by PwC in 2017, 33 per cent of shoppers were open to kerbside pickup, and 28 per cent to pick up at a third-party location. These modes are commonly referred to as ‘click and collect’ and experts assume that these models will grow even more (PwC, 2017). As noted in DHL’s 2015 Trends Report:
“Looking ahead, we expect to see the physical assets of logistics networks being virtualised and managed much more dynamically in line with customer demands. It is also anticipated that there will be more focus.”

  1. Same-day (or faster) delivery

As noted earlier, e-commerce has continued to grow by shaping and meeting consumer expectations for faster delivery. The next frontier is same-day delivery. According to DHL’s 2017 Trend Research: Sharing Economy Logistics report, “41 per cent of US consumers have used programs offering same-day, expedited, or on-demand delivery services.”
Other studies show that 20 to 25 per cent of consumers would pay significantly more to receive items on the same day. These premiums would be up to 3 Euro, 20 RMB and 3 US dollars for the respective regions. Assuming that the customers would have to pay the full costs for this fast delivery, only around 2 per cent of all customers would be willing to pay more than that. McKinsey experts predict that “same-day and instant delivery will likely reach a combined share of 15 per cent of the market by 2020” (McKinsey, 2016, p. 9).

“Industrial IoT networks will soon become an essential component of efficient warehouse management as they provide the connectivity and data on which the smart warehouse will depend.”

Emerging technologies
Emerging technologies will play a significant role in shaping the warehouse of the future and supporting faster delivery. The major technology developments on the horizon include:

  1. Drones

Leading companies like Amazon and DHL are actively exploring the potential of drones and filing patents for the use of drones in logistics. Amazon has patented an idea for an airship that can launch drones over larger cities. At the same time, many people see issues with thousands of drones flying over a city. These include traffic congestion, noise and an obstructed view of the sky. Energy-wise, flying is the most inefficient means of transportation.

In 2030, drones should play a role in the supply chain, although legislation could delay their application. The greatest potential may be in non-urban areas where drones would allow consumers to get the same high-speed, i.e., 2-hour delivery, as is possible in cities.
In addition, larger drones may play a role in connecting cities and even doing long-haul cargo flights. Inside cities, drones could play a role in ultra-high speed or short-distance deliveries. What percentage of parcel deliveries drones will carry in 2030 is still uncertain, but any future distribution plan should be designed to interact with drones.

  1. 3D Printing

3D printing will significantly change the way many products get to market. The most common 3D printing application today is small plastic parts. This is still a slow and, therefore, expensive process, but should become radically cheaper and faster as the technology matures. Plus, more advanced machines that can print complex parts of multiple materials, including metal, will emerge. There are even companies creating machines that will enable 3D printed food. By 2030, it is possible that we will see a three-tier approach to the use of 3D printing:

  1. Some consumers will have cheap, easy-to-use 3D printers that allow them to print small plastic parts based on licensed 3D models they buy online. This would apply to things like replacement parts for home appliances, a plastic case for a mobile phone or toys for children.
  2. For less tech-savvy consumers, or larger, more complicated parts, there will be ‘print shops’ in cities. Consumers could either send their digital designs to be printed or order a product online and never know it was printed on-demand for them. Ideally these print shops would be integrated into urban distribution centres.
  3. Complex industrial applications, which use multiple materials including metal, would be supported by sophisticated 3D printers within manufacturing or service centres.

 
3. Autonomous vehicles
Autonomous guided vehicles (AGV) have been used in warehouses for 30 years. In the next 10 years, the use of AGVs in warehouses will grow exponentially.
There are several drivers behind this trend. First, there is an increasing demand for flexibility in warehousing. Changes in processes, product ranges or distribution channels are all impacting warehouse requirements. Traditional, bolted-down automated conveyor systems are not able to adapt to these changes. AGV provide the required flexibility.
The other driver is the simultaneous decrease in cost and increase in performance of AGV as the core components increasingly support consumer products, such as robotic vacuum cleaners and automated lawnmowers. The economies of scale are much greater for consumer products than for warehouse technology and could drive down the costs of the underlying technologies, such as sensors and navigation systems, used by AGV. A similar impact could result from the technologies used to support self-driving automobiles.
Where early AGV still relied on fixed infrastructures, such as reflectors, floor markings or tags, the technology is available today to allow AGV to navigate with the help of on-board radar and camera systems. Intelligent software and self-learning capabilities interpret the images and instruct the vehicle where to go. This makes the systems plug-and-play and, therefore, easy to deploy and more flexible.
Replacing a large conveying system with flexible AGV could require hundreds or thousands of small AGV operating together. This would have been impossible in the past, but today, and certainly in 2030, the combination of peer-to-peer communication, faster wireless networks and cloud-based processing power enable coordinated operation. As the technology progresses, advances in sensors and electronics will allow AGV to move faster, even when interacting with people.

  1. Mobile robotics

In this context, a mobile robot is an AGV with a robot on top. This allows the robot to drive through the warehouse to where products are stored and retrieve them. For this to work effectively, these robots need robust navigation, vision systems and multi-functional grippers. A level of artificial intelligence is also required to deal with the near-infinite variety of products, shelf configurations and product placement. All of these supporting technologies are advancing rapidly.

  1. IoT connectivity

As more sensors are installed in machines and processes, the opportunity exists to connect groups of machines or entire facilities into IoT networks that provide visibility into product movement and enable capabilities such as predictive maintenance. Industrial IoT networks will soon become an essential component of efficient warehouse management as they provide the connectivity and data on which the smart warehouse will depend.

  1. Big data

Big data programs are already shaping everything from marketing to forecasting. They will also drive key advances in logistics, such as the predictive shipping model discussed earlier and will enable machine learning as the integration of real-time and historical data is what allows machines to continually improve their operation based on past actions.
This article is the first in a two-part series. The next article – to feature in the next edition of MHD magazine – will examine the impacts these trends and technologies have on distribution; what the distribution centre of 2030 will look like; scale, flexibility and the need for automation; and pose a key question of ownership: who will own and operate the distribution centres of the future?
Michiel Veenman is the head of the competence centre, warehouse and distribution solutions at Swisslog. Michiel is responsible for the development of some of Swisslog’s next-generation solutions. Michiel has over 20 years of experience in intralogistics with roles varying from consulting, design and project management to market strategy and innovation. For more information visit www.swisslog.com.
 

DHL signs deal with Chemist Warehouse

DHL Supply Chain has announced a partnership with Chemist Warehouse, which will see the company manage the supply chain for fast-moving consumer goods (FMCG) products and for front-of-store products going into their over 400 pharmacies nationally.

“There are some immediate synergies that enable this to be a beneficial partnership from day one. Many of the FMCG and pharmaceutical manufacturers already store their products in our warehouses. This means we can go from a pre-wholesale environment direct to the Chemist Warehouse pharmacies, and ultimately take a movement out of the supply chain,” Saul Resnick, CEO, DHL Supply Chain Australia & New Zealand, said.

“We are excited about our new partnership with DHL, an expert in the field of global logistics, and we look forward to working with DHL on further improvements to our supply chain to support the rapid and dynamic growth of the Chemist Warehouse business,” Damien Gance, Director and Co-founder of Chemist Warehouse said.

The partnership will immediately streamline the supply chain into Chemist Warehouse and MyChemist pharmacies, by reducing the reliance on wholesalers, Saul said.

Western Sydney Airport selects architect to develop business park

Western Sydney Airport has appointed Architectus to plan a business park on a dedicated 191-hectare parcel of airport real estate.
The business park will offer the opportunity to integrate office, retail, industrial, hotels and conference facilities within 1.5 kilometres of the airport terminal.
“There will be opportunities for businesses to be at the terminal’s doorstep at what will become Australia’s largest international gateway. When the Airport opens in 2026, it will be built for 10 million passengers a year, but we’ve got a blueprint for staged growth to become one of the world’s biggest airports in the decades to follow and our business park will be a key feature,” Graham Millett, CEO, Western Sydney Airport said.
Graham said he expects interest in the Airport’s business park to come from a range of different industries.
“Consultants, tech companies, defence and aerospace, airlines and pharmaceutical are just some of the industries that would enjoy considerable advantage being located at the Airport’s front door,” he said.
Master planning work on the Airport business park is expected to be complete in mid-2019. Work to build Western Sydney Airport began in September, with the business park set to open before Airport operations begin in 2026.

Frasers Property secures prime industrial land in Melbourne

Frasers Property Australia has settled on a 63.4 hectare prime industrial land parcel valued at approximately $40 million. It is located in Melbourne’s northern suburb of Epping.

Situated at 410 Cooper Street, the property stretches through to O’Herns Rd in the north and is abutting the Hume Freeway. It will be located between two full diamond interchanges, allowing unparalleled access to Melbourne’s northern suburbs.
“The Epping acquisition is a significant strategic purchase for the business and will further strengthen our position as one of the leading providers of prime industrial product in Melbourne. It also compliments Frasers Property’s other well-located industrial land holdings in Melbourne’s south east and west.,” Anthony Maugeri, General Manager Southern Region of Frasers Property Australia’s Commercial and Industrial division said.
The new site will accommodate up to 250,000 sqm of built form, enabling Frasers Property to service existing and new customers.
Neighbouring properties to Frasers Property’s Epping land parcel include Melbourne’s Wholesale Fruit and Vegetable Market and large land occupiers such as Mainfreight, Mission Foods, Chemist Warehouse, Visy, Coles, Bluestar Logistics, Linfox and Toll.

Toyota Australia opens new warehouse in Sydney

After more than 11-months of construction, Toyota Australia has officially opened its largest and newest parts warehouse in Western Sydney.
The Toyota Parts Centre NSW (TPC) is located on a 6.4 hectare site close to a network of motorways and major arterial roads at Kemps Creek, New South Wales.
The TPC will house more than 128,000 parts and will ship approximately 27,000 parts daily.
It features more than 50,000m2 of total work area and class-leading safety and technology, including low rack storage systems, which will provide a safer and more efficient workplace as employees will no longer need to work at heights to reach parts.
It will also include full separation of man and machine to build in safety, as well as the first use of a fleet of autonomous intelligent vehicles (AIV) to reduce manual carrying of parts.
The TPC was officially opened at a special event attended by the Honourable Shayne Mallard, MLC; Councillor Ross Fowler OAM, Mayor of Penrith as well as senior executives from Toyota Motor Corporation in Japan and Toyota Australia.
Speaking at the event, Toyota Australia President and CEO, Matthew Callachor said the project had a goal to be the best global Toyota warehouse in safety, efficiency and sustainability.
“Our commitment, as a mobility company, is to address the environmental challenges that we face, and to contribute to an ever-better society,” Mr Callachor said.
“Embracing green building solutions, cutting CO2 emissions and utilising alternative fuel sources go hand-in-hand with our production plans for new vehicles.
“We are already the leader in fuel-saving hybrid technology and we plan to introduce at least five new hybrid vehicles to our range by mid-2020, including the next generation RAV4 next year,” he said.
As part of Toyota Australia’s plans to reduce the TPC site to zero emissions by 2020, 2,200 solar panels were installed on the warehouse roof earlier this year.
So far, they’ve generated 556,000 kWh or enough energy to power 125 four-person households.
The power generated so far – before the building even became operational – has prevented more than 477 tonnes of greenhouse gases from entering the atmosphere.
Other environmental features built into the site include rainwater tanks for irrigation and toilets, as well as energy efficient LED sensor lights.
The building is cleverly positioned at a specific angle to ensure maximum natural cooling, effectively reducing air-conditioning costs.
For the first time outside of Japan, Toyota Australia will be trialling the use of hydrogen powered Toyota Material Handling fuel cell electric forklifts, with a long-term goal of being able to generate hydrogen on site in the future.
Read more:

Toyota opens new parts warehouse in Western Sydney

After more than 11-months of construction, Toyota Australia has officially opened its largest and newest parts warehouse in Western Sydney.
The Toyota Parts Centre NSW (TPC) is located on a 6.4 hectare site close to a network of motorways and major arterial roads at Kemps Creek, New South Wales.
The TPC will house more than 128,000 parts and will ship approximately 27,000 parts daily.
It features more than 50,000m2 of total work area and class-leading safety and technology, including low-rack storage systems, which will provide a safer and more efficient workplace as employees will no longer need to work at heights to reach parts.
It will also include full separation of man and machine to build in safety, as well as the first use of a fleet of autonomous intelligent vehicles (AIV) to reduce manual carrying of parts.
Toyota Australia President and CEO Matthew Callachor said the project had a goal to be the best global Toyota warehouse in safety, efficiency and sustainability.
“Our commitment, as a mobility company, is to address the environmental challenges that we face, and to contribute to an ever-better society,” Mr Callachor said.
“Embracing green building solutions, cutting CO2 emissions and utilising alternative fuel sources go hand-in-hand with our production plans for new vehicles.
“We are already the leader in fuel-saving hybrid technology and we plan to introduce at least five new hybrid vehicles to our range by mid-2020, including the next generation RAV4 next year,” he said.

As part of Toyota Australia’s plans to reduce the TPC site to zero emissions by 2020, 2,200 solar panels were installed on the warehouse roof earlier this year.
So far, they’ve generated 556,000 kWh or enough energy to power 125 four-person households.
The power generated so far – before the building even became operational – has prevented more than 477 tonnes of greenhouse gases from entering the atmosphere.
Other environmental features built into the site include rainwater tanks for irrigation and toilets, as well as energy efficient LED sensor lights.
The building is cleverly positioned at a specific angle to ensure maximum natural cooling, effectively reducing air-conditioning costs.
For the first time outside of Japan, Toyota Australia will be trialling the use of hydrogen powered Toyota Material Handling fuel cell electric forklifts, with a long-term goal of being able to generate hydrogen on site in the future.
 

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