MHD July 2020 by Prime Creative Media

JULY 2020

FROM CLICK AND COLLECT TO CLICK AND DELIVER

How Australia’s largest pharmacy is offering same-day delivery after a record peak in orders

FORKLIFT SURVEY RESULTS The latest trends and technologies shaping the forklift market

COVER STORY

A NEW ERA FOR RETAIL Cohesio Group (Körber) accelerates Kmart’s fulfilment

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greater strength and stability with

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hand pallet truck. No overhead gantry required.

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VERSATILE ARTICULATED NARROW AISLE FORKLIFT LIFTS UP TO 15m IN HEIGHT WORKS IN AN AISLE AS NARROW AS 1.8m CAPACITY UP TO 3 TONNE LEAD ACID AND LITHIUM BATTERY OPTIONS NO NEED FOR EXPENSIVE INVESTMENT IN FLOORS WITH CONVENTIONAL VNA

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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 Editor: Melanie Stark Journalist: Brittany Coles Business Development Manager: Bowie Phillips Design Production Manager: Michelle Weston Art Director: Blake Storey Graphic Designers: Kerry Pert, Madeline McCarty Client Success Manager: Janine Clements

FOR ADVERTISING OPTIONS Contact: Bowie Phillips bowie.phillips@primecreative.com.au

SUBSCRIBE Australian Subscription Rates (inc GST) 1yr (6 issues) for $78.00 2yrs (12 issues) for $120.00 – Saving 20% 3yrs (18 issues) for $157.50 – Saving 30% To subscribe and to view other overseas rates visit: www.tandlnews.com.au or Email: subscriptions@primecreative.com.au

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.

THE ROAD TO RECOVERY

hile coronavirus has taken its toll on many industries and businesses, as I write this column there are signs of healthier days ahead. One of Australia’s largest employment marketplaces has revealed that the Australian job market is making progress, with new job ads up nearly 50 per cent in May compared to April. Within this growth, transport and logistics jobs are among the top industries for employment opportunities, with an increase of 59 per cent. Prime Creative Media, the publisher of MHD, surveyed its entire readership and the logistics industry reported the highest increase in business, with 18 per cent of respondents saying they saw an increase over the COVID-19 lockdown. Another 20 per cent reported that the lockdown had no major impact, while just 12 per cent reported it as being “very negative”. Global logistics giant DHL has announced it will add 400 new jobs in the United States due to a double-digit volume increase in shipments compared to the same time last year. Investments across the industry are also strong. Online retailer Amazon has announced it is expanding its operations in Australia by opening its first Queensland fulfilment centre before the end of the year. Furthermore, plans for a major industrial precinct in Western Sydney has been approved by the NSW Government to boost jobs and investment in the area. Logistics and industrial properties are becoming increasingly desirable as retailers strive to cater for the changing consumer habits by putting logistics capabilities front and centre. In this issue of MHD, we look at ways the industry is adapting to the everchanging demands of the consumer. We explore the roadblocks around returns and reverse logistics, how to socially distance while maintaining throughput levels, why automation deployments should be commercially viable and how the warehouse is set to change.

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. COPYRIGHT MHD magazine is owned by Prime Creative Media. All material in MHD is copyright and no part may be reproduced or copied in any form or by any means (graphic, electronic or mechanical including information and retrieval systems) without written permission of the publisher. The Editor welcomes contributions but reserves the right to accept or reject any material. 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.

Melanie Stark Editor melanie.stark@primecreative.com.au

MHD Supply Chain

MHD JULY 2020 | 3

MORE UPTIME NO MATTER WHERE YOU ARE ANOTHER GREAT TOYOTA FORKLIFT ADVANTAGE

450+ service support staff. 300+ mobile service vans. 18 locations. Parts and service when and where you need them. In a country as large as ours – you need a service network as big as ours. That’s why when you choose to partner with Toyota Material Handling, you get the ongoing support of Australia’s most dedicated service and parts network, and that’s just part of the Toyota Advantage.

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JULY 2020

ISSUE #6 VOLUME 50

THIS ISSUE COVER STORY

22 Powering Australia’s leading retailers

TECHNOLOGY 30 Resilience and agility: responding to COVID-19

MATERIALS HANDLING 16 Transport leader exclusively Toyota for 25 years

COVER STORY

18 Forklift 2020 market 48 Going green 38 Keeping moving during COVID-19

EVENTS 46 See and shape your future

SUPPLY CHAIN 26 Return to sender 42 Automation as an enabler 50 Strong foundations for recovery

AUTOMATION 32 Reverse logistics: How to

JULY 2020

FROM CLICK AND COLLECT TO CLICK AND DELIVER

How Australia’s largest pharmacy is offering same-day delivery after a record peak in orders

FORKLIFT SURVEY RESULTS The latest trends and technologies shaping the forklift market

COVER STORY

A NEW ERA FOR RETAIL Cohesio Group (Körber) accelerates Kmart’s fulﬁlment

maintain profitability

36 Regaining operational control

DEPARTMENTS AND REGULARS 06 News 14 In the warehouse 52 Women in industry 56 Property focus 58 ASCI 60 ALC 62 The last word

ON THE COVER In an MHD exclusive, we reveal how two of Australia’s largest retailers are meeting increased consumer demands across their online and instore channels. MHD JULY 2020 | 5

MHD NEWS

Super Retail Group raising $203m to strengthen omnichannel business

uper Retail Group plans to raise $203 million to help grow its omnichannel business following a 126.2 per cent growth in online sales across its Supercheap Auto, Rebel Sport, and BCF chains and brands. The Group, which owns and operates the Supercheap Auto, Rebel, Macpac and BCF retail chains, is issuing approximately 28.2 million new shares to raise $203 million to create new opportunities as a result of the disruption caused by COVID-19. In an announcement to investors on Monday June 15, the company stated in a trading update that the Group saw a 26.2 per cent decline in like-for-like sales in April, which was followed by a rebound in May sales of 26.5 per cent. “During April and May, there was a strong shift to online with Group online sales increasing 126.2 per cent vs. the previous corresponding period (pcp) to represent 18.2 per cent of Group sales over the same period,” the company said in Monday’s statement. The group said sales growth has continued to benefit from a strong consumer environment in June as coronavirus lockdowns continue to ease, led by the Supercheap Auto, Rebel, and BCF brands. Macpac was hurt by the NZ governmentimposed lockdowns. The company credited the strong performance to its recent investment in its omni-retail platform and supply chain, which enabled it to meet the significant shift to online and clickand-collect purchasing. “The Group has also repurposed costs to areas of high activity to meet customer demand,” the company stated. In addition, the Group has undertaken a number of actions to support its omni-retail strategy including an acceleration of the migration to cloud-based platforms and an optimisation of the support 6 | MHD JULY 2020

Sport retailer Rebel Sport is part of the Super Retail Group. office functions and store network. Anthony Heraghty, Super Retail Group CEO said he was pleased with the company’s trading performance during COVID-19. “The execution of our strategy has continued during COVID-19, with our four core brands well positioned to take advantage of shifts in consumer behaviour that have been observed through the pandemic,” he said. “The equity raising enables us to continue the execution of our strategy, further strengthen our omni-retail capabilities and continue to organically grow our four core brands.” Throughout COVID-19, the Company’s omni-channel business strategy included leveraging customer behavioural analytics and insights to inform new COVID-19-specific campaign activity. “We leveraged our distribution centres’ assets to service significant on-line order demand and resourced our Customer Contact Centre to support customer requirements,” the company stated. The Group implemented contactfree click & collect across all Australian standalone stores and shifted from catalogues to digital

campaigns and maintained customer activity throughout. “While there is an uncertain economic environment ahead, the Group’s core four brands are well positioned to take advantage of consumer trends emerging from COVID-19, including a material shift to on-line purchasing, the trend towards home-based fitness and leisure, and increasing domestic tourism and leisure activities,” the Group stated. The Group is announcing an underwritten one for seven accelerated pro rata nonrenounceable entitlement offer to raise approximately $203m at a fixed price of $7.19 per share. “The Equity Raising will enable Super Retail Group to continue to execute its strategy and pursue strategic growth initiatives, allowing the Company to position the business to take advantage of changing consumer trends by returning capital expenditure to historic levels of c.$90m per annum, even if a softer trading environment emerges,” the Group stated. Investments are expected to include omni-retail digital customer experience and analytics and supply chain to facilitate omnichannel sales growth.

Warehouse Automation Built for High-Density Storage

PERFEC T PI CK® H D G O O DS-TO - PERSO N PI CK IN G SYSTEM SURE SO RT ™ AUTO MATED SO RTIN G SYSTEM WAREH OUSE AUTO MATI O N .CO M | WA _ APAC@ O PE X .CO M

MHD NEWS

New $115m distribution facility set for Western Sydney The acquisition is a rare opportunity to secure a major logistics facility in the tightly held Western Sydney growth area.

$115 million logistics property has been secured in Western Sydney for a national workspace solutions supplier, growing Charter Hall’s $1.3 billion pre-leased development pipeline. Winc Australia, previously known as Staples and Corporate Express, a national workspace solutions supplier of office essentials, furniture, safety equipment, IT solutions, toiletries and kitchen products, has secured a $115 million logistics property at 40-66 Lockwood Drive, Erskine Park. Richard Stacker, Charter Hall’s Industrial & Logistics CEO, said the company’s 10 billion industrial and logistics portfolio continues to grow via a $1.3 billion pre-leased development pipeline and selective acquisitions and is now 90 per cent located on the Eastern Seaboard. “The acquisition of Winc’s Erskine Park facility is consistent with both the 8 | MHD JULY 2020

Group’s and Funds’ strategy to acquire core logistics properties leased to good quality tenants on long term leases situated in key industrial precincts with access to major infrastructure and transport networks,” he said. Winc is a new tenant customer to the Charter Hall industrial and logistics platform. Winc have entered into a new 12-year lease to commence at expiry of their current lease in August 2020. The distribution facility has a total GLA of 43,000sqm, of which approximately 40,000sqm is used for warehouse accommodation with the remaining 3,000sqm being occupied as office accommodation. The property benefits from two truck access driveways, allowing for full drive around access, a separate access driveway into the large car park, and all-weather super awnings located along both the eastern and western elevations. Fund Manager of CPIF, Richard

Mason, said the acquisition provides a rare opportunity to secure a major logistics facility in the tightly held Western Sydney growth corridor that is supported by convenient access to M4 & M7 Motorways and major infrastructure projects underway including the Badgerys Creek Aerotropolis. Fund Manager for Direct Property, Miriam Patterson, said this acquisition enhances the quality of DIF4’s growing industrial portfolio which is approaching $800 million with a portfolio WALE of circa 10 years. “The attractive 3.25 per cent per annum rent reviews adds to the longterm sustainable income growth potential of the portfolio,” she said. The facility was originally developed in 2008 for the tenant, Winc, as their national distribution centre. The property has a site area of 8.273ha with a site coverage of 52 per cent.

MHD NEWS

New Amazon fulfilment centre to open in Australia

lobal e-commerce giant Amazon is expanding its Australian operations by opening its first Queensland multimillion dollar fulfilment centre before Christmas this year. The new facility is located at Goodman’s Port Industry Park in Lytton, Brisbane and is set to begin operations before Christmas, enabling faster delivery to customers in QLD during the busy holiday period. The fulfilment centre in Brisbane, along with the existing buildings in Sydney, Melbourne and Perth, will allow Amazon to handle current and future customer demand and speed up delivery to customers across the country. The new fulfilment centre (FC) will

be around the same size as two Rugby League fields, housing more than half a million items from Amazon.com.au ranging from health, household and personal care products, to electronics, books, gardening equipment and pantry staples. Craig Fuller, Director of Operations, Amazon Australia said Brisbane is a key strategic location to meet customer demand in Queensland. “We are committed to improving delivery promises for our customers as demand continues to grow and building infrastructure closer to where our customers and third party sellers live enables us to do this, while reducing our environmental impact,” he said. Local sellers will soon be able to

The new multi-million dollar fulfilment centre is in Brisbane.

send their products to the Brisbane FC where Amazon will then pick, pack and ship orders to customers, provide customer service support and manage returns on behalf of the seller.

You want your customers to get the right order at the right time - every time. Dematic’s Robotic Piece Picking Module is the revolutionary system that selects, grips, lifts, and places individual items of varying sizes and shapes at the last stage of the fulfilment chain. Combining advanced Artificial Intelligence (AI), collaborative and mobile capabilities, Dematic’s robotic solutions are ready to keep your operation at peak performance. With robotic picking, you will increase efficiency and accuracy today, and be well positioned for the demands and advancements of tomorrow. Visit dematic.com.au/robotic-systems to download our Journey to Lights Out white paper, or get in touch to learn more.

Ask us. 02 9486 5555 info.anz@dematic.com www.dematic.com.au/robotic-systems

THE ROBOTS ARE READY.

We Optimise Your Supply Chain

MHD NEWS

Emergency aircrafts bolster Victorian PPE supply

global transport company has collected millions of dollars’ worth of gloves, masks, swabs, face shields and gowns from manufacturers in China and Malaysia, and critically moved the PPE into emergency storage for Victorian hospitals. Health Purchasing Victoria (HPV) undertook the first step of locating manufacturers with the expertise and capacity to produce the required PPE. Once stock was secured, HPV set about determining the most effective way to move supply quickly from the point of manufacture into storage in Victoria. The world’s largest third-party logistics firm, C.H. Robinson, took the challenge of moving millions of dollars’ worth of PPE, weighing hundreds of tonnes, to safe storage in Victoria. Contracted by HPV, C.H. Robinson Oceania had the task of collecting gloves, masks, swabs, face shields and gowns from manufacturers and distributors in China and Malaysia, sourcing appropriate transport and delivering the goods safely into storage at the State Supply Chain central store.

C.H. Robinson has moved critical PPE into Victorian hospitals. C.H. Robinson Vice-President Oceania Andrew Coldrey, said its client had done the hard work in securing PPE that met required clinical standards, and needed to get it to Melbourne without delay. “C.H. Robinson representatives were on hand to guide every shipment from the manufacturer to the State Supply Chain store, through airports, customs and across borders,” he said. This preparation for dealing with a pandemic has become a priority for many

governments and health authorities; securing the right equipment and delivering it to end-users is a highly organised process. Andrew said the first shipment from Shanghai, on board a specially chartered Boeing 747-400 proved a major challenge, but international cooperation and flawless planning saw 650 cubic metres of PPE land safely in Melbourne at the beginning of May. “The queues to get into Shanghai Airport were 72 hours long at peak; three days of trucks creeping forward to meet a pre-determined time slot for the aircraft,” he said. “Slots were so tightly controlled, with 300 charters a day leaving Shanghai, any delays could mean that the plane left empty. C.H. Robinson was happy to execute successful flights 100 per cent.” A total of 13 flights from Shanghai via Hong Kong between the end of April and the beginning of June will deliver enough PPE to build stockpiles in Melbourne. These deliveries will be supplemented by additional chartered flights from Kuala Lumpur with additional PPE on board.

Sixty per cent job growth for transport and logistics industries

ustralia’s number one employment marketplace has revealed new figures that show Australia’s job market is making progress, with manufacturing, transport and logistics among the top industries for employment opportunities. As Australia begins its long road to recovery, there are promising signs that the job market is making progress, with new job ads posted on SEEK during the fortnight ending 31 May up 49.2 per cent compared to the April 2020 average. According to SEEK, the fastest changes in job ad growth are manufacturing, transport and logistics, 10 | MHD JULY 2020

presenting a +59 per cent increase. Trades and services, healthcare and medical, education and training and hospitality and tourism also experienced job ad growth on SEEK last month. SEEK data indicates that the jobs are in warehousing, storage and distribution, road transport, machine operators and assemble and process work. The industrial lifting has shown 28.7 per cent job growth, making up 11 per cent of job ads and the construction sector has increased job ad growth by almost 50 per cent.

The Consumer Services sector has shown the biggest growth in job ads listed on SEEK in the past two weeks with 151 per cent growth compared to the April average. All states and territories have seen an increase in job ads, and Queensland leads the charge with the largest growth in the past fortnight, up 62.5 per cent. Currently, Automotive, labourers and machinists are where the jobs are at in the trades and services sector, whilst business and system analysts, software engineers, developers and programmers are being sought after in information technology sectors.

MHD NEWS

Toll launches new $17m Australian logistics facility

oll has launched its new $17 million logistics facility, located in one of Australia’s fastest growing urban areas. The 1.8ha site on Queensland’s Sunshine Coast has now been completed and ready for operation, positioned on the largest lot in the Chevallum Industrial Park. The launch follows a $33 million investment in a new flagship logistics hub on the Gold Coast in September last year. Toll’s Sunshine Coast facility includes 5,000sqm of warehouse space and a 532sqm two-storey office. The property is tenanted by Toll Group under a 12-year pre-lease arrangement and has been completed by Gibb Group, in collaboration with repeat partner Lanskey Constructions.

The new Toll facility is in Queensland. The facility marks Gibb Group’s second development for Toll, having previously secured the development and pre-lease of Toll’s 3-hectare Gracemere Industry Park facility, sold to Charter Hall in 2013. Angus Holloway, Gibb Group’s Senior Development Manager said this facility has enabled Toll to streamline local business operations, by consolidating existing facilities into a location with close proximity to major arterial routes

accessing South East Queensland. Alan Beacham, Toll Group Acting President, Global Express, said the groups is continuing to look for opportunities to improve the speed and quality of its services. “The development of our new Toll Sunshine Coast purpose-built facility integrates our existing services into a modern logistics hub to meet the needs of our customers now and into the future,” he said. “We’re proud of what the team have been able to achieve in bringing our people and services together to support the Sunshine Coast community.” Over 40 per cent of contractors were commissioned from the local regions of the Sunshine Coast, Moreton Bay and Gympie.

MHD NEWS

Coles to become Australia’s most sustainable supermarket

Coles plans to roll out sustainability practices across its stores.

oles has taken another step toward being Australia’s most sustainable supermarket, incorporating Fair Farms Certification into the Coles Ethical Sourcing Program and continuing its transformation strategy. Coles customers and team members have recycled 997 million pieces of soft plastic through REDCycle and donated grocery essentials to the retail value of $7.9 million to vulnerable Australians during COVID-19. Over the past 12 months Coles has made further progress on its commitments to increase the proportion of energy it sources from renewables and implement more sustainable processes across its stores. On May 26, the Group announced that fresh produce suppliers to Coles can now register with Fair Farms to satisfy the requirements of the Coles Ethical Sourcing Program,

12 | MHD JULY 2020

which sets out detailed standards for treatment of workers in the supply chain that suppliers are required to follow and demonstrate their compliance. Coles General Manager of Produce Craig Taylor said adopting Fair Farms Certification meant farmers now had multiple ways to become approved under the Coles Ethical Sourcing Program, which also uses the internationally recognised Supplier Ethical Data Exchange (Sedex), a global ethical supply chain management platform used to assess supply chain risk in over 150 countries. “Around 95 per cent of the fresh produce we sell comes from Australian farms, and it’s important to Coles and to our customers that the workers in our supply chain are treated fairly,” he said. “By adopting this additional industry-based solution that can be used by all suppliers regardless of who buys their produce, Coles is making

it easier for Aussie farmers to meet ethical workplace standards.” Fair Farms Program Manager Thomas Hertel welcomed the support from Coles, which will work closely with produce suppliers who wish to transition to the Fair Farms Program and participate in its ongoing development through the Fair Farms External Stakeholder Reference Group. “We are delighted to have Coles on board. Their commitment to collaborate with industry on matters of ethical sourcing policy is very good news for businesses in horticulture,” he said. The announcement follows the development last year of the Coles Ethical Retail Supply Chain Accord, through which Coles is working with unions representing workers from every stage of the Australian fresh produce supply chain to promote ethical employment practices and treatment of workers.

MHD NEWS

Catch, Officeworks and Bunnings sales surge during COVID-19

esfarmers businesses including Catch.com.au, Officeworks and Bunnings are seeing significant sales as more customers turn to online shopping, amid coronavirus restrictions. The Group’s retail businesses delivered total online sales growth of 89 per cent, reflecting the significant investment across the Group in respective e-commerce capabilities in recent years as well as greater customer preference for shopping online during COVID-19. In a retail trading update released on June 9, Wesfarmers stated Catch.com. au’s total sales in the second half of the financial year (FY20) grew by 68.7 per cent, following Catch’s 21.4 per cent sales growth in the first half of FY20.

Wesfarmers stated that since its acquisition last August, Catch has provided the group with “pleasing progress”, with strong growth in both in-stock and marketplace segments and ongoing growth in Club Catch subscriptions. In the retail trading update, Wesfarmers also reaffirmed the group’s commitment to investing in the online channels of Bunnings, Officeworks and Catch. Sales growth at Bunnings is up 19.2 per cent in the second half of FY20, whilst Officeworks has also seen sales growth in the second half of FY20, up by 27.8 per cent. The Group stated that in Bunnings, the strong sales performance is supported

Sales growth at Bunnings is up 19.2 per cent.

by continued growth in consumer and commercial markets across all major Australian trading regions and in all product categories. Whereas for Officeworks, strong sales growth is supported by continued demand for technology, home office furniture and learning and education products.

Named to

SDCE 100 Top Supply Chain Projects for 2020 www.HighJump.com 800.328.3271

Learn More

HighJump becomes Körber MHD JULY 2020 | 13

MHD IN THE WAREHOUSE

In this month’s MHD warehouse we feature the latest from Combilift, Cohesio, Tennant and OPEX.

E D I S IN D H M THE E S U O H E R A W

M17 ELECTRIC SWEEPER SCRUBBER With the largest battery capacity in its class, the M17 Battery Powered SweeperScrubber machine will quickly improve your facility’s overall image. More info: au.tennantco.com

COMBI-CB The Combi-CB is the original compact multi directional counterbalance forklift, It’s manoeuvrability means it is perfect for handling palletised loads both indoors and out. Combine this with the ability to carry long loads such as timber and steel beams in sideways mode makes the COMBI -CB one of the most versatile all-round forklift available. More info: www.combilift.com

14 | MHD JULY 2020

SURE SORT™ A scalable, configurable, and cost-effective small-item robotic sorting system. OPEX’s® Sure Sort™ solution has changed the way companies handle small items, particularly as it relates to parcel sorting, multi-line orders, and reverse logistics. More info: www.opex.com

MHD IN THE WAREHOUSE

KÖRBER AUTOSORT MOBILE Maximise your operational capabilities through flexible, affordable and scalable automation. Körber AutoSort Mobile allows dynamic sortation, taking the shortest and most direct path. Now you can free up space in your DC and reduce your investment in traditional and fixed automation. More info: https://cohesiogroup.com/

COHESIO’S GOODS-TO-PERSON AMR, POWERED BY GEEK+ Geek+ Picking System realises Goods-to-Person picking by enabling robots to carry shelves, breaking from the traditional Person-to-Goods law. This reduces the travel path for operators, thus achieving fast, accurate and efficient order delivery. More info: www.cohesiogroup.com

MHD JULY 2020 | 15

MHD MATERIALS HANDLING

Followmont Transport operates seven days a week.

TRANSPORT LEADER EXCLUSIVELY TOYOTA FORKLIFTS FOR 25 YEARS Queensland’s largest family-owned transport company, Followmont Transport, has had new Toyota Material Handling forklifts exclusively at the heart of its warehousing operations for over 25 years.

ith 18 owned regional depots, a combined 40,000m2 warehousing and storage facilities and a network of local contractors, the Brisbaneheadquartered business claims to operate Queensland’s fastest transport network, which also covers New South Wales. With seven-day-a-week services to most locations, Followmont is the preferred carrier for many tier 1 accounts, including many businesses that are household names. They are also the delivery companyof-choice for many interstate transport companies, SMEs, online retailers, farmers, mums and dads and regional businesses - carrying everything from pharmaceuticals and fresh produce to spare parts and paint. Followmont CEO, Mark Tobin, says the business prides itself on going the extra mile to deliver in 16 | MHD JULY 2020

the fastest time possible, whether a single parcel or a complete transport, warehousing and logistics solution, and that this performance has helped the second-generation family business experience rapid growth. It is presently building three new depots and two new warehouses - to the tune of a $20million investment - to further expand and improve its network. “We’ve had a massive transition over the past 15 years and pretty huge growth over that time. Today we employ over 850 people and have around 250 forklifts spread out across our depots, with the majority being Toyota 62-8FD25 8-Series 2.5 tonne diesel-powered machines,” Mark says. Mark attributes the business’ success Followmont Transport relies on Toyota to deliver goods on time.

MHD MATERIALS HANDLING to number of factors including its principles, business partnerships and performance. “We are a close-knit family business and we adhere to our values. We are personal first, and commercial second. We pride ourselves on speed-of-delivery and customer satisfaction. “That’s our approach and those values are behind our longevity and continued expansion.” Followmont Transport has always striven to seek partnerships with like-minded suppliers and such is the case with its forklift supplier Toyota Material Handling Australia (TMHA), with whom shared values have formed the basis of a relationship extending back 25 years. “We are dedicated to our customers, our people and our suppliers. This is key to our values and behaviours. It’s all about our people and our partners, making sure we’re engaged with them and viceversa,” Mark says. “We have a couple of key suppliers and Toyota Material Handling Australia is one of those. The Toyota relationship goes back a long way, being key to our business for 25 years- plus, which is a pretty amazing duration. “So in a way, they have been part of our business and we still look at it like they are part of our business. Likewise, Toyota really values our business and it shows.” TMHA Corporate Account Manager, Jason Fennell, concurs. “We hang our business on our Toyota Advantage - part of which is Tailored Business Solutions - and have been proud to have been available to provide advice on the best business solutions and the right equipment and service support for Followmont Transport over such an extensive duration. Our solutions are fully tailored to their needs,” he says. Another key Toyota Advantage known to be vitally important to Followmont’s success is the demonstrated quality, durability and reliability of TMHA’s equipment. “Followmont’s business hinges on being able to deliver goods on time and it simply cannot sustain any delays caused by equipment failure,” Jason says. “They love our forklifts because they have been proven to be reliable. We think that’s why they keep on coming back to us.” After working his way up in the business from humble beginnings, Followmont’s Mark Tobin has settled on a model he is confident in. “I started out as a mechanic by trade and have since done every job in the business - all the way from sweeping the

For Followmont, the durability of Toyota’s forklifts is a major benefit.

“

Yes, we strive to be the best and we need the best partners and equipment to meet our own high service standards and customer expectations.

”

floor to CEO. So I know our business insideout and that extends to the performance of the products we deal with,” he says. As such, Followmont adheres to a policy of buying new Toyota forklifts outright, every four years or 10,000 hours. “Whenever we hit that mark, I trade them in for new ones, year in year out. “Toyota durability is already very good, but this way even less can go wrong and it ensures they’re not pushed too hard, even accounting for misuse. “We as a business simply can’t afford any down-time. The volume of our deliveries is too great. One of the reasons I buy new Toyota forks is that I don’t see them in our repair workshop. Nothing goes wrong with them. They just keep going, just keep working. “Because of this, I don’t have to buy other new forklift brands. I haven’t purchased a new forklift that wasn’t a Toyota for over 20 years.” And is this relationship likely to continue? “Yes, we strive to be the best and we need the best partners and equipment to meet our own high service standards and customer expectations. “We’re expecting to continue strongly with TMHA into the foreseeable future. The relationship has proven so successful for our business, why would we change?” ■ For more information freecall 1800 425 438 or visit www.toyotamaterialhandling.com.au MHD JULY 2020 | 17

MHD MATERIALS HANDLING

THE 2020 FORKLIFT MARKET We delve into the results from MHD’s biannual Forklift Survey and reveal the latest trends and technologies that are shaping today’s forklift market.

ack in February this year, MHD launched its biannual Forklift Survey. It was released to the industry pre COVID-19 in Australia and once the survey closed at the end of April, MHD can reveal that the survey received the most amount of responses that it has ever received in its history of conducting this survey. The last time the Forklift survey was available to industry respondents was two years ago in 2018. Results from 2020 show drastic changes in forklift consumer behaviour

and the expectations they have for forklift providers. The past few months have seen

Almost 90 per cent of forklift users said safety was the most important attribute in purchasing decisions. 18 | MHD JULY 2020

unprecedented events unfold around the world. However, what remains the same despite a world of uncertainty, is the

MHD MATERIALS HANDLING

demand for quality forklift trucks. Forklifts are even more vital than ever, aiding supply chain operations transport essential goods across local and international markets. Due to the spotlight on material handling during the COVID-19 era, the effectiveness and service of forklift companies and their products have never been more important. Australian forklift users were encouraged to take part in the 2020 forklift survey to help influence improvements of future forklift models. A wide variety of executives, operators, managers, supervisors, consultants, analysts and technicians took part in the 2020 Forklift Survey. Majority of respondents were part of 3PL, retail and logistics and transport businesses, however automotive, construction and FMCG were common areas of employment too.

SHIFT IN TRENDS Results from the survey will improve technology and enhance services offered to industry that meets the needs of material handling equipment owners. Enhanced operations with cost effective technologies have proven to be implemented since analysing feedback from forklift users who previously participated in the prior forklift survey 2018 survey. Two years ago, 83 percent of forklift users said safety was the most important attribute when evaluating forklifts. Performance, operator comfort and control were also highly noted by users as the most important features of a forklift. Fast-forward to now and almost 90 per cent of forklift users said safety was the most important attribute, highlighting the importance of products that help eliminate the risks in the workplace.

With heightened operations across the region, forklift safety is more crucial compared to 2018, largely due to the recent pandemic. The results clearly indicate that safety is strongly rooted as a deciding attribute when making a forklift purchase. However, a shift in market from 2018, results this year showed that reliability, operator control, ergonomics and parts availability are highly favourable attributes in a forklift too. Beepers, flashing lights and speed limiters are the most used safety features, with reverse cameras and operator ID confirmation on the rise as the most used tools to maximise safety too. According to the results, more than 55 per cent of forklift users are involved in the purchase of forklift products for their company. This further highlights why operator control and comfort, durability and performance were noted as ‘very important’ attributes when purchasing a forklift. Compared to 2018, there is a slight increase in companies choosing to lease forklifts rather than purchase. Forty six per cent of current forklift users purchase a new forklift when required, and 53.9 per cent choose to lease instead. This may be due to leases becoming more economical for businesses, opting for 25 to 60

month leases that some companies choose to offer. Some forklift users have indicated they prefer the option to make an offer to purchase after their lease is at the end of the term. In 2020, 45 per cent of forklift users are choosing to lease directly from the manufacturer. Prior results showed that over 50 per cent of forklift users lease with the supplier or distributor, however now, under 40 per cent lease with the supplier or distributor. A 10 per cent drop is a major shift in the market and provides a healthy outlook for forklift manufacturers.

AUSTRALIA’S FAVOURITE BRANDS In a drastic shift from prior results, more companies are choosing to purchase, and lease forklifts more frequently than they have before. Prior data reported 58 per cent of companies purchase or lease a new forklift more than every four years. Now, significantly under 50 per cent of companies are waiting more than four years to purchase or lease a new forklift. In fact, 38.5 per cent of respondents this year said their company purchases between one and four years, a noteworthy jump from just over 30 per cent two years ago. Further on that, there is a 3.7 per cent increase in the market purchasing or leasing a new forklift within 12 months, which is music to manufacturers ears. In even more promising news for forklift providers, the majority of respondents this year are looking to purchase a new forklift within the next 12 to 24 months. So, which brands are they choosing to purchase? The first brand that forklift users consider when planning to purchase or lease a forklift is Toyota. 60 per cent of respondents said Toyota is very favourable as a

MHD JULY 2020 | 19

MHD MATERIALS HANDLING

Compared to 2018, there is a slight increase in companies preferring to lease rather than buy forklifts. forklift truck manufacturer. In 2018, Toyota celebrated its 50th anniversary celebrations for Toyota forklift sales in Australia, proving to be a legacy brand and on-going first choice amongst consumers as prior results also indicated Toyota as the first brand they would consider. Cameron Paxton, Vice President and Chief Operating Officer, Toyota Material Handling Australia, previously has stated that Toyota Material Handling Australia (TMHA) is a technology leader in forklift safety and is particularly focused on automation. “Toyota’s massive ongoing investment in research and development means our materialhandling technology and product technology is continually progressed and refined,” he says. Logistics companies are increasingly relying on their equipment suppliers to develop solutions for new high-density warehouses. This is an area where Toyota’s material handling engineers have access to the corporation’s automotive research and hence can take advantage of this everdeveloping technology. Following Toyota, the second brand companies consider when planning to purchase or lease forklifts is Crown, 20 | MHD JULY 2020

and Linde as the third brand forklift users would consider. 36 per cent of respondents said Crown and 34.6 per cent of respondents said Linde are very favourable forklift truck manufacturers. Two years ago, forklift users were most familiar with brands including Crown, Hyster, and Toyota. In 2020, almost half of the respondents said they would consider a Chinese brand of forklift. With a vast range of manufactures now available to the market, respondents have shown their familiarity to these brands but also smaller manufacturers that are emerging in the competitive market too.

ALTERNATIVE SOURCES Fuel options in forklifts offer industries a range of options to meet different materials handling applications and

convenience for owners. Forklifts on the market today are designed to meet a range of industrial & handling applications including cold storage, flame-proof, confined spaces, warehousing to name a few. An overwhelming 91.7 per cent, proving to be the clear majority of respondents opt for battery electric as the power of choice for forklifts. However, this is down five per cent since the last biannual forklift survey. In 2018, petrol was closely following battery electric as the power of choice. Whereas now, LPG is trailing close behind battery eclectic, with 82.7 per cent choosing it as their most favourable power of choice. Unlike electric forklifts, LPG forklifts do not require substantial

MHD MATERIALS HANDLING

time for refuelling, it generally only takes around five minutes to refill or change an LPG cylinder, a desirable choice for companies with demanding operations. 64.7 per cent of people said they would be interested in a guaranteed buy back and full maintained service agreement, showing that proven performance is highly valuable for consumers too. When it comes to alternative fuel sources, such as hydrogen fuel cells and lithium ion batteries, more than half of the survey respondents

said they are of interest and they would be prepared to pay more upfront for the technology. This shows the shift in the market towards efficient and conventional technologies that significantly reduces energy costs and CO2 emissions. ■

SURVEY PARTICIPANT WINNER

Congratulations to Jeffrey Moon from Dematic for winning 2 x Ionic Fitbits.

MHD COVER STORY

AN AUSTRALIAN FIRST FOR KMART AND COHESIO (KÖRBER) Kmart Australia is set to become the first retailer in Australia to deploy Android Voice solutions across its fulfilment operations. MHD reports.

esfarmers, the owner of Kmart Group, recently announced that it would convert several Target stores to Kmart stores, in recognition of the continued strong growth across the Kmart brand. To meet increased demand across its online and instore channels, Kmart Australia has deployed Cohesio Group’s (Körber) Android Voice solutions across its fulfilment operations. This deployment will mark Kmart as the first retailer in Australia to do so. 22 | MHD JULY 2020

The large-scale deployment of Cohesio’s Android Voice solutions, powered by Honeywell’s Guided Workflow Solutions, took less than four weeks and follows Kmart’s previous installation of the solution at four DCs across the country. The solution will support Kmart stores and the new KHub stores that will be opening from July. By deploying Cohesio Group’s Android Voice solution, Kmart can better meet its retail fulfilment goals,

Nishan Wijemanne, CEO of Cohesio Group says. “With Android Voice, the leading retailer will be able to meet faster and more efficient delivery and picking targets across its instore and online operations,” he says. The Android Voice solution provides operators with significant productivity gains. Giving operators more freedom to carry out their tasks efficiently and productively. Users are no longer required to spend

MHD COVER STORY

The Android Voice solution will power Kmart’s instore and online fulfilment operations.

“ Kmart is one of Cohesio’s legacy customers. The two companies have worked together for more than six years.

time looking at picking slips but can instead listen to order details while they continue to pick and pack. The voice solution also provides the user with more information around location and order details, offering the picker an image of the product which is proven to enable them to make faster and more accurate decisions. “Over the past few months we have experienced unprecedented levels of growth across our instore and online fulfilment operations,” Oliver Blombery, General Manager – Supply Chain at Kmart Australia says. “Our goal is to ensure our customers enjoy a great shopping experience, with our stores well-stocked which is achieved through faster and more efficient picking and packing times instore as well as for our e-commerce customers. By partnering

We partner with Cohesio because of their innovative approach. By working with their inhouse software development team, we now have a much greater ROI on our equipment. Their Android Voice solution is the perfect fit for us.

”

with Cohesio, we have been able to increase productivity, accuracy and efficiency across our fulfilment operations.” For Nishan Wijemanne, CEO at Cohesio Group, Android Voice offers a truly flexible and scalable investment in improving and expediting DC workflows, especially for retailers who tend to experience various shifts in demand. “This makes the solution a great fit for Kmart,” he says. Training operators on the new solution takes less than an hour, and a typical Android Voice deployment for a fulfilment centre can be completed in less than four weeks. “This solution empowers retailers to maximise and deliver on the increased demand experienced since COVID-19,” Rizan Mawzoon, Head of Transformation at Cohesio Group says. Kmart and Cohesio Group have been working together for more than six years and Nishan says this partnership goes far beyond a supplier-customer relationship. “Kmart is one of our legacy customers and through this partnership we have been able to truly innovate together. We work with Kmart to push boundaries and consistently explore opportunities for continuous improvement. We’re a trusted advisor to Kmart and we are proud to work with one of Australia’s leading retailers,” Nishan says. “We partner with Cohesio because of their innovative approach. By working with their inhouse software development team, we now have a much greater ROI on our equipment. Their Android Voice solution is the perfect fit for us, offering us a rapid increase in our productivity and faster order fulfilment and store replenishment,” Oliver Blombery, General Manager – Supply Chain at Kmart Group says. ■ MHD JULY 2020 | 23

MHD COVER STORY

AN ESSENTIAL SERVICE During early COVID-19 restrictions, Chemist Warehouse went from 30,000 online orders a month to nearly 150,000. In less than four weeks, Cohesio Group (Körber) was able to develop a same-day delivery solution for the leading retailers 1.5 million weekly customers. MHD finds out how.

Cohesio Group has worked with Chemist Warehouse on both Click and Collect and Click and Deliver solutions.

As soon as COVID-19 reached Australia, many business operations came to a complete halt. However, as one of the largest pharmacy retailers in Australia, Chemist Warehouse had a critical role to play in providing the nation with access to essential health and beauty products. Established in 2002, Chemist Warehouse has grown from one single shop in the inner Western suburbs of Melbourne to the retail giant it is today, operating more than 500 stores across the nation. Now Australia’s largest pharmacy retailer, Chemist Warehouse serves more than 1.5 million customers and dispenses almost a million prescriptions per week. CLICK AND COLLECT TO CLICK AND DELIVER Chemist Warehouse has been working with Melbourne-based technology provider Cohesio Group since 2017. Chemist Warehouse deployed Cohesio’s dedicated retail software, Ignito, to power its Click and Collect processes across its 500 plus stores. Cohesio Group developed Ignito in response to the rise of online retail. Recognising that retailers need the ability

24 | MHD JULY 2020

to have real-time visibility on stock levels both front-of-house, across the network and in their warehouses, the software provides full supply chain visibility as well as sales trends and actionable insights into consumer behaviour. “Ignito is a powerful workflow optimisation software that integrates with every part of the supply chain. It collects data from multiple sales points, automates administrative and stockrelated tasks and facilitates click and collect processes,” Rizan Mawzoon, Head of Transformation at Cohesio Group says. Chemist Warehouse stores are unique in that they tend to be very large facilities and hold a huge amount of inventory. Cohesio recognised that this created the perfect opportunity to fulfil orders in store, rather than from a central distribution centre (DC). AHEAD OF THE TREND: MICROFULFILMENT Since introducing Cohesio’s Ignito software solution in 2017, the retailer has increased order fulfilment throughput rates by up to 30 per cent. “With the new Click and Collect and online delivery solution, if a customer is

based in rural Victoria for example, the order is fulfilled by their local store instead of coming from a central DC. This gives the customer a much faster option for collecting their order,” Rizan says. Cohesio Group rolled out the software across all of Chemist Warehouse’s stores, giving customers across the nation access to faster collection options. When COVID-19 hit Australia, Chemist Warehouse recognised that its customers needed a risk-free solution to receive online orders at home, instead of coming into the store. “We wanted to ensure that we could offer our customers the safest possible option to shop during COVID-19 restrictions. We knew that for many they felt it was a risk to leave their homes and shop in the traditional way, so we approached Cohesio Group to help us develop our existing Click and Collect solution to become a Click and Deliver solution,” Mark Finocchiaro, Managing Partner and Director, Chemist Warehouse Group says. In less than four weeks, Cohesio Group transformed its Click and Collect program to include Click and Deliver. “During COVID-19, Chemist Warehouse experienced a huge increase in online orders. On top of this there was a requirement to reduce the amount of people coming into the store, while still offering the same level of service,” Rizan says. Chemist Warehouse wanted to offer customers same-day delivery service, and the only way to get this kind of speed was to pick goods in store. ENABLING SAME-DAY DELIVERY One of Chemist Warehouse’s priorities was to ensure that its customers still had access to the goods that they needed in a timely manner. “Like many other retailers, our online orders sky-rocketed during COVID-19. We knew we had to do something different to meet customer demand. We wanted to make sure we could offer the same service and still allow customers to feel safe and comfortable and offer a hyper

MHD COVER STORY

convenient service. We didn’t want our customers to endure long delivery times which quickly became the norm during unprecedented delivery demands,” Mark says. Before COVID-19, Chemist Warehouse was fulfilling around 30,000 orders a month. When COVID-19 restrictions began, online orders reached higher levels than previous Black Friday sales and Christmas peaks. Since introducing the Cohesio solution, Chemist Warehouse now has the capacity to fulfil around 150,000 orders a month, a significant increase on the previous 30,000. When a customer selects an order on the Chemist Warehouse website or app, Chemist Warehouse’s Order Management System (OMS) will check the stock levels in the stores closest to that particular customer to fulfil the order. The online ordering system holds the profile of the customer, so if they have previously visited or ordered click and collect from a store, it will recognise their local Chemist Warehouse store. “Ignito then sends a message to the store inventory team and communicates which orders are for Click and Deliver, and which are for Click and Collect,” Rizan says. Significant work has been done to ensure ease of use for the picking and packing staff. “We’ve made the process very simple for the user in the store. They pick orders for both Click and Collect and Click and Deliver, and then

Chemist Warehouse team members fulfil online orders in store.

at the end it will communicate which boxes are for delivery and which will be collected in store,” Rizan says. Mark also recognised that while Chemist Warehouse was experiencing growth during COVID-19, some businesses had lost a lot of their work. With this in mind, Mark ensured he used a local Australian owned and operated transport carrier to fulfil the orders, keeping local businesses in work and local residents in jobs. Ignito communicates with the transport carrier, ensuring a seamless and efficient delivery time. Within four weeks, the solution was rolled-out across ten Chemist Warehouse stores, and after the successful trial the Click and Deliver solution is now being offered

Left to right: Rizan Mawzoon, Head of Transformation at Cohesio Group; Mark Finocchiaro, Managing Partner and Director, Chemist Warehouse Group; Edwin Chong, Project Manager at Cohesio Group and Tim Noakes, Development Lead at Cohesio Group.

at all of Chemist Warehouse stores across Australia, with New Zealand set to follow. AN ESSENTIAL SERVICE Mark says providing Australians with the essential goods they needed in the safest way possible during COVID-19 was a major priority for Chemist Warehouse. “We recognise the critical role that we play in keeping Australians healthy and giving them access to essential goods for the benefit of their health. We knew we needed to come up with a solution that reduced anxiety and risk for the most vulnerable members of our communities. Cohesio rose to the challenge and we are proud to be able to keep serving our customers with flexible and convenient delivery options,” Mark says. Speed of delivery was a major priority for Mark, as well as ensuring that society’s most vulnerable people could still get access to the medication and products that they needed without needing to come into the store. “We’ve already had great results working with Cohesio for our Click and Collect solution, so we were confident they would also deliver on our Click and Deliver solution,” Mark says. “At Chemist Warehouse we’re absolutely thrilled that we can now offer our customers this service, and we also see the convenience this will provide our customers post the COVID-19 crisis as we move into the new normal for retail in Australia and around the world.”

MHD JULY 2020 | 25

MHD SUPPLY CHAIN

COVID-19 has made 2020 the year of accelerated online shopping.

RETURN TO SENDER T

Raghav Sibal, Managing Director Australia and New Zealand, Manhattan Associates, sits down with Brittany Coles to reveal how record growth in e-commerce has changed returns management.

he 2020 pandemic will soon be marked in history as the gold rush era for global e-commerce operations. Data can’t keep up to the same speed as order volumes, with most major Australian retail brands experiencing an online growth rate of at least 60 to 80 per cent. Myer reported an 800 per cent overall growth in e-commerce sales during its Easter sale, and now into the second half of this year, extraordinary order volumes continue to soar. There has been a heightened emphasis on external order fulfilment from logistic hubs due to the surge in online shopping, but how are companies coping when a record amount of orders are being returned? Reverse logistics is part of an organisation’s integrated supply chain

26 | MHD JULY 2020

management. It’s one of those areas in operations that companies put to one side because it’s really difficult to get right. However, this is the year of accelerated digital shopping and organisational transformation, when the need for a stronger returns policy was put in place by many retailers following extreme order fulfilment during COVID-19. Raghav Sibal, Managing Director of Australia and New Zealand at Manhattan Associates says that traditionally in western markets when customers make a purchase from a physical retail store, they have always had the opportunity to go back and return their goods. “With the onset of e-commerce, returns have now become a big factor as part of omnichannel retail, turning

what was once a fairly low returns market into a major part of retail operations,” he says.

THE AGE OF FREE RETURNS “Eighty per cent of returners are considered to be the best customers a brand can have and 95 per cent of their loyalty is driven by a seamless returns process,” Raghav says. The reverse logistics market was already anticipated to grow substantially this year, owing to adoption of blockchain technology in the logistics industry. The major driver of the reverse logistics market is the expanded e-commerce industry, however despite this need, inventory management is one of the most underinvested areas in retail. Free returns are a particularly

MHD SUPPLY CHAIN

Raghav Sibal, Managing Director Australia and New Zealand at Manhattan Associates. valuable tool for items with high return rates, such as apparel. In a study from Doddle, 72 per cent of Australians will check a retailer’s return policy before committing to a purchase. Moreover, 42 per cent of Aussie shoppers said they would stop shopping with a particular brand if they’ve had a bad returns experience. Raghav says consumer trust is paramount to the ongoing success of any retailer. As of April, 44 per cent of the top apparel retailers now offer free returns. E-commerce retailers such as Amazon.com have extended their return policy windows, with some online retailers like ASOS advertising free returns on its website. “There is no such thing as free returns though, it’s built into the price point of supply chain operations. Given the proven success of free returns, it’s typical now that the consumer isn’t incurring any shipping related costs and it’s up to the retailer to facilitate those fees instead,” he says.

STREAMLINED RETURNS PROCESS

“

Eighty per cent of returners are considered to be the best customers a brand can have and 95 per cent of their loyalty is driven by a seamless returns process.

”

customer, including the initial purchase price through communication via a call or email, or established website portals, will commence the streamlined process. Raghav says capturing information prior to the goods being physically returned will ensure current data and a smooth-running supply chain is maintained, despite outbound influxes of order fulfilment. Following first communication, the return point can be established, whether that be the distribution centre, 3PL for returns only or a physical store. Raghav says if goods are being returned to the warehouse, the warehouse management solution needs to have all the capabilities and flexibility to process returns through automation. “The next question companies need to ask themselves is how returns will interact with outbound or other operations occurring in the warehouse, and how will they be handled differently?” he says. Raghav encourages retailers to assess their inventory and establish whether stock can be recycled and re-sold, or if goods will go back on shelves if they are returned to stores. He says there should also be a place in returns management for damaged or faulty items that need to undergo further assessment, but Raghav says at the end of the day, no matter where any variety of return points are located, different technologies and tools must be available across the supply chain.

CRITICAL TOOLS “Able planning of returns is absolutely critical; it is a labour-intensive process to manage returns at the warehouse as items need to be categorised and turned into something that can be resourced again as

In the logistics industry, there is no such thing as free returns.

Raghav says having a streamlined returns process is of utmost importance for any retail supply chain. So, what are the tools and capabilities required to offer consumers a seamless digital returns experience with an instant credit option to encourage a near-term purchase? He believes the first thing companies have to ask themselves is how they can make returns easier for the customer? “The last thing a retailer wants is parcels arriving at its distribution centre without any knowledge as to why it’s arriving back, with no prior authorisation or information from the customer,” Raghav says. Taking authorised information from the MHD JULY 2020 | 27

MHD SUPPLY CHAIN

Many retailers drive their own returns policy based on their customers. inventory stock,” Raghav says. That is why advanced notification of returns is important. Once the returned goods arrive at the warehouse, it’s about joining the non-stop flow of goods. Raghav says a streamlined management process of both outbound and returned goods is only achievable with an efficient warehouse management solution. “We are finding our clients are driving their own returns policy depending on the size of their operation, and most are adopting shopper-friendly policies. Our warehouse solution has capability to manage their returns process because it captures all the accurate real-time information that helps to provide a frictionless returns experience,” he says. Raghav says there is a trend for inviting customers to return goods to stores too, as it’s less labour intensive and cost effective, whilst also having the added advantage of getting customers in store again, which can lead to additional sales. “We have solutions that facilitate in-store returns too. Digital applications that allow returns via mobile devices are proving to be a huge success, 28 | MHD JULY 2020

emphasising the importance of a streamlined return process across our retail client base.”

FUTURE OF FULFILMENT Raghav highlighted that technology is driving both traditional retail and e-commerce operations, and retailers are becoming creative with the ways in which they are enhancing fulfilment capabilities. “Many retailers found during this period that just meeting the increasing e-commerce demand at fulfilment centres wasn’t good enough. Kmart converted select stores into dark stores to ramp up fulfilment and we can expect this drive in volume to continue,” he says. Raghav says omnichannel presents a channel of opportunity for retailers. “Click and collect and shipping from stores will become the norm for major retailers, which is why reverse logistics has to constantly evolve with the changes in fulfilment capabilities,” he says. Making the returns process harder or less attractive for the end consumer means doom and not boom for the

retailer. Raghav says companies who still believe that reducing returns is a smart move, need to realise they’re actually missing the mark. “Returns have always been a very acceptable and integral part of e-commerce operations. It’s now the break in the water for retailers who are experiencing an explosion in online sales, and who are realising customer satisfaction and loyalty is more important than a challenging returns process,” Raghav says. He is adamant that although there are new technology capabilities that are available, reverse logistics is not a new concept for the market. Raghav says major brands including Nike and Adidas have had sophisticated returns processes in place for years, but due to logistics facing some of the biggest changes in response to the pandemic, seamless return operations are now the only way forward. “Companies can’t fight the fact that there will always be returns, but a planned digital strategy will ensure a more streamlined and costeffective returns process for both the consumer and retailer.” ■

Cohesio Group (Kรถrber) announces the launch of new AMR solutions for flexible automation and a global rebrand to Kรถrber.

cohesiogroup.com/robotics

MHD TECHNOLOGY

A customer in the grocery sector contacted Dematic to develop a social distancing tool.

RESILIENCE AND AGILITY: RESPONDING TO COVID-19 MHD catches up with Pas Tomasiello, Senior Director Integrated Systems at Dematic to discuss recent innovations and developments the intralogistics provider has established in response to COVID-19.

hile many industries have suffered during COVID-19, there are also a number of industry verticals that are experiencing significant spikes in demand. According to Pas Tomasiello, Senior Director Integrated Systems at Dematic, many of the intralogistics provider’s customers have had growth during COVID-19. “We have been heavily involved in ramping up operations for a number of our customers in the grocery, e-commerce and pharmaceuticals sectors,” he says. In order to keep up with demand, as well as ensure that social distancing is 30 | MHD JULY 2020

practiced, many sites are now running additional shifts across longer hours. As a result, Dematic has been working closely with its customers to ensure that they can continue to rely on the solutions that keep their sites and operations running. “These industries have really relied on our customer service and preventative maintenance scheduling and routines to operate at higher volumes and with extra shifts,” Pas says. For Pas, the COVID-19 crisis has proven the case for automation. “If toilet paper demand suddenly increases and you try to deal with

that peak in demand manually, you’re going to have to throw a lot of labour at it which is very expensive.” If the site operates a flexible automated environment, then it doesn’t cost any more to run longer hours, Pas says. “Automation offers the ability to deal with an increase in volume and tighter delivery windows without incurring ridiculous costs,” he says For these reasons, Dematic has seen a huge increase in interest for its flexible automated solutions. “A lot of the conversation now is based on what they can learn from this, and where to go from here. For many, it’s

MHD TECHNOLOGY about future-proofing their operations with automation,” Pas says. COVID-19 has placed resilience and agility at the forefront. “These two words are popping up a lot in this discussion. Dealing with unpredicted spikes in demand with manual labour presents a huge cost to any organisation. If you can ramp up your operation with automation, then it doesn’t incur an unexpected cost for your business,” Pas says. Dematic’s innovations during COVID-19 are not just in the automation space, the intralogistics provider has also developed software that ensures social distancing among front-line employees. After a customer in the grocery retail space contacted Dematic to try and better manage social distancing among its picking and packing employees, software engineers at DAI – a logistics software solutions company acquired by Dematic in February 2020, rose to the challenge and developed a solution in just three days. “Dematic has always been focused on helping our customers respond quickly to critical business challenges -it’s at the core of what we do. Now, given the coronavirus pandemic, it’s even more critical. Our customers’ employees are no longer simply order pickers, grocery retail workers and cashiers, but front-line

In the UK, e-grocery website visits were up 146 per cent from February to March.

“

Dematic has always been focused on helping our customers respond quickly to critical business challenges – it’s at the core of what we do. Now, given the coronavirus pandemic, it’s even more critical.

”

Pas Tomasiello, Senior Director Integrated Systems at Dematic. workers. It is our duty as a business partner to provide creative solutions that make order fulfilment not just easier and faster but safer. This quick software update is the most recent example of how we take this role seriously with each project and with every customer,” Hasan Dandashly, CEO, Dematic says. When a picker is assigned an order, the software indicates the aisles that contain the items. However, with the new update the operator knows that an aisle or bay is already occupied, so they can move quickly to an open aisle, which helps ensure proper social distances. In addition to employee safety, the update also improves efficiency with pickers no longer having to wait for aisles or areas to clear. The software offers a store manager peace of mind that front-line workers are practicing safe social distancing. Currently being utilised by leading grocery providers in the UK, the feedback has been positive and Dematic sees an opportunity for this to be rolled out to more customers as social distancing remains a requirement in enclosed places. Pas says that COVID-19 has accelerated the uptake in online shopping in Australia, and with that comes an opportunity for logistics providers to try new ways of dealing with variable and unpredictable demand. “We’re having conversations around Micro-fulfilment Centres, Customer Fulfilment Centres (CFCs) and other ways of improving customers’ online shopping experience. We’re excited to work with our customers in this space and explore new ways of applying automation,” he concludes. ■ MHD JULY 2020 | 31

MHD AUTOMATION

REVERSE LOGISTICS: HOW TO MAINTAIN PROFITABILITY Jeff Hedges, OPEX Warehouse Automation President and Khurshed Mirza, OPEX Asia Pacific (APAC) Director, share the profitability of having an efficient returns management system that is powered by automation.

t’s Christmas time across the supply chain, but it’s only July? November is annually known as the beginning of the outbound inventory rush for retailers. Following a few weeks of holiday returns, distribution centres can take time to breathe after Christmas presents have been bought and returned. However, in recent times, the traditional set Christmas peak period is now a piece of cake compared to the volume of orders that fulfilment operations have been experiencing since consumers started panic buying in March. Everyday fulfilment centres are operating at maximum speeds and processing orders at rates never seen in the global supply chain outside the holiday rush. For today’s retailers, dealing with returned goods is one of the toughest challenges they face. During social distancing restrictions at the peak of the recent COVID-19 pandemic, more people were online shopping than ever before. Fashion retailers reported online orders were up an astonishing 450 per cent compared to the prior year, with many retail markets including fitness, grocery, home and garden recording similar figures. Unlike the holiday period, when companies can forecast orders and returns, the current situation is rapidly changing. Therefore, when returns volume is as high as it will be, a returns management system that is integrated in everyday 32 | MHD JULY 2020

Khurshed Mirza, OPEX Asia Pacific (APAC) Director. warehouse operations is essential. Jeff Hedges, OPEX Warehouse Automation President and Khurshed Mirza, OPEX Asia Pacific (APAC) Director, say returns aren’t a burden on operations with the right scalable solution. “E-commerce retailers are plagued by returns totalling anywhere from 25 percent to 30 percent of their orders. Many people will order three of the same pairs of shoes and send back the sizes that don’t fit,” Jeff says. For e-commerce and omni-channel retailers, there’s a direct link between the efficient handling of returns and profitability. Jeff says this is especially important in retail environments where free returns are encouraged as a strategic point of customer convenience differentiation.

Jeff Hedges, OPEX Warehouse Automation President.

FAVOURABLE RETURNS Jeff says not only is it favourable to have an efficient returns system, but it is also an important financial move to boost profits. “E-commerce and omni-channel merchants will need to re-evaluate and retool their DCs to efficiently handle a growing volume of returns and the expense dedicated to managing them,” he says. According to Jeff, most OPEX clients in the US have experienced a dramatic increase in e-commerce operations, even up to 300 per cent. As more orders get fulfilled, more returns have come back to the retail sender. He says companies have been forced to question automation capabilities, exploring solutions that process returns within the warehouse management system that is already in place.

MHD AUTOMATION

“Return policies are expected by consumers, no matter what product a business is selling on the market. Therefore, return management is just as important as initial order fulfilment,” he says. For fashion in particular, Jeff explains that there is a very high percentage of clothing items that get returned and can easily be resold by the merchant. “Being able to process that efficiently and get it back in the supply chain loop, makes returns management just as profitable as an original order,” he says. Khurshed agrees with Jeff and believes return management can be complex, but the

OPEX Sure Sort is a scalable, configurable, and cost-effective small-item robotic sorting system.

“

Being able to process that efficiently and get it back in the supply chain loop, makes returns management just as profitable as an original order.

” Improving returns operations begins with automated technology.

quicker the returned goods can be entered back into the order fulfilment system to customers, the better off a business will be. Khurshed says the efficiency lies in the automation of the warehouse system for sorting and picking. “It’s time to eliminate the manpower of manually sorting through packages of returned goods and entering them into the fulfilment loop. You can get immediate savings with a sophisticated automated solution,” he says.

RAPID FULFILMENT A constant two-way flow of merchandise requires considerable and dedicated restocking labour, and the labour allocated to managing returns will only climb as the volume of direct-to-consumer sales continues its upward trajectory. Jeff says it’s imperative that merchants get returned merchandise back in stock and into a saleable position as quickly as possible during this time of unprecedented demand. That’s where automation comes in. Khurshed says Perfect Pick from OPEX is scalable and can perfect the put function of the returns process as it is at speeding the pick function that enables rapid MHD JULY 2020 | 33

MHD AUTOMATION

OPEX Sure Sort is utilised by leading retailers across pharmaceutical, fashion and electronic brands. fulfilment. “Perfect Pick’s iBOTs can put products back into storage racking as fast as they can pick those goods for order fulfilment, which relieves a labour-and cost-intensive reverse logistics burden in distribution centres and speeding time to resale of returned merchandise,” he says. Jeff says keeping the cost of reverse logistics under control and getting returned goods available to sell are growing imperatives, and flexible two-way warehouse automation like Perfect Pick is a key enabler of those goals. Developing an e-commerce channel almost always requires retailers to expand their SKU counts. “Automating put away processes relieves that burden, Perfect Pick designed by OPEX can handle the put function of the returns process as seamlessly as it picks SKUs for fast fulfilment,” he says. The system can be set up to allocate and pick items for fulfilment from the front while returned goods are simultaneously put away from the back, items can be picked for fulfilment on one shift and returns put back on another, or merchandise can be picked for fulfilment while returns are put back in place simultaneously 34 | MHD JULY 2020

through two-way screen and light user interface. Jeff also says OPEX’s Sure Sort, a robotic item sorter that handles complex variables and delivers a wide variety of parcels and single items to their final location in a single pass, is helping clients achieve performance levels of over 2000 order lines per hour with precision accuracy. “Sure Sort can increase pick and pack rates by more than 7 times depending on the operation, equivalent to around 6 labourers. In a time where less human contact is welcome, this automated sortation solution is allowing retailers the flexibility for the goods-to-person system to grow with less workforce,” he says. Khurshed says the proven accuracy and small footprint of both Perfect Pick and Sure Sort is giving companies the ability to breathe and successfully manage the influx of return goods experienced across operations in both Australia and the US.

ELEVATED EFFICIENCY “Current trends indicate that returns will only continue to increase as e-commerce booms,” Jeff says. The challenge isn’t reverse logistics but

handing both inbound and outbound fulfilment. “Companies have to ask themselves how they will handle its returns as demand for goods increases, that’s where the investment in automation must come in,” he says. A recent study from a UK consultancy agency found that nearly two-thirds of customers wouldn’t make an order if they had to pay for returns. “Everyone who is part of the e-commerce industry is trying to get a share of the pie to build their customer base. Companies are competing to entice customers by offering an attractive returns policy, but it needs to be financially viable,” Khurshed says. Jeff and Khurshed say that the only way companies can be viable is to implement automation in its reverse logistics process. “Having a credible solution in place to manage returns whilst simultaneously picking and packing new orders ensures cash flow isn’t lost,” Khurshed says. “Your returns solution isn’t going to turn on and off like a tap, whatever a company decides to do to improve its reverse logistics, they can’t stop current operations,” Jeff says. For large retailers, flexibility and scalability are achieved by integrating business applications and systems. Although it may not be feasible for a small to midsize retailer to achieve full automation immediately, Jeff says replacing the traditional personto-goods fulfilment model with an automated solution is a good place to start. Khurshed says the benefit with OPEX Sure Sort is that the customer doesn’t need to have a huge initial capital investment, it is scalable and can be implemented whilst continuing operations, which is un-thinkable during this peak of increased fulfilment. OPEX Sure Sort is utilised by leading retailers across pharmaceutical, fashion and electronic brands, and 3PL’s. “Sure Sort grows with the business, which our clients are thankful for. We’ve had plenty of well-known clients across the global supply chain who have started with Sure Sort and scaled up as their e-commerce operations have taken off, which has proven to be a really powerful investment,” he says. ■

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MHD AUTOMATION

Automation offers consistencies around accuracy and standards.

REGAINING OPERATIONAL CONTROL Peter Hern, Business Development Manager – Automation at Diverseco says an increasing number of decision makers across logistics and supply chains are exploring automation to increase control across throughput, safety and efficiency.

ome organisations have previously been on the fence when it comes to implementing automation, however according to Peter Hern, Business Development Manager at Diverseco, now is the time to explore its capabilities. Since COVID-19 the automation team at Diverseco has seen an increase in enquiries. Peter says initially this was largely due to restrictions around social distancing. “Social distancing means people can’t work side by side. When it comes to assembly processes or picking and packing lines there has to be social distancing in place. This is making it very difficult to reach the same throughput rates with less 36 | MHD JULY 2020

people,” he says. Any function that is manual but can be automated with technology will allow organisations to keep their level of throughput with less people in a confined space, Peter says. “You really have two choices, you either need to explore automation, or look at increasing the size of your production areas,” Peter says. Many manufacturing and logistics organisations are close to capacity, and Peter says this is causing a further need to look to automation. “While labour is very expensive in Australia, so is property. Many businesses have reached capacity and have to be creative about operating

Peter Hern, Business Development Manager - Automation at Diverseco.

MHD AUTOMATION increased capabilities and volume in the same space,” Peter says. By investing in automation, rather than real estate, it is possible to improve productivity without incurring huge costs. “When you think about extending or moving facilities, it’s not just the cost of the property but also the cost to move,” Peter says. A further benefit of automation when it comes to COVID-19 is that there is significantly less human contact with product. “The less human contact you have, the less chance there is of contamination. This benefit is not just in relation to COVID, any time that people are touching things there is a risk of contamination,” Peter says.

LIABILITY OF LABOUR Whenever there are people involved in the process, there is often inaccuracies and inconsistencies in quality, Peter says. “Throughput can largely depend on how people are feeling on a certain day. People joke that you wouldn’t want to buy a car that was built on a Monday or a Friday, and it’s the same in any manual role,” he says. Automation offers consistencies around accuracy and standards. Peter says if your order volume doubles, with automation you don’t need to double your labour. He also says that automation does not lead to the displacement of people in the workplace. “Automation allows for the opportunity to re-evaluate the workforce and consider where the human skills can offer the most value,” he says. There are multiple uses for automation in the warehouse, in picking, packing, palletising, even shrink wrapping a pallet can be automated, Peter says. Automation also offers benefits around safety, and Peter says Diverseco is currently exploring options for the use of Automated Mobile Robots (AMRs) instead of a forklift to move stock from one place to another in a warehouse. “For us, forklifts are for lifting products. But when it comes to moving goods around the warehouse, we explore options with automation so that it creates the safest environment possible. An AMR will just stop if there is anything in its path, but with a forklift you have to rely on a human reaction,” Peter says.

“

Automation allows for the opportunity to re-evaluate the workforce and consider where human skills can offer the most value.

”

manufacturing onshore. To be able to produce the kind of throughput and productivity expected, Peter says this is a great opportunity to explore the benefits of automation. “If there is a demand for onshoring, these businesses need to be ready to ramp up rapidly when the demand comes. This is a huge opportunity, and automation can really play a huge role here,” Peter says. Diverseco has a very flexible approach to automation, and while some projects may take a few months to implement, Peter says they have been able to help some customers out in as little as a month. “Three months is a reasonable turnaround, but sometimes it’s simply the deployment of a collaborative robot and we can offer that kind of service in less than a month. Giving some of our clients significant efficiency and productivity gains with a very short implementation timeframe,” he says. According to Peter, COVID-19 has created the perfect storm for automation. “People are starting to re-evaluate how they do things. Over the last ten years, some people have questioned automation. But with social distancing in place, it really is one of the most sensible opportunities for remaining productive while you can only operate with half of your workforce at any one time,” he says. Diverseco has extensive experience across food and beverage, logistics, e-commerce and manufacturing and has implemented both large-scale and flexible and agile automation solutions. Peter says that automation offers safety, productivity, accuracy and efficiency gains and urges organisations to consider the benefits it could have on their business. ■

OPPORTUNITIES FOR ONSHORING Since global supply chains have been impacted by COVID-19, Peter says there is an opportunity for local manufacturers to ramp up production when businesses start to explore options around bringing some

Since COVID-19, there has been an increasing interest in automation due to social distancing requirements.

MHD JULY 2020 | 37

MHD MATERIALS HANDLING

KEEPING MOVING DURING COVID-19 Martin McVicar, Managing Director at Combilift invited MHD to find out how the company has continued to innovate while COVID-19 restrictions remain in place at the forklift providers global headquarters in Ireland.

ombilift operates out of a 46,000 sqm facility in Monaghan, Ireland. From this facility, the forklift provider exports 98 per cent of its products to 85 countries through its 250-strong international dealer network. The workforce consists of more than 650 people with expertise spanning warehouse design engineers, logistics and supply chain specialists and those with mechanical and electrical mechatronics skills. In Ireland, restrictions around COVID-19 have been in place since March. As a manufacturing facility involved in the supply, repair and installation of machinery and equipment, Combilift could have remained open in line with the essential services defined by the government but it decided to suspend production for a number of weeks at the height of the restrictions. It re-started all production at the start of May with increased safety measures in place. Martin McVicar, Managing Director at Combiift reveals some of the changes that have taken place at the site in Monaghan. “We now run two shifts instead of one. This way we can ensure that no more than 325 people are onsite at once. We also have a thermal camera at the entrance that monitors all employees as they enter the site. If a temperature above 37 degrees is recorded, then the employee and our HR department is immediately informed,” Martin says. Workers would ordinarily use a fingerprint system to enter the site, but Combilift has now introduced a key fob entry system so as to ensure that there is less opportunity for germs to spread. Combilift has also ensured that all

38 | MHD JULY 2020

Martin McVicar, Managing Director at Combilift.

MHD MATERIALS HANDLING door handles are now fitted with copper, while the virus can remain on a stainlesssteel surface for two to three days, it will only last two to three minutes on copper, Martin says. A further initiative is that all employees must wear facemasks when on site.

ADAPTING TO THE NEW NORMAL In Ireland, the recommended social distancing is two metres, and Martin says for many of Combilift’s customers worldwide it has been a challenge to get back to normal levels of production. “To have enough space to socially distance in a site has been very challenging for most of our customers. You either have to increase the area in which you are running production or run two shifts of operation. Significant changes to operation have been required,” Martin says. With this change in production and demand for a rethink of what manufacturing and logistics sites look like, Martin says there has been a huge increase in expressions of interest for Combilift’s narrow aisle forklift trucks. “Our enquires for this truck have doubled,” he says. Martin says that it is well-known that production areas in any warehousing or manufacturing site are where the revenue is created. “A storage area is cost, production area is where you drive profits and revenue,” he says. In order to keep production at the same levels now that social distancing is a requirement, Martin says many of Combilift’s clients have had to rethink their warehouse layout, a service that Combilift would historically carry out in person. “We like to get in front of our customers, we like to walk through their sites with them and meet them face-to-face. But with the possibility of international travel becoming near impossible, we

Combilift’s headquarters are in Monaghan, Ireland.

Martin McVicar says production areas are where the revenue is generated. had to find a different way to assist our customers,” Martin says. Combilift was very quick to innovate and has established a way of working with its customers on warehouse design and layout using video software on the messaging service WhatsApp. “We have more than ten engineers who can prepare warehouse designs and show clients how to maximise space. Now we are able to work with our customers remotely using video software such as WhatsApp. We can call a potential customer, no matter where they are in the world and have them walk us around the site,” Martin says. The customers can also send snapshots of their facilities, and measurements as well as details of the products they are handling. From here, the Combilift team will work on a 3D animated warehouse plan that will offer some ideas on how to better store more product. “This has little to no cost for the client, and a very fast turnaround time. We would normally go and visit a client which could take a week or so to plan, but with WhatsApp call we can start the process very quickly and, in some cases, come back with a layout in 24 hours,” Martin says. This solution has proved very popular among Combilift’s current and new MHD JULY 2020 | 39

MHD MATERIALS HANDLING

Combilift has introduced health and safety measures at its headquarters in Ireland to keep employees safe. customer base, with requests for warehouse design double what it was 12 months ago. Martin says that this kind of service offering will likely stick around post COVID-19, as the benefits around speed of turnaround will remain advantageous after this period is over. Furthermore, Martin acknowledges that there are some industries that are experiencing significant growth during this time, and that it is imperative that they are adapt quickly to meet this demand. “In Australia, infrastructure is booming so any suppliers to that industry are going through a growth period. Additionally, most countries have seen a huge push for e-commerce demand, so those providers also need to ensure they adapt their warehousing operations to meet this spike in demand,” Martin says.

A FORCE FOR GOOD Martin says, like many other businesses, he was eager for Combilift to play its part in the fight against COVID-19 and help out in anyway they could. “In mid-March we started to work with the Irish Health Service Executive (HSE) to start to think about ways in which we could help. Here, we managed to have access to a ventilator and three of our engineers were able to 40 | MHD JULY 2020

spend time with the tool and analyse how the it works,” Martin says. From here, the Combilift engineers established that a ventilator created enough air flow for more than one patient. By discovering this, the engineers worked to establish a way that one ventilator could be used for more than one patient. “By analysing this ventilator, we realised that the flow of oxygen and air could ventilate up to four patients. Pair this discovery with the known fact that there are not enough ventilators in the world and our engineers set out trying to establish a way that we could use one ventilator for two patients,” Martin says. The challenge was how doctors and medical professionals could monitor the flow of air after it had been split. “Currently there was no way of monitoring what patient A or B is getting. No one had been able to establish a sophisticated splitter system,” Martin says. In response to this challenge, Combilift developed the CombiVentilate, a splitter device that turns one ventilator into multiple ventilation stations. Developed by a team of mechatronic and software engineers, the CombiVentilate took only five weeks to develop. The splitter uses standard pipes and fittings for easy assembly

and its individual patient filters prevent cross contamination. Each patient has a dedicated screen which allows medical professionals to individually monitor their vital information, including live values, data on patient history and statistics and adjustable alarm settings.

Combilift restarted production at the start of May.

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IE5+ efficiency level which exceeds all global requirements Compact and hygienic design “We have made Combi-Ventilate under the same ethics and with the same objective as we do with all our Combilift products, which is about doing more with less,” Martin says. The Combi-Ventilate costs 25 per cent of the total cost of a new ventilator, which according to Martin could have significant benefits for the developing world where access to more ventilators is challenging. “We have undertaken this non-profit endeavour to meet and facilitate the demands of the global health crisis around the world, the lack or shortage of ventilators. The medical device sector is not our core business, but making critical equipment which keeps people safe and alive has always been our focus and this latest project, driven by our desire to help during these difficult times, mirrors what our research and development has done for the last 20 years,” Martin says. ■

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MHD SUPPLY CHAIN

Arthur and his team have extensive experience working on large warehouse design and build.

AUTOMATION AS AN ENABLER

With COVID-19 restrictions impacting supply chain and logistics operations, and retailers seeing a spike in demand, Arthur Dardoumbas Director – Supply Chain Solutions at ThreeSixty says businesses need to consider the application, the commercials and overall business and operation requirements before rushing to implement automated solutions.

hifts in consumer demands and expectations have placed more pressure on supply chain and logistics processes than ever before. In Australia, the online shopping boom is causing many retailers and 3PL providers to look at automation as a way of dealing with increased demand. In recent years automation has taken centre stage in warehousing and logistics operations. While much of the technology is not new, it is becoming increasingly viable and easier to adapt. Supply chain consultancy EFT conducted recent research revealing that 63 per cent of logistics professionals surveyed are investing in automation technology to deal with the challenges of shipping goods in 2020. 42 | MHD JULY 2020

Much of the team at ThreeSixty previously worked together at Toll.

MHD SUPPLY CHAIN holistically rather than jumping straight into the deep end. Considerations around automation must not only include opportunities around productivity and efficiency gains but ensure the end-to-end business and operational requirements are considered as well as the return on the investment. Arthur says it’s important to ask how are businesses going to ‘sweat’ the asset in five to ten years as their business shifts? Arthur says when it comes to automation, it’s about finding the right solution for the right application. ABI Research has revealed that four million commercial robots will be installed in more than 50,000 warehouses around the world by 2025, up from just under 4,000 warehouses in 2018. However, EFT data revealed that one of the biggest challenges for introducing automation in logistics and warehousing is the cost and how accurately to build a business case and the sensitivities on the return on investment. According to Arthur Dardoumbas, Director – Supply Chain Solutions at ThreeSixty, the increased uptake in automation is largely due to the change in the type of order profiles that are being moved through and out of the warehouse. “There has been a huge shift in the way that we buy. In the past, a warehouse would be used to replenish a physical store. But now individual customer orders are being picked, packed and shipped straight out of the warehouse. The orders are getting smaller and smaller and this is very challenging for retailers and logistics providers,” he says. “In Australia, e-commerce accounts for around 20 to 25 per cent of a retailers’ total sales. This is a fair chunk when you think that all of these orders have to be individually picked and packaged rather than unit picking. It’s a real challenge to do this manually.” In addition, the Asia Pacific region is one of the fastest growing regions and is taking up a large slice of the e-commerce pie. “Currently Asia Pacific makes up 40 per cent of total global e-commerce spend. By 2025 this is expected to reach 50 per cent,” Arthur says. This growth presents a unique opportunity for Australia and the surrounding region to capitalise on the growing appetite for online shopping. However, while many businesses are racing to automate operational processes, Arthur says it’s important to think

AUTOMATION AS AN ENABLER

“

Customers look at their supply chain and processes and often immediately jump to automation as the answer, but we encourage them to take a step back and think about the bigger picture.

”

According to Arthur, many organisations make the mistake of thinking that by installing automation alone, it will fix any pain points they have. “Customers look at their supply chain and processes and often immediately jump to automation as the answer, but we encourage them to take a step back and think about the bigger picture. Start at the strategic level and think about what you are really trying to achieve,” Arthur says. Automation is an expensive game. With installations of capital and automation regularly costing upwards of ten to twenty million dollars – and if it’s a greenfield site, property will be included in the commercials – almost every implementation approval will involve the Chief Financial Officer (CFO). “No supply chain or warehouse manager is signing off projects at this level,” Arthur says. To get sign off on this kind of project, a CFO will want to see the business case for

Arthur Dardoumbas, Director – Supply Chain Solutions at ThreeSixty.

MHD JULY 2020 | 43

MHD SUPPLY CHAIN the capital spend versus any return on investment. “A CFO might not know the technical difference between an AMR and a Goods-to-Person robot, but they will know what to look for when trying to establish what the cost versus return analysis is,” Arthur says. While automation can offer significant benefits in catering for demand, it’s also imperative to consider the right solution for the right application. “Unfortunately, many of the automation providers focus on their equipment and the automated solution and don’t consider the overall operation and the bigger picture. Their specialisation is automation systems and processes and that is what they deliver on. However, consideration must be given to systems, integration, processes, people, and inventory as this is as important, if not more important, than the automation. This focus becomes problematic for businesses when they have invested millions of dollars in something that doesn’t deliver on the improvements they were hoping for,” Arthur says. What may work for a fashion retailer, might not work for a pharmaceutical’s retailer or a grocery provider. Arthur says it is “absolutely critical” that the automation is applicable to the function and operation that it is intended for. He says that ThreeSixty has worked with many of its customers to design and implement a high level of automation, though also worked with customers to scale back the automation intended in order to work most effectively and efficiently.

automate,” Arthur says. By considering these fundamental values, there is often improvements that can be made without huge investments. “We explore ways that our customers can inject a smaller capital fee, which may be a lower level of automation and still meet the business requirements,” Arthur says. This well-rounded strategic view offered by Arthur and the team at ThreeSixty stems from the expertise that the team has developed from years in the industry. Arthur has extensive experience across the logistics landscape, including roles at Dexion, Dematic and most recently at Toll as General Manager of its Customised Solutions division. This division was tasked with building DCs for a number of different customers. “We built ten new greenfield sites in eight years. Only Coles and Woolworths operate on that kind of volume. We worked on projects from smart and efficient manual operations to some of the most highly automated sites in the country,” Arthur says. Much of the team at ThreeSixty worked together at Toll and have come back together to establish the consultancy. However, Arthur says ThreeSixty works as more of a partner to its clients than a consultant. “Our key focus is intralogistics. We have broad experience in building and designing DCs. Within that we have expertise in not just automation, but

the IT systems, ERP and WMS that goes with it. As well as the processes, we also have experience in IT and project management, operations management, operations ramp up and change management, which ensures any solution or automation that is implemented will be a success,” he says. When significant alterations are made to the way a DC functions and operates, it’s also important to ensure that change management is prioritised. Arthur says this is often overlooked, but ThreeSixty ensure it is part of a holistic view. “You can’t expect to run a fully-automated DC in the same manner as a manual one,” he says. Part of the passion behind ThreeSixty is the ability to offer customers an all-encompassing strategy that regards automation as an enabler for improvements rather than a solution in and of itself. “The reason our clients work with us, is because we understand what they are going through. Among the team at ThreeSixty we can confidently say that we have been in their shoes. We know what they are going through, and we know how best to solve their issues. In some cases, this is large-scale automation, in others its smarter processes, whatever is needed we can offer a solution and ensure that the solution is applicable and fits the operational needs as well as commercial outcomes,” Arthur concludes. ■

PROCESSES, SYSTEMS AND PEOPLE Arthur says considering processes, systems and people are fundamental to any supply chain strategy to avoid ongoing issues or failure. As such, ThreeSixty works with its clients to ensure any automation is integrated with IT systems, Enterprise Resource Planning (ERP), Warehouse Management Systems (WMS) and as well as the layout and design of the distribution centre (DC). “We offer supply chain strategy that is holistic. I always say to our clients fix your processes, systems and people first and then you 44 | MHD JULY 2020

ThreeSixty takes a holistic view of automation and technology.

28-29 OCTOBER 2020 WILLIAM INGLIS HOTEL, WARWICK FARM

Join us as Australiaâ&#x20AC;&#x2122;s most significant annual supply chain industry event comes to Western Sydney for the first time.

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#ALCForum2020

MHD EVENTS

SEE AND SHAPE YOUR FUTURE ALC Forum 2020 will take place from 28 to 29 October, the event is set to connect business leaders, government representatives, investors, infrastructure owners and leading logistics companies. MHD finds out more.

he most challenging and expensive circumstances in businesses tend to arise when the things we take for granted stop working properly. If there were any doubts about the veracity of such an observation, the first half of 2020 has surely dispelled them. COVID-19 was not a term most Australians had heard as 2019 ended. Yet today, it is dominating political discourse, economic thinking and has forced changes to the way we all live our day-to-day lives. After what has been an extremely difficult few months for businesses, it’s critically important to consider what the experience has taught us, and what adjustments we should now make to policy and investment settings to make our supply chains more resilient in the face of such challenges.

46 | MHD JULY 2020

One byproduct of the COVID-19 crisis has been the spotlight on the operation of supply chains – and the negative consequences that can result if those operations are interrupted. Prior to March this year, there were several generations of Australians who had no direct experience of shortages, or the imposition of purchase limits on certain products. Suddenly, something that many thought had been consigned to history books became very real. Although the panic buying that gave rise to that situation has now abated, our biggest lesson from COVID-19 must surely be that we need to be prepared for the unexpected and ensure that our supply chains are resilient and agile enough to deal with similar disruptions in the future. ALC Forum 2020 will be the freight and logistics industry’s best opportunity to explore these issues,

and highlight the central role our sector will play in supporting the nation’s post-COVID recovery. Successfully and efficiently meeting the challenge begins with focussing on the future and ensuring that Australia is equipped with high quality freight transport infrastructure that embraces technology and facilitates the faster, safer and greener movement of freight through supply chains, whether it is destined for domestic consumers or for export markets. It is rare for a genuine ‘greenfields’ opportunity for a globally significant freight and logistics hub to emerge in a major Australian city. Rarer still to have it shaped in real terms by the immediate lessons learned from a global crisis. Yet, that is precisely what is now happening in Western Sydney – and the Australian Logistics Council is preparing to peel back the layers as

MHD EVENTS part of ALC Forum 2020. On 28-29 October, ALC Forum 2020 will connect business leaders, government representatives, investors, infrastructure owners, educational institutions and leading logistics companies with the business opportunities that now abound in Western Sydney through Australia’s supply chains. With freight infrastructure including the Moorebank Intermodal Terminal and Western Sydney Airport set to transform supply chains, ALC Forum 2020 is your chance to connect with those who are designing the future - and make sure your business understands what that future means for you. With an estimated two thirds of the world’s population within half a day’s flight from Western Sydney, the new airport is set to become a key gateway for Australian producers taking their goods to emerging international markets. It is a unique opportunity for industry leaders to examine the opportunities of this globally significant project and help governments deliver global best practice for major supply chain infrastructure into the future. ALC Forum 2020 will explore how some of the best-practice approaches

“

Elements of the ALC Forum 2020 program are set to examine the challenges and opportunities for the freight sector nationwide in productivity, safety and building a sustainable workforce.

”

to planning, building and optimising freight infrastructure in Western Sydney can be deployed across other parts of Australia, enhancing the efficiency, safety, sustainability and resilience of the national supply chain. Other elements of the ALC Forum 2020 program are set to examine the challenges and opportunities for the freight sector nation-wide in productivity, safety and building a sustainable workforce. By attending, you’ll help set the agenda and hear insights from leading political figures, researchers and key industry leaders as they share their perspectives on emerging trends in freight movement and discuss the policy and regulatory reforms needed to accommodate a changing national freight task. ALC Forum 2020 is the one industry event that connects the whole supply chain at the most senior levels - service providers, infrastructure owners, investors, customers and governments. This is your opportunity to connect and help shape the future of your industry. ■ Visit www.austlogistics.com.au/ ALCForum2020 today to secure your place.

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MHD MATERIALS HANDLING

GOING GREEN WITH NORD’S ENERGY EFFICIENT DRIVES MHD catches up with Max Jarmatz, Managing Director and Phil Richards, Airport and Intralogistics’ Sector Manager from NORD Australia to learn how some of Australia’s largest logistics facilities and airports are gaining cost savings through innovative drives.

F Max Jarmatz is Managing Director at NORD Australia.

NORD’s IE5+ synchronous motor is characterised by its very high efficiency rating.

48 | MHD JULY 2020

resh in Australia, Max Jarmatz is new to his current role of Managing Director at NORD Australia. However, no stranger to the business and the world of drives, he has been working at NORD since 2005. His extensive experience at the company covers a variety of roles across a number of different countries and regions. He has worked for NORD in Europe, China, Indonesia and now in Australia. “For me, Australia is a very familiar culture. It feels very European here and I also have a lot of experience working across the Asian market, which is a huge focus for many Australian businesses,” Max says. According to Max, two of NORD’s fastest growing sectors are airports and materials handling, which NORD more commonly refers to as intralogistics. “Before COVID-19, we found that every country was looking to expand its airport capacity,” Max says. In addition, the global focus on climate change lets governments and consumers focus on energy saving and sustainability.

Despite restrictions to international travel during COVID-19, Max is confident that people will return to their usual habits of air travel. “Once we get through this challenge, humans will once again be eager travellers,” he says. Airport design and development is often backed by government so there is an element of sustainability and green initiative that needs to be considered. This is what NORD specialise in with their range of premium efficiency motors and inverters. “There is often a huge focus on energy savings when you are working on an airport project. Some focus on improvements like LED lighting, or solar. But one area that can offer significant energy efficiency, is the drives you are installing,” he says.

FROM PARIS TO TOKYO: NORD DRIVES Part of being a specialist drive solutions company is having specialist sector managers. This is where Phil Richards comes in, NORD’s Airport and Intralogistics Sector Manager for Oceania. Phil has been in the role at NORD Australia for close to eight years and has worked on hundreds of airport and intralogistics projects throughout Australia, New Zealand and the Asia Pacific region. “For NORD this sector has had phenomenal growth thanks in part to huge investments in product development and flexibility from our headquarters in Germany. I believe that NORD has the largest range of airport and intralogistics tailored products in the market and we continue to stay ahead of the competition” he says. According to Phil, the most efficient and flexible motor and drive technology is here already.

MHD MATERIALS HANDLING “At NORD we are excited to release reporting 60-80 per cent savings our new IE5+ PMSM permanent in power usage and electricity cost magnet synchronous motor compared to their previous IE2 and IE3 technology to the market which installations,” he says. far surpasses all global efficiency Phil concludes by saying it is requirements and will offer even important to remember the difference more reduction in electricity cost and in motor technologies out there as emission. We named the product range not all of them will reduce electricity IE5+ PMSM because in many cases the costs and contribute towards efficiency of the drive system we can carbon emission reduction. achieve is IE7 or IE8,” he says. “Motor efficiency standards are “We already have customers one thing and motor technology and requesting IE5+ PMSM for upcoming design is another. You could have projects which will work alongside an IE4 motor that is not PMSM but our proven IE4 drive package. The it meets the global standards based IE5+ motors are capable of being on full load. As we know in airports installed onto our existing range of and freight facilities most systems gearboxes and will work with all of our run at partial load and this is where VSD’s which makes this an extremely the IE4 and IE5+ PMSM motors can flexible solution.” save on electricity costs thanks to “We have had great success with their extremely low no load and partial our IE4 PMSM product and I have load current draw.” been lucky to be involved with some Phil encourages customers looking notable projects like FedEx Paris, to reduce energy costs or looking to go with 5,000 plus NORD drives. In green to talk to NORD about total cost addition, we’ve delivered drives for of ownership calculations compared to the new airport expansion at Tokyo’s an IE2 or IE3 product. Haneda airport in preparation for “Customers will be surprised at how the rescheduled Olympic Games in quickly the NORD IE4 and IE5+ motor Japan, with more than 1,000 new payback period is,” he says. units being installed at that site. Both of these projects are using BRINGING INTERNATIONAL our versatile NORDAC Flex VSD EXPERTISE TO THE each equipped with an onboard AUSTRALIAN MARKET Profisafe functional safety bus For Max, Australia is a big growth module,” he says. area for NORD and the capabilities Besides some very large they can offer. “We have experience international projects, Phil is across so many different markets. also working with airports in the We’ve seen how e-commerce can Oceania region. “Recently we were lucky enough to be awarded the Gold Coast airport expansion project. Gold Coast airport were looking for an efficient, flexible and green solution for their baggage system and NORD were up to the task,” Phil says. According to Phil, the new motor technology took a few months to catch on not just in Australia but in other countries too. “The energy savings really did seem too good to be true to some customers and I don’t blame them. With our NORD’s new IE5+ Drive IE4 PMSM permanent magnet Package is one of the most efficient drive solutions available. synchronous motors we had sites

grow and we’ve seen how it can be very efficient. In some parts of Asia, there is an expectation around same-day delivery. In order to be able to do this, you need a very capable, efficient and cost-effective operation. Our drives offer significant energy savings as well as reliability and durability,” Max says. Another area of growth is automation, and Max has extensive experience in this area throughout his work in Asia. “I think automation will become more and more important here in Australia. It’s played a huge role in South East Asia and is set to really play a significant role in Australia.” According to Max, NORD has been very lucky during the COVID-19 restrictions. “We haven’t had to seize operations at our site in Germany. We were lucky in that we were in the right area of the country and had implemented back up plans and increased stock reserves before the peak of the pandemic so we could continue to support our customers throughout this challenging time” he says. ■

MHD JULY 2020 | 49

MHD SUPPLY CHAIN

STRONG FOUNDATIONS FOR REVOVERY Following a survey conducted by MHD’s publisher, we reveal the latest stats from businesses in the sector as we move into a new normal following the peak of COVID-19 challenges.

t a time when the world has been shocked by a pandemic and resilience has never been more critical, Australia has been found to possess a strong foundation for a robust post-pandemic business recovery. That’s why MHD’s publisher Prime Creative Media recently undertook an industry survey, to help companies understand where the transport, logistics and supply chain industries are placed. Supply chain and logistics were the earliest industries impacted by COVID-19, with many factories in China shutting down for a prolonged period over the Chinese New Year. But now the interruption to component supply has been superseded by concerns over consumer and business demand in the Western markets for the foreseeable future. Simon Birmingham, Federal Trade Minister said at the end of April this year that one in five Australian jobs relies in some way on trade, for example in agriculture, manufacturing, tourism, education and financial services. “China is our largest trading partner and has helped Australia to record 26 consecutive monthly trade surpluses, meaning we’re exporting more than we’ve imported,” he said. Australia recorded a mega $19.2 billion trade surplus for the March quarter along with its highest ever current account surplus, highlighting how important our supply chains will continue to be as the Australian and global economy begins to recover from the impacts of COVID-19.

HOW WAS THE SECTOR IMPACTED? A wide variety of people across executive, mid-level manager, finance, sales and marketing, procurement and operations participated in MHD’s industry survey, reflecting where 50 | MHD JULY 2020

the logistics sector is placed as the national and global economy begins to emerge from this once-in-a generation challenging time. Australia is a nation of major global operations and small businesses, that are mixed across both metro and regional locations. Twnty five per cent of survey respondents have 11-50 employees in their company, whilst the other equal majority of respondents have over 500 employees. This can be attributed to Australia’s location in the oceanic region and wide open space that can facilitate large logistic hubs spread across multiple points of the country. During the pandemic, it was shown that one of the major disadvantages of stretched supply chains is that they can easily break at any point. You never know when a link in the supply chain fails due to uncontrollable factors, and your entire business is affected by it. Companies have had to invest their resources into shortening but also speeding up the supply chain and making sure that the required goods are transported from one end to the other in the shortest period of time. In the midst of the COVID-19 pandemic, logistics and freight workers ramped up their duties, going to work each day fulfilling a

critical role, allowing consumers to access essentials. However, companies in the sector have been forced to put control measures in place, limiting physical interactions between workers, suppliers, customers and others.

WHAT CHALLENGES ARE BUSINESSES FACING? Almost 50 per cent of industry respondents said the current effect of COVID-19 on their business is somewhat negative. Business has come under a variety of threats as a result of the COVID-19 pandemic including the closure of borders, increased screening and security measures and the greater frequency of cyber security attacks. However, all Australian states and territories consider freight and logistics to be essential services, exempting them from the interstate travel bans and quarantine requirements. This is most likely the contributing factor to over a quarter of respondents reporting that not a lot of impact is on their business at this time. Not many industries have had the luxury to see their business boom during this unprecedented time, but almost 20 per cent of people said they have seen an increase in business since

MHD SUPPLY CHAIN COVID-19. Due to social distancing restrictions, the digital transformation for companies to invest in omnichannel solutions has prematurely sky-rocked the e-commerce boom. Click-and-collect models, marketplace proliferations, buynow-pay-later options and increased availability of faster payments and delivery choices will fuel the next surge of online expansion and help restore revenue for Australian retailers with e-commerce capabilities. While ocean and surface freight volumes fell, due to COVID-19 restriction orders sapping global consumer and manufacturing demand, the pressure is on container lines to logistics managers to eke out efficiencies while still staying competitive and adapting to a new economic landscape. It’s unsurprising then that among logistics professionals that said they expect to make a change in the wake of COVID-19, majority will invest in technology and a recommencement plan for businesses who have temporarily closed and a diversified supply chain for those who operate as essential services.

WHERE TO NEXT? Majority of survey respondents said they expect their companies to return to previous levels in the next three to six months. Sixteen per cent believe it will take more than a year to return to normality, however just under a quarter of respondents are confident it will only be one or two more months until business can operate at the same levels pre-pandemic.

Another likely post-coronavirus impact is that companies that have been able to effectively adapt to workfrom-home environments will lessen their reliance on physical offices, thus reducing fixed costs. For shippers, this next period is focused on rethinking their supplier network, stage inventory to balance against current demand fluctuations, and lean on internal or 3PL-provided freight visibility solutions. Forty per cent of industry respondents said they don’t expect to create new positions in the next year, however 33.7 per cent are hoping to create more positions in the next twelve months. Employment marketplace SEEK has revealed new figures that show that Australia’s job market is making progress, with manufacturing, transport and logistics among the top industries for employment opportunities. According to SEEK, the fastest changes in job ad growth are manufacturing, transport and logistics, presenting a 59 per cent increase. SEEK data indicates that the jobs are in warehousing, storage and distribution, road transport, machine operators and assemble and process work. However, business and system analysts, software engineers, developers and programmers are being sought after too. This is further reflected in the industry survey, with an overwhelming majority of all respondents reporting they are exploring new technologies and services to make their company more productive and efficient. Clearly the focus now for all companies across the sector is strengthening

communication between a company’s stock management, warehouses and customers to streamline the supply chain network as best as possible.

INDUSTRY INVOLVEMENT As major news outlets continue to report on the strains the supply chain is experiencing and show a general perspective on the logistics industry, MHD’s close relationship with leading distributors, companies and decision makers has given the publication exclusive access to content and stories that cannot be found elsewhere. Industry respondents rated case studies about companies similar to their own as the most beneficial source to help purchasing decisions during this time. In fact, close to half of all respondents said that information from third-party sources such as industry magazines and reports has been highly beneficial over direct advertising from social media platforms like Google and Facebook. Forty per cent of respondents rated social media as the lowest trustworthy source during recent times. Emailed newsletters and media websites were rated moderately to highly trustworthy and the most trustworthy source according to industry is trade magazines and periodic journals. This data is reflected in MHD Supply Chain News reader engagement, which has set new records with the latest industry developments, innovations and successes during the COVID-19 pandemic. Although all physical trade events have been postponed until further notice, a very healthy 47.6 per cent of respondents said they are likely to attend trade events in the future when the government deems it to be safe. Fifty two per cent of respondents rated the Federal Government’s support for the sector during the COVID-19 crisis as acceptable, whilst 31 per cent said it was very strong. As businesses struggle to meet the demands of this new normal, they are continuing to leverage Government stimulus packages and explore new supply chain technologies that are dramatically improving visibility. Focusing and evaluating are being highly regarded as the most beneficial tools for preparing for the rebound during the foreseeable future. ■ MHD JULY 2020 | 51

MHD WOMEN IN INDUSTRY

THE PRESIDENT OF FEDEX EXPRESS Kawal Preet, at the helm of the Asia Pacific, Middle East and Africa region, tells Brittany Coles how she will transform and strengthen the FedEx network to become the most successful package delivery company in AMEA.

edEx Express, the world’s largest express transportation company, has a new president of Asia Pacific, Middle East and Africa regions (AMEA). Kawal Preet, previously Senior Vice President of Operations, North and South Pacific regions FedEx Express is now one month into her new role as AMEA president. She is managing nearly 40,000 team members across 103 markets and territories that make up the AMEA region. Accounting for nearly half of the destinations FedEx Express serves, AMEA is bursting with opportunities for global trade and businesses.

Q: Congratulations on your new role. What are your goals as President for the AMEA region? A: I will work towards bringing together our teams and business units across

Kawal will manage nearly 40,000 team members across 103 markets.

52 | MHD JULY 2020

a high growth and important region. Intra-AMEA offers a mega marketplace like no other with twelve of the top 25 fastest growing economies in the world in MEISA. AMEA is home to some of the powerhouses of manufacturing, trade and innovation, representing the most vibrant and dynamic part of our international business. Within Asia Pacific, as supply chains shift to South East Asia, a number of emerging economies among ASEAN countries could stand to benefit. My focus will be on ensuring we have the strongest portfolio available for our customers. We will tap into the increasingly important trade lanes between AMEA. These past few months of the COVID-19 pandemic have shown how essential FedEx is to businesses of all sizes and we will continue to provide that strength of connectivity

and possibilities as businesses and economies begin to recover. Q: What inspired you to first start working in supply chain or logistics? A: As an electrical engineer and as someone who loves solving complex problems, I was and still am passionate about engineering and the use of technology to transform businesses and connect people to possibilities. When I joined FedEx I could never have imagined where my job would take me and the opportunities that would come my way. What I found fascinating about the logistics industry back then still holds true today: logistics needs to continuously innovate as customers’ needs evolve over time. Logistics is the lifeline to society as we know it today. Whether through our air or ground network or innovative

MHD WOMEN IN INDUSTRY solutions, we have to keep pace with trends in relevant industries. We are tracking how commerce is changing and that defines how we anticipate and meet our customers’ needs. Q: What does a standard day for you look like? A: I like an early start. We all fall into the trap of thinking that working more equates to being more productive. And more often than not, that’s simply not the case. I keep a list of prioritised tasks at all times, that really helps me manage my time in the best way. You will find me meeting with folks virtually, right from our international HQ in the Netherlands to our global HQ in Memphis. I am a people person and thrive on energy from my teams. Whenever I get the time, I like to check in with team members. I do not shy away from a quick chat here or a walking meeting to catch up with what’s going on. I always enjoy meeting with my leadership team to plan new ways to shape the future for our business and better engage our customers. Q: What has been the highlight of your career so far? A: In the various roles I’ve held over the past 23 years at FedEx I’ve had many opportunities to contribute to the company. Looking at the past decade

alone, we’ve achieved so much and have made remarkable progress in the Asia Pacific region when it comes to our fleet expansion, our network enhancements and our vertical focus. For example, back in 2010 we first launched the Boeing 777 Freighter service in our fleet connecting Shanghai with the FedEx Super Hub in Memphis, Tennessee. Then in 2012, we transformed our Asia Pacific network with the addition of the South Pacific Regional Hub in Singapore. The most recent highlight was on June 1, 2020 when we started integrating our FedEx and TNT operations in Australia. This milestone enables us to bring together the power and reach of both our networks and supports our plans to provide better coverage and greater global and domestic connectivity customers in Australasia. Over the years, I have seen businesses undergo disruption in the digital era that has transformed customers’ needs. It’s no different at FedEx where we have embraced new technology. Through my career, I have seen and been part of how we have adapted for our customers including small and medium businesses and healthcare companies. We ourselves have transformed from a B2B company to a company that talks to our customers’ customers, given the e-commerce boom. Q: Despite the industry experiencing strong employment growth of 28 per cent in the last decade, the Australian Bureau of Statistics reveals 20 per cent of employees in the wider transport industry are female in 2017. This gender composition of the workforce has largely remained the same over the last 30 years. How does FedEx encourage opportunities for women? A: First, let me point out I am not the first or only female leader at FedEx. Before me, Karen Reddington was at the helm of our Asia Pacific business, and she has now moved to take on the role of president FedEx Express in Europe. FedEx has had a strong track record of women leaders who have risen through the ranks within. In Asia, over a third of our employees are women. There’s still progress to be made in getting more women CEOs in Asia overall, but I’m proud of our record at FedEx. As a female leader in this industry, I am passionate about helping women succeed and thrive, whether employees, customers or entrepreneurs. I am privileged that I had female mentors

Kawal Preet is the new FedEx AMEA President. and am always looking for meaningful ways to pay it forward. I hope to inspire more women to become women leaders not just in our industry but in AMEA. Q: As an important female figure in the industry, how did you navigate challenges to lead successful operations? A: Attitude is everything, really. I have a tendency to embrace change. Being comfortable with being uncomfortable is my personal motto and has really helped me grow as well as keep an open mind to learn and look at things from different perspectives. This requires courage but I think it is important to have a willingness to have a growth mindset and be willing to disrupt our own thinking from time to time. That means stepping out of the boundaries that your experience may have set in your mind. As long as you believe in yourself and work hard, you can achieve anything. Women should not put limits on themselves. Daring to be bold and seeking out opportunities in your career is important. That holds true whether it is about an opportunity to expand your responsibilities or an opportunity to engage with a mentor who could help you in any stages of your career. Q: What initiatives and actions will you take to lead APAC operations following the COVID-19 pandemic? A: Staying agile and adapting to changing customers’ needs in the wake of COVID-19 is what will determine the way forward. FedEx is one of the few companies in the world that has MHD JULY 2020 | 53

MHD WOMEN IN INDUSTRY the network and capabilities to keep commerce and aid moving during this time. I am proud of what our teams are doing. Our flight operations between Asia and Europe increased by almost 50 per cent in April 2020. We were one of the first responders from the get-go, extending courier delivery times in some areas, adding direct flights and implementing ‘contactless delivery by suspending requirement for signatures for most shipments, all with the goal to deliver essential items to customers and communities in need. Contactless commerce could become the norm which means a surge in consumption from an expanding middle class, and more digital transactions. In healthcare, Asian economies with capable research capabilities and ability to meet low cost healthcare delivery could take lead, especially in digital health solutions. Embracing technology and efficiency to serve resilient customers as well as those in recovery will be critical. Q: What’s your advice during current supply chain challenges? A: To tackle supply chain interruptions resulting from airport quarantine, isolation policies, reduction in flight and capacity, we are increasing our own agility wherever we can. We are navigating different country restrictions and dramatically improving clearance times for critical PPE, medicines

In Asia, over a third of FedEx employees are women.

54 | MHD JULY 2020

Logistics needs to continually innovate as customers needs evolve.

and medical equipment. With pressure to resume operations, there are some crucial actions businesses can take right now to help themselves get back in gear. Some important ones to consider are to watch out for government assistance initiatives and loans that you can apply for; take this time to review your business model, or consider adopting tech-driven solutions to streamline your operations; keep channels of communications open, both with your customers and your employees;

understand how your customers are dealing with the pandemic and find ways to improve customer convenience using technology. Q: What do you think the future looks like for Asia Pacific and its presence in the global marketplace? The role of Asia Pacific will only grow as it presents high growth powered by rapidly developing economies. Today, it is at widely varying points on its journey through the COVID-19 pandemic. As economies gradually re-open and businesses restart, the ability to adapt fast will affect how businesses in the region recover. Business models and working practices will take new shape as companies revisit how they serve their customers and how they adapt to the customer’s shifting needs. Digital transformation, especially AI, automation, data and analytics, will see more adoption as companies embrace technology to better address shortand-medium term demand and supply chain implications. On supply chains, the pandemic has shown us that there is a growing appetite among businesses for a diversified and decentralised supply chain. Markets in Asia Pacific are in a position to serve this desire in the near future. This will dictate how the logistics industry evolves, as companies seek out strategies to minimise disruptions and optimise cost. ■

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MHD July 2020

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Women in industry

Strong foundations for recovery

See and shape your future

Reverse logistics: How to

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