using epc to cut costs at nz's largest kiwifruit packhouse
DESCRIPTION
Utilizando EPC para reducir los costos en producción de kiwis en Nueva ZelandaTRANSCRIPT
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New Zealand
Using EPC to cut costs at NZ’s largest kiwifruit packhouse
Dr Peter StevensChief Executive, GS1 NZ
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First, a Word About T i lNew Zealand Terminology…
kiwis kiwiskiwiskiwis kiwiskiwiskiwifruit
© 2009 GS1 New Zealand 2
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ContentsNew Zealand
Contents
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timelinej
Results After 1st Season
© 2009 GS1 New Zealand 3
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Where (and with whom) it all t t dNew Zealand started …
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New Zealand’s Bay of PlentyNew Zealand
New Zealand s Bay of Plenty
80% of New Zealand’s 80% o e ea a d skiwifruit production
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EastPack LimitedNew Zealand
EastPack Limited
Established in 1983 in EdgecumbeEstablished in 1983 in Edgecumbe
1983: packed 60,000 trays2008: packed 15.7m trays
12% of industry GREEN trays12% of industry GREEN trays24% of industry GOLD trays
42 coolstores at 3 sites
© 2009 GS1 New Zealand 6
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Te Puke site:New Zealand
• purpose built• < 7 years old
k 8 t f hi h 5 t• packs 8m trays, of which 5m trays are GOLD
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New Zealand
Edgecumbe site:Edgecumbe site:
• 3.5m trays ofGREEN and GOLD
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New Zealand
Opotiki site:Opotiki site:
• 3.5m trays of GREEN and GOLD
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ContentsNew Zealand
Contents
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timelinej
Results After 1st Season
© 2009 GS1 New Zealand 10
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Eastpack Supply Chain (simplified)New Zealand
Eastpack Supply Chain (simplified)
$1b+
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EastPack’s ResponsibilitiesNew Zealand
EastPack s Responsibilities
To deliver in full on time in spec (DIFOTIS)To deliver in full on time in spec (DIFOTIS)• Checkpoint at the wharf• Replicated at coolstore door
DIFOTIS Penalties are severe • NZ$ 400 / pallet main season• NZ$ 500 / pallet kiwistart season• Total cost 2007: NZ$ 280k
Penalties for not loading ‘kiwistart’ product by the end of Week 24
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Bonus System as wellNew Zealand
Bonus System as well
If EastPack can be flexible to fill late order there is the ability to earnIf EastPack can be flexible to fill late order there is the ability to earn up to NZ$ 200 / pallet
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Issues with meeting ordersNew Zealand
Issues with meeting orders
Orders are comm nicated 10 da s in ad anceOrders are communicated 10 days in advance
O d h d t 2 d b f lOrders are changed up to 2 days before close load date• change in market requirement• change in market requirement• vessel arrival dates change• fresh fruit deteriorates fasterfresh fruit deteriorates faster
than expected
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Issues with meeting ordersNew Zealand
Issues with meeting orders
6,600 different SKU’s• often pallets need reworking to meet
orders
Short loading windowS o t oad g do• GOLD = 20 weeks• GREEN = 40 weeks
The bottleneck was finding pallets in the coolstorethe coolstore
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Large Seasonal WorkforceNew Zealand
Large Seasonal Workforce
1,300 seasonal staff employed, p y
31 different nationalities
Relatively short picking season, 83 daysdays.
Packing main pack & ControlledPacking main pack & Controlled Atmosphere product: 140 days.
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Solution needed…New Zealand
Solution needed…
To quickly find product in the coolstores
A system that requires no human intervention.
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ContentsNew Zealand
Contents
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timelinej
Results After 1st Season
© 2009 GS1 New Zealand 18
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Solution OverviewNew Zealand
Solution Overview
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Solution: EPC-enabled Pallet C dNew Zealand Cards
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Solution: EPC-enabled F kliftNew Zealand Forklifts
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Solution: LocationNew Zealand
Solution: Location
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Solution: Putting It All T thNew Zealand Together
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ContentsNew Zealand
Contents
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timelinej
Results After 1st Season
© 2009 GS1 New Zealand 24
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Project OverviewNew Zealand
Project OverviewInitial Meeting:
• 18th Jan 2007• General information about the benefits of RFID, EPC
Scoping to RFP (Request for Proposal):• March May 2007• March - May 2007
Proof of Concept to Pilot:• July to October 2007y
Full Roll-Out• December 2007 to April 2008
T t 100% f ll t t k d b t t f (20th M h• Target: 100% of pallets tracked by start of season (20th March 2008)
• 42 coolstore @ 3 sites, ±30 forklifts, 12,000 SkyMarkers, etc…
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ContentsNew Zealand
Contents
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timelinej
Results After 1st Season
© 2009 GS1 New Zealand 26
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ResultsNew Zealand
Results
2007 2008
DIFOTIS penalties $280k $90k
‘Kiwistart’ penalties $250k Nil
Coolstore managers ‘burnt out’
1 Nil
Forklifts 24 16Forklifts 24 16
Gold Fruit Loss 8% 4%
V l (T ) 1 8 2 ( 10%)Volume (Trays) 1.8m 2m (+10%)
*Investment: USD300,000. ROI= 1 season
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Coolstore Map: Pallet L tiNew Zealand Locations
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Coolstore Map: Forklift L tiNew Zealand Locations
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Underway now…New Zealand
Underway now…
1. Further mining the data2. We are out of our 24 months ‘non-compete’
clause3 T ti E t k’ tit & i l d k3. Targeting Eastpack’s competitors & single-desk
exporter (Zespri)
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New Zealand
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OverallNew Zealand
Overall
We have taken the chaos out of the coolstoreWe have taken the chaos out of the coolstore
Staff feel like they are part of a winning team againStaff feel like they are part of a winning team again.
We met the KPI’s and capex requirements of Eastpack’s board.
E t k i d h h ld lEastpack increased shareholder value.
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The Team That Pulled It Off…New Zealand
The Team That Pulled It Off…
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New Zealand
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