How investing in logistics can lift your standards

Whether you're running a small food manufacturing business or a large scale distribution operation, logistics matters. By Aoife Boothroyd.

There are a myriad of logistics models that businesses can subscribe to, with the size, scope and nature of the business being the key determining factors influencing which model is most appropriate.

Food magazine recently spoke to two food manufacturers that employ automation as a key part of their overall logistical operations: South Australian tomato producer D'VineRipe and cereal giant Kellogg's.

D'VineRipe was established in 2006 as a joint venture between food marketing company, Perfection Fresh Australia and investment company, The Victor Smorgon Group. 

The company produces a wide range of tomatoes from cocktail-sized, right up to the larger truss varieties.

D'VineRipe has the capacity to produce up to 15,000 tonnes of vine-ripened fruit year round in its state-of-the-art, 27 hectare glasshouse facility, complete with climate control and irrigation.

D'VineRipe supplies some of the nation's largest retailers including Coles, Woolworths, Aldi and Costco, and delivers to all the eastern states, with a smaller concentration in Western Australia and South Australia. Most impressively, they do this within a 24 to 72 hour turn-around from when the fruit is picked from the vine. 

D'VineRipe operates to the Delivered In Full, On Time (DIFOT) logistics model which is designed to measure delivery performance throughout the supply chain, and is geared to tailor deliveries to the customer by measuring how often the customer gets exactly what they want, at the time that they want it.

Image: www.vanderhoeven.nl

As D'VineRipe is in the business of perishable goods, it is imperative that its operations run as timely and as smoothly as possible. To achieve this, the facility is fitted out with a network of automatic guided vehicles which run down the rows of each glasshouse to collect fruit, and then deliver the full boxes straight back to the pack house where they are automatically weighed, entered into a buffer system, graded, and packed based on variety.

"All the picking operations are manually done, however the automatic guided vehicles improve efficiencies by eliminating that extra operation of someone transporting the fruit back to the pack house, picking up the box, weighing it, recording the weight on a piece of paper and then entering it into a computer," says Jon Jones, general manager of D'VineRipe.

"The vehicles enable all those steps to happen automatically."

The automatic guided vehicle system was built for D'VineRipe by Belgian company, Bogaerts Greenhouse Logistics. The vehicles deliver accurate recording data capabilities in terms of weighing the product, and also feature a built-in sensor, or a photo eye, that picks up if a person or object is within its range, enabling it to slow down or stop to avoid a collision.

When asked about the reliability of such a sophisticated system, Jones says that it's almost "bulletproof."

"It's like any computer system, it is » extremely reliable. Sometimes you can experience a glitch here or there, but the majority of the time it's bulletproof," he says.

Jones says that since the system was put in place over four years ago, operational efficiencies have improved even further thanks to various updates in technology.

"We are always looking for new efficiencies. We as a company have changed and gotten bigger; the technology in the automatic guided vehicles has also been upgraded and improved."

Logistics automation is key to the operations of many businesses, however the processes required by long shelf life FMCG's are obviously different compared to that of perishable produce like tomatoes.

Global food manufacturer Kellogg's decided to make the switch from an almost entirely manually operated 27,000 square metre distribution centre in Botany, New South Wales, to a system that could automatically process high demand volumes whilst also achieving high storage densities.

The system back in 2003 was capable of accommodating 28,000 pallet positions across the warehouse's 27,000 square metres, but the introduction of a new system saw the company achieve impressive storage and operational efficiencies that it did not expect.

Kellogg's worked with Dexion, a distribution management specialist, and supply chain solution company, Linfox, to create a more efficient and sustainable distribution model.  The model incorporated an automated storage and retrieval system (ASRS) which was implemented as part of a broader Real-Time Distribution System (RDS). 

ASRS is designed to tackle some of the most difficult challenges that FMCG distribution centres face including completing orders that cover high volume, fast moving and fluctuating quantities of goods that can be subject to strict use-by dates, while RDS controls the physical and operational aspects of a company's distribution centre from the receipt of goods to processing, storage, order fulfilment and despatch in real time.

Kellogg's new ASRS includes pallet conveyors, robotics, storage and retrieval systems and IT hardware that enabled the new distribution centre to hold 32,000 pallets – 4,000 more than what was previously possible – within the automated storage component and the conventional section of the warehouse. 

The new system enabled pallets to be stored in five aisles, six pallets deep on either side, with each aisle serviced by its own automatic crane. The ASRS enabled Kellogg's to have the capacity to put away up to 90 pallets per hour, and retrieve 120 pallets per hour.

Another impressive aspect of the new system was the command and control centre that provides a pictorial overview of the ASRS system, enabling the operator to see what the system's doing in real time and quickly resolve any issues that arise.

Since the introduction of the system, Kellogg's has reported a 10 percent reduction in pick error; production damage has been reduced by a staggering 85 percent and labour costs have also dropped as only half the amount of forklifts are now required, even with the increased capacities.

The most important part of any logistical operation is to have appropriate processes in place, enabling the operation to run as smoothly as possible by eliminating inefficiencies. 

While investing in sophisticated automation systems might mean a reduction in staff levels and a considerable investment initially, the productivity and long-term financial gains can most definitely outweigh the disadvantages. 


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