ALC Supply Chain Standards Working Group

ALC Supply Chain Standards Working Group

Supply Chain Week 2012

Michael Kilgariff, Managing Director ALC

Ken Brown, National Manager Linfox

Agenda

• ALC overview

• Some industry facts

• New industry working group

• Work plan

• How to get involved

About ALC

• The Australian Logistics Council is the peak national body

representing the major and national companies participating in

the Australian freight transport and logistics supply chain.

• ALC is the lead advocacy organisation to all levels of Government

and industry on freight transport and logistics supply chain

regulation and infrastructure issues.

• The mission of ALC is to influence national transport and

infrastructure regulation and policy to ensure that Australia has safe,

secure, reliable, sustainable and internationally competitive supply

chains.

Some Facts The T&L industry is a significant contributor to Australia’s

economy:

• 14.5% of GDP

• 1 million jobs

• 165,000 companies

Australia is facing a rapidly increasing freight task:

• 500 billion tonne kilometres in 2010

• 1000 billion tonne kilometres in 2030

• 1400 billion tonne kilometres in 2050.

Productivity growth for the transport sector only 0.6% per annum in the five years to June 2011

Mission To enable the Australian Transport & Logistics

industry to improve supply chain efficiency and increase product and shipment visibility.

ALC Supply Chain Standards Working Group

ALC Supply Chain Standards Working Group

Objectives • To work with industry groups to help resolve supply chain issues including

non-compliant pallet labelling, poor intermodal visibility, rapid recall and withdrawal of defective products and poor data quality.

• To consider the potential benefits that other relevant technologies and services may provide including:

GPS (Global Positioning Systems)

Location Management (GS1 Locatenet)

GSM (Global System for Mobile communications)

RFID (Radio Frequency Identification)

Data Synchronisation Solutions (GS1net)

Product Information Databases

Industry recall notification portals (GS1 Recallnet)

• Develop industry guidelines and case studies.

Start up participants

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Some identified challenges • Lack of interoperability – b/w modes, b/w carriers

• Pallet label compliance

• Data quality is sub optimal

• Re-working of the same information along the supply chain

• Existing standard information not being leveraged

• Weight/dimension data - getting it right from source

• Location data management – difficult to keep up to date

• Recall & withdrawal management

Four key issues…

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Working group team structure

ALC Board of Directors

ALC Industry Work Group Leadership Team

Chair: Ken Brown (Linfox)

Pallet labeling

work group

Inter-modal interoperability

work group 11

Inter-modal interoperability work group

Inter-modal interoperability Challenges

• Interoperability – a lack of standards hindering the ability to achieve full end to end visibility across the supply chain.

Re-work & transaction errors

Sub optimal data quality

Added cost

• Integration is currently achieved by building point to point solutions with each trading partner. This is not scalable and is costly to manage and support

Increases complexity

Difficult to achieve agility and rapid response to customer demands 13

Integration without standards…

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Buyer 1

Buyer 2

Buyer 3

Buyer 4

Buyer 5

Buyer 6

Supplier 1

Supplier 2

Supplier 3

Supplier 4

Supplier 5

Supplier 6

Standards support Global Interoperability

Pallet label Non–compliance cost • Pallet label quality – 44% discrepancy across FMCG

Poor pallet labelling is the biggest emerging issue in

retailers’ supply chains

• Cost to re-work labels that can’t be scanned ~ $10 ea

• 27,000 non compliant shipments in 13 week period

• 36% identified as label issues

• Total cost $10 x 9,720 = $97,200 x 4 quarters = $388,800 pa

• $388K x ‘n’ retailers = Cost to Australian business $$$$$$$$

• Re-labeling logistics units with proprietary labels

• Recipients can’t auto receipt goods

• Use of third party warehousing increases risk of non-compliance

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Pallet label compliance challenges • Pallet label compliance – there was consensus that the industry is

suffering a huge cost burden due to poor labeling of shipments. Some of the problems encompass:

poor quality

Multiple SSCC labels applied

different formats

load shifting destruction of labels

Incorrect product information

Manually adjusted SSCC labels.

pallet label position

3PL engagement

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Poor Print Quality

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No SSCC Label – can’t scan Damaged label – wont’ scan

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Multiple Labels Applied

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Incorrect Product Information

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Manually Adjusted Information

Two different SSCCs

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GTIN on carton is different from GTIN on label… • Incorrect goods

will be receipted • Inventory will be

incorrectly updated

Timelines

• First meeting was held 16th August

• Ken Brown from Linfox is Group Chair

• Work groups scheduled to kick off mid October

Pallet labelling

Interoperability

• Next Steering Committee meeting 25th Oct

• Will report progress to ALC board in November

How do you get involved?

• If you are interested in joining and participating in either of these industry wide project teams.

• We are currently taking expressions of interest so if you are interested you can contact either:

Ken Brown at [email protected]

or

Bonnie Ryan at [email protected]

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