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Using EPC to cut costs at NZ's largest kiwifruit packhouse
- 1. New Zealand
Using EPC to cut costs at
NZ’s largest kiwifruit
packhouse
Dr Peter Stevens
Chief Executive, GS1 NZ
- 2. First, a Word About
New Zealand Terminology…
T i l
kiwis kiwis kiwis
kiwifruit
2
© 2009 GS1 New Zealand
- 3. Contents
New Zealand
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timeline
j
Results After 1st Season
3
© 2009 GS1 New Zealand
- 4. Where (and with whom) it all
New Zealand started …
t t d
4
© 2009 GS1 New Zealand
- 5. New Zealand’s Bay of Plenty
Zealand s
New Zealand
80% o New Zealand’s
of e ea a d s
kiwifruit production
5
© 2009 GS1 New Zealand
- 6. EastPack Limited
New Zealand
Established in 1983 in Edgecumbe
1983: packed 60,000 trays
2008: packed 15.7m trays
12% of industry GREEN trays
24% of industry GOLD trays
42 coolstores at 3 sites
6
© 2009 GS1 New Zealand
- 7. Te Puke site:
New Zealand
• purpose built
• < 7 years old
• packs 8m t
k 8 trays, of which 5 t
f hi h 5m trays
are GOLD
7
© 2009 GS1 New Zealand
- 8. New Zealand
Edgecumbe site:
• 3.5m trays of
GREEN and GOLD
8
© 2009 GS1 New Zealand
- 9. New Zealand
Opotiki site:
• 3.5m trays of
GREEN and GOLD
9
© 2009 GS1 New Zealand
- 10. Contents
New Zealand
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timeline
j
Results After 1st Season
10
© 2009 GS1 New Zealand
- 12. EastPack s
EastPack’s Responsibilities
New Zealand
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
12
© 2009 GS1 New Zealand
- 13. Bonus System as well
New Zealand
If EastPack can be flexible to fill late order there is the ability to earn
up to NZ$ 200 / pallet
13
© 2009 GS1 New Zealand
- 14. Issues with meeting orders
New Zealand
Orders are comm nicated 10 da s in ad ance
communicated days advance
Orders are changed up t 2 d
Od h d to days b f
before close
l
load date
• change in market requirement
• vessel arrival dates change
• fresh fruit deteriorates faster
than expected
14
© 2009 GS1 New Zealand
- 15. Issues with meeting orders
New Zealand
6,600 different SKU’s
• often pallets need reworking to meet
orders
S o t oad g
Short loading window
do
• GOLD = 20 weeks
• GREEN = 40 weeks
The bottleneck was finding pallets in
the coolstore
15
© 2009 GS1 New Zealand
- 16. Large Seasonal Workforce
New Zealand
1,300 seasonal staff employed
, p y
31 different nationalities
Relatively short picking season, 83
days.
days
Packing main pack & Controlled
Atmosphere product: 140 days.
16
© 2009 GS1 New Zealand
- 17. Solution needed…
New Zealand
To quickly find product in the
coolstores
A system that requires no
human intervention.
17
© 2009 GS1 New Zealand
- 18. Contents
New Zealand
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timeline
j
Results After 1st Season
18
© 2009 GS1 New Zealand
- 24. Contents
New Zealand
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timeline
j
Results After 1st Season
24
© 2009 GS1 New Zealand
- 25. Project Overview
New Zealand
Initial Meeting:
• 18th Jan 2007
• General information about the benefits of RFID, EPC
Scoping to RFP (Request for Proposal):
• March - May 2007
Proof of Concept to Pilot:
• July to October 2007
y
Full Roll-Out
• December 2007 to April 2008
Target: 100% of pallets t k d b start of season (20th M h
• T t f ll t tracked by t t f March
2008)
• 42 coolstore @ 3 sites, ±30 forklifts, 12,000 SkyMarkers, etc…
25
© 2009 GS1 New Zealand
- 26. Contents
New Zealand
Introduction
Eastpack’s Supply Chain
Solution Overview
Project Timeline
j
Results After 1st Season
26
© 2009 GS1 New Zealand
- 27. Results
New Zealand
2007 2008
DIFOTIS penalties $280k $90k
‘Kiwistart’ penalties $250k Nil
Coolstore managers 1 Nil
‘burnt out’
Forklifts 24 16
Gold Fruit Loss 8% 4%
Volume (T
V l (Trays)
) 1.8m
18 2m (+10%)
2 ( 10%)
*Investment: USD300,000. ROI= 1 season
27
© 2009 GS1 New Zealand
- 30. Underway now…
New Zealand
1. Further mining the data
2. We are out of our 24 months ‘non-compete’
clause
3. Targeting Eastpack’s competitors & single-desk
3 T ti E t k’ tit i l d k
exporter (Zespri)
30
© 2009 GS1 New Zealand
- 32. Overall
New Zealand
We have taken the chaos out of the coolstore
Staff feel like they are part of a winning team again
again.
We met the KPI’s and capex requirements of Eastpack’s
board.
Eastpack increased shareholder value.
E t ki d h h ld l
32
© 2009 GS1 New Zealand
- 33. The Team That Pulled It Off…
New Zealand
33
© 2009 GS1 New Zealand