How Italpasta solved a space dilemma and increased

Transcription

June 2015
$15.00
Gain
from
Pain
ow Italpasta solved a space
H
dilemma and increased production
Publication mail agreement #40069240.
Inside
3 Taking Stock
4 Supply Chain Scan
18 Italpasta’s success story
25 Manage inventory like a big-box store
26Why Target failed in Canada
28 The business case for sustainability
30Datacapture
31Pallets
34 The Leading Edge
35 IT Matters
36 Legal Link
37 Learning Curve
38 Materials Handling
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15-06-08 2:16 PM
TAKING STOCK
www.mmdonline.com
PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins
(416) 510-5130 [email protected]
ART DIRECTOR: Stewart Thomas
(416) 442-5600 x3212 [email protected]
SENIOR ACCOUNT MANAGER: Catherine Martineau
PRODUCTION MANAGER: Karen Samuels
CIRCULATION MANAGER: Barbara Adelt
(416) 442-5600 x3546 [email protected]
NEWCOM BUSINESS MEDIA INC.
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Vice-President • Joe Glionna
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Counting on you
I
f you are a subscriber to MM&D magazine you’ve probably
already received an emailed invitation to take part in this
year’s Annual Survey of the Canadian Supply Chain Professional.
If you haven’t already done so, please take the ten minutes
needed to complete the online survey questionnaire. It’s
pretty painless and completely anonymous. It asks you about
your salary, bonus, working conditions and a little bit about
the issues you face in your daily work in the supply chain
sector. And there’s a chance to win a $350 gift card!
We need your help to continue the long tradition of this survey. It’s not only
the longest-running supply chain salary survey in Canada, it’s also the most
comprehensive and inclusive. We usually receive well over 1,500 responses, more
than enough to give us a statistically valid picture of employment trends in the
Canadian supply chain sector.
Each year MM&D partners with the Supply Chain Management Association,
Canadian Shipper magazine and PurchasingB2B magazine to produce the survey.
This year we are also pleased to announce that BDO is our sponsor; their support
makes it possible to bring you the results of this important and uniquely Canadian
benchmark study.
Data collection takes place from June through July, the results are tabulated in
August, and between August and October we pore over those data, looking for
patterns, trends and anomalies.
You can watch for the results to be published in MM&D’s September-October
issue. It usually takes the form of a four or five-page feature, complete with graphs
and charts, showing average salaries broken down by various classifications,
along with five-year trends in wages, and other key indicators like hours worked,
vacation allowances, bonuses and more.
There will also be a free webinar presentation of the results in November. The
editors of all three magazines, along with the president of SCMA and a group of
supply chain HR and recruiting professionals will offer their analysis of what
the numbers all mean for people working in the sector and their employers.
I hope this explanation of the survey will entice you to take part, and add your
input to this important, and all-Canadian research. Thank you in advance; we
are counting on you!
June 2015  Volume 60  Number 03
18
25
26
28
Gain from pain
Inventory
How to manage
your stock like a
big-box store
Why Target
failed
Sustainability
Italpasta gains
space and
production
volume
www.mmdonline.com | June 2015
03MMD-Editorial.indd 3
Expansion in
Canada is not that
simple
The business case
for sustainable
practices in your
operations
3
15-06-09 3:32 PM
SUPPLY CHAIN SCAN
HEROS
RISK MANAGEMENT
BC LAW
SQUASH
Selfless acts by brave
truck drivers, p 12
Two special reports on supply chain risks due to
disasters and crime, p 6 and p 8
Workers Comp Act
updated, p 13
PanAm Games squash
court a glass act, p 14
Bringing home the beacons
Tech start-up uses Bluetooth for tracking
By Emily Atkins
A
Toronto-based start-up is offering a new
tracking technology with supply chain
applications.
BeWhere Inc’s tech uses smartphone Bluetooth
connectivity with small battery-powered beacons
to keep tabs on mobile assets or goods in
transit.
About the size of a business card and about a
centimetre thick, each beacon is equipped with
an accelerometer, temperature sensor, light sensor,
high-intensity LED and buzzer. They record data
such as temperature, motion, light and impact
and transmit this to the user’s smart phone in real
time, using a low-energy Bluetooth modem.
The LED and buzzer are aboard to help locate
the beacon in a storage area or warehouse.
The beacons default to transmitting data to the
smartphone every second, but can also be set to
transmit ten times a second. However, this will
eat through the battery, which is intended to last
two years.
They have a 250m range, says BeWhere CEO,
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03MMD-News.indd 4
Owen Moore. But even if they are out of range they are recording and transmit
when service is resumed.
On the device there’s a mobile app and a web-based interface for office use.
It will show all the beacons status in real time, and will alert users to a beacon’s
status, whether it’s got a low battery or is out of range.
So far, the company has clients who are using the technology to track mobile
equipment in the emergency services and construction sectors.
Moore says the goal is to reach transportation providers with a lower-cost
alternative to previously available tracking systems.
As with any tech start-up there are a couple technical issues to resolve. In
this case, Moore says, it’s the Bluetooth connection.
Because Bluetooth is notoriously buggy, the system uses only the “advertisement” packet to transmit data from the beacon to the phone. This allows
one-way communication and is very effective because the phone and beacon
don’t have to maintain a connection.
But in order for the phone to activate the LED or the buzzer on the beacon,
a two-way connection has to be established and maintained. At the moment,
it’s a weak point that BeWhere is working on. The software is being enhanced
to make the connection stronger.
Pricing for the service is based on the number of beacons being used. At the
moment BeWhere is not charging for users who want to try up to 10 beacons.
Above that, to 100 beacons, the cost is $200 per month. If a user were to have
over 10,000 beacons, Moore says the price would come down to about 20 to
30 cents a month per unit. The beacons are sold for $45 each.
MM&D | June 2015
15-06-09 3:33 PM
“There’s always going to be risk. The issue is how to manage it.”
People who know Distribution, know BDO.
The Manufacturing and Distribution Practice at BDO
The logistics business has never been simple. And with recent emphasis on supply
chain sustainability, higher safety standards, and an evolving regulatory climate,
it’s getting more complex. BDO’s dedicated professionals provide an exceptional
array of partner-led services to help you keep up with key issues and maximize
profitability, even in challenging times.
Assurance | Accounting | Tax | Advisory
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15-06-08 2:16 PM
RISK
MANAGEMENT
SUPPLY CHAIN SCAN
Losses due to supply chain
disruptions increased in 2014
MM&D Staff
R
apid economic growth in emerging economies,
labour disruptions, political instability and a
disease outbreak in West Africa led to a rise in business losses in 2014 according to the latest Global
Supply Chain Intelligence report from BSI Supply
Chain Solutions.
Globally, over US$23 billion was lost to cargo theft
in 2014, while the four most economically damaging
natural disasters caused a collective $32.8 billion of
losses. Within Europe, trade interruption due to an
array of strikes caused $1.5 billion of direct losses
to business.
The report is based on data from BSI’s Supply Chain
Risk Exposure Evaluation Network (SCREEN), which
provides continuous evaluation across 20 risk factors
in 203 countries. The 2014 data reveals a clear picture
of the changing global threat landscape and how this
varies by country, continent and industry sector.
A third (36 percent) of the fastest-growing exporters
are based in countries rated as high or severe risk for
human rights or environmental violations.
Forty percent of Asia’s current top 20 exporters are
rated as high or severe risk for environmental violations according to the report, which notes that the
business costs of violations are rising. 2014 saw a
Chinese court impose the country’s heaviest environmental fine to date, with six firms penalized $26
million for dumping acid waste into waterways.
Shereen Abuzobaa, commercial director, BSI Supply
Chain Solutions, commented: “Companies are facing
an increasingly wide range of challenges to their supply
chain, from human rights issues to natural disasters.
Such complexity creates black holes of risk for organizations, both directly affecting the bottom line but
perhaps more seriously, hidden supply chain risk,
damaging a company’s hard-earned reputation.”
The report warns companies, particularly those in
the apparel trade, to scrutinize their global supply
chain closely. Countries such as Haiti are noted by
the report as having 29 percent of all children between
the ages of five and 14 working in slave-like conditions. This compares to 5.8 percent in the Dominican
Republic and 8.4 percent in Jamaica.
In recognition of this growing threat of human
rights and environmental violations, governments
in Western Europe attempted to push supply chains
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03MMD-News.indd 6
towards greater compliance with social and ethical norms, increasing the regulatory burden on organizations.
Port congestion and strikes continued to severely affect business continuity
across Asia Pacific, the West Coast of the US and Germany throughout 2014.
Limited container storage space resulted in cargo discharge times of up to a
week, increasing operational costs for companies shipping through Hong Kong
by nearly $1 million per month. General strikes across Belgium caused $1 billion
of direct losses to business, while airline strikes in France and Germany cost
$300 million and $198 million respectively.
BSI’s research shows that in 2014 cargo shipments were heavily impacted by a
rapid growth in supply chain terrorism. Terrorist organizations such as ISIS
imposed systematic controls across Syrian and Iraqi territory, imposing costs of
as much as $3 million in revenue per day through extortion and supply chain
control schemes.
Europe, the Middle East and Africa saw cargo disruption rates stay stable, in stark
contrast to the Americas where they saw an increase in disruptions driven by increased
illegal drug introduction, spikes in cargo thefts, terrorist plots and incidents.
The Asia-Pacific region saw a rise in disruption, both from a growing methamphetamine trade, and the long-term challenges of counterfeit production and piracy.
While the report highlights cargo theft as a growing risk, it is still outweighed
by the economic impact of natural disasters. 2014’s top four natural disasters
caused a collective $32.8 billion of damage to businesses, with flooding across
Pakistan and India making up a third of this figure. Three quarters (75 percent)
of the top exporters across the Asia-Pacific region are rated high or severe for
natural disaster risk.
MM&D | June 2015
15-06-09 12:48 PM
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15-06-08 2:17 PM
RISK
MANAGEMENT
SUPPLY CHAIN SCAN
Cargo crime taking a toll in Europe
Three major cargo crimes a day targeted high value
products in the supply chain in Europe in 2014.
The average loss was €205,624 (approximately
CAD$289,000), according to the Transported Asset
Protection Association’s (TAPA) 2014 Annual Report
for the Europe, Middle East and Africa (EMEA) region.
For the year as a whole there were 1,102 recorded incidents of cargo crime in the region. For the 33 percent
of crimes reporting a value, total losses for the year were €74,847,422 (CDN$105,019,915).
In addition to concerns over the number of crimes and the value of losses,
TAPA EMEA says the use of violence by organized criminal gangs continued to
grow last year with a 4.5 percent year-on-year increase, driven largely by 102
violent hijackings of trucks, notably in France, Italy and South Africa.
The figures show the top 10 cargo crimes in 2014 involved a combined loss of
€32,471,000 (CDN$45,560,710). Overall, there were 15 thefts from facilities and
vehicles during the year with losses exceeding €1 million as criminal gangs
targeted everything from lottery scratch cards, cosDONE DEALS
metics, consumer electronics, and clothing and
Penske Logistics completed its planned acquisition of Transfreight North
footwear to tobacco products, pharmaceuticals, food
America, a provider of third-party logistics and supply chain solutions, from
and beverage, car parts and tires, and cash.
Mitsui & Co, Ltd Financial terms were not disclosed. The acquisition adds
new customers and associates as well as warehousing, cross-docking, and
trucking capabilities to the Penske Logistics business portfolio along with 27
locations across the US, Canada and Mexico.
Kriska Transportation Group Limited (KTG) has acquired JMF Transport (1992)
Ltée based in Valcourt, Quebec. JMF Transport will continue to be led by the
current management team, including Stephan Brizard, who will remain GM
of the company. JMF Transport currently operates 65 tractors and 152 trailers.
With the acquisition of JMF Transport, KTG now operates 535 tractors, 1,650
trailers, and employs 750 people, including owner operators.
Norwegian wholesaler Europris is investing in lithium-ion batteries supplied
by GNB Industrial Power, a division of Exide Technologies. The Norwegian
company trialled GNB’s Sonnenschein Lithium batteries in part of its forklift
fleet for six months, and lowered its operating costs significantly. Europris is
one of Norway’s biggest discount chains, with more than 220 stores. The
company has around 200 forklifts across five warehouses. Europris is replacing
around 150 forklifts, with GNB providing lead-acid and Sonnenschein Lithium
batteries, and a set of GNB chargers.
BT has selected the HighJump warehouse management system. Through the
fulfilment of more than 40,000+ orders each day, BT Supply Chain manages
the fulfilment, testing and repair of home hubs, TV set top boxes and devices
for millions of end consumers; provides tools and equipment to tens of thousands of engineers and businesses; and undertakes inventory management
across the BT Group businesses. The roll-out of the HighJump solution is
planned to take 14 months.
Colavita USA has launched Robocom’s Warehouse Management System in
conjunction with Robocom’s wholesale distribution ERP system, Next
Generation. Colavita has been running Robocom’s Next Generation ERP
Software since 1996.
Lynden International, a freight forwarding and logistics company, acquired
Haas Industries on June 1 to e nhance its network and services throughout
the US and Canada. Haas Industries began serving customers in 1989; it is
now operating as Lynden International.
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03MMD-News.indd 8
Thorsten Neumann, Chairman of TAPA EMEA,
said: “It is well-known that the majority of cargo crime
still goes unreported and that is a situation industry
has to change. In 2007, a European Parliament study
on organized theft of commercial vehicles and their
loads put the annual cost to business as €8.2 billion
and attacks on the supply chain by organized criminal
gangs have certainly increased since then. We also
know that the true cost of loss, taking into account all
of the factors that can result from a cargo crime, can
be five times the cost of the actual stolen product.”
TAPA received information on 157 ‘major’ incidents
in 2014 (thefts involving a loss over €100,000).
Continues on page 10
MM&D | June 2015
15-06-09 12:48 PM
Packsize.indd 1
15-06-08 2:19 PM
RISK
MANAGEMENT
SUPPLY CHAIN SCAN
Continued from page 8
Germany and the UK stood out as reporting the
largest year-on-year increases. Germany recorded the
highest number of freight crimes in 2014, with a 42.5
percent growth over 2013, to 285 cargo thefts. With
175 cargo crimes, the UK saw the highest percentage
growth among the top countries suffering incidents,
climbing 98.8 percent on the previous year, to 175
crimes. The Netherlands, the main location for reported
cargo crimes in 2013, saw a 9.7 percent drop over 2013
but still recorded 258 incidents overall.
Thefts from vehicles continued to account for the
biggest proportion of freight thefts with over 500
crimes, representing more than 45 percent of all incidents recorded in 2014. Over the course of the year,
there were also 193 thefts from facilities and 185
vehicle thefts. Food & beverage products were the
most targeted cargo across the region as a whole,
closely followed by consumer electronics.
“We know that organized gangs of cargo criminals
are operating across our region, particularly within
Europe, and we can clearly see that they are becoming
more daring and sophisticated in the way they target goods moving in the supply
chain,” Neumann said.
“These are not always products with a high individual unit cost. They might
just as easily be a high volume of lower cost goods that can easily be traded on
the black market. Nonetheless, we are encouraged by the response from law
enforcement agencies across the region, and by government ministries and the
European Commission, which all recognize that this is a growing trend causing
a significant economic threat and it must be addressed.”
TAPA’s analysis shows that 92.8 percent of the 1,102 cargo crimes in 2014 in
the EMEA region took place in just 10 countries; Germany, the Netherlands,
United Kingdom, France, Italy, Russia, Spain, Austria, Sweden and South Africa.
The data is collected by TAPA from its members, law enforcement agencies and
credible media sources.
TAPA is helping its members achieve supply chain resilience by using its Security
Standards, training, intelligence and networking opportunities to enhance their
own in-house security programs. As a result, analysis shows that TAPA members
are three times less likely to be victims of cargo crime.
Thorsten added: “We are working to ensure the wider implementation of TAPA
Security Standards to protect high value, theft-attractive cargo in facilities and
during the road transport process, and pushing for investment in more secure
truck parks on trunk routes across Europe. TAPA EMEA is also committed to
ensuring legislators understand the real cost and impact of supply chain crime.”
GLOBAL FOCUS
Delhi and Schiphol sign MoU
Delhi Airport and Amsterdam Airport Schiphol have signed a
Memorandum of Understanding (MoU) to collaborate on, and
promote, cargo business between them. The MoU’s scope includes business promotion, product development, knowledge sharing, training, performance benchmarking
and regulatory agency cooperation. The MoU is intended to
enhance Delhi’s and India’s logistics capabilities at a global level.
“Amsterdam can be a global gateway for Indian goods destined
for mainland Europe, as well as other markets including the US,
Africa and Latin America; Schiphol offers 319 destinations in 95
countries,” said Enno Osinga, SVP Cargo at Schiphol.
“We will build a trade lane between Amsterdam and Delhi,
making Delhi a hub and a global gateway. We will work with our
friends in Delhi to take air cargo business on this lane to the next
levels of business efficiency and operational excellence.”
He added that Schiphol sees Delhi Airport as one of the very
few global airports with a robust cargo strategy in place, and it
therefore regards Delhi Airport as a natural ally.
Amsterdam Airport Schiphol handled a record 1.63 million
tonnes of cargo in 2014, up 6.7 percent from the previous year.
Pharmaceutical products from India form a growing element of
its throughput. Delhi Airport handled 679,841 tonnes of cargo
in 2014, up 12.24 percent over 2013.
Vanderlande buys Spanish company
Vanderlande has bought Dinamic Industrial Business (Dinamic)
as part of its ongoing strategy for growth in Europe and the US.
The takeover of the Spanish company extends Vanderlande’s
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03MMD-News.indd 10
manufacturing capacity and adds a number of new products to
its product portfolio.
Dinamic has had a longstanding working relationship with
Vanderlande. A new company, Vanderlande Industries Santpedor
SL, will be established in Santpedor, Spain to continue expanding
the manufacturing facilities, and developing and selling new and
existing products. These include the Scannojet tray return system—an automated security check system for hand baggage
inspection—as well as its Beltcurve and extendable conveyors.
As part of the agreement, Vanderlande has also acquired Dinamic
Manufacturing USA Inc, in Calhoun, Georgia, which will be
renamed Vanderlande Manufacturing USA Inc. This facility will
be developed into a comprehensive local manufacturing site.
Broekman Logistics to support Cryoport in Asia
Broekman Logistics will support Cyroport’s Operations Center in
Singapore. Broekman currently supports Cryoport’s European
Operations Center.
Broekman Logistics provides secure, full-service warehousing
facilities for distribution and shipping, as well as broker services
covering the entire Asian region. In addition, Broekman is CustomsTrade Partnership Against Terrorism (C-TPAT) certified and an
Authorized Economic Operator (AEO).
The arrangement between Broekman and Cryoport is inclusive of
all solutions and support, beginning with order entry to order fulfillment, monitoring, quality testing, cleaning, and maintenance of
Cryoport Express solutions. Central to Cryoport’s global solutions
offering is the Cryoportal, the cloud-based operating platform where
orders are entered and managed.
MM&D | June 2015
15-06-09 12:49 PM
Eaton’s Char-Lynn® Gerotor/Geroler
Valve-in-Star (VIS)™ motors are the next step
in the evolution of low speed high torque
(LSHT) hydraulic motors. The VIS design
provides a more compact package, better
efficiency and higher pressure capability than
other LSHT hydraulic motors. Designed for
both mobile and industrial applications, VIS
motors are appropriate at the mill and the
logging site.
And, you can find Eaton VIS motors at your
local Motion Canada location. Our local
sales and service specialists are experts in
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up and running.
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15-06-08 2:19 PM
SUPPLY CHAIN SCAN
A glass act
Schenker moves unique squash court for
PanAm Games
Emily Atkins
A
s the official logistics supplier to the PanAm Games coming to Toronto this
summer, Schenker of Canada Limited has made a few interesting moves.
Among them, this glass squash court, which will be centre-stage in the Direct
Energy Centre, one of five competition venues on the CNE grounds. It converts
Need news NOW?
from singles to doubles play and is the only one of its
kind in the world.
The court comprises 91 glass panels, a steel frame,
aluminum brackets and a double wooden floor, and
weighs between 13,750 and 14,250 kilograms, depending on the configuration.
The court was shipped to Toronto from BC, where
it was most recently used at the 2015 Canada Winter
Games. Previously, it travelled from Germany to
Glasgow for the 2014 Commonwealth Games. It was
then shipped to Toronto and used for the 2014
Women’s World Team Squash Championship (pictured) in Niagara-on-the-Lake, Ontario.
After being stored at Schenker’s warehouse it will
be assembled over six or seven days at the Direct
Energy Centre. It requires the use of forklifts, and
pallet trucks to unload the pieces, and scissor lifts to
complete the assembly.
Once assembled, the court is used in a darkened
venue, with lighting only over the playing area. This
prevents the players from being able to see out, but
allows the spectators to see all the action.
This feat is made possible through the use of glass
that is printed with two layers of dots. A layer of dark
dots and a layer of bright dots combine to create an
optical illusion that prevents those inside from seeing
out and allows those outside to see in.
Squash is expected to b e exciting in Toronto;
Canadian players have won a gold in every PanAm
Games to date.
MM&D
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CMHDS presents donation—$8,000 raised at golf
tournament donated to Canuck Place Children’s Hospice
http://tinyurl.com/cmhds-donation
Walmart Canada to expand hydrogen use in Alberta DC—
124 fuel cells for new High Velocity Distribution Center
building in Balzac, Alberta
http://tinyurl.com/walmart-hydrogen
Some GTA carriers considering PanAm surcharges—
OTA survey responses indicate the trucking industry is
anticipating heavy disruptions to their normal service
14
03MMD-News.indd 14
levels due to PanAm congestion
http://tinyurl.com/panam-surcharges
Battery transport rules confirmed for July 1—Transport
Canada addresses concerns on new lithium battery
regulations, affirms compliance deadline
http://tinyurl.com/battery-transport
Beta testers needed for skills matching tool
The Canadian Supply Chain Sector Council needs
volunteers to test online skills assessment tool
http://tinyurl.com/cscsc-beta-testers
MM&D | June 2015
15-06-09 3:28 PM
SUPPLY CHAIN SCAN
BENCHMARKS
ABF Systems Inc of Boucherville, Quebec has been recognized
as one of Jervis B Webb’s top distributors. ABF Systems received
the award at the 32nd annual Webb Chain Conveyor Distributor/
Integrator Conference in early April.
Webb’s Distributors/Integrators provide Unibilt enclosed track
conveyors, Unibeam I-Beam conveyors, Webb Power & Free
conveyors (P&F) and chain conveyor parts. They incorporate
Webb’s conveyor products into solutions for companies in a wide
variety of industries. Webb established its Distributor/Integrator
program in 1967.
This year, the champion will be chosen based on the degree to
which safety has improved since the previous year.
KION North America Corporation, a member of the KION
GROUP AG, the world’s second largest manufacturer of industrial
trucks, won first place in the KION Group’s 2014 cross-brand,
interregional safety competition. More than 40 groups from
around the world took part in the first corporate competition of
its kind.
The purpose of the KION Group Safety Championship was to
raise awareness, improve the management and employee safety
culture and to reduce unacceptably high accident rates.
The 2015 KION Safety Championship is already well underway.
AMETEK Prestolite Power, a provider of industrial battery charging and fleet management solutions, has met the requirements
conforming to ISO 9001:2008, a set of worldwide-accepted standards for quality established by the International Organization of
Standardization (ISO) for the manufacturing industry.
By being ISO certified, AMETEK Prestolite Power complies with
various international standards, such as product quality, environmental friendliness, safety, reliability and economy. ISO 9001:2008
standards are designed to give consumers confidence when buying
products from a manufacturer.
CEVA Logistics has awarded its annual Global Supplier of the
Year trophy to the Spanish supplier Alfaland, a provider of warehousing equipment.
This marks the second time that CEVA has held the annual event
in Spain. This year’s event in Madrid was hosted by CEVA’s chief
procurement officer Simon Boggis, alongside Marco Galbusera,
managing director of CEVA in Iberia.
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National Leader for Distribution and Transportation
T +1 416 360 2360 | E [email protected]
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Leader, Distribution Sector, Southern Ontario
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Leader, Transportation Sector, Southern Ontario
Audit • Tax • Advisory
© Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd
03MMD-News.indd 15
THIS AD PREPARED BY:
FILE NAME:
DOCKET:
CLIENT:
TRIM SIZE:
COLOURS:
RYAN EDWARDS
MATERIALS MANAGMENT
GT-15-088
GRANT THORNTON
7" X 4.875"
COLOUR
15-06-09 3:28 PM
SUPPLY CHAIN SCAN
MOVERS + SHAKERS
Lisa Vegso has been promoted to general manager, Canada for
Peco Pallet. She reports directly to Adrian Potgieter and will have
responsibility for sales, service and operations. Vegso will work
with the service and operations teams to lead depot, transportation and distribution strategies in Canada, including acquiring and
expanding depot services.
Peco also plans to hire a new sales person for Eastern Canada,
who will report to Vegso.
Katherine Mouzenian has joined Mississauga-based TSI Group Inc
as its new research and marketing consultant. Joining the TSI team
with several years of experience in marketing and communications
in the not-for-profit sector, Katherine comes to us from Supply Chain
Management Association Ontario (SCMAO), where she served as
communications coordinator for almost two years. She also served
as marketing and communications specialist for Supply Chain &
Logistics Association Canada (SCL Canada) for three years.
VersaCold Logistics Services appointed Mark Dienesch leader of
its sales and marketing customer solution team. Dienesch joins
VersaCold from iMD Health where he held the role of COO.
Mark Dienesch
Previously he was vice-president sales, National
Fast Freight and held progressively senior roles
with Consumer Impact Marketing (now Mosaic
Marketing) and GE Capital.
Mark holds an Honours BA from the University
of Toronto and is currently completing his CCLP
designation from the Canadian Institute of
Traffic and Transportation.
Mark Erceg has been appointed executive vice-president and CFO
of Canadian Pacific. Erceg joins CP from Masonite International
Corp where he had been executive vice-president and CFO since
2010. Erceg brings over 20 years of financial management experience. He holds a bachelor’s degree in accounting and an MBA in
finance from the University of Indiana.
MOL (Canada) Inc is pleased to welcome Allison Watson as the
new sales and customer service manager, working out of Halifax,
Nova Scotia. He will report to Tim Harrington, vice president,
Canada, and will focus on Eastern Canada and sales activities for
Atlantic Canada supported by colleagues in Mississauga and in
18th annual SCMAO conference
navigating
change
October 22–23, 2015
Mississauga Convention Centre
Join us for Ontario’s premier event for supply chain professionals! Navigating
Change brings you two full days of quality education, networking, and the
most up-to-date information on industry trends and best practices.
SPEAKER
Jennifer Jones
Olympic Gold Medalist
CHOOSE FROM
OVER 18
SESSIONS TO:
• Learn from the leading professionals in supply chain management
• Network with over 500 of your industry peers
• Discover how the latest research, innovation and technology
can help you and your company achieve success
Register today at www.scmao.ca
03MMD-News.indd 16
15-06-09 12:49 PM
SUPPLY CHAIN SCAN
Lombard, Illinois. Watson joins MOL after 27 years at NYK Line
(Canada) where he served as a district manager of sales and a
district manager responsible for the Halifax branch office.
Eric Simard is now a director of the Montreal Port Authority. Simard
was appointed to this office by the City of Montreal for a three-year
term ending March 23, 2018. He replaces Claude J. Melançon,
who has served on the Board since March 24, 2012. Simard is a
partner with the law firm Fasken Martineau and practices law as
a civil and commercial litigant. Simard is a member of the Quebec
Bar, the Canadian Bar Association and the Board of Trade of
Metropolitan Montreal.
Antonio Fondevilla is now executive vice-president responsible
for CEVA Logistics‘s global automotive sector. The automotive
sector accounted for 24 percent of the company’s annual revenue
in 2014. Fondevilla has more than 20 years of supply chain management and automotive logistics experience. He joined CEVA in
2008 and most recently served as vice-president, global key account
management, as well as the company’s interim leader of the
European automotive sector.
03MMD-News.indd 17
Intelligrated has appointed John Sorensen senior vice-president
and general manager, Lifecycle Support Services. Sorensen has
more than 18 years of experience and a track record of managing
large-scale aftermarket service and support organizations. He
oversees all Intelligrated aftermarket services from installation and
training to maintenance and technical support.
Before joining Intelligrated, Sorensen spent most of his career at
Honeywell Process Solutions, working as a director and regional
manager before serving as general manager of lifecycle services
and solutions.
Tim Webb has been promoted to National Sales Manager at
Hyundai Forklift. Webb will direct the district sales manager team,
as well the overall sales efforts for Hyundai Forklift in the US and
Canada. He will also continue to lead the company’s product
development, training and pricing efforts.
Webb brings more than twenty years of material handling
industry experience and perspective to his new position. He has
been an integral part of the growth of the Hyundai Forklift brand
for the past six years, most recently in the role of product
manager.
15-06-09 12:49 PM
From
pains
to
gains
When Italpasta brought SSI Schaefer in to install a new automated packaging solution
in its plant, the company’s productivity doubled and many more benefits followed.
Mary Del Ciancio has the story.
I
talpasta is a premium manufacturer of pasta in
Canada that has enjoyed continued growth since
it was founded in 1989. Today, the company runs like
a well-oiled machine from its manufacturing plant
on Nuggett Court in Brampton, Ontario.
But this wasn’t always the case. There was a time
when an inefficient packaging process caused major
problems for the company.
Packaging couldn’t keep up
Historically, packaging was a bottleneck of the company’s production. At times, Italpasta even had to
stop production because it was producing more than
it could package. Employees couldn’t keep up because,
while the manufacturing line was fully automated,
packaging was a semi-automatic operation.
Once the pasta was packaged and placed in cases,
all of the cases were handled by an operator—manually building pallets and applying a handwritten label
to the finished pallet. Then a forklift driver would
pick up the pallet and deliver it to the shrink wrapper
before moving it to the shunting area.
18
03MMD-ItalPasta.indd 18
And with 21 packaging stations—eight in operation
at any given time that needed to be replenished with
empty pallets—it was a busy process with operators
(at least three at every station) and forklift drivers
working near each other in a small, congested area.
“We needed to go to the next step in automation,
especially on the packaging side,” says Riccardo
Bordignon, Italpasta’s plant manager. “Since our plant
was, on the production side, completely automated,
the missing connection was the packaging and the
palletization system.”
In addition to being a bottleneck, the packaging
process opened up the opportunity for increased error,
as well as injury, due to the manual lifting and the
close proximity of the operators and forklifts. And
because empty wood pallets were stored near the production area, food safety was also a concern.
The packaging process needed to be addressed for
the company to enjoy continued growth and success.
The problem was, the facility’s footprint was too small
to accommodate an expanded packaging area, which
at the time only accounted for one-third of the comMM&D | June 2015
15-06-09 2:53 PM
ing plant and the finished goods holding area located
in the building next door, so the proposed solution
could seamlessly extend the packaging process.
Once construction of the 50-foot bridge was completed, two case-conveyor lines were added to connect
the 21 lines of packaging to the case buffer area, where
Italpasta sorts and stages cases for palletization.
The solution starts on the production side, after the
product is boxed and labelled with one of the company’s
750 SKUs. At this point, Schaefer’s software—WAMAS
Material Flow Control (MFC) system—reads the barcode of the case, recognizes what its weight is supposed
to be, which pallet it will be on, how many cases per
layer and how many layers that pallet will be.
That case moves along the conveyor to another
station, where it is weighed. If it’s not within its preset
weight, it is rejected. If it is within the range, it moves
along the conveyor, through the bridge, to the sortation system where the case label is read again.
The system knows how many cases are available for
that particular SKU, and when a preset number is
reached, the cases are sent to one of four automated
palletizing stations where machines palletize the
cartons and auto shrink wrap them, apply SSCC/
GS1-128 code labels and prepare them for storage
until they are shunted to the distribution centre.
High-tech equipment
pany’s production area—too small by industry standards. Italpasta needed more space.
Hello, neighbour
Right next door to Italpasta on Nuggett Court was an
office for SSI Schaefer, one of the world’s largest solutions providers and components manufacturers, offering automated systems, storage and distribution,
materials handling and logistics software.
SSI Schaefer was only using the office space in its
building; its warehouse space was available. The two
companies worked out an agreement that would allow
Italpasta to use that space for its finished goods holding area (though Italpasta now owns that building).
At the same time, Italpasta determined that SSI
Schaefer technology was the best solution to its packaging area bottleneck. The technology would help to
automate and restructure the packaging process,
move material from one building to the other, and
work seamlessly with the current manufacturing
process, all with minimal impact on operations.
Bridging the gap
To implement the solution—which included conveyors,
buffers, palletizers, elevators, scales, label applicators
and software—Italpasta had to bridge the manufacturwww.mmdonline.com | June 2015
One of the things that attracted Italpasta to this solution was the sophisticated equipment.
The conveyors used at Italpasta are Schaefer’s FT+,
a lightweight, modular and scalable intelligent bin
conveyor system. The majority of them are accumulating roller conveyors.
“Depending on the customer requirements, the conveyor system layout is custom-designed to fit exactly
into a project and direct the material flow through
the facility,” says Roger Campbell, service manager
Canada, for Schaefer System International, Ltd.
The accumulating conveyors act as a small production
buffer, allowing Italpasta’s machines to function even if
there is a delay in downstream production.
“Should a conveyor line be required to stop due to
such a downstream delay,
the product carriers will
accumulate as closely as
possible to bring the product as far away from the
upstream feed as feasible;
therefore allowing the
machines to continue production output for a
while,” Campbell explains.
The layout of the conveyors at Italpasta was
designed to m atch the
The infeed point. 19
15-06-09 3:31 PM
L– R: Frank DeMichino
(Italpasta COO), Riccardo
Bordignon (Italpasta Plant
Manager), Carmen Noori
(SSI SCHAEFER VP &
Controller) and Joseph Vitale
(Italpasta Owner & Founder)
Roller-Switch Diverter (left)
and the Interior Bridge
(right).
20
production output of the machines, streamlining the
material flow while merging at the right points to avoid
producing throughput overcapacity.
A particular challenge SSI Schaefer needed to consider, says Campbell, was the unique quality of the
conveyed product—ie, certain pasta, like penne,
spreads out quite a bit if it spills. The FT+ roller conveyors are lightweight and do not have many surfaces
where product spillage could fall.
With the roller conveyors, if a spill occurs, the majority of products will fall through the conveyor to the
floor, where they can be cleaned up. The belt conveyors,
however, are sealed, so if a product spill occurs, it conveys the product to the next roller conveyor, where it
drops the spilled product to the ground to be cleaned
up. The belt on these conveyors does not have sufficient
clearance to the plate below, so there is no risk of product getting wedged below the conveyor belt.
Another piece of the high-tech solution is the case
palletizers—four of them. These are from VonGAL
Palletizers, now Premier Tech Chronos.
Robert Wallace, client services director with Premier
Tech Chronos, was involved with the installation,
and says four SPLXMK2 case palletizers were chosen
for this application because that model is a “beast
that would handle most anything you threw at it.”
The machine, he says, is user-friendly and can
handle a wide range of products.
“This machine had to handle 300 patterns, roughly
1,000 different SKUs and it had to handle three different pallets. And we did all that automatically,” he
explains.
For his part, the challenge of this installation was
that two of the palletizers had to be able to handle
product that had been rotated on its side. Using a
small, mechanical, belt-driven device called an
“upender”, the palletizer is able to turn the cases up
on end, convey them into the machine, rake them,
form a pattern, put them on a pallet and discharge it
out of the machine.
The palletizers are designed to handle up to individual layer sizes of 500 pounds, and load weights of
3,000 pounds. For this application, it had to perform
at roughly 84 loads per hour—a key requirement the
palletizers met with ease.
Another important part of the solution is the
WAMAS software, which ties the system together
and is able to handle the high speed.
“The most important part of the software is actually
the sortation system where every case entering the
system is being scanned at quite a h igh speed,”
Bordignon explains. “This system can handle 5,400
cases of finished product per hour...[and] within that
speed is able to divert and sort the different product
coming in through the conveyor to different buffers,
handle the amount of cases at the buffers, control which
palletizer to send them to when the preset number of
cases for that particular SKU is reached on the buffer,
and it handles all of the logistics of the system.”
All this, and it produces reports, too, so the company
can get a clear view of its production.
Major gains
Since the project completed in August 2011, Italpasta
has seen many benefits. First and foremost, the packaging bottleneck is non-existent.
“We eliminated that bottleneck and we are able to
produce more because the efficiency went up,”
Bordignon says.
The company went from packing 800 to 900 pounds
per person-hour before the installation, to packing
1,800 to 2,000 pounds per person-hour—effectively
doubling its productivity.
MM&D | June 2015
15-06-09 2:53 PM
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costs by 55% after installing a
VFD, savings in other parts of
his business went into overdrive..
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IES.indd 1
15-06-08 2:20 PM
The SPLXMKII palletizer
machine with cases on the
infeed liveroller and a single
layer of product on the
slide plates. Italpasta has also increased its footprint, which
allows them to increase capacity. With the additional space, packaging now accounts for about half
of the facility.
Furthermore, by not stopping production to wait
for packaging to catch up, peak performance capacity
has increased.
“Before we were peaking at maybe 1,000 to 1,200
pounds per man-hour. Right now we are peaking 2,200
to 2,400 pounds per man-hour,” Bordignon adds.
In addition, Italpasta reduced 170 person-hours per
working week—that’s seven people per shift on a threeshift operation. Bordignon stresses that no one was fired.
The packaging operation historically had a high turnover because it was a difficult job in a fast-paced environment. The company just stopped hiring, and now
it’s only the machine operators who work in that area.
And, because the system is automated, turnover has
also declined. Another bonus: employee skill level
has improved by transitioning from manual labour
to more skilled work.
The company has also noticed a drastic reduction
in errors now that the packaging operation is automated (though no numbers are available). Cases are
no longer put on the wrong pallet, and tags (no longer
hand-written) all have the appropriate code for that
particular product.
Now that the pallets and the forklifts are in the finished goods holding area, Italpasta has eliminated the
company’s earlier employee and food safety concerns,
and reduced congestion in the packaging area.
And the company doesn’t have any loss of working
hours related to product handling and pallet moving,
because there isn’t any manual product handling and
pallet moving. This, in turn, has lowered the costs
associated with employee compensation.
The solution is so efficient—now packaging 5,400
cases per hour—they will be adding three more packaging lines to the palletization system before the end
of the year.
The system is an overall success, and provides
Italpasta with many additional benefits the team
hadn’t even thought of. More than anything, though,
the system gives Bordignon confidence that every
case of pasta is going where it is supposed to go.
“What it’s done for us,” he says, “is peace of
mind.”
MM&D
PROJECT HIGHLIGHTS
System requirements:
• The proposed solution needed to be turnkey
and dynamic.
• It had to meet the company’s current packaging
maximum output, plus five years of growth.
• Cases had to be checked for weight and rerejected if they didn’t meet a preset value.
• The system had to be able to read and apply
information on GS1-128 barcodes.
• The equipment had to be able to accumulate
cases from multiple lines to form pallets.
• Only one SKU per production line per shift on
a pallet.
• The system must be able to trace from which
production line the product was produced.
Building size:
• Manufacturing area approximately 90,000
square feet
• Packaging area approximately 30,000 square feet
• Staging/holding area approximately 40,000
square feet
System components:
• Conveyor connected to 21 packaging lines
• Merging and elevating to second storey level
• Two conveyors crossing a bridge from manufacmanufacturing/packaging to staging/holding area
• Two five-lane buffers
• Conveyor sortation loop
• Four case palletizers
• Case conveyor and pallet conveyor
• Handling systems include: automatic case/layer
palletizers, scales, label print and apply systems,
elevators, sortation
• Software solution: WAMAS Material Flow ConControl (MFC) system
Productivity stats:
• Packages up to 5,400 cases per hour
• Packages 1,800-2,000 pounds per person hour
22
MM&D | June 2015
15-06-09 2:53 PM
Floor level pick module with high density pushback storage above
Pallet Racking | Drive-In | Push Back | Pallet Flow | Cantilever
Carton Flow | Shelving | Mezzanines
We don't sell our solution to your problem
It's our problem to develop your solution
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3D.indd 1
15-06-08 2:21 PM
CargoLogistics.indd 2
15-06-08 2:22 PM
Manage inventory
like a big-box store
By Nancy Harris
E
ffective inventory management is the cornerstone
of any successful business operation, big or small.
But with more limited cash flow, storage space, and
a smaller customer base, small businesses have much
less room for error. And with increased customer
expectations, small businesses are expected to have
a wider variety of products available at all times—or
risk losing a customer to a willing competitor.
When done right, inventory management can curb
costs, improve the bottom line and enhance customer
service. Big box retailers have mastered inventory
management and small businesses can take a page
out of their book in an effort to better manage their
own inventory and increase efficiency, even if you
don’t have a big fancy inventory management system
at your fingertips.
Keep detailed accounting records
The first step to effective inventory management is
maintaining up-to-date accounting of the inventory
you have on hand at any given time. One of the most
effective ways to track inventory is using a perpetual
inventory system that tracks inventory purchases,
allowing your business easy access to up-to-theminute inventory information.
Many small businesses are inclined to use paperbased systems or spreadsheets to handle their accounting and inventory, in fact, according to the 2015 Sage
State of the Start-up Survey, 51 percent of Canadian
start-up owners say they do their accounting manually on paper or on spreadsheets on a home grown
database system.
As an alternative, they should be considering
accounting software instead. Accounting software
can help simplify the process by allowing you to easily
track inventory, keep tabs on inventory levels, establish a preferred suppliers list that identifies previous
pricing for materials or goods purchased, and forecast
sales so you can plan ahead and be aware of customer
buying patterns.
Take a yearly physical count
No matter how meticulous your inventory management
records are, they often don’t account for loss of inventory
due to theft, waste or breakage. A yearly physical count
of inventory will help ensure your inventory numbers
are accurate and also help identify ways to improve your
ongoing inventory management tracking.
03MMD-Inventory.indd 25
Ask an accountant
Your dealings with an
accountant shouldn’t be
limited to tax time. They
can help you year-round
by interpreting and analyzing your inventory data to help identify ways to
improve inventory management to reduce costs, increase
customer satisfaction, and identify areas for growth.
So once you have the basics of inventory under
control, what are some more advanced inventory
management techniques and processes?
Think big data & analysis
Big data isn’t just for big companies. A number of
new tools and processes can harness the power of big
data to further optimize inventory management.
While big box stores have mastered the power of big
data and analysis, there are a number of things that
small businesses can do as well.
Using big data to help with inventory management
can let you predict customer behaviour and be prepared for any sort of influx or change in business as
a result of those predictions. This data can also help
guide your business decisions, whether it’s offering
different products or ramping up customer service.
How can you start using big data and analysis to
improve inventory control? First, look at the data you
already have and how you can best use that information to improve inventory, reduce costs and meet
customer demand.
An advanced accounting solution can help you
analyze, diagnose, and identify seasonal shifts in
demand for every item on your inventory; patterns
for large customer orders; when you are likely to run
out of stock or incur an overage; lost sales; items that
are moving slowly enough to warrant draw downs;
unsellable items; and, patterns of price reductions
and volume discounts from suppliers.
Inventory control is both a science and an art. By
mastering the basics and beginning to implement
some advanced big data and analysis techniques big
box stores use, small businesses have the potential
to significantly increase their competitiveness and
profitability.
MM&D
Nancy Harris is senior vice-president and general
manager, Canada, for Sage North America. Her
responsibilities include driving the strategy and
day-to-day operations for the small business portfolio.
25
15-06-09 11:37 AM
Why Target failed in Canada
By Paul Noël
T
aking your retail business international
is no easy feat. You face a new competitive
landscape, different geographic, supply
chain and cultural challenges, in addition
to an entirely new set of customers.
Because all of these aspects factor into
your potential success, it’s crucial to do
your due diligence before diving in.
Take Target for instance.
Instead of slowly expanding into Canada—its first
international expansion—
by opening a f ew stores
initially, the retailer opened
124 new stores here within
months. Look where Target is
now—pedaling backward just a few
short years after its initial move.
Target isn’t the only US retail giant to
struggle across the border. Sears announced in
October its plans to sell a big stake in its Sears Canada
unit in order to keep profits afloat. Electronics retailer
Best Buy was forced to close a slew of its Canadian
stores two years ago, and has done it again with Future
Shop’s recent closure, and Big Lots had to pull the
plug on all of its Canadian locations in late 2013.
Clearly, Canada expansion isn’t as “easy” as it seems.
So, where did all of these experienced retailers go wrong?
It’s easy for a company to go into a Canadian expansion
project thinking it will play out like expansions into other
US markets, but this isn’t the case. While the US and
Canada are geographical neighbors with many things in
common, there are still major differences to account for.
If US companies hope to make a splash here, they need
to plan ahead and fully understand the market. Here are
four tips for US companies looking to expand in Canada:
Get a sense of your target market
A company must first and foremost understand the
needs and expectations of its target customers here.
As with any country, customer preferences will vary
depending on what region of the country you’re in.
This is even truer in Canada due to its daunting size
and dispersed population.
Choose store locations wisely
If store locations are difficult for customers to get to or
are located in areas that don’t generate much traffic,
chances are the stores won’t incur much foot traffic
either. Location is also incredibly important for logistics
26
03MMD-Target.indd 26
purposes. Stores in less than ideal locations present
distribution challenges for company suppliers who need
to constantly replenish merchandise.
Target bought more than 120 stores from discount
retailer Zellers to jumpstart its expansion. However,
most of the stores were difficult to access for both customers and distributors. While the Zellers deal seemed
like an optimal opportunity for Target to quickly and
affordably break into the Canadian market, Target
executives should have done their homework and looked
into all aspects of the stores besides their price tag.
Slow and steady wins the race
It’s better to enter the market at a gradual pace
rather than jump right in and open a large number of stores at once. Not testing the waters first
prevents you from being able to learn the likes
and dislikes of the market, as well as control any
potential loss. Important details also slip through
the cracks when trying to operate and maintain
too many stores right from the get-go.
Target opened more than 100 stores over the course
of a few months. However, this led to many supply
chain issues and wreaked havoc on Target’s inventory
planning. Barcodes on products going to their warehouses didn’t match the numbers in its computer
system, causing shelves to come up empty and customers to leave disappointed.
Scope out the competition
No matter where you go, there will always be competition. And it’s important to know how your company
stacks up against your new competitors before making
any moves. There are fewer sizable retailers in Canada
than in the US, but the Canadians are already familiar
with the market and geographic landscape.
Target made the mistake of going in blind. Not only
were its shelves empty, but its prices didn’t match up
to customer expectations or the market standard.
Target was competing against Walmart (which has
been here since 1994), as well as Costco. Both offered
much lower prices than Target and fully stocked
shelves. Needless to say consumers quickly caught
on and forgot all about Target.
Target and countless others have tried their hand
at the Canadian market and have come up short. This
just proves how thorough retailers need to be before
making any move.
MM&D
Paul Noël is senior vice-president of procurement
solutions at spend management and procurement
solutions provider Ivalua.
MM&D | June 2015
15-06-09 12:34 PM
Smoother operations. That ’s Ryder.
Ryder.
er
Specialized capabilities and proactive services—that’s what allows us to continuously optimize
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with us can improve your fleet management and supply chain performance at ryder.com.
FLEET MANAGEMENT |
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Ryder and the Ryder logo are registered trademarks of Ryder System, Inc. Copyright © 2015 Ryder System, Inc.
Ever better is a trademark of Ryder System, Inc. PT000000 041315
Ryder.indd 1
15-06-08 2:22 PM
The business case for
supply chain
sustainability
By Duncan Wilson
G
one are the days when productivity was the main,
if not sole, measure of supply chain excellence.
While efficiency is essential in our industry, a demonstrated awareness of and meaningful attempts to
reduce environmental impacts are now an equally
important aspect of successful supply chain
operations.
Aside from being the right thing to do, incorporating sustainable practices into supply chain operations
makes good business sense.
Organizations that effectively manage environmental impacts, and are receptive to the concerns and
interests of local communities, enjoy greater levels
of public trust, stakeholder confidence and long-term
stability. Those that don’t face increasing risk and
uncertainty that can threaten their bottom line and,
ultimately, the viability of their business.
When considering the pressures, uncertainties and
risks that exist now–and even more so in the future–it
makes the question of how to sustain value creation
all the more important. Which is why sustainability
is an increasingly important driver of long-term value
for businesses across the supply chain.
Planning
The first step towards sustainability is defining what
it means for your business. It starts with engaging
your organization and key stakeholders—from industry, government and local communities—to identify
common ground and build a collective vision for
the future.
For example, our Sustainable Gateway Definition
Initiative – an ambitious vision for a world-class sustainable port in Vancouver – was developed with
extensive input from our stakeholders. As was our
Port 2050 scenario planning process, which examined
a variety of possible growth trajectories and what
28
03MMD-Sustainability.indd 28
each would mean for port operations.
This type of proactive planning and long-term
thinking helps reduce uncertainty for our operations,
as well as those of our customers and stakeholders.
It also ensures our organization will be in the best
position possible to remain competitive by leveraging
our assets, playing to our strengths and mitigating
potential risks.
Programs
Sustainability programs can and should benefit both
the environment and business.
Programs must strike a delicate balance of reducing
environmental impacts while enhancing business
productivity. For instance, through our Smart Fleet
Strategy, we have outfitted all trucks licensed to operate at the port with GPS units and are developing a
common reservation system, meaning trucks will
operate more efficiently and spend less time idling
in traffic.
It is also important to carefully weigh the financial
burden of any program. In 2015, we were the first
port in Canada to address diesel emissions from
operating equipment. Our Non-Road Diesel Emission
Program is aimed at reducing diesel particulate matter associated with terminal operations and cargo
handling equipment.
The program instituted a fee for the operation of
older, dirty equipment. However, before launching
it, we undertook extensive financial modeling to
ensure fees would not cause undue harm to a terminal
operator’s bottom line.
As some environmental programs will involve
upfront costs, one way to encourage participation
is through incentives. Our EcoAction program,
which reduces emissions from ships, offers operators up to a 47 percent discount on harbour rates
for vessels that go beyond required emission reduction levels. More than 500 ships participated in
MM&D | June 2015
15-06-09 2:38 PM
our EcoAction program this past year, which was
the equivalent of removing approximately $1 million from Port Metro Vancouver’s revenue stream—
a cost we are ready to absorb because the risk of
not addressing environmental impacts is simply
too great.
Businesses that produce environmental impacts, as
many in the supply chain industry do, only need to
consider the potential risks of not taking action, such
as being the target of collective action, legal fees or
operational disruptions, to immediately see the business case for sustainability.
Relationships
Fostering respectful and mutually beneficial relationships with local partners is also an essential component of supply chain sustainability. Without their
support, our industry would be unable to operate in
and around local communities.
For a relationship to be respectful, businesses need
to consider and, where feasible, accommodate the
input of local stakeholders. For supply chain operators, that can mean reviewing operational impacts
on traffic flows and noise levels. To make the relationship beneficial, businesses should seek out opportuni-
ties to give back and tailor their support to the needs
of local communities.
Transparency is also critical to building trust that
forms the bedrock of these relationships. Businesses
that demonstrate accountability enjoy greater public
acceptance. An example is an annual sustainability
report, which provides the public with a comprehensive overview of operational, environmental and
social performance.
Lastly, healthy, productive relationships require sustained engagement. Businesses should maintain a presence in key local communities. Some options include
assigning permanent staff and office space, participating
in relevant committees, as well as holding or attending
local events that provide an opportunity for both official
and unofficial community consultation.
Sustainability is not easy. It means thinking years,
if not decades, in advance. It often demands forgoing short-term gains in exchange for long-term
benefits. But incorporating sustainability practices
today is what will ensure there is a business to grow
tomorrow.
MM&D
Duncan Wilson is VP corporate social
responsibility, Port Metro Vancouver
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15-06-09 2:38 PM
DATA CAPTURE
News and products for your
inventory and asset tracking needs
Digi-key carries Avery Dennison RFID
Distributor Digi-Key Corporation, has added Avery
Dennison RFID tags to i ts portfolio of electronic
components.
Avery Dennison has delivered over four billion RFID
inlays to users in a variety of industries such as retail,
manufacturing, healthcare, supply chain, and many
others.
Handy railcar reader
Janam Technologies LLC launched its XM2-RFID for
Rail mobile computer. A rugged, handheld RFID reader,
the XM2-RFID for Rail offers best-in-class read range
and battery life and is the first fully integrated handheld
computer to d eliver the ability to r ead Automatic
Equipment Identification (AEI) RFID tags to the palm
of the hand.
The XM2-RFID is specially-designed to read the AEI
RFID tags required on all railcars in North America and
widely used globally, allowing rail and intermodal companies to track and monitor equipment effectively.
The XM2-RFID for Rail mobile computer reads AEI
tags from at least one meter away, and after five hours
of continuous use and more than 40,000 tag reads,
a customer’s unit recently still had 20 percent capacity
remaining in its battery.
ate with SAP Auto-ID Infrastructure for RFID tag writing
and RFID label printing from within SAP solutions.
SATO’s new CL4NX thermal label and RFID encoding
printer is the first of SATO products to include this
printer interface, with other products scheduled to
follow. With the CL4NX printer, users can print directly
from their SAP applications without any middleware
or additional programming. This significantly reduces
time and offers customers a scalable, cost effective,
rapid way to print barcodes and RFID labels within
their SAP solution-based environments.
Siemens has better memory
Siemens is expanding its RFID product range, Simatic
RF600, with new transponders that have greater memory capacities and a compact mobile read/write device.
With a capacity of 4 KB, the new UHF RFID data carriers,
RF622T and RF622L, allow large volumes of data to be
stored on tagged objects as well as facilitating rapid
access to them. They are suited to use in distributed
configurations for example in the fields of production
control, asset management and logistics.
Growing with the Granits
Honeywell’s Granit family of scanners has grown, with
the addition of the1980i wired and 1981i
wireless full-range area-imaging
scanners. Capable of reading both
1D and 2D barcodes from six inches
to 50+ feet away, these additions
to the Granit family enable
maximum operator productivity in harsh environments.
Granit is rated IP65 and can
withstand 5,000 tumbles from 3.2
ft (1 m) and 50 drops to concrete from 6.5
ft (2 m). Bluetooth wireless technology provides
freedom of movement up to 100 meters (330 feet)
from base with the 1981i, and reduces interference
with other wireless systems.
SAP-SATO printer integration
SATO’s XML-Enabled 4.0 printer interface has achieved
certified integration with SAP Auto-ID Infrastructure
7.1. The SATO printer interface has proven to interoper30
03MMD-DataCapture.indd 30
Siemens is also launching the new mobile handheld
reader, Simatic RF650M. This enables reliable identification of a large number of transponders at a range
of up to three metres. The device is specially designed
for logistics and service applications.
It has a colour touch display with a resolution of
240 x 320 pixels, a rugged keypad and a large trigger
button. Users can fold down the RFID antenna. The
device is small enough to be carried in a pocket and
it weighs only 235g, including the rechargeable battery, to allow fatigue-free use over long periods. The
MM&D | June 2015
15-06-09 12:34 PM
DATA CAPTURE
battery has a life of up to nine hours, ensuring power
for at least one shift. Users can also create their own
applications for the device based on the Microsoft
Windows Embedded operating system.
Barcode sled
KOAMTAC, Inc released a barcode sled solution for
the Samsung Galaxy Tab Active as the newest addition
to the KDC sled line for smartphones and tablets. The
Galaxy Tab Active sled has integrated the KDC20, a
miniature 1D laser Bluetooth barcode scanner, and
KDC30, a miniature 2D imager Bluetooth barcode
scanner, as a detachable configuration to maximize
business operations.
The typical business tablet requires diverse features
such as water/dust/drop protection, security, flexibility
and productivity. The proposed challenge to find a
tablet with high performance barcode scanning capability has found a solution.
The KOAMTAC Galaxy Tab Active Sled has two scan
buttons, in addition to the scan button on KDC20 and
KDC30 which enables the user to scan a barcode while
holding the tablet with both hands. Simultaneously, the
user
may use the
KDC20 and KDC30 as a
Bluetooth barcode scanner.
KOAMTAC plans to add the PCI compliant
detachable Bluetooth EMV/MSR/NFC terminal as a
mobile POS companion to the Galaxy Tab Active Sled
to support the point of sale (POS) application in 2Q 2015.
KOAMTAC’s sled design protects the user’s investment by providing an easy upgrade option. The future
of the EMV/MSR/NFC option will provide full transition
options with innovative KTSync data collection and
application generation tools.
Are You
Getting Enough
Greens?
Find out by participating in the
2015 Annual Survey of the
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CANADIAN
03MMD-DataCapture.indd 31
15-06-09 3:41 PM
PRODUCT FOCUS: PALLETS & ACCESSORIES
1. Universal walkie pallet attachment
The PalletPal Walkie from Southworth
Products mounts to any standard electric
walkie or walkie/rider pallet truck. Built
on the design of PalletPal Level Loaders,
the PalletPal Walkie uses a calibrated
spring mechanism to automatically
adjust the height of a pallet load as
boxes are added or removed. The top
layer of the load is always at a convenient
working height, allowing employees to
load or offload items with no bending,
stretching or awkward ergonomics.
No tools are required to mount the
PalletPal Walkie on a pallet truck. The
specially designed, reinforced baseframe
has generous flared openings at the end
of each fork channel to receive the forks
of all standard electric walkies for easy
pick-up and drop-off without binding.
Once loaded onto the pallet truck the
PalletPal walkie is ready for use with no
adjustments or modifications. Whether
under load or empty PalletPal Walkie will
not slip on the pallet truck forks.
Typically a worker picks orders until a
pallet is full and then drops the load,
including the PalletPal Walkie, in a staging
area where the pallet is loaded onto a
truck. The worker then picks up another
PalletPal Walkie and repeats the process.
The platform accepts any type of pallet
or skid including GEO and half pallets.
Platform recesses and non-skid base treads
allow workers to step up close to the load
to minimize reaching across the pallet.
2. PECO now offering
half pallets in Canada
PECO Pallet, Inc is now providing
half-size (48- x 20-inch) wood block
pallets for its Canadian customers. Pallets
can be shipped within 72 hours of order.
The half-size pallet is popular with
leading Canadian retailers because its
smaller footprint makes it ideal for
in-store merchandise displays and
end-cap promotions. Grocery and
consumer goods manufacturers can
build floor-ready product displays on the
half-size pallets and ship them directly to
retailers to be displayed in stores.
PECO’s distinctive red block pallets are
used to ship CPG products and fresh
produce across North America. Its
distributor network now covers over 90
percent of Canada’s grocery retailers,
including Loblaws, Walmart Canada,
Sobeys, Metro, and Costco.
Once pallets are empty, they are picked
up and returned to a PECO depot, where
they are inspected, cleaned, and
repaired as needed before being
reissued. This sustainable practice helps
to reduce waste, cut costs, and improve
safety and efficiency throughout the
supply chain.
The new PECO half-size pallet is a full
four-way, multiple-use block pallet built
of responsibly forested North American
timber.
3a
Lifdek blanks, ready for assembly.
3 Corrugated pallets
Lifdek Corporation, a developer of
corrugated paper pallet technology, is
launching its site-assembled corrugated
pallet system.
Lifdek pallets are constructed from two
flat blanks that easily fold together
without the use of adhesives or staples,
are recyclable and are received and
stored flat, thus reducing incoming
pallet freight and pallet storage costs.
Lifdek has started production of its
pallet assembly machines with Ofab Inc,
a contract equipment manufacturer in
Ocala, Florida. Lifdek has licensed
Unisource Worldwide, Inc, to distribute
corrugated products to be used with the
Lifdek machines in the US and Canada.
According to the company, its
corrugated pallets offer cost savings
through reduced weight of freight, fewer
forktruck moves and less space required
for empty pallets, the option for direct
shipping to stores and more.
3b
Assembled Lifdek pallets.
1
Southworth’s
PalletPal Walkie
32
03MMD-Pallets.indd 32
MM&D | June 2015
15-06-09 11:34 AM
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15-06-08 2:23 PM
THE LEADING EDGE
Fail faster for success
M
Ross Reimer
34
03MMD-le.indd 34
any of us have a si gnificant aversion to
failure.
From an early age we are encouraged to be careful
and avoid making mistakes. Those of us with children
can probably think of numerous times we’ve encouraged our kids to take the safe route and avoid risk. I
know of one person who decided a hockey helmet
was in order for her toddler who was learning to walk!
This thinking becomes part of who we are and dramatically affects our lives, both personally and
professionally.
But maybe a better way to long-term success is to
embrace failure.
Thomas J Watson Sr led IBM from 1914 to 1956 as
chairman and CEO. Under his leadership the company became an international force in business. By
any measure he was a hugely successful innovator
and leader of people.
Perhaps his most compelling statement was: “If you
want to increase your success rate, double your failure
rate.”
At first glance it doesn’t seem like the most intuitive
way to approach success. If we heed Watson’s advice
we need to be willing to fail more.
So what does it look like to employ this kind of
thinking in our working lives?
First, we have to recognize that as leaders we have
enormous influence. Perhaps you lead an entire corporation or maybe you lead a small team. Either way
the tone you set and the actions you take shape the
culture for your team.
In an era where margins are generally thin for most
business ventures it can be easy to look only for incremental gains. This kind of thinking is rooted in minimizing risk and rarely produces breakthroughs and
dramatic innovation.
What would happen if you employed Watson’s mantra and regularly met with your team to explore risky
innovation where failure was part of the process?
Envision a brainstorming session where there are
no bad ideas. The team tackles one of your most
significant business issues in this fashion. You arrange
for an interruption-free and off-line location where
each person is encouraged to explore boundaryless
solutions with no critical judgment from anyone. The
whole exercise is focused around building on each
other’s ideas. There’s no pressure to solve the problem
in one brainstorming session, and when it’s done you
may not have the solution you’re looking for.
What you will have is the beginning of fresh thinking that embraces a new process where failing is part
of the road to success. It will lead to new ideas and
potential solutions.
As you employ the new ideas and make decisions,
the resulting outcomes may or may not be successful.
In fact there is a good chance that obstacles will rise
and midcourse corrections will be required.
This kind of strategy may well lead to failing faster.
It’s at this point that your cultural decision to employ
this kind of thinking will be tested. As failure in a
particular area becomes clear will you quickly regroup
and learn from the results, or will you fall back into
much less risky behavior?
The fact is that significant innovation depends upon
a collective mindset that accepts failure as an essential
part of the path to success. The Wright brothers would
never have gotten off the ground without embracing
this truth and Neil Armstrong wouldn’t have walked
on the moon. Those are dramatic examples, but the
final success of their ventures was entirely dependent
on thousands and thousands of innovative ideas that
didn’t prove successful.
Many midcourse corrections and the determination
to pursue success were the key.
I’ve been fortunate to be part of numerous conversations both personally and professionally over the
years that were couched in the desire to pursue success
while accepting setbacks along the way.
If I were to list some of the ideas that I, and others,
have come up with, many of them would look very
suspect. That’s okay. Alongside the crazy ideas are
some pretty interesting solutions to complex problems. Solutions that would have never have come to
the forefront without the willingness to embrace the
idea of two steps forward, one step back.
So can Thomas Watson’s exhortation to fail faster
be an effective tool in our daily working lives? I believe
it can if we, as leaders, are willing to adjust our thinking; if we will purposefully set aside some blocks of
time to allow ourselves to look for solutions that are
truly outside the box.
Over the long haul there’s no question we will look
back on the successes and see how they were directly
linked to embracing the inevitability of failure on the
journey.
MM&D
Ross Reimer has over 30 years of experience in
transportation/supply chain. He was an owner and
senior executive with Reimer Express Lines and for
the last 15 years has been President of Reimer
Associates, a recruitment firm within supply chain.
[email protected]
MM&D | June 2015
15-06-09 11:35 AM
MAXIMIZE IT
As-A-Service and the Cloud
I
have had quite a few non-tech people ask me the
same question over and over: “What is ‘as-a-service’?”
That is usually followed immediately by “What is this
‘cloud’ I keep hearing about?” So, for those of you nodding your head right now, this column is just for you.
Simply stated, “as-a-service”, referred to in this
article as AAS is a service that is specific and usually
uses the Internet as a delivery mechanism. If you do
online banking, it’s a “service” you access via the
Internet. So, in today’s nomenclature, you could call
it BaaS, “Banking-as-a-Service” that you access in
the cloud (via the Internet.)
Wait! Can it be that simple? Yes, it is. Us IT people
like to give acronyms or cute little names to everything; it adds to the mystery of things and makes us
feel important. “You simply use it as a SaaS offering
in the cloud.” We don’t do it on purpose. It’s just some
common flaw in our IT brains.
So why is AAS attractive? Easy. All of the expenses
for the service (eg hardware, software, IT personnel,
development, disaster recovery, testing, maintenance,
upgrades, etc) are absorbed and provided by the service
provider. This means all the headaches around maintaining and growing a service or application are theirs.
You don’t need IT resources to run and maintain it.
Ok, that’s great, but you must have to pay for the
provider having to buy and maintain everything,
right? Well, yes and no. Usually, the price is very
reasonable for the solution you are getting. In fact,
when you compare it against doing it yourself (an “on
premises”) solution, the price is very attractive and
is often the selling point.
Ok, so wait a minute, someone else has to buy and
maintain everything so there isn’t anything you have
to do, you access it from the Internet and it’s cheaper?
There must be a catch.
There is a catch. You never actually own the solution. It is based on a subscription model, so as long
as you pay (usually annual fees,) you have access to
the service. That isn’t really a downside since the cost
of buying or developing an application, procuring
the hardware, maintaining everything and absorbing
the risk is usually a higher cost than the service.
Also, economies of scale allow the service provider
to provide top-notch technology that would normally
be out of reach for most organizations due to cost. A
good example of this is security. The “cloud” service
providers can afford to implement a very robust security
environment that will cover all clients and will generally far surpass what we can all individually implement.
This economy of scale upside extends to almost every
03MMD-mi.indd 35
other facet of the application infrastructure.
“Ok, that’s great, but my company is different and
we like things presented to our employees in a certain
way and have unique processes.”
You’ll be happy to know there are companies who
will work with your organization and your service
provider to customize the service even further so that
it meshes with your organization seamlessly. This
can be anything from cosmetic enhancements and
additional functionality to integration with your
financial and/or enterprise software. The result is
typically a transparent solution with the desired functionality that looks and acts home grown.
You need to actively manage the partnership with
your service provider as you would any other. Ensure
you adequately address the following:
• Service Level Agreements (SLAs): what is the time
frame, by criticality, for resolving issues—and what
are the ramifications if those are missed?
• Data: Do not assume you own the data! Make sure
you have it in writing that the data belongs to your
organization and that there is a plan in place to
access your data should the vendor close shop.
The beautiful thing about AAS is because it requires
only an Internet connection, you can access it from
almost anywhere. The bad thing about AAS is that it
requires an Internet connection. If it goes down, you go
down. However, most reputable AAS providers have an
“offline” mode for this exact scenario. The offline mode
will allow you to keep working and synchronize your
data when an Internet connection is re-established.
It never ceases to amaze me how old things become
new again. Years ago we had the mainframe and the
terminal access to the centralized applications. We then
moved to the decentralized model for many years with
the personal computer. Now, with AAS and “the cloud”
we have basically moved
back to t he mainframe
model, hailing it as the
latest and greatest new
thing. I better go look for
that black fedora I wore in
the 80’s; it may be worth
something!
MM&D
Kevin Squires
Kevin is Vice President,
Business Technology for
the Econo-Rack Group
of companies (Konstant,
RediRack, Econo-Rack,
Technirack.)
35
15-06-09 11:35 AM
LEGAL LINK
Honesty is the only policy
“Whoever is careless with the truth in small matters cannot be
trusted with important matters.” -- Albert Einstein
Marvin Huberman
I
n its landmark decision in Bhasin v. Hrynew,
released November 2014, the Supreme Court of
Canada established a general doctrine of good faith,
which requires the parties to a contract to “perform
their contractual duties honestly and reasonably and
not capriciously or arbitrarily”.
Justice Cromwell, writing for a unanimous court,
explained honesty requires that parties to an agreement
“not lie or otherwise knowingly mislead each other
about matters directly linked to the performance of the
contract.” Parties to a contract are now required to have
“appropriate regard” for the other party’s interests.
Although the contracting parties need not subordinate their own interests to the other party’s interest,
they must not seek to undermine those interests in
bad faith. The Supreme Court was not attempting to
impose a duty of loyalty in contractual relationships,
but rather decided that there must be a minimum
standard of honesty between contracting parties.
It is of great importance to note the doctrine of good
faith has existed for a long time in respect of certain
types of contracts, the two most important of which
are insurance and employment contracts. This article
will focus on the duty of good faith and fidelity in
respect of employment contracts.
Good faith and fidelity
There is implied, as a matter of law, in every contract
of employment a duty of good faith and fidelity. This
requires that an employee act honestly and faithfully
during their employment. An employee must:
• Put the employer’s best interests first and avoid any
conflicting personal interests;
• Avoid competing with the employer during the term
of employment;
• Avoid any personal interest sufficiently connected
with the employee’s professional duties that there
is a reasonable apprehension that the personal interest may influence the actual exercise of the professional responsibilities;
• Avoid the unauthorized disclosure or appropriation
of the employer’s trade secrets and confidential
information;
• Not conceal from the employer “facts which ought
to be revealed”; and
• Provide full-time service to the employer.
If the employee’s breach of the duty of good faith and
36
03MMD-ll.indd 36
fidelity is sufficiently damaging to the employment relationship, the breach is grounds for summary dismissal
of the employee by the employer. As stated by the House
of Lords in Malik and endorsed by the Ontario Court
of Appeal in Spendlove v. Thorne, Ernst & Whinney:
“…the trust and confidence required in the employment
relationship can be undermined by an employer, or
indeed an employee in many different ways…the conduct
must, of course, impinge on the relationship in the sense
that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the
employee is reasonably entitled to have in his employer.”
Potential harm is sufficient
For an employer to establish just cause for dismissal
on the basis of breach of the duty of good faith and
fidelity by an employee, an employer need not prove
actual prejudice; potential harm is sufficient.
As long as the employee continues in the employment relationship with the employer, including any
period of working notice, the duty of good faith and
fidelity continues in full force and effect. If the duty
of fidelity is breached by an employee during the
notice period, the employer may well have the right
to dismiss him or her for just cause, even if the
employer previously agreed to pay severance.
Once the employment relationship ends, employees
are generally not bound by the duty of fidelity unless
there are specific contractual provisions or other legal
duties making the employee bound to continue that
requirement, or unless there are trade secrets or confidential information which are the subject of a continuing duty of fidelity on the part of the employee.
Last thoughts
The duty of good faith and fidelity in the employment
relationship is not one-sided; there are reciprocal duties
on both the employer and the employee.
It is clear then that for employees, and employers,
honesty isn’t everything, but it’s the core duty which is
relied upon by the courts to compel “faithful service”
in an employment relationship so as to protect the legitimate interests of both contracting parties.
MM&D
Marvin J. Huberman (www. MarvinHuberman.
com) is a Toronto trial and appellate lawyer,
mediator and a chartered arbitrator.
MM&D | June 2015
15-06-09 2:40 PM
LEARNING CURVE
Managing retail relationships
T
oday’s retailers face a great many challenges, but
consumers’ lack of buying power is likely to cause
the most searing pain. Still, while other Canadian
economic trends such as low consumer confidence,
higher personal debt and a weakening dollar indicate
much of this pain could linger, there are a few steps
retailers could take to quell the worst of it.
Consumer confidence (which is a reflection of employment and debt factors on Canadians’ spending habits)
has dropped 0.6 percent from Q4 2014 to a disappointing
96 percent. Meanwhile, Canadian retail sales rose only
0.7 percent in March this year, partially due to a consumer price index increase of 1.2 percent.
The Canadian unemployment rate held steady at
6.8 percent, with an increase in employment of 0.8
percent in the last 12 months and 47,000 additional
full time jobs gained in April.
Due to a weakening Canadian dollar, some analysts
expect the added cost of imported goods will result
in rising prices and threaten the likelihood of
increased consumer spending. Current debt levels
are also causing analysts to grow more concerned for
Canadians’ financial stability, with households with
incomes between $50,000 and $100,000 having
between 37 and 38 percent debt levels. Household
debt to disposable income has risen to an alarming
163.3 percent.
At least people are in a buying mood. If a modest
increase in spending does happen, retailers will gain a
bit of wiggle room to experiment with new (or at least
different) ways to capture Canadian consumer dollars.
The biggest change influencing retailer sales is the
fact that three in four Canadians are buying products
online. As a result, the leading players are changing
their ways.
Although Amazon remains the e-commerce titan,
Walmart is gaining traction in online sales. Walmart
sales were sluggish in traditional markets last year
with a 0.6 percent decrease. In response, the world’s
largest retailer recently embraced a digital/physical
retail strategy and triggered a huge 22 percent increase
in online sales and a total of 0.6 percent increase in
overall sales.
With the purchase of some of the former Canadian
Target stores’ real estate, Walmart is set to grow its
grocery business too, which now represents 55 percent
of its product mix. In the meantime, Amazon posted
a 19.5 percent increase in overall sales, while also growing its grocery business. While it enters a faceoff with
Amazon, Walmart will leverage its global 4500-store
network to help distribute the goods purchased online.
03MMD-lc.indd 37
This could be a wise move. After all, online stores
can sometimes represent more than just a threat to
brick-and-mortar-only retailers—they can be downright infuriating. This is never clearer than when a
customer uses a retailer’s physical store to do a detailed
in-person product check before simply going home to
buy that same product from a different retailer online.
For this and a host of other reasons, every retailer
should be highly invested in understanding the path
to purchase. In other words, there is great value in
obtaining customer contact and buying information,
because these details offer data retailers can use to
further assist and/or influence buyers.
Shoppers tell retailers what they want through their
buying behaviour, and retailers can then market to
them with this critical information in their back
pockets. Then, they can combine and bundle complementary items or play around with options, models
or the customer experience as necessary.
Online retailing inherently provides a way to get
valuable information,
when a retailer manages
to collect and save it.
Successful retailers make
sure to l everage such
information to extend
their reach to larger consumer bases, by tracking
patterns in buying choices
and customer trends.
After all, it is never a
bad idea to understand
more about the way purchases are done or to
learn how customers feel
about, for example, prepay, mobile pay, loyalty cards
and other methods of payment.
One of the most important things to offer when
selling products online is a set of delivery options
around such factors as time, location and packaging
type. Flexibility on this front will allow you to meet
many essential customer needs.
But some things never change. The continuation of
the buyer/seller relationship hinges, as always, upon
the ability of the retailer to engage, satisfy and reengage and re-satisfy the customer.
MM&D
Tracy Clayson
Tracy Clayson is managing partner, business
development of Mississauga, Ontario-based
In Transit Personnel. [email protected]
37
15-06-09 11:36 AM
MATERIALS HANDLING
Dimensional pricing – Part II
I
Dave Luton
38
03MMD-mh.indd 38
n coping with an external change to the warehouse
environment; like dimensional small shipment pricing, sometimes it is best to start with reducing the issue
to its basics and see if this can solve the problem.
To keep things simple, one approach to solving this
problem is to ship smaller packages. Smaller packages
can have advantages other than lower freight costs.
But how smaller packages are integrated into existing systems is where the complication sets in. Let’s
take a look at how this plays out.
Head over to your small shipment packing department. In many warehouses small shipments do not
use the original exterior packaging to ship the product
but the inner contents are uncased (assuming corrugated packaging) during the picking stage and
recased once they reach packing.
At the packing stations you want to view and classify
your picked order contents into a couple of categories:
Damage-prone or not damage-prone, and if there is
a combination, what proportion is there of each?
How much wasted cube in the finished packages
before they are sealed? A little or a lot?
Placing these two categories on a simple X-Y grid
allows you to categorize your situation and starts the
process of solving the problem.
This creates four apparently simple basic situations:
A: Not damage-prone and a lot of wasted packaging
cube;
B: Not damage-prone and limited wasted cube;
C: Damage-prone and a lot of wasted cube;
D: Damage-prone and limited wasted cube.
From a warehousing viewpoint let’s look at the
apparently simplest of the four basic combinations
to solve first: Not damage-prone and a lot of wasted
cube.
The bottom line is you are over-packaging. This
one can be easy to solve by putting your shipment
packaging on a diet.
Assuming corrugated packaging, use smaller boxes.
Or—going for the lowest cube option—use one of:
polybags, thin envelopes or bubblewrap envelope
packaging.
These latter solutions, however, can create another
challenge in your processes. This is particularly true
for larger warehouses and also in the downstream
logistics system.
What’s the problem? The increased variety of package types, and particularly soft bottomed ones like
polybags, are a no-no for many types of automated
conveyor systems.
Traditional automated conveyor systems use cor-
rugated containers because the flat, rigid bottoms
provide an ideal conveying surface and the rigid sides
or tops can be positioned for proper throughput gapping and sortation scanning.
Let’s take (the admittedly extreme) example of a
roofing supply company that, as a promotion, that
ships a hammer with its logo on the handle to all of
its customers; one hammer per customer each year.
They use a fulfillment centre that has a nice, automated overhead conveyor system. In the past, using
corrugated packaging was no problem. But, faced
with the new dimensional rules they switch to polybags as a cost-saving measure at the suggestion of
their traffic manager, who looks like a hero.
But guess what happens in the fulfillment centre,
particularly as polybags do not eliminate the shape
of the interior contents? (Hint: the next time you visit
there, you see the staff have started wearing
hardhats.)
It could get worse. Some conveyor systems use
sensors to regulate flow by sensing the beginning
and end of packages. Cardboard boxes have a nice
clean exterior shape to determine front and back
edges that allows the conveyor sensors to give proper
gapping to regulate flow. Bags do not have the same
characteristics.
Finally, the labels on corrugated cases can be successfully applied on a rigid surface and provide accurate positioning and presentation for label sortation
scanning. Bags can cause both label application issues
and legitimate scanner reading concerns.
The bottom line is to save the money on freight,
you may need a supplementary conveyor system or
enhanced controls.
Remember, we are dealing with the best case of the
alternatives. Damage-prone contents are no longer
cushioned and are subject to shocks and other issues
caused by both interior and exterior (those used by
your courier) conveyor systems.
In summary, a transportation cost change this fundamental can have huge impacts on small shipment
warehouse operations. They include everything from
supplier packaging, to receiving, picking and even
scanning and WMS.
While I will touch on it in future I recommend that
now you give it some attention in your own operation;
before you wonder why your forecast is way off for
the year.
MM&D
Dave Luton is a consultant in the greater
Toronto area. [email protected]
MM&D | June 2015
15-06-09 11:35 AM
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15-06-08 2:23 PM
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2:25 PM

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