From the desk of Phillip Austin

Transcription

1 CHEP s unique view into supply chain logistics From the desk of Phillip Austin Our connections with our customers, serving your everyday needs and simply helping make your supply chains better, are what adds value to our business, and are what drives us to keep striving for better in all aspects of our operations. CHEP s unique position in connecting with and integrating so many of Australia s supply chains also provides context to what seems to be an increasing uncertainty in the Australian economic environment in the three months since the last edition. Consumer confidence dropped below neutral in May, retail sales growth has slowed, and the long running and well known pressures on local manufacturing have again been highlighted, most recently in the automotive industry. Our customers are feeling this uncertainty and there are common issues in our many discussions with you: a relentless focus on inventory management, how to innovate as a key for positive engagement with your customers for mutual growth, how to manage import supply chains for maximum received product quality and availability, and how to work together with suppliers to lower the total cost of doing business. In uncertain times, CHEP s value as a supply chain partner is reinforced through: Our breadth, depth and reach of people, product and location which offers you not only certainty, but the flexibility and availability to respond to opportunities for growth as soon as you spot them or make them Our product innovations for more effective retail promotion, for more efficient produce and protein supply chains, and for enabling low-damage/high-yield international imports which are in the market both here in Australia and in New Zealand. They work, and they are available now to support your customer engagement and growth plans Our customer facing teams who are having great success working with you to build joint business plans that identify mutual costs savings and sharing. I m delighted that they are saving a number of our customers significant unnecessary and wasteful costs by improving asset control. In this edition, you will see and hear case studies from just a few of our customers who are working with CHEP to tackle the challenges and opportunities of these uncertain times. You ll also read about CHEP s ongoing and growing commitment to sustainability. We have always had a strong foundation of sustainable sourcing, species selection that meets Australian cross-border bio-security requirements, and proven carbon reductions outlined through ISO14044 Life-cycle assessments. As we look for better, we are exploring how we can make a difference, partnering with many of our customers and the AFGC in their commitment to sustainability. At CHEP, we re committed to setting new standards of leadership in equipment pooling, and we thank you for choosing CHEP. Phillip Austin President CHEP Australia & New Zealand In this issue WHY ALDI DRIVES PACKAGING INNOVATION TRANSPORTER REDUCES PAIN OF CORRECTIONS EQUIPMENT CONTROL TRAINING GOES ONLINE CHEP STREAMLINES SPICY SUPPLY CHAIN TARGETING A MORE SUSTAINABLE SUPPLY CHAIN CHEP is a Brambles company 1

2 Why ALDI drives packaging innovation Since ALDI opened its first store in Australia in 2001, it has been an innovator and leader in the use of reusable packaging. ALDI s innovative approach has been recognised by the Australian Retailers Association, and in 2009 ALDI was named Retail Innovator of the Year. The retailer introduced the concept of one-touch display pallets, used by its European counterparts for fast moving items, to Australia. For many years ALDI ran its own display pallet pool, but in 2009 asked CHEP to step in. The move coincided with the introduction of the Multi-Purpose Beverage Tray. ALDI Australia Logistics Director, Shane Hafiz says: ALDI is a hard discounter so in terms of packaging we are looking for one touch which makes it more efficient. We have many fast moving lines which come in on display pallets, for us that s one touch, which means the product comes in, is stored for a very short period of time and then would go straight to store. In terms of pooling equipment, we don t see it as our core function. CHEP has the expertise to manage the equipment; they have the understanding and the background in how to have the right equipment at the right place at the right time; that s what they specialise in. We ve worked very closely together to come up with solutions for the display pallets, the beverage tray and the produce crate. Beverage supply chain In the late 2000s, ALDI Australia challenged CHEP to develop an innovative one-touch solution to move beverages through the supply chain. The result was the Multi-Purpose Beverage Tray launched in 2010 which integrates with the Display Pallet to become a supply chain solution. ALDI s beverage manufacturers pack straight from their production line into the beverage trays, which stack five high and two across on a display pallet. The stack is then strapped and moves through the supply chain. When it arrives at the ALDI distribution centre dock, it is already shopper ready. It moves straight across the warehouse without being picked or packed and is sent direct to retail stores. In terms of pooling equipment, we don t see it as our core function. CHEP has the expertise to manage the equipment; they have the understanding and the background in how to have the right equipment at the right place at the right time; that s what they specialise in. ALDI Australia Logistics Director, Shane Hafiz ALDI Logistics Assistant, Daniel Woods and ALDI Logistics Director, Shane Hafiz, surrounded by CHEP Multi-Purpose Beverage Trays and Display Pallet solutions. We wanted a customer-ready merchandising solution, Mr Hafiz says. We went to CHEP and asked what solutions they could come up with. CHEP had an idea of what they thought the market was looking for as a solution. At that point in time it was driven by both parties. We like to drive innovation because we want to make sure we have an efficient supply chain. ALDI Australia Logistics Director, Shane Hafiz The Multi-Purpose Beverage Tray and Display Pallet retail-ready solution was, and still is, unique to Australia and has since been embraced by a number of retailers. The solution has received wide recognition, being Highly Commended in the NSW Government s 2012 Green Globe Awards and named a finalist in the 2012 Banksia Awards. Fresh produce supply chain Innovative thinking gave birth to the Multi-Purpose Beverage Tray which has been a hallmark of the collaboration between ALDI and CHEP Australia. In July 2013, ALDI will be the first Australian retailer to introduce CHEP s Generation 3 foldable reusable plastic crate (RPC) to its fresh produce supply chain. The Gen 3 crate will replace a swing bar crate currently used to transport produce from farm gate to store loading dock. The Gen 3 is a superior crate for many reasons, providing improved product protection, stability and space utilisation compared to the swing bar crate. It cools produce faster and more consistently, and allows uniform temperature control during storage and transport. The roll out of the lift-lock Gen 3 crate will start in Queensland and spread to the other eastern seaboard states in late Always innovating Looking ahead to innovations in the pipeline Mr Hafiz says: We are always exploring the market for what s available. You have to be aware of what the needs are now and in the future. You want to understand the market and there are so many options out there you have to really understand each one. We like to drive innovation because we want to make sure we have an efficient supply chain. CHEP is a Brambles company 2

3 Transporter reduces pain of corrections When CHEP got together with a focus group of customers in mid-2011, one of the pain points highlighted was the time spent dealing with transaction corrections and reversals when reconciling hire accounts. Read how transporter Glen Cameron Group was surprised by how easy it was to reduce their correction rate by implementing new processes. In September 2011, CHEP conducted an audit, revealing the customers most affected by corrections and the top causes of high correction rates. It painted an interesting picture. Many of the customers affected were shown to be transporters. The top four causes of corrections were: physical load not matching the transfer docket; an incorrect shipment or effective date; a missing docket; and, a load being rejected. The situation One customer keen to see a process change was Glen Cameron Group, whose pallet account manager, Precise Pallet Management, spent 50 per cent of their time managing corrections. We were actually surprised at how easy it was to action. We are hopeful that there is a great reduction in corrections and we re on track to reduce our corrections by 35 per cent by the end of June. Director of Precise Pallet Management, Phil Doolan In order to drive best practice, thereby saving time and money, CHEP Australia Asset Management Specialist, Sarina McKeon, worked with the director of Precise Pallet Management, Phil Doolan to help identify the root cause of the problem and come up with a solution. The key issue for Glen Cameron Group was effective dates. We conducted a site visit and looked at the volume of corrections. One of the underlying reasons for corrections that really stood out through the analysis was the number of corrections being conducted to the effective dates on dockets, Sarina says. Easy solution The solution was to set up an agreement between Glen Cameron Group and its suppliers that would allow CHEP to implement an automatic EDO adjustment, or an EDO rule, that reflect the Equipment Days Offset agreement that already exists between the supplier and the retailer. Phil s team communicated with the Glen Cameron Group customers and proceeded to implement the new trading rule with several customers in mid-may. It will progressively National logistics company, Glen Cameron Group, reduced correction rates by implementing new processes. roll out the agreements with other customers over the next six months. The EDO rule means Precise Pallet Management will no longer have to spend time correcting the effective dates nor does it carry costs agreed between two other parties. CHEP has assisted us greatly in this process. To be sitting down with specialists looking at equipment activity reports enabled us to drill down, see where the problems occur and solve them. Director of Precise Pallet Management, Phil Doolan We were actually surprised at how easy it was to action. We are hopeful that there is a great reduction in corrections and we re on track to reduce our corrections by 35 per cent by the end of June, Phil Doolan says. The less time we spend on corrections, the more we can spend on process improvement. CHEP has assisted us greatly in this process. To be sitting down with specialists looking at equipment activity reports enabled us to drill down, see where the problems occur and solve them. Background on Equipment Day Offset When trading partners have an Equipment Days Offset (EDO), also known as Delay Days rule in place as part of their commercial trading agreement, transport companies who are transporting goods from the supplier to the end customer, can be affected by the EDO rule in place if the equipment is transferred onto their account by the supplier and not directly transferred to the end customer s account. To offset the additional cost of the EDO agreement between the supplier and end customer, transporters commonly establish a matching effective delay so that the supplier is financially responsible for the EDO as agreed in their trading terms with the end customer. Corrections to the effective date are required when the supplier does not include this delay when transferring to the transporter. By adding an automatic EDO rule between supplier and transporter, the transporter will not have to adjust their effective dates manually. CHEP is a Brambles company 3

4 Equipment control training goes online How do you approach equipment control training when new staff comes on board or when someone is away. Here, CHEP Australia s Brand and Communications Manager, Cate Binet provides insight on a new free, online course on the basics of equipment control soon to be available on CHEPedia.chep.com. What happens when your equipment controller is away? Does someone else from the business step in to help with the equipment control processes? How do you approach equipment control training when new staff come on board? "Best practice techniques help take the hassle out of equipment management and save your business time and money." Brand and Communications Manager, CHEP Australia Cate Binet To help build a strong foundation in equipment control best practice, next month CHEP will launch a new training tool on CHEPedia.chep.com. We have developed the course so that even a first time user could jump online and do a 10 minute module to give them the basic best practice processes and procedures. Whether you need to induct new staff or would like a refresher course for your regular equipment controller, the online training course, Introduction to Equipment Control, is designed to help. It s based on the face to face one day courses that we ve been running nationally for more than 10 years and is a combination of Basics of Equipment Control and Fundamentals of Equipment Control. Best practice techniques help take the hassle out of equipment management and save your business time and money. But effective equipment control requires good processes and an understanding of them. By helping to raise awareness in your business about best practice in equipment pooling, we hope to help your staff understand the value and cost benefit of efficient and effective equipment control, see how it fits in the bigger picture of inventory/warehouse management, improve their equipment processes and reduce the number of corrections, losses and indeed, trading partner disputes experienced. The course is structured into modules so you can dip in and out depending on which part of the process you need to focus on. The topics range from the overarching concepts, like Why is control important? to the very practical Managing exchanges and Investigating account variances. In July 2013, CHEP will launch a new training tool on CHEPedia.chep.com to assist in industry best practices for equipment control. The training will be available to CHEP customers on CHEPedia.chep.com, 24/7. It only takes about 10 minutes per module, so you can use it to address a specific need, or treat it as an education program. "We have developed the course so that even a first time user could jump online and do a 10 minute module to give them the basic best practice processes and procedures." Brand and Communications Manager, CHEP Australia Cate Binet From July, visit and use your Portfolio Plus login to access the member area. If you don t have a Portfolio Plus login, it s easy to set up, just call our customer service team on 13 CHEP ( ). CHEP is a Brambles company 4

5 CHEP streamlines spicy supply chain Australian food manufacturers are required to meet strict food safety standards, often across multiple supply chains. Find out why CHEP s plastic pallets were the perfect pooling solution for McCormick Foods Australia. With heritage dating back to the 1800s, McCormick Foods Australia Pty Ltd has a reputation as a strong innovator, flexible manufacturer and a supplier of quality products and ingredients. Required to meet strict food safety standards, often across multiple supply chains, McCormick s partnership with CHEP is critical in maintaining the integrity of its supply chain. As part of its wide-ranging business, McCormick ships 100 tonnes of spices and blends to poultry producers across the country each week. Porous materials, such as wood, are not permitted on the manufacturing floor of facilities that manage raw produce. Working with poultry producers, it s imperative that we maintain stringent food safety standards. Importantly for us, the plastic pallet is non-porous, meaning that it does not absorb or retain water, dirt or odours, McCormick National Warehouse and Distribution Manager, Warren Salisbury Warren Salisbury, McCormick National Warehouse and Distribution Manager, says that CHEP plastic pallets, made from polyethylene plastic, were the perfect pooling solution for the McCormick supply chain. Working with poultry producers, it s imperative that we maintain stringent food safety standards. Importantly for us, the plastic pallet is non-porous, meaning that it does not absorb or retain water, dirt or odours, Warren says. The herbs and spices we transport across the country are bagged, so it s also critical that the pallets are corrosion-free and there s no potential for loose or protruding nails or splinters, which could puncture and contaminate the product. The breadth of CHEP s pooling solutions which include both plastic and wooden pallets mean McCormick needs to go no further than CHEP for its pallet needs, delivering operational efficiencies and pallets that are fit for purpose. Warren says that CHEP s equipment pooling system, where customers hire, rather than purchase the plastic pallets, saves McCormick on capital outlay and provides the flexibility to manage pallet inventory according to demand. McCormick National Warehouse and Distribution Manager Warren Salisbury inspects a plastic pallet load of spices. For example, school holidays are usually our busiest time, so prior to this CHEP is easily able to increase our pallet supply, Warren says. "CHEP s equipment pooling system, where customers hire, rather than purchase the plastic pallets, saves McCormick on capital outlay and provides the flexibility to manage pallet inventory according to demand." McCormick National Warehouse and Distribution Manager, Warren Salisbury Hannah Coring, CHEP Business Relationship Manager, says that use of CHEP plastic pallets was a growing trend among Australian manufacturers seeking to both reduce the risk of contamination within their finished goods processing areas, and easily manage pallet inventories. CHEP plastic pallets are designed to be safer in strict hygienic manufacturing environments so they are perfect for the food industry. They do not absorb pathogens or bacteria and are immune to insect contamination as pests cannot penetrate the plastic and infest products, Hannah says. The CHEP plastic pallets are also 100 per cent recyclable. To speak to one of our customer service team about your business needs, call 13 CHEP (2437). CHEP is a Brambles company 5

6 Targeting a more sustainable supply chain To help meet the great environmental challenges of our time, our shared responsibility is to become more sustainable. When you already have great practices and an excellent track record in sustainability, how can you take things to the next level? Many Australian food and grocery manufacturers already have excellent sustainability credentials but the challenge is to become even more efficient and reduce water use, waste and carbon emissions significantly. How can this be done? The Australian Food and Grocery Council has tackled that question for its members and come up with Sustainability Commitment, a strategy that provides a path to sustainability for its members and the industry as a whole. The strategy focuses on five focus areas: water, waste, energy and emissions, packaging and sourcing. It features clear objectives, targets and metrics and provides a coordinated strategy for the food and grocery industry to meet those objectives. CHEP is working to improve its performance in each focus area of the Sustainability Commitment. CHEP Sustainability Manger, Nicole Boyd The Sustainability Commitment report demonstrates some of the industry s achievements in these key focus areas to date and the table opposite provides a snapshot of some of these case studies. CHEP s sustainability goals are aligned with those of the Sustainability Commitment and CHEP is working to improve its performance in each focus area of the sustainability commitment, as seen in the table opposite. CHEP Sustainability Manger, Nicole Boyd, says: While CHEP s not an FMCG company, we are an integral part of many FMCG supply chains. At its core pooling is a sustainable business model because it is based on the shared use of reusable packaging resources. The principles of reduce, reuse, recycle are embedded in our business model and we are committed to reducing our sustainability footprint help to reduce our customers sustainability footprint. Actions aligned with the Australian Food & Grocery Council Sustainability Commitment Target Industry Case Studies CHEP Reduce water consumption Reduce waste to landfill Reduce carbon emissions Commit to actions of the Australian Packaging Covenant A cereal manufacturer has tracked water usage patterns over 10 years and continues to identify opportunities for reduction in consumption through daily monitoring. In 2012 the company reduced consumption by more than 30ML through measures such as optimising cleaning programs and recycling water. A confectionary manufacturer has achieved zero waste to landfill by recycling, sending solid food waste to animal feed, and directing disposable solid waste to energy production. A food manufacturer reduced energy use by installing technology to generate its own energy and by increasing the use of natural light in its facilities. A manufacturer of cleaning products is constantly developing more efficient, sustainable solutions for product packaging that include using recyclable or compostable materials. For example, in it rolled out a range of sustainable wipes made from natural biodegradable fibres. CHEP s foldable RPC system reduces water usage by more than 1.2 million litres a day i.e. 85 per cent less than a single-use cardboard system. Around 85 per cent of the timber from damaged pallets is reused for pallet repair. At end-of-life, timber is recycled or repurposed and by 2015, CHEP aims to send zero timber waste to landfill. Energy use has been reduced through installing energy efficient equipment and replacing electric lighting with skylights at selected service centres. By 2015, CHEP aims to reduce its carbon emissions by 20 per cent on 2010 levels. CHEP is a signatory to the Australian Packaging Covenant and is committed to developing sustainability profiles of the full product range. For more information on how CHEP can help you meet your reporting requirements, please contact nicole.boyd@chep.com Implement a sustainable sourcing policy A manufacturer of tissue products has a goal to source 100 per cent of its wood fibre from Forestry Stewardship Council (FSC ) certified or controlled wood by 2015 and at the time of the report was on track to achieve this by the end of All timber is sourced from sustainably managed forests. CHEP is a Brambles company 6