Using EPC to cut costs at NZ's largest kiwifruit packhouse

New Zealand Using EPC to cut costs at NZ’s largest kiwifruit packhouse Dr Peter Stevens Chief Executive, GS1 NZ

EastPack Limited New Zealand Established in 1983 in Edgecumbe 1983: packed 60,000 trays 2008: packed 15.7m trays 12% of industry GREEN trays 24% of industry GOLD trays 42 coolstores at 3 sites 6 © 2009 GS1 New Zealand

EastPack s EastPack’s Responsibilities New Zealand To deliver in full on time in spec (DIFOTIS) • Checkpoint at the wharf • Replicated at coolstore door DIFOTIS Penalties are severe • NZ$ 400 / pallet main season • NZ$ 500 / pallet kiwistart season • Total cost 2007: NZ$ 280k Penalties for not loading ‘kiwistart’ product by the end of Week 24 12 © 2009 GS1 New Zealand

Issues with meeting orders New Zealand Orders are comm nicated 10 da s in ad ance communicated days advance Orders are changed up t 2 d Od h d to days b f before close l load date • change in market requirement • vessel arrival dates change • fresh fruit deteriorates faster than expected 14 © 2009 GS1 New Zealand

Issues with meeting orders New Zealand 6,600 different SKU’s • often pallets need reworking to meet orders S o t oad g Short loading window do • GOLD = 20 weeks • GREEN = 40 weeks The bottleneck was finding pallets in the coolstore 15 © 2009 GS1 New Zealand

Large Seasonal Workforce New Zealand 1,300 seasonal staff employed , p y 31 different nationalities Relatively short picking season, 83 days. days Packing main pack & Controlled Atmosphere product: 140 days. 16 © 2009 GS1 New Zealand

Project Overview New Zealand Initial Meeting: • 18th Jan 2007 • General information about the benefits of RFID, EPC Scoping to RFP (Request for Proposal): • March - May 2007 Proof of Concept to Pilot: • July to October 2007 y Full Roll-Out • December 2007 to April 2008 Target: 100% of pallets t k d b start of season (20th M h • T t f ll t tracked by t t f March 2008) • 42 coolstore @ 3 sites, ±30 forklifts, 12,000 SkyMarkers, etc… 25 © 2009 GS1 New Zealand

Results New Zealand 2007 2008 DIFOTIS penalties $280k $90k ‘Kiwistart’ penalties $250k Nil Coolstore managers 1 Nil ‘burnt out’ Forklifts 24 16 Gold Fruit Loss 8% 4% Volume (T V l (Trays) ) 1.8m 18 2m (+10%) 2 ( 10%) *Investment: USD300,000. ROI= 1 season 27 © 2009 GS1 New Zealand

Underway now… New Zealand 1. Further mining the data 2. We are out of our 24 months ‘non-compete’ clause 3. Targeting Eastpack’s competitors & single-desk 3 T ti E t k’ tit i l d k exporter (Zespri) 30 © 2009 GS1 New Zealand

Overall New Zealand We have taken the chaos out of the coolstore Staff feel like they are part of a winning team again again. We met the KPI’s and capex requirements of Eastpack’s board. Eastpack increased shareholder value. E t ki d h h ld l 32 © 2009 GS1 New Zealand

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Using EPC to cut costs at NZ's largest kiwifruit packhouse

by RFIDPOINT on Nov 25, 2009

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