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

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Utilizando EPC para reducir los costos en producción de kiwis en Nueva Zelanda

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

  1. 1. New Zealand Using EPC to cut costs at NZ’s largest kiwifruit packhouse Dr Peter Stevens Chief Executive, GS1 NZ
  2. 2. First, a Word About New Zealand Terminology… T i l kiwis kiwis kiwis kiwifruit 2 © 2009 GS1 New Zealand
  3. 3. Contents New Zealand Introduction Eastpack’s Supply Chain Solution Overview Project Timeline j Results After 1st Season 3 © 2009 GS1 New Zealand
  4. 4. Where (and with whom) it all New Zealand started … t t d 4 © 2009 GS1 New Zealand
  5. 5. New Zealand’s Bay of Plenty Zealand s New Zealand 80% o New Zealand’s of e ea a d s kiwifruit production 5 © 2009 GS1 New Zealand
  6. 6. 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
  7. 7. Te Puke site: New Zealand • purpose built • < 7 years old • packs 8m t k 8 trays, of which 5 t f hi h 5m trays are GOLD 7 © 2009 GS1 New Zealand
  8. 8. New Zealand Edgecumbe site: • 3.5m trays of GREEN and GOLD 8 © 2009 GS1 New Zealand
  9. 9. New Zealand Opotiki site: • 3.5m trays of GREEN and GOLD 9 © 2009 GS1 New Zealand
  10. 10. Contents New Zealand Introduction Eastpack’s Supply Chain Solution Overview Project Timeline j Results After 1st Season 10 © 2009 GS1 New Zealand
  11. 11. Eastpack Supply Chain (simplified) New Zealand $1b+ 11 © 2009 GS1 New Zealand
  12. 12. EastPack s EastPack’s Responsibilities New Zealand To deliver in full on time in spec (DIFOTIS) • Checkpoint at the wharf • Replicated at coolstore door DIFOTIS Penalties are severe • NZ$ 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
  13. 13. Bonus System as well New Zealand If EastPack can be flexible to fill late order there is the ability to earn up to NZ$ 200 / pallet 13 © 2009 GS1 New Zealand
  14. 14. 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
  15. 15. 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
  16. 16. 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
  17. 17. Solution needed… New Zealand To quickly find product in the coolstores A system that requires no human intervention. 17 © 2009 GS1 New Zealand
  18. 18. Contents New Zealand Introduction Eastpack’s Supply Chain Solution Overview Project Timeline j Results After 1st Season 18 © 2009 GS1 New Zealand
  19. 19. Solution Overview New Zealand 19 © 2009 GS1 New Zealand
  20. 20. Solution: EPC-enabled Pallet New Zealand Cards C d 20 © 2009 GS1 New Zealand
  21. 21. Solution: EPC-enabled New Zealand Forklifts F klift 21 © 2009 GS1 New Zealand
  22. 22. Solution: Location New Zealand 22 © 2009 GS1 New Zealand
  23. 23. Solution: Putting It All New Zealand Together T th 23 © 2009 GS1 New Zealand
  24. 24. Contents New Zealand Introduction Eastpack’s Supply Chain Solution Overview Project Timeline j Results After 1st Season 24 © 2009 GS1 New Zealand
  25. 25. 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
  26. 26. Contents New Zealand Introduction Eastpack’s Supply Chain Solution Overview Project Timeline j Results After 1st Season 26 © 2009 GS1 New Zealand
  27. 27. 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
  28. 28. Coolstore Map: Pallet New Zealand Locations L ti 28 © 2009 GS1 New Zealand
  29. 29. Coolstore Map: Forklift New Zealand Locations L ti 29 © 2009 GS1 New Zealand
  30. 30. 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
  31. 31. New Zealand 31 © 2009 GS1 New Zealand
  32. 32. 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
  33. 33. The Team That Pulled It Off… New Zealand 33 © 2009 GS1 New Zealand
  34. 34. New Zealand 34 © 2009 GS1 New Zealand

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