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Keeping it cool Whatever the temperature, UPS can store it

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Taking Stock

Human health and the supply chain

uring a previous professional incarnation I worked as an editor and writer at a large research and teaching hospital in Toronto. One of the most satisfying and reassuring aspects of the job was the opportunity, every so often, to glimpse how the treatments patients received helped transform their lives from illness to health. In more than a few instances, those treatments played a role in saving a patient’s life. In no small part, pharmaceuticals and medical devices played a role in how those patients were cared for at the hospital. Although I suspect patients rarely thought about it, nurses, doctors and other medical staff knew the importance of getting products on time and in the best condition possible. Those who work in the supply chain also understand the importance of getting medical products (or anything, for that matter) where they’re needed, on time. Our cover story on UPS’s Burlington campus (see page 14) describes the facility’s distribution of pharmaceuticals, vaccines and non-drug medical supplies—not to mention commercial products. Of note are the secu-

rity measures in place at the campus. The DC is fully fenced in, with a security guard on site at all hours. Swipe access is required for each area of the facility and employees can access only those areas they need to for their work. Vaults that store high-value or high-risk products like narcotics have concrete floors three feet thick. They are equipped with tremor sensors in case someone is foolish enough to try breeching the vault by, say, driving a vehicle into it. Health Canada classifies the vaults as Level 10, the highest level possible for such a facility. The auditing process at the facility is also thorough. Health Canada, clients and UPS itself are involved in ensuring the campus is operating as securely and safely as possible. Reg Sheen, vice-president of operations, logistics services, UPS Supply Chain Solutions, notes the facility is likely “one of the most audited organizations anywhere.” Security of goods within the supply chain is important, and knowing where goods are and when they’ll arrive is crucial for everyone involved. When human health might be affected, security becomes an even more pressing priority. It’s not front-line healthcare, but it helps ensure that care remains as effective as possible.

November/December 2011 | Volume 56 | Number 6

Contents Departments

Columns

Features

3 5 6 8 11 12 12

26 Legal Link Time to sue?

14 UPS’s Burlington DC What it takes to store pharmaceuticals and other products at the right temperature.

Taking Stock Supply Chain Scan Done Deals Global Focus Benchmarks Movers + Shakers Professional Development Directory

28 Materials Handling Keeping your DC secure. 29 Learning Curve What affected the job market in 2011? 30 Firefighter Keeping the Olympic trains rolling.

MM&D | November/December 2011

18 Mobile powered workstations MPWs help add efficiency to DCs and other facilities. 21 Adapting with sustainability A guide to green for SMEs. 23 Modex 2012 A peek at Atlanta’s new trade show.

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Job Name: iGPS Greener T- 7” x 10” Publication: TBD

Night flights banned Frankfurt ban disrupts cargo flows, page 8

Supply Chain Scan

Inside | M + S, page 12 www.mmdonline.com Publisher/Editor-in-Chief: Emily Atkins (416) 510-5130 EAtkins@bizinfogroup.ca EDITOR: Michael Power (416) 442-5600 x3259 MPower@bizinfogroup.ca MANAGING EDITOR: Deanna Rosolen (416) 442-5600 x3234 DRosolen@bizinfogroup.ca ART DIRECTOR: Stewart Thomas (416) 442-5600 x3212 SThomas@bizinfogroup.ca SALES MANAGER: Dorothy Jakovina (416) 510-6899 DJakovina@bizinfogroup.ca SENIOR ACCOUNT MANAGER: Catherine Martineau (647) 988-5559 CMartineau@bizinfogroup.ca production MANAGER: Cathy Li (416) 442-5600-5150 CLi@bizinfogroup.ca circulation mANAGER: Barbara Adelt (416) 442-5600 x3546 BAdelt@bizinfogroup.ca

BIG Magazines LP Vice-President of Canadian Publishing • Alex Papanou President of Business Information Group • Bruce Creighton Executive Publisher • Tim Dimopoulos Editorial Director • Lisa Wichmann How to reach us: MM&D (Materials Management & Distribution), established in 1956, is published 6 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. 80 Valleybrook Drive, North York, ON, M3B 2S9; Tel: (416) 442-5600; Fax (416) 510-5140. Editorial and Advertising Offices: 80 Valleybrook Drive, North York, ON, M3B 2S9; Tel: (416) 442-5600; Fax (416) 510-5140. SUBSCRIBER SERVICES: To subscribe, renew your subscription or to change your address or information, contact us at 416-442-5600 or 1-800-387-0273 ext. 3258. SUBSCRIPTION PRICE PER YEAR: Canada $62.00 per year, Outside Canada $120.00 US per year. Single copy price: Canada $11.00, Outside Canada $24.00 CDN MM&D is published 6 times per year except for occasional combined, expanded or premium issues, which count as two subscription issues. ©Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher. DISCLAIMER: This publication is for informational purposes only. The content and “expert” advice presented are not intended as a substitute for informed professional engineering advice. You should not act on information contained in this publication without seeking specific advice from qualified engineering professionals. MM&D accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue. MM&D receives unsolicited materials, (including letters to the editor, press releases, promotional items and images) from time to time. MM&D, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. Privacy Notice: From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374 Fax: 416-442-2191 Email: privacyofficer@businessinformationgroup.ca Mail to: Privacy Office, 80 Valleybrook Drive, North York, ON M3B 2S9 Printed in Canada Publications Mail Agreement #40069240, ISSN: 0025-5343. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund (CPF) for our publishing activities. MM&D is indexed in the Canadian Magazine Index by Micromedia Limited. Back copies are available in microform from Macromedia Ltd., 158 Pearl St., Toronto, ON M5H 1L3

Highway H20 expands shores By Michael Power

he Highway H20 conference has pushed beyond its water-based attendees to include participants from transportation modes like rail and trucking, according to Bruce Hodgson, director of marketing development for the St Lawrence Seaway Management Corporation. Hodgson made the statements while opening of the two-day conference, held in Toronto November 8-9. Hodgson led the conference with highlights for the water system in 2011. Cargo and new business was ahead of last year at over 24 million tonnes, he said. Canadian grain shipments were up—a trend he noted will likely continue—while the movement of salt and petroleum products had also increased. Transition Aron Gampel, vice-president and deputy chief economist at Scotiabank, painted a shaky picture of the global economic scene. “These aren’t the easiest of times,” Gampel told the roughly 100 conference attendees. With the big economies “under water,” the world was in a transitional period with developing countries driving economic growth and developed economies lagging, he said. The issue involved sovereign debt in nations like Greece. “If those problems weren’t enough, we just don’t have enough growth in the world,” he said. Although Scotiabank had downgraded its growth forecast for 2012, Gampel didn’t predict a double-dip recession. Erin Fletcher, public affairs and communications manager for the Grain Farmers of Ontario, stressed how the Seaway helped the grain industry. The Seaway represents an important piece of the industry’s logistics network, Fletcher said, allowing grain to be shipped internationally. In 2010, Ontario exported 500,000 tonnes of corn, two million tonnes of soybeans and 300,000 tonnes of wheat through the Seaway. It also meant less paperwork while crossing the US border, she said, so goods arrived fresh south of the border. “We highly value the Seaway and the relationships we have with lake terminals,” Fletcher said. Sustaining the hinterland Michael Van Toledo, commercial manager, containers, at the Port of Amsterdam, presented the port’s plans to service the Netherlands’ hinterlands in a sustainable way. Cargo flows from Amsterdam and Rotterdam will grow, he said. One percent of economic growth will equal 3.5 percent container growth. “So we expect growth of about 50 percent within the next 10 years,” Van Toledo told the audience. The consequences of growth are congested roads near ports, delivery delays and health risks. In the coming years, the port will need more capacity and at the same time ways to reduce cost and C02 emissions. One strategy was to connect transportation systems, Van Toledo said. Port authorities in Amsterdam were also co-operating with other terminals on sustainability. “Port Base”, for example, is a system in Rotterdam and Amsterdam that exchange information so cargo flows efficiently. Van Toledo stressed the importance of identifying cargo flows between the Great Lakes and Europe.

MM&D | November/December 2011

Supply Chain Scan Done Deals The Department of Homeland Security (DHS) Science and Technology Directorate (S&T) has awarded a contract to BSI Group’s Supply Chain Solutions business unit to create a protocol to help screen cargo at US ports. BSI will work with DHS S&T-sponsored engineers to integrate data from new detection systems, along with BSI’s proprietary intelligence on cargo disruption and antiWestern terrorism, to better identify high-risk containers. Clarks Companies North America has selected Knapp Logistics Automation Inc to provide all material handling systems for Clarks’s new logistics centre in Hanover, Pennsylvania. The 451,000-sqf facility is slated to be ready by the end of 2012 and will approach 80ft high. Knapp will install its OSR Shuttle system, used for goods-to-person picking, buffering, storage and sequencing. Horizon Beverage has selected the HighJump warehouse management system (WMS) to manage its new 500,000-sqf DC in Norton, Massachusetts. Horizon Beverage distributes wine, spirits and beer in the New England states. The company expects the WMS to boost accuracy and efficiency of Horizon’s operations while improving service to customers. The HighJump WMS will also integrate with a new material handling system. RMT Robotics, a Cimcorp Oy Company and the manufacturer and integrator of ADAM intelligent mobile robots, has made its first sale through its new German sales partner, eepos Nord. The German company

recently sold a fleet of seven ADAM Autonomous Mobile Robots to InSystems Automation GmbH, a German automation systems integrator. The end user of the ADAM system is a global manufacturer of personal care products and the equipment will be installed at its Berlin manufacturing facility. CEVA Logistics is renewing its contract with Tech Data Corporation, a distributor of technology products. CEVA has expanded the relationship to become the wholesale technology distributor’s primary less-than-truckload (LTL) carrier in the US. Through the agreement, CEVA will provide LTL services for all of Tech Data’s US retail distribution of electronic devices. CEVA will also offer onsite operational support at Tech Data’s largest logistics centres. CN and Agri-Food Central Ltd have an agreement to improve the service delivery performance and consistency of the supply chain for specialty grains moving from Western Canada to Mexico via rail and to other markets including those in Latin America through Atlantic, Pacific and Gulf coast ports served by CN. Agri-Food Central loads bags of lentils, canary seed, flax and peas into 53-foot containers at CN’s Winnipeg Intermodal Terminal. CN hauls the containers by rail to Montreal, Vancouver and New Orleans for export, as well as to Mexico in cooperation with Kansas City Southern Railway (KCS). Containers are interchanged with KCS at Jackson, Mississippi, and return from Mexico loaded with consumer goods.

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Supply Chain Scan

Night flight ban causes stir By MM&D Staff

ban on cargo flights at night could have serious consequences for the international logistics industry, says Lufthansa Cargo chairman Karl Ulrich Garnadt. The October 30 ruling from a German court banning night flights from Frankfurt was issued days before the introduction of winter flight schedules. Lufthansa Cargo has put together an emergency timetable, said Garnadt. “We’ve managed at great expense to keep our customer services comparatively intact,” he said. “The night-flight ban has forced us to lay on a timetable, which in part is economically and ecologically absurd. We will be operating in future with unnecessary take-offs and landings, which will lead to more noise, higher fuel consumption and more costs, running into millions.” A number of Lufthansa’s flights have been relocated to daytime slots or early and late hours of

the day, while individual connections—for example to China—have been cancelled. Other flights bound for China would have to stop at Cologne/Bonn Airport after an evening departure from Frankfurt. This would then allow the flights to continue towards Asia at night, as originally planned. Beginning in January, an MD-11 freighter will be transferred from Frankfurt to Cologne/Bonn Airport. The freighter will operate overnight flights to North America. Roughly 40 percent of German exports are transported by air, Garnadt said, and a blanket ban on the nighttime flights could sever Germany from global trade lanes. “Closing the world’s seventh biggest airport for six hours each night and thereby decoupling it from the international goods flows constitutes a severe blow to the air traffic industry,” he said. “No other transport mode is subject to such operational restrictions.” The Miami, Florida-based International Air Cargo Association also weighed in on the ban, saying it would have wide-ranging consequences for the industry. “It means a negative impact not only on airlines, but shippers and all the businesses and consumers linked to the shipments,” said the organization’s chairman, Michael Steen. “It also results in flights being re-routed over longer distances or flown at different times, which can lead to greater congestion and emissions during daytime hours.” Steen noted night flights were often the best or only way for cargo to fly. “All-cargo operations are often forced to fly nighttime operations because of slot restrictions that have been steadily increased over the years,” he said. “Particularly as passenger flights are usually given preference ahead of freighter services.” The federal administrative court in Leipzig (Germany’s supreme court of appeal) is due to rule soon on whether to allow the night flights in the first quarter of 2012.

Global Focus

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Halifax hosts Estonia A delegation from Estonia visited Nova Scotia recently to talk about Halifax as a primary gateway option to North America. Estonia provides access to a consumer market of approximately 300 million, one of which is the Russian market, through the Port of Tallinn and Estonian Railways. Similarly, Halifax provides cargo owners and 3PLs direct access to Ontario, Chicago and the American mid-west market. Transportation and logistics organizations from Estonia have been investigating the North American freight market since 2009. This delegation is the final step in formalizing a strategic partnership. LyondellBasell joins the cloud LyondellBasell, a plastics, chemical and refining company, has signed a contract with GT Nexus to extend the capabilities of its GT Nexus Cloud Supply Chain Platform for logistics visibility. The service will automate the closedloop process for tendering and rate management.

A subsidiary of Automation Associates Inc 8

MM&D | November/December 2011

Supply Chain Scan

Study looks at RFID use in apparel supply chain The American Apparel & Footwear Association (AAFA) and not-for-profit, supply chain standards organization GS1 US are sponsoring research at the University of Arkansas on the use of radio frequency identification (RFID) in the apparel supply chain. The researchers will look at the benefits to apparel suppliers of adopting RFID based on electronic product code (EPC) standards. They will quantify effects of EPC-based tracking on improving the suppliers’ inventory accuracy, along with the effects on their productivity, costs and revenue. “AAFA’s mission is to ensure that our members are educated on the key issues that will enhance their competiveness,” said AAFA special advisor, Mary Howell. “This study will help to raise awareness about the key touch points in the supply chain where EPC-enabled RFID can increase efficiencies and reduce costs, which in turn will benefit retailers and suppliers so they can remain competitive in the global market.” The research project—called Supplier Return on Investment Use Case Data Collection and Analysis—is the second phase in a three-phase study known as the many-to-many study. It will focus on three supplier use cases identified during phase one of this research, published in January 2011. That initial phase identified 60 use cases that could benefit from RFID, said David Cromhout, RFID Research Center lab director at the University of Arkansas. “In phase

two, we’ll assess the value of something that has become the primary target for most suppliers; namely, what RFID can do about inventory accuracy, and more specifically, how RFID can assure high accuracy at lower cost,” Cromhout said. Along with funding the research studies, AAFA and GS1 US support the VICS Item Level RFID Initiative (VILRI). The initiative, formed in 2010, is an inter-industry group that explores the benefits of EPC-enabled RFID technology for the retail industry. Research results for phase two of the study will be published in January 2012.

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Supply Chain Scan

Ontario blitz targets racking, storage Ontario is focusing on workplace hazards related to racking and storage during an enforcement blitz at industrial workplaces across the province. Ministry of Labour inspectors are checking for hazards involving the installation, use, maintenance and repair or racking and storage systems. This includes ensuring material is placed safely and stored on racks. Inspectors will check that: • Racking is selected and installed in a hazard-free way; • Racking is properly maintained and repaired; • Material is safely loaded onto racks by lift trucks; and • Aisles are obstruction-free, lighting is adequate and pallets are in good condition. Between 2006 and 2010, three workers died and 45 others were seriously injured in racking and storage incidents. The increased enforcement is part of the province’s Safe At Work Ontario strategy, launched in 2008.

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Canada Post building Vancouver processing facility Canada Post plans to build a new facility at the Vancouver International Airport in Richmond, BC. The corporation has secured a long-term land lease with the airport authority, and the building will be on a 42-acre parcel of land at the city’s international airport. The 700,000-square-foot processing facility is expected to be fully running in 2014. Canada Post said it’s investing $200 million in the multi-purpose facility and related equipment. The plant will process letters, parcels, packets and advertising mail. The new facility will be built to Leadership in Energy and Environmental Design (LEED) standards.

MM&D | November/December 2011

Supply Chain Scan Benchmarks Nissan Forklift Corp has announced the winners of its Service Excellence Awards for 2011. Nissan dealerships that participate in the program meet standards in financial performance, employee competence, operational excellence and customer satisfaction. The JH Ryder Machinery Ltd dealership in Mississauga, Ontario was the lone Canadian dealership wining a Silver award. The standards in each area result in Nissan dealerships that provide efficient work order processing and billing, well-trained and certified technicians as well as overall quality products for their customers.

has won the award. Penske handles outbound distribution for Whirlpool products in North America. Penske also performs warehousing, sequencing and inbound and outbound transportation management services across Whirlpool product lines in Canada, US, Mexico and Brazil.

INNOVATIVE

The Deloitte Technology Fast 50 has ranked Nulogx as one of the fastestgrowing technology companies in Canada. The ranking is based on the percentage of revenue growth over five years. To qualify for the Fast 50 ranking, companies must have been in business for at least five years, have revenues of at least $5 million, be headquartered in Canada, own proprietary technology and conduct research and development activities in Canada. As well, Plug Power Inc has been ranked on Deloitte’s Technology Fast 500, ranking of the 500 fastest growing technology companies in telecommunications, life sciences and clean technology companies in North America. Plug Power credits its GenDrive hydrogen fuel cell product with the company’s 149-percent revenue growth. To be eligible for recognition, companies must own proprietary intellectual property or technology in products that contribute to a majority of the company’s operating revenues. Whirlpool Corporation has recognized Penske Logistics with the 2010 Supplier of the Year Award for Warehousing and 3PL services in North America. This is the second straight year Penske

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MM&D | November/December 2011

Supply Chain Scan Movers + Shakers Mike Hamilton is the new vice-president of finance at Steel King Industries Inc, based in Stevens Point, Wisconsin. Hamilton has been the companyâ&#x20AC;&#x2122;s director of Finance since June 2010, managing and directing financial and human resource activities.

Hartland, New Brunswick-based Day & Ross Transportation Group has appointed Douglas Harrison president, Day & Ross General Freight. Harrison was previously president of Calyx Transportation Group and prior to that he was president of Acklands-Grainger, an industrial supply company.

Mike Hamilton

Douglas Harrison

Trade Tech, a supplier of cloud-based solutions for the logistics industry, has hired Bill Fehr as director of sales, North America and Patrick Clancy as programming manager. Fehr will implement cloudbased computing applications linking sales, operations and accounting. He has worked with Cisco Systems, Agistix Shipping, KPMG, Ariba and others. Clancy will establish user workflow and information design for web applications. His prior experience includes with Credit Suisse, Cisco, Cendant Mobility, Cartus, Sun and AvantGo.

Elizabeth Nohe has joined Chicago-based Morton Salt Inc as vice-president of supply chain. Nohe will lead the companyâ&#x20AC;&#x2122;s supply chain function across operations in Canada, the US and the Bahamas. Most recently Nohe, who was at McCormick & Company prior to Morton Salt, held a newly created position there that was focused on global procurement processes.

Elizabeth Nohe

Professional Development Directory

CITT11E-PA02-profitability - OUT1 1

3/9/2011 3:42:41 PM

Professional Development Directory Advertorial

It pays to know what you’re doing – and to have the proof on your resume Are you responsible for the movement, distribution and storage of your company’s products? If you are, a professional designation from CITT can help you develop and demonstrate your expertise in warehousing along with the profitable management of materials within larger, integrated logistics and supply chain systems. There’s a lot at stake CITT knows you’re handling one of your company’s biggest assets. And that you’re also responsible for the cost and time-efficient management of people, resources and ancillary costs associated with managing this inventory. We understand the decisions you make impact your customers and their continuing loyalty. It’s a lot to manage, and a lot to master. Fortunately, management believes in professional designations Over 80% of employers will pay for the education you need to obtain a designation.1 Human resource experts also report that companies are investing in specialized development of their people, even during tough economic times.2 And CITT can help you get smarter, faster. A professional designation from CITT is the most respected and widely-held supply chain and logistics credential, outnumbering all others nearly 3:13 1 2010 Salary Survey Results, MM&D Magazine, September-October 2010. 2 Clayson, Tracy. Learning Curve: What are you worth? MM&D Magazine, September-October 2011.

Prove you’re a “Logistics Expert”—Add CITT to your professional credentials. And more value to your supply chain.

CITT is also industry’s most attainable logistics designation: • Only five expert-level, specialized courses are needed for professionals with a college/university degree • World-class business education is available for professionals who need it • It’s accessible, with all required courses available online • It’s affordable and has the best ROI in the business The five specialized logistics courses from CITT provide the greatest depth and breadth of understanding of the silo-free integrated logistics business of any designation program in the industry. Materials Management pros will especially appreciate Logistics Processes, Integrated Logistics and Logistics Decision Modeling to strengthen their operational competencies for more a more profitable supply chain and logistics system. And business courses such as Organizational Behaviour can be invaluable in sharpening managers’ people skills and their ability to motivate. Visit www.citt.ca for more information and to download your FREE guide to the logistics industry’s most respected source of professional training and most commonly held designation. And get you on your way to higher pay, enhanced professional credibility and other professional enrichments. 3 12th Annual Survey of the Logistics Professional, Canadian Transportation & Logistics, January 2011.

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Keeping it cool Publication mail agreement #40069240.

Whatever the temperature, UPS can store it at its Burlington campus

Plus: Benefits of going wireless How SMEs can reduce, reuse and get ahead Modex 2012 sneak peek

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Keeping it cool

A peek inside UPSâ&#x20AC;&#x2122;s new pharma DC MM&D recently toured UPSâ&#x20AC;&#x2122;s campus in Burlington, Ontario. The three-building complex houses products stored at temperatures ranging from -25C to room temperature. Michael Power dons his earmuffs and goes inside.

MM&D | November/December 2011

here’s a clear and vitally important message all UPS employees receive when dealing with pharmaceutical and medical products handled at the company’s distribution centre in Burlington, Ontario. In fact, the message hangs from signs inside the DC for all to see: It’s not a package, it’s a patient. The message is so clearly visible because compromising some of those products within the facility could mean compromising the health of the end users—patients who rely on medical products such as vaccines and other pharmaceuticals for their treatment and care. Reg Sheen, vice-president of operations at UPS Supply Chain Solutions, isn’t about to let that happen. “Th is is the mantra that we as an organization— right from executive levels to the hourly folks on the floor—this is what we live and die by as far as our healthcare facility is concerned,” Sheen says. “We don’t treat every package as a package— we treat it as a patient. It’s actually going to somebody to help them with the medical issue they’re dealing with. That’s how we treat the handling of those products.” The UPS Burlington facility is located just north of the Queen Elizabeth Way and within striking distance of international airports in Buffalo, Hamilton and Toronto. The campus is close to the major highway arteries in the Southern Ontario corridor. And with 44 healthcare clients across Canada, Sheen points out the decision to locate the facility in the heart of the Greater Toronto Area was a strategic one. About six years ago, Sheen says UPS made the decision to invest in three of the company’s key strategic markets, one in Louisville, Kentucky, another in the Netherlands and a third in Burlington. The company invested $77 million in the Ontario location, which includes two buildings (called Building One and Building Three) owned by UPS. The company leased another building—known as Building Four—about four years ago. The original design of the campus included a Building Three on an adjacent piece of land that remains empty. Plans to build a 300,000-sqft facility on that land were shelved temporarily when the opportunity to lease Building Four came up, Sheen explains.

are consolidated. Although it changes throughout the year, the operation can receive several hundred orders each day. “It’s our largest building and supports a number of work streams,” says Maria Thomas, director of operations, distribution, at UPS Supply Chain Solutions. “But it also supports medical devices, which would be any components that aren’t pharmaceuticals; anything that doesn’t need a temperaturecontrolled environment (like syringes or diabetic socks).” An added draw of not storing and shipping these products through Building Two, which is dedicated to pharmaceutical products, is that it costs less, says Sheen. Facilities focused on pharmaceuticals and other temperature-controlled products simply cost more to use. “We utilize a better solution by using Building One for those medical device accounts,” he says. One of the first things a visitor to Building One notices is the height of the ceiling that, with a clearance of 36.5 feet, allows for pallets to be stacked six high. That allows clients to take advantage of space in a more efficient manner, says Sheen. “It’s a 20-percent increase in the amount of storage space just by having that capability,” he notes.

Several products that go through Building One require specialized ticketing such as a specific label size or a price attached to the side of a box—a service UPS provides. UPS also handles the e-commerce for one of its clients (a home and garden centre) through the Burlington campus. If a customer of that client orders a product online from the client’s website, that product is shipped directly from the Burlington campus. “If you go onto that website and you want to order a garden shed, that garden shed is coming out of our facility,” says Sheen. “No matter where you are in Canada, if you go onto that website, we’ll fulfi ll that order and get it to your home.” A pool of part-time staff is kept available to deal with the peaks and valleys the facility experiences throughout the year. Staff is also cross-trained and employees rotate from one area of the facility to another, depending on where Height matters they’re needed most. Staff even shifts from the Burlington campus to other Building One focuses mainly on consumer products, nearby UPS facilities, such as one in Oakville. Sheen says. But the facility also has a small high“We’re multi-client and multi-facility,” says Thomas. “We’re able to deploy tech returns operation, as well as dealing with our labour well. There’s a lot of seasonal variability and we’re able to move medical devices that don’t require specialized tem- our resources around very effectively. Everyone is close by and trained in perature controls. This part of the facility boasts UPS policy. If one account doesn’t need so much labour, staff can be moved more than 100 dock doors and is where shipments someplace else.”

MM&D | November/December 2011

Different products, different temperatures Building Two consists of 200,000sqft of space devoted to temperature-sensitive healthcare products such as vaccines. The building hosts areas held at different temperatures—from ambient, or room temperature (15 to 25C) to four coolers for products such as vaccines. Each cooler is maintained at as low as 2C and as high as 8C. The temperatures within the building are controlled by an automated system to ensure each section stays within its designated range. The products are timestamped to show how long they’ve been exposed to ambient temperatures. The building also has two freezer chambers that are maintained at -20C. “Some products need that level of coldness, like certain blood products and certain medical supplies,” Thomas notes. The building supports 15 UPS clients and its 24-hour-a-day operation runs each week from Sunday night until Friday. The building houses a vault (used to store narcotics and other products with street value or some risk attached) classified by Health Canada as Level 10—the highest security level for such a storage facility. A cage surrounds the vault and the client that uses the facility is licensed by Health Canada to store specific drugs there. Visitors and employees first walk through the cage’s gate before going through the vault’s doors. To meet the Level 10 security requirements, Health Canada says a vault must use a minimum level of electrical detection, an alarm system separate from the rest of the facility and doors, walls and a floor with specific thickness. How thick? In UPS’s vaults, the concrete floors are three feet thick. The vault’s frame (made entirely of concrete) is built separately from both the rest of the building and the cage that surrounds it. It employs a tremor sensor to deal with situations such as a vehicle driven against the vault in an attempt to steal its contents. Other controls include a background check for employees working within the vault, and product codes, lot numbers and expiry dates are checked before a product leaves the vault towards its destination. Each of the building’s three vaults is dedicated to a single customer.

perature monitor on the shipment; it could be on the pallet or case itself for inbound shipments. Going out, it’s as close as possible to the product—the customer gives us their specs on how they want us to adhere.”

Lock and key Given the number of high-value, high-risk products at the facility, UPS has heavy security in place, says Thomas, and the yards surrounding the campus are fully fenced. “We have a security guard on site 24/7, allowing trailers into the yard; and we have strategically placed, closed-circuit cameras,” she says. Swipe access is needed for any part of the facility, whether it’s an office, warehouse or cooler, notes Thomas. That’s because so many of the products have the potential to be harmful, or are drugs with a street value. Some of the pharmaceuticals can be lifesaving and would take months to reproduce if they disappeared. “You can only access the area Vial in you need to access; if you need it for your work While preparing three small vials for shipment, an employee checks the product you’ll have access on your card,” she says. against what’s on a piece of paper to ensure the lot number, expiry date and The campus also has an automated system that quantity are correct. While packing the vials, the employee puts two ice bricks monitors temperatures in the various areas of the in the bottom of the container before placing a cardboard divider on top. He campus, Thomas notes. If an area becomes warmer then puts in a polar pack, then places the three vials in the box in a separate or cooler than it’s supposed to be, visual alarms bag. He places a temperature-monitoring device inside before putting another such as red lights flash outside the coolers. There divider on top. Two more ice bricks go on top, then bubble wrap. The process are also audio alarms, and employees are paged will keep the product between 2-8C for up to 48 hours. so they can respond to the temperature change. The worker then time-stamps the box and places “do not freeze” stickers Each building employs a generator so temperatures on its sides. A customer copy of the bill of lading is attached to the box, and remain where they should be in the event of a the employee marks down the box’s order number. Each client has an individual power failure. packing procedure, and staff is trained regularly in how to pack boxes. As well, the campus uses several auditing sysDepending on the product, even pallets provide temperature monitoring tems, adds Sheen. Health Canada audits the facilto ensure a product stays within a certain range. Some of the pallets can keep ity, as do clients. UPS also has its own internal a specific temperature for up to 48 hours (although the time varies among quality assurance standards and hires external clients and products). auditors. “There’s a constant flow of audits,” he “Each customer has their own requirements on how to control the tempera- says. “We’re probably one of the most audited ture along the way,” says Thomas. “When they ship them out there’s a tem- organizations anywhere.” MM&D

MM&D | November/December 2011

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Going wireless? Why not go all the way? T

The benefits of mobile powered workstations By Christine Wheeler hanks to wireless technology, mobile powered workstations (MPWs) are opening up new frontiers of efficiency and productivity. These workstations, with integrated power supplies, can maneuver computers, printers, scales and barcode scanners to wherever they’re needed. For some facilities, multiple MPWs can bring a “system solution”—a new way of doing business. Capitalizing on the benefits of auto-ID technologies, they integrate the facility’s software with devices on the workstations to establish mobile on-demand label printing stations, mobile shipping/receiving stations and so on. Here are three basic ways these workstations or “mobile desks” can help you take full advantage of wireless technology to improve your business. Time and labour savings By significantly reducing foot travel and paperwork, an MPW can have a favorable impact on your bottom line. In many enterprises, countless hours are wasted as employees walk back and forth, chatting with co-workers en route, between sites where work is taking place (such as loading docks, storage racks, assembly lines and inspection/testing areas) and a deskbound computer and printer where they log information into a database, print labels/orders, etc. Often, these employees are merely keying in data they have previously written on paper at the work site. Or, they rely on memory, which leads to mistakes. In contrast, an employee operating an MPW has continual, paperless and real-time access to information via warehouse management systems (WMS), enterprise resource planning (ERP), or automated data collection (ADC) software from anywhere in the facility, since the workstation’s computer is always at hand. Because an MPW can carry a computer and relatively heavy peripherals such as a high-volume label printer—and can supply them all with adequate on-board power—it’s more useful than a tiny portable/handheld thermal printer or scanner. This “on-demand” high-volume label printing/PC sta-

MM&D | November/December 2011

tion (when compared to a portable printer) would enable the use of thermal transfer labels, large labels, a full computer screen to toggle between different software programs and more. You therefore have a fully functioning packaging/labeling/processing/ inspection station that can be moved to wherever it’s needed. Although large facilities might need more than one, a single MPW can often do the job of two or three stationary desks, which means fewer computers and peripherals will be needed. For example, a workstation can be used all morning at a receiving dock and then wheeled to the shipping department for the afternoon. The opportunities to save time and labour through “on-the-spot” data entry, “on-the-fly” scanning, “on-demand” label printing and other tasks are numerous. An MPW can be an asset in several applications, including: • Warehousing and distribution An MPW can increase the number of packages processed per day by facilitating order picking, put-away, packaging, labeling, shipping, receiving, cross-docking and other functions. In a receiving department, for example, the MPW operator can scan barcodes or read radio frequency identification (RFID) tags to indentify incoming shipments and inspect, re-label and re-route it—all at the same workstation. Shipping accuracy improves when the operator can scan outgoing shipments to verify the order is correct and scheduled for the proper shipping method. For break bulk and mixed-unit orders, MPWs allow quick and easy picking with on-site high-volume printing of labels, packing slips, delivery receipts, refund receipts and so on. The operator can track previously shipped parcels and keep track of multiple stock-keeping units (SKUs). He or she can even take and file digital photos to provide proof of the condition of a returned shipment and then credit the customer immediately. No power outlets at the far corners of your facility? Problem solved. • Retail Here, an MPW is ideal for inventory management, shelf and product labeling and “line-busting”. The device can be used as a mobile checkout or pointof-sale (POS) station where the operator can check prices, process credit cards and print receipts and coupons. • Manufacturing MPWs can be used for labeling received components before stocking or labeling samples picked from assembly lines for quality control.

MM&D | November/December 2011

• Improved Employee Morale Employees know when their time is being wasted. They feel better about their jobs (and their lives) when they instead know they are doing work that needs to be done, and doing it efficiently. The gains provided by an MPW are not only for management ledger sheets but also for employees’ day-to-day experience—greater productivity benefits everyone. Good MPWs also provide ergonomic advantages. The MPW you choose should have adjustable shelves and large, stable work surfaces. Some MPWs allow the shelves to be raised and lowered, while some do not. A tall employee should be able to quickly raise a shelf to the most convenient height, and a shorter worker on the next shift should be able to lower it just as quickly. Your workstation should have a compact footprint and be easy to push, with large, easy-to-grip handles and top-quality swivel casters. Casters should provide years of smooth, quiet rolling and positioning, yet be lockable for stability and safety. The size, weight and capacity of the onboard power package (battery/inverter/charger) are also ergonomic considerations; some packages are bulkier and heavier than others. Because the workstation is wireless, there are no cords long enough to trip over. For cables connecting the devices on the workstation to each other, the best-designed MPWs have cable-management components that keep cabling tangle-free. • Improved Versatility The more your workstation can do, the more your business can accomplish—in ways you might not yet envision. That’s why you’ll want your new MPW to be versatile. Check the weight capacity of individual shelves and of the unit overall. The MPW you buy should be powerful enough to run various devices simultaneously—look for one that can hold and power four devices for at least eight hours and can be recharged in five to eight hours. It’s important that the MPW manufacturer offers multiple options for the workstation’s power package, and choosing the best one for your business can be difficult on your own. Some MPW manufacturers have technicians who will make sure your package is fully integrated with the devices you intend to run, and some even have software tools on their websites that help the customer choose the most appropriate power package by calculating the total wattage of the equipment to be supported. Last but not least, your MPW should be modular—designed to accept many different accessories for your specific application. Accessories include additional shelves and drawers, keyboard trays, laptop holders, flat-screen holders and scanner holders. Like your business, your MPW will be what you make of it. Shop Around Obviously, different needs require different MPW configurations, so shop around until you find the model that fits your facility. Some basic attributes, such as sturdiness and durability, trump all other characteristics. Because further technological advances will give us new gizmos that will once again require us to reorder our thinking as well as our equipment, versatility and ergonomics should also be at the forefront. Some careful research will lead you to a well-built yet reasonably priced model. You should expect to pay $1,500 to $3,000 for a good MPW, but when you consider the potential for productivity improvement, it should pay for itself many times over. MM&D Christine Wheeler is marketing director at Newcastle Systems.

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Reduce, recycle, reuse and adapt SMEs achieve sustainable logistics By Donna St Jean Conti

Adapt For those companies which either cannot or choose ustainable logistics is about cutting costs while using fewer expendable not to maintain their own logistics processes, 3PLs resources, with the added value of delivering items undamaged in a complex can fi ll the need in ways that make the user far supply chain. Companies that find a way to eliminate the most recurring costs more competitive than otherwise possible. can gain a significant financial advantage over their competitors. This is a Outsourcing logistics enables companies without stunningly simple concept, yet it only recently became viable through the use established distribution networks to grow considof reusable shipping crates. erably faster than they otherwise could. At the We’ve all heard the slogan, “reduce, reuse and recycle”. Reusable metal ship- same time, such companies can focus on their core ping crates make logistics processes more sustainable and profitable by reducing business offerings. the amount of packing materials needed, recycling shipping containers and However, the key is to identify and engage a enabling owners to reuse crates in cost-effective and convenient ways. To this flexible service provider. Many 3PLs cater to large slogan, we can add the word “adapt”. By outsourcing logistics operations to a companies and offer only static packages and third party logistics (3PL) provider, companies—especially small to mid-sized pricing, yet there are some that specialize in servones—are adapting and achieving sustainable competitive advantages. ing small to mid-sized businesses with custom pricing structures. Reduce Smaller companies should hire 3PLs offering Reusable metal shipping crates reduce costs and well as trash. They eliminate flexible programs while also incorporating effidisposable packaging and shipping materials such as shrink wrap, bubble wrap cient information technology with services that and other packing matter, as well as pallets. complement what those companies have already Through the use of crates, pallets are eliminated so companies no longer put in place. have to purchase and arrange for outside storage of fumigated or heat-treated The best 3PLs offer unbundled services like wooden pallets. This reduces materials and storage costs while removing freight forwarding to include drayage, bulk storage harmful pesticides from the environment. with pick-and-pack operations enabling companies The reusable metal crates offering the best cost-savings reduce the number of to store inventory in off-site facilities and break shipping containers used because they are designed around the inside dimensions bulk services. They also offer customized national of a 53-foot trailer. They reduce wasted space by maximizing the cubing when freight forwarding, inventory sorting, quality conshipping products. Various crate sizes allow for flexibility in transport and for trol, kitting, assembly and distribution services. customers to mix small, medium and large-size crates to fully maximize trailer As is the case in other industries, the internet volume. has leveled the playing field in logistics, making Even companies with uniquely shaped or especially fragile products benefit green and sustainable operations possible. Flexible from employing reusable metal crates by contracting with providers for cus- 3PL providers now use customer-specific warehouse tomized versions. For example, a solar panel company might purchase custom management systems. They track inventory status designed reusable crates to protect its solar panels while they are in transit. and input purchase and sales orders online from any computer in real-time, using companies like Recycle Redprarie, Manhattan and SAP. These soft ware By returning metal crates to warehouses so they can be reused, companies systems were designed with multiple customer wareare in essence recycling them and therefore eliminating the cost of buying house management in mind. This makes them scalor using additional crates, boxes or other containers. Th is means sustainable able, so 3PL providers can offer logistic services to cost savings for many years. multiple clients using dedicated or shared facilities at significantly lower costs than customers might Reuse be able to achieve on their own. Some reusable metal crates have an additional advantage over the use of Reusable crates coupled with flexible 3PL services traditional shipping methods. Properly designed reusable crates allow efficient provide small- to mid-sized companies cost-effective access to products for loading and unloading via folding and removable and flexible offerings for sustainable logistics and panel doors. warehousing while adding green to their bottom An important side benefit to these doors is flexible racking. Because the crates also lines. MM&D interlock and can be safely stacked, they can be used as storage racks. The crates can then be folded and stored or shipped back for reuse as flex storage solutions Donna St Jean Conti is a marketing communications that meet seasonal peak and valley storage requirements. and public relations professional.

MM&D | November/December 2011

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Modex Preview

Modex 2012 Modex 2012—the trade show for solutions that move supply chains—is taking place at the Georgia World Congress Center in Atlanta, Georgia from February 6 to 9. The 2012 show is expected to be one of the largest expos for the industry. Modex will feature an educational conference slated to offer attendees an impressive list of keynote speakers. Some of the high-profile presenters include Rick Blasgen, CEO of the Council of Supply Chain Management Professionals. Blasgen will speak about the state of logistics and supply chain management on Febuary 6. The following day, Alberto Aleman Zubieta, CEO of the Panama Canal Authority, will address the canal expansion and its impact on supply chains and global trade. And on February 8, attendees can hear Dr Donald Ratliff, regents professor and executive director at Georgia Tech Supply Chain & Logistics Institute, speak about how supply chain and logistics performance impacts trade. Leading associations are co-locating with the show, offering several professional development opportunities. Associations include the Council of Supply Chain Management Professionals, the Reusable Packaging Association, the Material Handling Equipment Distributors Association and the Institute of Industrial Engineers. Attendees can also see the latest technologies, products, equipment and services from more than 500 exhibitors. Here’s a sneak peek at just a few.

MM&D | November/December 2011

sneak peek The Raymond Corporation The Raymond Corporation will feature automated lift trucks using vision-guided technology that the company says enables flexible automation solutions without system constraints. The lift trucks are open, with a standardized interface to integrate Seegrid’s Guided technology. Through the vision-guided system, the truck learns the steps of the operation is will perform and doesn’t need lasers, tape or wires. Booth #712

Kuka Systems Corp KUKA Systems, along with Grenzebach Corporation, will offer a demonstration of their Flexible Robotic Sortation (FRS). FRS is a case-sequencing and buffer solution that helps reduce exact sequencing requirements of conventional case-sequencing equipment. The system can be deployed into existing manual or semi-automated order-picking solutions to generate a specified packing sequence to pack pallets in the sequence the re-stocker needs. The solution comes with software based on KUKA’s AuROrA framework (Automated Robot Order Assembly). KUKA is also collaborating with Grenzebach on a mobile bot platform for tugging various types of objects positioned on a frame with four caster wheels. The mobile bots can push and pull payloads of up to 2,000lb. Booth #4900 Interlake Mecalux Inc Interlake Mecalux will highlight its product line, which includes selective, drive-in/drive-thru, widespan, structural, cantilever, push-back, pallet/cartonflow, AS/RS, VLM, carousels and its new warehouse management software, EasyWMS. The company will also showcase its carousels, mezzanines, shelving, workstations and vertical lift module. Booth #2909

Modex Preview Swisslog Warehouse & Distribution Solutions Swisslog will highlight its SmartCarrier, which can consolidate and release product at high rates in required sequences. Goods are presented at goodsto-person picking stations by shuttle vehicles or connecting conveyors. Swisslog will also be demonstrating its AutoStore, a 3D modular robotic bin system. The system can be used for highefficiency, goods-toperson piece and small case picking. Booth #3105 Westfalia Technologies Inc Westfalia will highlight its flexible Automated Storage & Retrieval System (AS/RS) designs and its Version 2.3 of Savanna.NET Warehouse Management Software. The company’s AS/RS solutions can double or triple storage capacity of existing conventional low-bay warehouses to new green field high-rise projects. The Version 2.3 of Savanna. NET includes such features as real-time 3D visualization of the warehouse; a dashboard for tracking key statistics of warehouse operations; streamlined user rights management interfaces; and improvements to the order picking module for integrating third-party picking solutions. Booth #3611 Demag Cranes & Components Corporation Demag will be showcasing the latest additions to its KBK workstation crane construction kits that can increase load capacity and spanning capability. The company says the new track profile, called KBK II-H, can be used for cranes, monorails and workstation cranes. Demag will also feature an operational stepless high-speed chain hoist that offers precise positioning and high speed. The company will also be launching its new standard Coil Master cranes, which have capacities of 30 to 50 tons. Also on display will be the company’s lines of overhead cranes, wire rope hoists, electric chain hoists, workstation cranes, Gottwald port cranes and crane service capabilities. Booth #3318 HAL Systems HAL Systems will be highlighting its WMS, a complete and customizable warehouse management system. The company says it’s a solution that includes RF terminals, scanners, voice direction, bar-code

printing and a software package. The company’s OutBound Shipping Systems offers an advanced application for automating the shipping process. The WMS is a multi-functional and multi-carrier shipping system now part of the company’s suite of applications for the small- to mid-size distributor and manufacturer. Booth #215 KardexRemstar KardexRemstar will introduce its Megamat RS Vertical Carousel, which the company says uses up to 40 percent less energy with a 50-percent unit weight reduction. The new design also uses customized performance drive motors with frequency inverters to reduce energy costs. The highly compressed unit provides economic use of resources throughout its life cycle. The Megamat RS is an enclosed system of carriers that rotate vertically, delivering stored goods to the operator. The unit is operated using the pushbutton drive and view function and has FastPic5 inventory management software that can provide integration with existing WMS software as well as higher level ERP and host systems. Booth #2914 Hyster Company Hyster Company will showcase several of its lift trucks, including the E3040HSD2 series of electric stand-up lift trucks. The three-wheel E30-40HSD2 series delivers lifting capacities of 3,000 to 4,000 lbs and features suspended floorplates with anti-fatigue mats that absorb and reduce the transmission of vibration to the operator by 25 percent. The company is also highlighting its new series of sit-down electric lift trucks, such as the three-wheel J30-40XNT and the four-wheel J30-40XN. The series delivers a zero turn radius. Hyster has also launched the new internal combustion S50CT cushion tire and H50CT pneumatic tire lift trucks. Booth #2518 ORBIS Corporation ORBIS will introduce its newest reusable bulk containers, the HDMC4845 BulkPak. The container comes in two heights—27-inch and 34-inch—and is designed to use less shipping space for containers and lowering container weight. The containers come with up to two access doors, solid sidewalls, solid deck and replaceable bottom. Booth #2700 Akro-Mils Akro-Mils will showcase its newly expanded Stak-N-Store Bin Series, now in a clear material. The company says the bins offer users a solution to organize heavy, bulky items. The bins feature large radius corners and curved upper lips for added strength, side ribs for added stability when stacked, a wide hopper front and large comfort-grip handles. The stackable bins can store 75pds

MM&D | November/December 2011

Modex Preview each. The company will also showcase floor trucks and carts, racks, shelving, order picking fulfi llment and containers and dunnage. Booth #3900 Buckhorn Buckhorn will unveil its new container, the BN4845. The box has foam panels, drop-down doors and an injection-molded, two-piece welded base. It includes ergonomic handles and four drain holes for outside storage. Its full 31.7-inch wide dual drop-down doors are either 10.25- or 14.5-inch deep, based on the height of the box. The panels snap into the base while the latches and hinges lock into the door. The box comes with multiple recessed ID tag areas and flat surfaces on the panels and doors for labels or for RFID tracking. Booth #3700 Intelligrated Inc. Intelligrated will introduce its new shipping and packing sortation soft ware packages as part of the InControlWare warehouse control soft ware suite. The ShipSort and PackSort applications—designed to manage high-speed tilt-tray and cross-belt sortation systems—help manage people, processes and product flow. The company says ShipSort provides routing and controls management for shipping sorter applications, while PackSort handles order fulfi llment applications. Booth #2900 Komyo Logistics Komyo plans to launch its reusable crates at Modex 2012. The company says the crates help eliminate the need for pallets and can reduce waste materials such as shrink and bubble wrap. The crates interlock so they don’t shift in transit and are designed around the inside dimensions of a 53-foot trailer. The crates can be stacked up to seven high and used as storage racks. Empty crates can be folded and stored or shipped back for reuse. Booth #1520 4Front Engineered Solutions 4Front will showcase its 4Sight Yard and Dock Management System. 4Sight allows facilities to monitor, schedule and communicate trailer movements, load assignment and loading dock status in a simple, easy-

MM&D | November/December 2011

to-use interface. The company says 4Sight combines RFID, GPS and sensor technologies to provide realtime yard and loading dock visibility, full automation, and optimization from the time a vehicle approaches the inbound gate to the time it exits the outbound gate. The system’s event-management capabilities and alert notifications can improve trailer co-ordination and turn time. The system also allows facilities to schedule maintenance based on actual usage. Once equipment reaches its usage threshold it will send e-mail alerts to service providers and facility managers. Booth #209

Legal Link | Marvin Huberman

When it’s time to sue

Going to court isn’t always the right answer

“Everything has its season, and there is a time for everything under the heavens.” —Ecclesiastes 3:1

here are three primary processes for resolving disputes: negotiation, mediation and adjudication (arbitration and litigation). The first two—as well as arbitration—make up ADR, the acronym for alternative dispute resolution and are touted as being faster, cheaper and better than traditional adversarial litigation. ADR professes to lessen costs, save time, reduce stress, build and strengthen relationships and facilitate win-win solutions. It is hailed as a way to provide more flexible processes and more party-sensitive and creative solutions than a traditional litigated outcome, which typically results in a winner-loser setup.

Traditional adversarial litigation But litigation remains a frequently chosen dispute resolution process. A party that believes its rights have been violated, or that has been offended, defrauded, suffered injury, loss or damage will often hire a lawyer and start a lawsuit to vindicate its rights. That party wants—and has a right—to have its day in court. Take the transportation industry. A recent review of newspapers and law reports indicates that several lawsuits have been launched by the following parties: • A carrier seeking payment of its freight charges from the shipper and/or consignee; • A shipper or claimant against a carrier for a loss that occurred during the undertaking of carriage; • A consignee seeking damages from the carrier in consequence of losses suffered due to the late delivery of cargo; • A passenger claiming damages for an injury suffered on the line of a connecting carrier; and • A carrier who has been required to pay a cargo claim seeking to claim over against the responsible carrier. Time for litigation Obviously, for some parties litigation is the chosen dispute resolution process, but why? When might litigation be a better dispute resolution choice than ADR? Litigation may be the more appropriate dispute resolution process where: • A disputant has no interest in settlement but wants its day in court; • The disputing parties place no value on strengthening or building their relationship, even after the determination of the conflict; • The parties have been fighting with each other for a long period of time, are highly emotional, irrational and will not co-operate in resolving the dispute; • One disputant fails or refuses to negotiate in good faith; • The disputants have unequal resources or there is a gross inequality of bargaining power; • A monetary award is the desired result; • The dispute involves legal technicalities or highly complex or scientific matters;

• The disputants require or want an objective standard of what is a just and equitable decision; • A binding judicial precedent is required or desired by the disputing parties; • The parties need or prefer a public hearing, the strict application of the rules of evidence, full pretrial discovery and/or the right to appeal; • A substantial public interest component is at stake, such as constitutional questions, environmental lawsuits, occupational health and safety proceedings or class actions; • A party needs or wants personal vindication, retribution to protect its name or reputation or a public declaration of guilt. Such instances can include cases involving breach of fiduciary duty, fraud and sexual harassment; • One party wants or needs to send the message that frivolous or meritless claims or defences will not be tolerated and that resources will instead go toward litigation rather than on settlement; • W here irreparable harm is imminent, such as in the case of trademark and patent infringements, misappropriation or dissemination of trade secrets or confidential information, or unfair competition or unlawful interference with business relations and interim relief is necessary to protect against the unlawful activity being engaged in by the other party; and • The “survival” of one of the disputing parties is at risk. In such cases, it would be better to litigate until the end. The three “Ps” There is a time to litigate. The decision to launch a lawsuit is one that must be made wisely and carefully. And it must be made in a specific context in which the three Ps are considered: the correct dispute resolution process, the specific problem at issue and the people involved in the dispute. Once these factors are understood, litigation may indeed prove to be the most appropriate dispute resolution process in certain circumstances. Then it can properly be said that it’s time to sue. MM&D Marvin J. Huberman, LLM, (www.marvinhuberman.com) is a Toronto lawyer, mediator and arbitrator.

MM&D | November/December 2011

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Materials Handling | Dave Luton

Are your DCs secure?

Protect your facility from internal and external threats

ecurity concerns in warehousing are as old as the need to store and ship goods. While there are some recent wrinkles such as the need to comply with CTPAT, the basic principles of protecting goods and warehouse staff have been around a long time. Those concerns can be classified within three general areas: Internal threat, External threat and Stealth mode threats.

Inside jobs Internal threats are important because if your internal security is not sufficient, then the potential for losses from other types of theft or security breach increase greatly. Internal security starts at the hiring stage with the need for police and background checks. In the US, employee checks often include drug testing. In Canada, our human rights laws have limited this. The logic behind such testing is a person who has an expensive habit is potentially more prone to try and find an unauthorized source of income. As well, some US companies are excluding people with poor credit scores for the same reason. With employees, the main protection against internal theft is access control. It reduces opportunities for collusion with regular external visitors like truck drivers. Some common, simple steps to prevent internal theft include: •R otate work schedules to reduce collusion opportunities; •K eep employee parking away from the warehouse; • Limit employee access to a front door so employees can be observed entering and exiting the building; • Use mirrors to eliminate blind spots; • Check the garbage occasionally to prevent unauthorized disposals; • Eliminate bushes and foliage next to the warehouse; • Use vehicle seals that can’t be resealed once closed; • Use personalized packing tape and opaque stretchwrap; and • Ensure you have an effective inventory accuracy program and follow up if there are discrepancies. Personnel safety is also a concern, particularly for warehouses with multiple shifts. For example, using some window coverings that reduce heat gain from sunlight have an additional benefit of allowing people inside a warehouse to look outside but prevent people outside looking in. This also reduces risk of smash and grab theft. Often a key human factor is discipline—the ability to follow processes and procedural standards designed to minimize risks. We highlight the advantages of technology to minimize theft risk—everything from security cameras to sophisticated alarm systems. These are only as good as their weakest link; if people leave doors open to go for a smoke or cool a building at night even the most sophisticated system can be defeated. Talking about security to strangers also can expose facilities to risks. From the outside External theft can be caused by various techniques ranging from brute force to unauthorized entry. An example of brute force is when a stolen vehicle is used to smash through a loading dock door and steal before police can respond. One way to safeguard against this is using vertical dock levelers that add

security behind the loading dock door because they stow vertically. Unauthorized access is another external threat that can be reduced by having a proper access control system. As part of your strategy, design your facility so that authorized visitors are limited to designated peripheral areas. Examples of good design include: Have a secondary egress control point inside the building entrances where truck drivers report; Have a truck driver washroom by this point; In general, the objective is to not allow truck drivers off the loading dock or away from closely controlled areas around the shipping/receiving offices. Ensure your returns are moved from the loading dock staging area promptly and have processing far away from the loading dock. Theft by stealth involves neutralizing security systems or accessing computer systems to commit fraud. I will use as an example the traditional methods used to neutralize security systems. Historically, it was common to cut the phone lines and to jam backup cell phone alarm systems. With internet or satellite backup access cheaply available now, these methods aren’t as effective as they once were. Another technique is to set off an alarm and wait until for the police to leave after finding nothing, then move in. In some cases, this is done several times so people turn off the alarm, believing it’s faulty. In warehouses equipped with motion sensors, some thieves use a cat to set off the alarm. Even laser-equipped perimeter sensors can be defeated by use of night vision goggles. With the exception of very high value merchandise, any security system can be defeated with time and enough resources. Your objective is to make it difficult enough that the bad guys seek a softer target. MM&D Dave Luton (dluton@cogeco.ca) is a consultant in the greater Toronto area.

MM&D | November/December 2011

Learning Curve | Tracy Clayson

It’s not over

Canadian supply chain professionals can’t rest yet

ometimes, it’s great to be Canadian. Thanks to our stable economy, we have a lower unemployment rate than the US and are benefiting from a growing global demand for our natural resources. As the top economic performer among the G8 countries, we have managed to maintain a strong currency and investment opportunities. While a stronger US economy would help shift stagnant market ratings, it appears the pace of recovery will be slower than hoped. In spite of the recent decision by the Obama administration to delay approving the Keystone Pipeline—a system to transport synthetic crude oil and diluted bitumen from the Athabasca Oil Sands in northeastern Alberta to various US destinations—there are brighter days ahead for Canada’s global trade for energy products. Prime Minister Stephen Harper is making headway to bring Canada into trade negotiations with the US-led Trans Pacific Pact (TPP) trade agreement. Along with Australia, New Zealand, Malaysia, Singapore, Brunei, Chile and now Japan, Canada is participating in the TPP to better access Asian markets. Given the weak Eurozone economy resulting in many European countries having to bail out the few that lacked fiscal responsibility, expanding Canada’s reach to other emerging markets as an alternative makes sense, but involves many complex challenges. Assessing the risks of doing business in BRIC economies—Brazil, Russia, India and China—is key. While these are regions other countries are engaging with, Canada has room to grow its relations with them as well. Auto sector woes This year, the auto sector showed signs of recovery following the market shake up and historic bail out in 2010. Still, there were major setbacks due to delays and shortages from parts suppliers in places affected by natural disasters, such as Japan and Thailand. Assembly plants in North America and dealerships faced abrupt interruptions in production output and delivery that resulted in rising vehicle prices. Sourcing products from overseas markets also resulted in increased transportation costs and service backlogs due to shortages of equipment and drivers. This year also saw a dwindling number of transportation companies in a high merger and acquisition environment. Increased labour costs and rising debt load forced yet another shake up in the automotive industry

MM&D | November/December 2011

when Allied, a major player in the car haul business, pushed the panic button in an attempt to get rate increases. This poorly executed demand by Allied for price increases involved holding back vehicles from delivery and prompted swift action from most auto makers to change haulers and take legal action. Blackberry service interruptions this year may have encouraged customers to switch to other devices such as the iPhone. This helped prove that tech companies must respond quickly and brace for major losses. Timing for product launches are also a big part of success in capturing larger market share. An example of this was when Apple’s iPhone suffered declining sales due to delays in the release of the iPhone 4, while Google’s Android swept in and grabbed 52 percent of global market share for smart phones. According to Dan Gallagher, technology advisor with Marketwatch, the company accomplished this through marketing efforts, lack of competitive offerings and new operating systems. Keep that morale up How can organizations better control company value during times of change, when top players are gone or are perhaps reaching the peak of their performance? Technology companies are bracing for expanding competition with higher demands for innovation, establishing best vendors and reliable supply chains. During unstable times, challenges like employee commitment and morale become another obstacle to continued growth. Loss of key product developers and business leaders can significantly affect consumer confidence. With company shakeups, firms are vulnerable to recruiting raids and staff turnover. As well, losing star employees to competition can mean losing large groups of clients along with them. JCPenny, the US retailer, has aggressively gone after major talent by hiring former executives from Apple and Target to reinvent the company and attract a wider demographic. Here in Canada, Hudson’s Bay Company sold 220 Zellers stores to Target for their expansion into Canada by 2013, a good sign that US retailers are keenly interested in expanding into Canadian markets. The US still has a lot more buying power compared to Canada. Canadian retailers face unfair competition with US counterparts due to price gaps. The Canadian Senate investigated price disparities and revealed international distributors and manufacturers give better prices to US retailers and have higher tariffs for Canadian retailers. According to the Retail Council of Canada, duty for hockey skates from China to the US is set at three percent, while the duty on Canadian products is between 18 and 22 percent. How does this affect the supply chain professional? As Canada increases its trading power and global business replaces reliance on US opportunities, today’s supply chain executives must develop their skills. This includes the ability to manage more suppliers, access real time data, negotiate best solutions for clients, control costs with key analytical information and motivate a team of dedicated staff. As well, the MM&D/Purchasingb2b/PMAC 2011 supply chain salary survey shows wage increases ahead for logistics professionals with designations. As always, education equals success. MM&D Tracy Clayson (tracy@in-transit.com) is managing partner, business development, of Mississauga, Ontario-based In Transit Personnel.

Firefighter | Perry Lo

Olympian logistics

Moving the Canada Line trains for the 2010 Winter Olympic Games

n 2004, SNC Lavalin/Serco was awarded the contract to construct and manage Canada’s first direct airport rapid transit system. The Canada Line was Vancouver’s largest transportation infrastructure project for the 2010 Winter Olympic Games and, as a result, the most visible, not only to the two million inhabitants of the city but to all Canadians. SNC Lavalin ultimately decided to award the entire rail vehicle contract to Hyundai Rotem from South Korea on November 25, 2005. A three-year production window was given to manufacture 40 made-to-specification rail vehicles. The system was built with a capacity of 15,000 passengers per hour, per direction. The vehicles needed to reach a maximum travel time between the airport and downtown Vancouver of 24 minutes at speeds of up to 90kph. Each rail vehicle weighed 40 tonnes and was just over 20 metres in length. They would be fully assembled in South Korea and shipped to Canada in batches of eight vehicles at a time. They were due on site no later than November 2008.

Day one • 6 am: Vessel docks at the Port of Vancouver. • 7 am: Canaan in attendance with stakeholder representatives. • 8 am to 10pm: Cranes unload eight rail vehicles from the ship and place them onto special flat deck extendable trucks.

Managing the transportation With the contract signed, we ramped up our internal activity to finalize requirements in order to accomplish the move successfully. We finalized the shipping, trucking, crane, Customs and other arrangements. We planned and ran the route the rail vehicles would follow while ensuring escorts, police, fire, ambulance and utility concerns were taken care of. Canaan also co-ordinated with the BC Ministry of Transportation and other regulatory agencies—as well as various suppliers and stakeholders—to ensure a smooth move. Our senior management traveled to the factory in South Korea to supervise the loading of the first eight rail vehicles. We also ensured tariff advanced rulings were submitted and approved by Canada Border Services Agency for the vehicles. With a shipment of eight vehicles per ship, the 40 vehicles needed a total of five ocean trips and 10 trips by road, spread over a year, to ensure they were on site in late 2008. With each move, the timeline was the same:

The results With the world watching, we delivered the rail vehicles on time and on budget, allowing the Canada Line to open in the fall of 2009, three-and-a-half months ahead of schedule. That’s almost a full six months before the start of the 2010 Winter Olympics. Originally built to a capacity of 100,000 boardings a day by 2013, the Canada Line has exceeded all expectations by handling 228,190 riders per day during the 2010 Winter Olympics. MM&D

Day two • 12am to 5am: Four truck drivers and 12 escort vehicles arrive to start the night move. Due to city restrictions, Canaan was only allowed to move four rail vehicles each night and we could only be on public roads between 12am and 5am on certain nights. The original 21-km direct route was extended to 49km due to height and traffic restrictions. The travel time of five hours (at a maximum of 40kph with some sections as slow as 2kph) left Winning the contract no room for error or delay. When Hyundai Rotem went shopping for a logistics company in Canada to • 9am to 7pm: Rail vehicles were moved from the handle the movement of these 40 rail vehicles, they were looking for a transtruck and placed onto the complete and electrified portation professional who could advise them on how to enter the Canadian rail track. market with their product. They had no experience in North America—let alone Canada—and this project was the proverbial foot-in-the-door they Day three • 12am to 5am: The remaining four rail vehicles needed to win larger contracts in the future. After meeting with many other logistics companies, large and small, national take the same route to the final destination. and international, Hyundai Rotem ultimately chose Canaan Transport Group • 9am to 7pm: Once again, the four rail vehicles are Inc. We got the contract on September 30, 2007 with the first eight rail vehicles offloaded from the trucks and placed directly onto delivered in December 2007. the rail track.

Perry Lo, CITT, is a chartered accountant and transportation professional with a licensed Customs broker designation. He is the founder of Canaan Transport Group Inc.

MM&D | November/December 2011

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