May/June 2014 $8.00

Making order(s) from chaos MM&D’s e-Commerce Roundtable

Inside 16 e-Commerce Roundtable 22 Taking a load off 26 Boxing clever 30 Product roundup 32 Learning Curve 33 Legal Link 34 Materials Handling Publication mail agreement #40069240. agreement mail Publication Intelligrated.indd 1 14-06-09 10:47 AM TAKING STOCK Why the supply www.mmdonline.com chain will PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins (416) 510-5130 [email protected]

ART DIRECTOR: Stewart Thomas (416) 442-5600 x3212 [email protected] never be green

SENIOR ACCOUNT MANAGER: Catherine Martineau n this issue of MM&D you’ll enjoy reading the results of our first e-commerce (647) 988-5559 [email protected] Iroundtable. Our select group of supply chain practitioners unpacked the pain PRODUCTION MANAGER: Kim Collins points that keep DC managers with e-comm operations awake nights. (416) 510-6779 [email protected] Retail distribution is already a chaotic world—at the mercy of consumer whims CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x3546 [email protected] and trends—and throwing multi-channel distribution into the mix makes for an interesting dance in many a DC. The complexity that needs to be controlled—or BIG MAGAZINES LP at least accounted for—is mind-boggling. You truly want to have some big brains Executive Publisher Tim Dimopoulos Vice-President of Canadian Publishing Alex Papanou on your side if you want to make this work in a cost-effective manner. President of Business Information Group Bruce Creighton An element the roundtable touched on is reverse —taking back returned

HOW TO REACH US: items. Returns are the bugbear of e-commerce operations. They take chaos and MM&D (Materials Management & Distribution), established in 1956, make it an art form, with a few notable exceptions where the retailer manages is published 7 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. to control consumer behaviour. But typically, returns come back unpackaged,

EDITORIAL AND ADVERTISING OFFICES: in questionable condition and requiring a great deal of analysis, intelligence and 80 Valleybrook Drive, Toronto, ON, M3B 2S9; labour to return them to the pick face or store shelf. Tel: (416) 442-5600; Fax (416) 510-5140. It’s no wonder then that so many retailers and their 3PLs opt to simply scrap SUBSCRIBER SERVICES: To subscribe, renew your subscription or to change your address or information, contact us at the stuff. How many consumers are aware that the items they return for a refund 416-442-5600 x3258 or 1-866-543-7888. may in fact be headed straight for the landfill? It’s a dirty little logistics secret. SUBSCRIPTION PRICE PER YEAR: Returns are often so expensive to handle that the cost is prohibitive, resulting in Canada $84.95 per year, Outside Canada $159.95 US per year. Single copy price: Canada $15.00, Outside Canada $32.65 CDN colossal waste of perfectly good consumer items around the globe. MM&D is published 7 times per year except for occasional combined, expanded or premium issues, which count as two subscription issues. I don’t need to remind you of the massive inequities in wealth between the long-industrialized countries and the newly developing. It’s a cruel irony that ©Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher. the people in those countries—like China, Bangladesh or Cambodia—who make

DISCLAIMER: This publication is for informational purposes only. most of the stuff we end up scrapping would probably be pretty delighted to have You should not act on information contained in this publication without seeking specific advice from qualified professionals. MM&D access to what we discard based solely on an ROI calculation. accepts no responsibility or liability for claims made for any product In a coming issue of MM&D we will be looking at reverse logistics in depth. or service reported or advertised in this issue. MM&D receives unsolicited materials, (including letters to the editor, press releases, What works, what doesn’t, and how can the ROI picture be altered to prevent promotional items and images) from time to time. MM&D, its affiliates and assignees may use, reproduce, publish, re-publish, waste. I’m interested in ideas and perspectives from distribute, store and archive such unsolicited submissions in whole or the logistics community on this topic. Please in part in any form or medium whatsoever, without compensation of any sort. give me a call or drop me a note if you’d like

PRIVACY NOTICE: From time to time we make our subscription to share your point of view. I can be reached list available to select companies and organizations whose product or service may interest you. If you do not wish your contact at [email protected] or 416 510 5130. information to be made available, please contact us via one of the following methods:   Phone: 1-800-668-2374, Fax: 416-442-2191 May/June 2014 Volume 59 Number 03 Email: [email protected] Mail to: Privacy Office, 80 Valleybrook Drive, Toronto, ON M3B 2S9 16 22 26 30 Printed in Canada Publications Mail Agreement #40069240, ISSN: 0025-5343 (Print) ISSN: 1929-6460 (Digital). We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage for our publishing activities. MM&D is indexed in the Canadian Magazine Index by Micromedia Limited. Back copies are available in microform from Macromedia Ltd., 158 Pearl St., Toronto, ON M5H 1L3

Making order Taking a load off A good fit Equipment from chaos New unloading Right-sized focus e-commerce technology saves shipping Forktruck, ceiling roundtable backs and boosts prevent damage fan, fast charging reveals the tricks the bottom line and save bucks technology

www.mmdonline.com | May/June 2014 3

03MMD-Editorial.indd 3 14-06-09 1:17 PM SUPPLY CHAIN SCAN

DEALS SHIPPERS STAND UP M+S SURVEY Who’s buying what International shippers’ groups take a stand against Appointments and Annual survey of from whom; p 10 unfair charges; p 6 promotions; p 14 supply chain pros; p 12 Trade interruption continues to be significant supply chain risk

hreats to supply chain security are constantly traband via introduction into cargo shipments, as well as several entirely new Tevolving, and supply chain risk management global trafficking flows. firm BSI recorded a number of important changes Trade interruption incidents such as strikes, protests, and adverse weather to the threat landscape facing supply chains around events significantly impacted regional and global trade in 2013 and exceeded a the world in 2013. quarter trillion dollars globally. Supply chain terrorism continued to plague a With a few notable exceptions, the countries BSI number of countries, particularly Colombia, India, the Philippines, and several rated High or Severe for cargo theft continued to see nations in Africa and the Middle East. significant losses and violent cargo theft incidents, The BSI report includes a breakdown of the supply chain security situation in specifically in Italy, Mexico, Russia, and South Africa. each region of the world, with special attention paid to threat rating changes and BSI also noted a number of important shifts in the trends BSI Analysts observed in 2013. To access BSI’s 2013 SCREEN Global tactics used to smuggle illegal drugs and other con- Intelligence Report, visit www.supplychainsecurity.com/downloads.html. Shifting dynamics in the global parcel marketplace

he dynamics of the express and small parcel market are shifting as time Trequirements and technology enhancements such as 3D and e-commerce result in more options for customers. Added to this changing scenario are improving economies and the rising needs of emerging markets. This is the key finding of Transport Intelligence’s new report, Global Express and Small Parcel Market, 2014. The report reveals that for 2013, the global express and small parcel market grew 6.8 percent from 2012. This growth, not surprisingly, was led by emerging markets in Asia-Pacific, South America and the Middle East. But at the same time, improving economic conditions in the US also resulted in improving demand for services. For Europe, innovative delivery solutions such as lockers and other alternative parcel pick up points have created an interesting market as well. DHL Express, FedEx Express, TNT Express and UPS have all played leading roles in the express and small parcel market but competition is picking up from regional providers and post offices within domestic markets. How are these leading providers responding? Indeed, changes within domestic markets are definitely occurring but international express services are still dominated by the integrators. But, like everything else, shifts in product mix and service levels are underway and have also resulted in changing needs for such services. However, for the international time-definite leader, DHL Express, it continues to consolidate its global lead with a strategic focus on this need. The global express and small parcel market is forecasted to grow at 9.8 percent through 2017. While all regions are expected to note good growth for this period, Asia-Pacific, Africa and North America will be the leaders with the highest forecasted growth rates.

4 MM&D | May/June 2014

03MMD-News.indd 4 14-06-09 1:21 PM SUPPLY CHAIN SCAN Store Smart. STORE VERTICAL.

Ocean Spray gets new DC n May 1, NFI opened a new DC for Ocean Spray in Kutztown, OPennsylvania. This 1-million sqf facility expands the footprint of NFI in the Lehigh Valley and will serve as the distribution centre for 40 percent of Ocean Spray’s global volume. “It has been an exciting week for Ocean Spray,” said Ed Poloway, Ocean Spray director of operations and supply chain. “On Tuesday we held the grand opening of our manufacturing plant and today we held the ribbon-cutting of the distribution centre operated by NFI. “Ocean Spray values long-term relationships, and with NFI we Scan to learn have a partner who understands our business. Together we col- more about Material Handling Carousels. laborate to solve business challenges and meet the goals of Ocean Spray,” Poloway added. On July 16, 2013, ground was broken at the site where the ribbon Vertical Carousels cutting celebration is occurring today. In a short ten months, with some of the most extreme weather in history, the DC was built and It’s your space. Make the most productive use of it fully operational. Sid Brown, NFI’s CEO, added: “With great partners and a dedicated with material handling and storage carousels from team we delivered the distribution centre ahead of schedule—even Vidir. Our semi or fully automated systems consist with record snowfall of over 68 inches. It is a pleasure to witness of carriers that rotate up and down to quickly bring the ongoing growth of Ocean Spray after over a decade of working product to the operator to maximize efficiency together and we thank Ocean Spray for the partnership.” while fully utilizing overhead space for storage. Our NFI is a privately owned, integrated 3PL headquartered in Cherry proven track record of success drives efficiency, Hill, New Jersey. minimizes the footprint and increases safety as well as security.

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www.mmdonline.com | May/June 2014 5

03MMD-News.indd 5 14-06-09 1:21 PM SUPPLY CHAIN SCAN

Shippers unite to contest unfair charges

BENCHMARKS by MM&D Staff Ayer’s Cliff, Quebec-based Wulftec International, a manufacturer of wrapping and stretch t its recent annual meeting in Los Angeles, the Global Shippers’ Forum wrapping machines, has recognized Sigma Supply A(GSF) agreed to organize a new global campaign to confront the imposition of North America, Inc, based in Arkansas, as the of unsubstantiated shipping surcharges, terminal charges and more than 20 number one distributor worldwide of Wulftec other non-negotiable local charges on shippers worldwide. products in 2013. The campaign is focused on persuading national competition authorities or other appropriate regulatory bodies to introduce new shipping regulations and CLARK Material Handling Company has recog- laws to prevent these local anti-competitive practices. Current widespread mal- nized its sales managers, salespeople, sales coor- practices include imposing non-negotiated charges on consignors and shippers dinators, and rental managers of the year. These for a range of local charges over which the consignor or shipper has no control winners achieved excellent growth in CLARK or influence in their freight rate negotiations with the shipping line, terminal forklift truck sales and rentals in 2013 throughout operator, shipping agent, or third party logistics provider. Shippers generally are North America and are recognized as outstand- not party to the contracts in which these fees are set, yet they have no choice but ing contributors to the continued success of to pay the fees if they want their cargo to be transported. CLARK. Sandra Marcucci of JH Ryder Machinery, Addressing the GSF annual meeting, Sean Van Dort, vice chairman of the Sri Ltd in Toronto, is one of the top sales coordina- Lankan Shippers’ Council said: tors, and Herve Durocher of JH Ryder Machinery, “We are already seeing the benefits of new laws in Sri Lanka that specify that Ltd in Montreal, has been recognized as a top all charges for shipping containerized cargo must be quoted so as to cover the salesperson. entire cost of the carriage of goods from origin to destination or agreed delivery point. The provision of so-called ‘all in inclusive freight charges’ to be paid by The Port of Montreal is the proud recipient of an the shipper, including all local add-on charges and surcharges, has resulted in Étoile d’Or trophy, awarded annually by Cercle dramatic reductions in the door-to-door freight costs, reductions that benefit Esteler - Belgian Business Network in Quebec. both the seller and buyer of the goods.” The awards ceremony took place in Montreal on Van Dort added: “In just one real-life study we have achieved a saving of April 26 during the ninth edition of the Grand US $1,950 on one forty foot equivalent unit representing a staggering 31 percent Bal des Étoiles d’Or. The trophy awarded to the reduction in logistics surcharges and multiple charges on the bills of lading since Port of Montreal highlighted the Memorandum the new Sri Lankan regulations came into force on 6 January 2014. These new of Understanding (MOU) signed with the Port arrangements have increased earnings on sales and the competitiveness of our of Antwerp in 2013. Under this agreement, the products in world markets.” two partners have established four areas of col- He continued: “The new arrangements do require close collaboration and laborative activity: marketing and business devel- cooperation between buyers and sellers, and in particular there will need to be opment; business intelligence; asset management; a change in business practices including using the new and more appropriate and sustainable, socially responsible develop- Incoterm for containerized cargo shipments such as ‘free carrier named place’ ment. The Port of Antwerp is the Port of (FCA). But the prize for both sellers and buyers is the elimination of illegitimate Montreal’s largest trading partner in Europe. and inflated charges and surcharges and considerable reductions in freight costs More than one in every five handled which benefit both parties.” by the Port of Montreal comes from or goes to Discussion at the GSF annual meeting noted that the problem of unsubstanti- the Port of Antwerp. ated charges and surcharges imposed on consignors and shippers without bar- gaining power in Africa, Asia and South America has been a concern for shippers

6 MM&D | May/June 2014

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10 30 50 70 90 100 10 30 50 70 90 100 10 30 50 70 90 100 CYAN MAGENTA YELLOW SUPPLY CHAIN SCAN

in these regions for many years. It is only now that the Global Shippers’ Forum and UASC, campaign for Sri Lankan style legislation the true scale and impact on shippers and trade in to tackle the problem of local charges and surcharges”. these regions is being fully understood and appreci- GSF Secretary General Chris Welsh said: “Shippers in Africa, Asia and South ated. The GSF maintains that non-negotiable sur- America have now called time on these unacceptable shipping practices which long charges and local charges imposed on non-contracting ago disappeared in European, North American and liner shipping trades in other consignors and shippers effectively act as an indirect more developed economies. As part of a coordinated global campaign, the GSF will trade barrier, which inhibits international trade. The take the matter up with the main political, UN and other international agencies GSF agreed to take up the matter with the relevant such as the African Union, UNCTAD, WTO, OECD, ASEAN and MERCOSUR. global trade authorities. In addition we will support the implementation of the kind of national legislation In work undertaken in West and Central Africa by introduced in Sri Lanka to deal with this widespread problem.” GSF member the Union of African Shippers’ Councils “The GSF will also launch a global program to explain how the use of the most (UASC), estimates that the cost to the economies of appropriate commercial terms can potentially reduce freight costs in the transport Ghana, Cameroun and Nigeria alone to be in the and logistics supply chain. The program will further focus on liability implica- region of €437m per annum. tions, responsibilities of the respective parties and the allocation of risk under The Secretary General of the Union of African modern commercial terms”. MM&D Shippers’ Council, Adamou Saley Abdourahamane, said: “The UASC believes that wider regulatory mea- GLOBAL FOCUS sures are necessary to curb the power of shipping UPS opens DC in Beijing lines in the African region. We fully endorse the UPS has opened a new contract logistics distribution facility in changes made to national legislation in Sri Lanka, Beijing. The 6,500 sqm non-bonded warehouse space is 19 km which has prevented exploitation of shippers exposed from Beijing’s international airport and serves growing demand to a long list of local charges and surcharges. Shippers’ in China. It is capable of servicing contract logistics orders with organizations in the region will, with the support of four-hour delivery within the metropolitan Beijing area and next-business-day orders for major cities throughout China. Additionally, UPS has expanded its post-sales services in China. This network now provides same-day critical parts delivery within the metro area in 87 cities throughout China. The opening of the Beijing facility follows closely after the opening of similar UPS distribution centres in Chengdu and Shanghai in 2013. The centres support growing industries in China, including high-tech, industrial manufacturing, aero- space and retail. Capabilities of these facilities include order fulfillment, inventory management, kitting, packaging and other specialized value-added services. According to market research firm Transport Intelligence, China is expected to overtake Japan in becoming the largest contract logistics market in the Asia Pacific region by 2016, driven by rising domestic consumption from a growing middle class and the gradual move of Chinese businesses up the value chain.

ORBIS builds in Mexico ORBIS Corporation has begun construction on a North American manufacturing plant in Silao, 390 km northwest of Mexico City in the state of Guanajuato. Plans are to complete the facility by the end of the year. The company hopes the Mexican expansion will allow it to be more responsive to customers in this area, with local manu- facturing, expertise, resources and capabilities, and improve its service reach throughout Latin America. ORBIS makes and is a subsidiary of Menasha Corporation, which was founded in 1849. It has approximately 40 sales, service and manufacturing locations in North American, Europe and Asia and 1,600 employees worldwide.

8 MM&D | May/June 2014

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Packsize.indd 1 14-06-09 10:46 AM SUPPLY CHAIN SCAN

DONE DEALS TECSYS Inc, a Quebec-based supply chain management software added, quality-driven, third-party warehousing and fulfillment company, has signed an agreement to purchase all of the shares of solutions. The financial terms of the investment were not disclosed. Logi-D Holding Inc (“Logi-D”), a provider of point-of-use technology Amware’s president, Vincent Gulisano, will become CEO of the for supply chain automation servicing hospitals and healthcare orga- company, and Rotunda Capital operating executive, John McAlpin, nizations. Logi-D, based in Laval, Quebec, has approximately 27 will become chief operating officer. Mark Wilhelm and Jim Smith, employees. TECSYS will acquire Logi-D’s shares for $2,950,000 in cash, Amware¹s co-owners, will retain a meaningful ownership stake subject to adjustment, and $100,000 in common shares of TECSYS. in the company and serve on the board of directors.

The Transportation Intermediaries Association (TIA) Contracts Rexel, a distributor of products and services for the energy world, Subcommittee, which operates under the Full Operations has selected the OpenSCi solution Operated by PrimeRevenue to Committee, has updated the joint TIA and National Industrial set up and manage its supplier finance program. Through the Transportation League (NITL) model Broker-Shipper contract. OpenSCi supplier finance platform, Rexel’s suppliers can select Additionally, the Subcommittee is excited to announce the release to receive early payment on their approved invoices at very attrac- of the new model Broker-Forwarder contract. The Subcommittee tive funding rates, backed by Rexel’s solid credit rating. has been working with NITL the past few months to update the contract to reflect regulatory and legislative changes that were Carrier Transicold received full verification for its engine emissions part of MAP-21, the Transportation Reauthorization Bill. system (EES) option from the California Air Resources Board (CARB) as a level 3+ verified diesel emission control (VDEC) device. Full Rotunda Capital Partners (Rotunda Capital), a lower-middle-market verification validates the EES as an evergreen compliance solution private equity investment firm, has acquired a majority stake in for CARB’s particulate emissions standard for transport refrigera- Amware Logistics Services (Amware), a premier provider of value- tion units (TRUs) used in California.

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03MMD-News.indd 10 14-06-09 10:39 AM Order Fulfillment Solutions For any size business. For any size budget.

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The Annual Survey of the Canadian Supply Chain Professional – Canada’s most comprehensive benchmark study of the supply chain professional ever conducted is now live!

Your participation will ensure an accurate benchmark of salaries in the supply chain sector.

To make your voice count, please visit our homepage at www.mmdonline.com and Results of the survey will be featured follow the link to the survey. in the October issues of MM&D, PurchasingB2B, and Canadian Thank you in advance for your contribution! Shipper, and online.

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MOVERS + SHAKERS Jim Daw has been named plant manager for Akro-Mils. He will In addition, Ken Hamel was made senior vice-president of manage the company’s Wadsworth, Ohio facility, reporting to Daifuku Webb Holding Company. In this position, Hamel will Jeff Gervais, vice-president and general manager of Akro-Mils coordinate Daifuku’s Global Airport Baggage Handling (ABH) and Jamco. Daw previously was director of strategies. Hamel has been with Webb for operations for Myers Industries’ Lawn & over 30 years. Garden Segment, and he has transferred to As well, John Doychich was promoted to the Myers Material Handling Segment to executive vice-president. In his new role, assume his new position. Daw joined Akro- Doychich will assist in achieving company Mils’ Wadsworth plant in 1996 as its manager financial goals and objectives with continued of shipping and warehousing, and he was focus on operating performance. He has been later promoted to operations manager. In with Jervis B Webb, a subsidiary of Daifuku Jim Daw 2010, Daw moved to Myers Lawn & Garden John Doychich Webb Holding Company, for over seven years as director of operations. and most recently served as senior vice-pres- ident and CFO. Daifuku Webb Holding Company has promoted Rob Schmit to Tetsuya Hibi replaces Doychich as senior President. In his new role, Schmit will oversee all departments vice-president and CFO of Daifuku Webb at Webb and is in charge with leading the company to future Holding Company. Hibi has been with the growth. He is a graduate of Eindhoven University of Technology, Daifuku organization for over 25 years and located in The Netherlands, and has over 20 years of experience previously served as general manager of in logistics and material handling. He was most recently execu- Global Business Administration of Daifuku tive vicepresident at Daifuku Webb Holding Company. Tetsuya Hibi Co Ltd.

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14 MM&D | May/June 2014

THIS AD PREPARED BY: RYAN EDWARDS CLIENT: SCMAO 03MMD-News.indd 14 FILE NAME: SCMAO-14-002_CONFERENCE AD 14-06-09 10:40 AM AD #: SCMA0-14-002 TRIM SIZE: 7.25" X 4.875" COLOURS: CMYK PROFESSIONAL DEVELOPMENT DIRECTORY

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www.mmdonline.com | May/June 2014 15

03MMD-News.indd 15 14-06-09 10:39 AM (Top L-R) Craig Crawford, Peter Stock, Nicolas Dorget (Bottom L-R) Arnold Cunje, Brian Martin, Steven Bryce

16 MM&D | May/June 2014

03MMD-Roundtable.indd 16 14-07-07 11:02 AM  The MM&D e-commerce Making order(s) from roundtable is an editorial feature, made possible with support of the following companies. The sponsors’ input was made exclusively through their participation in the panel discussion.

How to keep operations smooth in a multi-channel environment

MM&D’s E-Commerce roundtable examines how back-end operations in the DC support and enable e-commerce sales

by Emily Atkins should? And then they say, ‘Oh my God, I forgot we’ve got the execution part behind the wall that we haven’t n May, MM&D convened its first e-commerce round- even thought about.’” Itable. This gathering of six supply chain profession- Brian Martin, of Kuehne & Nagel calls it a “cus- als, moderated by MM&D’s editor and publisher, Emily tomer-centric” model. “The customer can buy goods Atkins, looked at the points of pain for DC managers in the channel that is acceptable to them and at the tasked with ecommerce fulfillment operations. timing that is acceptable to them. So now let’s translate At the table were Peter Stock, senior systems sales that to the warehousing operation. It’s up to the 3PL manager, apparel and e-commerce integrated projects, community or the traditional brick and mortar verti- at Knapp Logistics & Automation; Arnold Cunje, cal integrated companies to react to that with multi- senior sales manager with Intelligrated Canada; Brian channel DC operations. And I think this is where it’s Martin, vice-president of sales and marketing for really causing the stresses.” Kuehne & Nagel Canada; Steven Bryce, vice-president of the supply chain division of Reimer Associates; Complexity Crag Crawford, Canadian territory manager for From a practical point of view, inside the DC, what HighJump Software; and Nicolas Dorget, vice-pres- does this mean? ident of customer solutions with UPS Canada. For Knapp’s Peter Stock the problem distills down The words chaos, spikes and SKU proliferation were to this: “You don’t know how to design your warehouse front and centre in the pre-event questionnaire the par- because they have no influence on any order struc- ticipants completed. It was immediately apparent that tures or what’s coming in at what time.” e-commerce fulfillment is a rapidly moving, complex, “Basically, within a warehouse you’re trying to fulfill multi-faceted environment. Complexity enters when the normal retail operations of stores. But then you DC managers are expected to fulfill orders for individual end up with spikes because you have an e-comm side customers alongside those for retail or other channels. and the order profiles are totally different. The aver- The new normal is omni-channel commerce—retailers age pick for e-comm is one-point-something, not are giving customers choice about how they purchase even two [items]. Now we have to look at technol- and receive their goods, and it trickles down to the DC, ogy—what is the kind of technology we could be able creating a challenge and sometimes chaos when different to use in order to assist and help those retailers get order types all have to be fulfilled in the same facility. these products and do not disrupt their mainstream According to Highjump’s Craig Crawford: “The operations?” said Intelligrated’s Arnold Cunje: way we talk about e-commerce, it’s all about the shiny According to Cunje, picking can be done jointly, things in the front. It’s always the front-end piece that but then the e-commerce orders need to be diverted people are concerned about. How does my website to a different outbound area where they are packaged look? How user-friendly is it? How much interaction? for distribution via parcel delivery service or to a Can I get all of my products looking the way they store for customer pickup.

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03MMD-Roundtable.indd 17 14-07-07 11:02 AM Stock agreed: “The goal centres. So 3PLs and vertically integrated companies always should be that there are faced with multi-channel fulfillment within the should be no difference if a same box,” he said. picker picks for an e-com- merce order or if he picks for retail store “…It’s always the front- deliveries.” Even more complex- end piece that people are ity is added, however, when different ele- concerned about. How ments of an ecom- merce order have does my website look? to be integrated. As Stock pointed out, How user-friendly is it? the individual white shirt has to be married up with the How much interaction? shoes, which may come from a different area or different DC, or maybe they’re not in stock. Can I get all of my Craig Crawford “And that’s where the challenge is in e-commerce... because then you have to make decisions: shipping products looking the immediately or waiting for consolidation. You have to do these cost evaluations and programs. And that’s way they should? And where—from the automation and process side in the DC— then they say, ‘Oh my the biggest challenges come from,” Stock added. God, I forgot we’ve got “But then there’s the other challenge, because as you the execution part behind change and you blend e-comm into your facil- the wall that we haven’t ity, there’s a packaging issue and how you’d even thought about.’” handle those pack- ages,” said Cunje. “In a traditional The typical scenario goes like this: You have a DC warehouse or dis- that’s been operating for 15 to 20 years, doing tradi- tribution centre we put tional retail fulfillment with case or pallet picking, everything in a case or a reach forklifts with nine-and-a-half foot aisles, 30-foot tote and convey them. But clear, and within a five-year period approximately 10 when you’re e-commerce, when percent of that warehouse space has to be converted you are ready to ship, you’re shipping into single each picks on single shelf, with a pack Peter Stock in an , in a . You’re looking at the station, with a checker (because the order quality has lowest cost to get it out to the consumer. The other to be perfect for B2C). thing that you have to be careful with is the type of “This is where the chaos is,” Martin said. “This is packaging. Soft goods are treated differently from a major shift in engineering at the warehouse level hard goods. So there’s a combination of different and a major shift in warehouse management systems issues that we try to solve with technology.” to enable each picking versus case fulfillment or pallet fulfillment, and retraining staff that understands the The DC model B2C fulfillment and the quality has to be perfect.” According to Martin, the e-commerce market in Canada is less than 10 percent of retail sales. And yet it’s a major Other options undertaking to convert a regular retail DC into one that But converting that old DC is not the only option. can handle e-commerce orders efficiently. According to Nicolas Dorget of UPS, “The reality is “In today’s warehouse environment, there’s still not that there’s not more dollars being spent, they’re spend- adequate consolidation and volume for e-commerce ing the same amount, just taking away from their sales to really run pure-play e-commerce fulfillment traditional channels and siphoning it elsewhere.”

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03MMD-Roundtable.indd 18 14-07-07 11:02 AM He said some retailers are looking at their inventory To some extent, that may be why, Walmart has a whole more broadly, and have opted to pick e-commerce bunch of stuff integrated and is in a much better situ- orders from the retail store. Because clerks are not ation,” said Steven Bryce of Reimer Associates. busy with in-person customers all the time, they can “There continues to be a gap in what I would classify use their spare time to pick orders from the floor. as middleware or middle people between the innovative Retailers are thus “able to source from their retail side of retail and the back office fulfillment. And that network and footprint around the country to mini- translation of scope, forecasting, new product introduc- mize their shipping costs, optimize transit times. tion, new channel introduction, that is very Rather than limiting yourself to who comes into your weak in the Canadian mar- store, use everybody who’s not in your store and wants ket today,” Martin added. to buy something and process that as a sale and give A second major area is the credit to the store. So I think that’s where finance having an accurate idea turns what would appear to be a disadvantage—bricks of what your supply and mortar—into an advantage. And for those that chain actually looks like. are able to do that—with technology, with integra- “Most companies don’t tion—they will win,” Dorget said. understand their supply chains. If you ask any Room for improvement corporation, ‘Show me It would appear that in solving the e-commerce your supply chain map dilemma there are no hard and fast rules. Just as and how does it overlay customer demand is fluid and impossible to predict, to your customer expe- supply chain managers responsible for multi-channel rience map,’ they act like fulfillment have to stay nimble. you’re speaking a foreign But the panelists identified a couple areas where language,” Dorget said. there is definitely room for improvement. First is on “You have to understand the the management side. intricacies of your supply chain. Is there a better way to do it? You’ve got to re-evaluate that. Not every three Arnold Cunje “In today’s warehouse years and not every five years; it’s every six months, every quarter if you need to, depending on the market environment, there’s still that you’re in. And you have to understand the market that you’re in,” he added. not adequate consolidation Made to measure and volume for The panel was asked what needs to be measured in e-commerce sales to really order to succeed at omni-channel run pure-play e-commerce fulfillment. For Arnold Cunje, fulfillment centres. So 3PLs “it’s what we call the Distributed Order and vertically integrated Management Type System, companies are faced with where you look at the inven- multi-channel fulfillment tory pool, you look at intelligent within the same box.” order routing and service level commitment that they want to offer and, ultimately, the best source of “One of the bigger challenges, is normally the execu- fulfillment. If they can encompass those four things tive; presidential people in the retailers are all mer- then you can satisfy your customer. If you can’t, you Brian Martin chants and store operations people. There are very few wouldn’t retain their business.” senior logistics guys who ever make it up to the top. Peter Stock suggested growth rate is key. “Growth The one example that’s actually different is Walmart. rate is the final question, always.”

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03MMD-Roundtable.indd 19 14-07-07 11:02 AM Craig Crawford empha- sized good planning Uniquely Canadian can help a company avoid a big mistake. One point our panelists agreed on is “E-commerce isn’t for that the nature of Canada’s vast all retailers. There geography, and population centres are retailers where maybe it just concentrated in four major areas doesn’t work if makes distribution operations more they look at the challenging. There’s nothing new about overall pic- that issue—as Martin said: “No matter ture,” he said. “And what we do in Canada, as warehouse that’s where providers or transportation providers, planning comes there’s still five days overland between in. Maybe the Toronto and Vancouver Island. There’s goods that aren’t sell- ing don’t warrant shipping still four days to get to Newfoundland.” and selling and buying online, How it impacts e-commerce is in maybe it is a bricks and mortar Steven Bryce play. So these companies have got to adapt, but what the customer expects to pay for they have to do it practically. They have to go shipping. How can you think that if through that consulting stage and planning stage you’re in Barrie (Ontario) or Yellowknife, to figure out: ‘Can we plan it on the front end? And you should pay the same as someone in can we execute it properly on the backend and make it profitable?’” a condo in Toronto, Bryce asked. “I’ve Nicolas Dorget “The devil is in the details,” lived in a couple of the big retailers Steven Bryce said. “You have and the price is the same in St. John’s to understand the data, the as it is in Woodbridge. But the cost of flow, what products are coming. And that will getting that product out to St. John’s, allow you to build a case depending on the value of the item and for why you need how much handling there is, is massively whatever it is you different. I don’t know how Canada is need—more soft- ware, different going to make e-commerce work unless labour, different they put some sort of graduated pricing structure, limits and there’s some sort of delivery charge. on what you I don’t know who can afford it.” can do, how quickly. Dorget suggested that if you have good ‘Cause the enough metrics, as a retailer you can data is where the devil is, for sure.” adjust pricing on the fly to take account For more on this round- of where the customer is and adjust for table, including comments on the the additional shipping costs. “So if you future of grocery e-commerce operations understood that 60 percent of your sales along with the thorny issues raised by return logistics, please check www.mmdonline.com. MM&D were north of Toronto and you only charge five bucks for shipping, but you know that segment is okay with paying What are your e-commerce challenges? We’d love for shipping, you could go with charging to hear from you for a follow-up online forum on Canadian e-commerce operations. Please drop a seven or eight dollars and still get note to Emily at [email protected] with the sale.” your experiences or to set up an interview.

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loadHow unpacking trailers and containers just got a whole lot easier By Kara Kuryllowicz and productivity suffered when case weights were in the upper region of the maximum.” abour saving devices are not always looked upon According to the Canadian Centre for Occupational Lkindly by the workers whose job they might Health and Safety, manual material handling is the replace, but in the case of a new machine introduced most common cause of occupational fatigue and low to de-stuff containers at the Liquor Control Board of back pain. In fact, about three of every four Canadians Ontario’s (LCBO) , workers were coming whose job includes manual material handling will in early to ensure they got to use the machine. suffer pain due to a back injury at some time. Such The unit in question is a Destuff-IT unloader built back injuries account for about 33 percent of all lost by Engineered Lifting Systems in Elmira Ontario, and work and more than one-third of all compensation the story of how it came to be is a shining example of costs. On top of that, thousands of Canadians are George Soleas creativity and ingenuity coupled with persistence. permanently disabled by back injuries every year. Before Destuff-IT, if you worked in material han- The LCBO’s Health and Safety committee was com- dling at one of the LCBO warehouses in Durham, mitted to finding an ergonomic solution that would London or Toronto, chances are you spent 7.5 hours ease the negative impact on employees while reducing a day unloading cases of internationally sourced, the unloading time and increasing warehouse capaci- fragile and expensive vintage wines that weigh nine ties. Fully automating the unloading process wasn’t to 18 kg and require manual handling to prevent viable due to the related equipment cost and the risk product damage. In a typical shift, you lifted at least of product damage and loss. 400 cases from their spot in the trailer—anywhere “We’re constantly looking at how we can identify between the floor and ceiling—then pivoted to place opportunities for improvement,” says Soleas. “In each one on a conveyor about three feet off the floor. this instance, we knew the task was labour intensive Bruce Pizzolato Because shipments often contained irregularly and that there were initiatives within the logistics stacked, mixed product, workers manually sorted the world that were being explored by companies around cases while unloading to make it easier for their col- the globe.” leagues upstream in the warehouse. As well, two “We found and tried a machine from Denmark, workers were required to push and pull coupled sec- and while it looked promising, it ultimately didn’t tions of the flexible roller conveyor into position and work with the types of packaging we had,” says Soleas. finally relocate it to the multiple staggered docks, all Fortunately, Bruce Pizzolato, director at the Durham of which was time consuming and strenuous. facility, is a positive and creative individual with a “The nature of the de-stuffing task with all of the deep appreciation of the potential benefits of automa- repetitive lifting, twisting, carrying, pushing and tion and a true understanding of ergonomics. He was pulling was such that employees were prone to mus- convinced if he couldn’t find a ready-made solution, culoskeletal type injuries and certainly suffered he could come up with the concept and find a firm fatigue as a result of the various case weights,” says with the engineering and manufacturing capabilities George Soleas, executive vice president, LCBO, required to design and build it. Toronto. “Employees were often off due to injuries “This wasn’t the first time the LCBO had taken this

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03MMD-Destuffit.indd 22 14-06-09 10:31 AM sort of approach,” says Soleas. “We’ve done it before with capacities ranging from 20 lb to 20 tons or more and don’t find it at all unusual.” for a variety of sectors since 1971. The individuals who face challenges every day are “About 50 percent of our total volume is custom, often the best equipped to develop the ideas that will which can mean developing a product from scratch drive the solution. The LCBO recognizes product or modifying an item that’s part of our standard, design, development and production are not their off-the-shelf product range,” says Richard Kat, vice- core competencies and readily outsources to experts president of sales and marketing at Engineered Lifting when necessary. Systems & Equipment Inc. “We let customers approach Pizzolato did his research, then leveraged his insights us with challenges and we collaborate on the solutions and experience to determine the most ergonomically that we develop and fine tune based on customer friendly way to “de-stuff” a container. The key was input, trials and market research.” to reduce or eliminate the lifting and carrying of the It took about two years to take Pizzolato’s initial heavy cases. concept through to the engineering drawings, manu- Pizzolato had a lightbulb moment. Rather than have facturing, testing and adjusting the prototype that the case come to the conveyor under person power, was trialled at the LCBO’s Durham facility. At that the conveyor comes right to the case with the help of point, the final design was ready for production and a hydraulically or mechanically powered, flexible after many tweaks and changes to the design over attachment. If the attachment could be moved along the next two years, the unit was patented in the US both vertical and lateral axis, the employee’s primary in 2013 and is patent-pending in Canada. task would then be positioning the attachment and Customers invariably ask: “Can you design and sliding the case onto it rather than lifting, twisting build it?” Destuff-IT’s answer: “We can do anything and carrying. if you give us enough time and money,” says Kat. The Destuff-IT machine The LCBO identified and approached Engineered ELS developed a unit with an adjustable-height is the product of close Lifting Systems (ELS). The firm has been designing, hydraulic platform that can move one or two employees collaboration between building and installing standard and customized (maximum weight 500 lb) up or down to the case. The LCBO and Engineered bridge cranes, jib cranes, monorails and transfer carts user can then raise or lower and pivot the conveyor Lifing Systems.

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03MMD-Destuffit.indd 23 14-06-09 10:32 AM The unit won’t move unless from side to side to reach the container’s corners. The you need to work collaboratively with your partners.” a person is standing on the unit has laser sensors at each of its four corners to pre- In a typical warehousing environment, the pressure-sensitive ergomat vent collisions, and a pressure-sensitive ergo mat that Destuff-IT unit can boost the case rate by up to 75 at the operator’s station. prohibits motion unless an operator is aboard. percent. Generally, two people can manually unload Emergency stop buttons and a touch-sensitive safety 300 to 575 cases per hour, while the Destuff-IT bumper will also halt the unit. The entire unit can be easily handles 900 cases/hour or more. To match “driven” further into the container under battery power. the new pace set by the Destuff-IT units, some users “The product evolved significantly from the initial have to hire additional employees to staff . napkin sketch the LCBO supplied, to the final machine Some customers have even experienced a reduction that would become a part of our standard lineup,” in the total hours required to unload, even when says Kat. personnel added to the palletizing department are What is the key to making such a partnership work taken into account. and ensuring it produces a viable end product? Of The LCBO’s Durham location now has 11 Destuff- course, communication is vital. The more the cus- ITs, the London operation has two and the Toronto tomer shares with ELS engineers, the better they’ll warehouse has one. Employees gave the units an imme- be able to come up with a design that addresses the diate thumbs-up because the machines made their issues. It also helps if customers are receptive to onsite jobs easier and they went home with energy rather changes such as improved layouts to facilitate work- than exhausted at the end of the day. During the trial flow and make room for equipment. phase in Durham, the employees, who knew the dock “We can’t be experts on every business out there so you get at the start of the day is yours for the entire we need you to tell us what’s important to you and shift, made a point of beating colleagues to work to your employees,” says Kat, who also recommends reap the benefits of the Destuff-IT. making employees part of the process since they’re “The equipment is so simple, employees required the ones who will use the equipment daily and best very little training, but in the early days, we needed to understand the challenges. “Get employees engaged remind them that the Destuff-IT was there to do the early on and they’re more likely to accept and even heavy lifting and that we wanted and expected them welcome the final product.” to take full advantage of the equipment,” says Soleas. Adds Soleas: “You have to OWN it and actively par- At the Durham location alone, the LCBO expects ticipate through the entire process. You can’t walk away to save about $121,000 annually since the Destuff-IT at any point and hope you’ll get what you want. If you boosts productivity by cutting the average time want a quality product that meets your expectations, required to unload a container by more than half. In

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03MMD-Destuffit.indd 24 14-06-09 10:33 AM this application it can handle 650 cases/hour up from 575 cases/hour. Previously, it was a two-person job but with the Destuff-IT, one person can unload a container, which has resulted in labour savings. “The ROI on our investment was approximately nine months and over a consecutive three years, thanks to enhanced ergonomics, training, standard operating practices, culture changing initiatives and to an extent our new DestuffIt units, our logistics departments have experienced an 82 percent reduc- tion in lost-time accidents and a comparable decrease in WSIB expenses,” says Soleas. “Workers are naturally and understandably leery of any semi- or fully automated device that might take jobs away from people,” says Kat. “However, we’ve found that once they realize our units always require at least one and sometimes two operators, while dramatically reducing the height and distance they need to lift the cases, they tend to embrace the change.” MM&D

Lifting the boxes down from celing height in a container to a fixed-height conveyor is a thing of the past.

03MMD-Destuffit.indd 25 14-06-09 10:33 AM Right-sizing packaging means cost savings efficiencies

By Kara Kuryllowicz lower fixed real estate costs or allow customers to reallocate that space. very time a part or product gets shipped it needs Eprotection. An extraordinary range of plastic and Not for sale usually fills the gaps resulting from packaging The Packsize business model is also unique because that doesn’t fit the product being shipped. That empty while customers can have the use of a Packsize space, the dunnage and the excess corrugated all carry machine onsite, they can’t buy, lease or even rent the material, shipping, handling and disposal costs that machines. Packsize covers the cost of shipping, install- ultimately affect corporate bottom lines—and con- ing, maintaining, repairing, troubleshooting, sumer pocketbooks—as well as global sustainability. employee training and relocating the machines at At least that is how it was until Canadian firms like their customers’ sites. All customers have to do is call Holland & Crosby, PH Tech, KML Windows and Canadian area manager Marcus Flannery, ask for a Packaging Logistics discovered Packsize, a privately packaging and shipping analysis and agree to buy all held company founded in 2002 by Hanko Kiessner, of their corrugated for the machine (a proprietary whose father introduced corrugated in Europe in z-Fold corrugated) exclusively from Packsize. Despite 1969. Packsize manufactures on-demand, automated, the fact z-Fold’s contents are 97 percent recycled right-size box-making equipment that uses its pro- corrugated, it is as durable as it is sustainable. prietary z-Fold corrugated. Headquartered in Salt “This business model has been the key to our suc- Lake City, Utah, Packsize installed its first On cess because the prospect’s decision to go with Demand Packaging machine in Canada at Packaging Packsize is a slam-dunk—it’s a risk-free proposition Logistics in 2007. because the z-Fold corrugated material is the only According to Packsize, the move to on-demand, cost they pay and they’d be buying corrugated any- right-size packaging from standardized sizes ordered way,” says Flannery. “Single-sourcing z-Fold from in bulk results in savings of about 35 percent by reduc- Packsize saves customers’ the administrative time ing shipping, excess packaging, product damage and and effort required to order, track and manage cor- returns and disposal costs. The use of Packsize rugated from other suppliers.” machines typically reduces shipping volumes and Packsize now offers four machines: iQ Fusion, iQ corrugated consumption by 40 percent and 15 percent Fusion 2, the EM7-25 (bale widths of 10.63 to 96 respectively. Reducing on-site box inventory can also inches with no length limit) and the EM6 (bale widths

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03MMD-Packsize.indd 26 14-06-09 2:29 PM of 10.63 to 94.49 inches with no length limit). The windows. The smallest PVC profile measures 1 inch machines make sense for a wide variety of industries, wide by 1/8 inch high by 16 feet long and the largest but due to the nature of their products or their manu- is 12 inches wide by 6 inches high by 16 feet long. When facturing and shipping environments, some verticals PVC profiles are packed four to 200 per box, the box tend to rely more on a specific model. For instance, can weigh up to 154 lb. However, the parts may be as the EM7 works for all industries, but the EM6 is a small as just a few inches square. A part-filled box can particularly good fit for woodworking and heavy weigh up to 100 lb. As a result, PH Tech typically needs manufacturing and the iQ Fusion & iQ Fusion 2 suit up to 200 boxes daily and relies on 100 standard box fulfillment and light manufacturing. With the z-Fold sizes, which were generally manually cut to size. in place, the footprint of the iQ Fusion is 6 feet by 8 “Thanks to Packsize, I make the size I need, in the feet, which is the smallest footprint. The EM7-25 volume I require, on the spot—I don’t have to order footprint is 10 feet by 10 feet with the z-Fold. and store 200 pieces onsite when I only need 25,” says Holland & Crosby press Eric Bellavance, procurement manager, PH Tech. “We operator Terry Phillips at the Agile and flexible often cut boxes and threw out the extra 70 inches Inca Onset S70 machine. “Packsize really was a no brainer for us—why doesn’t because it was cheaper and less hassle than tracking everyone have one?” says Max West, operations man- and inventorying the remaining pieces for future use.” ager at Holland & Crosby, a Mississauga, Ontario- Right-sized, just-in-time box production has allowed based printing company, which got its EM7-25 in PH Tech to put 10 to 15 percent more product on a August 2013 and has since reduced associated pack- truck and reduced its onsite cardboard inventory by aging and shipping costs by 30 to 40 percent. “As a about 17 percent. As well, it has freed up warehouse digital printer in the fast-paced, on-demand world space and cut disposal costs since PH Tech no longer of retail POS, we needed a packaging system that was throws out five to 10 percent of its corrugated. as agile and flexible as our printing solutions.” To accommodate and stabilize customers’ uniquely While Holland & Crosby, PH Tech and KML shaped products, all Packsize machines can also Windows all appreciated their previous packaging manufacture “packaging kits”, each of which might suppliers’ ability to provide the required packaging include outer box and edge protectors, partitions and within 12 to 48 hours, those providers simply couldn’t the dead space fillers that keep oddly shaped products deliver the extraordinary range of necessary sizes firmly positioned in the box. and shapes in mere minutes or in low volumes. In the past, Holland & Crosby and KML employees Holland & Crosby’s EM7-25 can print any size of made these “corners” and “bumpers” themselves, but box in about 30 seconds, but many of the box sizes Holland & Crosby’s West finds the machine-made produced on the Packsize machines can be made in pieces are better than the handcrafted versions and under 10 seconds. It is true on-demand, just-in-time, actually strengthen the box once in place. right-size printing, which is important since Holland & Crosby’s POS product dimensions can change just before or even in the middle of a print run. Like Holland & Crosby, KML, a custom window and door manufacturer, produces an infinite variety of sizes and shapes and rarely repeats itself. “Our packaging department had to custom-craft every single box and due to the unusual shapes, our packed boxes often had voids,” says Ricardo Rodriguez, performance engineer at KML in Strathroy, Ontario. “Initially, our packaging employees were skeptical but the Packsize EM6-30 performed as promised and cut the time it takes to pack a unit in half.” Of course, oversize boxes can be cut to size, but that option will require additional labour, disposal and poten- tially dunnage and corrugated replacement. Undersize boxes are even more of an issue than oversize boxes, because they’re typically thrown out, recycled or inven- toried in the hopes they will fit another product run.

Sturdy and strong In Lévis, Quebec, PH Tech designs and extrudes PVC profiles for high-performance residential doors and

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03MMD-Packsize.indd 27 14-06-09 2:29 PM Less damage reduces returns While void-fill products can help protect the contents, they won’t provide the requisite resistance when heavy boxes are stacked. If the box is crushed, it commu- nicates a less than positive message and also visually alerts recipients to carefully check the contents for any sign of damage. When void-fill product is lacking or insufficient, the contents can move around and sustain damage. If products arrive in less than pristine condition, returns or compensation are likely, which also affects everything from the company’s reputation to its carbon footprint and additional packaging, shipping, administrative and replacement costs. “Our consolidators and customers noticed the dif- ference right off the bat and based on the feedback, they really see the benefits,” says KML’s Rodriguez. “Using properly fitting boxes has virtually eliminated crushing, despite the fact we’re now able to stack the packages higher.” Perfect-fit boxes have affected returns at each of the three firms, and so far at PH Tech, returns are down five percent, with Bellavance expecting an additional five percent drop as they maximize their use of the EM7-25. the Packsize isn’t an issue if you do it just few times Learning on the job daily, but depending on Training is supplied by Packsize and in most cases, the frequency and the employees have embraced the system in less than a size of the plant, the week. While it helps if they’re accustomed to working number of minutes and with Windows-based applications and touch screens, steps will have a cumula- Murray Ferguson works with a PH Tech employee with no computer experience tive effect. one of Holland & Crosby’s now runs his firm’s EM7-25 seamlessly. In more than When users encounter Zund digital cutting devices 25 years with PH Tech, that employee’s time had issues with the Packsize in the finishing room where been devoted exclusively to packing product into machines, they call the Holland & Crosby’s the digital diecutting is done. boxes. As the dedicated Packsize machine operator, Packsize helpline and operations manager Max he now works year- typically get a callback West beside the Packsize round with no downtime within three to five EM7-25 machine that has even when PH Tech’s minutes. been a part of every plant volumes slow in “Packsize really does tour since it arrived in December and January. provide excellent sup- August 2013. “He’s thrilled to have port,” says West. expanded his skills and Across the board, these Packsize customers agree be in charge of program- the on-demand Packsize right-size boxes deliver a ming and operating a big variety of productivity, efficiency and cost benefits machine that is now an and as an added bonus, the machine-made Packsize integral part of PH Tech’s boxes present a consistent and professional image daily operations,” says that’s aligned with customers’ expectations. Bellavance. “Retail tends to be a little last-minute and while Packsize machines we’ve always followed our customers’ leads and can be operated/pro- adapted to them, Packsize has made it far easier and grammed right at the less costly for us to do it,” says West. “Our customers machine’s touch screen aren’t noticing a difference in our service or packag- or operators can do it ing, but my stress level and my shipping distribution from a networked com- managers’ are down by 40 percent. We’re so proud puter elsewhere in the of our EM7-25 that we show it off on all of our plant plant. Walking over to tours!” MM&D

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Ryder.indd 1 14-06-09 10:45 AM PRODUCT FOCUS

Warehouse products roundup 1 Fast lift forktruck 2 500-watt fan A new series of Jungheinrich forktruck Herkules Equipment Corporation has has been released. Mitsubishi Caterpillar introduced a new light-weight, quiet, Forklift America Inc’s (MCFA) new and cost efficient ceiling fan for cooling Jungheinrich ETR 340 - 335d series trucks large warehouse and manufacturing have 3,500- to 4,500 -lb capacity. MCFA facilities. The vertical, tri-pole mount claims industry-leading lift speeds ceiling fan improves air movement, combined with high capacity retention, reaching over 300 feet away, efficiently to allow loads to be staged at higher rack cooling a large working area. The fan’s levels for greater warehouse efficiency motor and blade design consume a small 2 and productivity. amount of energy—just 500 watts at full “The ETR 340 - 335d series allows power. With lightweight aircraft grade operators to lift loads up to 450 inches, aluminum encasing a polyurethane foam helping to maximize their warehouse core, each blade weighs only 1.5 lb. The space,” said Jeff Bowles, product line fan is also unique due to the Herkules manager at MCFA. brushless, direct drive motor. The zero The hydraulic system delivers the maintenance motor is extremely long fastest published lift speed in the lasting and has no belts, drives, gears or industry—up to 160 ft per minute—in pulleys that need replacing. The motor is addition to variable reach and retract fully sealed and resists corrosion. speeds. This forktruck also includes a suspended articulating drive axle that evenly balances load weight for 3 Charge up on break 4 Floor lifts improved stability during cornering and EnerSys is offering a customized power Ergonomic XZ Series hydraulic floor-level when working at high lift heights. The management program for lift truck fleets lifts from Presto Lifts Inc can handle reach truck also has a rigid mast with that provides an alternative to liquid loads of up to 6,000 lb, are useful in all cushioning at all mast stage transitions. propane, hydrogen fuel cells and the usual lift-table applications conventional, lead acid battery-charging (assembly, maintenance, palletizing, systems. The Zero Battery Change etc.), and can be easily loaded/unloaded (ZBCSM) Solution allows lift trucks to with an ordinary hand pallet truck. operate all day without changing The platform of an XZ lift lowers to floor batteries and without the need for a level, leaving the pan-style platform no battery room. more than half an inch above the floor for “With the ZBCSM Solution, drivers easy roll-on/roll-off. Accessible from all four simply pull up and plug in,” explains sides, XZ lifts rise to a height of just over 35 Steve Spaar, marketing director Americas inches to minimize bending and lifting, for EnerSys. “Our technology allows thus reducing employee fatigue, injuries, operators to charge their trucks during and production times. A bright yellow regularly scheduled breaks, eliminating 6-inch flexible strip is mounted to the lip of the need to change batteries—even in the platform to protect against toe injuries. 3 multi-shift operations—while keeping The lift motor can be controlled by a foot every lift truck performing at its peak switch or pushbuttons, and a 10-foot lead throughout the day.” is available at no additional charge. The ZBCSM Solution includes ZBC Six models offer two standard platform Designer software, an industry-first sizes (44 x 48 and 50 x 48 inches) and lift interactive modeling software that capacities of 2,000, 4,000, and 6,000 identifies the most efficient and pounds, but custom designs are cost-effective energy configuration for available. Bellows skirting is also companies running forklift fleets. The available. Any XZ Series lift can be software completes operational and relocated with a hand pallet truck. financial analysis within 30 minutes to 4 provide a savings framework.

30 MM&D | May/June 2014

03MMD-ProductFocus.indd 30 14-06-09 1:43 PM The Konstant Group has the most extensive selection of product storage equipment and accessories available in Canada. Large or small we can provide the best solution for your requirements

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Konstant.indd 1 14-06-09 10:46 AM LEARNING CURVE Keeping personal information private is a joint responsibility

onsidering the number of data security breaches Organizations we deal with should also offer an Coccurring in the world, even at some leading opt-out so we as consumers don’t have our personal global organizations, few would claim our personal information provided to third parties for telemarket- Tracy Clayson information is more secure today than it was in 2001. ing purposes or used for other means. We have a right That’s when Canada’s federal government introduced to decide how much information we offer. the Personal Information Protection and Electronic In our industry, some companies have been accused Documents Act, (PIPEDA) to protect individuals of releasing personal information directly, impacting from having their personal data released by organiza- a person’s ability to gain employment. However, it tions without their written approval and consent. can be noted the use of employment reference infor- Such security breaches can be very serious, resulting mation is a key factor in selecting applicants and, in financial, professional or personal loss, identity further, can protect employers from hiring someone theft, credit theft, damage to reputation and loss of who is a liability. career opportunities. The Professional Drivers Bureau of Canada, (PDBC) To deal with current data security challenges, on a privately owned data collection company, provides April 8, 2014, the Harper government introduced Bill background checks and retains the employment S-4, the Digital Privacy Act, which offers several records of more than 160,000 truck drivers in Canada. amendments to PIPEDA. It’s the third attempt to PDBC offers potential employers a service to expose amend the original Act. full details of a driver’s work history, including those The proposed bill commits employers to report to he/she may otherwise omit on an application. Carriers the Privacy Commissioner any breach of security are given a credit of $5.50 by PDBC every time they resulting in loss of, or access to, personal information offer up employment information and termination as a result of failure to have established safeguards— records to augment a truck driver’s file. leading to a breach that causes significant harm to But the teamsters have challenged whether the busi- one or more individual. ness is legal, and are critical of the ethics of the PDBC, Among other elements, the bill contains a definition saying personal information released without permis- of “business contact information” to make things sion. Is this type of service fair to individuals? easier for employers to communicate with employees. What then about the use of personal data obtained Employers must now include as part of an employee’s through other means, such as video surveillance at personal information their name, business address, work sites, use of IP address information to gain title and telephone number. internet usage data, legal access to personal informa- The bill is a positive step, and I’m pleased to see the tion for litigation purposes, inappropriate use of government is trying to raise levels of consumer pro- information through its sale to third parties, GPS tection. However, I would argue that securing our tracking systems in employer fleets and security personal information is something for which we all breaches of organizations’ computer systems? bear responsibility. Law enforcement agencies are In the end, preventing data security breaches requires not able to keep up with every possible weakness, a combination of government regulation, corporate leak, and failure of the nation’s systems and processes. awareness and common sense among individuals. Bill For these agencies, there will never be adequate S-4 is a positive step, but we all need to ensure compli- resources, skills and monitoring capability. ance and take steps to protect ourselves. MM&D Instead, as we continue to build our communica- tions globally and become more interconnected, we Recommended reading: Cassels Brock & Blackwell’s have to ensure we all take appropriate steps. Our paper “Digital Privacy Act – Everything Old Is New machines, including smart phones, laptops, iPads Again” by Bernice Karn of the firm’s Privacy Group. and desktops, must run firewalls, virus and spyware See: http://tinyurl.com/jwvc6ew protection software and be properly password-pro- tected. Employees must also be provided with regular Tracy Clayson is managing partner, business training on the use of information and on laws regard- development of Mississauga, Ontario-based ing use of personal information. In Transit Personnel. [email protected]

32 MM&D | May/June 2014

03MMD-lc.indd 32 14-06-09 10:35 AM LEGAL LINK You can’t say what you think

he law of defamation tries to balance two often- Publication by the defendant Tcompeting societal interests: the importance of the The plaintiff must prove the defamatory words were protection of reputation; and freedom of expression. published by the defendant, that is, communicated In the leading case of Hill v. Church of Scientology to someone other than the person defamed. Any act of Toronto, the Supreme Court of Canada re-balanced which has the effect of transferring the defamatory the common law of defamation, emphasized the information to someone else—a third person—con- importance of the protection of reputation and con- stitutes a publication. Symbolic ceremonies, dramatic Marvin Huberman firmed that the right of freedom of expression, guar- pantomimes, mimes, brochures, gestures, handbills, anteed under the Canadian Charter of Rights of letters, photographs, placards, posters, signs, or car- Freedoms, is of a limited nature. toons, can be a publication. What is required is that the defendant had “knowing involvement in the pub- Essential elements of the tort lication of the relevant words”. Certain Canadian The aim of the law of defamation is to protect the provincial defamation statutes contain provisions reputation of individuals and corporations from the presuming publication in some circumstances. publication of false statements which could harm their However, certain persons who play a secondary role reputation in the community. Defamation comprises in the distribution of words, like news agents, book two sub-categories: slander and libel. Spoken and other sellers and libraries, may have a defence of “innocent transitory forms of communication, like sounds and dissemination” if they can prove they were not aware. gestures, fall within slander. Defamatory words pub- The plaintiff must prove that ordinary and sensible lished in the form of written, visible or audible words persons familiar with the plaintiff would reasonably recorded in any form of a more or less permanent understand the negative statements, in the circum- nature, like letters, newspapers, films, or television stances attending the publication, referred to the and radio broadcasts, are usually classified as libel. plaintiff. Provided the plaintiff would be reasonably Other forms of immediate communications, par- identifiable by, for example, the use of a picture, a ticularly involving the Internet, like instant messag- description or identifying facts, the plaintiff need not ing, tweeting and blogging, have added new be specifically named. dimensions to the law of defamation, especially to the meaning and effect of publication, which has Defamatory meaning forced Canadian Courts to adapt the traditional rules The plaintiff must prove that the alleged defamatory to better fit into the new global landscape. statement carried a defamatory meaning, that is a Generally, defamation is a strict liability tort. statement which tends to lower a person “in the esti- Defendants will be liable for publishing a defamatory mation of right-thinking members of society”. statement even when the intention was innocent. Whether the words complained about are capable of In an action for defamation, the plaintiff must prove: a defamatory meaning is a question of law; whether those The defendant published a defamatory statement; words are understood as defamatory is a question of fact. The defamatory statement referred to the plaintiff; In determining whether a plaintiff has satisfied the The statement is defamatory, meaning it “has the essential elements of a defamation action, the court tendency to injure, disgrace, prejudice or adversely will take into consideration all of the circumstances affect the reputation or character of the plaintiff”. of the case, including the circumstances of publica- Once the plaintiff has proved these essential ele- tion which will vary with time, place and context, ments, the law presumes the defamatory words are the reasonable implications the negative words might false and the plaintiff has suffered damage. bear, the context in which the words are used, the Unless the defendant displaces these presumptions, audience to whom they were published and the man- the plaintiff will be entitled to a judgment in its favour. ner in which they were presented. The law places an onus on the defendant who, in order A defendant in a defamation action has several to avoid liability, must establish a positive defence. The potential defences available that may provide protec- plaintiff may then be able to defeat certain defences tion. In Part Two of this article, the principal defences by establishing that the defendant acted with malice. are discussed. MM&D Depending on the facts and circumstances of a par- ticular case, a defamation action can be extremely Marvin J. Huberman, LLM, is a Toronto lawyer, complex, risky, time-consuming and costly. mediator and arbitrator. www.marvinhuberman.com

www.mmdonline.com | May/June 2014 33

03MMD-ll.indd 33 14-06-09 10:35 AM MATERIALS HANDLING Can Uber conquer the package delivery business?

he small package transportation business is one density, dispersed-demand (mainly city) transporta- Tof the mainstays of logistics delivery services. In tion market where pickup and delivery are performed many countries it started with the post office and on the same trip. Dave Luton was taken up by a large number of large and small While the same niche exists in the small package transportation firms. freight market, it is relatively specialized and Recently Uber, maker of a taxi-finder app, has reserved for goods that can bear the high cost. People announced plans to enter the small package delivery are willing to pay a lot for important deliveries, for business. There has been speculation about its example, chocolates to your significant other on possible success but little comment from a serious Valentines day or roses for your anniversary; if you logistics perspective. are away on business, you’ll be willing to pay a sig- This is not the first time firms in the people trans- nificant delivery cost to ensure it gets there. portation business have entered the small package There are also important differences between business. In fact, most firms transporting people— people and freight transportation. For goods trans- including stage coaches, railway and air passenger portation the freight does not load itself. People, on transportation and even bus lines—have offered the other hand, are used to walking to the down to freight services. In most of these the freight is car- ground level and going to the curb for pickup. That ried in the belly space of a passenger transport is a huge and important difference, particularly in vehicle and is ancilliary to the main business. the downtown core of most cities. If you want to hear Overall, these carriers make up only a small portion tales of woe, ask any small package operations man- of the overall package delivery marketplace. So this ager about deliveries to the 12th floor of a downtown begs the question: Will a concept like Uber be a office or apartment. mainstream or niche player like traditional passenger And of course there is parking. Ever try to find a oriented parcel delivery services in the small package parking spot mid-day in the Toronto financial district? delivery business? Stopping is one thing, parking for 15 to 20 minutes To answer that question we have to strip away some is another. The tickets add up quickly. It’s so bad some of the non-logistics speculation. We must examine local courier companies have gone back to bicycles. what Uber is from a logistics perspective, what it brings Once we get out of the downtown core, small pack- to the market place and finally what transportation age companies all use a hub and spoke delivery system. niches are open to be exploited by the concept. Uber, in its current form, does not have a hub, and Uber is a broker of transportation services for that will prevent it from entering the non-specialized people. It hires independent contractors using an commodity, small package freight delivery market. innovative web-based dispatch and payment app. Add to that the need for protective packaging and Using proprietary mobile phone technology it pro- labeling, and I forcast Uber will remain a niche vides an integrated dispatch and payment system that freight company in its present form and will not answers the question: “How long will my pickup take business from traditional small package delivery take?” Maping technology allows it to show the prog- companies. ress of the pickup vehicle, and the driver can inform What Uber is doing is not unique. To our traditional the customer on arrival. delivery companies I pose the question: Should you The other innovation is the electronic mobile adopt some of the Uber dispatch features in your device (credit card) payment which is entirely han- existing freight delivery operations. I could see an dled by Uber. The system uses standard payment interesting application for them in the delivery of but employs variable demand pricing (at peak times large bulky items like mattresses or appliances or you pay more) and does not permit tipping. It also their servicing and repair. allows passengers to give feedback on driver service In our next column I will outline what Uber can and performance. do to be more of a competitive force. MM&D With this capability Uber has successfully pene- trated the cab market in several cities around the Dave Luton is a consultant in the greater Toronto world. The cab market is a local, time-sensitive, high- area. [email protected]

34 MM&D | May/June 2014

03MMD-mh.indd 34 14-06-09 10:36 AM Pallet Racking | Drive-In | Push Back | Pallet Flow | Cantilever Carton Flow | Shelving | Mezzanines

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3D.indd 1 14-06-09 10:49 AM CUSTOMER SERVICE THAT CREATES VALUE BEYOND THE PLATFORM. CAN YOUR PALLET PROVIDER DO THAT? CHEP CAN!

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CHEP.indd 1 14-06-09 10:47 AM