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Hicube pallet analysis

An initiative of the Citrus Growers Association. By Koos Bouwer Independent Industrial Engineering Consultant. 19 August 2010. Hicube pallet analysis. Contents. Purpose and task Symptoms Cause Effect Supply chain analysis Cost analysis vs risk Proposed Action. Purpose.

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Hicube pallet analysis

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  1. An initiative of the Citrus Growers Association By Koos Bouwer Independent Industrial Engineering Consultant 19 August 2010 Hicube pallet analysis

  2. Contents Purpose and task Symptoms Cause Effect Supply chain analysis Cost analysis vs risk Proposed Action

  3. Purpose Define the “issues” in hicube dilemma Collect inputs from different role players Analyze cause/impact/effect Assess supply chain process Cost analysis vs risks Define the way forward

  4. The task • A relative small sample was taken over 3 days in August • The task is to define the way forward – • Identify problem areas – the real issues • Propose action to develop solutions • Beware of generalization • Many good products, practices • Additional measures already taken • More evident in Northern areas • Longer transport distances

  5. Problem Symptoms PHOTOGRAPIC TOUR

  6. symptoms Bigger problem with open display cartons than telescopic A15C Printed cartons slippery vs Kraft Packaging Logistics • Bad presentation of pallet unit loads • Fruit damages, carton damages • Pallet base damages • Unattractive appearance (leaning pallets, uneven consolidation of load) • Pallets falling over • On trucks during transport • On train • In cold stores • During handling • Road Transport Issues • Losses due to pallet damages • Insurance cost • Weighbridge problems / axle loads • Turnaround time at farms (PPECB inspection) • Turnaround time at cold stores / port • Seasonality • Return Loads

  7. Possible causes Were the carton- and pallet base designs and palletization methods adequately adapted during move towards hicube pallets? • HiCube pallet • Higher centre of gravity • Higher mass • Packaging Quality • Quality failure (Non-conformance to spec - Lack of quality control) • Specification failure (Conform to spec – inadequate design) • Application failure (Conform to spec – unsuitable application) • Handling abuse (Forklift handling , potholes, load securing on trucks, driving methods)

  8. Technical • Higher centre of gravity • 120 to 150 mm higher on 1050 mm • Higher mass • Approx 15% more per pallet • Influence loading pattern on trucks • Stability by headboards • Axle mass limits • Tautliners vs Flatbeds • Clients prefer tautliners (no walking on pallets) • More damages on tautliners (Flatbed cargo better secured by tarp and cargo net)

  9. Carton failure • Open Display Cartons • Increased load on bottom layers by • Extra hicube layers • Tightening of cargo straps • Leaning and CoG combination • Cartons slip inside ones below • Not a vertical carton compression problem • Triangular corner supports better • Telescopic A15C • Corner pieces • Spot glue • Horizontal straps

  10. Quality control High levels of ignorance towards any specification or standard Pallet bases Cartons Palletization Materials Palletization Methods • Standards • CRI guidelines • Exporter guidelines • Procurement practices • Do not purchase and inspect against specification • Defective materials • Used by packhouses • Acceptable defect level? • Force it into chain • Pride of Ownership • Little attention to detail and pride of packaging related workmanship • Feedback • No feedback loop (good or bad)

  11. Risk Survey Note: Not a representative sample of total supply chain

  12. Mind map

  13. The effect • Damaged pallet loads • Losses to transporters • Higher insurance cost • Higher citrus transport cost due to claims • Losses to cold storage operators • Higher cold storage cost • Discounted product in market • Lower returns for export chain • Transport Turnaround time • Higher transport cost

  14. FRUIT SUPPLY CHAIN Shipping Dis. Port Transport to CDC Load Port Transport & Refrigeration Farm Packhouse Packaging Supply Chain Timber and Paper Cartons Pallets Other materials Packing Materials Neglected since Deregulation

  15. Supply chain characteristics Still a hybrid supply chain? • One channel system (pre 1998) • Outspan packaging dept – design, development, quality control • One exporter – many resources • Transporters, cold stores and shipping controlled by one organization • Good packaging standards, well maintained, central authority • Deregulation (post 1998) • Less investment in packaging design and development • Many exporters – sharing the same supplier/resources • Transporters, cold stores and shipping: market forces • Various suspect standards, implemented as guidelines • Less involvement from exporters in packaging quality control • General ignorance on packaging issues by all parties in supply chain

  16. Gaps in supply chain Supply Chain owner: Packhouse to Port – Grower ? Port to Market - Exporter ? Who is the supply chain owner? Who is setting the packaging standards? Who is controlling conformance to standards? Who has the authority to act? No central packaging standards authority. Limited research and development for packaging improvements.

  17. Cost Analysis Recommendation: HiCubes are here to stay. Adapt the supply chain • Costs of Hicube vs Standard Pallet: • Shipping Costs • Transport Costs (per Carton) • Cold Storage Cost • Packaging Cost • Other Supply Chain Costs (admin, inspection, clearance, etc) • Downside: • Are the current problems of such a nature to revert back to Std ? • Alternatives: • Truck to Durban in Standard pallet, build up in port • Use only rail for hicubes

  18. Hidden costs Some responsible supply chain owners invest in good practices and controls, but by using the same supply chain service providers, they are prone to higher service cost due to the lack of discipline of the minority • Most exporters present a good product in market • Minority provides a product with low presentation value • Value of all South African products decreases due to minority action Deregulation versus unified supply chain Transport turnaround times create premium Pallet damages create transport premium Pallet damages create cold storage and handling premiums

  19. Proposed solutions Any solution should align with the “Business Strategy” • Technical Solution (A few design changes in packaging and handling practices might solve the problem) • Implementation Solution (How to implement the proposed technical changes) (How to maintain acceptable standards as a sustainable solution)

  20. Characteristics of a good solution Accommodate current good practices Differentiate between pallet loads Differentiate between transport conditions / distances / regions Keep it simple Keep costs down Do not restrict new developments / innovations Aim for a sustainable solution

  21. Technical solutions • Telescopic A15C (HiCube) • Horizontal straps on each layer • Quality control on all packaging materials • Monitor stability of supervent • Reconsider absence of corner pieces • Open display type cartons (HiCube and Std) • Carton design change to prevent slipping of cartons into each other • More horizontal straps for vertical stability • Increase vertical support at bottom layers • Truck loading practices • Review after above

  22. Implementation solutions Commercial Approach Central Guidelines Selective Privileges to conforming parties Price and Opportunity dictates Service Groups Legislative Approach Central standards Enforce rules and standards Legislative Power Infrastructure and resources Or any other better solution • Determine Supply Chain Standards Ownership • Who set standards? • How control and feedback? • How act on non-conformances? • Power of authority?

  23. Basic Quality system

  24. Quality system Status

  25. Proposed Action Plan - 1 High priority : • Choose between Legislative / Commercial Approach or suitable alternative • Appoint Standards Authority (specification owner) • Update A15C hicube palletization method (strapping) • Improve Open Display carton design to prevent pallet compaction / load compression • Improve open display carton palletization method (hicube) • Implement recommendations of pallet base project • Design and implement a basic quality management system for • Specification maintenance • Quality control and feedback

  26. Proposed Action plan - 2 Lower Priority : Develop and implement functional specifications and test methods for palletization methods Revise stabilization of supervent palletization Revise truck loading methods and securing of cargo Revise specifications for palletization materials e.g. corner pieces, straps, top decks, securing sheets Attend to handling abuse once an acceptable quality standard of packaging can be demonstrated

  27. THE END Koos Bouwer 082 8878425 Email: bouweb@orangenet.co.za

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