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TOPICAL ISSUES OF LOGISTICS. Учебное пособие для студентов-магистров направления «Экономика»

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Text 6. GE Lighting Brightens Its Logistics Scene
with Intermodal
Intermodal transport has in general been growing faster than just about any other transportation mode, but has a lot of room to grow even more. That was clearly the message during a presentation on intermodal by Amy Rice of rail carrier CSX and David Slates of GE Lighting, at the CSCMP conference in Denver last week.
Rice said CSX has built a tool that analyzes a company's truckload shipments and looks for opportunities where intermodal might be a good option. Across more than 100 shippers, Rice said that on average 14% of those truckload moves are either an excellent or good fit for a switch to intermodal, with additional moves not included in the 14% also being potential candidates.
While the data might be seen as self-serving, SCDigest editor Dan Gilmore talked to Rice about how the tool works, and believes this is a pretty accurate assessment.
So, is that 14% of current truckload shipments sort of the ceiling for where the intermodal industry can grow? No, said Rice, because as intermodal networks improve, additional track is built, etc., new current truckload moves will emerge as good candidates. The industry has been steadily pushing down the minimum miles for which intermodal may make sense for a shipper.
GE's Slates said that within all of GE, growth in use of intermodal has been strong, but that there is still a long way to go. In 2012, GE spent about $70 million on intermodal transport, versus some $400 million on straight truckload. While a substantial portion of that current truckload spend could probably be converted to
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intermodal, and more will be, some business units or pockets of logistics operations are still resistant to the change, for a variety of reasons.
That's not true at GE Lighting, where intermodal growth was 25% from 2010 to 2012.
Why the aggressive switch to intermodal? Slates cited a number of factors:
Cost: Intermodal can often reduce shipping costs more
than 30%. Capacity: At certain times of the year, obtaining needed
truckload capacity can be challenging. Intermodal rarely has capacity constraints, Slates noted.
Environment: Use of intermodal substantially reduces CO2 emissions for a given move.
Competitiveness: GE Lighting belies it will gain the advantage if it gains the benefits of intermodal earlier than its rivals do.
"You don't want to be at the end of the line on this transition," Slates said.
Of course, one barrier to greater adoption of intermodal are concerns about service, but Slates said that while these worriers may have been valid even 5-6 years ago, "Those days are long gone. Service is simply no longer a factor."
Slates described how GE Lighting currently brings in containers to the port of LA, and then drays them to the BNSF yard, where they are moved to Chicago. There, the containers are transferred to CSX, which moves them to Atlanta. From there, they are trucked to a GE factory in Tennessee.
Total transit time: six days - and rarely is there any deviation from that. That intermodal transit time is just one day more than the five days it takes to move a container
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from the West coast to Tennessee via truck, Slates said, and that the trucking move today actually has more variability.
And the benefit: shipping costs some 40% lower than truckload costs.
Slates added that the idea of a hand-off between rail carriers often gets logistics managers nervous, and thus serves as a barrier to greater us e of intermodal. But he said shippers should simply use a less-than-truckload (LTL) analogy.
"Shippers don't even really know how their pallets move across an LTL provider's network, or what terminals it passes through," Slates noted. "That doesn't make them nervous - the goods still usually arrive on-time. You should think about intermodal hand-offs the same way."
Slates added that there are big opportunities to link inbound and outbound moves by sharing equipment like containers and chassis, either with other units within your own company or with trading partners. He said GE's customers were increasingly interested in such relationships, as well as almost totally supportive of the switch to intermodal, contrary to some perceptions of customer resistance. That is very isolated and shrinking, Slates said.
Slates then offered a simple four-step process for building an intermodal program:
1. Data Gathering: Get together current lanes, costs, and transit time requirements. Identify the opportunities.
2. Start Small: Pick one or two lanes of the most attractive conversion opportunities. Demonstrate success. Learn in more detail how it works.
3. Expand: Start scaling up the program to other lanes
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4. Optimize: Connect moves across the network, and find ways to bring in moves that are more challenging to make work
Slates said GE Lighting is just about out of level 3 and heading into its optimize phase.
He also said you can pick other spots to get going. Seasonal spikes can be a great place to get started, Slates noted. Ditto for unexpected demand surges. He notes the company recently had an unexpected giant order for 20 truckloads of goods coming out of an Ohiofactory that would have been difficult to service using only trucks. So Lighting moved 12 of the loads using intermodal, and the other eight via truckload, a combination that worked very well.
He also said shippers need to be more conscious of inventory levels.
"I've seen times when logistics managers are worried about a small increase in transit times when the target DC already has plenty enough inventory there already to meet demand," Slates noted.
Year to date intermodal volumes are up about 3.7% in 2013, according to the Association of American Railroads.
Text 7. Star quality cooling for brakes distribution
Brakes has invested in a bespoke cooling system from Star Refrigeration for its landmark multi-temperature distribution centre in Berkshire. Brakes recently established a state-of-the-art temperature controlled storage and distribution centre near Reading. Brakes is a leading supplier to the UK foodservice industry and the brand new purpose built facility forms part of the company’s continued drive for sustained growth.
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With an overriding commitment to reduce environmental impact, Brakes awarded the refrigeration contract to Star following a competitive tender process. A world leader in cooling and heating system innovation, Glasgow-based Star designed, supplied, installed and commissioned a bespoke refrigeration plant for cold and chill stores at the new facility.
Star’s Director of Sales – Food Market, James Ward, says: “Energy efficiency and reduced carbon footprint were key
factors in securing the cooling contract for the new Brakes facility in Reading. As well as offering a competitively priced bespoke system, we selected high quality components and built-in design features such as reverse cycle defrost and floating head pressure control, to maximise efficiency and significantly reduce energy
consumption.”
He adds: “Rising energy costs are putting increasing
pressure on temperature controlled storage and distribution businesses. With refrigeration accounting for up to 80% of total energy consumption in warehouse facilities, plant design and efficiency is key to cost saving and energy
management.” Star’s multi-temperature cooling system for Brakes
comprises four LPR (low pressure receiver) refrigeration units. The packaged LPR plant has an ultra low charge of ammonia and is designed with energy saving features for highly efficient operation.
The plant features two direct ammonia LPR systems, which supply cooling to a frozen food cold store (-21?C) via four ceiling evaporators. Two ammonia/glycol chillers supply cooling to a chill store for meat products (+1?C), a banana store (+13?C) and vehicle loading bays via 13 ceiling mounted air coolers.
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Star has a long standing working relationship with Brakes, installing systems in depots across its UK network. As well as supplying cooling solutions for Brakes over many
years, Star’s nationwide refrigeration engineering team
continues to deliver planned, preventative maintenance support to ensure ongoing plant safety, reliability and efficiency.
When it comes to designing energy efficient cooling and heating systems, Star is a natural innovator. Star works with strategic partners across the globe to deliver low carbon, cost saving solutions
Text 8. The Complex Challenges of Designing an
Automated Distribution Center
Considering a new automated distribution center? There can be many operational and financial rewards at the end, but it's smart to well understand the many complexities involved in facility design and approval that logistics managers and executives may face in getting there. That was clearly one of the takeways in an excellent presentation this week by Dalen Mathys-Cook of on-line grocer Peapod and Paul Huppertz, a consultant at The Progress Group, which assisted the retailer with its design for a new DC to support the Northeast market. The two told their story this week at the Material Handling and Logistics Conference in Park City, UT. Somewhat under the radar, Peapod has been successfully expanding its business in terms of both top line revenue and number of markets served. Peapod has well penetrated its home market of Chicago, and now also operates in the New York City and New Jerseyareas as well as some areas of the Mid-Atlantic.
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Its distribution and logistics requirements are challenging and complex. Customers place on-line orders across a very wide number of SKUs, and are given two-hour delivery windows for the following day. Delivery trucks of course have to be loaded by order and route, with a small picking and staging window (about four hours) to get the first wave of trucks loaded each night. (Mathys-Cook says Peapod is also experimenting with same-day delivery.)
That core complexity is exacerbated by the storage handling needs of different classes of products. Peapod carries larger, more bulky products such as pet food or charcoal all the way to frozen foods that must are subject to "cold chain" requirements from DC to customer delivery. It actually has several different areas for refrigerated space, because some produce stores better at 41 degrees while others are best say at 36 degrees.
In fact, a Peapod DC might have some nine different storage and picking zones from which product must be merged to consolidate a customer order, each with its own handling characteristics, volumes and SKU profiles.
At its flagship Chicago distribution center, picking and replenishment processes are manual, with downstream sortation of picked cartons and totes to enable consolidation for loading.
In the New York-area market, however, picking is primarily today performed in the back of local Stop & Shop stores, which like Peabody are owned by Ahold, in an area Peapod calls "WareRooms."
When the company decided a few years ago that its strategy would be to significantly expand the number of SKUs it carried in additon to tthe overall growth expected in in the region, it became clear that the current fulfillment
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processes in the Northeast would no longer cut it. A new dedicated distribution center would be needed.
But how large should the facility be? Peapod logistics executives wanted to consider automating what they could in the new operation to improve throughput capabilities and reduce cost per unit in this notoriously low margin sector, but what was the right level of such automation? What would be the best places to invest assuming the capital budget was fixed, as it almost always is?
These of course are the types of questions every distribution automation project faces, but perhaps made even more challenging to answer given all of Peapod's requirements and constraints.
Peapod and The Progress Group decided to evaluate each pick area using a high/medium/low approach to material handling automation, exploring what the options were and how those would intersect with throughput goals, capital expenditures required, and ROI. The effort would also identify the pros and cons of each level of automation, and its impact on DC complexity, flexibility for the future, and ergonomics.
"As we added levels of automation, the question was can we gain enough incremental benefit to justify the investment," Huppertz said.
One early challenge was that there was no real forecast for growth in the thousands of new SKUs expected to be added over time, so Huppertz said they just had to extrapolate from the data they did have on existing SKUs as best they could. He noted that they did have pretty good numbers on productivity rates for the more manual approach from both Peapod's Chicago DC as well as some Ahold facilities in Europe.
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Obviously, estimates of rates, equipment costs, implementation costs and other data had to be developed for the medium and high options - no small task, especially when the effort involved multiple picking areas.
At a high level, the "low" option involved basically what Peapod was currently doing in its Chicago DC, picking into cartons and totes using a "pick and pass" type approach in any individual pick area. When complete, the carton/tote is taken by conveyor to a sorter for delivery to the proper staging area.
The medium level approach selected for more detailed analysis was a use of automated replenishment of pick faces using "multi-shuttle" technology from Dematic. Picking would be semi-automated using what Huppertz called a "put wall," where pickers place items into a series "cubby holes" by order, which when an order is complete are then manually moved into cartons or totes for delivery to the sorter.
Put Wall System from Dematic The "high" option involved a full good-to-picker (GTP)
approach, in which multi-shuttles would deliver SKUs for an order to pickers, where the picker would then place items into cartons by order, after which the multi-shuttle then whisks away to go to another picker station or back to storage, and the process continues.
Also considered in the high option was an automated buffer between picking and staging/loading to enable Peapod to pick further ahead of loading times.
The initial concept was to pick very fast movers from pallets, medium movers would get the medium level solution of auto-replenished and manual picking, and slow movers would use some goods-to-person and some of the put wall concept.
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Budget Reality Sets In Somewhere along the way, the initial budget for the figure
was reduced, causing the team to go a bit back to the drawing board. Clearly, some of the automation would need to be cut, and the team had to look for areas where changes could be made that would have the least impact on productivity and throughput.
To accomplish that, they went back to the original ABC velocity analysis across zones and redid the same analysis for the big block of B movers, which were then broken into their own ABC sorting by volumes.
A simulation tool was also used to see test the full system in action.
As Huppertz said, "We had all the individual data elements for each area, but we needed to see it all together."
The simulation looked, for example, at how long it would take a carton or tote to make it through the system to the loading area across various scenarios.
This analysis also allowed Peapod to see at what point in looking at the full spectrum of fast to slow movers the cost per unit for manual methods would cross over and be higher versus a more automated system (it was around the top 40% of total B mover SKUs).
Some things just had to be cut. One of those was using automation in the freezer area, which Mathys-Cook said was desired primarily to make the work easier for employees there and therefore improve retention. But in the end, with the constrained budget, freezer automation just couldn't make the ROI cut.
Then came another wrinkle - early estimates of implementation costs proved too low, as they were based more on national averages versus the specifics of the New