scm_logistics

The online journal of the International Federation of Warehousing and Logistics Associations

WAREHOUSING& LOGISTICS

INTERNATIONAL

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www.warehousinglogisticsinternational.com Summer 2011

Contents 1

2 NEWS

6 COUNTRY PROFILE: INDIA: India has much catching-up to do in logistics terms before it can reachthe same level as the world’s leading industrialnations, but massive investment is underway

10 INFORMATION TECHNOLOGY: Using technolo-gy to orchestrate the supply chain

14 RESEARCH: In its latest published research,Western European Logistics 2011, Analytiqa forecastsa re-bound in growth for outsourced logistics expendi-ture across five key sectors

20 HONG KONG: Hong Kong’s logistics sector is anarea marked by change, and while challenges existfor this world-class command and control centre,opportunities are also present.

22 WHITE PAPER: Supply chains are becoming farmore extended, complex and under increasing riskfrom disruption. Ulrike Rowbottom, Clyde Buntrockand Haukur Hannesson set out three steps to buildingthe resilient supply chain.

26 WMS: Steve Cross of ATMS has some advice forThird Party Logistics Providers who want to raise theirgrowth and profitability

I am delighted to say that the first issue of the

International Federation of Warehousing and Logistics

Federations’ new digital magazine has been very well

received and I am grateful to all of those who have been in

touch with kind comments about the publication and, indeed,

the supporting website.

We believe that this new venture will provide a valuable

means of communicating best practice around the global

logistics industry.

Since our last publication the IFWLA has held a very suc-

cessful conference in Taiwan and we are now looking ahead

to next year’s convention which takes place in Italy. It promis-

es to be a special event with a gala dinner in the Vatican just

one of the attractions. More details will be made available as

and when we have them.

The global logistics industry continues to develop at great

pace and in this issue you will find a number of stories that

highlight the changing nature of our industry.

For example, we focus on India – which with its rapidly

growing economy, is presenting a number of challenges for

our industry.

Of course, the logistics sector relies heavily on technology

and this issue also features a number of stories that highlight

how the latest developments in both IT and more traditional

hardware such as lift trucks are helping logistics companies

provide the optimum service for their clients.

Please send your contributions to me via email at:

[email protected]

Roger Williams, Secretary General, IFWLA

The IFWLA Secretariat is based at the offices of the: United

Kingdom Warehousing Association, Walter House, 418-422

Strand, London WC2R 0PT England www.ifwla.com

Warehousing and Logistics International is an official publication ofthe International Federation of Warehousing and LogisticsAssociations It is published by Quad PublicationsPublisher: Daren Thomas; T: 0044 [0]771 9740736E: [email protected] Development Director: Richard DaviesT:0044 [0]7970101515E:[email protected]

Serving thelogistics community

2 International Newsfeed

www.warehousinglogisticsinternational.comSummer 2011

Menlo Worldwide Logistics, a sub-sidiary of Con-way, has started con-struction on a new 400,000 sq ftwarehousing and retail distributionmanagement centre on SunviewWay in Singapore.

The new centre will featureadvanced building design and con-struction materials emphasizingenvironmental sustainability andhigh levels of energy and water effi-ciency to achieve the SingaporeBuilding & Construction Authority's(BCA) Green Mark environmentalinitiative.

The new Sunview Way facility willserve as the company's new basefor storage and distribution, high-

velocity picking and packing opera-tions, customised labelling andreturn management services.

The company said that the newfour-storey facility will join its exist-ing network of seven facilities locat-ed across Singapore.

The new facility will offer cus-tomers a more sustainable tenure ofspace, the ability to share andleverage existing IT platforms, anexperienced management andlabor infrastructure, automatedproduct and freight-handling equip-ment and warehouse managementassets.

Menlo managing director ofSouth Asia Desmond Chan said the

company started in Singapore 15years ago with one facility and 25employees.

"This expansion marks an impor-tant milestone which speaks to ourcommitment to Singapore and ourfocus on providing customers withbest-in-class facilities, tools andservices to increase efficiency anddrives value into a wide spectrum oflogistics operations and supplychain solutions," Chan said.

Menlo also operates additionalmulti-client facilities in SoutheastAsia, as well as China, India,Australia, North America andEurope.

SINGAPORE

New centre opens in Singapore

Agility has introduced a sched-uled air freighter service to con-nect China via Shanghai toKaunas, Lithuania.

The freighter has a capacity of107 tonnes and will initiallyoperate on a weekly basis. Spaceis guaranteed, with reducedtransit times of between one andfour days, depending on destina-tion.

The service forms part of acomprehensive logistics offeringfeaturing additional supply chainservices: pick-up and warehous-ing in China, customs clearancein Kaunas and warehousing inLithuania.

The service is intended to helpcustomers move goods fromChina into the rapidly growingmarkets of Northern Europe, theNordics, Russia and the Baltics.

John Klompers, Agility’s chiefcommercial officer, said: “Thisnew service underlines Agility’scommitment to our customers infast developing markets. Thisservice will help them buildrobust and reliable transporta-tion links that in turn connecttheir customers and operationsaround the world.”

KAZAKHSTAN

GEFCO openKazakhstan office

The GEFCO Group hasannounced the opening of its firstsubsidiary in the Republic ofKazakhstan. The subsidiary, which isbased in Almaty and was registeredon the 27th of June 2011, is part ofits wider in te rna t iona l expan-s ion program and re in forcesi t s pos i t ion in Cent ra l As ia .Kazakhstan’s growing geopoliticalrole and increasing number ofglobal logistics flows will allowGEFCO to respond to its customers’needs more effectively

Sultan Zhassybay, GEFCOKazakhstan’s new ManagingDirector, said: “Kazakhstan’s favor-able geographic location, at thevery centre of the Eurasian conti-nent, makes it the principal transitbridge between Europe and Asia.Kazakhstan connects Central Asiancountries such as Uzbekistan,Kyrgyzstan, Tajikistan andTurkmenistan, with Europe androutes through our territory provideChina with access to the Russian

and European markets.Furthermore, we are experiencingextensive growth in Kazakhstan’slevels of industrial manufacturingand foreign trade, which creates anadvantageous environment for thedevelopment of transportation andlogistics infrastructure.

“By taking into account GEFCO’sexpertise and top quality services,as well as meeting the highestEuropean standards, we hope tocontribute to the development of thetransportation and logistics clusterin Kazakhstan.”.

GEFCO Kazakhstan will primarilysupport corporate clients throughthe optimisation of their supplychain processes. However, it willalso seek to expand its client portfo-lio by offering a full range of logis-tics services for customers operatingin various sectors ranging fromFMCG to industrial equipment.

GEFCO Kazakhstan’s team willconsist of 10 employees by the endof 2011.


Interntational Newsfeed 3

Kerry Logistics has beenappointed by Marks & Spencer(M&S) as its logistics partner inGreater China. The contractincorporates logistics serv-ices across the supply chainfor M&S, from suppliers' pick-up through to direct deliveryto retail stores across theregion.

Under the new contract,Kerry Logistics manages andoperates both M&S's NationalDistribution Centre (NDC) inMainland China as well as itsRegional Distribution Centrein Hong Kong (HKRDC).Under the direction of theM&S regional sourcing hub,Kerry Logistics managesM&S's inbound and outbound

supply chains and a widerange of value-added servicesincluding packing and unpack-ing, re-labeling and steaming.

In order for Kerry Logisticsto align with M&S's environ-mental and ethical policy,called Plan A, the HKRDC islocated within Kerry Logistics'Product Customisation andConsolidation Centre (PC3) inTai Po, Hong Kong. With theaim to be LEED (Gold) and HK-BEAM (Gold) compliant, thispurpose-built facility has incor-porated green technology intothe design and construction ofthe building.

With a total area of 25,700m2, PC3 is equipped with aGarment-On-Hanger (GOH)

Centre, the largest facility of itskind in Hong Kong in terms ofscale and capacity. The PC3centre supports the dailyreplenishment of all M&S retailstores in Hong Kong, coveringhanging and boxed garmentsas well as accessories,footwear and home products,whilst food merchandise isserviced from Kerry Logistics'cold store facility located inTsuen Wan, Hong Kong.

One of the factors in award-ing the contract was thatKerry Logistics specialisesin both fashion retail andcold chain logistics, meetingM&S’ different needs on cloth-ing and food merchandiseunder one roof.

Geodis Wilson is opening an 8,500m2 distribution centre in Jebel AliSouth within the free zone of Dubai,extending the company's freight for-warding services to a full-servicecontract logistics model in theMiddle East region.

Geodis Wilson invested heavilyin the Jebel Ali distribution centre,which offers ambient and tempera-ture-controlled accommodation,configurable racking up to an eavesheight of 13 metres, and fouradjustable loading bays.

The facility also has the benefit ofGeodis Wilson's global in-housewarehouse management system -which is being configured for localoperating requirements.

The entire premises are wi-fienabled with RDT scanners, andmobile docking stations can bemoved to the point of cargo recep-tion for immediate capturing.

Geodis Wilson runs its own

freight network, including truckingservices between the various coun-tries and a 24-hour on-line customsservice.

Geodis Wilson has also strength-ened its position in the US marketwith the acquisition of One SourceLogistics, a domestic transportationprovider for an undisclosed amount.

The company said that the acqui-sition will accelerate the growth ofits US domestic product offeringsand also cross-border truckingthroughout North America.

The acquisition will enhanncecompany's inland and final miledelivery services with the access to awide local distribution network.

Geodis Wilson EVP PhilippeGilbert said with the extended linkto domestic services in NorthAmerica the company is able to sat-isfy the needs of a wide range of itstoday's air freight and ocean freightclients.

"We can offer them a better sin-gle source solution for end-to-endsupply chain management into andfrom the US and at the same timewe connect the domestic customerbase of One Source Logistics toGeodis Wilson's global freight serv-ices," Gilbert said.

Geodis Group CEO Jean-LouisDemeulenaere said the group isplanning to double its freight for-warding business in the US over thecoming 5 years, based on externaland organic growth.

One Source Logistics based inMinneapolis, Minnesota, offersdomestic transportation serviceswith a focus on FTL and LTL, backedby a transport management system,it currently supports a nationwidenetwork of transportation, logisticsand distribution services throughoutthe US.ilable on the route in addi-tion to Geodis Calberson's standardgroupage.

CHINA

MIDDLE EAST & USA

M&S hand Kerry China logistics role

Dubai move and US acquisition announced

4 Country Focus: India


India is bordered on thenorth by the HimalayaMountains. For this reason,

creating road and rail con-nections from this direction isa major undertaking. In thesouth, though, the Indianpeninsula is well suited forsea harbors. India is indeedthe country with the world’ssecond-largest population.But the population is unequal-ly distributed, creating amajor challenge for logisticsservice providers.

Core countries for tradeThe most important exportcountries for Indian productsare the United States, the United Arab Emirates,China, Singapore and Great Britain. The biggestimport trading partners are China, the United States,Switzerland, the United Arab Emirates and Belgium

Indian infrastructureA vital step in India’s further development is expandingthe road and rail networks, and modernizing harborsand airports. In the process of globalizationGlobalization , which is expanding India’s position inworld trade, transport volume has climbed rapidly inrecent years. The expansion of the logistics infrastruc-ture has been unable to keep up with this pace. For thisreason, transport capacities have already reached theirlimits.

The transshipping times for ships in Indian harborsare three to four times longer than the average time inthe West. Logistics costs are also very high in interna-tional comparison because of the poor infrastructure.For this reason, India will have difficulties positioningitself as a global logistics hub in years ahead.

Road transport is especially important for India’stransport system. After all, India has one of the world’slargest road networks, with a total length of 3.3 millionkilometers. But much of this network does not meetWestern standards. For instance, a truck takes five tosix days to cover the 2,061-kilometer-long routebetween Bangalore and Delhi. The government isindeed trying to introduce counter-measures and shift

freight transports from the roads to the rails. But, first,the rail infrastructure must be expanded and the con-nections to harbors and airports improved.

Many sub-areas of the 63,000-kilometer-long railnetwork still use the technology of 1947, the year thatBritish colonialists left. Only about one-quarter of theroutes are electrified. One other challenge is the fourgauge widths used in the rail network.

Logistics requirements and service areasRoad transports are characterized by small forwarderswho frequently use antiquated technology. In addition,the splintered political structure requires an excellentunderstanding of local conditions.

As national highways in India are built and roadtransports Road transport are increasingly liberalized,the productivity of road shipping will rise in yearsahead. The network business with LTL [Less than truckload] in India has excellent potential. The Indian road-transport market is forecast to rise to $40 billion by2012 - it is currently $28 billion.

The CEP market Courier, express and parcel servic-es on the subcontinent is growing rapidly. In the lastfive years, revenue has experienced double-digitgrowth, climbing to about $650 million. Its share of theentire logistics market totals only about 3 percent.International service providers are working to set up oracquire domestic networks in India.

Logistics service providers have been focusing more

India has much catching-up to do in logistics terms before it can reach the same level as the world’sleading industrial nations, but massive investment is underway

Land of opportunity


Country Focus: India 5

extensively on traditional storage functions and distri-bution. But the number of high-bay warehouses thatmeet European standards is extremely small. Typicaladded-value services that meet Western standards alsoare hardly offered. For this reason, the contract logisticsmarket Contract logistics in India has a share of onlyabout 6 percent of the entire logistics market.

Logistics centers in IndiaIn terms of logistics, India remains a developing coun-try in many areas. For instance, it has hardly any multi-modal logistics centers. Despite its good geographicposition, India has also been unable to evolve into ahub for international freight transports, like Dubai.

In regional terms, India lags behind logistics centerslike Singapore, Thailand and Hong Kong. Currently,

India is moving forward with a plan to turn the coun-try’s 12 main harbors into integrated freight hubs.Many of these harbors do not have the rail and roadconnections needed to handle the transport volume ofships. Containers Container frequently sit for weeks inthe harbor before they can be transported.

Important logistics service providersThe largest Indian logistics service providers areShipping Corporation of India, Container Corporationof India, Great Eastern Shipping, Reliance Ports /Terminals, Essar Shipping, Transport Corporation ofIndia, Reliance Logistics, Blue Dart Express, VarunShipping Company and BLR India. International serviceproviders are Schenker, DHL, Arvato, Kühne & Nageland TNT.



The Indian logistics market is poised to gathergreater momentum with the emergence of India asa manufacturing hub and improving multimodal

transportation infrastructure. India is seeing significantgrowth in the logistics sector due to rise in manufactur-ing sector. Inspired by the economic boom and themassive investment on infrastructure, the logistics mar-ket in the country is set to double by 2012.

The markets that have been responsible for therapid growth of Indian logistics include the growth oforganized retail industry, commodity markets, andgrowth in manufacturing and development of SpecialEconomic Zones (SEZ). Indian logistics industry isexpected to grow annually at the rate of 15 to 20 per-cent reaching revenues of approximately $385 billionby 2015.

There are about 110 logistics parks, spread overapproximately 3500 acres. The estimated cost of theselogistics parks is about $1 billion and an estimate of 45million sq. ft of warehousing space with an investmentof $500 million is expected to be developed by variouslogistics companies by 2012.

Many SEZs have necessitated the development oflogistics for the development of logistics for the domes-tic market as well as for global trade. Mumbai, Kolkata,Chennai and Hyderabad have become preferred loca-tions for logistics parks. These locations are character-ized by excellent port, rail, and road connectivity andare witnessing significant investment in infrastructure.Eight logistic parks with an approximate investment of$200 million are 600 acres of land around Mumbai.

Seeing the rate of development, there are plans for4 logistics parks spread across approximately 400acres. Centers like Haldia, Falta, Pargana, Dankuni,Kharagpur, Bantala and Durgapur are expected to wit-ness substantial logistics activities in the near future.Five logistics parks are being set up in Hyderabad,spread across 220 acres and approximately 10 millionsq. ft of warehouse space coming up by 2012.

Dedicated freight corridors by the railways andimprovements in coastal shipping facilities along withthe construction of massive state-of-the-art logisticsparks at key distribution hubs are helping to meet thespecialized warehousing needs of freight forwardersand industry players. The non-major ports are drivingthe traffic growth with the traffic at these ports growingat a very healthy rate. This strong growth is expected to

continue, with the share of the non-major ports increas-ing further.

After analyzing the future prospects of the logisticsmarket in India, Manch communications, a business tobusiness exhibition and conference organizer based inDelhi/NCR launched India Warehousing Show in April2011. The show received great response from all atten-dees having about 6714 visitors and 210 conferencedelegates who attended the technical session. The con-ference focused on “Developing Effective Strategies toBuild Profitability in Warehousing and Supply ChainLogistic Operations”. Topics like the present scenario ofthe Indian Warehousing Industry, overview of Asianindustry and India’s role and growth inhibitors of thesector, how leveraging regulatory frameworks can helpsector maximize growth and how Mobility Acceleratesthe Adaptive Supply Chain etc. were discussed.

Encouraged by the success of the show in 2011,Manch decided to make it an annual event based inDelhi/NCR. India Warehousing Show 2012 will see alarger number of participants with more exhibit area.The show visitors will get a chance to know the latestdevelopments and innovations in the area of warehous-ing and supply chain sector. The ones seeking someinformation to improve their knowledge of logistics,supply chain, material handling, cold storage etc., IndiaWarehousing Show 2012 is the most appropriate plat-form for them. Further, concurrently India WarehousingConference 2012 would give an insight into the variousaspects of modern warehousing, logistics, cold storage,and material handling. Like it 2011 edition it will againa two days program.www.indiawarehousingshow.com

Indian Warehousing Show 2012

A two day event in Delhi will give exhibitors the chance to reach the Indian logistics industry


Country Focus: India 7

India has experienced a consistent GDP growth of over6% in the last decade and a 7% growth in 2010.Currently India ranks only 17th in terms of importingworld products and consuming just over 2% of globallyproduced merchandise but it is growing at 35%. Indiaranks only 26th in terms of exporting products whichcontributes just over 1.3% of globally consumed mer-chandise, but it is growing at 22% p.a.

It has enormous potential; consumption is expectedto grow four-fold in real terms from the present US$378 billion to US $1.56 trillion by 2025. By 2020,India is projected to have an additional 47 millionworking population, with an average age of 29 whichwill enable India to become a manufacturing hub of theworld. Comparatively the average age of othereconomies at that time will be 37 in China, 45 inWestern Europe and the USA and 48 in Japan.

66% of India’s 1.1billion population is currentlyunder the age of 35 and is expected to outpace Chinaby 2030.

The ChallengesThe biggest challenge the Indian economy faces todayis the need for specific infrastructure in the logistics fieldincluding roads, rail, ports and world class logisticsparks to support the fast pace of growth.Infrastructure has led to success stories for economiessuch as Singapore, Dubai and China over the last fewdecades but India has been comparatively slow in real-ising the benefits. Entrepreneurship has been a key driv-ing force in India, and also for the growth of industriesand companies, including in the logistics and supplychain space. The average time taken to clear importand export cargo at ports is about 19 days in Indiacompared with 3 to 4 days in Singapore.

It is not helped by the fact that the World Bank’s2010 survey ranked India 134th amongst 183economies in terms of “Ease of doing business” cou-pled with a complex tax structure and archaic labourand property laws.

The issuesThe logistics cost for most developed nations is about 9-10% whereas in India it is approximately 14% of GDP.Why is it so high? It is partly due to the enormous sizeof the country, partly the poor road infrastructure andpartly the disorganised trucking network in the country.Approximately 65% of the total Indian freight transportis through the road network while only about 30% trav-els by rail. It is estimated that India burns nearly US$2.5 billion worth of fuel as a result of trucks standingidle on inter state check-posts.

Challenges, issues, opportunities

and developmentsDerek Bell provides an overview of the Indian economy together with the challenges and issues it

faces. It also examines the opportunities and developments in the logistics field and the support theUK’s CILT can give



OpportunitiesAlthough India has a unique geography with over7,000 kms of coastline, a diverse demography andhuge domestic market, the country still only processedjust over 7.7 million containers last year, as againstDubai (12 million), Singapore (24 million) and China(over 186 million). Global companies selling theirproducts in India are using these economies as trans-shipment hubs and regional distribution centres. Thesehubs have excellent road and port infrastructures. Itis their logistics parks known as Free Trade Zones (FTZs)which help to attract this container movement. Inorder to compete India needs Free Trade andWarehousing Zones (FTWZ) and Domestic DistributionCentres which are supported by a Rail Infrastructurewith Rail as the preferred mode of transportation ratherthan road.

DevelopmentsThe Government of India introduced the Free Trade andWarehousing Zones (FTWZ) Policy, as a part of ForeignTrade Policy (FTP) 2004-2009, governed by the SEZACT 2005 and SEZ Rules 2006. It is a deemed for-eign territory within Indian soil. The FTWZ regulatoryframework should provide India with the much neededimpetus to drive its economic growth to the next level,while truly leveraging the nation's vast domestic marketand purchasing power parity.

With FTWZ India can emerge as a major economichub for companies importing, exporting and providingvalue added services for distribution in India or otherregional countries. The need for FTWZ in a vibranteconomy is substantiated by the fact that India is theworld’s second largest developing and fastest growingeconomy just behind China. With a population ofapprox 1.1 billion, its domestic consumption is 58% ofthe GDP.

One company in India, Arshiya, is currently investingheavily by building 5 FTWZs coupled with 5 DomesticDistriparks including those in Mumbai (165 acres)which was operational in 2010, Delhi (315 acres) in2011 and the others to be completed by 2012. All ofthese are being built to best in class standards and arebeing linked by a Pan-India Rail network.

India and CILTThe provision of an education and professional devel-opment infrastructure is essential for the success of anetwork of hubs; both for the initial design and efficientoperation. CILT India has a vital role to play in this.In order to contribute effectively CILT India will needto develop a network of branches throughout the coun-try as have other successful CILT territories.

Two of the top 5 most populous cities in the worldare in India; Mumbai 13 million and New Delhi 12.56million. Bangalore, Chennai, Hyderabad, Kolkata,

Ahmadabad and Pune have populations in excess of 4million. In addition to this there are 48 agglomera-tions with a population of more than 1 million. Theopportunities are huge and CILT India needs regionalchampions to take this forward.

* Derek Bell FCILT is the Chief Executive of BishamConsulting (www.bishamconsulting.com), a member ofthe Council of Trustees and a Vice President of CILTInternational (www.ciltinternational.org)

Investing in technologyBuoyed by the economic boom and massive invest-ment in infrastructure, the logistics market in India iswidely considered to be set to double by 2012.

Across the country logistics hubs and warehousesare going up and ports are being developed to servethe consumer needs of India’s growing middle-class.

And India’s logistics services providers areembracing the latesttechnology to keeppace with their over-seas counterparts.

For example, articu-lated forklift trucksfrom Flexi Narrow AisleLtd have recently beensupplied to KiswockIndustries and DorfKetal – metal castingmanufacturers andchemical specialistsrespectively.

“ Flexi articulatedtrucks are ideal for theIndian logistics market– they enable the small-est aisle widths to beused and can operateboth inside and outsidethe warehouse,” says John Maguire, sales director ofFlexi Narrow Aisle Ltd.

As part of its commitment to the Indian market,Flexi Narrow Aisle Ltd recently announced a compre-hensive partnership agreement for the distributionand support of its range of Flexi articulated forklifttrucks in India.

The partner company, Voltas, is one of the world'spremier engineering solutions providers and a lead-ing manufacturer and supplier of forklifts and othermaterials handling equipment in India. It is part ofthe Tata Group – the largest industrial group in India.Tata has interests a number of industry sectors and inrecent years has acquired Jaguar Land Rover, CorusSteel (now Tata Steel Europe) and Tetley Tea.

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10 Information Technology


UK-based Proteus Software has got together with Psion,Varlink and Imtech Logistics to provide technologies thatwill aid in the orchestration of the supply chain.

The comprehensive partnership gives logistics andsupply chain companies the ability to pull together allaspects of their supply chain and control the processesin the moving, managing, storing and shipping ofstock.

Proteus has over twenty years experience in supply-ing warehouse management systems, whilst ImtechLogistics has been providing transport managementsolutions for over 15 years. Both suites of software arefunctionally rich, are highly flexible and scalable, ensur-ing that the end-to-end solution fits all sizes of organi-sations from the small to medium enterprise through tomajor blue chip organisations.

Psion has an extensive range of Scanners and PDAsthat can be used in the warehouse, and on the road.They have recently released their new EP10, whichutilises GPS, POD and Mobile Phone technology in onesingle PDA. This can be used in the warehouse as ascanner, for InCab technology purposes, Proof ofDelivery or in the field for Service Engineers.

Varlink’s comprehensive portfolio of mobile comput-ing and data capture products includes Zebra andBrother printers, (static and mobile). Stock is held for

immediate despatch from their UK distribution centreallowing them to offer economical next business daydelivery as a standard service.

Linda Rodway Market Development Manager ofProteus Software says, “We are delighted to be partner-ing with such well known branded companies. Thepartnership has given us the ability for all of us to offera complete technology solution to companies operatingin the Logistics industry, all of whom are under pressureto achieve supply chain perfection in order to meet theever growing demands of today’s consumer. Our com-bined solution gives operations professionals the toolsto achieve year on year operational growth, lean inven-tory management, make bottom line cost savings, andsustain customer satisfaction throughout their supplychain.”

The companies involved in the partnership are host-ing a special seminar in October, where not only youwill be able to see the product offerings on display, butthere will also be an exciting agenda of presentationsby the companies involved. The seminar will be held inthe Planetarium Suite at Millennium Point inBirmingham on 18th October 2011. If you are interest-ed in attending the event please contact Linda Rodwayon + 44 121 717 7474 for details on how to register.

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12 Case Study


Palmer and Harvey is the specialist nationwide dis-tribution service for the independent and multipleconvenience, forecourt and CTN (convenience,

tobacco, news) retail arena. With their 1,000 strongvehicle fleet, they can provide a complete supply of allgoods needed for a successful store – ambient goods(including tobacco, confectionery and soft drinks) aswell as fresh, chilled and frozen produce. From smallindependent retailers, through fuel forecourt sites tolarge multiple retailers – a very wide range of differentretail outlets are supplied through the P & H organisa-tion. Their well known brand name Mace is seen onmany stores across the country. The company’s head-quarters are in Hove and they distribute from ten multi-temperature centres on the United Kingdom mainland -with one ambient centre in Northern Ireland.

As with any distribution company handling productswith a wide temperature range, P & H have continuedto improve their operation in recent years. Having beenusing refrigerated vehicles for many years, they decidedto examine whether portable insulated containers wouldcomplement their resources. Following a series ofdetailed tests, P & H discovered that they had moreconsistent temperature control for sensitive producewith Olivo containers. This, together with the contain-ers’ reliability, meant P & H thought they would fit wellinto their system. In addition, they have achieved betterspace optimisation on their vehicles, reduced CO2emissions, lowered their fuel consumption and havelower energy costs. They have also managed to reducetheir vehicle fleet and reduced the number of staff thusmaking even greater cost savings.

P & H opted to use the Siber System® which injects

liquid carbon dioxide into a special compartment at thetop of each container to create “snow” for temperaturecontrol. The tanks are charged with special computer-controlled “guns” with the liquid gas from a refrigerat-ed pressure tank owned, maintained and supplied byAir Liquide. An important aspect of the Siber System®is that the dry ice injection station computer automati-cally adjusts the injected amount to specific operationalparameters – thus making a considerable cost saving.The carbon dioxide is “green” as it is a recovered andpurified product. If it had not been processed for fur-ther use, it would have been discharged to atmosphereas an unwanted product in the chemical industry.

Logistics and Development Director, Richard Slater,has been with P & H for 3 years and has a wealth ofprevious experience with Exel. He said recently: “Wedeliver to every UK postcode area every day and wecouldn’t do that without our integrated network operat-ing with flexibility. Using the Olivo containers providesus with distribution efficiency and customer satisfac-tion”.

Olivo is a family owned business based near StEtienne in France and has been developing and pro-ducing portable insulated containers for over fifty years.The current production capacity is 50,000 containersper year and these are supplied worldwide throughsales offices in the UK, Spain and Singapore plus arange of distributors in many countries. The containerscan be used for many different types of temperaturesensitive products but are predominant in the distribu-tion of chilled and frozen food – customers includesuch well know names as Boots, Aldi, Netto, Colruyt,Carrefour, Casino, Tesco, Londis, Compass, Ocado.

Olivo containers are helping a major distribution company

Time is money

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On impactBarrier bends as vehicle hits it.

After impactBarrier returns to original shape, thanks to built-in memory.

That’s exactly what A-Safe barrier protection systems can provide.Because, unlike steel barriers which bend or crumple, A-Safe products aremade from polymer with a built-in memory which springs back into shapeafter being hit. This means that A-Safe can provide effective protection in somany different areas:

A Safe Environment

14 Research


Analytiqa’s latest research, “Western EuropeanLogistics 2011”, reveals that spending on logisticsservices by manufacturers and retailers, both in-

house and outsourced, is set to increase by almost 32billion over the next five years as the size of the out-sourced logistics market grows by 26%.

However, Analytiqa’s research warns those thirdparty logistics providers (3PLs) managing the out-sourced element of the market, who may be expectinga smooth growth path, that country markets will eachrecover at their own pace. Whilst some markets willrecover to pre-recession levels in 2011, others will takeuntil 2013.

Recovering lost groundWhilst Analytiqa forecasts significant growth in logisticsspend in Western Europe over the next five years, a sig-nificant share of this is attributable to the ‘recovery’ ofmomentum lost during the recent global economicdownturn.

At a macro level, growth in logistics markets will bedriven by the performance of individual countryeconomies, levels of government spending and con-sumer confidence within those economies. The chang-ing dynamics of globalisation will also feature promi-nently, as economies elsewhere across the globe growat faster rates than Western Europe and the location oflow-cost manufacturing locations is challenged.

Automotive and hi-tech lead growth trendsAnalytiqa’s research identified that, whilst retail logisticswill continue to dominate as the largest sector of theWestern European logistics market, it is not forecast togrow most quickly. The sector will be increasinglyimpacted by changing consumer habits and multi-channel retailing, as ‘click and collect’ and onlineshopping / home delivery change the traditional logisticmodels.

The FMCG logistics market will continue to be close-ly aligned to growth in the retail sector. FMCG logistics

In its latest published research, Western European Logistics 2011, Analytiqa forecasts a re-bound ingrowth for outsourced logistics expenditure across five key sectors

Bouncing back

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© Kewill plc 2011. All rights reserved. Kewill and the Kewill logo are trademarks or registered trademarks of Kewill plc.

[email protected] tel: +44 (0)161 905 5530

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Research 17

markets are set to grow by around 15% in the period to2015 as manufacturers across the sector continue tomerge and / or consolidate as they seek the advan-tages of scale at a global level.

Growth in pharmaceutical logistics markets will con-tinue to be driven by the increasing demands of ageingpopulations across Western Europe, together with leg-islative requirements, and the pressures that manufac-turers face to bring products to market more quickly.The outsourced contract logistics element of this marketis set to grow by almost 24% up to 2015.

The Automotive and hi-tech logistics sectors sufferedmost from the economic downturn and, as a conse-quence, will likely see the largest growth rates over thenext five years as the markets recover. However, asthese sectors rely to a greater extent on consumer confi-dence, growth may be somewhat unpredictable, oruneven, especially at a pan-European level, as recoveryin markets such as Spain will not align with growth inGermany, for example.

At a country level, logistics markets in the UK, Italyand Germany are set to grow fastest in the years to2015, partly as a consequence of those markets alsoseeing the largest decreases in revenues over the 2007-2010 period.

In outsourced logistics, the market in Spain will growby the least amount over the 2010-2015 period, regis-tering growth of over 15%. In France, Belgium and theNetherlands, contract logistics markets will grow at asignificantly higher rate.

Changing dynamics of logistics outsourcingDuring the economic downturn, many manufacturersand retailers evaluated their logistics models as theysought moves away from fixed cost operations to moreflexible alternatives based on variable costs, aiming toachieve cost savings and greater efficiencies. As aresult, the level of outsourcing was boosted.

At the same time, however, prices and contract nego-tiations in outsourced markets were made increasinglychallenging for 3PLs, not least as a result of the overca-pacity of warehouse space seen across many markets.

Whilst this boost to outsourcing rates fell back some-what as shorter term contracts came to an end, levelsare expected to continue growing, and at faster rates inthe less mature logistics markets. Across the moredeveloped markets, growth in outsourcing rates will beharder to achieve in the near term, and particularly inthe retail and FMCG sectors, as the rationale for out-sourcing becomes less compelling, as markets andeconomies recover.

Mark O’Bornick, Research Director, Analytiqa com-mented: “Whilst logistics markets are set for growth, for3PLs, managing the outsourced elements of the market,this lies largely outside of their control as wider macro-economic factors combine to determine which industry

sectors and geographic markets will grow more quickly. Analytiqa’s research identifies that growth opportuni-

ties are there for 3PLs to seize, given careful targetingof both customer and country markets. However, 3PLsface challenging times. Whilst they are able to exertgreater influence over growth in the outsourced ele-ments of the logistics market, increasingly sophisticatedcustomers, tighter stricter security and environmentalstandards and the changing dynamics of globalisationrequire that they constantly evaluate their service propo-sitions, the value they add to supply chains and theirrole in helping their customers meet their strategic andcommercial objectives.”

As a business information provider, Analytiqa is posi-tioned between the logistics providers and their cus-tomers to provide the supply chain sector with commer-cially relevant business intelligence. Analytiqa worksclosely with logistics providers to source new customersand to better help them understand their existing clients.

Similarly, retailers and manufacturers use Analytiqa’ssupply chain profiles, databases and research servicesto analyse the operational and service capabilities ofservice providers and to benchmark the services theyreceive against those of their own competitors.

Analytiqa works closely with its clients, building part-ner relationships based on trust and the delivery of highquality and commercially relevant research. Analytiqa’sservices correspond to client’s demanding requirements,assisting with their business development and profitabil-ity objectives.www.analytiqa-interactive.com

18 Advertorial


Established since 1989, the CoGri Group are ware-house floor solutions specialists. The Group are aworld renowned leader and experts in their industry,particularly in the grinding and measuring of Superflatfloors.

Key services include: • Design consultancy• On-site training• QA• Flatness testing• Due diligence surveys• Floor performance testing• Superflat Laser Grinding• Bespoke tolerance grinding• Floor joint repairs• Floor joint stabilising• Screed systems• Re-surfacing of worn out floors• Laser Screed floor construction• Superflat floor construction• Wire guidance

The Group’s passion and commitment in warehouseflooring began in 1987 when the Group’s

MD was first involved in the design and constructionof a very narrow aisle warehouse floor in

the UK. He then went on to form a small concretefloor grinding business. During the early

1990’s he saw a gap in the market for a more effec-tive way to grind and measure floors and subsequentlyinvented the Laser Grinder®, one of a number of prod-ucts that are innovative and unique to the Group.

The Laser Grinder® The patented Laser Grinder® uses laser guided tech-

nology which enables aisles on new and existing floorsto be upgraded to the flatness standards required tooperate VNA forklift trucks safely and at their optimumefficiency. It is a clean, quick and a very effective wayof achieving the desired level of floor flatness, whileoffering little or no disruption to the ongoing warehouse

activities. The Laser Grinder® is designed to grindeither the individual wheel tracks of a forklift truck orthe whole aisle width, for complete flexibility.

The Laser Grinder®can easily achieve allinternational industry floorflatness standards to TR34,TR34 Appendix C, DIN15185, The EuropeanStandard and ACIFmin100.

The Group currently hasa fleer of Laser Grinders®in operation globally.

The FACE Digital ProfilegraphThe FACE Digital Profilegraph is exclusively operated

by one of the Group’s companies, Face Consultants Ltd.

The FACE Digital Profileograph has attachmentswhich make it adaptable to meet with varying floor flat-ness specifications for defined traffic floors. Morerecently, the Group are now able to offer floor surveys

Experts in warehouse flooring:


Advertorial 19

to the newly introduced VDMA guidelines with the intro-duction of the Face ‘Fx’-meter as an attachment to itscurrent Face Digital DIN 15185 Profileograph. Thisnow enhances the family of Face Digital floor surveyingequipment which already covers TR34 (FM and DM),The American F number system (including F min), EN15620, DIN 18202 and Din 15185.

Face Consultants has also been instrumental in thedevelopment of flooring standards used throughout theconstruction industry in the UK and overseas and arealso independently assessed by United KingdomAccreditation Service (UKAS) which helps to maintain &verify its high standards.

Growing Strong In the past few decades, the Group has grown from

strength to strength.

A joint venture company was set up in Singapore in1994 and the Group has also been trading in SouthKorea for over 10 years, setting up a joint venture com-pany there in 2006. These companies are recognisedin the industry as CoGri Asia Ltd, CoGri Asia Pacific PteLtd and CoGri Korea Co., Ltd.

In 2007, FACE Middle East Fzc was established inthe United Arab Emirates (UAE) to accommodate theflooring market and build a stronger brand presence inthe Gulf region.

To date, the Group has set up a number of corpora-tions to meet the growing concrete flooring market invarious regions which include CoGri Malaysia Sdn Bhdin Malaysia, CoGri Australia Pty Ltd and FaceConsultants Pty Ltd in Australia, CoGri Middle East LLCin UAE and Face Floor Consultants (Shanghai) Co., Ltdin China.

In addition, the Group actively works with its over-seas partners to serve the flooring market in mainlandEurope and other continents around the world.

The CoGri Group of companies are membersof many reputable Trade Associations

The Group’s M.D. is a founder member and on theboard of governors of the Association of ConcreteIndustrial Flooring Contractors and CoGri is a memberof The Concrete Society, the British Standards Institute,the British Industrial Truck Association (BITA), StorageEquipment and Manufacturers Association, UKWarehouse Association (UKWA), the Chartered Instituteof Logistics and Transport and the Resin FlooringAssociation (FeRFA).

Today, the Group is regarded as the link betweenthe Logistics Industry and the Construction Industry,understanding the requirements of one and the capa-bilities of the other. The knowledge and experience ofthe Group come from the best people in the industry itemploys. With a range of expertise, the Group areable to provide a total package solution for any ware-house flooring problems.

Head Office,Dene House, North Road, Kirkburton, Huddersfield,HD8 0RW, United Kingdom.Tel: +44 (0) 1484 600080Fax: +44 (0) 1484 600095Email: [email protected]: www.cogrigroup.com

International Offices: Australia, China, France, Germany, Greece, Italy,Malaysia, New Zealand, Singapore, Spain, SouthAfrica, South Korea, United Arab Emirates and UnitedKingdom.

20 Asia


Hong Kong is the world’s busiest air cargo centre,and one of the world’s busiest container ports,handling 23.7 million TEU in 2010, represent-

ing a 12.6 per cent increase over 2009. Its containerterminal is connected by about 400 weekly sailings toaround 500 destinations worldwide. In all, nine con-tainer terminals are operated by five companies.

That is not to say, however, that it will be nothing butsmooth sailing for Hong Kong to remain as Asia’s pre-mier regional distribution hub.

According to a 2009 report entitled Hong Kong as aPreferred Logistics Hub: User Survey-cum-StrategicForum, commissioned by the Hong Kong TradeDevelopment Council and the Hong Kong LogisticsDevelopment Council, costs are a factor that many inthe industry are watching.

“ … Hong Kong’s competitive future would need torest on superior levels of efficiency and reliability,” saidthe report.

Other concerns centre around the rise of neighbour-ing sea ports and the challenges that Hong Kong facesin entering the mainland market due to its vast size.

In spite of the increasing cost and competition, HongKong’s leading position as a regional logistics hubremains strong, thanks to its strategic location andworld-class efficiencies.

From its envious location on the southern tip ofChina, Hong Kong logistics companies can access thefast-growing logistics sector on the Chinese mainland.Kerry Logistics, for example, has been expanding onthe Chinese mainland at a tremendous rate in the lastfive years. Goods handled by Kerry on the mainlandhave increased by 20 times in that period. The compa-ny now has more than 140 distribution centres, 2,000trucks and 8,000 staff on the mainland.

As well, according to the report, “Hong Kong retainsthe potential to provide a natural channel for satisfyingthe Chinese demand for imported luxury items, thoughHong Kong logistics operators will need to readjustservices to match the rebalancing process.”

That has proved to be no problem for JamesThompson, Founder and Chairman of CrownWorldwide Group, which includes Crown Logistics.

“Businesses dealing in luxury goods have recognizedthat Hong Kong is the best location in Asia to serve as

a distribution point for their fashion and cosmeticsproducts,” said Mr Thompson.

Mr Thompson will be a speaker at seminar entitled“Spanning Asia – Hong Kong’s Logistics and MaritimeAdvantages,” that is part of a large-scale promotioncalled “Think Asia, Think Hong Kong,” which will takeplace in London 12-16 September.

The event will feature a symposium and a range ofseminars led by high-profile speakers from Hong Kongand the UK. Business leaders, senior government offi-cials and international celebrities will take part, under-lining Hong Kong’s role as the services centre of Asia.

In all, Hong Kong’s efficiencies have enabled thefree port, ranked as the world’s 10th largest tradingeconomy, to claim its competitive edge in the air cargosector.

Hong Kong is the global leader when it comes to aircargo tonnage, handling some 4.1 million tonnes in2010, which was a 23.4 per cent increase over 2009,making it the busiest air cargo centre in the world.

Hong Kong’s advantageous location certainly helps,enabling its connectivity with most urban centres in Asiawithin five hours of flight time. Currently, over 80 air-lines operate about 5,800 flights weekly, linking HongKong International Airport to more than 150 destina-tions worldwide including 40 cities of the Chinesemainland.

Hong Kong also has a pool of international andhighly experienced logistics companies that enablesmooth logistic flows. Many of them are represented inthe Hong Kong Association of Freight Forwarding andLogistics, with members including: UPS, Expeditors,Panalpina, the aforementioned Kerry Logistics,Schenker and DHL.

Regarding DHL, in September 2008, DHL completedits expansion of Central Asian Hub facilities in HongKong, more than doubling its handling capacity to75,000 pieces per hour from 35,000 previously.

Australian-listed Goodman is investing more thanHK$4 billion in a new Interlink facility in Hong Kong.Interlink is the first major new Hong Kong warehouseproject in nearly a decade. The 2.4 million-square-footdevelopment is being built in the Tsing Yi port district, astrategically important air, road and sea cargo location.It is scheduled to open in 2012.

Hong Kong’s logistics sector is an area marked by change, and while challenges exist for this world-class command and control centre, opportunities are also present.

Hong Kong - Asia’s premierdistribution hub


Asia 21

DHL Supply Chain will invest HK$360 million to cre-ate a multi-use facility at Interlink. Paul Graham, CEOof DHL Supply Chain Asia Pacific, told the Hong KongTrader in April 2010 that Hong Kong is one of thegroup’s key markets in Asia Pacific “and we remainconfident in our growth potential here. As a high-quali-ty facility, Interlink will enhance our operational efficien-cy and capabilities in offering best-in-class supply-chainsolutions for our customers.”

Along with Hong Kong’s continued dedication tooperational efficiencies, the city’s logistics sectorreceived a further boost recently from the mainlandgovernment.

In the 12th Five-Year Plan, the Central governmenthas stated that it supports Hong Kong to be a centrefor high-value inventory management and regional dis-tribution. When placed against the expectation that

China will further promote domestic consumption overthe next few years, this is a promising signal to this sec-tor.

One thing that Hong Kong has never lacked is confi-dence. Based on its clear advantages as a free port, itslead in the high-tech air cargo sector and its growingrecognition as Asia’s Central Business District, prospectslook good. Perhaps Crown’s James Thompson sumsHong Kong’s value as a logistical hub best:

"In the 40 years that my company has been estab-lished as a packing and logistics company, I’ve foundHong Kong to be the most efficient location in Asia inwhich to move and distribute goods," he said.

For more information and pre-registration for freeadmission of Think Asia Think Hong Kong, visithttp://www.thinkasiathinkhk.com.

22 White Paper


Recent tragic events in Japan graphically illustratethe vulnerability of modern supply chains. The dis-ruption in the supply of automotive components

has been felt worldwide, halting assembly lines conti-nents apart. The electronics sector has been equally hitwith the closure of numerous sites around Tokyo, push-ing up the price of components and chips as manufac-turers seek new sources of supply. These problems arenot uncommon, only last year air traffic was severelydisrupted by volcanic ash over Europe and unusuallylarge heavy snowfalls hampered transport in lateautumn.

These may be regarded as ‘Blue Moon’ events, butas supply chains have extended to distant locations insearch of lower manufacturing costs, the risk of supplydisruption has grown significantly - exacerbated bytechniques such as just-in-time inventory management,outsourcing, and lean supply chain philosophies.Understanding supply chain risk is now critical to thesuccess of every enterprise operating in a global mar-ket.

However, risks come in many varied forms and themore complex the supply chain the greater the risks.So, risk assessment and mitigation must be plannedwith a high degree of skill. The consequences of a lackof adequate planning can extend well beyond the costof remedial action and include loss of sales, negativepublicity, devalued brand image, loss of market shareand eroded shareholder value.

In this White Paper we look at three key steps to mit-igating risk and ensuring supply to the customer. Theyare: 1. Mitigating supplier risk2. Managing global flows3. Demand forecasting to avoid stock-outs

Step 1 - Mitigating supplier riskAll too often, a disruption in supply may be the

result of a failure in a supplier’s supply chain, beyonda buyer’s sphere of control. The situation is frequentlyexacerbated by a lack of visibility.

New supply chain strategies, such as horizontal col-laboration - which is attracting huge interest from man-ufacturers and suppliers alike - is further increasingreliance on partner organisations and their supplychains. Although these collaborative initiatives maydeliver benefits in terms of increased profitability,reduced carbon footprint and improved customer serv-ice, it may also add greater complexity with less directcontrol. Therefore, it is essential to recognise the risk ofdisruption to the business from any potential supplychain glitches occurring at first, second and even thirdtier supplier level.

At a macro level, it is very likely that at least onecore supplier will have off-shore dependencies withensuing socio-political and economic constraints - andenvironmental scanning is no longer a nicety, butrather a must.

In October last year, a survey of resilience profes-sionals conducted by The Business Continuity Institutefound that almost three quarters of supply chains hadexperienced significant disruption in the 12 monthsprior to the study. With 28 per cent of those occur-rences attributed to supplier insolvency and 20 per centdue to failure of outsource service provision, almosthalf of these supply chain disruptions were down tosupplier or service provider failure - in other words, cir-cumstances outside one’s own immediate control.

This raises some key questions: How secure is yoursupplier’s supply chain? What visibility do you have oftheir risk management and continuity policy, if indeed,they even exist? What processes and audits are in placeand who is responsible for what at any given juncture?

Systematic risk assessment evaluation and modellingwill not only highlight your own company’s inherentweaknesses and ensuing break points, but will alsothrow light on those of your suppliers. In so doing, oneoften identifies processes that can be fixed almostimmediately, making your supply chain more secure.For more complex processes, a rigorous risk manage-ment programme using risk minimisation tools, tech-niques and applications should be employed.

Three steps to supplychain resilience

Supply chains are becoming far more extended, complex and under increasing risk from disruption.Ulrike Rowbottom, Clyde Buntrock and Haukur Hannesson set out three steps to building the resilientsupply chain.


White Paper 23

One example of ‘best practice’ business continuitymanagement is the coupling of demand forecasts withan intelligent supplier management function, enablingautomated visibility, monitoring and control of a suppli-er’s quality and delivery promise.

This process can also serve as a catalyst for chang-ing suppliers through adopting a set of rigorous suppli-er selection criteria which rewards those who collabo-rate in mitigating risk, whilst moving away from thosethat under perform and therefore constitute a higherrisk.

In summation, an organisation’s dependency on itssuppliers’ supply chains should not be underestimated -the risk of doing so can result in a substantial adverseimpact to the bottom line. Any supplier collaborationinitiatives should encompass a formalised and struc-tured risk resilience programme that not only identifiesrisk, but also pro-actively strives to minimise and elimi-nate risk factors wherever possible.

Step 2 - Managing global flows In addition to managing suppliers, supply chainresilience requires the close management of operationsand global flows. This must involve the logistics serviceproviders who need to, firstly, link their incentives andobjectives to those of the ultimate consumer - so thatthey understand when change is required quickly in

response to the unforeseen - and, secondly, have theagility to action a contingency plan to maintain productand cash-flows.

With complex flows and a network of trade lanes,international service providers often see expeditingshipments as simply moving a box. However, it isimperative that it is seen as an operation built around aconsumer in a store who wants product on a shelf at acertain date, and at a particular level of quality andprice. The provider needs a workforce that is attuned tothe needs of the end customer.

Resilience also comes from prescience of potentialdisruption to global flows. Short-to- medium term hori-zon scanning will, by sifting through the calendar forpotential disruptions across the globe, allow time tomitigate risk by establishing how forthcoming eventswill affect the supply chain, plan for it, and even identi-fy any opportunities to be gained.

Joint activity planning allows the service providerand the customer to create a shared calendar aroundthe company’s key pinch points. A collaborativeapproach will provide both parties with a common viewof where overlaps and pinch points occur, and is animportant element in a service provider’s ability to alignits operation to the objectives of the customer.

This should be backed up by technology - for exam-ple, a global visibility system showing the stock keeping

24 White Paper


units (SKUs) and purchase orders (POs) which must beshipped and when, in order to meet customer demand.So, when an order is raised on a supplier in a locationsuch as Chongqing, 1000 miles up the Yangtze inChina, the service provider’s local office will get analert. The alert will show the order and the fact that itneeds to be shipped in two weeks time or it will miss itsrequired-by date in the UK.

Systemisation and a degree of automation is criticalfor developing scale and requires managing theprocess by exception. When placing thousands oforders a year across a shifting supply base in multiplelocations, it becomes impossible to micro-manage theprocess. A system is required that highlights only whereproblems are occurring, issuing alerts for failures andmissed targets, and so enabling preventative action tobe taken.

A system offering visibility of the key milestones canmanage the entire process against those milestones -raising an order, order confirmation, acceptance, quali-ty control checks, dispatch, shipping and receipt ofgoods. This will ensure the order is on-track and, if itgoes off-track, such a system can identify where andwhy, and then deal with it at source.

Slack in the critical path can be removed by per-forming total lead time compression. This will often findthat time is wasted upstream within the supply chain,which then puts a huge amount of pressure on thephysical transport of the goods. Too often the focus isplaced on the ‘seen’ lead time such as physical move-ment, rather than the ‘unseen’ lead time, which is mostoften the ‘enabling process’. A system can then bedeployed to manage the process in the compressedenvironment.

Having gained this agility a company can find theoptimum way of moving product to match the nature ofthe demand and deal with a product that is runninglate. It is a thermostat for the supply chain that can beturned up or down based on the required demand. Thisallows an organisation to make savings on freight by,for example, putting an order on a ship sailing out ofChina to Korea and then air-freighting it to Europe at a30 per cent cost saving over direct air freight fromChina. Product may move in 7-10 days rather than 3-4days, but direct airfreight incurs a price premium butmay also cause a problem by arriving too early.

By utilising a system that is capable of delivering fullvisibility across a supply chain, a network can becomepro-active, identifying errors early on and consequently,being able to take immediate action to resolve the situ-ation. Step 3 - Demand Forecasting to prevent stock-

outs Managing flows and suppliers in a way outlined in thefirst two steps will help create supply chain agility, butthe third important step to building supply chain

resilience is achieved through improving demand fore-casting - optimum inventory investment whilst ensuringproduct availability to the customer.

Exception management systems play an importantrole in demand forecasting. Often they work on thePareto principle and focus mainly, or in some casesonly, on ‘A’ items identified in an ABC analysis, whichaccount for 80 per cent of the turnover or units sold.Some companies will list, for example, 50 of the mostvital products on which they will be alerted immediatelyif a problem occurs. Perhaps, a further 2000 items willbe rated as ‘important’ and an alert will be generatedon a daily basis in the event of a problem.

However, it is important to review the exceptionrules. It may be that, having divided stock into A, B & Ccategories, in practice a number of ‘A’ items mightbehave like ‘C’ items or vice versa. For example, anautomated ABC analysis carried out by a carpet manu-facturer might classify a carpet glue as a ‘C’ itembecause the low-cost product is given away free, so itmay not seem important. However, because a carpetcannot be despatched without the glue, a stock-out ofglue will prevent sales of an ‘A’ item.

A two-dimensional ABC analysis will classify itemssimultaneously based on turnover value and sold unitsgiving, for example, AA, AC, BA items and enablingcompanies to prioritise their efforts in terms of theimportance of each product.

The key to having a good forecast is to have theright data, the ability to cleanse the data and a set ofautomated rules that take into account issues, such asdealing with peaks. A simulator module can be used toanswer various ‘what if’ questions to evaluate theimpact of change. Finally, having some estimate of howaccurate a forecast is can be even more important thanthe actual forecast.

In conclusion, accurate real-time information on allaspects of purchasing, inventory and sales will givegreater visibility into the supply chain and will have apositive impact on decision making, responsiveness andefficiency. These process improvements will help delivermore accurate forecasting decisions that can, in turn,reduce inventory, whilst meeting high customer servicerequirements. Together, these are the steps that willbuild supply chain resilience.

Ulrike Rowbottom is Partner at AgnusConsultancy. Phone: +44(0)1235 550449 Email:[email protected] Clyde Buntrockis Business Solutions Director at Allport Phone:+44(0)1895 206150 Email: [email protected] and Haukur Hannesson is ManagingDirector at AGR. Please contact Melissa Cupis atAGR Uk Phone: +44(0)1483 243575 Email:[email protected]

Are you looking for the right contacts

to find out right relations

in the Italian logistics?

Call ASSOLOGISTICA!

ASSOLOGISTICA is the nationalassociation of logistics entreprises, generalstores and refrigerators, port terminaloperators, interportual and airportoperators.

The main purpose of the association isto promote and to protect, both in Italy andto the foreign countries, the effectivenessand the quality of enterprises belonging theassociation, as well as the image of thenational logistics system in its complex.

The peculiarity of Assologistica isconstituted by the meeting amongmanagers of the logistics infrastrutures withoperators exploiting them.

For all those foreign firms that intendto develop logistic activity in Italy, or todevelop the correct contacts with peopleresponsible for the biggest Italian logisticoperators, Assologistica is the right answer.

The association counts on a net ofcontacts and relationships, able to open thedoors of the Italian market easier andfavour your entry in the logistic sector"made in Italy".

For every information, call us to the followings numbers and addresses:MILANO: Via Cornalia, 19 - 20124 Milan - Tel: +39 02 669 15 67 / +39 02 669 03 19Fax: +39 02 66 71 42 45 - Email: [email protected]: Via Panama, 62 - 00198 Roma - Tel : +39 06 84 128 97 Fax : +39 06 88 448 24 - Email: [email protected] web site: http:// www.assologistica.itEuromerci web site: http:// www.euromerci.it

26 Warehouse Management Systems


Third Party Logistics providers have a tough time, forinstance in the retail supply chain they’re squeezed inboth directions – by the mighty retailers and by the costconscious importers.

Traditionally such 3PL’s have provided a storageand haulage service – storage prices based on basiccharging of handling and storage, and haulage pricesbased on distance and quantity. This of course is adifficult way to make money – the service becomes acommodity and the barriers of entry are low. Lowbarriers to entry mean that competition for both newcontracts and contract renewal is stiff, and even if cus-tomers prefer to stay with a 3PL they know and trustthere will be ongoing reductions in profit margins inmost cases.

The 3PL provider is often working to arduous serv-ice levels agreements where often their performance ishighly dependent on external factors including the time-ly arrival of deliveries and the keeping of deliveryschedules - despite inevitable traffic problems. All ofthis in a climate where the provider is often financiallyresponsible for the clients’ stock.

So what is the answer? The old phrase ‘business issimple, but it’s not easy’ comes to mind. The simpleanswer is to add more value and to carve a niche in themarket. The ‘not easy’ is that it needs a lot of think-ing through, a lot of determination, greater attentionto detail, the drive and persistence to implement andimprove , and no doubt some trial and error. Buzzphrases like thinking outside the box, pushing the enve-lope and moving outside one’s comfort zone all cometo mind.

Adding value; that all comes down to workingwith companies or people and doing things that youcan do better than they can, better being a combina-tion of faster, cheaper, smarter. Continual innova-tion and careful change management is all part of theequation. By adding value the 3PL significantlyimproves their potential to make better margins. Themore services he or she offers to the clients, and themore intricate these services are, then the greater thepotential to develop a really strong and symbiotic part-nership – a partnership where both parties have agreater commitment and are less likely to part ways.

If you look at a typical importer or retailer what arethey good at? or at least what should they be good at? Essentially the really important things, the thingsthat make the retailer stand out, are down to sourcing,and perhaps designing, the right product - at the rightprice, then marketing and selling it. The rest is impor-tant but is a bit of a distraction; the rest being theadmin of sourcing and importing, stock managementand storage, admin of order processing and despatch,the fulfilment process of picking and despatch.These are all areas that are, or can be, the core com-petence of the 3PL. These extra services give the 3PL alot more to go for than the traditional receipt of palletsand despatch of pallets and cases.

We’ll explore some case studies to see how some3PL’s are succeeding. For reasons of confidentialitywe’ve anonymised the exact nature of the businessesand processes, the elements described are based onreal world clients of ATMS plc in the UK, Middle Eastand Far East.

Case Study 1 - the 3PL and the importer oftablewareThis is a classic example of companies playing to theirstrengths. The importer is typical of those compa-nies that have seized the opportunity of low cost productsourcing from the Far East based on superb productdesigns from their own in house UK team. By design-ing products with a great market appeal and by sourc-ing at low cost and by carefully cultivating relationshipswith key wholesalers and retailers their business hasboomed. This has recently been supplemented by adirect to consumer web shop they have developed.

Design, sourcing, marketing and key account man-agement is what they focus on, and excel at. The restthey leave to their Third Party Logistics provider. The3PL looks after order taking and order processing, alsotakes a direct despatch requirements feed from theirshopping web site. The 3PL then takes care of orderpicking and despatch. Direct to home deliveries areundertaken using major parcel carriers. The 3PL usesthe most economic carrier for each shipment, based ondelivery date, delivery location, weight and cube. The3PL generates all the labelling and electronic manifest

Adding more value – making more profit Steve Cross of ATMS has some advice for Third Party Logistics Providers

who want to raise their growth and profitability


Warehouse Management Systems 27

data required automatically. Deliveries to retailstores and warehouses are carried out with a combina-tion of the 3PL’s own trucks and sub-contract vehicles.The 3PL also looks after invoicing and credit control onbehalf of their client.

So far so good for the downstream process. Inaddition the 3PL looks after the upstream process aswell. The tableware client places bulk orders ontheir Far East suppliers. The 3PL then manages calloffs in line with stock levels and sales forecasts.

The 3PL uses the global tracking module of itswarehouse management system to control and trackthe production, despatch and importation process.The module allows the Far East manufacturer touniquely label cartons of product as they come off theproduction line; using this unique bar code, cartonscan be scanned and tracked into the shipping contain-er. This provides almost real time visibility of produc-tion and despatch, and provides an electronic manifestof container contents.

The 3PL of course handles all the ‘traditional’ activ-ities such as container receipting and de-stuffing, crossdocking, put-away, pick face replenishment, kitting,assembly and packing. Receipting productivity andaccuracy is increased by an order of magnitudethrough the use of the uniquely bar coded cartons,combined with the electronic manifest.

The use of a comprehensive warehouse manage-ment system is essential for this operation; the WMSprovides the communications hub to the client and tothe outside world – virtually eliminating data entry and

associated errors. The WMS is used to optimise allthe warehousing and logistics processes, and to recordthe costs of these processes allowing improvements tobe identified, planned and measured. Importantly italso by its very nature collects and reports the servicelevel information needed for when the client and the3PL sit down to review performance.

So what about the money side of all this? Well itis really quite straight-forward, the 3PL just agrees a feebased on percentage of the client’s sales turnover.This is a very visible figure as the 3PL is administeringall sales anyway. The beauty of this simple arrange-ment is, well, simplicity, but also because it incentivisesthe 3PL to continually innovate and improve. It alsoincentivises the 3PL to hold optimum stock, not toomuch and not too little – an incentive that isn’t normallyassociated with third party warehouses where the desireis often to maximise stock holding.

The tableware importer can really focus on his corebusiness, this focus has enabled the company toachieve solid year on year growth – growth that hasalso, of course, benefitted the 3PL provider. Thepartnership can be seen as a genuine win-win partner-ship. The commercial terms are reviewed periodicallyof course but assuming professionalism, open ness andgood communication the chances of either partydefecting are low.

Case Study 2 – the 3PL, the printer and theretail bank Printing companies are good at printing, banks are

28 Warehouse Management Systems


good at banking, so the theory goes. This leaves abig void when it comes to ensuring all the brochures,forms, booklets, point of sale material and stationeryare in the right place at the right time – in this case nottoo many and not too few at each of the banks 100plus branches and its third party agencies. This voidalso extends to managing the central buffer stock toensure branches can be replenished on a regular basis.

The 3PL in question again uses a comprehensivewarehouse management system to control its opera-tion. This has a web portal which allows clients, andclients of clients, to place orders, place delivery requestsand to view stock. Indeed, on an authorised basis,users can view any warehousing and supply chainactivity, its status and its history. This allows all thebank branches to call off their printed material require-ments, within guidelines set by head office, for next daydelivery.

The 3PL communicates electronically with the print-ing company – communicating details of stock levels,re-order recommendations and daily order anddespatch information. In turn the printing companyprovides electronic advanced shipment notifications inorder that the 3PL can be prepared for the receipts,and can simply scan in the stock on receipt. Thebanks head office can also drive the call off process,electronically, direct to the 3PL or via the printing com-pany – for instance requesting new point of sale materi-al to be delivered to all or selected branches for arrivalready for the launch of a new promotion.

Case Study 3 – the 3PL and the maintenancemanagement companyMaintenance management is a complex job. Thestrength of a maintenance management company is itstechnical knowledge and its ability to cater for customerneeds in a profitable but cost effective manner. Goodlogistics is a necessary evil and it is a mixed bag.Material required by the field service staff ranges fromspecialised spare parts through to every day consum-able items, not forgetting personal protective equipmentand work-wear. To service its operation the mainte-nance company has set up a number of remote storesacross the UK. Stores are often based in one of themany self-store facilities that are springing up acrossthe UK, but can also be a unit at the premises of alarger client or can be a lock box outside the home ofthe field service technician.

The 3PL stores everything on behalf of the mainte-nance company within its centralised multi client ware-housing facility. Some stock, particularly fast movingconsumable stock, is held at each remote store in linewith an agreed stocking policy. The 3PL replenishesstock and delivers parts and items to each store on adaily or weekly basis. Use is made of the latesthand held mobile computers by both the 3PL and its

client. The latest hand-helds have an inbuilt bar codescanner, an option for an RF-ID tag reader, and GPSfor location recording and satellite navigation. Touchscreens are used for signature capture and informationentry. The units normally support both WiFi and 3Gcommunications, the latter normally working in con-junction with a standard mobile phone SIM card alsoallowing voice communications. The use of hand-helds gives great potential for control of field basedlogistics operations.

Using his or her hand held device, the 3PL opera-tive can confirm his or her presence at the remote storeby scanning a location bar code inside the store; thisinformation can be combined for extra security with thelocation as recorded from the inbuilt GPS sensor. Theoperative can then place items and stock in therequired location, topping up parts bins as requiredand recording all these activities with the inbuilt barcode scanner. Inventory counts can also be carriedout.

Whilst at the store room the operative can also col-lect parts and equipment for return to the central ware-house. An in-built camera in the hand held unit canbe used to record any damaged or broken items beforetheir removal. All information collected is communi-cated back in real time to the central warehouse man-agement system. The 3PL and their client are lookingat further security measures such as CCTV and remoteelectronic unlocking of the store using innovative RFIDtechniques.

The client’s field service staff in turn use their handheld computers to record stock they take from the storeand return to the store. They can use their own per-sonal hand held unit or in certain cases use a handheld unit that is left permanently in the store for sharedusage. The hand-helds are also used to orderwork-wear and personal protective equipment – a barcoded menu with photos of the items in question isused for this purpose.

The 3PL is looking to extend its operations in simi-lar sectors now that it has the expertise and technologyin place. It is looking at all markets that need vendormanaged inventory, consignment and indent stock andcontrol of remote stores. The technology they usecan work anywhere in the world with mobile phonecoverage meaning that they don’t need to invest in anyinfrastructure.

Case Study 4 – facility rentalSome third party logistics providers are happy to rentout their vacant or surplus warehouses on a conven-tional landlord and tenant basis. Some however arekeen to innovate in search of a little bit more of the‘action’. One interesting approach to this, by a majorinternational 3PL, has been to rent out their warehous-ing facility as a working warehouse, complete with nar-

To find out more call: +44(0)121 628 9000email [email protected] or visit www.atmsplc.comATMS plc, Birmingham Science Park - Aston, Birmingham, UK, B7 4EJ Offices in Dubai, Manila and Singapore

controlling you logistics operations – around theworld, around the country or around your yard

WarehouseManagement Systems

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Warehouse Management Systems 31

row aisle racking, core mechanical handling equipmentand, interestingly, complete with a blue collar work-force. Additional labour and MHE can be rentedfrom the 3PL on an hourly basis.

The end client then manages the warehouse them-selves . The advantage of this as far as the client isconcerned is that he can walk into a warehouse andhave it working for him from day one, with minimalhassle. The advantage for the 3PL is that he canattract good quality clients who will pay a premium touse a modern, ready to use facility.

The systems that make this possibleGood systems are vital in most cases in enabling theinnovation we have discussed. They are not the mostimportant factor - the most important factor is goodpeople with creative, innovative minds and a commit-ment to delivering the quality of service they’ve agreedwith the client, and with an ability to communicate wellwith the client. Systems though are the essentialtools that this team needs in order to deliver success.

A good warehouse management system, with thefeatures we’ve discussed that extend to cover the wholesupply chain, is normally the core business tool. TheWMS for most operations must also have the ability togenerate activity based charging and billing informa-tion – even if the client is not billed this way. Thepotential for charging should include receipt, qualityand conformance check, storage, handling, picking,pick and pack, kitting, despatch, inventory checking,ad-hoc charging space rental and transport.

In most scenarios it is good practice to record theoperating costs of client specific operations using arobust costing model even if the client is charged on afixed price basis, an open book basis or a percentageof turnover basis. This helps with the costing of con-tract renewals and new contracts. It also helps to pin-point areas of high operating cost where savings couldpotentially be made. The information providesbenchmarking data and can be used as the basis forkey performance indicator (KPI) reporting – often usinggraphical visual dashboards.

Another key function of the WMS is to report per-formance against Service Level Agreements, SLA’s.SLA’s are notoriously hard to police, the client will oftenfocus on the last few issues and problems – even if per-formance is generally exemplary. The 3PL will oftennot have the facts and fingers at his fingertips to defendand promote his position. A good WMS can collectand report on the information needed, simply as a byproduct of its core purpose in optimising and control-ling the warehouse operation.

In SummaryIn summary the more value a 3PL can add to its client’soperation, often through additional services and inno-vative processes, then the more he is likely to retain thatclient and the more profit he is likely to make from thatclient. This is not a guaranteed road to riches but it’smore likely to generate real and profitable growth thanthe well trodden haulage and storage path still followedby many 3PL’s.

32 Advertorial


Yale takes Materials handling

to the next

level Despite the worldwide economic crisis forklifttruck and warehouse

equipment manufacturer,Yale Europe Materials

Handling, has continued to invest in its product

development and manufacturing facilities.

The company has recentlyunveiled a range of newclass leading models that

take materials handling tothe next level, andrevealed details of

$2 million investment at its Masate facility

in Italy.

33


Advertorial

Masate plant investment Yale has made significant investment in its electric

warehouse production facility in Masate including theintroduction of a new product development centre, anextensive testing area and a very narrow aisle (VNA)production line serving the global market.

Huge importance is placed on innovation and productdesign and the state of the art design centre allows theYale team to perform validation and testing of new fea-tures and technology.

A new 50 metre test track means both current and newor prototype products can be tested to their full capabili-ties. Testing includes lift and travel speeds, productivitytesting, energy efficiency examinations and internal sta-bility testing.

VNA for space optimisation Responding to one of the most significant current trends

in warehousing and materials movement, which is thedemand for space optimisation, Yale’s VNA equipmentallows customers to get the maximum storage capacityfrom the minimum site footprint.

Offering lateral fork movement, Yale’s MTC VNA truckis able to operate in aisles of only fractionally wider thanthe size of the pallet. Productivity is increased as the truckis able to travel and lift simultaneously. Further spaceoptimisation is possible as lift heights are significantlyhigher than those of counterbalance or reach trucks.

The VNA production line at Masate has beenimproved as part of the site investment and uses thedemand flow technology (DFT) assembly process whereeach truck is built to the customer’s requirements and istested at each stage of assembly and manufacture.

Yale’s MTC series has been designed with AC technol-ogy sealed motors, CANbus technology, and diagnosticcapability, which provide increased levels of reliability.Low lifetime cost of ownership is achieved through min-imised unscheduled repairs and maintenance.

Seeing is believing – MR Reach truck Increased visibility and operator comfort upgrades

have been made to the MR series of reach trucks.Reacting to research that highlighted visibility as a majorfactor influencing an operator’s attitude towards ware-house equipment, the reach truck’s overhead guard hasbeen completely redesigned without any compromise toits strength or security.

To enhance operator comfort, the MR series can be fitted with a full suspension ergonomic seat, designed todrastically reduce whole body vibration. As well as offer-ing benefits to the end user, the improved ergonomics ofthe reach truck allow the operator to maintain optimumproductivity for longer as fatigue is reduced.

Productivity is further enhanced by an eight per centincrease in travel speeds, particularly beneficial whentrucks need to operate over longer distances.

Ergonomics for increased picking productivity Yale’s new MO20 low level order picker has been

designed to optimise picking speeds and ease of pickingwhen retrieving goods from both sides of a warehouseaisle.

Combining ergonomics, efficiency and reliability, theMO series is designed to assist the operator in achievingincreased pick rates and offers a large comfortable workplatform. This allows easier pass through with easy ‘onand off’ access helping to minimise operator movement,saving valuable time when picking.

The easy to operate scooter control feature providesfingertip control when on the platform. In addition, acreep speed function allows the operator to move the pal-let truck to the next pick location without having to accessthe truck.

34 Advertorial


Tow tractor is smooth operator The new MO50T tow tractor from Yale has been devel-

oped specifically for applications in industries where ‘inline feed’ or ‘milk run’ operations are prevalent. A com-fortable work platform allows easy access and reducesoperator movement and the truck includes a universalflange suitable for many types of hooks and tow pins.

The tow tractor features the same 2.6KW motor thatcan be found on the MO20 low level order picker serieswhich delivers high performance acceleration and travelspeed leading to maximum productivity throughout thefull shift. Performance, regenerative braking and anti-rollback on slopes are also standard features shared withthe MO20 order picker.

Continued innovation and investment Yale Area Business Director for the UK David Bunting

says that developing new features and continuouslyupdating current models as a result of the introduction ofnew technology and research allows Yale to offer cus-tomers even greater value for money as it results in moreproductive equipment with lower cost of ownership andservice costs.

He says: “Yale will continue to innovate and deliver awide range of materials handling equipment to cater forthe varying demands of customers. Through investmentmade by our parent company NMHG in facilities like thenew VNA manufacturing, Test and Development centre inMasate Italy and the new Engineering Concept centre inHampshire, UK Yale will be able to respond to theincreased demand for more sophisticated technological-ly advanced equipment epitomised by the companiesMTC VNA series and deliver products that meet cus-tomers’ individual requirements more exactly.

“Yale will continue to ensure that people and newproducts are priorities. The result will be people andproducts focused on providing customers with practicalsolutions to increase productivity, decrease operatingcosts and provide a more comfortable environment foroperators of Yale materials handling equipment.”

For more information on the new range of productsand the company’s investment in the electric warehouseand VNA equipment production facility, please log on towww.yale-forklifts.eu.

AEB (International)Ltd announcesManagement

Changes


Leamington Spa, 28th July 2011 – As part of its latestbusiness growth strategy, AEB (International) Ltd hasannounced changes within its leadership team. MarkBrannan, General Manager, is moving on to the cor-porate role of International Business DevelopmentDirector, while Claire Umney will assume responsibili-ty for the management and continued developmentof AEB (International) Ltd as the new GeneralManager.

During his 11 years with the company, MarkBrannan has gained considerable experience advis-ing companies ranging from SMEs to major multi-national corporations on solutions for optimising sup-ply chain performance. In his new role, Mark reportsdirectly to AEB’s CEO at the company’s headquartersin Stuttgart, and the key focus of his global responsi-bilities is on developing new markets, key accountsand partner networks worldwide.

Mark Brannan said: “AEB's international expansionprogramme is crucial to the future success of thecompany, so I’m very happy to be taking a key rolein this area. Our international presence has grownsignificantly during the last ten years and we are keento expand into new markets and strengthen our posi-tion in some of our existing markets.”

As UK General Manager, Claire Umney is lookingto build on the growth of the company in recent yearsand further develop the company’s reputation as aleading provider of software solutions and consultan-cy in supply chain and logistics. Claire’s ambitiousbusiness development plans include expansion ofcurrent staff levels, a significant increase in UK mar-ket share and further establishing local brand recog-nition.

Claire has been working with AEB (International)Ltd since 2008, when she joined as a ProjectManager. Her wealth of experience in the Logisticsand Supply Chain sector has been integral to the UKbusiness and its success. Claire’s responsibilities dur-ing the past 12 years in industry include businessprocess consultancy, business development and soft-ware solution implementations, ranging from ware-house and transport management to carrier and cus-toms management and regulatory compliance.Claire Umney said: “We are at a very exciting junc-ture in AEB’s development as a global company, andI am happy to be leading the UK business into thefuture. We have an excellent and expanding productportfolio as well as an experienced and motivatedteam to drive our success. I am looking forward tothe challenges ahead.” www.aeb-international.co.uk

36 Packaging


Automated Packaging Solutions can be seen com-monly in the central DC of High Street brandsbut not much by Logistics Providers. A common

belief is that such investment takes time to pay backand requires long term stability of the business.

On the time scale of the history of industry, packag-ing automation in distribution is a very recent move. Itstarted approximately twenty years ago with the firstheat shrink solutions and was reserved for B2B applica-tions. While it is popular in Europe today, it is still rarein major countries like the US and Japan where mil-lions of boxes are hand taped every day.

The major change in the fulfillment business of thecurrent time is that brands now outsource their logisticsincluding warehousing and that B2C is booming withe-commerce. As a consequence, Logistics Providers arenow in charge of distributing the products of manymajor brands. Besides, business stability is no longer aspecialty of High street brands as far as distribution isconcerned as competition gets harder and the peak

period is every year more intense. But automated pack-aging solutions are still being selected by the brands,and not much by Logistics Providers. The cautiousapproach is still there while the reasons no longer.

Business stability has disappeared in almost everysector but not the need to stay competitive. In thesetimes of changes, the typical pay back expected bycompanies selecting packaging automation is eighteenmonths maximum, which is compatible with typicalthree years long logistics contracts. Contrary to a pieceof conveyor that saves purely on labour, a packagingmachine saves not only on labour, but on packagingmaterials, on transport (with the cube reduction option),on returns, on pilfering losses. Combined savings is theclue to the attractiveness of packaging automation.

Concerning the capability of packaging automationto reduce the height of the boxes to the height of theproducts inside, all the brands selecting this option aremotivated by the positive consumer impact, but a fewget savings on transport costs because transport is

Packaging automation -yes you can

Bernard Dominici from B+ Equipment contends that automated packaging make good business sense for 3PLs


Packaging 37

charges by the weight or more usually by the parcel.Potential savings are missed here because reducingboxes provides typically a global 15 to 25% globaltransported cube reduction, which means approximatelythe same reduction of the number of trucks. When aLogistics Provider is in charge of both warehousing andtransport, the savings on transport becomes real.

While savings are proven, capital investment stilldeter Logistics Providers. With the current developmentof logistics outsourcing, packaging equipment vendorslike B+ Equipment adapt their offering and proposeleasing options, or more innovative, a cycle charge pro-posal where the equipment is paid through a clickcharge per box. With such option, the savings providedby packaging automation is known and cashed fromday one.

Logistics Providers most frequently investigate auto-mated packaging solutions when they have just beenappointed new business. The project runs over severalmonths and vanishes as the contract dead line getscloser. If considered when in the tender phase, theautomated option keeps its full financial benefits overthe contract period. Besides, packaging automation isan efficient way to win new business: besides the com-petitive prices, it offers the customer a nicer and moresecured package.

Packaging automation puts also the LogisticsProvider in a good position to keep the business when itis renegotiated. First, the customer is reluctant to moveback from a neat glued packaged to a hand taped0201 case. Then, the Logistics Provider has significant

financial flexibility after the equipment has been paidfor during the initial contract.

Most Logistics Providers running multiple businessesin the same warehouse keep these businesses separateon bespoke systems. This makes sense as businessescome one after the other, but when the decision is gofor a material handling system is taken, it should beconsidered for multiple businesses, at least in the longrun. The usual belief is that orders could be mis-matched and an order from business A could beshipped to a customer of business B. With a licenseplate printed on each box and automated data pro-cessing, the probability to mix orders from differentbusinesses is no more important than the probability tomix two orders from the same business.

It is also commonly believed that packaging automa-tion stays as it is forever once it is there. While it is truethat it makes no sense to revamp any material handlingequipment every year, packaging equipment can bemoved over a week-end in the warehouse. Moreover,such equipment can be revamped to different box sizes.Changing the box height is really insignificant work,and changing the box footprint is heavier job but defi-nitely can be done.

It is true that packaging automation frightens a bitbecause it is big pieces of hardware and big money.However, the big hardware turns out to be flexible withregards to the current business changes, and moneycan be spend as boxes exit the warehouse with finan-cial innovation like the Cycle Charge Option.www.bplus-equip.fr

38 Technology


Warehouse One, based in Winsford, Cheshire, providewarehouse and distribution services to clients through-out UK and Ireland.

The company has recently invested the PODFathersuite of software, directly integrating it into one of theirmajor clients’ global freight forwarding systems toensure all UK road transport information is communi-cated to their Import and Export staff electronically -and in real-time - to help improve their audit trail andreduce communication costs.

Warehouse One provides a range of warehousingand trucking services to Expeditors InternationalLimited, one of the top five Global Logistics providers.When originally tendering for the business, WarehouseOne were aware that Expeditors was seeking a partnerwho could optimise management reporting and proof-of-delivery notification.

Warehouse One Director, Liam Lee stated “When webegan to explain that the PODFather system could belinked into their freight management system to providePODs in real-time Expeditors became very interested inthis concept.

But the PODFather system is about more than just

proof of delivery. For example, Warehouse One trans-port staff have access to the PODFather scheduling sys-tems for load building and vehicle tracking, and alldrivers are equipped with a robust handheld runningthe PODFather PDA software. This displays full mani-fests to the drivers, allowing them to indicate to the cen-tral system when goods have been collected and deliv-ered, capturing customer signature, time and locationstamps at each critical point.

Another advantage of the PODFather PDA system isits simplicity of use means operators do not requireextensive training. It's really no more complicated thanusing a mobile phone or sending a text message,” saysLiam Lee.

The PODFather system offers a number of other userbenefits. For instance, the backoffice system allows jobsto be booked into the system, with tariffs and costs setfor each consignment. Traffic Planning facilities areavailable to allocate jobs to your drivers and vehicles,and calculate ETAs for multi-drop runs.

The Tracking module of the PODFather system runson the driver’s PDA, and is fully integrated with thebackoffice booking and despatch systems to give both

Seeking proofWarehouse One has recently invested the PODFather suite of software, directly integrating it into one of

their major clients’ global freight forwarding systems


Technology 39

staff and customers visibility of the locationof the drivers and jobs.

The PODFather’s handheld systemallows drivers to download manifests, con-firm when goods are collected and whenthey are delivered. PODs can be cus-tomised to match existing paperwork;adding photographs, customer names andsignatures.

The system runs locally on the PDA, andoperates on any mobile network, anywherein the world. Users can sign off jobs out-side network coverage and they sync whendrivers are back in range.

The Invoicing section of the PODFatherensures all PODs are invoiced as soon asthey are complete. Uninvoiced PODs canbe processed either individually, or as abatch. Processed invoices are generated inPDF format, and a batch export file isavailable for integration with third-party accounts sys-tems, e.g. SAGE.

The PODFather system has also been designed withsystems integration in mind. It is purposefully simple tolink with existing systems and push jobs out to driverPDAs. Completed PODs can then be downloaded backinto these systems within seconds of them being com-pleted.

Liam Lee, concludes: "Integrating PODFather into thebusiness has been a great success and we now use thesystem for both transport management, and helping ussecure new major contracts.

We have an excellent partnership with PODFatherwho are very flexible and approach our business needswith a ‘can-do’ attitude.”

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40 Case Study


German manufacturers of intralogistics products haveovercome the economic crises in a good condition. Theeconomic upswing is expected to continue throughout2011. For 2011, industry experts of the IntralogisticsForum expect an increase in sales of nine percent overthe previous year to 16.1 billion. The drop in sales of thecrisis year 2009 could be attenuated by the end of 2010with only a slight decrease of eight percent over the pre-vious year.

The logistics sector is a central area of growth for theGerman economy and just as much for many ofGermany’s neighbouring countries. The FederalGovernment has recognized the importance of Germanlogistics for Germany and for Europe. The FederalTransport Infrastructure Plan provides for the extension ofmany existing as well as new and modern transportroutes and logistics locations to optimize transport flowand to simplify passenger and freight transport. Large-scale infrastructure projects are aimed at bringingGermany’s “hinterland” closer to the global marketplace.These infrastructure projects are not always met withapproval, which can temporarily delay the direct benefitfor the location and the technical advancement of therespective region. The extension of the transport networkaims to optimize the interconnection between individualcentres and increase the turnover speed of merchandisewhile reducing standby times.

Products made in Germany enjoy a worldwide reputa-tion, as they meet customer-specific quality criteria andrequests due to their sophisticated and elaborate designand availability. The German manufacturers of engineer-ing products, just like numerous manufacturers in othersectors of the German economy, have been the world’sundisputed champion exporters since many decades. Inaddition to good products and services, well-organisedand reliable logistics have also contributed to that topposition.

However, logistics not only means transport by water,air, rail and road. The technically most important part ofthe logistic performance is in-house logistics with intralo-gistics. Without any doubt, both sectors are closely inter-connected and together form the logistics sector.

An upward trend is recognizable in the main sectors ofthe German engineering industry. The industry sectorwith the biggest volume, intralogistics, had to put up withan unequalled decrease in sales of 24 percent to ⇔16 bil-lion. Industry experts of the Logistics Forum expect thatthe sales level of 2008 will not be reached before 2013.By the middle of 2010, the intralogistics industry saw asignificant increase in incoming orders and was, there-

fore, able to cushion the previous year’s blow with adecrease by only eight percent to 14.8 billion. Similar tothe logistics sector, where in 2010 about 210 billion insales were generated with 2.7 million employees, theintralogistics sector profited from a good global econom-ic climate and, according to well-founded forecasts byindustry experts of the Intralogistics Forum, will slightlyexceed the nominal sales level of 2009.

Industry experts view this trend as a confirmation of theglobal competitiveness of German intralogistics and ofthe location Germany altogether. Almost half of theemployees in the German logistics sector operate or useintralogistics products. A comparable ratio can be foundin other important sectors of the German economy, e.g.in the automobile industry (sales volume 2010: 260 bil-lion with 720,000 employees), in the German logisticssector, as well as in the engineering industry (sales vol-

ume 2010: ⇔174 billion with 912,000 employees). Theintralogistics sector serves all major German industrieswith innovative equipment and products. It providesoperators all along the supply chain with a high degreeof availability as well as rationalisation and savingspotential without neglecting ecologic as well as econom-ic sustainability and social responsibility. This is why noother industry currently receives as much attention on a

global level as intralogistics.

With the new emerging logistics requirements, the sig-nificance of intralogistics continues to grow both inGermany and abroad. This is supported by the growingnumber of incoming orders correlating with the salesdevelopment of the industry, however, also by a bal-anced ratio of domestic and foreign business. The exportrate of German manufacturers of intralogistics products isjust above 50 percent.

Due to its geopolitical location in the centre of Europe,Germany is a transit country for transports of freight and

Intralogistics High-tech industry profitsfrom economic upswing

www.warehousinglogisticsinternational.com July 2006

Case Study 41

raw

materials from West to East, North to South and viceversa. This unrivalled central location inevitably increasesthe significance of intralogistics. Almost 60 percent of thecustomers of German intralogistics manufacturers arelocated in the 27 EU countries.

With a share of approx. 15 percent in German intral-ogistics exports to BRIC countries (Brazil, Russia, India,and China), the importance of these threshold markets forGermany is growing significantly. In addition, countriessuch as Saudi Arabia have gained importance forGerman manufacturers of intralogistics products due totheir constant and crisis-resistant import behaviour. Theincreasing share of exports to these countries proves thatthe German manufacturers continue towards a healthydistribution structure, also to markets outside of Europe.Hence, the German intralogistics industry was in a betterposition for mastering the economic crisis of 2009 thanits international competitors.

China has become the most important market forGermany. In 2010, the People’s Republic became themost important buyer of German intralogistics products.German companies exported products and systems witha value of ⇔946m to China; which is 43 percent above2009. This put China for the first time into the leadingposition as a market for German intralogistics products;

in 2009 it was still in third place after the US (2010:702m) and France (2010: 658m).

In 2010, the BRIC countries showed the highest growthrates for intralogistics products from Germany. Theincrease in German intralogistics exports to Brazil is alsoremarkable; with a growth rate of 133 percent over2009 to 414m. Exports of German intralogistics toRussia increased by 39 percent and to India by 31 per-cent. These numbers do not include the locally createdvalue by German intralogistics companies.

Despite the sales decline in 2009 and 2010, the num-ber of employees in the intralogistics industry in Germanyhas almost remained stable. This is attributable, in part,to working-time accounts being made more flexible, toshort-time work and the instruments of temporary employ-ment in Germany, as well as to company policies. Withthese instruments, which were supported by the Germangovernment and implemented by the industry, massivelayoffs in Germany could be avoided. And this is why, atthe first sign of an economic upswing, a qualified work-force was available to react quickly to the demands of themarket. This helped to significantly cushion the crisis andto strengthen Germany’s competitiveness during and after the crisis.

The author: Jens KarstenRohrbaech, Project Manager of theIntralogistics Forum, a VDMA initia-tive, and advisor for branch market-ing, public relations and tradeshows in the VDMA MaterialsHandling and Logistic TechnologyAssociation, Frankfurt, Germany

42 Gideon Hillman Consulting ltd


Whilst outsourcing has always been prevalent in thelogistics and supply chain sectors, there has been amarked increase in the requirements for Warehousedesign and operational consultants over the last 12months. This is the result of a number of factors all con-tributing to this rise in demand for specialist and practi-cal expertise. The recession forced many businesses toreduce their logistics infrastructure and cost base whilst aslowdown in product demand put additional constraintson warehousing with slow moving and obsolete stocktaking up valuable space and resource.

Many companies, regardless of industry sector, havesurvived the recession to date through drastic cost cuttingexercises frequently having reduced the workforce andeither closing or “mothballing” production and ware-housing facilities. This strategy is often borne out ofnecessity and has the immediate short term benefit interms of cost reduction however this raises two furtherquestions; “What else can you do to improve your costbase?” and with evidence in some sectors that the worstis behind us, “How should you be planning not only torecover but also to grow and become stronger than youwere before the economic downturn?”.

There has been a noticeable increase in warehouseand picking facilities within the internet retailer and

e-fulfilment sector as well as a number of business merg-ers and acquisitions now seeking to benefit from ware-house consolidation and economies of scale. Planning how to react to economic recovery and capi-talise on every opportunity as and when it arises is cru-cial. Where measures have been taken to rationalise andcontract to combat recession, businesses need to be surethat they can react to the inevitable recovery and upturnin trade as and when needed and not be found wantingor lacking in resource and strategy when the time comes.Long term security will be highly dependent on a robustand sustainable Logistics and Warehouse strategy withinyour business and within that of your customers and sup-pliers throughout the supply chain. In order to survive,companies must endeavour to undertake the widestreview possible to ensure that all elements of their ware-house processes, systems and facilities are not ‘sub-opti-mised’ and that inventory levels are minimised yet

remain effective.The need for a consultant with operational and practicalmanagement experience is essential and a good logisticsconsultant should be highly expert in Logistics Networkdesign and reviewing current warehouse process andoperations. They should be able to successfully developand implement solutions for all areas of MaterialsHandling, Procurement, Stores and InventoryManagement including Regional, National and GlobalDistribution Strategy Development and implementation,Tactical Stock locations, Handling and Picking processes,Demand Forecasting, Integrated Inventory Control,Vendor Management, Vendor Support Operations,inbound and outbound Logistics Management andPerformance and Cost Measurement.All of the analysis and solutions specific to the clientrequirements must be presented with clear and conciserationale, having been costed and tested.Most importantly the costs of current warehouse andinventory operations (per item or unit load despatched),must be clearly identified and the on-going cost reductionstrategy must define requirements for flexibility in thebusiness over the next 3 to 5 years planning horizon.The strategy must be tested to ensure Interface / interac-tion between Warehousing and despatch and otheroperations / departments within the business as well asintegration with existing ERP / MRP systems and WMSmodules.“What businesses don’t need is a lengthy and unneces-sarily costly outsourced consultancy project which deliv-ers little or no practical benefit with no consultant / clientinteraction”, says Gideon Hillman FCILT MIC, “Whatcompanies rightly demand and subsequently shouldreceive are implementable solutions specific to theirrequirements, costed, tested and presented with clearand concise rationale, including a detailed implementa-tion path. This can be achieved through a fixed cost andlogical approach which is effective and adds value to aclient’s businesses with no additional or variable costsover and above those agreed for the scope of the work.”

For further details Contact:Gideon Hillman Consulting LtdTel: +44 (0) 1926 430 883Email: [email protected]: www.hillman-consulting.co.uk

What you should expect fromyour warehouse consultant

Advertorial


June 2011---The Co-operative Electrical’s 230,000 squarefoot Electrical warehousing and distribution operation haspicked warehouse performance management systemDeltaWMS with RF to support its UK wide distribution serv-ice for E-commerce and store network.

James Holland, Managing Director of The Co-operative Estores and Electrical buying group said: “At a time when thebiggest electrical retailers in the UK have performed poorly,we have increased both our profitability and market share.

“We have done this primarily down to outstanding prices,excellent customer service, and our rapid and very reliabledelivery service. To ensure the continuation of the latter weneeded a specialist warehouse management system thatwas dedicated to logistics performance and designed tosupport significant business growth. DeltaWMS ticks thoseboxes".

David Butterfield, Head of Warehousing and Distributionfor The Co-operative Electrical said: “The decision to deployDelta followed a tender involving a number of major WMSbusinesses. We liked the ease of the Delta system, the qual-ity of the people who would project manage its deploymentand the team that would support it over time.”

A single DeltaWMS system will be networked across threesites, which handle customer orders generated by The Co-operative Electrical website and Co-operative stores, as wellas managing third party distribution for other commercial

customers. DeltaWMS will be integrated with the existingtransport management, business and e-commerce systems.

“Our solutions allow warehouse operations to be continu-ously and measurably improved - boosting supply chain per-formance,” said Delta Software Operations Director LanceBennett. “DeltaWMS’ graphical warehouse map and KPIdashboard manage and measure warehouse inventorymovement in real-time to optimise productivity, deliveringbetter business process performance for WMS users.”

Delta Software: company backgroundFounded in 1990 and headquartered in Wakefield,

Yorkshire, Delta Software (www.deltawms.co.uk) is the UK’sfastest-growing supplier of interactive warehouse manage-ment systems and a just-in-time technology innovator. Thecompany’s ‘DeltaWMS’ flagship single- and multi-site sys-tems are open-database, feature a unique, user friendlyinteractive warehouse management ‘graphical map’ andcan be quickly and easily integrated into any ERP enterpriseor smaller business environment.

Delta Software deploys its solutions throughout the UKand continental Europe, on-time and to-budget, providingrigorous fixed-price guarantees. Delta clients include TheCo-op E-store, Eddie Stobart, Foulger Transport, Life Fitness,Maximuscle, Toyota Tsusho, Edexcel, Condor Ferries,Palletways and The Royal British Legion.

THE CO-OPERATIVE E-STORE PICKS DeltaWMSWAREHOUSE PERFORMANCE SYSTEM

43

Damco unveils app for all major mobile platformsDamco - one of the world’s leading providers of freight

forwarding and supply chain management solutions - todayannounced that it has released an app for all of the majormobile platforms; iPhone/iPad, Android and Blackberry.The new app is aimed at providing customers a fast and sim-ple way to get an overview on the status of the logistic serv-ices being delivered to them by Damco.

Damco is the first logistic provider in the industry to offerits customers apps on all important mobile platforms and thelaunch is part of an overall effort to prepare for a futurewhere more business processes will need to be efficientlysupported on smartphones and tablets.

“The proliferation of mobile devices is making it econom-ical and scalable to reach customers with apps. Duringrecent years tremendous advances have been made, notonly in the capabilities of the devices, but also in their easeof use,” says Mark Scotland, Chief Information Officer atDamco. “As a result the screens and functionality of thedevices are more than sufficient to give customers mobileaccess to the applications they access via our standard plat-forms today.”

According to market data made public by IT researchcompany Gartner 428 million mobile communicationdevices were sold in Q1 2011, which represent a 19 per-cent increase year-on-year. Smartphones continues to out-pace the rest of the market and accounted for 23.6 percentof overall sales in Q1 2011, an increase of 85 percentyear-on-year, according to Gartner.1

“Even entry-level smartphones will be capable of runningbusiness apps over the next years, especially in developingcountries. We need to meet customers on these platformsand not only focus on targeting the conventional stationaryPC, which is what the logistics industry has done traditional-ly,” says Mark Scotland.

First step of a larger journey

The tracking app Damco has made available foriPhone/iPad, Android and Blackberry will make it possibleto track shipments quickly using a device that is available atall times instead of being tied down by a normal PC. Inindustries where secure and constant delivery of goods areessential – apparel and retail for example – this flexibility isvaluable.

Initially Damco’s apps will offer tracking of ocean freightshipments, and the plan is to expand the functionality withairfreight tracking and provide mobile access to a numberof the key customer facing applications that are currentlyaccessed by customers using myDamco; a portal onwww.damco.com where customers can fulfill all of theirbooking, reporting, tracking and document handlingrequirements in one easy-to-manage location.

In addition to launching mobile apps, Damco has alsolaunched a number of widgets, which are small stand-aloneapplications that can be executed within a webpage whencustomers access their applications on myDamco. Thewidgets allow users to create individual content and haveconstant access to them throughout their workday, explainsMark Scotland.

“In today’s work environment getting information is rarelya problem. However, structuring the flood of informationinto a relevant view to create insight and be able to makecritical “on-time” decisions is a major issue. The widgets rep-resent a simple to use solution to this because Damco cus-tomers can easily design their own cockpit or dashboardwith the exact online information they need to do their jobefficiently. It is easily done with a simple drag and dropfunctionality similar to iGoogle and other successful webcontent providers,” says Mark Scotland.

1 Gartner press release; 19 May 2011: “Gartner Says428 Million Mobile Communication Devices Sold Worldwidein First Quarter 2011.”

“RedPrairie Warehouse Management has helped streamline our warehouse processes and we now have a real-time system giving us visibility across our various terminals making planning much easier than before.”Thomas Granberg, System Owner, SCA Transforest

SCA TrAnSforeST

RedPrairie > Third Party Logistics > Case Study

The CustomerSCA Transforest is part of SCA’s Forest Products business area within the SCA Group, and the company was originally established in 1967 to meet the transportation needs of this multi-national forest industry group. SCA Transforest’s terminals offer stevedoring, warehousing, forwarding, customs clearance, ships agency and other related services.

SCA Forest Products produces high quality publication papers for newspapers, magazines and catalogues, pulp, solid-wood products and forest based biofuels. Products are transported by SCA Transforest from mills in Sweden and onwards by truck, barge, or train to SCA Transforest terminals in Sweden, Finland, Germany, United Kingdom, The Netherlands, Portugal, and Ireland. With this highly developed European distribution network in place, SCA Transforest saw the potential to expand the business and solve transportation and logistics tasks for companies outside the SCA group as well.

The ChallengeHowever, winning more business posed certain IT challenges in order to successfully meet the requirements of various new customers. For many years, warehouse and distribution processes were managed from custom-designed, home-grown warehouse management systems specifically built to support forest products. These systems were not flexible enough to process different types of goods while taking individual customer requirements into concern. Each terminal system worked individually and offered no visibility across the organisation,

2

making it difficult for logistics managers to make well-informed decisions. Therefore it became clear to SCA Transforest that with their ambition to successfully attract new customers it was critical that they invested in a functionally rich best-of-breed warehouse management system.

After the decision to invest was made, the team at SCA Transforest began a thorough selection process to find the right WMS vendor. A dozen vendors across Europe received the RFP. Four were selected for a more detailed evaluation, and ultimately RedPrairie was selected.

3

“We selected the solution from RedPrairie because we identified that its vast range of functionality would give us the best long term cost efficiency, and more importantly it would give us the flexibility we needed to run an agile and modern logistics operation, now and in the future.”Thomas Granberg, System Owner, SCA Transforest

The SolutionIt was decided to implement the solution at the largest and most complex terminals first and at the associated terminals afterwards. Together, SCA Transforest and RedPrairie developed a system template that would cover the complexity of each of the terminals; that could be applied for each implementation; and that would ensure that system could be rolled out to new sites in a quick and cost effective manner.

Of nine sites, the first to go live was SCA Transforest’s terminal in Umeå, Sweden with 75,000 m2 warehouse capacity, which successfully went live on time in March 2007. Later the same year the terminal in Sundsvall, Sweden (70,000 m2 warehouse) went live and in 2008 the remaining two main terminals went live in London, UK (50,000 m2

warehouse) and Rotterdam, Netherlands (73,500 m2

warehouse). Combined, these four main terminals manage around 6.7 million tons of goods annually.

During the roll-out to the first four sites several enhancements were made after each of the go-lives, making the following go-live smoother. Thomas Granberg explains: “Internally we all feared the Rotterdam implementation. It was our most complex site and everyone kept telling me that the problems would come when we implemented in Rotterdam. However because of the enhancements and experiences learned from the first three go-lives the Rotterdam implementation was in fact the smoothest of them all.”

Since the go-live in Rotterdam, SCA Transforest has continued the roll-out across Europe and has now gone live at sites in Skövde, Sweden (February 2009), Vasa Finland (March 2009), and Dublin, Ireland (April 2009). The eighth site is scheduled to go-live in Lisbon, Portugal in May 2009 and the ninth and final site in will be implemented in September 2009 in Lübeck, Germany. The fact that SCA Transforest has the ability to go live with four sites in just four months was very much due to the hard work put in to develop the system template at the beginning of the project.

The ResultsPreviously a warehouse planner allocated warehouse locations for all inbound goods. Locations were reserved and often empty for days before the goods arrived. Today, warehouse operators just scan the barcode of the received goods and the system instantly directs him to the specific stock location, or carrier if direct loading is possible.

“RedPrairie Warehouse Management has helped streamline our warehouse processes. The system also meant more efficient use of our warehouse space and we are now able to manage higher volumes. The direct loading of goods to the ships or trucks has been greatly improved. Another huge benefit has been that we now have a real-time system giving us visibility across our various terminals making planning much easier than before.” Thomas Granberg, System Owner, SCA Transforest

4

RedPrairie Corporation has made every effort to ensure the accuracy of the information included in this document. This document is subject to change without notice. The information contained in this document may not reflect the final design in some instances.

Copyright © 2010 RedPrairie Corporation. All rights reserved. This publication contains proprietary information of RedPrairie Corporation. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of RedPrairie Corporation.

RedPrairie and the RedPrairie logo are registered trademarks of RedPrairie Corporation. E2e is a trademark of RedPrairie Corporation.All other trademarks and registered trademarks are the property of their respective holders.

For more information

RedPrairie CorporationBeacon HouseIbstone Road, StokenchurchBuckinghamshire HP14 3AQ+44 1494 486 500 [email protected] RedPrairie.com

Successfully attracting new customers In the transportation business it is critical that all transfers move quickly and smoothly while spending as little time standing still as possible. Freight and goods must be carefully coordinated and therefore it is important that operators, managers, partners, and customers all have access to the right information at the right time. SCA Transforest has successfully created this environment and has gained the agility to take on new customers with diverse products and logistics requirements.

“We are proud to say that more and more companies are now discovering the benefits of working with us. Customers choose us because they can easily integrate their systems with ours and gain maximum control. Our customers can now track their goods all the way from mill to end customer. We have achieved the goals we set” Thomas Granberg, System Owner, SCA Transforest

http://www.RedPrairie.com

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A-Safe


Few competitors in the safety barrier field test theirproducts to the extent that A-Safe does in order to protect both its image of excellence and, the image ofBritish manufacturing at its very best. A recent filmingday at the A-Safe factory complex in Halifax most visibly demonstrated this. Filming at the innovativepolymer safety barrier company took place to showcasethe importance that industry has always played in thegrowth of the UK economy. At the heart of the pro-gramme for A-Safe, was the demonstration depictingthe strength of the polymer barrier, set against theequivalent barrier manufactured from steel.All of the A-Safe product range is tested, but particular-ly the barriers that segregate and protect pedestriansfrom vehicles, or vehicles from ancillaries and vitalequipment within the working environment , be it a factory floor, logistics warehouse, airport complex or acar park and any other situation where the safety ofworkers and assets is paramount. The testing is doneunder rigorous conditions with results calibrated.Certificated results can be simulated in the worst casescenario of a 90o impact. There are only two officialstandards for safety barriers and both refer to the specification for car parks: BS 6399-1 and BS6180.All A-Safe barriers including their own ‘armco’ barrierhave passed this test.In the A-Safe factory there are two impact calibrationrigs; one, a dynamic pendulum impact simulator andone a static constant force simulator. The other very visible and maybe unorthodox method is to erect barriers and, under controlled safety conditions, bashthem with a fork lift truck (FLT).On the day in review, all three tests were carried out aswell as filming in general to show the end-to-end manufacturing process. This involved a direct comparison between the A-Safe polymer barrier and itssteel counterpart.The dynamic rig tested in turn the A-Safe Traffic Barrierand steel ‘armco’. The polymer barrier took six hits insuccession without any real discernable damage. Thesteel barrier lasted for three hits before Abdul Mukith,A-Safe’s product Development Manager, also in chargeof health and safety, advised it too dangerous to allowfurther impacts, as the barrier had buckled and thebolts were failing. Similarly, the Pedestrian Barrier wastested next. The A-Safe version was filmed with fourhits and just slightly bent, the steel handrail equivalentsnapped on immediate impact and went flying, shocking everyone.The static constant force showed an increasing heavyload on the polymer Traffic Barrier; the equivalent of upto 152 kN. On release this returned to its normal condition. A steel barrier would buckle without

returning and would need replacing.A run of A-Safe Traffic barrier was erected on a safepart of the factory floor. Under stringent and controlled

conditions, several hits were made with a 3.5 tonneNissan FLT both at an angle and at 900 to try and simulate real working conditions. There was a slightbend to one of the legs only. In turn, the test was

repeated fitting a run of armco steel barrier, albeit bolted to the floor with an A-Safe specification bolt system. Similar hits showed severe damage to the steelbarrier, although it did not fail completely and the baseplate was badly distorted. The day of filming was primarily about the excellenceof UK manufacturing, with A-Safe being deemed a classic and shining example. What was clearly demonstrated and documented, is the superiority of theflexible A-Safe polymer barriers over rigid steel.www.asafe.com

A-Safe at the forefront in testingfor quality in barrier protection

49

Advertorial


Torque and Red Prairie Providea Seamless Service

Warehouse management systems are a key part of anysupply chain, so it is vital to implement a market lead-ing and intelligent system to ensure accuracy and effi-ciency.

Torque is a long standing customer of RedPrairie, imple-menting its warehouse management system (“WMS”)successfully in 2004. With some 1,000,000 items dis-patched weekly across numerous warehouse customers,RedPrairie has helped optimise Torque’s every move –from dealing with unfinished bulk goods to gift-wrapped customised home shopping parcels – enablingthe most productive and transparent distribution opera-tion possible. Torque IT Director, Ed Friel explains how the system tookthe company’s already renowned service to a higherlevel: “In 2004, we decided to purchase RedPrairie’s WMS toservice our largest contract and help improve our accu-racy, efficiency and data visibility to this customer. Thesystem enabled real-time updates of stock and orderinformation via radio data terminals (RDTs). These notonly allowed the customer and our staff to know exactlywhere stock was at all times, we were able to performmultiple tasks including stock-taking whilst still picking.The open architecture of the RedPrairie WMS alsohelped us to produce improved management informa-tion and automated exception alerts for this first cus-tomer. RedPrairie’s WMS allowed us to interface allwarehouse data contained within the system to our cus-tomer’s own systems or via our own web-based enquiryand reporting services.One of the most important key benefits of implementingRedPrairie’s WMS is that it allowed us to consistentlykeep well above our exacting accuracy targets andoverall, made the end to end service much slicker andmore efficient. To such a degree that following our ini-tial implementation in 2004, we quickly expanded useof the system to the majority of our other warehousecustomers.

We managed the migration of stock using proven andtested data handling techniques and project planning.Even if customers had unusual requirements or oldlegacy systems with severe constraints, our IT specialistsworked with their data flows to ensure that real addi-tional value was obtained.

We currently handle all our customers’ specialistrequirements via RedPrairie’s WMS such as clothingalterations, repairs, steam tunnelling and quality controlchecks. We cope with all types of customer and order,including retail replenishment, wholesale, cross-dock-ing, consolidation, home shopping and e-commerceorders. Torque also has direct links to courier systems,which ensure control is maintained all the way to a con-sumer’s doorstep, as well as offering automated reportsthat can be tailor-made for staff or business partnersvia e-mail or SMS to prompt the next appropriate actionin the supply chain. RedPrairie’s WMS is now fully integrated with our freightforwarding and collaborative purchase order manage-ment systems allowing our ‘full service’ customers toseamlessly view progress of their stock from creation inoverseas factories, across sea and air, through into ourwarehouses and then out to their customers or ownstores – a truly end-to-end offering.

Over the last seven years with the help of RedPrairie,Torque has built on its knowledge and experience todevelop a seamless supply chain warehouse manage-ment system. It allows customers to choose the serviceoptions they need, when they need them – there is no‘one size fits all’ approach adopted, which is why somany of our customers have been with us for years andwe have become a truly trusted business partner.”www.torque.eu

50

Driving Jaguar’s global aftermarket support

Maintaining a leading position in a demanding global automotive market requires a heavy emphasis on aftermarket and support. Jaguar Cars and Unipart Logistics have worked together for over 20 years perfecting the process.

A Jaguar is an instantly recognisable symbol of success, reflected in its reputation for quality and unsurpassed customer service. Maintaining its leading position and its quality brand image demands excellence in aftermarket and service support, something the Jaguar team delivers through a long-standing partnership with Unipart Logistics.

The two companies have worked together for over 20 years, with Unipart Logistics providing Jaguar with a full automotive parts service, which includes sourcing, storing, processing and despatching of parts from 16 warehouses - located in the UK, USA, Canada, Germany, Spain, Russia, China, Japan and South Africa - to over 700 Jaguar dealers in over 60 countries. Unipart Logistics teams provide dedicated customer service, procurement, pricing, parts marketing and finance support. Their aim is to ensure that the right part is in the right place at the right

time, 24 hours a day seven days a week.In addition to delivering a global logistics

service, Unipart Logistics invests in the creation and implementation of unique processes and products, to maintain continuous improvement to its service for Jaguar. This is achieved through the company’s adherence to ‘lean’ practices which, through highly developed processes and tools known as the ‘Unipart Way’,

deliver continuous improvement to Jaguar’s aftermarket supply chain by removing waste at every step.

The Unipart Way encourages staff to work in teams and to constantly monitor and question the efficiency of the tasks they perform. In meeting areas known as ‘Communication Cells’, teams meet on a daily, weekly and monthly basis to review performance

against key performance indicators (KPIs) set in accordance with customer goals. A series of tools are used to examine processes and drive performance, delivering greater value to Jaguar. Staff are encouraged to research solutions to problems using modules available on the company’s intranet, enabling best practice

Industry Sector �Automotive Aftermarket

Issue �Jaguar’s reputation is highly dependant on the aftermarket support it provides to its customers. Continuous improvement in its global aftermarket logistics is critical to its brand.

Benefits �For over twenty years Unipart Logistics has successfully provided aftermarket logistics in support of Jaguar’s expansion into new markets across the globe, new model introductions and its population of classic cars.

Solution �Unipart Logistics, as an integral part of the Jaguar team, uses its ‘lean’ practices to deliver continuous improvement to Jaguar’s global aftermarket support operation.

JaguarCASE STUDY

“Unipart has a great reputation with the National

Sales Companies… They are seen as a company who delivers on time

and with a quality product”

Mike Warillow – Director, Parts Operations JLR

(May 2009)

of-the-art control centre brings together people, processes and systems in order to continuously improve each step of the supply chain and create harmony.

Regular reviews of service level targets between Jaguar and Unipart Logistics ensure supply chain performance is quantified. These service level targets range from availability through to problem resolution and customer satisfaction. An ongoing joint commitment to focus on the customer ensures that world-class levels of service are consistently achieved.

Unipart Logistics is fully involved in Jaguar’s business, from a new model’s development through to its launch, and the support continues throughout the whole of the car’s lifespan. With the provision of a Jaguar Classic service, Unipart Logistics manages the “whole life” of the vehicle, providing parts and specialist customer support on classic vehicles, such as the much loved and admired E-Type.

New vehicle launches require a high standard of parts and accessories support - Unipart Logistics typically works with Jaguar engineers for two years pre-launch to ensure high levels of parts availability to underpin a car’s debut.

With over 20 years of implementing ‘lean’ principals across the supply chain through the ‘Unipart Way’, Unipart Logistics has created an aftermarket supply chain for Jaguar that is attuned to the expanding requirements and exacting needs of one of the world’s most prestigious automotive brands. Jaguar drivers across the world can now experience the same excellent levels of aftermarket service and support, regardless of their location – a continuity of service and support that helps drive brand value across global markets.

to be shared across the organisation. It is this meticulous methodology for removing waste from processes and the company’s dedication to staff engagement that drives continuous improvement in Jaguar’s aftermarket logistics operation.

Along with a focus on driving out inefficiency in Jaguar’s aftermarket logistics operation, the company supports the car maker’s expansion into emerging markets, such as China and Russia, by project managing the delivery of new warehouse facilities. And, once the facility has ‘gone live’, delivering ongoing aftermarket parts logistics and business services support, including:

� Unipart Logistics System (ULS) – a global, end-to-end supply chain system, with an accompanying set of business processes.

� Unidial Parts Communication – a browser-based, multi-lingual management system, which links into the Unipart Logistics Systems and enables dealers to track orders in real-time.

� Unipart Parts Replenishment System (UPRS) – an online business system to manage a dealer’s inventory, improving their availability and automatically replenishing stock.

� Direct to Dealer (D2D) programme – this has increased availability and shortened the lead-time on critical orders, servicing key European dealers directly from the UK warehouse, with emergency orders coming from one of Unipart Logistics’ European facilities.

Over recent years, Unipart Logistics has developed the Jaguar Global Control Centre as the focal point to manage, monitor and provide finger-tip control of the complex Jaguar aftermarket parts supply chain, using a SAP enterprise resource planning system that provides a single version of the truth. This state-

JaguarCASE STUDY

For more information contact:Sue Pryce Unipart Logistics Unipart House Garsington Road Cowley OX4 2PGTel: +44 (0)1865 383362or visit our website: www.unipartlogistics.comRef: CSJAG10

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