MHD May 2021

MAY 2021

COVER STORY

POST-PANDEMIC FORMULA REVEALED

Using instore inventory to meet digital shopper demands

THE SMART WAY TO ELECTRIFY

How to make data-drive decisions for maximum ROI

REVERSE LOGISTICS 101

What the future holds as suppliers and retailers become more consumer-centric

AUTOMATED SHIFT

Sigma Healthcare partners with Dematic to streamline two new DCs

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MHD FROM THE EDITOR

MHD Supply Chain Solutions CONTACT MHD Supply Chain Solutions is published by Prime Creative Media 11-15 Buckhurst Street, South Melbourne VIC 3205 Telephone: (+61) 03 9690 8766 Website: www.primecreativemedia.com.au

THE TEAM CEO: John Murphy Publisher: Christine Clancy Group Managing Editor: Sarah Baker Assistant Editor: Edward Cranswick Journalist: Emilie Baxter Business Development Manager: Beth Jarvis Design Production Manager: Michelle Weston Art Director: Blake Storey Graphic Designers: Kerry Pert, Madeline McCarty Client Success Manager: Janine Clements

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ACKNOWLEDGEMENT MHD Supply Chain Solutions magazine is recognised by the Australian Supply Chain Institute, the Chartered Institute of Logistics and Transport Australia, the Supply Chain and Logistics Association of Australia and the Singapore Logistics and Supply Chain Management Society.

ARTICLES All articles submitted for publication become the property of the publisher. The Editor reserves the right to adjust any article to conform with the magazine format.

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While every effort has been made to ensure the accuracy of information Prime Creative Media will not accept responsibility for errors or omissions or for any consequences arising from reliance on information published. The opinions expressed in MHD are not necessarily the opinions of, or endorsed by the publisher unless otherwise stated.

IT’S A TWO-WAY STREET

C

OVID-19 has caused a massive spike in e-commerce over the past year. And accompanying this frenzy of online shopping was a commensurate rise in the rate of returned items. By the time that pink flamingo dress you bought at 2:00am the other night actually arrives, you’ve probably already decided to return it.

As Australia Post’s Ben Franzi points out in this edition (see page 18), while the reverse logistics process can be relatively straightforward when consumers return products to retailers, how each retailer manages returns depends in large measure on their overall commercial imperatives.

Toll Group’s Jason Bush adds that the reverse logistics process in Australia has some catching up to do compared with European counterparts when it comes to environmentally sustainable recycling for more complex products (see page 20).

Complicating the reverse logistics picture, as GS1’s Richard Jones points out (see page 31), is that the supply chain was originally conceived as a one-way street. But manufacturers especially are burdened by myriad different reverse logistics processes, with each retailer often having its own way of doing returns.

Implementing an industry-wide reverse logistics process for the retail-tomanufacturer leg of the journey is a promising idea for which GS1 is seeking stakeholder engagement.

We urge companies to heed GS1’s call to come together and support a unified approach to reverse logistics. The creation of a workable, affordable and sustainable model for the entire supply chain could allow all players to engage in logistics as a two-way street. Let’s ensure that flamingo dress finds its proper home.

While we’re waiting, David Hall of Colliers discusses (see page 56) the growth in demand for staple foods during COVID-19, and the impressive resilience of food supply chains, both of which bode well for food-related logistics industries.

As the vaccine rollout continues moving forward, it will be fascinating to see whether trends and innovations accelerated by COVID-19 will maintain their current pace of development. Are COVID-changes to the supply chain permanent? What will the post-COVID era look like? Whatever the answers, we hope this edition of MHD provides some valuable insights into the trends, people, companies, and technologies that will undoubtedly shape that future.

Sarah Baker Managing Editor sarah.baker@primecreative.com.au

MHD Supply Chain

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MAY 2021

ISSUE #4 VOLUME 52

THIS ISSUE 14

COVER STORY

14 Sigma Healthcare’s growth through automation

SUPPLY CHAIN 18 What to do about reverse logistics?

23 Jabra on why technology is the answer to seamless communication 24 Geotab’s smart way to electrify 31 A unified approach to reverse logistics 35 Körber’s formula for post-pandemic

COVER STORY

retail and supply chains

INDUSTRIAL PROPERTY 44 LOGOS on what investors and tenants want

MATERIALS HANDLING 27 Toyota on why quality stands the

MAY 2021

tters

MHD SUPPLY CHAIN SOLUTIONS

®

test of time 42 SICK’s Inspection Plus Tracking solution

MAY 2021

27

ervice. enables nd more.

k® 7’’ Touch Display

AUTOMATED SHIFT

Using instore inventory to meet digital shopper demands

39 Manhattan Associates’ new era in warehouse management 49 Microlistics on why enhanced visibility

COVER STORY

POST-PANDEMIC FORMULA REVEALED

WAREHOUSING

is key to success

Sigma Healthcare partners with Dematic to streamline two new DCs

52 The Combilift Aisle Master forklift lifts

THE SMART WAY TO ELECTRIFY

the game for eStore Logistics

How to make data-drive decisions for maximum ROI

REVERSE LOGISTICS 101

What the future holds as suppliers and retailers become more consumer-centric

t connections

DEPARTMENTS AND REGULARS 6 Industry news

ON THE COVER

54 IOT Trends

Sigma Healthcare has partnered with Dematic to automate operations at two new DCs in Perth and Brisbane.

56 Property Focus

52

58 Associations 64 Products 66 People on the move MHD MAY 2021 | 5

MHD NEWS

MV Ever Given freed: emerging impact on global supply chain

The giant cargo ship was stuck in the sandbank of the Suez Canal for almost a week.

E

lectronics and car manufacturing will be the industries hardest hit by the Suez Canal blockage, supply chain management expert Flavio Macau says.

The MV Ever Given was successfully floated on 29 March, with around 400 boats waiting outside the canal now able to start passing through.

Flavio, Vice President at Australasian Supply Chain Institutes’ (ASCI) WA Chapter and supply chain management expert at Edith Cowan University, says industries that were already fragile with low inventories – such as electronics and cars – may take a couple of weeks to get back to normal operational levels.

“If their inventories were low at the start, and they’re only receiving product this week, it will have a domino effect and put them behind schedule for a bit more time,” he says.

“High performance microchips have been struggling for the past two to three months and this blockage certainly didn’t help. Freeing the canal doesn’t solve the problem, it

6 | MHD APRIL 2021

just alleviates it a bit.”

Flavio says livestock and perishable industries may go without stock for a few days but shouldn’t see too much disruption.

He predicts most other industries will hardly see any impact on a global level from the blockage, which lasted almost a week when the ship became wedged on 23 March.

Flavio says that although oil prices did spike a little, they wouldn’t be influenced by the canal blockage going forward.

“The blockage wasn’t long enough to have caused these problems, it just exacerbated them,” he says.

“The event gave visibility to some parts of the supply chain that needed a bit more care that were low in inventory due to a number of reasons.”

It will take between five to 10 days for business to resume as usual in the canal, and for all the boats waiting outside to pass through.

“They do have to reorganise the line, but the canal is free now so it shouldn’t be that much of a hassle,” Flavio says.

One of the main contributors to being able to dislodge the boat was the event of a Supermoon, in which the gravitational pull between Earth and the moon is stronger. This caused the tide to rise in the Suez Canal to around 2m.

Approximately 30,000 cubic metres of sand was dredged to refloat the 224,000-tonne container ship, with 11 tugs and two powerful sea tugs used to free the ship.

When the boat became stuck in the sandbank the highest tide was around 1.5m. Flavio says the extra 50cm was a huge factor in why the boat was able to be released.

“If they weren’t able to free it today, it would have taken several more days.

It was a really critical day,” he says.

Rachel Webster, Astrophysics Professor at Melbourne University, says the workers only had a very narrow window of time to take advantage of the high tide.

“The total tide range in specific places can be quite enhanced, and from what I’ve heard this was the case in the Suez Canal,” she says.

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MHD NEWS

Australian FedEx and TNT operations merge into one entity

F

edEx Corp Australian subsidiaries FedEx Express and TNT have merged into one company called FedEx Express Australia.

“Customers are already benefitting from the strength of the combined entity with expanded service offerings and strong connectivity to meet both the domestic and international needs of Australian businesses including small and medium enterprises,” says Peter Langley, Vice President, FedEx Express Australasia.

“I see this transformation as a new chapter in the story for both FedEx and TNT brands,” Peter says. “TNT has always had a strong presence domestically in Australia and FedEx is well known as an international service

Peter Langley, Regional Vice President at FedEx celebrates the merger of FedEx Express and TNT. provider. This coming together means we can continue to provide increased access for Australian SMEs, which make up 61 per cent of all exporters in the country and support them to

reach out to new international markets.

Even with the challenges of COVID19, the number of exporters continues to increase and is up seven per cent year-on-year, driven by an 11 per cent growth in small exporters.”

This integration is part of a wider global process of integration between the companies after FedEx acquired the Dutch-owned TNT Express in 2016.

The product and service portfolios for FedEx and TNT will remain unchanged and there will be no change to customers’ existing FedEx or TNT accounts.

“We’re now in a better position than ever to support Australian SMEs in their business recovery efforts as we move forward post the pandemic disruption,” added Peter.

Almost 80 per cent of small businesses to continue with e-commerce, Amazon finds

A

mazon Launchpad research has found 78 per cent of small business owners will continue to use e-commerce and digital tools in the year ahead.

The 2021 Amazon Launchpad Innovation Report, commissioned by Amazon Australia, says more than a third of small to medium businesses’ (SMB) customers are more open to buying online now than 12 months ago.

Chadd Ciccarelli, Head of Launchpad at Amazon Australia, says e-commerce and digital tools have allowed people to run their businesses from anywhere.

“Lockdown restrictions have fast tracked the digitalisation of Australian businesses,” he says.

With four in ten having seen an increase in online enquiries over the past 12 months, 42 per cent of businesses are focusing this year on growing their digital presence, 39 per cent are taking 8 | MHD MAY 2021

their business into new markets and 33 per cent are revising product offerings.

Coming out of the uncertainty of 2020, almost a third of SMB’s said they invested in product or business innovation to reach new customers, and 82 per cent say they will continue to lean into innovation to grow over the next year.

As well as innovation, SMB’s say they will need access to new customers, support with marketing, advertising and social media activity, financial support and help with future growth and planning to succeed going forward.

Digital solutions will also be a big area for growth, with 81 per cent of SMB’s saying they will use digital tools to network over the next 12 months, and 69 per cent will use online channels to seek investment in their business.

Amazon Launchpad – Amazon.com. au’s program to help Aussie startups

Small businesses, like Nort, are more open to the use of e-commerce post pandemic. and entrepreneurs bring innovative products to shoppers – has also opened applications for their 2021 Innovation Grants Initiative.

The grant will select five Australian entrepreneurs to receive grant packages worth more than $200,000 to grow their businesses through e-commerce.

More Industrial Experts More Industrial Services More Opportunity We create enduring value for every property solution through our investment in relationships with our clients and our people. Collaborating across services, markets and experts we drive exceptional results wherever our clients do business.

Demand more from your industrial experts and maximise the potential of property. colliers.com.au/services/industrial

MHD NEWS

Australia Post: Record number of people shopping online

A

n Australian Post report has found more than 1.3 million households shopped online for the first-time last year.

The Australia Post 2021 Inside Australian Online Shopping report, released on 31 March, delves into how the growth in e-commerce – up 57 per cent from the previous year – is affecting people’s shopping habits.

Ben Franzi, General Manager Parcel and Express Services at Australia Post says in 2020, online platforms became an essential shopping channel due to Australians spending more time at home in lockdowns.

“Australians spent an incredible $50.5 billion online last year, and e-commerce accounted for 16.3 per cent of total retail spend,” he says.

“Almost nine million households across the country bought something online as people shopped for the things they needed, avoiding large shopping centres and other busy retail settings.”

Of the 1.3 million first-time online shoppers, 93 per cent of their initial purchases were made between

March and December.

By the end of the year, new shoppers had become regular shoppers, and regular shoppers had ramped up the frequency of their purchases.

“We found that of the 240,000 households who made an online purchase for the first time in April, half were regular shoppers by the end of the year,” Ben says.

“When it comes to seasoned shoppers, the average household increased its online shopping frequency by at least 10 purchases over the year and the range of categories and retailers they purchased from also expanded significantly.”

Ben says the popularity of online shopping is set to continue into 2021.

“We’re seeing around five million households continue to buy on a monthly basis which is 1.1 million more than the average in 2019,” he says.

Across the country in 2020, every state and territory recorded double digit growth – with Victoria leading the way with year-on-year purchase growth of 82 per cent, followed by New

South Wales with 50.5 per cent.

The most purchased categories were Food and Liquor and Home and Garden products, each up 77 per cent and 70 per cent YOY respectively.

Top 10 locations for online shopping by volume in 2020 1. Point Cook, VIC 2. Cranbourne, VIC 3. Hoppers Crossing, VIC 4. Craigieburn, VIC 5. Doreen, VIC 6. Toowoomba, QLD 7. Liverpool, NSW 8. Rouse Hill, NSW 9. Ballarat, NSW 10. Gosford, NSW Top 10 locations for new online shoppers in 2020 1. Sorrento, VIC 2. Blairgowrie, VIC 3. Rockbank, VIC 4. Cowes, VIC 5. Austral, NSW 6. Riverstone, NSW 7. Anglesea, VIC 8. Port MacDonnell, SA 9. Point Lonsdale, VIC 10. Wollert, VIC

Almost nine million households in Australia purchased something online for the first time last year.

10 | MHD MAY 2021

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MHD NEWS

Australia Post announces new CEO

A

ustralia Post is celebrating the announcement of Paul Graham as its new Group CEO and Managing Director.

Paul will commence the role in September. He was previously Chief Supply Chain Officer at Woolworths Group and has had an extensive career working in eCommerce and supply chain, with global experience in digital marketing and retail.

Lucio Di Bartolomeo, Chairman at Australia Post says the company undertook a thorough global search before choosing Paul to lead the business through the next phase of its transformation program.

“On behalf of the board I am so pleased to announce Paul as the next CEO of Australia Post – an outstanding candidate with strong logistics, digital and retail experience both here and overseas, including as a senior executive at Deutsche Post DHL,” Lucio says.

“Paul has a demonstrated track record of delivering results in large, complex organisations and is a proven leader managing large teams.

“The Board was impressed by

Paul’s 40 years’ of deep industry experience working in supply chain in Australia, Europe and Asia. We are also confident Paul’s community and customer philosophy is a perfect fit for Australia Post.”

Paul says he is proud to be appointed as CEO of such an iconic Australian brand and looks forward to starting the role later this year.

“Australia Post has proven itself to be one of the most resilient and successful postal businesses anywhere in the world.

I feel fortunate to be joining at a time when we can truly capitalize on the extraordinary growth in eCommerce experienced in the past year and continue developing our retail and digital offerings while keeping letter deliveries strong,” he says.

“I am most looking forward to meeting the team across the country – the posties, Post Office workers, mail processors and delivery drivers that kept our country operating during COVID-19.

“I am also looking forward to getting out into regional Australia where Australia Post has an enormous presence, as well as meeting with the thousands

Paul Graham will commence as Australia Post’s new Group CEO and Managing Director from September. of Post Office licensee partners who play a critical role every day serving the country.”

Paul’s remuneration is set at $1,456,560 fixed annual total remuneration and the potential to earn incentive payments of up to $1,456,560 in accordance with the parameters set by the Commonwealth Remuneration Tribunal.

Rodney Boys will continue to lead the business through the CEO transition period until Paul commences in September.

New government measures to protect grain exports from khapra beetle threat

T

he Australian government has mandated that sea containers packed with high-risk plant products and loaded in a khapra beetle target risk country be treated offshore.

David Littleproud, Minister for Agriculture, Drought and Emergency Management, says the mandatory offshore treatment is one of the urgent actions being put in place under the Australian Government’s $14.5 million investment in surge capacity to respond to the changing threat of khapra beetle.

“Khapra beetle is a significant global pest threat,” David says. “Australia is free of khapra beetle and it is important we keep it that way for continued access 12 | MHD MAY 2021

The Khapra beetle is a significant global pest threat to Australian grain exports. to valuable international markets.”

“80 per cent of our grain exports would be at risk if khapra established in Australia or if there was the perception that it had,” he continues. “Dried food exports such as nuts and dried fruit would also be at risk.”

David says that the khapra beetle is a unique threat to our export grains because of its ability to survive for long periods of time.

“Khapra beetle can survive as a hitchhiker pest in sea containers for a number of years with little to no food, and managing the risk of sea containers is a complex, global problem,” he says. “The government is working with overseas counterparts, industry and research organisations to identify possible global supply chain solutions.

In the meantime, urgent actions are being put in place to minimise the risk this pest entering Australia via sea containers.”

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MHD COVER STORY

GROWTH THROUGH AUTOMATION Sigma Healthcare has partnered with Dematic to automate operations at two new DCs in Perth and Brisbane. MHD finds out more.

S

igma Healthcare is a leading Australian full line wholesale and distribution business catering to community and hospital pharmacies.

Employing over 1,100 team members, Sigma services over 4,000 pharmacies and operates 10 distribution centres (DCs) nationwide.

Sigma has one of the largest pharmacy networks in Australia, with

Dematic’s Multishuttle storage system ensures maximum inventory accuracy.

14 | MHD MAY 2021

over 1,200 branded and independent pharmacies, including some of Australia’s best known pharmacy retail brands such as Amcal, Guardian, Pharmasave, Chemist King, WholeLife, and Discount Drug Stores. Collectively, they account for close to 20 per cent of consumer spend at pharmacies in Australia.

Sigma’s core business focus resides

in its responsibility to ensure that all Australians have access to the full range of Pharmaceutical Benefit Scheme (PBS) medicines via community and hospital pharmacy outlets. Sigma concentrates heavily on collaborating with customers and suppliers to continuously pursue and implement value-added and cost-effective wholesaling and distribution solutions.

MHD COVER STORY SIGMA’S SHIFT TO SELFSUFFICIENT, AUTOMATED DISTRIBUTION CENTRES As part of its network optimisation strategy to increase its competitiveness in the pharmaceutical industry, Sigma implemented materials handling solutions from Dematic – an intralogistics innovator that designs, builds, and supports intelligent, automated solutions and software for retail, manufacturing, and distribution operations.

Sigma selected the Dematic Goods-toPerson (GTP) Picking Solution as the central system to improve operational efficiencies at its two new DCs in Perth and Brisbane.

Sigma’s decision stemmed from previous challenges experienced from legacy systems deployed at other DCs, which was curtailing its ability to continue to improve service delivery to customers.

The central objective Sigma had for the new system was for an automated solution that was modular and capable of expansion.

The key operational improvements were enhanced productivity and accuracy rates achieved through the reduction of manual put away, replenishment, and picking processes with an end goal of the DCs processing the majority of their volume through automated picking procedures.

“The increased demand for products and services Sigma was experiencing drove us to implement a DC picking strategy capable of delivering efficiency and productivity rates that matched the high demand,” says Paul Brown, National Operations and Logistics Manager at Sigma.

“By automating operations with the Dematic solution, we wanted these new DCs to be robust and innovative, all while meeting Australian Standards and Sigma’s own quality parameters. Likewise, we wanted to offer service differentiation through improved DIFOT (delivery in full, on time) and an advanced ability to manage order volume growth,” Paul added.

“

The increased demand for products and services Sigma was experiencing drove us to implement a DC picking strategy capable of delivering efficiency and productivity rates that matched the high demand.

”

Picking Solution was a step up from the previous technology deployed at other DCs, as it provided a solution to better meet the desired productivity rates, while still supporting the traditional voice picking and radio-frequency systems in place.

“The competitiveness of the pharmaceuticals industry today is very high compared with previous years,” Paul says.

“Pharmacies are constantly pushing Sigma as their sole distributor for increased service levels, which were just not achievable at previous operation rates.

By initiating a more innovative approach to picking operations, we can make the most of our two new DCs with advanced automation technologies ensuring the highest efficiency.”

The solution concept focuses on improving picking productivity with an A-Frame and the GTP solution moving more volume through the system.

Dematic iQ software controls operations by optimising order fulfilment, from direct picking into right-sized shipping containers to reducing cycle times, labour costs, and shipping and transportation costs.

Dematic iQ interfaces with Sigma’s existing Warehouse Management System (WMS).

“The Dematic GTP Picking Solution delivers items directly to workstations – eliminating the need for operators to manually locate and retrieve items

A SOLUTION TO AUTOMATE AND STREAMLINE OPERATIONS Sigma selected Dematic as its automation partner due to its track record of successfully implementing automated solutions to manufacturing and distribution operations in Australia, as well as its global expertise in supply chain optimisation and fast-moving consumer goods (FMCG) warehouse innovation.

The overarching goal was to modernise its new DCs with the latest in automated picking technology. The Dematic GTP

The Dematic GTP Picking Solution delivers items directly to workstations.

MHD MAY 2021 | 15

MHD COVER STORY

Paul Brown is the National Operations and Logistics Manager at Sigma. by travelling across the DC floor.

The solution enhances operator performance by combining highdensity, secure storage with the rapid rates and accuracy of directed picking from the ergonomically designed workstations,” says Darren Rawlinson, Regional Solutions Development Director at Dematic APAC. The GTP solution receives inventory at decant workstations where operators scan barcodes and transfer items into inventory totes, which are automatically weighed and then conveyed and stored in three aisles of Dematic’s Multishuttle storage system. This ensures maximum inventory accuracy. For order picking, inventory totes are retrieved and sent to the picking workstations, where lights and graphical instructions direct operators to pick the required items from the inventory tote. Operators then place the items into order totes, which can be stored in a storage buffer ahead of despatch. When the delivery run is released, the totes are retrieved prior to automated lidding, labelling, weighing, and scanning, and routed to the despatch sorter. The inventory totes are then returned to storage, ready for the next order.

Additionally, the system can operate in a temperature-controlled environment, which is required for 16 | MHD MAY 2021

select pharmaceutical products that must be stored between 2°C and 8°C.

THE SOLUTION ROLLOUT Throughout the rollout phase of the projects, Dematic supported Sigma with in-house teams in Perth and Brisbane specialising in Dematic technologies and equipment.

Dematic’s expertise in software, controls, and project management ensured that the deployment was done correctly to achieve the best performance. The Brisbane DC was the first to go live, with the Perth DC completed six months later.

“We worked alongside Sigma’s in-house project management teams throughout every stage of implementation, including the rollout and going live. This collaboration ensured that the Sigma team understood how the system was going to work and were onboard with the fundamentals of it being integrated within the new DCs,” says Glenn Barnes, Industry Manager G&GM at Dematic.

“During the rollout, we had a ‘ramp up’ period where we supported Sigma through important details.

Additionally, our residential technology support team worked alongside the project management team to answer any queries and ensure

technical issues were dealt with immediately,” Glenn added.

Throughout the rollout, Dematic encouraged a “train the trainer” approach to developing a good working knowledge and understanding of the system among key operational and management personnel at Sigma, who then trained all Sigma employees working with the system.

“Dematic worked in collaboration with our in-house project management teams at both DC sites, which really helped to ensure that our own staff understood the changes the new system was going to have on operations and how it was going to work,” Paul says. “Dematic’s support and expertise throughout the rollout and the entire project made for an easy transition, and with their constant assistance, we were confident that the new system would perform at its best.”

SERVICE AND SUPPORT Darren notes that the ongoing Dematic service and support program optimises system uptime and continuity of production efficiency. It includes 24/7 support for all equipment, controls, and software with a residential service team located on site.

“By proactively working to reduce system downtime, we can reduce the

MHD COVER STORY overhead costs of system maintenance for Sigma. The program offers assurance to Sigma from us [the system designers] that their system is operating at peak efficiency,” Darren says.

BENEFITS OF THE NEW SOLUTION Glenn says that Integrating an advanced automated picking system for improved operational efficiency has been a big benefit for Sigma overall.

“The GTP solution is a standout innovation for streamlining DC operations – Sigma is now equipped to match the high level of demand and competitiveness they are currently experiencing,” Glenn says.

“The system works out of an automated picking and buffer sequence process, meaning orders are picked, buffered, and then sequenced categorically. So, for Sigma, this process works to optimise the entire picking and delivery process by organising orders accurately and efficiently, and much faster than manual operation,” Glenn added.

For Sigma, warehouse and logistics has been an area of significant focus over the past three years. Through the deployment of the Dematic and other solutions to its network of new

Lights and graphical instructions direct operators to pick required items from the inventory tote.

DCs, Sigma has subsequently made significant progress to its initiated business transformation program (Project Pivot), which aims to deliver $100+ million in efficiency gains by the end of the 2021 financial year.

Additionally, the Dematic GTP Picking Solution provides a safer workspace for all DC staff, meeting all current regulations that apply to Sigma’s DCs in Brisbane and Perth, such as Work Health and Safety, OH&S, Guide to Good Distribution Practice (GDP) for Medicinal Products, and the current health government

regulations around COVID-19.

Sigma is now set to be able to fulfil current and future order volumes with an increased number of stock keep units (SKU) to accommodate volume growth in line with Sigma’s business plans through to 2027.

“The modular and scalable solution provides us with the flexibility to optimise current operations and to expand as our business grows.

Likewise, the ability to manage logistics costs and forecast budgets has been a significant benefit to us,” Paul says. ■

The Multishuttle storage system is revolutionising order picking efficiency.

MHD MAY 2021 | 17

MHD SUPPLY CHAIN

WHAT TO DO ABOUT REVERSE LOGISTICS? Reverse logistics is a hot topic as suppliers and retailers seek to become more consumer-centric. MHD talks to Ben Franzi of Australia Post and Jason Bush of Toll Group on this crucial element in supply chain management.

“A straightforward example would be if I have a pair of pants and I want to return them. What I’ll do is go onto an electronic portal, raise a ‘return’ note, get a generated label that’s associated with that stock movement, whether it be for a courier pick up or a drop off at – for

Ben Franzi, General Manager, Parcels and Express Services Australia Post.

A

t the outset, it seems pretty straightforward. In a typical interaction, a consumer will reverse their logistics when they return a fashion item to an online store because it’s the wrong size. From consumer to retailer, the item is moved back from end- to starting-point.

It’s a process that the logistics industry is seeing increasingly more these days. It might need to be done to return faulty products such as fashion apparel or consumer electronics. Or it could be part of a product stewardship scheme, to recycle electronic parts or coffee pods. It might be returning a pharmaceutical product that cannot be reused.

One thing is certain, that reverse logistics is a challenge that is here to stay. Ben Franzi, General Manager, Parcels and Express Services Australia Post, says that as e-commerce increases, so will reverse logistics. He tells MHD

18 | MHD MAY 2021

that the uptick in reverse logistics is roughly commensurate with the overall growth rate for e-commerce that has taken place due to the pandemic. More e-commerce is happening, so more returns are happening.

REVERSE LOGISTICS 101 The question now is how can retailers best manage this complex process.

“Reverse logistics depends a lot on how a retailer wants to run it,” says Ben. “There are some retailers who will outsource their reverse logistics operations if they’re complex and require multiple steps – such as might be the case with a large fashion house that employs people to carefully assess goods to determine whether they’re re-sellable – but others are relatively less complex.

Ben notes that companies in Australia have done a relatively good job at making the process consumer friendly.

Toll will deal with the large-scale returns process, whereas the end of a product’s life cycle is handled by specialists.

MHD SUPPLY CHAIN

instance – an Australia Post store or red post box. In some cases, I might be given a QR code that I take into the store and they generate the return label for me.”

The complication, Ben points out, is what happens with that product once it is returned to the retailer. “Whether it be a logistics function that retailers operate themselves, or an outsourced logistics function, there will be an inspections process,” Ben says. “After that comes the reintroduction to stock: where it is repacked, re-labelled, re-priced, and then perhaps repackaged into whatever inventory is being readied for re-sell. But coming off this there are two other streams: if something needs to be destroyed or something has to be recycled. So, there is the element of re-sell, but also the elements

of destroy and recycle.”

He says that lately there have been a lot of retailers who won’t even properly engage the reverse logistics process but will simply send the consumer a brand-new item because the cost of the returns process is comparatively more expensive. “It’s a balance between the commercial values and what they’re trying to achieve through their own chain,” Ben says.

Some items might be disposed of or destroyed if it’s not worth the retailers’ money to wear the cost of returning the item. “It’s a retail-by-retail preference,” Ben says. “But anywhere retailers think they can get a re-sell where they’ll make more than the cost of the return, then they’ll want a return.”

As the national postal service,

Jason Bush, Global Head of Warehousing for Toll Group.

MHD MAY 2021 | 19

MHD SUPPLY CHAIN Australia Post naturally plays a big part in facilitating the return of items from business to consumer and back again. “We’re probably the major logistics provider dealing with consumer returns,” Ben says. “We have about an 80 per cent market share in consumer movements and that mirrors back to a similar level for reverse logistics. Possibly more in the latter case because of our store and postal box coverage, which means ease of accessibility for consumers returning items.

With Australia Post, consumers have about 20,000 options available to them if they want to return items.”

RETAILERS AND WAREHOUSING Jason Bush, Global Head of Warehousing for Toll Group, says that there are basically two sectors in reverse logistics: simple product returns, and what he refers to as the more “hardcore” end, involving specialist recycling, potential raw material recovery and destruction. He says that as a general rule, Toll will deal with the large-scale returns process, whereas the processes at the end of a product’s life cycle will usually be handled by specialist third parties.

Jason says that the recycling and destruction end has been a significant factor since the early 2000s, with specialist companies catering to niche reverse logistics services.

As for product returns from retailers, he says it’s a mixed bag as to the efficiency of their processes. “Some retailers have always been good at it, but there are some who have some way to go.”

Jason says large retailers will often use Toll for their reverse logistics process because Toll already manage clients’ e-commerce distribution straight out of its large warehouses.

“The vast majority of large retailers have e-commerce come out of large distribution centres such as ours, due to the economies of scale involved,” he says. “If you try and do your e-commerce out of your regular stores – the retail space in these stores is hundreds and hundreds of dollars per square metre more than in a warehouse – and it’s not an efficient use of in-store labour and prime retail space.”

Toll has the space and technology to do such work more efficiently and at far greater scale.

“Toll can do it through automation, through robotics; packaging that is customcut and made through robotics – so that’s the reason it’s done out of DCs such as ours,” Jason says. “Some of the major apparel brands might have 30,000 different products on sale, but their retail stores may only have space for 400 or so. So, if it’s coming out of a DC then your choice as a 20 | MHD MAY 2021

“

It’s a retail-by-retail preference. But anywhere retailers think they can get a re-sell where they’ll make more than the cost of the return, then they’ll want a return.

”

consumer is 20 to 30 times bigger than if you went into a retail store. This makes perfect sense for fashion and technology, where their retail outlets will be displaying their current season or their current tech, but they won’t have old product in stock at their stores for consumers to buy.”

The rise in e-commerce and its rapid uptake during COVID-19 has driven consumer demand for faster delivery times, Jason says. While Australia’s small population and massive geography limit the same-day delivery potential possible in places like New York City or Korea, Toll has been working to expedite the despatch and delivery process.

“We’ve put a lot of processes in place to speed up e-commerce,” he says. “Around five years ago you’d probably be at seven to 10 business days from order to receipt of a product. Now we have facilities that can have that product out same-day or early the next day, depending on transit times. If you’re in Sydney and the warehouse is in Sydney, you can have the product within 36 hours. Or even between Sydney and Melbourne.”

ROOM FOR IMPROVEMENT Jason agrees with Australia Post’s Ben Franzi that on the whole Australia stacks up pretty well with its reverse logistics processes when judged on the international stage. However, there are some areas where we have to play catch-up, he says.

“When we’re talking about end of product life cycle returns management – recycling, recovery of rare earth minerals and the like – we’re very behind compared to Europe,” Jason says. “Europe had their environmental crises in the 1980s with acid rain and similar concerns. So, they put significant controls in place in terms of technology destruction and what can be put in landfills. That was driven at a government level maybe 25 to 30 years ago.”

By contrast, he says Australia is only now at the point where laws stipulate that tech and electrical goods can’t be thrown into landfill.

“By virtue of the fact that our regulatory system is just starting to evolve, we’re well behind. There are small companies that can do it, but at the moment there’s not enough demand to fund them on Europe-like scales,” Jason says.

“One potential method by which proper recycling and destruction can be promoted is by mandating that the costs of the destruction or recycling actually be pre-factored into the sale price, such that those kinds of externalities are accounted for at the point of sale – well before the day of destruction or recycling actually arrives.” ■

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MHD TECHNOLOGY

TECHNOLOGY: THE ANSWER TO SEAMLESS COMMUNICATION In a world where efficiency is key to productivity, implementing solutions to advance these areas is at the forefront of most businesses’ minds. Dave Dessmann, ANZ BDM GN at Jabra’s BlueParrott, identifies how correct technology solutions can play a significant role.

F

rom busy warehouse floors to noisy trucks transporting freight on the roads, Dave Dessmann, ANZ Business Development Manager GN at Jabra’s BlueParrott says communication is key to effective operation.

“Businesses are trying to get a lot more done with a similar number of resources, and the best way to do that is to have the best technology in place,” he says.

“For most, there is a focus on increased efficiency and optimal customer service in these challenging environments.”

Dave says the future of technology in supply chains will be centred around efficiency and making the end user experience better.

“At the end of the day it’s about increasing that productivity and making users comfortable with their devices,” he says. When it comes to improving efficiency, the first step is ensuring a business has optimal communications solutions in place.

“In a warehouse, workers are going to have to repeat themselves. They’re looking out for potential hazards, which is difficult with all the noise going on around them.

“They might have their voice picking software talking to them but, if they’re wearing a stereo headset, then they’re not hearing what’s going on in the environment [around them].”

The answer, says Dave, is implementing correct technology solutions for different situations. “Truck driving is a very tough job since they’re always on the road.

Being able to have a device that makes them even more productive and safe is crucial,” he says.

“At BlueParrott, we’ve recently launched our new M300-XT noisecancelling mono Bluetooth headset which is optimised for noisy environments and working on the go.”

The device can be activated by the touch of a single button, or if preferred, with a simple voice command.

“You don’t need to pair it to the cabin in the unit – drivers can pair it to their own devices, so when they exit the truck, they still have a 100m wireless range to take calls away from the main cabin,” Dave says.

He says this style of hands-free communication is how drivers can increase productivity as the demand for last mile delivery grows.

“Having that long talk time and being heard on calls by cutting out background noise is imperative,” Dave says.

“With the M300-XT, it doesn’t even sound like you’re in a truck and driving, which is what a lot of our customers have been saying. It really makes their day a lot smoother.”

The device boasts a long battery life, with a 14-hour talk time and 24-hour talk time on many of BlueParrott’s other devices.

“Our devices are fit for the challenge and can stand up to the rigors of life – there’s no longer a need to worry about dropping your device and breaking it as it can withstand moisture and other elements,” Dave says. “The ergonomics of the new design being smaller makes it the perfect solution for field workers.”

Even as more people continue to work from home and outside the office, BlueParrot’s flagship noise

The BlueParrott M300-XT helps busy professionals communicate on the go. cancellation technology can help reduce unnecessary background noise that can often prove distracting. The headset boasts an impressive 80 per cent of noise cancellation with its twomicrophone technology, creating a clear communication with no annoying sound interruptions, wherever you’re calling from.

“We have all learnt how to be productive outside of the office and having the right tools and technology is only going to amplify that,” Dave says.

“Sometimes headsets are just seen as accessories, but often we have customers coming to us after seeking a cheaper solution that didn’t work and trading up for the right solution.”

As technology continues to evolve supply chain operations, Dave says he expects to see a huge increase in functions like push-to-talk across all verticals.

“We are seeing massive growth in that software across companies we work with like Zebra and Microsoft. I think the push-to-talk function and having the option to talk to your team in real time globally is really appealing,” Dave says.

“Organisations are striving to become more efficient and they’re becoming smarter about the technology they invest in. BlueParrot is the perfect solution because they want something robust that will increase productivity and be something employees actually want to use because it makes their day easier. In the end, it’s all about productivity.” ■ MHD MAY 2021 | 23

MHD TECHNOLOGY

THE SMART WAY TO ELECTRIFY

As the electrification of fleets gains traction around the world, Joshua Gordon, EV Strategy Manager for Geotab, offers tips on making data-driven decisions to help ensure maximum Return on Investment in this space.

D

ialling in on video conference to MHD in the early morning hours from the United Kingdom, Joshua Gordon, Electric Vehicle (EV) Strategy Manager for Geotab, has a busy day ahead of him.

Joshua’s job is to support the electrification of vehicle fleets in the region. This is a mammoth task, as the United Kingdom is currently on a race to electrification. Its government has invested nearly £1.5 billion into the push for zero emission vehicles, with the aim of all new cars and vans to be effectively zero emission by 2040. Joshua is working with some fleets that are looking to go fully electric as early as 2024.

And while Australia has yet to set such ambitious targets, Joshua notes that Australian businesses should take note that sustainability objectives aren’t alone in driving this push. As EVs keep improving, and telematics technology like Geotab is helping fleets get the most out of their EVs, the business case for electrification keeps looking brighter.

From a perspective where EVs are gaining strong ground, Joshua offers this advice for Australian fleet managers considering electrification.

GATHER DATA ON CURRENT FLEETS Geotab is more than just a telematics provider, but a true partner when it comes to electrification, Joshua explains.

He recommends companies work with Geotab as soon as they start considering EVs. “What we are trying to do is take the guess work out of choosing a vehicle, and help fleet managers make data-driven decisions,” he says.

He notes that, too often, companies are making decisions based on upfront costs, instead of taking a longer ROI approach to choose their EV models. With the upfront costs of 24 | MHD MAY 2021

Geotab’s hardware can easily be installed in any vehicle, and allows managers to track driver behaviour, fleet mileage and fuel usage, among other data, to guide better decision making.

EVs so much higher than combustion, Joshua says it’s important to gather the right data, to understand what vehicles will deliver the best ROI over time. Questions like: ‘Will the EV meet drivers’ range requirements?’ and ‘Will batteries perform in extreme weather conditions?’ need to be considered carefully.

Joshua says Geotab’s EV Suitability Assessment is the best way to ensure a strong ROI. It’s powered by Geotab’s largest real-world EV performance dataset. This means that partners can benefit from Geotab’s work around the world to assess factors like the impact of local climate on EV range.

By fitting existing fleets with Geotab’s hardware, in as little as one month Geotab can gather enough data to guide fleets on their choice of EVs. The personalised plan is based on actual trip data from current fleets, looking at exact range requirements, fuel usage, and carbon emissions.

But while the data can be gathered

in one month, the more data, the better. Joshua says that companies who are looking to go electric, even in the distant future, should consider telematics on their fleet as soon as possible.

WORK ON LONGER RANGES With range anxiety being one of the biggest barriers to electrification, Joshua notes that few people are surprised that it’s last-mile delivery companies who have been the first to adopt EV fleets.

The challenge, Joshua notes, is that it’s actually longer-range drivers who would get the most ROI on an EV fleet.

When Geotab works with a company to help select the right vehicles for them, they look at what could work with the longest routes possible, not the average.

“It’s important to take a conservative approach to choosing an EV. You really need to use EVs to their maximum usage to get the most out

MHD TECHNOLOGY

Geotab’s technology can help score drivers on their speed, hard braking, hard accelerating and more. As a result, drivers are encouraged to not only drive safer, but also use less energy. of them,” he says. “It’s not just fuel you are saving on, but maintenance as well. So over time, the more you drive the EVs, the quicker you’ll get to that break-even point. You need to gather the right data to choose the best vehicle, and then use the right data to get the longest ranges you can out of your EV fleet.”

Joshua says managers should proactively manage their EVs to ensure they are getting this maximum range. Geotab’s EV advantage provides its users with 24/7 real-time views of its fleets, helping managers understand if they are losing productivity because of charging and how much range they are getting.

Perhaps most importantly, Geotab is able to help drivers and managers understand if the EV has enough charge to complete its daily route.

“With Geotab’s platform, we can see vehicles charging, and also their batteries decreasing in real time,” he says. When a vehicle’s battery levels are critically low, Geotab can send an alert to the driver. Fleet managers can determine those key levels, setting rules for instance at 10 per cent, and sending messages to drivers, asking them to consider finding a charging station.

Geotab can also support fleet managers to help ensure vehicles will be ready when drivers need them.

The software allows fleet managers to prioritise certain vehicles, saying they need, for instance, a vehicle charged at 85 per cent by 8pm. The software will tell them if those vehicles will be ready, and fleet managers can adjust charging stations as needed.

FOCUS ON CHARGE COST AND TIME With Geotab’s technology monitoring not just EVs, but also hybrids and combustion engines, Joshua says fleet managers should be looking at the efficiency of every type of power source, and track those costs, to truly understand ROI. “We know that the switch to EVs is not overnight, so we need to continue to look at insights into all types of fuel until fleets make the full transition,” says Joshua.

He advises to not just look at the difference between fuel and electricity costs, but importantly to understand the different costs of electricity that charge the vehicle. Geotab’s EV Charging report records every time a vehicle is charged, how long it takes, and what’s the cost per kWh. “For instance, some drivers might charge at home at night, others use public charging stations, while others will charge at the central depot,” he explains.

Joshua says this analysis is critical to understanding ROI. He has seen costs vary from as little as £7 to as much as £40 for the same unit of energy.

“Knowing the cost of charging is super important. If a driver is using the most expensive charging source, fleet managers can tell them to use a different charger,” says Joshua.

ENGAGE DRIVERS WITH GAMIFICATION Geotab’s telematics system not only helps fleet managers to make better centralised decisions on vehicle use, but also monitor the behaviour of their drivers. Geotab’s hardware can track

actions like speed and hard braking.

And while it’s one thing for fleet managers to have this driver data on hand, it’s another thing to use that data to engage a team to improve their behaviour.

This is why Geotab offers the Driver Challenge app through the Geotab Marketplace. Drivers are scored based on custom KPIs, and data is tracked and analysed to give both the driver and managers insights on what needs to be improved, and who deserves recognition.

“Fleet operators can set the parameters for the metrics used for the game,” explains Joshua. “For instance, if they want to discourage fast breaking, they can set a certain G-force maximum value they can hit. If it’s speeding, then they set a maximum speed they can’t pass.”

Joshua points to one of Geotab’s partners, the UK-based grocer Farmdrop, that was able to reduce its poor driving incidents by 33 per cent after introducing its app to drivers.

“It builds up healthy competition,” says Joshua. “The driver sees another score and thinks: ‘What’s that driver doing that I’m not doing?’ They compete against each other.”

Joshua notes that when it comes to EV use, safer driving comes with a generous bonus.

“If drivers are driving more safely, it goes hand in hand with fuel efficiency,” he explains. In Farmdrop’s case, in addition to safer driving, the introduction of gamification led to a 27 per cent decrease of power use, further increasing ROI.

ROI ALL THE WAY Through its tools, Joshua says Geotab is looking to help fleets understand that government incentives and regulations, as well as sustainability objectives, are not the only drivers in the move to EVs. He’s keen to educate the market on the business case to make the switch.

“A lot of fleets today are only looking at the upfront costs. We can’t just look at the short term though, you need to be looking at a long-term approach,” he says. “I think educating operators to look at the total cost of ownership is key.” ■ MHD MAY 2021 | 25

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MHD MATERIALS HANDLING

QUALITY STANDS THE TEST OF TIME

The new Toyota 8FD30 forklift is giving Laurens the peace of mind he needs to retire.

Ki-Ki Engineering has relied on its trusty Toyota 62-7FD25 forklift for more than 20 years. When the opportunity arose to purchase a second forklift, they looked back to Toyota. MHD finds out more.

I

t’s not often a company is so satisfied with a forklift they want the same thing 20 years later – but for Ki-Ki Engineering, that couldn’t be closer to the truth.

The South Australian-based agricultural equipment manufacturer recently added a new 3-tonne Toyota 8FD30 forklift to its fleet, to accompany its existing 2.5-tonne Toyota 62-7FD25 it first purchased new 20 years ago.

Ki-Ki Engineering, based in the small town of Ki Ki – on the Dukes Highway between Adelaide and Melbourne – predominantly makes large-scale stone rollers used in broadacre farming to prepare soil ahead of sowing crops.

Laurens Verhees, Partnership Owner at Ki-Ki Engineering, has operated the business with his brother Theodore Verhees for 40 years, ever since it was

started by their father in 1968. A true family-run business, both brothers’ wives also work in the operation and the youngest brother Peter Verhees has recently joined.

“Basically, we manufacture agricultural stone rollers that break-up stone in fields prior to seeding,” Laurens says. “Mostly we use welders and oxy-cutters, lathes and drills. Our forklift duties include unloading raw materials arriving from interstate or Adelaide, moving steel plates, square tubing, and flat bars around after they have been cut, and putting the pieces into position.”

Brendan Shegog, Area Sales Manager at Toyota Material Handling Australia (TMHA), says with Laurens nearing retirement, he decided to purchase the new Toyota 8FD30 forklift to shore

things up for his younger brothers.

“The original plan was to retire the old Toyota 62-7FD25 but once they got used to the luxury of having the additional forklift and not having to wait in line, they decided to keep the old one,” Brendan says. “Also, they’re really busy at the moment so it was quite good timing for their business.”

Laurens says he is surprised by how often both forklifts would be in use simultaneously. “We didn’t realise how handy it would be to have them both at the same time,” he says. “Before, one of us would be doing a job and then something else [requiring a forklift] would come up, but we’d have to wait around. Now we can just hop on the other one right away, which is just great.”

TMHA’s Brendan says the MHD MAY 2021 | 27

MHD MATERIALS HANDLING

Having a second forklift is revolutionising day-to-day operations at Ki-Ki Engineering. longstanding performance of Ki-Ki Engineering’s older forklift greatly influenced the decision to buy another Toyota for the fleet. “They bought their 62-7FD25 about 20 years ago. Laurens actually kept the original receipt and showed it to me,” he says. “In that time, basically nothing has gone wrong with that machine. In all its years, it’s been well looked after and serviced regularly

by Toyota, it’s had a really good run.”

Laurens says Toyota’s reputation for reliability – as shown by the enduring innings of the Toyota 62-7FD25 forklift – gave him confidence to buy the new Toyota 8FD30 forklift. “We know the Toyotas have a reputation for lasting a long time. We have found our 2.5tonne Toyota forklift to be a reliable workhorse in its time with us, it’s been really good,” he says. “Even our steel suppliers who deliver to us use Toyota forklifts and they say they are good, and that helped with our decision too.

We get Toyota to do the servicing and our old Toyota forklift has been almost faultless during its time with us.

The only thing they’ve ever had to repair was the brakes, which was easily fixed, Laurens says. “Other than that, nothing has gone wrong at all. We are expecting a nice, long service life from the new one too. It’s definitely going to see me out given I’m retiring, that’s for sure,” he says.

28 | MHD MAY 2021

Toyota’s legendary reputation for durability hangs on a major cornerstone of the Toyota Advantage: Quality, Reliability and Durability (QDR), Brendan says. “We shorten it to QDR and that’s a huge part of our business.

We at Toyota have a very advanced production system that ensures highquality machines, so when you buy one of our forklifts you know it’s not going to let you down.”

When asked to compare his old Toyota forklift to the new one, Laurens says there are a few differences. “The old forklift is still performing well, the new one is excellent but it’s quite different. I guess we’re old fashioned because it took a little bit of getting used to with all the extra safety gear, but I suppose you have to have that and it’s there for a good reason,” he says.

“The SAS safety feature is a good thing to have. Luckily, we have never been in a situation where we’ve had a tip over and I hope we never do, but it’s good to know that the SAS system is there just in case something does happen.”

Brendan says the safety feature Laurens is referring to is Toyota’s exclusive System Of active Stability (SAS), which is another key tenet of the Toyota Advantage. “Our automatic safety system, SAS, is an indispensable feature for our forklifts and a huge part of the Toyota Advantage,” he

says. “The SAS computer constantly analyses the potential for a tip over.

If the SAS computer finds tip over potential, it sends a signal to the Toyota forklift actuators, which then minimise tip-over potential.”

Laurens says another advantage of the new Toyota forklift included it being significantly quieter. “The side shift is excellent, it makes a lot of difference. The larger 3-tonne capacity is great as well.”

The process with Ki-Ki Engineering was quite seamless, Brendan says. “We talked about the kind of forklift that would best suit their business and gave them a quote. They were happy with that, so it was ordered and delivered. It was made easier by them pretty much knowing what they wanted, which was mainly a larger capacity diesel,” he says.

Brendan also notes how enjoyable the entire process was. “The outstanding long-term performance of their old Toyota forklift made it a lot easier to choose another Toyota. I don’t think they actually considered any other brands,” he says.

In regard to Ki-Ki Engineering’s 20-year-old (and counting) Toyota forklift, Laurens says they have no plans to retire it. “We’ll simply be keeping it until such time as we need another, and then we’ll buy another new one.” ■

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MHD SUPPLY CHAIN

TOWARDS A UNIFIED PROCESS FOR REVERSE LOGISTICS Richard Jones, Chief Marketing Officer for GS1 Australia, talks to MHD about the need to come together to address reverse logistics.

F

or manufacturers – through to wholesale and distribution, retailers, and in fact organisations of all types – reverse logistics has far too often been seen as a one-way street, Richard Jones, Chief Marketing Officer for GS1 Australia, tells MHD. “Manufacturers have put a lot of time into their supply chains for getting goods to market: in one direction from manufacturer to wholesaler to retailer to consumer,” he says. “And there is a lot of effort around that in terms of unique identification of things: in terms

of barcodes, electronic messaging, alignment of master data, and so forth. There has been a lot of investment that has gone into developing standards around that process and streamlining that process.

Many of these same standards have also been gradually introduced in sectors such as healthcare to help to streamline one of the most ‘just in time’ and fast-moving supply chains.”

It is time now, says Richard, to put the same effort into seeing logistics as a two-way process, and for the industry to push for a unified

One electronics brand had to support up to 64 different reverse logistics processes.

Richard Jones, Chief Marketing Officer for GS1 Australia. approach to deal with logistics in reverse.

Although the issues of reverse logistics have magnified with the growth of online shopping, and the increased awareness that counterfeit product can enter supply chains via reverse logistics in areas such as pharmaceuticals or luxury products, discussions of how to deal with this challenge are not new. Richard says that about 10 years ago GS1 did work with different areas and sectors across the retail and manufacturing side of the reverse logistics process.

“We created a set of guidelines for industry on how to put together this process in a standard way that all retailers and manufacturers could be confident in and were able to support,” he says. “There were a number of companies that came together and were signatories to this document – but the reality is that not very many of those have implemented it MHD MAY 2021 | 31

MHD SUPPLY CHAIN because they’ve had other priorities.”

He says that the reluctance to implement the standard could be because it’s not perceived as a significant cost to retailers, who are satisfied enough with the processes they have in place and don’t register the cost to manufacturers. “But it is another cost and another area where potentially things could be streamlined,” Richard says. “It’s annoying, if nothing else, to manufacturers if they have to go through these multiple hoops to get the product back into their business.”

Since this initial set of standards was developed, further standards have been developed to address areas such as verification of products re-entering controlled product environments, for example prescription medicines. Given that the original guidelines are now a decade old, and the opportunities across many sectors have only been amplified in recent times, Richard says that GS1 would like to engage in a reassessment with leaders across the sectors. He says they would look at where members report the greatest challenges to make sure there are guidelines that are appropriate for the modern ways of trading and the volume and speed of operations today. “We would like their help in getting new guidelines promoted as well as getting some ownership of the process from stakeholders.”

GS1 is now at the starting point of re-opening this discussion. Richard says that a working group could look at tackling this specific problem. “I think ideally it would be a group that worked across different sectors, because while some retailers may only work in one sector, a lot of retailers – particularly online retailers – are trading across a whole range of different areas,” he says. “So crosssector buy-in is important. We’d be happy to facilitate that group and get it together. At this stage we are looking for expressions of interest from major stakeholders.”

GS1 Australia is part of a global standards organisation with 115 international offices.

Richard says the discussion needed really is global: “Since so many industries and companies now operate without borders, any effective solution needs to be interoperable across borders. That’s part of ascertaining industry best practice. Presently, no country that we know of has a universal policy that we could take as a model.”

CHALLENGES IN ACTION Richard says GS1 has seen first-hand the urgent need for a unified standard

32 | MHD MAY 2021

“

We did some work a year or so ago in consumer electronics, for instance, where a local supplier or brand owner was telling us they had to support up to 64 different reverse logistics processes for the 70 or 80 odd retailers they traded through.

”

Ten years ago GS1 worked on general standards for the reverse logistics process. on reverse logistics.

“Locally, we did some work in consumer electronics where a local brand owner was telling us they had to support up to 64 different reverse logistics processes for the 70 or 80 retailers they traded through,” he says.

“That’s a significant cost to their business.

They were talking to us about trying to streamline that process and to see if it could be adopted by all retailers across the board.”

This is a significant problem for manufacturers, Richard says, particularly for discrepancies between reverse logistics processes used by retailers in returning faulty or customised products to manufacturers.

“There can be different messaging formats, so a number of retailers will require electronic notification to be provided to them, for example product recalls; others want suppliers to fill out proprietary forms; others will require manual paper-based solutions,” he says. “So, there’s a lot of different ways in which these things are initiated and then followed through. Peak manufacturers don’t want to be fiddling around with paper, but they are sometimes forced to, especially when dealing with second-tier retailers.”

ACHIEVING A GLOBAL STANDARD While Richard says that theoretically a global standard could probably be

MHD SUPPLY CHAIN

GS1 RECALL

formulated within a few months, the end point of this process will more likely be five to 10 years away to full implementation. “The key for us right now is to get organisations interested and involved, because for a lot of them they believe they have a system that works; it’s their system, and they’re not seeing the cost could be eliminated through greater consistency in practices,” he says. “Getting these people together, to collaborate and build a business case – that’s the initial goal.”

The bottom line, Richard says, is about minimising cost and maximising efficiency for manufacturers, as this directly affects consumers at the other end of the supply chain.

“A lot of the reverse logistics process is about ensuring a positive experience for the consumer or buyer,” he says. “If there is confusion between a manufacturer and retailer that can lead to confusion for the consumer as well, in healthcare the consequences could be far greater. So ultimately it is about streamlining the entire process. While our standards apply directly to one

part of the supply chain, ultimately it is the consumer that will benefit from all of this. Whenever we have a product that we want to return as consumers we know that there can be challenges in doing that.”

Richard says that consumers will be familiar with how easy it is to get products, but how timeconsuming it can be – particularly when a transaction is international – to get a faulty or customised product replaced.

“The people we buy it from are much quicker at getting the product to us than returning faulty or unwanted goods back to them,” he says. “And they’re loathe to do it because the financial imperatives are there and because the systems just aren’t streamlined to make it easy for them. That’s why we’re opening up this discussion again to try and get this problem fixed, for consumers as much as for manufacturers and retailers.” ■ For more information regarding GS1 reverse logistics or to become part of the GS1 reverse logistics working group visit www.gs1au.org/reverse-logistics.

GS1 offers a product called GS1 Recall that can help brand owners with the reverse logistics process.

“GS1 Recall is a platform where a brand owner enters all of the information about a product recall or withdrawal into a system and that information is immediately sent out to its trading partners electronically,” Richard says. “It is mainly used in grocery and healthcare.”

“One of the problems we often find with product recalls is that an initial message goes out to trading partners alerting them to look out for this or that batch,” Richard says.

“But as they go through the recall process, they will continually find that it’s broader than they initially thought. At first they think it’s only two batches that have been contaminated, then it’s 10 batches and they have to re-issue the recall message all over again. The people at the other end might never be sure if they have the latest advice and information.”

“This is where GS1 Recall is really useful,” Richard says. “Information about the recall is entered into our database, and new messages are sent out whenever new data is entered, it pushes the information to the users and they will always know they have the latest advice.”

MHD MAY 2021 | 33

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MHD SUPPLY CHAIN Last mile delivery efficiencies start in a warehouse with a solid tech backbone of automation, picking tech, such as Andoid Voice, and an adaptable software.

THE FORMULA FOR THE POST-PANDEMIC RETAIL AND SUPPLY CHAIN REVEALED As the profile of bricks and mortar stores fundamentally change, retailers are rethinking their instore operations. With rising pressure from consumers, MHD asks Körber whether there is a better way to utilise instore inventory and footprint to meet the demands of today’s digital shoppers?

T

he latest e-commerce figures are in. Australia Post has revealed that e-commerce grew 57 per cent in 2020. Across the country, every state and territory recorded double digit e-commerce growth throughout last year.

With most restrictions surrounding shopping in-person now largely lifted throughout Australia, retailers are now tasked with serving a consumer base whose buying habits have fundamentally changed since the pandemic.

“As retailers are getting over the initial shock of the impact of COVID, we’re seeing an influx of requests to transform their instore profile to try and better serve their growing online consumer base,” Rizan Mawzoon,

Head of Transformation ANZ at Körber Supply Chain Software says.

Pre-COVID, many iconic Australian retailers were heavily focused on growing their bricks and mortar store strategy and servicing customers in-person. “COVID-19 forced Australia to grow up very quickly when it came to e-commerce,” Rizan says.

Kmart, one of Australia’s largest and most well-known retailers, had to quickly adapt to a rise in online orders. The leading retailer converted almost 120 physical stores into mini fulfilment centres and rolled out Körber’s Android Voice solution across its fulfilment operations to keep up with online demand.

While some of the quick changes made during COVID-19 were to

cater to the rapid rise in online demand, as shoppers return instore, their habits and expectations have completely changed.

This is leading to a merge of supply chain and retail operations and an opportunity for retailers to rethink the way they manage and operate their physical stores. By utilising technology and fulfilment capabilities that are traditionally found in a warehouse, retailers can improve delivery time, enhance customer experience and boost revenue.

“When you move away from the traditional mindset of a bricks and mortar store’s sole purpose being to serve instore customers, you can get creative and better serve your growing online consumers by looking MHD MAY 2021 | 35

MHD SUPPLY CHAIN

Rapid e-commerce fulfilment efficiences with AMRs is available in flexible and scalable options.

to technology that is currently transforming warehouse and fulfilment centre operations,” Rizan says.

THE CHANGING PROFILE OF THE RETAIL STORE Being able to service online customers with same-day or even one-hour delivery is a major opportunity for retailers. But the question remains: how do you use your store network to service both instore and online customers at the same time?

In response, retailers are looking to technology that is more commonly found in the warehouse to empower their employees with the tools and capabilities needed to dramatically increase fulfilment volumes.

Automation, picking assisting technology and innovative software are helping major retailers to adapt.

“There are now a number of instore and DC tech options that alleviate the growing pains of a post-pandemic retail e-commerce business. These are scalable, agile, mobile, flexible and collaborative and there are a number of very low-investment options such as AMRs, robots-as-a-service or hardware-as-a-service,” Anthony Beavis, General Manager ANZ at Körber Supply Chain Software says.

A good example is Chemist Warehouse, one of Australia’s largest pharmacy retailers, modifying its click-and-collect solution during COVID-19 to better service its growing online consumers with a same-day delivery service.

36 | MHD MAY 2021

“

This is a very exciting chapter in our industry.

As many organisations are now acknowledging the importance of blending retail and supply chain operations, there’s a golden opportunity to conquer the last mile through innovative and scalable technology.

”

By thinking creatively, Körber developed an award-winning software solution that enabled the retailer to fulfil online orders from the store closest to the consumer.

“If a customer is based in rural Victoria, the order is fulfilled by their local store instead of coming from a central distribution centre. This enables Chemist Warehouse to provide their customers with a super-fast click and collect or delivery window,” Rizan says.

Iconic Aussie retailers such as Kmart and Chemist Warehouse hold a lot of inventory in their physical stores, so were in the perfect position to fulfil instore with minimal disruption to the customer experience.

“Retailers now have the right options by tech providers to achieve the ultimate technology backbone. E-commerce heads can now pivot their strategy almost overnight knowing they have the technological means to support their supply chain including picking, packing, sorting and last mile delivery efficiencies,” Anthony says.

For more specialist retailers, such as Decathlon – one of the world’s largest sporting retailers – an automated microfulfilment solution is better suited.

“Not all retailers hold as much inventory instore as Kmart and Chemist Warehouse, especially if they specialise in unique and high-value items. If someone orders something online and a retailer is only holding one or two of those items in stock instore, it’s extremely problematic if a customer purchases the same item instore

MHD SUPPLY CHAIN before the online order is fulfilled,” Tim Baracz, Sales Director ANZ at Körber Supply Chain Software explains.

Capable of moving at speeds of close to one metre per second, the Körber AMR deployment at DHL and Decathlon’s Sydney fulfilment centre enables workers to despatch up to 144 customer orders per hour – more than double the productivity expected in a manual environment.

EMPOWERING EMPLOYEES In 2020, Woolworths’ app and online store sales increased 100 per cent. As a result, it’s becoming increasingly common to see instore employees picking online orders in retail stores around the country.

However, Tim warns that this approach can be problematic if employees are not given the right tools to service the instore customers as well as those online.

“Kmart is a great example of best practice here. Körber’s Android Voice solution allows their instore employees to pick online orders, but they are still aware of what is happening around them. They don’t need to put a device down

Android Voice along with Locus Robotics solution offered by Körber is an efficient fulfilment combination.

Chemist Warehouse’s Click to Deliver Solution by Körber – an innovative solution during a pandemic and beyond. and their hands and eyes are free to serve any customers who need help instore,” Tim says.

There’s also the issue of stock availability and inventory control.

Jamie Sterling, Director of Sales APAC at Körber Supply Chain Software uses the example of an online consumer being given misinformation around stock availability.

“If accurate inventory data isn’t available, this nightmare scenario is bound to happen,” he says. “When you’re running more systems, you need full end-to-end visibility of what’s being ordered in real time.

Having the ability to prioritise your inventory and facilitate fast picking for online is one of the biggest challenges we’re seeing at the moment.”

As retailers fight for customer retention and loyalty, the online customer is becoming more important and speed to market is the key to success. The retailers who will succeed are the ones who make the most out of their store footprint and deploy the technology to empower their employees to service both online and instore customers.

“We might start to see longer opening hours, or overnight shifts working instore to pick orders to despatch the next morning. Retailers’ priorities lie in getting orders out the door, meeting the needs of their consumers and hitting their delivery expectations. With the right

technology instore, you can use digital tools to meet this growing demand, remain competitive and boost revenue,” Jamie says.

ADAPTING SKILLSETS This phenomenon is not just apparent in the merging of retail and supply chain roles and operations, but also in the merging of titles and skillsets across all levels of roles within these industries.

Nishan Wijemanne, Managing Director APAC at Körber Supply Chain and Global AMR Solutions leader asks: “Have you met someone recently with position titled Head of Innovation or Head of Transformation?”

Recruiting a combined skillset or leader that can deliver transformation and innovation across the organisation as opposed to just one core area of the business is paramount in the postpandemic retail world, Nishan says.

“The pressure is on for Chief Information Officers or Heads of Retail Operations to innovate and transform. This industry is looking for innovative capabilities to adapt to this major operational change.

Overall, this is a very exciting chapter in our industry. As many organisations are now acknowledging the importance of blending retail and supply chain operations, there’s a golden opportunity to conquer the last mile through innovative and scalable technology,” he concludes. ■ MHD MAY 2021 | 37

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MHD WAREHOUSING

A NEW ERA IN WAREHOUSE MANAGEMENT As Manhattan Associates rolls out its new unified cloud-native Warehouse Management System, MHD explores the challenges to effective warehouse management and the benefits of the global leader’s latest offering.

O

ver the last two decades, the growth of connected consumers and a fast and free fulfilment economy has fundamentally changed the dynamics of supply chains all over the world.

While new businesses with unique warehouse management needs are not a product of COVID-19, the virus has forced companies to re-evaluate the systems they have in place, and this is especially so for their Warehouse Management Systems (WMS). Upgrading existing WMS technologies, even in normal times, is a challenging and drawn-out process, given individual business’s unique needs and the implementation process that must meet those needs. But global WMS technology group Manhattan Associates has been working on a game-changing technology for more than a decade to create a holistic and unified WMS. “Today’s supply chain leaders need actionable insights across their entire operation from a single, intuitive application. They need

augmented intelligence from AI and machine learning to navigate skyrocketing volumes and decreasing commitment windows,” says Raghav Sibal, Managing Director Australia & New Zealand at Manhattan Associates. “And they also need to creatively engage their labour force and interconnect their automation to ensure maximum efficiency for humans and machines.”

A NEW SOLUTION FOR A NEW ERA To connect the two sectors, Manhattan Associates has created a unified supply chain execution tool: Manhattan Active Warehouse Management (WM). This device combines all demand, supply, labour, slotting and automation into a precision instrument of efficiency across every facility in the business network, regardless of physical size, velocity or volume.

Manhattan Active WM is cloudbased and version-less, which means businesses need never buy another WMS. Instead, Manhattan Active WM

Manhattan Active WM is a unified supply chain execution tool.

Raghav Sibal, Managing Director Australia & New Zealand. offers organisations continuous access to new capabilities and solutions to meet their customers’ needs. All system and software maintenance are ongoing and seamless, freeing up businesses to focus even more energy on serving their customers.

It also improves customer service by strategically grouping items together for fulfilment and continuously updating placement recommendations based on new trends and data.

“This technology can transform what a distribution facility is capable of by an order of magnitude,” Raghav says. “The incorporation of gamified associate experiences and the re-engineered flexibility of slotting, picking, packing and sorting have unshackled order streaming and will unlock its full potential for real-time orchestration of simultaneous wholesale, retail and direct fulfilment. This will significantly increase the potential for picking efficiency and overall throughput.”

MHD MAY 2021 | 39

MHD WAREHOUSING

“ Manhattan Active WM optimises employee-engagement.

OPTIMISING PRODUCT SLOTTING Manhattan Associate’s new technology automatically determines the best locations for inventory to increase workforce efficiency, shorten order fulfilment cycles, and maximise throughput For Raghav, warehouse operations are just like real estate. “Location makes all the difference,” he says. “It directly affects productivity, worker safety and order accuracy. You want fast-moving items situated in the most accessible locations, heavy items placed to minimise damage, and total storage capacity optimised.”

“With the challenges of smaller orders, SKU proliferation, volatile demand and shorter order cycle times, warehouse spaces must be constantly fine-tuned.

As distribution operations adapt to requirements driven by digital commerce, optimised slotting becomes more critical to controlling costs and meeting customer expectations,” Raghav says.

ENGAGING YOUR MODERN WORKFORCE Raghav says labour management approaches must evolve together with a new generation of workers and labour market conditions. With labour shortages, the rise of digital native and gig economies, and the impact of COVID-19, companies need new tools to get the most out of their workforce without treating workers one40 | MHD MAY 2021

Today’s supply chain leaders need actionable insights across their entire operation from a single, intuitive application. They need augmented intelligence from AI and machine learning to navigate skyrocketing volumes and decreasing commitment windows.

”

dimensionally. “Measuring success has to expand beyond common standards for evaluating productivity to understand how we can motivate and engage employees on a human level,” Raghav says.

Manhattan Active WM features employeeengagement technologies that prioritise and optimise metrics like recognition, feedback, happiness, personal growth, satisfaction, wellness, ambassadorship, relationships with managers and co-workers, as well as alignment with the company.

To cultivate these attributes, team leaders need more than just raw performance data assessing worker productivity. Manhattan Active WM’s technology facilitates more holistic feedback and employee engagement.

“Similar to the real-time performance data we experience using fitness apps, this new employee engagement technology fills an important void in the need for immediate and constant feedback for employees in a large and complex operations environment,” says Raghav.

REIMAGINING OUTBOUND AND RETURNS PROCESSES Manhattan’s new technology allows for greater efficiency on the warehouse floor.

Picking is no longer limited by pick type, order type or the processes that follow downstream. Instead, picks are organised around priority and precisely sequenced to minimise travel. Different pick types can now be chained together to minimise the distance and travel time between locations.

“Outbound sortation can automatically, or manually, direct inventory to the optimal packing area using our intuitive graphical pack station options,” Raghav says. “Based on configurable rules, outbound put-away intelligently directs completed licence plate numbers to the correct pickup or drop-off location, or directly to a consolidation area on an outbound dock where items are loaded right onto the correct truck.”

Manhattan Active WM also streamlines returns processes, returning merchandise to sellable condition as quickly as possible.

Its modern returns processing interface supports multiple initiation workflows and rapid inventory disposition to drive faster inventory recovery and more rapid customer credits.

UNIFIED AND ADAPTIVE PLANNING Order Streaming technology allows Manhattan Active WM to continuously plan, learn and replan every task and resource simultaneously across retail, wholesale and

MHD WAREHOUSING

Manhattan’s new technology streamlines picking processes. direct fulfilment workflows.

“As soon as orders arrive, they are streamed individually or sorted into wave-like collections depending on the urgency, type of fulfilment and customer needs,” says Raghav.

“Rather than flooding the floor with

work all at once, our Order Streaming ensures the right resource where sufficient capacity is quickly identified, so orders get to the dock ahead of the carrier cut-off times and promised service commitments.

Order Streaming also maximises a

business’s delivery truck utilisation by constantly adding applicable new orders to open shipments right up until transport departure.”

Order Streaming allows for delays in final task construction and assignment, including travel and pick paths, until the work is ready to be assigned. Picking efficiency is maximised through advanced task optimisation, scheduling, and the ability to build hybrid picking carts so that individual and bulk picks for retailers can be done simultaneously.

The suite of facilities in Manhattan Active WM makes it ideally suited to the problems facing supply chains today, says Raghav.

“Distribution centres today are under pressure like never before, with heightened customer expectations and shortening delivery windows,” Raghav says. “Our cloud-based Manhattan Active WM is version-less, and so offers the industry continuous access to new capabilities and solutions to key operational pain-points.” ■

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MHD MATERIALS HANDLING

HELPING MANUFACTURERS REACH INDUSTRY 4.0 Praveen Kannan, National Product Manager for SICK’s Industry 4.0 platform, shares how the company’s new Inspection Plus Tracking (IT+) solution is bringing manufacturers up to speed with the Fourth Industrial Revolution. provides digital visualisation for users.

With superior tracking and inspection technology, Praveen says, comes better data and data visualisation for manufacturers.

“Data is key for all manufacturers,” he says. “We at SICK are trying to create new data through our inspection and tracking system. Previously, our customers haven’t had the best data because they haven’t had the technology that produces that data. So with new data we create new value – and align with customers’ business synergies to create both top line growth and bottom line savings.”

SICK’s Inspection Plus Tracking (IT+) brings together machine vision and RFID technologies in synergy.

A

s the Fourth Industrial Revolution (Industry 4.0) continues to evolve, businesses need flexible solutions to adapt, says Praveen Kannan, National Product Manager for SICK’s Industry 4.0 Platform.

“The move towards Industry 4.0 is an unfolding macroeconomic trend that has been occurring across all sectors,” Praveen says. “We are seeing a shifting focus from traditional quality control and lean manufacturing to more agile processes. An example is a customer who wants their product made in a factory but doesn’t necessarily want the same product as everyone else. It’s that customisation that is driving the adoption of Industry 4.0, making manufacturing very flexible in terms of not only what is made, but also customising things to a degree we haven’t seen before.”

Under the umbrella of Industry 4.0, says Praveen, is the idea of ‘Seamless Manufacturing’, which allows organisations to scale up and down 42 | MHD MAY 2021

production-based variabilities of Stock Keeping Units [SKUs], lots, and batches.

MAKING IT SEAMLESS SICK’s Inspection Plus Tracking (IT+) solution is playing a big role helping firms to achieve their goal of seamless manufacturing, says Praveen. Central to this solution is the use of machine vision and radio frequency identification systems (RFID) for quality control and end-to-end tracking.

“Our advanced machine vision system uses a high speed, three-dimensional camera system,” says Praveen. “This system allows for infinite quality control on the production line. The accuracy of the system is down to micron level. With three-dimensional inspection, objects of varying sizes and shapes can be assessed for quality; and the system is suitable for any production line.”

The IT+ solution combines this machine vision with RFID for automated identification of products and assets, and

INTERNATIONAL ADVANCES SICK was founded in Germany after WWII to provide safety manufacturing solutions. Today, it employs more than 10,000 employees across all the major continents. While owned by its parent German company, he says that SICK’s Australian business is entirely focused on the local market.

“In terms of technology adoption, Australia is lagging behind, both due to price point and competency perspectives,” says Praveen. “But in terms of need and desire we are in greater need than – for instance – the United States or Germany.” To that end, he says that SICK has been investing in competency development in Australia for both machine vision and RFID, so that customers can leverage technologies at the right price point for their business.

Praveen says that SICK sets itself apart from its competitors both because of its own high-quality, German-produced engineering solutions and its energy in adapting those solutions to the Australian context.

“SICK invests locally in resources to

MHD MATERIALS HANDLING build competencies: we have onshore Industry 4.0 engineers working in Australia developing applications to link software with customers’ systems, and to assist in implementation,” he says. “We have a very large services and application skill set available for our customers. And we also have a great deal of local experience. Culturally, it’s a very different workforce in Australia for manufacturing and supply chains – so our experience working in Australia means we can tailor our solutions.”

Building core competencies and helping Australian firms to implement Industry 4.0 technologies is a core focus for SICK in the near term, says Praveen.

“A lot of our customers have expressed a desire to implement Industry 4.0 technologies, but they don’t know where to start,” he says. “If a customer asks us: ‘I’m at level one how do I get to level 3.0 or 4.0?’ then we come up with a blueprint to help them get there.

TAKING THE NEXT STEP

Bleed Praveensize: says 220mmx158mm(H) that SICK’s IT+ solution is a great place to start for many

manufacturers. Often, machine vision and RFID technologies are used in isolation, so businesses aren’t seeing the optimal results of either. “An example might be a customer who is using RFID in isolation, but not seeing the true value of tracking because they’re not seeing the defects as well,” he says. “On the other hand, a customer might be using machine vision solutions to locate defects but can’t leverage the true value of their insights because they lack the tracking technology to do more targeted recalls.”

The key, he says, is to get RFID and machine vision working in harmony: “By marrying machine vision and RFID together we are seeing exponential benefits and synergies for our customers.”

For a concrete example of where IT+ is paying dividends, Praveen points to customers SICK has in the Australian food and beverage sector: “There have been increasing compliance requirements in terms of maintaining traceability as well as maintaining quality standards.

Trim size: 210mmx148mm(H) And this is where our RFID and vision technologies are really helping

our customers.”

Praveen notes with pride SICK’s work with a large Australian-owned multi-species meat manufacturer to achieve its vision of farm-to-plate transparency. “By tagging and tracking every single animal on their production floor, this customer is able to achieve full traceability from raw material to finished product,” says Praveen. “These tracking events, combined with machine vision inspection, assures them that every single product is subjected to the highest quality check and can be tracked all along their production and supply chain.”

SICK’s sensor and tracking technologies are proving very helpful in high-risk businesses, such as meat production, to track and maintain workforce and consumer safety.

“In Australia we think the adoption of Industry 4.0 technology will make Australian manufacturers more resilient,” Praveen says. “And this will build a very strong foundation for Australian manufacturers to remain relevant and competent going into the future.” ■

MHD INDUSTRIAL PROPERTY

LOGISTICS PROPERTY FOR A NEW ERA LOGOS has built a strong reputation for its logistics property developments over the past decade. MHD talks with two of its Australian leaders about its success, industry trends, and what investors and tenants want in a new era for logistics and supply chain facilities.

L

OGOS started 10 years ago as a fund management platform for international capital partners.

According to Darren Searle, Head of Australia and New Zealand for LOGOS, its founders and Managing Directors, John Marsh, Trent Iliffe and Stephen Hawkins, had strong backgrounds in the industrial investment and development sector, and focused LOGOS’s funds management strategy on what they knew best: logistics real estate.

“They identified a niche in the market for a pure play operator to focus only on logistics real estate,” Darren says. “We don’t mix it up – we stick to our bread and butter. And that has meant we have expanded in a relatively unique way discerningly focused on Asia and the north-south

The new Gold Coast Logistics Hub.

44 | MHD MAY 2021

supply chain route connecting that region down through Australia.”

By managing their capital partners’ funds through industrial real estate development, LOGOS has positioned itself as the medium through which property investment opportunities are matched with high value and innovative customers. “We are the gel in the middle that allows those two groups to work together – one as owner and one as occupier,” Darren says.

A DECADE OF TRANSFORMATION “What has happened in the past decade in warehousing is a real drive towards automation,” Darren says.

“That automation takes pressure

off labour certainty and labour cost considerations; and in dense urban Asia Pacific markets is the only way to address scalability bottlenecks.

There has been a big uptake in warehouse automation – which has provided more delivery certainty, security, as well as less damage to freight within warehouses caused by human error.”

But the warehouses of old are not necessarily equipped to adapt to this trend, Darren says. “One of the problems with automation is that it’s very difficult to retrofit warehouses,” he says. “Instead, you have to start afresh with a blank canvas with a vacant warehouse or greenfields developments, integrating the installation of automation into the

MHD INDUSTRIAL PROPERTY

LOGOS purpose-built Toll’s new Gold Coast facility.

new warehouse as you go.”

Higher labour costs in Australia and New Zealand operate in tandem with a scarcity of industrial land in the capital cities, Darren says, necessitating fresh warehousing solutions for both old and new companies. “There’s a reducing supply of industrial land, and as a consequence land prices go up and occupancy rates go up. Therefore, there’s a real ambition to automate, reduce area footprint with taller warehouses, and increase efficiency,” he says.

Another key driver for both investors and customers today is an insistence on sustainability, says Darren.

“The sector is going through a transformative period that we’re very proud of in terms of being both effective and sustainable,” he says.

“Previously, we’ve had our capital partners telling us: ‘We’re only going to invest in green’. But now we are seeing a trend where occupiers are also saying: ‘We’re only going to occupy sheds that are green.’”

To that end, LOGOS has implemented a sustainability framework. It is achieving green building certifications and awards across its portfolios. Its framework includes carbon neutrality targets, resource efficiency initiatives, as well as measures to conserve and regenerate biodiversity.

COVID-19 AND THE EMERGENCE OF E-FULFILMENT “We went into COVID in 2020 and we came out in 2030 in terms of advancements to the way in which people procure and buy,” Darren says.

While the trend towards e-commerce had been gathering momentum for years, COVID-19 forced a sudden, rather than orderly, transition for many retailers and logistics companies.

“In many respects Australia is very advanced in automation and maturity because our cost base in terms of labour and other things forced it upon us,” Darren says.

“But e-fulfilment is a different matter. Our cities are much less population-dense than Shanghai or New York City, for instance, where two-hour delivery is commonplace.”

Moreover, he says, e-commerce players in dense urban areas in Asia-Pacific have begun to adopt more automation to accommodate the vast scalability of the sector.

Darren says that Australia has consequently placed less emphasis on last-mile delivery. But COVID-19 has shifted consumer emphasis to e-commerce.

“We’re in a situation where e-fulfilment will have to be looked at differently,” he says. “But there’s one difference. Previously Australian purchasers weren’t prepared to pay for delivery. Now they are starting to

adapt – so I expect more investments in e-fulfilment and the ability to deliver quickly. We might see traditional retail centres shift from a classic shopping mall model to also include e-fulfilment centres.”

While the future of e-fulfilment in Australia is unclear, Darren says that many of LOGOS’s customers are considering different methods of distribution, including a move to decentralisation.

“Rather than just having one big distribution centre serving a capital, some are looking at creating multiple distribution centres around the city,” he says.

LOGOS anticipated this trend and is already working to develop larger estates from which multiple distributors can operate. “We look at opportunities where we can aggregate occupiers into one location. We are always testing the market to see where we can bring customers into one estate,” Darren says.

“Being forward looking in our development of land banks is very important to us,” he says. “We have a variety of sites that we can offer customers depending on where and how they wish to distribute. We’re buying, developing, and capitalising on land bank opportunities across Australia.”

Anticipating the needs of tomorrow is crucial, he says, to developing land MHD MAY 2021 | 45

MHD INDUSTRIAL PROPERTY banks that are adaptable to tenants with flexible needs. “In particular, I think having real estate opportunities that connect with key infrastructure is key – whether it’s roads, airports, rail lines, or being adjacent to solid utilities such as data and power,” Darren says. “For us it’s all about constant and progressive development of our landbank so we can effectively serve our customers going forward.”

The new Toll facility consolidates its last mile operations for the Gold Coast.

A GOLDEN OPPORTUNITY Justin Sherlock, LOGOS State Manager for Queensland, says that LOGOS is well positioned to offer the kinds of flexible warehouse solutions that the market demands.

“We have been developing our Gold Coast Logistics Hub since we acquired the land in late 2017,” he says.

“The acquisition was driven by our identification of strategic shortages of zoned industrial land in the central Gold Coast region.”

The Gold Coast Logistics Hub is well placed for supply chain connectivity. It is 75km away from Brisbane Airport, 38km from Gold Coast Airport, 24km from the Yatala Enterprise Area, and 75km from the Port of Brisbane.

The Hub’s first purpose-built facility was for Toll Group, so it could centralise and streamline its distribution operations in the area, says Justin.

“Toll had had a number of different facilities on the Gold Coast, which was getting inefficient. The facility we built them meant they could centralise all their disparate components into one facility, and they have got a lot of

supply chain efficiencies out of that,” he says.

“It was a big project for them because they’d been looking for a suitable Gold Coast site for about 10 years and couldn’t find it. We worked together to solve the problem and create a true last mile destination for them.”

Before it became the Hub, the Gold Coast estate was previously a Colgate Palmolive toothpaste and washing powder facility, long dormant due to offshoring of its manufacturing, Justin says.

“We acquired the site, removed the existing improvements and undertook an extensive program of bulk earthworks,” he says. “We moved over 600,000 m3 of material and invested about $14 million in infrastructure

Aerial view of Toll facility and surrounding area .

46 | MHD MAY 2021

to create the lots, roads, services and external road upgrades for the estate.”

But the Toll facility is only one part of LOGOS’s overall vision for the Hub. As Justin says: “There is a critical shortage of decent product on the Coast to accommodate logistics & warehouse occupiers. That’s why we’ve built eight units specifically designed for such tenants, ranging from 1400 to 7000 sqm and to be made available from July.”

These eight units are ideally suited to occupiers that have experienced rapid growth during COVID-19, says Justin. “We’ve currently leased out two of the eight units and we are expecting the others to be taken up quite quickly.

Additionally, we can also offer tailored facilities within the estate of up to 30,000 sqm – purpose built for what our customers need in this great lastmile location.”

The Gold Coast Logistics Hub is one exciting manifestation of LOGOS’s guiding philosophy, says Darren Searle.

“Building sheds is not a difficult task, and that ability is not what differentiates LOGOS. What is important is having the capital partners and tenants that will back us into the next genre of sheds – sheds that are more efficient, more sustainable, have higher clearances and therefore storage capacities, are more specialised, and so on. That backing comes down to the confidence we have from our capital partners and our customers, a confidence built on our outstanding network in the Pan Asia region.” ■

CLOSING THE CIRCLE.

Production and intralogistics in harmony. Once considered two distinct disciplines, now these areas are growing closer and closer. The prerequisite for a smart, networked production. SICK, with their 360° approach, represents optimization of the entire value-creation chain. So the circle is completed – and production logistics gets smart. We think that’s intelligent. www.sick.com/production-logistics

MHD Supply Chain

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MHD TECHNOLOGY

WHY YOU NEED ENHANCED VISIBILITY As businesses are remodelling their supply chains, analyses of warehousing and distribution operations are bringing to light areas for improvement. Archival Garcia, Vice President of Sales at Microlistics, sits down with MHD to discuss where businesses are losing out, and how enhanced visibility is key to success.

W

hen COVID-19 hit in early 2020, businesses had to suddenly transform their operations to survive. “COVID-19 hit businesses overnight, and great retail stores had to shift into fulfilment centres,” Archival Garcia, Vice President of Sales at Microlistics, tells MHD. “We had to turn sites around with our WMS technology in only three months. Our retail customer base has more than doubled in the last two years, growing more than it has in the past 25 years.”

With the unexpected shift in operations, businesses were forced to analyse their warehousing and distribution processes in record time, says Archival. As a result, business leaders saw where they were losing out in productivity and profitability and had to consider solutions to these now visible problems.

Archival says the key for these managers to maximise profitability is enhancing their visibility on the warehouse floor. “It means understanding elements in the warehouse – in particular the inventory, the tasks and the labour – and understanding in real time what is on hand at any given moment to be able to provide accurate fulfilment options to the customer,” he says. “With all the growth in e-commerce, businesses have to be able to service those complex flows, and we can’t do that without understanding what we have and how we’re getting it there.”

According to Archival, this enhanced visibility in the supply chain is key.

“Businesses need to understand how fast they can go and how efficient they can be,” he says. “The other big aspect is accuracy – that they’re picking the right product for the right order at the right time, all the time.” Archival

“

We had to turn sites around with our WMS technology in only three months.

Our retail customer base has more than doubled in the last two years, growing more than it has in the past 25 years.

”

Archival Garcia, Vice President of Sales at Microlistics says enhanced visibility is the key to success on the warehouse floor.

offers this list of areas businesses can focus on to improve their operations, and how Microlistics can help.

UNKNOWN COSTS “Many people don’t know that in this region most businesses are now online, yet many are servicing online orders using the same workflows as their store fulfilment,” Archival says. “The problem with the pandemic when it hit is when all the stores closed, businesses had to send items to each customer individually.” When this happened, Archival says it became apparent that many businesses didn’t have a clear idea of what costs were involved in handling products and delivering the last mile. He notes companies thought they were making a large profit margin when they were selling high numbers of a product online, but failed to account MHD MAY 2021 | 49

MHD TECHNOLOGY

The metrics can help warehouses identify areas for improvement to increase visibility, efficiency and productivity. for labour, speed and cost margins.

“They didn’t have the visibility of how much time or costs were involved with picking an order,” he says. “What we do is offer that visibility, that this is how long it actually takes to fulfil an order for a type of unit, and this is how much it will cost you.” Archival refers to Microlistics WMS and the real-time data it portrays on dashboard screens.

“It supports every task, so every task is time and date stamped so you get a real understanding of when the task was released, picked and finished,” he says.

The system displays real-time inventory levels, broken down into fastest and slowest moving goods, to understand each individual warehouses’ needs. “The fast bit is really critical, because if you have fast moving inventory in a warehouse location that’s hard to reach, you’re already playing catch up and can’t get the most out of your system and marry it up to what you have practically,” he says.

LABOUR PERFORMANCE The most expensive aspect of warehouse operations after real estate is labour, Archival says, and its important businesses have full visibility on these costs.

“Labour costs in Australia are 50 | MHD MAY 2021

extremely high compared to a lot of other places, which means it’s imperative to get workers to reduce non-direct warehouse tasks as much as possible,” he says. “Businesses need to ensure that whatever their labour resources are doing is always related to getting product in, storing it, and getting it out.” The Microlistics WMS provides both inbound and outbound data, both currently and historically over the past few weeks, months and years. “You’re able to create your own KPIs to see how you and your workers are doing and can even place them side by side to create healthy competition,” he says.

The outbound system is especially designed for incentivising labour.

“The system sees all the product and where it is, so you’re able to bundle tasks together to improve productivity,” Archival says. “You can incentivise by seeing data around who’s picking more, who’s picking better and more accurately since you have real metrics.”

The dashboards provide the ability to have the data presented in an easy-to-read format, rather than hidden away in a spreadsheet or in a system. “Now you can get a real understanding of who your best workers are by taking the subjectivity

out of performance evaluation since everyone is treated equally and fairly,” he says. “When you measure a person, you can measure how much of their working time is productive, and how to maximise it.”

INEFFICIENT PROCESSES Another key area that benefits from enhanced visibility is inefficient processes within warehouses.

Archival says it’s most important that managers have the flexibility to understand certain scenarios. “In the past, businesses would try to fulfil orders in full to save on transport and send it out, but with the minimal shipments and lack of container availability due to COVID-19 there’s a lot more movement to just pick what you can bill for it and get it out the door,” he says.

When other orders start being treated as back orders, that’s when he says businesses can get themselves into hot water. “If you don’t have that visibility, you’ll be shocked by how difficult it is to reconcile and see what’s left and what processes you need to follow. If you treat normal orders the same way you treat back orders, then you’re already behind the eight-ball.” By implementing WMS dashboard technology, Archival

MHD TECHNOLOGY says businesses are able to understand what they are able to do to begin with, how they’re performing with the current strategy and how future strategy adjustments will impact their operations either positively or negatively. “As a WMS provider we’ve got the efficiencies of the operations down pat, so the next level of advancement is to have visibility of what’s happening and how any of these affect your business, such as workforce planning and strategy,” Archival says.

MARGIN LEAKAGE When businesses fail to accurately charge clients, it becomes a cost to the business itself, Archival says. “If these costs are higher than they thought, it becomes a loss for the business.” If 12 single line orders come through, and a warehouse worker spends their time individually selecting each item, packaging it and sending it off one by one, they’re wasting 12 fold the amount of time. Archival says in this instance, time equals money. “If the worker is able to bundle that task and pick all 12 items at the same time, perhaps pre-print the labels and stick them on as they’re packing the product, that becomes a lot more efficient,” he says. “The key is for us to be able to provide those metrics. How businesses operate is always changing, so giving visibility and showing why we are taking so much time to complete these orders

“

Businesses need to ensure that whatever their labour resources are doing is always related to getting product in, storing it, and getting it out.

”

and why it’s costing so much is imperative to maximising profitability.” Providing enhanced visibility allows businesses to see what changes mean for their operations, and how to respond in kind to keep up with them.

Archival points out that Microlistics WMS offers a billing module which captures every single activity that occurs on the warehouse floor. Each activity is automatically rated to fully understand recover actual cost.

THE SOLUTION “The current business environment is really dynamic. Any big changes or anything that goes wrong, the whole warehouse feels it,” Archival says. For this reason, implementing enhanced visibility is the key to future success. As businesses shift to omnichannel and e-commerce delivery, diversify into new product types and onboard new customers, the need for visibility will only grow, according to Archival. “Those factors are instant gratification, so if you miss a timeframe, a service level or an order, there’s a bigger connotation for a brand for that,” he says. “It’s driven by the fact that what you think you know might not necessarily be true, and that this is how fast you’re actually going.” He says the data itself isn’t what’s important – it’s how its presented in a meaningful way to focus on accuracy and productivity. “Our metrics will tell you what’s actually happening, and without that visibility, you’re blind.” ■

Data is portrayed in real-time on dashboard screens in user friendly style.

MHD MAY 2021 | 51

MHD WAREHOUSING

LIFTING THEIR INSIDE GAME As Australia’s largest e-commerce warehousing and order fulfilment provider, eStore Logistics treats every square metre of floor space as a valuable commodity.

The Combilift Aisle Master articulated forklift helps lift their inside game through the use of very narrow aisle racking, freeing up critical floor space for robotic automation handling operations.

A

ustralia’s e-commerce boom has increased demand for both third party logistics provider (3PL) eStore Logistics and leading global forklift manufacturer, Combilift.

Yet both are acutely aware that to stay ahead of the game, they must continue to innovate and customise solutions that directly fill their customers’ needs.

For eStore Logistics, that has involved developing a fulfilment solution that harnesses robotics and human smarts to provide same day delivery.

“The pandemic has accelerated digital literacy and in turn, encouraged more people to shop online frequently which has resulted in increased demand for our services,” explains eStore Logistics Strategic Projects Manager Kieran Boyce. “For example, eStore Logistics customers sold 181 per cent more items in June 2020 compared to that of June 2019.”

Moreover, eStore Logistics data indicates that the shift to online sales is permanent as consumer confidence in e-commerce has lifted since the lockdown experience.

52 | MHD MAY 2021

“E-commerce was already growing rapidly in Australia before the pandemic, at a rate of about 20 per cent per year. Part of the reason for this is that we’re still catching up with more developed markets like the US and UK,” acknowledges Kieran.

“What is interesting though is that people who experienced the convenience, choice and price benefits of e-commerce during lockdown are unlikely to fully return to bricks-and-mortar retail – so this is far from just a flash-in-the-pan.

Retailers need to be prepared for this.”

Significantly, Kieran notes that consumer expectations are increasing in tandem with online sales growth.

Therefore, “the power to offer faster, more efficient, and more cost-effective deliveries is a crucial step to building a loyal customer base.”

For many retailers, the costs of expanding or developing their own warehouse operation is not tenable, particularly as this requires investment in warehouse space, as well as exponential technology such as AI-powered robots to deliver a speedy

and cost-effective service. A 3PL strategy is often the more practical choice.

Which is why eStore Logistics has been upgrading and developing their own offering to retail customers.

“In response to increasing consumer demand for fast delivery, eStore Logistics set out to develop an industrywide fulfilment solution which cost effectively supports same day delivery and all-day fulfilment with a 4pm cut off for same day fulfilment,” he expounds. “eStore Logistics’ mission was to make enterprise level logistics available to retailers of all sizes.”

This solution was enabled by innovation – eStore Logistics have built their services “from the ground up” to increase the speed and efficiency of their operations. This includes the use of Combilift Aisle Master, an articulated forklift designed to work in very narrow aisles (VNA) of 1.6 metres, with a reach height of 15 metres. The Aisle Master is deployed across all eStore Logistics facilities nationwide. “eStore Logistics is a highly innovative business – each square metre of floor

MHD WAREHOUSING

Combilift’s Aisle Master forklift has been deployed across all eStore Logistics facilities nationwide to increase the speed and efficiency of its operations.

space is a value commodity that can be used for advanced robotics, storage or manual handling operating areas,” says Kieran. “The Combilift Aisle Master allows our business to minimise the footprint of our bulk pallet storage through the use of VNA pallet racking, which allows us to maximise storage per square metre, and to reclaim valuable warehouse floor space for other value-added activities.”

Those “value-added activities” include the autonomous mobile robots (AMRs) that eStore Logistics has in their employ.

“The availability of floor space is critical for the allocation of robotic automation handling operations,” Kieran explains. “The Aisle Master helps reduce our racking footprint to maximise the available floor space for our robotics footprint.”

Importantly, the Aisle Master provides eStore Logistics with the versatility they require to optimise warehouse space and their operational efficiency.

“The Combilift Aisle Master has great versatility across a variety of applications, this is the key strength of the product. It can be used in VNA pallet racking, traditional standard racking configurations, for internal pallet movements and vehicle loading or

“

The Aisle Master helps reduce our racking footprint to maximise the available floor space for our robotics footprint.

”

unloading,” enthuses Kieran.

“This supports the equipment having limited downtime between tasks as it is flexible in work assignments across the business. Unlike other VNA products in the market which require expensive wire-guidance installations, the Combilift Aisle Master doesn’t have these limitations.”

The Aisle Master also meets eStore Logistics’ foremost consideration in the warehouse – safety.

“Safety is the first consideration at eStore Logistics. The Aisle Master is designed with a range of essential safety features that make it suitable for deployment in our operation,” says Kieran. “Selection of the Aisle Master was driven by the most efficient operating design and speed when compared to other articulated forklift products that were fit for purpose in our operation.”

The fact that the Aisle Master meets eStore Logistics’ key criteria is no coincidence.

Combilift as a company prides itself on listening to customer needs and developing products that are truly fit for purpose.

“Combilift as a company doesn’t manufacture conventional forklifts – that’s not our forte,” states Martin McVicar, CEO and Co-Founder of Combilift. “The products we bring to market are designed to save space and for handling products more safety – those are our key drivers.”

Innovation is also central to Combilift’s offering – in fact, the company’s tagline is ‘Lifting Innovation’, which is a promise the company takes seriously.

“Safety is at the forefront of every Combilift innovation. That, and listening to what our customers actually need is what differentiates us. We invest heavily in R&D – 7 per cent of our turnover actually,” stresses Martin. “And we’re not blinkered by what other companies are doing, we’re just interested in solving the issues that our customers have raised with us.”

Combilift’s success – much like that of eStore Logistics – can be ascribed to this commitment to innovation and tailoring services to meet customer needs. Which is no doubt why the two companies will continue to work together in future.

“The Combilift Aisle Master is an innovative product that will continue to see demand within the Australian market, particularly in cities with rapidly increasing land costs – every square metre counts,” concludes Kieran. “eStore Logistics look forward to continuing to work with Combilift, they are a high-quality business, and the Aisle Master product is a best-of-breed design of articulated forklift.

Combilift are a pleasure to work with and have gone above and beyond for eStore Logistics.” ■ MHD MAY 2021 | 53

MHD TRENDS IN IOT

BROUGHT TO YOU BY

IOT: THE ANSWER TO INTERCONTINENTAL SHIPMENT TRACKING With many supply chain operations facing unprecedented challenges, Internet of Things has stepped up as an unlikely ally in revolutionising the way we use data to solve complex shipping and tracking issues.

BY LOIC BARANCOURT, CEO AND CO-FOUNDER OF THINXTRA

I

t’s no surprise we are seeing more and more supply chain organisations demanding accurate, real-time data about the location and condition of shipments on both a national and intercontinental scale.

Throughout the COVID-19 pandemic – and more recently the MV Ever Given crisis in the Suez Canal – unprecedented challenges were created for supply chain management. The ongoing situation has been described as a sea freight crisis, with prices going up and services going down. Within the past 12 months, the cost of one container shipment between China and Melbourne increased from US$2000 to US$5000, while only 44 per cent of ships arrived when they were scheduled to. At the same time, the Shanghai Containerised Freight Index grew by 280 per cent from US$1100 to 54 | MHD MAY 2021

US$2800 in just one year.

In these times of great uncertainty, access to dependable, real time data is a huge challenge for most supply chain operations. Reliable information about where the container is, and when it will arrive at the destination, has become difficult to obtain. In our world of on-demand supply and lean manufacturing, this is clearly a huge risk.

Today, the Internet of Things (IoT), while not an obvious solution, offers the exact location and condition information that organisations such as Michelin use at scale to mitigate risk.

The company felt the pain of inefficient freight tracking and decided to take control by partnering with Sigfox, the world’s leading IoT Service provider and inventor of the 0G Network technology, and Argon & Co, a global management consultancy specialising in

Sea freight is in crisis, with prices going up and services going down.

operations strategy and transformation.

The result was Safecube, an IoT solution provider which specialises in locating intercontinental shipments and tracks their transport condition, including temperature, humidity and shock. All of a sudden, Michelin’s problems were solved.

“IoT-based track&trace solutions automatically give reliable and granular data about shipments: it opens many opportunities to improve your operational performance. First, there are quick wins related to better steering of your flows thanks to realtime visibility. Moreover, data can be leveraged to spot optimisation opportunities, improve transport schemes, have a more balanced relationship with transport providers, and offer better customer service,” Raphael Anasthase, Sales Director at Safecube says.

We are now seeing the significant impact of sea freight dynamics in our local Australian and New Zealand markets. With containers and assets having become scarce and globally imbalanced, lead times have increased, and reliability has decreased, resulting in escalated costs and risk.

Frans Verheij, Partner at Argon & Co says having real-time location and status visibility of containers is more important than ever to efficiently manage end-to-end supply chains.

Argon & Co provides transformational and digital supply chain consulting services to maximise the operational effectiveness of Safecube’s technology.

Partnering with Thinxtra, The IoT Telco, the trio provides a comprehensive global end-to-end solution.

Reusable IoT tracking utilises reverse logistics by sending back devices with shipments already on their way back.

HOW IT WORKS Despite reverse logistics being notorious for its negative implications – such as the loss of revenue for companies and supply chains resulting from initiatives like free returns – it actually has a positive role to play when it comes to the implementation of reusable IoT tracking devices. Safecube utilises reverse logistics to save on costs by sending back their tracking devices to be re-used again with shipments already on their way back. The devices travel with the shipment inside the container, and upon arrival at the destination, are returned for re-use in the next shipment. The tracking device is able to send real-time communication via the global 0G Network and vessels’ automatic tracking system (AIS) at any point during the journey. It sends real time alerts and data insights to help track and monitor from the beginning to final point of delivery.

The innovative solution is the answer to putting a stop to endless emails and phone calls in an attempt to find out what is really going on with shipments.

This makes supply chain operations less dependent on their service providers, while at the same time getting their control back. In Europe, exporters have been deploying low cost tracking for intercontinental cargo – and the result is always knowing where your container is.

“Safecube’s IoT solution enabled Michelin to transmit the location of the goods to our customer quickly.

This avoids the need to mandate an emergency air transport and therefore to preserve the customer relationship,” says Frédéric Jeandin Service, Distribution Manager at Aircraft Tyre Michelin. Operational scalability allows seamless tracking, with long battery life of the devices allowing tracking without the need to recharge.

In terms of data, insights deliver much more value than knowing where the shipment is and how it’s doing. The end-to-end track and trace solution data enables a multitude of benefits with day-to-day operational savings.

Reduced in-transit lead time and inventory, reduced demurrage fees and detention costs, alerts of delay or transport conditions and visibility and better service for customers are just a few of the benefits achieved through data insights. Condition monitoring data enables the management of deviation in realtime, which allows the identification and tracking of responsibilities.

The technology can even deliver flows re-engineering, sea routes optimisation and transport mode balance, which informs flow performance assessments and the testing of new transport solutions.

NUMBERS TALK After the implementation of Safecube, Michelin quickly saw real results in its operations. The company achieved a four-day reduction of in-transit inventory on a route from Antwerp to Chicago and saved 40 tonnes of CO2 for each shipment by transferring from air to sea freight. It was also able to successfully reduce detention costs by €150 per day (about AUD$230), per container through container sleeping alerts in arrival ports.

Evidently, the IoT is able to deliver the transparency supply chain operations needed to gain the data insights for better decision making and better customer experience. Our new normal has clearly lifted the importance of risk management and operational agility over yesterday’s cost reduction objectives. The close collaboration between Thinxtra, The IoT Telco, with our solution partner Safecube and the management consultancy Argon & Co brings all the elements together required to leverage the power of IoT. ■ For more information, visit Thinxtra.com, argonandco.com or safecube.com MHD MAY 2021 | 55

MHD PROPERTY FOCUS

THE FUTURE IS FOOD After COVID-19 turned logistics on its head in 2020, one industry has come out as a clear winner in terms of growth. David Hall, Head of the Western Sydney Industrial team at Colliers tells MHD how the food industry will continue to grow into the future.

T

he food and grocery sector in Australia has recorded strong growth over the past year, creating a positive effect for the industrial and logistics sector, despite challenging economic circumstances, according to David Hall, Head of the Western Sydney Industrial team at Colliers. He tells MHD, that as consumers became more cautious in their spending patterns in 2020, there was a large shift towards consumer staples, leading to strong demand from industrial occupiers in the food subsector.

As retail stores struggled to replenish stock flying off the shelves at the height of the pandemic, food-based tenants had to bring larger volumes of stock in closer proximity to stores to service the demand. David says the result was a spike in short-team leasing to firm up supply chains.

“Since then, we’ve seen a fairly significant shift in groups looking to study or examine their supply chain models all the way back to their primary producers,” he says. “This has meant we’ve seen significant investment in relation to the functionality and efficiency in their operations, with groups exploring automation that never did before.”

David says nowadays, supermarkets are increasingly selecting individual grocery items from their warehouse rather than the shop floor as ‘dark stores’ become more widely used within the supply chain. “The pandemic and growth we’ve seen has changed the way these warehouses and distribution centres (DCs) are being run and how they’re actually storing product,” he says. “That’s a fairly labour-intensive operation. Now tenants are looking at how they can reduce labour costs as this represents a sizeable portion of the cost model – and a way forward for achieving that is automation.”

56 | MHD MAY 2021

The pandemic has led to a strong demand from industrial occupiers in the food subsector.

Since the beginning of 2020, prior to the panic-induced buying in March 2020, expenditure on food items rose by 9.5 per cent, well above the 2.7 per cent recorded for the corresponding period in 2019. In 2020, 43.2 per cent of every retail dollar spent in Australia was on food items, well above the 6.8 per cent spent on clothing and the 18.5 per cent spent on household goods.

While a contraction of 2.2 per cent was recorded in spending at cafés and restaurants in 2020 as many were forced to close, this fall was offset by significant growth in food expenditure at supermarkets over the same period.

Given the resilience and perceived ‘recession-proof’ nature of the food industry, David says there was strong demand in 2020 from investors seeking assets anchored by food-based tenants.

“Going through COVID-19 has shown that the food industry is resilient to global pandemics, which is quite significant when you’re talking about weighing an industrial property portfolio in terms of risk,” he says.

David says food-based tenants and facilities are generally on longerterm leases, which also adds to their attractiveness from investors. “From a financial performance perspective for their portfolios it’s much better having a triple-A rated covenant, but also the length of the lease improves the valuation metrics of the asset,” he says.

ONLINE FOOD SALES Online food sales only represent 5 per cent of total retail sales, however, this is up from 1.5 per cent in 2015 with a growth of 31 per cent per annum over the past five years. By comparison, online retail sales excluding food represents 15 per cent of all retail sales and highlights the enormous growth potential of online food sales.

For the major supermarkets of Woolworths and Coles, online grocery sales represent only a small portion of total revenue (5.5 per cent for Woolworths and 4 per cent for Coles) and as a result, the bulk of online orders is currently serviced via their existing

BROUGHT TO YOU BY retail store networks. However, the fragilities of this system were brought to the forefront when COVID-19 hit with both Woolworths and Coles, and they suspended home delivery and in-store pick up for a period of time as they struggled to keep up with demand. Online grocery sales jumped by an astounding 45 per cent in the last few weeks of February and early March, which placed significant pressure on delivery networks and supply chains.

Not all this growth has been recorded at supermarkets, with strong demand also coming from meal delivery kits and online food delivery platforms. The meal kit segment of the market is currently valued at $300 million annually in Australia and significant growth has been recorded in 2020.

Two of the larger operators in this space, Marley Spoon and Hello Fresh, have both recorded growth in excess of 85 per cent over the past year. Given they remain in the early phase of adoption, the segment still has a significant growth opportunity, and operators are expected to seek investment to expand their operational scale over the next five years.

THE FUTURE FOR THE INDUSTRIAL AND LOGISTICS SECTOR With online food and wider retail sales forecasted to grow significantly over the next decade, David says the result will be an emergence of hyperscale sheds, particularly in Melbourne and Sydney as the mostly densely populated parts of Australia. “You’ll see big, large and some fully automated distribution facilities, providing efficient supply chain solutions to the major densely populated markets while also acting as national DC’s within their networks,” he says.

As well as the change in type of facility, David also says we will see a significant shift in facility size. “On average it will grow,” he says. “The average pre-lease solution was circa 16,000sqm, which is now over 20,000sqm and is expected to get closer to 30,000sqm on average in the next five to 10 years in Western Sydney.”

Major food retailers and delivery platforms are expected to invest significantly in their online fulfilment capabilities to build resiliency in their supply chains. In supermarkets, this will mean a greater take-up of automation within their warehouses and further rollout of dark stores. Online takeaway food retailers are expected to make further investments in dark kitchens in infill locations close to major population centres. David says that as well as seeing more dark and automated facilities emerge, more transport type

“

Going through COVID-19 has shown that the food industry is resilient to global pandemics, which is quite significant when you’re talking about weighing an industrial property portfolio in terms of risk.

”

depots will also come into play.

“As these other facilities grow, ultimately, they are still serviced by heavy vehicles,” he says. “When you have that many vehicles on the road, and moving this much product around, there is going to be the need for parking, servicing, repair, fuelling and driver facilities.”

These trends have already occurred in recent years with Woolworths operating multiple dark stores and temporarily converting three existing supermarkets in Victoria to dark stores when Melbourne entered stage 4 lockdowns.

Woolworths has also more recently opened its third 15,000sqm dark store in Lidcombe, Sydney which will enable the company to boost online distribution capacity of its groceries by almost 20 per cent. It will also help it continue to invest in micro fulfilment centres at the back of or close to its existing supermarkets.

Regardless of whether food is bought in-store or online, David says further growth in the demand for food and consumer staples will have positive implications for the industrial and logistics industry in Australia.

Considering that more than 90 per cent of food items go through a warehouse at some stage before reaching the consumer, an increase in food consumption will generate further requirements for both cold storage and ambient distribution centres. David says this forthcoming need for more cold storage will also be reflected in growth in DCs going forward.

From an investment perspective, David says given the resilient nature of food, investors will continue to place a premium on assets backed by a strong food related covenant as they remain focused on tenant security. ■

Online food sales spiked in 2020 due to the COVID-19 pandemic.

MHD MAY 2021 | 57

MHD SCLAA

THE SCLAA MENTORSHIP PROGRAM A

Kyle Rogers is an Independent Director of the Supply Chain & Logistics Association of Australia (SCLAA) and a Co-founder & Director of uTenant.

s a Director of SCLAA I’m proud of the extraordinary work our organisation does in fostering the development of the next generation of brilliant supply chain professionals.

As an immigrant from Northern Ireland, I know the hard work it takes to make it as a youngster, not only in a new country but in the supply chain industry in particular. I’m also grateful for the part that some of my own mentors played in bringing me success so early in my career.

When we launched the SCLAA Mentorship Program in 2019, I was delighted to help launch a platform that would connect aspiring young supply chain professionals with the kinds of mentors that helped me.

The SCLAA program connects mentees with mentors, fosters deep rooted relationships, provides a platform to share ideas, as well as a means to keep up with advanced technology and best industry practice. It is the perfect place to learn from the best in the business and provides a unique springboard into a supply chains career.

Below are testimonials from just some of our many brilliant mentors and mentees. If you’re looking for a career in supply chains, consider the SCLAA Mentorship Program to jumpstart your future.

ASHLEIGH MOLLOY “The SCLAA 2020 Mentoring Program was a great success, especially during COVID-19. I have made friends for life.

We all came together to ride the tidal wave of COVID and get to know each other through one of the toughest years. I was a mentor for the 2020 program and am very proud of my mentees Nesli Yontem and Tejas Kalbate, and everything they have accomplished. I was also a mentee for the 2020 program. I would like to thank Alfred Ablaza who took the time to really remind me of my strengths in who I am. A special thanks to all the mentors who gave their time to the mentees in achieving their goals. We have two great leaders on the mentoring committee – Devan and 58 | MHD MAY 2021

Ashleigh Molloy was both a mentor and mentee in 2020.

Ryan who were in the background making this program such a success. Thank you to both, I am looking forward to another strong year in the mentoring program.”

AVINASH MAMTORA “Having spent most of my career in an industry that has traditionally considered procurement and supply chain as more of a clerical and trade job, SCLAA came to me as a breath of fresh air. I finally felt at home among like-minded professionals: being able to speak the same language and share the same triumphs, opportunities and struggles. And then came an opportunity to join the Mentoring Program. I was a bit unsure about joining it since I had never mentored anyone before but what a wonderful experience it has been. The entire mentoring program has been a hugely rewarding experience for me, and I have come out much better than I went in. The program is very well organised and tailored. You get assigned to the right mentor/mentee – someone who can really help you in the areas you need. I would encourage anyone who is thinking of registering as a mentor or a mentee for the SCLAA Mentorship Program to go for it, because you will emerge having learnt a lot and improved yourself in the process.”

MHD SCLAA

Michael Sponza was a final year student when he joined the program.

Established professional Avinash Mamtora found new and likeminded peers through SCLAA.

NESLI YONTEM “I became a member of SCLAA in January 2020. I was not a very active member and did not know where to start. I was a newly graduated international student and lucky enough to have a full-time role in a big manufacturing company.

However, I always had that feeling of wanting guidance and being able to ask questions freely and without concern. During the hard lockdown, my mentoring sessions were my favourite weekend activity.

We had online sessions almost every Saturday. Back in August, I was asked to provide logistics training at my company by senior management. I was having issues

Nesli Yontem benefited from mentor support in understanding complex trade rules.

regarding some of the INCOTERMS [International Chamber of Commerce terms that govern international commercial law] and could not find any online resources that answered my questions. My mentor Ashleigh Molloy helped me to clarify all my concerns about INCOTERMS and sharpened my presentation skills.

She shared her experiences, I shared mine, and we have learnt so much from each other. I am thrilled to be a part of SCLAA, working with amazing people, and learning new things from them – and it all started with the Mentoring Program.”

“

MICHAEL SPONZA

For anyone considering joining the program I would highly recommend they do as it has proven to be a very rewarding and supportive experience.

“Coming into the program in 2020 I was a university student in my last year of study and very new to the whole supply chain and logistics industry. My mentor Rakesh Bandipelli provided me with valuable insights into the work and projects he conducts through his role as a Supply Chain Manager at La Marzocco, allowing me to see how the theory I have learnt transfers into a real business environment.

Rakesh’s guidance and willingness to assist me pursue this interest resulted in my decision to begin my professional career in this industry and inspired me to have role like Rakesh’s one day. It was also this connection through the mentorship program that afforded me the opportunity to work in La Marzocco’s operations team, and I look forward to working

on future logistics projects with Rakesh. The program has also allowed for me to become more involved in the SCLAA and I am excited to work on the Membership Committee this year. For anyone considering joining the program I would highly recommend they do as it has proven to be a very rewarding and supportive experience. I thoroughly enjoyed the program last year and cannot wait for it to start again in 2021 and beyond.” ■

”

MHD MAY 2021 | 59

MHD ALC

NATIONAL CONSISTENCY FOR ELECTRIC VEHICLES

Electric and hydrogen vehicles face a mountain of legislative obstacles before they can get a foothold in the Australian freight and logistics market.

A

ustralia is a single national economy. Yet its business regulatory framework is designed and enforced at a state or local level. For freight and logistics businesses this means daily confronting a hodgepodge of legislative and regulatory hurdles that can complicate the process of transporting freight safely and efficiently.

States have rushed to establish their own state specific sets of road user pricing. The result is that they are strangling an infant commercial market with excessive unit cost increases before it has even managed to take its first breath.

Victoria has announced the introduction of a 2.5 cent per kilometre levy on electric vehicles, following an earlier decision made by South Australia. The ACT appears to be mooting an ‘opt in’ distance charge while the NSW Government appears uncertain.

Disappointingly, we are at risk of a complex set of charges administered at the state and territory level instead of a nationally consistent Federal fuel excise regime.

ALC believes that a road pricing process should fairly capture all the relevant cost components of roads so that, as far as is practicable: • pricing does not distort the choice of transport mode used by consignors and/or consignees in the transport of freight; while • road infrastructure development undertaken to advance either general congestion issues, light vehicle user or community amenity (rather than the efficient movement of freight down the supply chain from freight generation point to ultimate 60 | MHD MAY 2021

destination) is not cross subsidised by heavy vehicle operators.

Australian governments currently have on foot a process called Heavy Vehicle Road Reform (HVRR).

The intention is to change the manner in which the road user charge on heavy vehicles is levied to one that calculates charges using a forwardlooking cost base, as used to calculate prices for other utilities.

In a submission made in response to a 2020 discussion paper prepared as part of the reform, ALC said: “One of the key benefits of HVRR is the opportunity to align more closely road and rail pricing and create a more level playing field and hopefully help get more freight on rail – an aim of a number of jurisdictions.

“Whilst this reform is only about the supply side, the proposed methodology for roads will facilitate a more similar approach to rail.

“This is a useful outcome, even if this will not be fully achieved until the demand side of HVRR is progressed.”

ALC is firmly of the view that taxation mechanisms for road use should be uniform throughout the country.

It is also imperative that all road users, irrespective of whether they are operating light or heavy vehicles, electrically or traditionally powered, pay the road user charges necessary to permit the construction and maintenance of the roads Australia needs now and in the future. We can no longer rely on the fuel excise to do this.

As the CSIRO noted in its National Hydrogen Roadmap, with respect to the growth of fuel cell electric vehicles: “An inter/intragovernmental authority with the power to make decisions within a reasonable time

frame will be important in facilitating industry growth. This could provide a ‘one-stop-shop’ for gathering all the required licences for a specific hydrogen project.”

The Roadmap also noted that a lack of infrastructure is a barrier to supporting increased use of fuel cell electric vehicles.

This raises two issues.

Firstly, it is important the infrastructure is there to allow the efficient transport of hydrogen that is not completely reliant on movement by road.

The second issue relates to planning.

While it is unlikely Australia’s federal system would permit a single consent authority to develop a hydrogen approval authority as suggested above, jurisdictional planning instruments must ensure: (a) a spread of charging and refuelling stations in urban areas; (b) ‘back to base’ charging and fuelling infrastructure is not impeded; and (c) infrastructure for the movement and storage of hydrogen is permitted.

The Australian Government has recently published Draft National Urban Freight Planning Principles that are intended to be included in the planning documentation generated by States and Territories.

They are one of the important outputs from the National Freight and Supply Chain Strategy – a process championed by ALC. Uptake of alternatively powered vehicles is the future of Australia’s commercial and consumer economies.

Consistent taxation mechanisms for road access are key to supporting Australia to remain competitive in the global market. ■

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MHD FROM ASCI

THANK YOU TEAM ASCI Australasian Supply Chain Institute is a not for profit professional accreditation body for supply chain management that relies on the contribution of its expert volunteer community to deliver its vision.

Board of Directors Driving strategic vision in pursuing Supply Chain Management as a Legislated Profession

Alexandra Riha RegPracOps

Geoff Palm RegPracProc

Inderjeet Virdi RegPracProc

Michael Harich

Tom Janoshalmi

Professional Committees Providing ethical, risk and technical requirements to support the Professional Accreditation Scheme

Aima Aidoo Sam

Inderjeet Virdi RegPracProc

Linda Venables RegPracLog

Mark Skrzypiec RegPracLog

Dr Pieter Nagel

Rebecca Presgrave RegPracProc

Regional Chapter Committees Tim Proust RegAssocLog

Adnan Qureshi

Christine Miller

62 | MHD MAY 2021

Wayne Larsen RegPracLog

Delivering continued professional development for membership and community experiences that support the professional pathways

Adriaan Van Wyk

Arushee Aggarwal

Azraai Abi Musa RegPracOps

Claire Stuart

Craig Bennett

Daniel Harding

Bree Clements

David Hogg

Brendan O’Keeffe

David Woods

Steven Murdoch

MHD FROM ASCI

Dom Barone

Duncan Wardle

Flavio Macau

Gary Pearce RegPracILS

Geoff Palm RegPracProc

Ignacio Losada RegPracLog

Indrasen Naidoo

James Scotland

Justin Butcher RegPracProc RegPracLog

Karen Livey

Mark Skrzypiec RegPracLog

Matthew Jackson

Ambassadors Ambassadors Development Program for our next generation supply chain leaders with mentoring and career plans to advance to committees

Scott Theuerkauf

Ahsan Ahmed

Cindy Tran

Suhaila Quaddus

Tayla Ayling

Vinod Raja Nagarajan

Advisory Board for ASCI2021 Award judging and Conference programming

Amanda Brisot

Duncan Wardle

Giovanni Ferrante

Hayley Jarick

Inderjeet Virdi RegPracProc

Indrasen Naidoo

Louise Weine

Mark Skrzypiec RegPracLog

Matthew Cauchi

Nina Younes

Renu Agarwal

Tania Montesin

Thank you to all our professional certification and collaboration partners who also add value to our vision and mission.

Join ASCI and take steps towards your professional career pathway in 2021.

Membership starts at $275 with concessions available upon evidence of your employment situation or membership to another association.

Visit: www.asci.org.au/Join

MHD MAY 2021 | 63

MHD PRODUCT SHOWCASE

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By providing simpler, more productive, predictable power, virtually maintenance-free NexSys PURE batteries reduce overall Total Cost of Ownership (TCO) and allows more focus time on core business operations.

The NexSys range of products are also offered in sensitive ATEX (Ex) zone classed applications.

To find out more, visit: www.enersys.com

REVOLUTIONISE WORKFLOW AND SAVE TIME WITH CROWN’S QUICK PICK REMOTE Increase operator productivity by leveraging a truck that allows the operator to maintain a consistent rhythm and pace, making the most of every second in the picking process. A typical order picker steps on the operator platform, approximately 1200 times each shift. QuickPick Remote eliminates up to 70 per cent of this activity. With the simple press of a button on the wireless remote, the order picker remotely advances the lift truck to the next pick location, allowing the operator to minimise steps and remain in the optimal pick position. At a fivemetre interpick distance, this can save up to five seconds per pick.

Under certain conditions, at a pick rate of 100 picks per hour, one operator can generate as much as 14 per cent time savings.

CITYMASTER 1650 ZE

To find out more, visit www.crown.com

Electromobility goes multifunctional – 100% electric, 0% emissions.

The new Citymaster 1650 ZE is just as efficient as a conventional dieselpowered sweeper but with significantly lower carbon dioxide emissions.

Providing up to nine hours operation without recharging the battery, this highly manoeuvrable machine with articulated steering is well equipped for long working days. With a top speed of 40 km/h, the Citymaster 1650 ZE quickly makes its way to the next job site or the next charging pole, allowing fast, easy and safe charging of the battery.

The Citymaster 1650 ZE offers significantly increased driving and operating comfort, including an ergonomic steering column and driver’s seat in the cabin.

All functions can be controlled at just the push of a button via Hako’s one-button operating system integrated in the armrest. The large display also provides at-glance information on relevant operating data.

To find out more, visit www.hakoaustralia.com.au

64 | MHD MAY 2021

GS1 RECALL The GS1 Recall platform helps brand owners manage the reverse logistics process. Used largely in grocery and healthcare, operators can enter information about a product recall or withdrawal into the GS1 online platform, with the information immediately sent to trading partners electronically. This fast and efficient process ensures that trading partners have access to the latest advice and information.

To find out more, visit www.gs1au.org/recall

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MHD PEOPLE ON THE MOVE

BROUGHT TO YOU BY

PEOPLE ON THE MOVE A monthly wrap up of the latest appointments in the supply chain, materials handling and logistics industry.

NEW PROGRAM MANAGER AT TMX Helder Lira, a regionally recognised and accredited Program Manager, joins TMX in Hong Kong to lead a large supply chain transformation.

NEW STRATEGY ANALYST AT TMX

NEW SENIOR CONSULTANT JOINS THREESIXTY SUPPLY CHAIN GROUP

Leon de Mel, an up-and-coming supply chain professional, joins TMX as Strategy Analyst, and will add to the impressive bench

Bao Phung, a seasoned supply chain professional with over 15 years’ experience in logistics, has joined ThreeSixty Supply Chain Group as Senior Consultant – Solutions.

strength of the company.

Bao brings his extensive experience delving into data to bring new insights and solutions to ThreeSixty’s clients.

COLLIERS APPOINTS NEW NATIONAL DIRECTOR

AUSTRALIA POST ANNOUNCES NEW CEO

Colliers has promoted Elizabeth Dixon to National Director, Marketing & Communications Australia. Elizabeth now leads a team that integrates marketing,

Australia Post has appointed Paul Graham as its new Group CEO and Managing Director, starting in September. Paul was previously Chief

communications, business development and research to promote Colliers’ services, experts, and brand. Previously, Elizabeth was Colliers’ National Director

Supply Chain Officer at Woolworths Group and has had an extensive career working in e-commerce and supply chains, with global experience in digital marketing and retail.

for its Business Development Centre.

Do you have career news to share? Email Edward Cranswick at Edward.Cranswick@primecreative.com.au to be featured.

66 | MHD MAY 2021

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