Solutions June/July 2016 by Linfox

Solutions In this edition

Asia Pacific June/July 2016

Pharmaceutical industry in focus

ASEAN growth and the supply chain

Technology and the modern supply chain

Striving for equality

Embracing industry trends

SUPPLY CHAIN SOLUTIONS

Solutions can now be delivered to your inbox! Solutions online offers the same content as the printed version in a more convenient and interactive format. Read it on your PC or smart device anywhere, any time with our magazine-like reader. A must-read for those in logistics. Go to www.linfox.com and click on the home page link to subscribe.

Solutions

A s i a P a c i f i c J u n e / J u l y 2 0 16

Contents EXECUTIVE CHAIRMAN

CEO AUSTRALIA AND NEW ZEALAND

CEO LINFOX INTERNATIONAL GROUP

Pharmaceutical industry in focus

FEATURES Pharmaceutical industry in focus

ASEAN growth and the supply chain

Technology and the modern supply chain

Big data improves operational performance

Sustainability: the journey continues

ASEAN growth and the supply chain

Technology and the modern supply chain

Striving for equality

NEWS Project management the Linfox way

Specialist facility for mining and equipment storage

COMMUNITY Striving for equality

Dominoes Melbourne

SAFETY The safety journey continues

Linde and Linfox celebrate safety

Cover photo: Linfox Storeperson, Kurstie Niven at the Linfox Healthcare site in New South Wales.

EXECUTIVE CHAIRMAN

Embracing industry trends

Technology and its accompanying software is playing a pivotal role in the day to day operations of transport and logistics companies. We live in an age where technology is everywhere. Self-driving cars, drone package deliveries, robotics, artificial intelligence, the internet, and many other technological advancements are driving this new ‘Fourth Industrial Revolution’. Who would have envisaged five years ago that Uber would provide the ability to connect individual drivers and passengers together disrupting the taxi business, or Airbnb would become the planet’s largest accommodation provider without ownership of one single hotel room or apartment.

As data’s role in our lives expands, the threat of cyber attacks grows with it. With the advent of the Internet of Things, it is not just the personal devices but cars, photocopiers, Wi-Fi networks, household whitegoods and cash machines that are at risk of being hacked. Simple ‘Firewalls’ across our own Linfox networks will not stop sophisticated hackers from accessing our data and information. We remain highly protective of our systems and data and conduct regular reviews of our IT security safeguards. We recently commenced the introduction of a big data enabler called SAP HANA. This new high performance database will enable us to improve visibility in our warehousing and transport operations and provide us with more readily available information. We take a long term approach to technology investments, and we must continue to explore and adapt to new smart technologies.

Linfox, as an industry first, has an opportunity to develop and implement electronic work diaries (EWD). With ever evolving fatigue management laws, the EWD solution allows our drivers to input working hours and receive real-time audio and video alerts about when and how often breaks must be taken. The new systems will devise routes that overcome traffic congestion, optimise our transport times and mitigate waste and costs. We see a driver centric world with increased safety and simpler means to ensure compliance. These new systems will converge the multiplicity of systems we are using into a singular screen. It will facilitate visibility of information on fatigue, job data, routes, network roadblocks, mass limits and engine management diagnostics into a singular device, aiding both ease of use and regulatory compliance.

Linfox Solutions

Worthy collaboration Linfox has a strong reputation for the quality of our professional development and training programs. Many of our valued employees have progressed from operational roles to senior leadership positions; opportunities made possible through our continuous development and training opportunities. I am therefore pleased to announce that Linfox has recently formed a strategic partnership with Monash University. Monash is a leading ‘Group of Eight’ research-intensive University with world leading researchers in supply chain management, transport studies, analytics and optimisation. This mutually beneficial relationship will enhance Monash’s research capabilities, build a shared knowledge base and provide leading learning and development opportunities for our people. As a member of the Monash Industry Council of Advisors, I am acutely aware of the value of industry-led research and engagement with the higher education sector.

The first Monash-led training programs were recently developed and implemented, training our people in Linfox Project Management (Linfox PM). Based on the principles of Prince2, Linfox PM provides a streamlined method to select, assess and manage projects across the Linfox business. You can read more about this on page 20. Our partnership with Monash will bolster our capabilities in this area and support our people and development strategy. I look forward to seeing the tangible outcomes that will come as we develop our learning and research capabilities with Monash.

Towards 2020 As we progress towards our 2020 vision of the creation of sustainable solutions through the convergence of the physical/digital age, Linfox must keep an open mind as to how technology can assist us all, to produce better and more efficient outcomes. I too am excited by the opportunities that our newly formed educational partnership means for the development of Linfox’s leaders of tomorrow. The world is awash with problems that require smart and sophisticated Solutions. Enjoy the read!

Peter Fox Executive Chairman

CEO AUSTRALIA NEW ZEALAND

A new approach for Solutions In the first of our industry feature articles we examine the dynamic pharmaceutical industry, how changes within it will affect supply chain providers and how Linfox is responding with innovative customer solutions. We are focused on expanding our current healthcare offering to tailor new supply chain solutions to pharmaceutical companies. We have an established state-of-theart healthcare facility in Sydneyâ&#x20AC;&#x2122;s west and have committed to broadening the siteâ&#x20AC;&#x2122;s capabilities. Read more about this on page 8. Solutions will now be published biannually, keeping our readers up to date with industry-leading solutions, innovation and broader industry trends from Linfox experts. We welcome you to subscribe to the new digital version of Solutions via our website home page, www.linfox.com.

Striving for equality

A new method

Linfox understands the benefits of a diverse workforce and recognises that global female workforce participation rates are still lower than the rates for men, particularly in the logistics industry. We are committed to encouraging female diversity within our organisation, now and in the future. I am proud to say that Linfox recently became a corporate member of the National Association of Women in Operations (NAWO). As a NAWO ambassador, I am committed to encouraging women to pursue a career in the transport and logistics industry, particularly in operational and line management roles, and supporting them as they strive to develop and succeed within our organisation.

Linfox recently collaborated with Monash University to establish a customised project methodology to be used across the business. Based on the principles of Prince2, the methodology provides a standard method to select, assess and manage projects. This initiative supports the Linfox 2020 Strategy by standardising and simplifying projects to reduce errors and exceptions. As always, we look forward to working with our existing and future customers to provide them with solutions that best meet their needs.

Annette Carey CEO Australia and New Zealand

CEO LINFOX INTERNATIONAL GROUP

Linfox Solutions

Female empowerment and women in operations Recently I had the pleasure of speaking at the UN Conference for Women’s Empowerment in Laos. Presenting at this event gave me the opportunity to discuss a topic that is so important to me and to Linfox – diversity and female empowerment. Like all operational businesses, Linfox faces challenges in female representation: our industry is traditionally a male-dominated space, as typically men drive trucks and work in warehouses. We recognise that when it comes to female representation, we’re behind some sectors such as banking, and we still have a long way to go. However, Linfox is committed to evolving and taking several steps to address this, which you can read about on page 22. It is encouraging to remember that strong women have always been central to Linfox’s success. We will continue to embrace diversity through programs that develop our next generation of female leaders.

It is encouraging to remember that strong women have always been central to Linfox’s success.

Linfox Thailand Tesco contract renewed On a commercial note, our colleagues at Linfox Thailand recently renewed their contract with Tesco for a further four years. This extended deal will create nearly 2,000 Linfox jobs, including managers, drivers, support staff and sub-contractors. It is a huge operation, with five main DCs servicing approximately 1,800 stores from Mae Sai Chiang Rai in northern Thailand to Surat Thani in the south. We will deliver an extensive range of fresh food, prepared foods and grocery offerings, as well as non-food offerings such as electrical appliances, apparel, toys, stationery and household goods.

A culture of empowerment I take ongoing pride in how we’ve shaped such a positive corporate culture within Linfox Asia, from one of high power distance to an inclusive, team-based environment. As a CEO, it’s important to place trust in my team and delegate tasks, rather than making every decision myself, which represents a significant change in the Asian cultural context. It also empowers my team on the ground to make decisions about the work they do, giving them the freedom to make mistakes and learn from them. Empowering our people also creates more opportunities for our local employees by promoting succession planning with the local teams.

We are delighted to continue our relationship with Tesco and look forward to four more years of shared success. 1000 days LTI in Surabaya A cause for celebration: our team in Surabaya, Indonesia, recently logged a record 1,000 days Lost Time Injury (LTI) free. This is a substantial achievement and demonstrates the effectiveness of the Vision Zero campaign across the Linfox business. I warmly congratulate the team on this accomplishment.

Gabby Costigan CEO Linfox International Group

FEATURES

Pharmaceutical industry in focus: Rethinking the supply chain

Linfox explores the shifting landscape of the Australian and global pharmaceutical industries and the implications for supply chain and logistics providers. Building effective supply chains involves continuous navigation of changing economic, social, political and financial terrain. Analysis of the Australian pharmaceutical supply chain has identified inefficiencies, as the legacy of current regulations signals the need for major structural reform. “Initial assessment by Linfox sees significant opportunity to enhance efficiencies within the Pharmaceutical Benefits Scheme (PBS) supply chain over the next five years,” said Linfox General Manager, Strategic Market Development Chris Buckthorp.

“As we continue to analyse and design what a progressive industry supply chain might look like, it is clear this new model must have cost efficiency and transparency at its core.” “The modern pharmaceutical industry is intriguing, as industry foundations have shifted dramatically over recent years due to global and local factors,” said Chris. Global cost pressures Between 2011 and 2018 the number of drug patent expiries will peak, placing hundreds of billions of industry dollars at risk.

This ‘patent cliff’ is expected to cause significant pressure on industry revenue and margin as more generic alternatives become available. This global generics trend won’t just include newly expired products. Pharmaceutical companies will increasingly incorporate generics as part of their overall strategy, catering to increased demand both for price driven products and from key emerging markets.

Linfox Solutions

The cost of healthcare and its impact on public health are big issues for Australia’s economic future, particularly with the increased burden of chronic disease. Over the past decade the Australian Federal Government has focused on delivering the National Medicines Policy (NMP). This commits to providing timely, Australia-wide access to affordable medicines that meet appropriate standards of quality, safety and efficacy, while maintaining a responsible and viable medicines industry.

Meanwhile in Australia As a core part of Australia’s healthcare system, the pharmaceutical industry produces and distributes prescription medicines so they are readily available to all Australians, regardless of their location. “Embedded within this highly regulated task is the need to supply products in an efficient, timely and quality controlled way, while delivering profitable stakeholder return,” said Chris.

During this period, Government regulations around mandatory price disclosure have resulted in negative impacts across the current PBS supply chain, from manufacturers through to pharmacies. “It is evident that the supply chain of the future will need to be very different to today, to preserve the viability of critical entities across the supply chain while also meeting the needs of the NMP,” said Chris.

CAGR 3.2%

1500

1265

1300

1156

CAGR 6.2%

1100 Revue in billion USD

1056

900 700

601

560

649

726

799

831

964

968

2011

2012

888

994

1057

Average $70b p.a. Impact of patent cliff and associated generics replacement

498

500

428

390

300 100 -100

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2013

2014

Actual Projected

While growth from 2001 to 2011 was sound the period from 2011 to 2014 reflects a slowdown in global industry revenue, attributed to the patent cliff and increasing demand for generics.

Patent cliff 2011-2018: USD 310b annualised revenue at risk from patent expiry

Data source: Statista 2015 and internal analysis

FEATURES

Product quality and security At present the Australian industry adheres to the globally recognised Good Manufacturing Practice (GMP) and the Australian code of Good Wholesaling Practice for Medicines (GWP) covering storage and distribution of temperature sensitive goods, facilities, personnel, information handling and security requirements. “Internationally, the industry is moving towards the new Good Distribution Practice (GDP) code which appears largely similar to GWP, but extends the requirements around storage, transportation and traceability,” said Linfox President FMCG, Greg Thomas. Specifically, the GDP will introduce the condition that manufacturer temperature guidelines be maintained during transport.

The implementation timeline for GDP in Australia is unknown, although industry sentiment suggests it is reasonably imminent. “New GDP standards will add logistics challenges that demand significant investment in Australian infrastructure by supply chain providers,” said Greg. “We will need to respond with solutions that ensure additional quality and security standards.” Review brings opportunity The Australian Federal Government is currently undertaking an independent Review of Pharmacy Remuneration and Regulation. A critical part of this will examine whether the structure of the current PBS supply chain (manufacturers, wholesalers and pharmacies) can continue to cost-

effectively meet the ongoing needs of the NMP and associated changes to regulations and funding. Insights from this review are likely to guide the supply chain into more commercially viable territory, while maintaining nationwide service levels and delivering full transparency of the PBS supply chain to the Government. “Just as the Government is looking for transformative value through its current industry review, Linfox is working to bring new supply chain solutions to market that enable pharmaceutical companies to support Government objectives, while achieving commercial and financial targets,” said Linfox General Manager Strategic Customer Development, Sergio Galanti.

Linfox Solutions

Linfox Healthcare Logistics facility: New South Wales

• T he introduction of secondary packaging,

shipper labelling, customisation and kitting maximises Linfox’s ability to handle more complex requirements and meet diverse customer needs.

• N ew services build on proven expertise in product

integrity, regulatory compliance and secure storage solutions for the pharmaceutical industry.

• T he 29,000m2 temperature controlled facility can

store up to 30,000 pallets. With ambient, chilled and frozen storage areas, it caters to a range of ambient and temperature sensitive products.

• T he facility’s high security systems also offers protected storage for dangerous goods and controlled products scheduled under the Therapeutic Goods Administration (TGA) classification system.

Linfox is using its industry research and insights to shape services the market needs. “Our pharmaceutical industry knowledge is allowing us to build innovative solutions, designed hand in hand with customers, many of whom are already requesting valueadded services that are aligned with our broader industry strategy,” said Sergio.

Linfox sets the standard with high tech facility As one of Australia’s largest supply chain providers, Linfox is building on its current healthcare offering by expanding its healthcare network and broadening the capabilities of its state-of-the-art healthcare facility in New South Wales. “Our specialist supply chain hub services 15 clients across pharmaceutical, biotechnology, medical device and nutritional products and has just expanded its capabilities following Good

Manufacturing Practice (GMP) endorsement for secondary packaging and storage,” said Linfox General Manager, Healthcare and Consumer Goods, Mike Sullivan. “We are able to provide expert, bespoke solutions for all our healthcare customers, specially tailored to their diverse products and supply chain requirements.”

FEATURES

ASEAN growth and the supply chain:

Preparing for change Gabby Costigan CEO, Linfox International Group

As multiple forces propel the economic growth of the Association of Southeast Asian Nations (ASEAN), supply chain providers in the ASEAN Economic Community (AEC) are encouraged to prepare for the significant growth expected in intra-regional logistics. Powerful progress A formidable economic force, ASEAN is the seventh-largest economy in the world and the third-largest in Asia. It represents one of the largest global population groups, the majority of which is under 30 years of age. According to the ASEAN Secretariat, the ASEAN gross domestic product (GDP) has nearly doubled between 2007 and 2014, and the region has enjoyed significant increases in foreign direct investment during this time. ASEAN trade has increased by a massive USD 1 trillion since 2007, with its largest trading partner being itself. The ramifications for logistics service providers from this alone are enormous. The significant economic growth seen in ASEAN nations will certainly create further, extensive opportunities for logistics providers in the region. What factors will drive growth in logistics? The AEC can expect incredible expansion in intra-regional logistics and several factors will generate logistics opportunities in the region. A single market and production base will enable a free flow of goods, services, investment, capital and labour. Creating a more liberalised, competitive economic region will encourage a more business-friendly environment that facilitates innovation, growth and cost reduction. Common standards relating to competition and intellectual policy, consumer protection and infrastructure development are all key elements.

Linfox Solutions

The disposable income of the burgeoning middle class is expected to increase from USD 190 million in 2012 to 400 million in 2020 (Nielsen). Considerable planned infrastructure investment by governments in the region means a number of critical, large scale projects are in progress. The Asia Development Bank (ADB) predicts infrastructure investment in the ASEAN region could be as high as USD 8 trillion, of which roads and railways will form a significant part. As an example, the current infrastructure development plan for Thailandâ&#x20AC;&#x2122;s railroads and ports is around USD 75 billion and almost 54 per cent of infrastructure development in Malaysia, Philippines and Thailand is for transportation modes including highways, railways and ports and airports. Provided governments continue to direct, develop and execute positive infrastructure projects, the opportunities are arguably endless. How can supply chain providers maximise these opportunities? Governments have clearly begun to set the infrastructure road map and the middle class is moving the economy forward. With expected infrastructure investment and tariff reductions to open the market, logistics providers need to stay at the forefront. Organisations should focus on developing flexible and efficient networks across multiple transport modes, positioning themselves in the locations that make the most logistical sense. Pan regional capability for logistics providers is crucial. The ability to operate in multiple countries and form relationships that span across the region will foster ongoing connections and growth.

Business certainly has a role to play in shaping ongoing infrastructure investment. By lobbying relevant government bodies and engaging with respective ministries, companies can encourage investment in locations that help countries to promote effective development. In addition, companies are encouraged to lobby for reductions in non-tariff barriers to trade. For example, single window clearance at border crossings, stabilisation and co-ordination of clearance processes and tariff codes will ensure that border freight processing is reduced from hours to minutes. The Trans Pacific Partnership Business outcomes over the next decade will also be linked to the Trans-Pacific Partnership (TPP) and its subsequent ratification. As one of the initial participants in the TPP, Vietnam has a strong lead here. If the TPP is indeed ratified, it is safe to expect significant production will move to Vietnam. Other countries such as Indonesia and Thailand may also ratify the partnership however Vietnam is on the front foot. The nature of the TPP (with the elimination of tariffs and duties on a number of items) will render Vietnam highly lucrative, particularly given its proximity to deep ocean ports.

How is Linfox responding to changes in the region? After decades servicing companies in Asia, Linfox has intimate knowledge of its markets, customers and solid expertise managing established operations. With our enviable presence in countries across the region and strong cross-border capabilities, we are preparing to lead the way in response to the changing landscape in Southeast Asia. We are actively working with customers and governments at the highest levels to facilitate ongoing cross border trade and encourage reductions in non-tariff barriers. The outstanding quality of our fleet and our core focus on safety also provide significant competitive advantage for us. Our vehicle standards and safety initiatives meet and exceed government standards across all countries in Asia and ensure service interruptions are minimised. Linfox is currently looking to expand support for heavy industry clients requiring service from Laos into Thailand, with particular focus on the mining industry. Our regular border crossings will enable us to support these services and the increased demand for them. Linfox looks forward to staying at the forefront of ASEAN opportunities to design and deliver customer solutions that optimise the changing regional landscape.

FEATURES

Technology and the modern supply chain Q&A with Linfox President, Information Technology and Chief Information Officer, Morgan Hurwitz. What are the top tech trends impacting the supply chain industry? The ubiquity of eCommerce is driving a different experience and level of expectation for customers. As consumers themselves, the level of communication and visibility our customers experience when they shop online is influencing their expectations at every stage in the supply chain. They have the same expectations placed on them by their own customers, so the impact of eCommerce is felt across the board. We’re investing today to meet the demands of the future, and enable improved end-to-end visibility through dashboard, sign-on-glass and trackand-trace technologies. The other noticeable trend is advanced analytics. We’ve recently commenced a long term project to roll out dashboards detailing live operational analytics to our sites.

Powered by SAP HANA, the dashboards will offer a snapshot of key warehouse and transport metrics. It’s incredibly powerful. Complex calculations that previously took hours to process can be completed almost immediately. Once implemented, this improved operational visibility will empower our people and customers with real time information to make quick, informed decisions based on empirical data. Linfox is ahead of the curve in this regard. In fact, we’re one of the first Australian companies to implement this technology in warehouse and transport operations. Where will supply chain technology go in the next five years? I see automation becoming increasingly prevalent and user friendly, particularly in relation to warehousing and processes. While the industry is unlikely to adopt full automation in five years, we will likely see an increase in hybrid operations: for example, a warehouse where manual labour is supported by automated guided vehicles. This will also apply to the automation of processes such as paying an invoice or scheduling labour.

In five years, we will also see more organisations harnessing big data to predict operational events. In a transport context, this will mean improved ability to predict delivery times based on variable inputs such as weather, speed limits and traffic congestion. Predictive analytics could also be used to drive performance. For example, tracking technology might help individuals measure their output and progress throughout the day. This in turn will allow organisations to set goals, measure productivity and reward those who are meeting their targets.

Linfox Solutions

Linfox is investing heavily in analytics technology. We’ve embarked on a long term project to standardise our in-cab vehicle tracking technology. This flow of information direct from the vehicle will offer valuable insights that in the future, will be used to predict events and improve safety and sustainability outcomes. For example, automatic exception alerts will capture information on idling and braking behaviours, speeds and seat belt status. All this information will feed into an extensive data repository that, in time, will be used to determine patterns and better predict operational events.

How is Linfox adapting to meet these trends? Linfox is investing heavily in analytics technology. We’ve embarked on a long term project to standardise our in-cab vehicle tracking technology. The convergence device brings together several disparate technologies and integrates with our transport management system to provide a complete view of the delivery cycle.

“The other noticeable trend is advanced analytics. We’ve recently commenced a long term project to roll out dashboards detailing live operational analytics to our sites.“

FEATURES

Big data improves operational performance Linfox began implementing SAP HANA technology in selected warehouse operations from late 2015. In doing so, it became one of the first companies in Australia to invest in this revolutionary reporting technology.

The Dulux distribution centre in Dandenong, Victoria.

Currently in its early stages, this investment will expand over the next 12 months to allow ongoing implementation throughout various Linfox warehouse and transport operations.

SAP HANA powering performance At the centre of this real time platform is the SAP HANA database. It allows large volumes of data to be analysed in near-real time (one to three seconds), unlike other database engines on todayâ&#x20AC;&#x2122;s market.

Linfox Solutions

“Supply chain providers must deliver customer value while keeping up with the rapid pace at which technology develops.”

SAP HANA provides live analytics on warehouse measures such as pick, put-away and replenishment performance rates for items, cases and pallets; and transport metrics such as delivered-on-time, asset utilisation and capacity information. “The Linfox IT team then takes that information and turns it into a visually useful solution for customers,” said David. Better operational visibility The depth of information provided by SAP HANA helps Linfox to better deliver key performance indicators (KPIs) in its warehouse and transport operations. “Real time reporting allows us to provide relevant data as events occur, such as delays or changing order patterns. “The information can be acted on immediately by key decision makers at site level, in time to impact performance and run smarter operations for customers,” said David. “When information is delayed for hours or days, it’s difficult to regain that loss and improve efficiency.” Who will benefit from the technology?

“SAP HANA’s in-memory technology allows Linfox to process data one thousand times faster on average,” said Linfox Business Intelligence Data Analytics Principal, David Vitali. “Complex calculations that previously took hours to process can now be completed almost immediately.”

Selected Linfox-managed warehouse sites currently benefit from these improved KPIs, however all current and future Linfox-managed sites that use a Linfox Warehouse Management Solution (LWMS) or Linfox Transport Management Solution (LTMS) are in line to benefit from this new data platform. The new reporting capability has assisted the Linfox Healthcare site in New South Wales to more efficiently service their 15 pharmaceutical clients.

“After identifying certain gaps in our pick scanning process, we are seeing major performance improvements because we were able to resolve the issue immediately,” said Linfox Distribution Centre Manager, FMCG and Healthcare, Scott Belcastro. Harnessing technology In a world of increasingly complex supply chains, the demand for real time information and improved visibility of ‘big data’ is high on the agenda for many large organisations. “Supply chain providers must deliver customer value while keeping up with the rapid pace at which technology develops,” said Linfox President IT and CIO, Morgan Hurwitz. “Linfox recognises this and continues to refine and extend our IT solutions like SAP HANA to maintain our competitive advantage”.

The benefits of SAP HANA SAP HANA has equipped Linfox with enormous potential to deliver greater customer value with more accurate, timely and visible data.

• R eal-time reporting for

warehousing and transport

• D eep and detailed operational insights

• A ccurate measurement of operational performance

• I ncreased control and visibility in operations

• Maximised workforce productivity and efficiency

• Accessible KPI information for LWMS and LTMS users

• S tandardised business operations and reporting

FEATURES

An iconic Linfox truck on its journey near Shoreham, Victoria.

Sustainability: the journey continues Linfox looks towards renewable energy initiatives as it nears its target of 50 per cent reduction in greenhouse gas emissions, an ambitious milestone set by the organisation in 2007. Building on energy efficiency activities that played a huge part in the greenhouse gas emission reduction to date, renewable energy represents an increasing focus of the Linfox sustainability agenda.

What is renewable energy? Renewable energy can be obtained from natural resources and is able to be replenished. This includes energy generated from solar, water, wind energy, biomass (including biogas) and geothermal. How is Linfox utilising renewable energy? As part of its 2020 strategy, Linfox continues to strive for and implement best practice environmental initiatives.

Linfox Solutions

The organisation is examining opportunities to increase the use of renewables where possible in warehouse and transport operations, working in close collaboration with customers and business partners. Solar Linfox is investing in a growing number of sites to utilise solar energy and will work to expand this where possible. For example, the new Linfox owned and operated DuluxGroup distribution centre (DC) in western Sydney will incorporate a baseline solar panel solution. “The Linfox DuluxGroup DC solar panels will be scaled up to meet any additional energy requirements,” said Linfox DuluxGroup DC Manager, Ashley Edwards. “From site commencement, the facility is expecting greater operating cost efficiency from the solar capability.”

Renewable diesel Linfox is assessing the opportunity of renewable diesel for its transport operations when it becomes available. The organisation values insights from research and development initiatives in renewable diesel and actively supports organisations undertaking this work. Biodiesel Linfox is actively reducing the reliance on fossil fuels by using blended biodiesel where practical. For example, the Linfox Woolworths fleet in Victoria includes around 65 vehicles that run exclusively on B20 diesel which is made from waste materials such as tallow and used cooking oils. Zero waste to landfill Working to reduce waste streams that end up as landfill is a priority for Linfox. The organisation has been harnessing its data to provide comprehensive waste metrics and insights. Some sites are already at around 97 per cent diversion of waste from landfill. Across the business, Linfox is currently diverting 45 per cent of its waste from landfill.

A global commitment The 2015 United Nations Climate Change Conference heralded the negotiation of the historic Paris Agreement on climate change. This pact to reduce global greenhouse gas emissions was signed at a UN ceremony in April 2016 by representatives from almost 200 countries, including Australia. The Paris Agreement raised worldwide consciousness of the threat of climate change and reinforced critical reduction targets. As one of Australia’s largest logistics organisations, Linfox shares concern for the effects of climate change. “The Linfox Vision Zero program includes a long term strategic goal of achieving zero net environmental emissions through initiatives that contribute to greenhouse gas reduction,” said Linfox President, Human Resources, Laurie D’Apice. “Linfox supports Australia’s commitment to the development and use of renewable energy in the collective spirit and commitment of the Paris talks.”

Linfox sustainability initiatives so far: Through Linfox’s GreenFox sustainability program a range of initiatives were implemented to reduce greenhouse gas emissions and improve energy efficiency across the business. These efforts significantly contributed to the company’s reduction in greenhouse gas emission intensity of almost 50 per cent as at June 2016 and included:

• • • • • •

New truck and tyre technologies Efficient warehouse lighting systems Eco-driver education programs Aerodynamic vehicle design Best practice equipment use Creation of a green workplace culture

NEWS

Project management the Linfox way

Linfox has developed Linfox Project Management (Linfox PM), a practical project methodology specific to Linfox but flexible enough to apply to all projects, bringing the benefits of project-based work to Linfox and its customers. Linfox’s new approach to project management was launched in April. Projects have become the 21st century way of working. Projectbased work enables companies to take leaps to grow or transform their business and then embed the change as a ‘business as usual’ practice. Projects nurture creativity among employees by providing a break from their day-to-day work to explore new possibilities and new ways of thinking. A robust project management method is essential for embedding effective change: if a business is good at managing projects, it will be good at transformation and growth. A consistent but flexible project management methodology ensures the success of each transformation. It also ensures that key decision makers have a clear understanding of the risks and benefits of each project, and how it relates to other projects across the business. Based on the principles of Prince2, Linfox PM has been developed with the help of more than 30 senior contributors under the leadership of a cross-functional steering group. It provides a consistent approach to project management and a standard method to select, assess and manage projects across the business.

Linfox PM has been designed to be scalable. It is supported by a library of materials including project documents and reference information. President DSI, Chris Hemstrom says, “It became apparent the objectives of several projects were lacking clarity from an enterprise-wide perspective. We also noted a lack of consistency between the operating procedures of different business areas”. One of Linfox’s most successful projects to date has been its contract with the Australian Commonwealth, which involved one of the biggest transition exercises in Australian history. Linfox PM has been largely based on the templates developed for this project.

Linfox PM ensures everybody within the business understands the stages of a project. They can participate throughout and know exactly where the project is up to, regardless of when they join. In partnership with Monash University, Linfox has developed three targeted training courses to introduce Linfox PM to senior leaders, project practitioners and people new to project management. The Linfox PM initiative supports the organisation’s 2020 Strategy; to simplify and streamline processes to reduce errors and exceptions, while increasing interaction across business units, sharpening skills and sharing resources.

Linfox wishes to thank those who helped develop Linfox PM.

Linfox Solutions

Specialist facility for mining and equipment storage

A new Linfox facility is setting the standard for safe tyre and equipment storage in Western Australia.

The Bullsbrook Storage Solution is a dedicated storage facility for the mining and construction industries. Strategically located north of Perth and accessible via the Great Northern and Brand Highways in Bullsbrook, the facility links the city to the Pilbara. Linfox President Resources & Industrial, Gary Allen said the new facility offers 96,000 square metres

of storage space to protect valuable assets against theft, fire and damage. “We have invested in best practice security, safety and compliance systems to offer the highest quality facility and service for our customers,” said Gary. “The facility exceeds Western Australian Department of Fire and Emergency Services guidelines and sets the industry benchmark for fire safety and compliance standards.”

The Bullsbrook Storage Solution brings together safe work systems, trained personnel, fit-for-purpose equipment and a safe and controlled working environment to offer a specialised risk management approach. The storage facility caters for a wide range of fleet, equipment and materials, including large tyres and mining equipment.

The Bullsbrook facility offers a range of solutions for short and long term storage:

• Storage of mining and off-road tyres • Mining equipment storage • S ecure parking for heavy machinery and oversize

• A ssembly point for remote site service technicians • Overflow storage for auction houses • C ontainer storage, inspection station and holding

• S ecure parking for country and regional service

• S taging area for transport equipment en route to the Pilbara

equipment vehicles

area

For more information contact Michael Hogg from Linfox WA at Michael_Hogg@linfox.com or visit www.linfox.com and search ‘Bullsbrook’. 21

COMMUNITY

Linfox 2016 Graduates with CEO ANZ, Annette Carey during their induction.

Striving for equality

Women are an integral part of the transport and logistics industry. However, with female workforce participation lower than their male counterparts and the gender pay gap widening, there is still room for improvement.

Linfox Solutions

Today, Linfox is committed to attracting and encouraging female participation in the workplace. Of the six CEOs employed by the Linfox group of businesses, four are women. Over 10 per cent of truck drivers and machinery operators at Linfox are female. The Linfox graduate program also strongly supports supporting gender diversity, with around 30 per cent of female graduates. The program has a high success rate with all recent graduates finding employment within the business.

Linfox understands that more needs to be done to ensure women and men are equally represented and valued at every level. This year, Linfox proudly became a corporate member of the National Association of Women in Operations (NAWO). Based in Australia, NAWO aims to develop and support the pipeline of women working in operational functions as they progress through to leadership and executive roles. According to NAWO’s national director Louise Weine, women only represent a fraction of employees in the transport sector, with the majority of these in administrative and support roles. “At management level women occupy around 20 per cent of positions. This reflects a lack of diversity in the workplace, and indicates that businesses in this sector are only accessing 50 per cent of the talent pool when resourcing their operations. “The business case is now well researched and proven. Businesses with diverse teams, particularly at key management and board level are more innovative and in touch with customer needs, and ultimately more successful in achieving financial targets than those with more homogeneous teams,” said Louise.

“The challenge for operational industries is that the pipeline of female talent is not yet well established. “Organisations within these industries must think laterally about how they attract new female talent, and identify, retain and develop the women already in their talent pipeline,” said Louise. Linfox recognises this challenge, demonstrating leadership and encouraging its people to think and act differently to achieve female workplace participation. Linfox Australia and New Zealand CEO Annette Carey is a proud NAWO ambassador: “Through NAWO, our female employees have access to professional development, leadership programs and networking events. “Attracting and retaining a diverse workforce is an integral part of Linfox,” said Annette. “The business prides itself on our culture of fairness and equality – we strive to have the best person for the job, irrespective of background, gender, religion.”

COMMUNITY

Dominoes Melbourne 2016 Art pulls a community together... Art makes you feel differently. That’s what artists are doing all the time, shifting and changing the way you see life. - Lister Sinclair, 1921 – 2006, Canadian playwright

The dominoes commence their journey from Linfox’s Linehaul facility in West Melbourne.

Linfox Solutions

Earlier this year, Linfox’s iconic red trucks and shipping containers played a starring role in Dominoes, a moving sculpture installation which saw a chain of 7,000 concrete breeze-blocks knocking each other into action as they traipsed through Melbourne.

The project was run by Arts Centre Melbourne, forming part of the Centre’s Betty Amsden Participation Program. Having been strong supporters of Arts Centre Melbourne for many years, Linfox was invited to activate the Dominoes operation from its Linehaul facility in Footscray Road. A video record of the event on Arts Centre Melbourne’s website documents the journey of the breezeblocks: One concrete block falls from a red Linfox container, launching the dominoes into effect. The line of blocks snakes through the yard and out of the main gate, ready for an adventure. Stopping at a boat, a trusted captain nurses the end block during a short cruise up the Maribyrnong River before resuming the domino action in Footscray. Collapsing through the Heavenly Queen Buddhist Temple in Footscray, the line makes a brief cameo rambling across Brighton Beach and Toorak before heading back to Fitzroy.

Children from The Fitzroy Adventure Playground laugh and squeal in delight as they run alongside the cascading dominoes, trying to keep pace with the heavy concrete snake before it departs the grounds. In contrast, the reactions of Fitzroy’s café patrons and passers-by range from bewilderment to cool nonchalance. Upon reaching Melbourne’s CBD, the thrill of the crowd lining the sides of the standing blocks is palpable. The breezeblocks make their way from the Melbourne Town Hall, along Swanston Street and down the mosaic centre aisle of St Paul’s Cathedral. Mounting the stairs at the City Library, another brick falls over the balcony to relaunch the journey along the footpath below.

Crossing the Yarra River on its way to Arts Centre Melbourne.

COMMUNITY

Dominoes Melbourne 2016

Under the Flinders St Station subway and up the stairs to cross the bridge across the Yarra River, the crowds line up along Southgate to wave hello to the snake as it finally arrives at its home, the Arts Centre. It rises up a carefully-placed structure of breezeblocks and collapses into a heap under the spire, the cheers of the crowd drowning out the crashing of the blocks. The dominoes snaked through several iconic Melbourne landmarks.

Linfox Solutions

Arts Centre Melbourne â&#x20AC;&#x201C; the final destination.

Dominoes was first conceived in the UK in 2009 and carried out during the London Olympics Arts Festival. While it has since been reproduced a dozen times throughout Europe and the UK, Melbourneâ&#x20AC;&#x2122;s Dominoes project was the first time it was presented outside Europe.

Linfox is proud to have participated in this historic project. Threading its way through historical and everyday parts of the city, linking diverse communities in both a symbolic and a physical chain of cause and effect, the Dominoes remind those who pay attention that we are all connected to something bigger than ourselves. See the video at: www.artscentremelbourne.com.au/whats-on/2016/families/dominoes

SAFETY

The safety journey continues Linfox continues its commitment to ongoing safety improvement through its respected Vision ZERO program that entwines strong leadership, safe behaviours and continuous improvement of safety systems. While the ‘zero’ objective is the absence of negative outcomes, aiming for ‘zero’ has held overwhelmingly positive value for our people, our customers and the communities in which we operate. Managing risk Excellence in risk management is embodied within the Linfox safety culture. Linfox encourages its people to understand and improve the management of safety risks and maintains a culture where everyone is encouraged to identify hazards and near misses. “Some of these are based on equipment failure, changed conditions or errors that we need to better understand,” said Resources and Industrial National Safety Manager, Sharon Thompson. Doing this creates an environment where everyone is mindful and always ready for the unexpected. “The effective management of risks improves our capacity to be a reliable,

quality service provider that delivers on time and on demand,” said Sharon. Linfox constantly reviews its critical risks to understand how any activity, process, substance or situation can cause or contribute to a serious injury or worse. “We regularly consider safety risks and how we can best control and improve the management of risk controls,” said Sharon. “Over the next 12 months, Linfox will continue to improve our focus and understanding of critical risks within our safety culture and apply controls in a way that is respectful, fair and just.” Creating a fair and just culture A fair and just culture is one that is respectful and provides clear, understandable and agreed boundaries that define what is acceptable and unacceptable. It also encourages people to provide essential safety information for continuous improvement.

A just culture is achieved when there are clear expectations and well understood consequences of working safely, both positive and negative. Fairness reflects an understanding of the multi-faceted nature of incidents and errors and objectively measuring them against our safe systems of work. This supports Linfox as a learning organisation to deliver agile, customised solutions that set industry leading standards in safety and quality. President Human Resources, Laurie D’Apice says Linfox is committed to instilling a fair and just culture. “This refers to a way of thinking that promotes a questioning attitude, is resistant to complacency and is committed to safety excellence. “It fosters both personal accountability and leadership commitment to the continuous improvement of how we manage risks.”

Linfox Solutions

‘Vision ZERO’ has overwhelmingly positive outcomes

SAFETY

Linde and Linfox celebrate safety commitment

Linde Malaysia, a member of The Linde Group, and Linfox Malaysia joined to celebrate the Linde Global Safety Day on 28 April, which coincided with the United Nations World Day for Safety and Health at Work. This event aimed to reinforce crucial safety principles embedded in the day-to-day operations across Linde sites. “Held at the Linde site in Petaling Jaya (PJ) in Malaysia, the event united over 50 staff including Linfox operations team managers, drivers and attendants, together with members of Linde’s management team,” said Linfox Country Manager Malaysia, Saj Iqbal. “The event recognised two Linfox truck drivers and two Linfox attendants from the Linde PJ site for their commendable driving records and overall commitment to safety.”

During the event, Linde and Linfox made a joint commitment to uphold safety as their top priority. “In a symbolic gesture, all attendees reinforced their safety commitment by adding thumbprints to the Linde Safety Principle Tree,” said Saj. “The Linde event was a fitting acknowledgment which complements the Linfox annual ‘Stop-for-Safety’ campaign run across Linfox Malaysia operating sites, strongly supported by Linde.”

L-R: Charlene Quek (Linde Malaysia’s Head of Sales, Electronics), Vinoth M Baskaran (Linfox Senior Manager, Linde Operations & Country Safety), Yusof Haron (Linfox Truck Driver), Zulhelmi Norazizan (Linfox Truck Attendant), Kuganesh Chidambareswaran (Linde’s Head of Delivery, for Malaysia and Singapore), Bakir Zainal (Linfox Truck Attendant), Saiful Bakri (Linfox Truck Driver), Saj Iqbal (Linfox Country Manager, Malaysia) and Derek Phua (Linde Malaysia’s Area Cylinder Delivery Manager).

Linfox Solutions

Linfox containers at the Parkes, New South Wales Logistics Hub.