One of Australia’s leading strategic thinkers, Phil Ruthven, founder and Chairman of IBISWorld delivered an information-packed keynote address to hundreds of logistics professionals on critical factors affecting the global and Australian economy, with special emphasis on the supply chain.
Phil Ruthven, IBISWorld
According to Phil Ruthven, Australia is well placed in an exciting and rapidly growing region, which will be bigger than the EU and USA economies by 2025. He explained that Australia was at the beginning of an eight-and-a-half year growth cycle that will be driven by capital investment, with virtually no chance of a recession in the country before 2018.
He illustrated how consumer power has transformed the supply chain from cost-plus in the mid-1960s through a production-oriented era to today’s revenue-minus model.
Speaking on the rapid growth of internet shopping and its impact on traditional bricks and mortar retail, he forecast that online shopping would double from 4.5% to 8.9% of retailing in Australia by 2016, creating the need for significant supply chain transformation to cope with such a fundamental shift in consumer buying habits. Pressures extend all the way up the supply chain to the primary sector and importers and, with virtually full employment, the availability of labour will hinder one of the supply chain’s perceived sources of flexibility.
Mr Ruthven pointed out that investment in Information Communications Technologies (ICT) and innovative automated solutions will be essential to increase productivity and maintain a competitive advantage.
Mr Ruthven concluded his presentation with some practical advice:
- Stick to one business at a time and do not diversify
- Aim to dominate some segment(s) of the market
- Be forever innovative, valuing the business’ IP
- Outsource non-core activities to enable growth
- Don’t own hard assets
- Have good and professional financial management
- Plan from the outside-in, not the inside-out
- Anticipate and be prepared to respond to any new industry lifecycle changes
- Follow world best practice for the business
- Develop strategic alliances
- Encourage unique organisational cultures
- Value leadership first and management second
Presenting an overview of the latest logistics technology and software developments enabling businesses to respond efficiently to changing consumer, market and industry demands, Glen Borg, Chief Executive Officer, Dematic said that their mission was to help companies optimise their staff, facilities and equipment as they move products and information through the supply chain, reducing costs, improving service levels and providing a competitive advantage.
He explained that the key is to deliver quality solutions that improve productivity, but are flexible, scalable and modular, three very important qualities that are vitally important for those involved in multi-channel and online retailing.
Flexibility translates into the ability to deal with ongoing changes in SKU and order profile, scalability is the ability to deal with peaks during the day and yearly seasonality, and modularity is the ability to grow to meet future business demands. Mr Borg said that these challenges could be met by fine-tuning existing operations and improving productivity through better material flow and simple improvements to DC layouts.
Dematic’s solutions attack the waste within a business’ operations such as the amount of time pickers spend travelling rather than picking. Some of the most basic improvement ideas such as carton and pallet live storage deal with reducing or eliminating travel altogether. Techniques such as batch-picking reduce travel even further, while incorporating zone-skipping conveyors can deliver even higher productivity gains.
Flexibility, visibility and control of the DC can be improved by eliminating paper while voice and RF picking not only increase productivity, but also improve management decision-making by making the necessary information available when and where it’s needed.
Introducing three new, innovative logistics solutions from Dematic, Mr Borg emphasised the importance of automation and innovation for Australian businesses to deal with rising labour costs, labour shortages and workplace safety.
The new Dematic solutions, all of which provide flexibility, scalability and modularity include the new Multishuttle buffer storage and sequencing system, a new family of RapidPick ergonomic Goods-to-Person (GTP) picking stations, and automated mixed-case palletising solutions for full-case order assembly.