A supply chain of efficient fulfilment

SPEED, TRUST AND PREDICTABILITY ARE THE
CORNERSTONES OF A STRONG RETAIL SUPPLY CHAIN.
A SUPPLY CHAIN
OF EFFICIENT
FULFILMENT
By Hailey Settineri.
hat trend or development has had the greatest effect on
transport, logistics and warehousing globally in recent
years? How well are Australian businesses keeping up with such
changes? Retail World spoke to technology and supply-chain
experts to find out how traditional supply chains are evolving.
W
To page 50
49A P R I L , 2 0 1 8
BUSINESS REVIEW – TRANSPORT,
LOGISTICS & WAREHOUSING

The experience economy
According to JDA Software
VP Industry Strategies Danny
Halim, e-commerce has had
the greatest effect on the
entire logistics segment across
the retail, manufacturing and
distribution industries.
“What Alibaba and Amazon have
done to e-commerce has created
a new kind of economy – shall I
say the experience economy?”
he said. “While product features
and prices still matter, customers
value experience much more.
“This has revolutionised the
logistics industry that used to
work based on the concept of
standard lead times and economic
order quantities; now businesses
must be able to provide shipment
options – some extend to
same-day and even on-demand
shipments – and then also
personalisation services, such
as custom packaging, labelling,
or even configuration where
technologies such as 3D printing
become relevant.”
While customer expectations
continue to rise and the supply
chains seem to be getting
faster and faster, a new wave
of entrepreneurs are capturing
the opportunities to fill the gap
in the market, such as same-
day delivery-service providers
that make money based on
commissions or fees for same-day
grocery deliveries.
“The companies innovate
well by providing integration
to the grocery retailers and/
or independent applications
that connect directly to the
consumers,” Mr Halim said.
“Grocery retailers should be
looking to partner with these
innovators if they haven’t done so.”
Mr Halim says businesses that
can offer fulfilment advantage over
others, create a satisfying digital
experience for their customers,
and even find ways cooperatively
(and profitably) to work with
Alibaba or Amazon as channel
extensions of their business will
have a greater chance for growth.
“With these trends, the focus
of their investment should be to
create a differentiating customer
experience,” he said. “This will
require a paradigm shift and
it should start at the top of the
organisation, and not be limited
by the traditional retail and
supply-chain platforms of the
past that were based on fixed
hierarchies and rules.
“The retail and supply chain
of the future will leverage
the integration of real-time
data and insights to improve
customers’ online experience,
store operations, assortment
management, replenishment
and planning. Machine-learning
and artificial-intelligence
technologies are becoming
available to help retailers and
suppliers orchestrate their future
supply chains.”
JDA says it has been
transforming the supply chain for
30 years.
“We’re here to help companies
build their digital-transformation
roadmap with industry and
solution experts that can
assess the current state of a
business, analyse the gaps
and inefficiencies, define the
requirements of the future, and
jointly design a transformation
roadmap along with quantified
return-on-investment analysis
that can help businesses move
forward,” Mr Halim said.
Data versus technology
Blockchain is one of the latest
buzzwords in the transport,
logistics and warehousing arena.
Blockchain is a distributed
database that holds records
of digital data or events in a
way that makes them tamper
resistant. While many users
may access, inspect, or add to
the data, they can’t change or
delete it.
Many businesses are looking
to implement cutting-edge
blockchain technology to improve
efficiency and supply-chain
visibility, enable traceability,
identify counterfeiting and
resolve disputes.
GS1 Australia Senior Advisor
Trade, Transport and Heavy
Industry Michiel Ruighaver says
blockchain, like all technology
solutions for sharing data,
must be established on strong
foundations.
“Data quality is one of the major
factors in the mix that brings about
business success,” he said.
“Although the data stored
and shared in a blockchain is
digitally signed and securely
distributed, requiring majority
agreement from multiple parties
to be recorded, unchangeable
and irrefutable, if there are no
data standards, can everyone
be sure they’re talking about the
same thing?
“Without data standards,
blockchain data could become
corrupt and cause confusion. Is
ABC123 a single freight unit or a
consignment with multiple freight
units moving through the supply
chain? Is freight unit ABC123 sent
by company A the same as freight
unit ABC123 sent by company B?
Is the expiry date 12-09-2018 the
12th of September [interpreted
as an Australian date] or
December 9, 2018 [interpreted
as a US date]? Without data
standards, companies run the
very real risk of putting garbage
data into a blockchain only to
pull garbage data out.”
At its core, any supply-chain
implementation needs to be
based on all involved parties
agreeing on a common way
uniquely to identify any item,
location, shipment, consignment,
asset or any other ‘thing’ that
blockchain transactions relate to.
Trading partners must also
adhere to common data
definitions to ensure all parties in
the chain can correctly interpret,
and integrate, the ‘meaning’ of
data in the blockchain. This is what
GS1 has been doing for more than
40 years across the globe, says
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50 A P R I L , 2 0 1 8
Machine-learning and
artificial-intelligence
technologies are
becoming available
to help retailers and
suppliers orchestrate
their future supply
chains.

Mr Ruighaver: “providing a solid
foundation upon which enhanced
supply-chain solutions can be
designed and built”.
GS1 Open Global Supply Chain
Standards are the most widely
used standards for efficient
business communication,
providing a common language
that supports systems across
the globe.
“GS1’s global standards for
identification and structured data
enable blockchain network users
to scale enterprise adoption and
maintain a single, shared version
of the truth about supply-chain
and logistics events – increasing
data integrity and trust between
parties,” Mr Ruighaver said.
More and more blockchain
pilots are beginning every week
and, according to Mr Ruighaver,
pilot participants soon realise
that quality data is a fundamental
component without which
participants waste time and
money having to manipulate data
from multiple sources and in
multiple formats to develop a new
proprietary standard.
“State-of-the-art technology
has little meaning or functionality
without reliable quality data,”
he said. “Data-quality problems
resulting from inconsistent data
formats, incomplete data and data
inaccuracy can be avoided if it is
standardised across the supply
chain using GS1 standards.”
Optimise fulfilment
Food and grocery companies
have a tremendous opportunity
to drive faster, more efficient and
more cost-effective supply chains
in ways they might never have
previously considered, says Toll
Group Chief Customer Officer
Damain Bishop.
“They can now incorporate
store-ready fulfilment options
where items are sequenced and
sorted by SKU and aisle from the
warehouse, which saves shelving
time in-store,” he said. “Similarly,
price ticketing, security tagging
and quality assurance can be
automated or completed earlier in
the supply chain, enabling simpler,
faster checks later in the process.
“Retailers are also looking
more closely at opportunities to
fulfil and replenish stock from
one facility or through a single
logistics partner that they can use
to leverage multiple supply-chain
capabilities.”
Toll’s new retail and
e-commerce fulfilment centre
at Prestons in western Sydney
is claimed to be one of the
most advanced e-commerce
fulfilment hubs in Australia,
transforming the way retail
orders are picked, processed,
sorted and delivered.
The site is fitted with $50
million worth of highly advanced
automation technology that will
support a range of efficiency
improvements. This includes
the ability to pick about 35,000
separate stock-keeping units an
hour, and pack boxes ready for
shipment within 30 minutes.
“When designing the site, our
brief was to create a highly
specialised and customised
processing and fulfilment centre
fit for modern retailers – and their
future needs,” Mr Bishop said.
The multi-user facility was
designed predominantly
for fashion retailers, but its
technology can readily be
deployed for clients across other
sectors, including supermarkets
and FMCG, department stores,
telecommunications and
pharmaceuticals.
The site features a “smart
and fully system-integrated”
warehouse-control system
that enables Toll to prioritise,
optimise and sequence customer
orders. It also has some of the
latest in e-commerce fulfilment
technology – such as driverless
forklifts, carton-optimising
equipment and a shuttle-based
storage and retrieval system with
automated order planning and
release functionality.
“The facility’s advanced
automation makes it capable
of processing five times
the volume of a standard
distribution centre, in only half
the area,” Mr Bishop said.
Toll claims to be working
closely with its retail clients
to enhance the warehousing,
fulfilment and delivery aspects of
the supply chain.
“Along with temperature-
controlled vehicles to transport
perishables to stores, we have
local retailers introducing
narrower delivery windows,
providing a click-and-collect
option, organising pick-ups for
return items, and offering ‘value
adds’ such as gift cards and
wrapping – all of which we can
help with,” Mr Bishop said.
Strategic mobility and the IoT
Organisations throughout the
supply chain increasingly rely on
mobility and connected devices
as vital components of their
business-critical operations,
resulting in better customer
service, lower costs and
increased productivity.
Almost half of Australian road-
transport fleets are now using
telematics systems (vehicle
monitoring) and it has been
predicted that the installed base
of fleet-management systems in
Australia and New Zealand will
reach 1.4 million units by 2021
(ACA Research, January 2017
and Berg Insight, October 2017,
supplied by SOTI).
SOTI MD APAC Adele Beachley
says implementing an integrated
IoT (internet-of-things) and
mobility-management program
that leverages everything from
smartphone and tablets to in-
vehicle sensors and connected
cameras, as well as geospatial
data from the driver’s mobile or
wearable devices, can help an
organisation:
• Enhance security: “For example,
an IoT camera is activated
and turned on when the doors
are locked and the driver’s
smartphone has exited the
vehicle. GPS trackers packed
in your merchandise are
activated if the lock on the door
is breached, whenever a delivery
person is a certain distance
away from the vehicle, or when
the merchandise is moved off
the truck. A sensor triggers an
alarm and automated messages
back to HQ when the cargo
door is opened, but the delivery
person’s mobile device is not in
the vicinity.”
• Reduce shipping errors: “Those
same GPS trackers alert HQ
when the cargo is deviating
from the intended delivery
path or area. Skids can ‘talk’ to
one another, each reading the
other’s sensors to determine
if the right skids are on the
truck, and trigger automated
text warnings to the driver if the
cargo in the truck doesn’t match
the order pick list.”
• Manage risk: “Wearables and
connected devices monitor the
amount of time a driver is on the
road. This is cross-referenced
with GPS tracking and driver-
behaviour data to not only
determine whether your people
are driving safely, but whether
they’re taking optimal routes
to ensure timely delivery of
spoilable shipments. Sensors
monitor refrigeration units in real
time to avoid delivering food that
will make the end consumer ill.”
• Improve customer service and
communication: “Make real-
time adjustments to delivery
schedules based on last-minute
requests, to deal with traffic
snarls and to recover from
shipping delays due to vehicle
breakdowns. With an integrated
IoT and mobility-management
system, all your various
widgets and apps communicate
to each other and not only
trigger automated actions and
responses, but also allow you
to proactively keep customers
well-informed.”
• Upgrade technical and
employee support: “Feed critical
information to administratorsToll’s new retail and e-commerce fulfilment centre in Prestons, western Sydney, is claimed to
be one of the most advanced e-commerce fulfilment hubs in Australia.
51A P R I L , 2 0 1 8
With an integrated
IoT and mobility-
management system,
all your various
widgets and apps
can communicate to
each other and trigger
automated actions.
To page 52

and managers, notify them of
failures and anomalies and
allow them to provide remote
service to all your devices,
from checking battery and
connection status to pushing
out updates and bug fixes.”
Ms Beachley says adding more
mobile and IoT devices can be
challenging, but successful
organisations are rising to
this challenge by gaining an
integrated picture of their
devices and related data to
relieve complexity and IT
headaches and eliminate the
risk associated with formerly
disconnected devices, separately
managed mobile fleets and ad-
hoc application rollouts.
She also says a vital component
of running connected devices
efficiently and securely is
leveraging the data they collect.
“Retailers must consider,
today, how they will manage
all their mobile, rugged, hand-
held, remote, connected, and
wearable devices into one
platform, to inform, secure, track,
automate and enable business-
critical operations all under one
single pane of glass,” she said.
“Developing a holistic and
strategic mobility and IoT
program to support and inform
their business with an integrated
approach is vital.”
Adapt to remain competitive
If you haven’t already, it may be
time to rethink your supply-chain
strategy or risk being left behind,
says BluJay Solutions General
Manager APAC Katie Kinraid.
“The logistics and supply chain
industry is undergoing some
significant changes,” she told
Retail World. “The adoption
of new technologies such as
blockchain and geocode-driven
address systems means the
industry is innovating, but also
facing its challenges from the
likes of Brexit, GDPR (General
Data Protection Regulation)
and the Notifiable Data
Breaches scheme.”
Ms Kinraid says the recent and
ongoing rollout of Amazon has
caused serious disruption in
Australia. Recently launching its
Fulfilment by Amazon service,
the giant has changed the supply
chain considerably and this
will continue with Prime set to
arrive in 2018.
“Customers expect deliveries
to arrive in the shortest
possible time, so companies
need to adapt their strategies
and supply chains to stay
competitive,” Ms Kinraid said.
“Retailers and e-commerce
players will also have to continue
to offer and develop processes
for simpler returns, as this
complex part of the supply
chain grows.
“To respond to the Amazon
effect, small suppliers will
need to facilitate effective
consumer-driven global trade.
Organising global supply chains
as efficiently as the market
leaders doesn’t work for these
companies, which don’t have the
massive pressure from their own
market power to rely on.”
BluJay Solutions delivers an
array of software and supply-
chain services to retailers
throughout Australia and
worldwide. Models such as
its Global Trade Network are
promoted as an effective way
to keep up. It allows rapid
expansion of a company’s own
supply chain by including
new suppliers, as well as
monitoring and controlling
goods movements.
Online retail
“Online retailing is creating
new supply chains that are
direct to the consumer,” he said.
“These are both big and small as
the market concentrates in big
players like Amazon, Alibaba and
large-scale niched sellers, and
also fragments, as small sellers
emerge and sell highly niched
products to a global market from
their garage or small distribution
centres. Global trade is growing
and becoming more personal.”
Warehouse automation
This has always been important
in large-scale distribution
centres, but Mr Clark says the
fragmentation of orders from
traditional large wholesale
shipments into personal sized
orders makes automation
essential for the big players to
process the volume of orders at a
reasonable cost.
“The forefront of this is robotic
storage and retrieval systems
that automatically store goods
coming in from the receiving
dock and deliver those goods to
the picker, who will assemble a
batch of outbound orders from
the items queued up for them by
the robots,” he said. “Amazon’s
Kiva robots move entire shelves
around the warehouse floor and
Exotec’s Skypod moves tote bins
around in three dimensions.”
Opposing this is the
proliferation of small and
medium businesses that cannot
afford large-scale automation
and rely on manual processing.
Mr Clark says traditional
big-company technologies,
such as ERP and Warehouse
Management Systems with
mobile barcode scanners, are
now affordable even for small
business, so they can match
the productivity of the big
distribution centres.
Digitalisation of the
supply chain
The supply chain is getting
more and more digital with
increased automation and
generation of big data from
sophisticated software, and
remote sensing devices tracking
everything that happens. Mr
Clark says the huge amount of
data about everything in the
supply chain will allow it to be
optimised with AI algorithms
that will organise freight,
warehousing and distribution
operations – even to the extent
of preparing stock before you
even know you want it.
Cloud software
Connecting your business
to global markets and support
services democratises
sophisticated logistics for
everyone. Mr Clark says the
latest cloud business systems
have prebuilt integrations with
every imaginable business
app, and also with your trading
partners.
“You can connect your
suppliers and customers all
over the world by connecting to
marketplaces in other countries,
drop shipping the stock to
Amazon or your 3PL or even
direct to customer,” he said. “It’s
available to everyone, it’s easy
and its cheap.”
Crowd-sourcing apps
Sometimes referred to as
the “Uberisation” of the supply
chain, the concept of a carrier
that owns no vehicles but simply
connects buyers and sellers
with an app, has been applied
to the freight market by Uber
Freight in the US, and GoPeople
and Passel in Australia. Mr Clark
says this trend is only going to
get bigger and extend to any
physical activity that occurs in
the supply chain.
“Similar to this idea is niche
services like Deliveroo and
Uber Eats that have done the
same thing for a product niche
by crowdsourcing the freight
to enable sellers [restaurants]
to get access to a much bigger
market of buyers,” he said.
Autonomous transport
‘Driverless’ ships, trucks,
vans, drones and even small
delivery carts are expected to
emerge, once the technology
and regulatory issues are
overcome. Mr Clark says this
technology will have a huge
impact in cutting freight cost by
half or even more.
“This will accelerate the
personalisation of the supply
chain by nearly eliminating
transport as the dominant
cost factor in a personal sale,”
he said. “It also extends the
digitalisation of the supply chain
even further as AI algorithms
optimise the routing of
autonomous vehicles for lowest
cost and greatest speed.”
Andrew Clark is the founder
of Logistics Help, whose
mission is to help small and
medium enterprises create
high-performance logistics
that deliver the promises
of the 21st century. He
told Retail World there are
several key developments
affecting transport, logistics
and warehousing.
Shaking up the supply chain
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52 A P R I L , 2 0 1 8

Emergent Cold, described as one of
Australia’s leading temperature-controlled
supply-chain specialists, and technology
disruptor irexchange, have signed a heads
of agreement to support the next phase of
growth for both businesses.
The agreement outlines a collaboration
between Emergent Cold and irexchange that
will provide temperature-controlled flow-
through DC transport and fulfilment capability
to irexchange, initially within Victoria and,
in the mid term, nationally. Irexchange says
it will provide best-in-breed technology
and analytical capabilities to facilitate the
creation of a next-generation temperature-
controlled supply-chain capability.
In December 2017, Emergent Cold acquired
local privately owned Swire Cold Storage.
The acquisition provides Emergent Cold with
numerous temperature-controlled facilities
across Australia with sites totalling more
than 300,000 pallet spaces of temperature-
controlled storage.
Emergent Cold Australia Managing
Director Greg Holt said: “We’re pleased to
partner with irexchange to develop the next
generation of supply-chain capability in the
temperature-controlled market, especially
for smaller independent retailers. There are
great synergies between Emergent Cold’s
capability and the irexchange platform
and technology, which we look forward to
realising.”
Irexchange says it harnesses the disruptive
capabilities of new technologies to create
next-generation distribution without the need
for a traditional wholesaler. The agreement
with Emergent Cold will support irexchange’s
growth into fresh and perishable products,
and enable irexchange to broaden its
customer base across numerous sectors.
“We’re continuing to build our efficient
world-class network and national footprint,”
Irexchange CEO Clive Yoxall said. “With
this agreement, we’ll deepen our support
capabilities across the independent-
grocery and smaller-retailer sectors. Our
new relationship with Emergent Cold is a
significant and important milestone and we’re
confident that both our organisations will
generate strong and sustained value through
the partnership.”
Irexchange gains access to temperature-controlled fulfilment
Toolkit to drive supply-chain efficiencies
The Australian Food & Grocery Council
(AFGC) says the release of its Common
Despatch Checklist Toolkit will be a valuable
resource for supply-chain professionals to
drive greater efficiencies to retailers.
Developed by the AFGC’s trading partner
forum (TPF), the toolkit provides a suite of
simple tools to support suppliers and ensure
deliveries to retailers have the best chance of
being quickly and easily receipted.
Project Director John Cawley says the TPF
has worked to facilitate alignment across the
retailers and simplify the task for suppliers.
“The direction provided by the tools is
consistent across Coles, Metcash or
Woolworths, and the requirements are no
more onerous to suppliers than currently,”
he said.
The toolkit contains a poster that serves
as a visual aid for checking product
before despatch; a one-page reference
guide giving more detail in relation to
basic requirements associated with pallet
quality, use and wrapping, carton integrity
and SSCC labelling; and an operational
document that despatch staff can use before
despatching goods to a retailer DC to record
any issues identified.
Mr Cawley says the toolkit is the result
of the TPF identifying an opportunity to
deliver clarity and a common approach to
optimising the supplier-to-retailer delivery
process, with a focus on the physical
flow of goods, called The Perfect Delivery
Project.
“This project will continue to develop ways
of improving supply-chain efficiencies and
will continue to deliver member services by
developing toolkits and advice to achieve
this objective,” Mr Cawley said.
The toolkit is freely available from
www.tradingpartnerforum.com.au.
CeMAT Australia returns to Melbourne
The world’s leading trade fair for
intralogistics and supply-chain management
is set to explore “industry 4.0” and greater
global competitiveness when it returns to
Melbourne in July.
In its third year, CeMAT Australia will focus
on the fourth industrial revolution, sharing
insights into how smart technology, efficient
information management systems and
data are enabling industry competitiveness
through improved processes and timely
decision making.
Across the CeMAT Exhibition and Knowledge
Theatre, industry leaders will showcase how
improved automation, machine-to-machine
communications, the industrial internet of
things (IIoT) and digitalisation is shaping the
future of warehousing, manufacturing and
intralogistics.
Harvey Stockbridge, Managing Director,
Hannover Fairs Australia – organiser of
CeMAT Australia – commented on the
importance of embracing “industry 4.0” as a
fast and flexible solution of automation and
connectivity for Australian firms to maintain a
global presence and competitive position.
“CeMAT Australia will showcase first-
hand how Industry 4.0 is revolutionising
the manufacturing, materials handling and
intralogistics industry and promises to be an
unmissable event in 2018,” he said.
“The entrance of global retail giant Amazon
to the Australian market will have a dramatic
impact on manufacturing and supply-chain
management in our region. It is now more
important than ever for manufacturers to
keep their finger on the pulse of innovation
and embrace technology to improve
processes and productivity, and remain at the
forefront of the industry.
“With live demonstrations and cutting-
edge presentations, CeMAT Australia
offers visitors the chance to see with their
own eyes how integration of warehousing
and intralogistics technology will optimise
production and reshape the industry.”
The CeMAT exhibition will showcase more
than 100 international and local companies
that are using innovative technologies such
as robotics and IIoT to redefine warehouse
processes, including Swisslog, Kuka Robotics,
Daifuku BCS, Jiangsu, Sew-Eurodrive, Dematic,
Vanderlande and Harley Industrial.
CeMAT Australia will bring together
logistics, warehousing, supply-chain, IT
and finance leaders from a wide variety of
industries, ranging from FMCG through to
resources, at the Melbourne Convention and
Exhibition Centre (July 24-26).
53A P R I L , 2 0 1 8

A supply chain of efficient fulfilment

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