Sunday, 27 October 2019

Pallet racking collapses' preventative measures are inadequate

Outside of fire, the most damaging warehouse hazard is collapsing pallet racking. Such can be the grievous losses and business disruption that despite insurance it can break businesses, yet arguably the defence measures against such risks are woefully inadequate.

Pallet racking is safe. It only becomes unsafe when it combines with careless people and so any means to eliminate huge costly collapses should be encouraged but is there foot dragging on this? Sadly and evidently there is. Until three years ago the only anti-racking failure measures were a variety of rack barriers, column guards and guide rails, all with one serious limitation, namely they extend up from the ground no more than a few feet. Given that pallet racking legs reach many times higher than that they are widely exposed to that most common cause of collapse --- forklift collision. This can even occur while a truck is manoeuvring in an aisle with load at maximum lift height, causing it to topple over, crash the mast and load into the racking and create a domino collapse.

This is not to belittle the traditional means of protection but their shortcomings clearly show they need augmenting that would protect at all heights. Just such a solution is Rhino from RCP* introduced three years ago but seemingly downplayed by the leading UK trade body, Storage Equipment Manufacturers Association (SEMA). This unique, patented design prevents racks from collapsing by means of using wire ropes suspended from the steel structure of the building, if possible, and then attached to each racking support leg. When the building's steel structure cannot be used than a secondary steel structure is installed to form a support for the suspension ropes. With this system in place, any leg that is damaged will not be able to collapse, thus preventing any costly domino effect.  

But does the cost of Rhino make one blink? Hardly. the cost of a domino-type racking collapse could run into seven figures, not including any serious injuries, fatalities and possible, permanent business losses through disruption, and massive future hikes in insurance premiums. One of RCP's benefits, in fact, is reduced insurance costs because the system has been proved in the field. Irrespective of the number of stored pallets, the cost is calculated by the length of the racking run. As an indication, this can vary from £85 to £130 per outer leg. Inner legs are not used if the racking is back-to-back. In respect of drive-in racking, RCP would look to fit to three rack legs deep. The only form of racking that would not warrant the system would be automated crane rack systems.

As regards Rhino's maintenance, the only action needed would be an annual inspection so as to identify any unreported impacts, which in any event is a requirement with or without Rhino. The issue of rack inspection is critically important because one of the rarely mentioned risks that really catches the facility and safety managers off guard is the rack collapse caused by the pervasive, subtle damage that can be unnoticeable to the untrained eye. For example, if a rack system has multiple uprights that exceed out-of-plumb guidance of 0.15 inch per three-foot section a collapse could occur. It is very easy to walk by a 0.15 inch deviance and not even notice it, or "it's just a little damage, not worth bothering with now." The necessity for watchfulness becomes even greater in cold store environments.

So far, most of RCP's 12 installations have been retrofits, and there are five pending with  30,000- pallet stores, and there is much interest coming from seismic-prone regions. As regards overseas representation, RCP would consider licencing arrangements.

One might reasonably ask that given this major breakthrough in warehouse racking safety why does Britain's leading warehouse racking trade body, SEMA, apparently take a low-key view, even though SEMA's technical adviser has witnessed a live demonstration and reported that the system works. It has been mooted that if they recognised Rhino warmly as worthy of serious consideration then that would be questioning their members' installation design and integrity, a curious attitude if true because all racking is safe but accidents will happen.

UK racking collapses involving fatalities are rare, about less than one a month, but serious injuries are measured in their hundreds. SEMA also claims that UK rack collapses are rare, but with at least one major racking collapse occurring every week, according to one involved source, that is a curious definition of rarity.


Domino style pallet racking collapses like these could break businesses

Saturday, 10 August 2019

New unique compactor slashes reverse logistics costs

Do retailers know the true costs of their reverse logistics? With regard to waste handling it seems not, according to the creators of the Spacemaker* card and plastic compactor devised by two directors, Simon Brown and Paul Overfield, formerly at Translift Bendi whose revolutionary articulated forklift did so much to transform warehouse economics. The result is that in Britain alone many millions of pounds are lost every year through the inefficient handling of waste card/plastic in reverse logistics.

One of Britain's four leading grocery retailers knew it had a costly problem handling its reverse logistics for waste card and plastic, made worse by the fact that recycling plants became more discriminatory over acceptance of waste card. This meant that card should not be mixed with plastic, otherwise it would be rejected and so any payments (cost recovery) made from recycling waste would be lost, which can be considerable given that clean cardboard can fetch £45 per tonne and polyethylene stretchwrap £200 per tonne.

The supermarket method of choice was to use traditional baling machines in stores but the problem with such a compaction rate was that if the bale was contaminated it did not fall apart easily and so the extra labour needed to separate the card and plastic eroded the bale's value. One innovative retailer decided to remove the conventional compactors from stores and use reverse logistics to collect the card from and take it to one of eight regional recycling plants located next to their regional distribution centres, (RDCs), where it would be sorted and baled to maximise cost recovery. The Spacemaker, however, is unique as it is designed to reduce volume by 75% and hence the cost of transport whilst showing that it is still easy to separate and sort on arrival.

What Spacemaker does is to use a compression rate of only 4 to 1 while card is still inside the roll cages because the patented design protects the cage from the effects of compression whilst inside the Spacemaker. But to see if the machine is suitable to achieve all the 'soft' and hard benefits plus the considerable environmental bonuses it is necessary to consider your current set-up.  

If you are using roll cages to decant lorry loads what type are you using and are you so short of space in the back of store that you have to replace card/plastic filled roll cages out in the yard for return to recycling centres? To save time and therefore money roll cages should be nestable with a metal front rather than use of a cling film wrap to the front to contain the load, which is time-consuming and nauseating given that operatives must walk around the cage several times. Storing card-filled roll cages out in the yard for long periods where they can get wet and attract pests is inadvisable because rain water adds weight and there is a good chance of recyclers rejecting such waste. But not putting roll cages in the yard can lead to congestion in back of store, leaving no room for arriving produce. This hugely impacts the time taken to tip a load and also delays putting stock on shop shelves.

Volume is the big issue

Does your yard space typically store many hundreds of trays and stacks of pallets along with roll cages waiting to be reversed for reuse? If so do you know how much capital is tied up in them? So the big issue is that card and plastic take up too much volume and adds cost of business. Each supermarket of this retailer, for example, typically produces one full lorry load of card and plastic (40 roll cages) in one 24 hr period. Spacemakers' directors were given a brief to reduce volumes by any amount they could by compacting it in a cage to reduce double handling and much else besides and all by using a 13 amp power supply.

Correctly integrated into the labour shifts, the Spacemaker saves time, space and transport costs. The space gained from the roll cages is the footprint of 10 instead of 40 which saves almost 30 mt2 but the empty roll cages can also now be stacked outside as they take up far less room and don't attract pests. Over a seven-day period Spacemaker can produce close to 300 packed rolled cages which gives three benefits. The first is the reduction in cage fleet size. Secondly, cage availability at peak periods is critical to get products on the shelves without delay. Spacemaker is also reducing lorry loading and unloading times by over one hour a day, and estimates show that an ambient lorry costs £50 an hour to run. Space is also freed up in the returning lorries because now only 10 card-filled roll cages are needed instead of 40, thus releasing 30 mt2 of space for pallets and trays to be returned.

But what, you may wonder, are the environmental benefits, which also translate into cash gains? Let us just take one superstore experience at a trial store. After 10 months of operation completing 19,800 cycles, potential roll cage reduction was from 11,313 to 2,829 and what would have been 257 lorry loads reduced to 64  In a full year this store expects to save 231 lorry journeys a year or 6,237 miles of HGV travel. What is more, it released 10,182 roll cages back into the network, plus 6,930 pallets and 69,300 reusable trays out of the stores. With a steady Spacemaker roll out to the stores, by the end of this year returns would be reduced by 1,078 HGV trips which so far will mean 12,936 saved trips or 342,272 HGV road miles per year. Those figures will be very much larger after all stores have Spacemaker which leaves this innovative retailer deserving some 'green' accolade of the year.

There are 14,000 potential supermarket users of roll cages in the UK alone. Worldwide the figure is far more and so shows the huge potential to cut costs and improve the environment. Relevant businesses should take a serious look at the Spacemaker.


Spacemaker tutorial at a new installation

Sunday, 5 May 2019

What makes a great logistician?

Logistics, when formerly known as materials handling, storage and distribution, was less complex, with the disciplines required to make the materials, components, sub-assemblies flow cost-effectively through all the production processes well understood. But it was a small field of disciplines relative to what is required today to fulfil the effective control of the global supply chain from raw materials through to final consumer. Driving that change from relative simplicity to complexity is globalisation, in which global companies will typically source on a worldwide basis for global production.

While logistics nowadays rightly attracts far more board attention, those thinking of rising to board level through the logistics hawsehole might like to think twice, because it would be like needing encyclopaedic knowledge in your head. It would be no exaggeration to say that a great logistician needs a tolerably good grasp of subjects like global economics and politics, good governance throughout the global supply chain, and even history. Now that is a tall order for any one person but logistician directors can alleviate that by ensuring the teams under them have the various knowledge disciplines to look at all the angles. So far, however, experience suggests there is still much room for improvement, the 1995 Kobe earthquake and the Japanese 2011 tsunami being good examples.

The risks to smoothly operating logistics are legion. Those logisticians who do not anticipate, assess likely disruptions and have robust plan Bs to fall back on are asking for trouble. These risks range from industrial accidents involving key, globally-demanded components, through to natural hazards like earthquakes, hurricanes, tsunamis and volcanic eruptions. The latter have been used by insurance companies to assess disaster-prone areas but they cannot accurately forecast future events. But what about the less likely and more opaque risks of a political/economic nature, and is enough attention being paid to labour conditions in one's supply chain partners? Should they be a worry? Yes, they most certainly should.

Take the economic threat for starters. Would it surprise you that the International Monetary Fund (IMF) at a meeting last month thought Italy was considered a bigger threat than a no-deal Brexit? On one analysis it was thought that no-deal was a risk only because it would catalyse an Italian crisis. It is not difficult to see why. Good financial governance in Europe's southern EU nations has never been their forte and is largely built on chronic, ubiquitous tax evasion. Greece needed nearly a Euro 300 billion bailout, the world's biggest, that nearly wrecked the Euro but Italy's debt is much larger, making it not only too big to fail but too big to bail. With its credit rating just two notches above junk, should Italy's sovereign debt rating fall to junk status then the nation faces insolvency. One cannot rely on the guardians of fiscal responsibility in Brussels for a solution because it has consistently failed to do its chastising duty by just kicking the can down the road. If it were only Italy that was the problem it would be a less nightmarish outlook but the fact is France and other countries have also been fiscally irresponsible, leaving the EU with a ticking time-bomb.

The political threats, which should include terrorism and cyber crime, are no less scary. Political instability is global and needs to be properly assessed, along with the feasibility of alternative supply sources that can be rapidly deployed. But be of good cheer. Yet another threat on the horizon --- disruptive technology--- like 4D printing, could make logisticians' life easier because it will be much quicker, easier and cheaper to produce goods in home markets and so sidestep the problems of globally-stretched supply chains. If you are into containerised shipping, now may be a good time to jump ship.

Monday, 29 April 2019

Lessons from allies' Afghanistan defeat

Afghanistan has shown that logistics can defeat the most potent of world powers when ignored in the environment where it is expected to work. After 18 years of war, the Allies working to defeat the Taliban have admitted defeat, a war that cost America alone over an estimated $1 trillion and 2,400 lives. In Britain a very conservative cost estimate is put at over £30 billion, money diverted from pressing demands elsewhere. President Trump is preparing America for a cut and run as he attempts to deliver on his promise to pull out of America's "endless wars" by excluding the Afghan government from the peace talks with the Taliban, who have never been defeated in the countryside where the terrain and climate favours guerrilla warfare and imposes huge logistics cost on the foreign occupying forces.

As I warned in my blog of July 10, 2010: "Logistics will be Britain's Afghanistan calvary," the Talibans' great advantages over its enemies were the country's ideal guerrilla warfare terrain and its enemies' logistical problems, "the cost of which would break the coalition's will at a crucial time when nations must tighten their belts as the world faces another possible financial meltdown." I went on the say: "Military logistics is not just about controlling the supply chain effectively to deliver all that is required to the war theatre at the right time. It is also about how the chosen battlefield can be used to degrade an enemy's military ambitions. In this respect the Taliban had the country's geographical and climatic conditions working in their favour That, perhaps, more than any other factor, ensured that the allies could not win a military victory."

But there are other lessons to be learned from the allies' Afghanistan defeat. First and foremost, never fully trust the military mind, almost never known for its original thinking, because, as with the Pentagon, it will always advise throwing more good money after bad. Britain's military advisers were no less obtuse when, following Britain's withdrawal from Iraq, the British commander in charge was more concerned at using up his recently freed-up troops for fear of losing them. "If we don't use them we lose them," he crassly averred.

Another key lesson is the economic one and its political reverberations since the two are inextricably entwined. Consider what these "endless wars" have cost the American societal fabric. Real incomes per capita are lower now than the were over 30 years ago, while most of the country's wealth is now concentrated in the hands of a tiny few. Huge sums are desperately needed to shore up America's crumbling infrastructure. Such is the level of homelessness in American cities that the Government has been concerned at the soaring rates of Hepatitis A, which is caused by faecal contamination. Its response has been to issue poo maps so people can avoid the risks! One wonders if Capitol Hill is on a poo map.

President Trump's aim is to pull out of Afghanistan before next year's election. The proposed deal is that the Taliban will pledge not to host any terrorist attacks on America, in return for bringing American troops home. Years of strife would suggest that the Taliban would be inclined to uphold the deal, but don't hold your breath. Reportedly, the Taliban have also pledged not to undo the progress made with women's rights. In a deeply conservative society that, too, alas, may prove a hollow pledge.

Sunday, 28 April 2019

Ocado automated warehouse fire cause identified

The cause of Ocado's disastrous automated warehouse fire at Andover, England, earlier this year has been identified as an "electrical fault at one of the first-generation battery charging units at the edge of the ambient storage grid....caused the plastic lid on top of a grocery-carrying robot to catch alight." This was revealed in a document issued to shareholders as part of its planned tie-up with Marks & Spencer (M&S) retail group. Steps to prevent further crippling fires involve introduction of extra "localised" smoke detectors and removing the plastic lids on its robots, which serve no practical purpose and will not impact the robots' efficiency. It also plans to add heat sensors in the ambient product storage grid, in addition to the those existing sensors in the chilled storage grid. Curiously, however, one is left asking why an 'award-winning' fire suppression system was so quickly overwhelmed. Fire fighters at the scene also remarked on the highly compact nature of the grid storage locations over the top of which hundreds of robots swarmed, which made it difficult for firefighters to get around easily.

Automated warehouses have been around in Britain since the 1980s and while their level of applied 'intelligence' has grown remarkably there are certain aspects that have not changed. Their costs and risks remain as high as ever, and while some improvements have been made regarding their flexibility, if business circumstances change so much as to make them redundant then their resale value would be near zero. Their payback periods will, of course, vary according to how hard they are worked and that, of course, is a function of customer demand, but anything less than five years would be unlikely. All this shows the critical necessity of conducting a sound payback exercise. But is there something else that may be overlooked and yet is critical to any successful, automated warehouse? Yes, there is, and big automation investors ignore it at their peril.

                 Price governs automation viability

The overall business model must be closely examined in relation to where a company stands with its competitors. If the revolution in British food retailing over recent years proves anything it is that price is king, but the dominant  retailers have still not taken that fully on board, which partly explains the meteoric rise of the food discounters like Lidl and Aldi, who between them now account for nearly 15% of the total UK grocery market. Their secret of success was two-fold. They spent far less on outfitting new shops and brought them to readiness much quicker. Secondly, they treated inventory-holding costs with respect, because such costs can dwarf all other warehousing costs combined. This meant sticking with far fewer product lines, typically 1,600, compared with 40,000 for their big competitors, all of which were chosen for their fast turnover rates, and if they began to slow they were quickly replaced by anticipated fast movers. Translated at the shopping level, it meant buyers, comparing like-for-like shopping baskets, could expect to spend 30% less than with the big four retailers. 

This brings us back to the payback scenario that will emerge next year once Ocado has dropped food retailer Waitrose in favour of M&S. Next year M&S will pay £750 million to form the 50-50 joint venture with Ocado to allow it to offer its customers an online service, currently lacking. In the Ocado shareholders' circular about the fire, however, it warns of several risks relating to the deal, one of which is that Ocado's retail customers may stop shopping with the company and instead buy products from Waitrose online or other competitors because they view M&S to be more expensive. In one survey of 250 Ocado customers a disturbing 22% said they would no longer remain with the company if it did not sell Waitrose products. M&S's notoriously high food prices  may yet prove its undoing now that it has embarked on a costly automation route. Before its proposed tie-up with Ocado was announced, M&S's food side was already struggling against cheaper competition, warning enough, one would think, in a world where price is king.


Monday, 22 April 2019

Britain's air pollution curbs are failing

Latest air pollution concerns signal more stringent targets

Transport is the lifeblood of logistics but along its arteries from motorways to minor roads its emissions are a growing health concern which has left the British Government on the backfoot after years of inaction. Belatedly, the Government is waking up to the problem, which public health officials are only now recommending that local councils take action, too

The need for firmer action and the abandonment of old air pollution reduction targets has been highlighted by a new report from Public Health England, (PHE) the official public health agency, and other new research. London, for example, compared poorly with Paris. Since 2010 levels of fine particulates from London traffic have dropped only a quarter the rate of Paris. The latest research from Kings college, London, points the finger at the 11% year-on-year rise since 2010 in the use of motorcycles like Deliveroo, whose exhausts tests are much weaker than those for cars and lorries. "This comes as a big surprise," says Dr Gary Fuller, Kings College. "If we just carry on in the same way it will take many years to reach the legal limits," he said. "Progress is very slow." Support for this claim is that the level of fine particulates from traffic between 2010 and 2016 fell an average of  2.6% a year but more recently appears to be tailing off.

The implications for logistics transport operators are profound and point to an accelerated adoption of various sticks and carrots to hasten the reduction of air pollution largely caused by diesel and petrol vehicles. But apart from the more obvious moves like switching from fossil-fuelled vehicles to all-electric, the logistics industry could help in other ways, especially in relation to online shopping and lack of joined up thinking in big cities like London where typically food outlets could receive up to 13 deliveries a day. Consolidation warehouses in cities could relieve that problem.

At the dawn of online shopping it was thought that there would be a net environmental benefit because one delivery van could deliver dozens of shop orders in a small area and thus replace dozens of separate car journeys to do the weekly shopping. It would also have meant significantly fewer road accidents. It has not worked out quite like that because many shoppers now order single items or, for example, may order six dresses of the same design but in different colours so that they can choose which one and return the other five. The online suppliers have made a rod for their own backs because the high cost of returns means that they are making very little money.

Prompt, firm action to limit air pollution does work and the transport players recognise the need for change but are they ready to meet the hastening of existing measures and new ones to slash the estimated 40,000 premature deaths from air pollution in Britain every year and billions of pounds in medical care?


Friday, 22 March 2019

Have China's global trade ambitions had a bum Press?

China has received much adverse comment in the western Press lately over its global trade ambitions but has it been overdone and are the newspapers overly partial, dancing to the political tunes of their owners.

All newspapers are tainted with that most plausible and effective of lies, namely deception by omission, leaving their readers with only some of the facts and therefore unable to strike a fair and balanced view of events, and unlikely to look to other countervailing views. This means that there is a risk of world trade disruptions, or worse, if readers with a meaningful free vote in the West confine and shape their conclusions based only on facts that their newspapers want to reveal. Among the British China-bashing newspapers is the Right-leaning Daily Telegraph whose excoriating, fatuous style has led to remarks like: "Italy is selling itself lock, stock and barrel to the Chinese communist party, flouting the EU's tough new line on Beijing and openly taunting the Franco-German axis." But more on that later.

International trade is the handmaiden of prosperity and prosperity, when fairly shared, is the surest guarantor of peace. China's big drive to develop overseas assets, particularly ports, is a lynchpin in that developmental goal. Its meteoric growth in GDP over the last 25 years has done much to stabilize global trade equilibrium, especially since the global credit crunch begun in 2008, an entirely Western-created malaise. In terms of buying American government IOUs, China has been by far the biggest overseas buyer, which has helped keep American interest rates down and asset value from collapsing.

Now none of this is to say that China has not unsettled some of its near neighbours by making ill-advised moves, as in the South China Sea, where it has violated maritime law by illegally developing artificial islands and subsequently militarising them. Nor should it be forgotten that when it comes to intellectual property theft China is a master at it. But when countries acquire much economic wealth through overseas trade they naturally enough want to protect their overseas assets. This is what Britain and America did in earlier centuries and have done in living memory when, for example, Britain shamefully allowed America to develop the Chagos Islands as a bomber and spying air base, forcibly expelling all of its 2,000 islanders, an act that has just been declared illegal by the World Court at the Hague, with the recommendation that Britain return the Chagos Islands to Mauritius and allow its islanders to return. And as regards intellectual property theft, America, too, was a dab hand at it when it stole British textile inventions in the 19th century.

Ports investments make good sense

The Western media suggests that China's port investments around the world, numbering 42 in 34 countries so far, can be used to build political influence and create 'strategic support states' while also being potential strategic support points enabling developments of logistics hubs that support an expanded military presence. They include ownership of the Port of Piraeus, a container terminal in Zeebrugge and a foothold in Europe's three largest ports, Rotterdam, Antwerp and Hamburg. The Press portrays this as raising fears in the EU that China may use its involvement in European ports to exert political influence on individual member states. The reality is that it makes good business sense for Chinese players to acquire overseas port assets. European countries don't need to feel threatened because in almost all cases the landlord function remains in the hands of local countries.

So far China has signed 38 bilateral and regional maritime agreements covering 47 countries along the Belt and Road Initiative (BRI) routes, an unprecedented logistics scheme that will cost over $1 trillion, and has been likened to a modern-day Silk Road route. Fifty more deals are in negotiation, covering customs, engineering, telecoms, banking, infrastructure projects and above all ports, with Genoa and Trieste first in line.

Back to the Daily Telegraph's China-bashing stance, the paper casts doubt on the economic value of the Silk Road and claims "it has proved to be a Faustian pact for African and Asian states. Try telling that to the Ukraine's citizens, where China has been honoured with the title of "Year of China". The paper also claims that many schemes are white elephants and refers to Brussels warning Europe that it must close ranks or let China pick of states one by one.

All these Xenophobic tones seem to be overlooking one vital fact. Like it or not, the West, particularly America, must get used to the notion that the future is Asian. Europe and Asia are the two most significant regions in global trade, and their trade with each other comprises a greater trade volume than in any other pair of regions. As infrastructural linkages and trade agreements expand, Eurasian trade is accelerating and far outstripping either regions' trade with North America. Far from being the Trojan horse a hostile Press likes to make of China, it is only doing what America did with its European and Asian partners during the Cold War. The BRI will reveal just how crass this colonial logic is.

 If one redefines Asia as stretching from the Eastern Mediterranean to the Pacific, taking in all of Australasia, it includes five billion people, of which China has only 1.5 billion. Despite splurging $50 billion between 2000 and 2016 on infrastructure and humanitarian projects across the region, China has leveraged little, meaningful loyalty, and so the phrase "China-led Asia" would be no more acceptable to most Asians than the notion of a "US-led West" to Europeans. At most, China will be an eastern anchor of the Asian and Eurasian mega-system. And unlike America, China is deeply cautious about foreign entanglements. Foreign markets are what China wants, not foreign colonies, and it is a pity the hostile elements of the Western Press have failed to grasp that and are too purblind to see where world trade is going.