Coldmove Article
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THE SUNDAY BUSINESS POST n24 commercial report JANUARY 20 2013 SUPPLYCHAINMANAGEMENT 2-PAGE SPECIAL REPORT Evolution not revolution in Irish SCM Research shows a steady improvement in leading edge thinking among practitioners, writes Dave Boland L ogistics has al- EU a nd Nor t h A m e r i c a. the CSO refers to as the ‘tradi- ways b e e n a Whereas we haven’t really been tional’ sectors of industry.’’ re ason able good at tapping into emerging Sweeney highlighted a num- ya r d st i ck to markets, and especially not the ber of issues that need to be ad- gauge an eco- BRIC (Brazil, Russia, India dressed and one of these was nomic activity and China) economies.’’ the notion of how supply chain ^ if goods are moving, trade is The other issue facing Irish management is perceived. happening, whereas a mori- exporters is that much of the ‘‘In a lot of traditional areas bund supply chain points to a growth has been driven by the of the economy, there is a very terminally ailing economy. multinationals based in Ire- old-fashioned view of supply But as a small island nation, land. But, said Sweeney, there chain thinking,’’ he said. ‘‘In Edward Sweeney, director of learning at the National Institute for Transport and Logistics (NITL) at DIT Ireland has always had a split has been significant progress many cases, it is still regarded personality when it comes to in the activities of indigenous as ‘loading bay’ rather than as the movement of goods ^ there organisations, especially in the a strategic, boardroom activity. ple with the sustainability that into practice is the diffi- ways been that good supply on the one hand and supply with short product lifecycles. is the local market and there is food and drink sectors. ‘‘Secondly, while we con- agenda, and a part of all NI- culty, but awareness of the is- chain management is about chain thinking on the other. This is not a luxury, it’s vital to the export market, and often ‘‘The agri-food sector has at- tinue to see incredible develop- TL’s programmes focuses on sue is a prerequisite to doing maximising the use of re- ‘‘The supply chain begins on give producers a competitive the two bear little resemblance tracted a lot of plaudits, and ments in technology, especially sustainable supply chain man- anything about it and we are s ou r c e s a n d e l i m i n at i ng the drawing board,’’ he said. edge, and there are some who other than the fact both are ex- from a supply chain perspec- in smartphones and telematics, agement. making progress, albeit slowly. waste.’’ ‘‘It’s the idea of simultaneously have it down to a fine art form. cellent indicators of the state of tive we are seeing a lot of good we see only a patchy take-up of ‘‘I think we are seeing a far ‘‘There is a sense that when Finally, another area where designing a product and a sup- But then ... supply chain man- the country’s economic health. practice and a number of new the technology and it is a very stronger recognition of the im- the recession began to bite, sus- Sweeney is seeing some pro- ply chain to supply that pro- agement is not science and not So, while Irish exports have models emerging,’’ he said. mixed story in terms of its ef- portance of green issues,’’ said tainability issues slid down the gress is in the link between pro- duct, and it’s happening more art, but somewhere in be- been having another positive ‘‘But what we are seeing is an fective application.’’ Sweeney. ‘‘Of course, putting agenda, but our mantra has al- duction design and innovation and more, especially in sectors tween.’’ year (despite gloomy predic- evolution rather than a revolu- Still, it is not all bad news, tions at the beginning of 2012), tion, and a steady learning and NITL is currently seeing there is still a lack of confi- curve rather than one thing demand for its advanced train- dence in the domestic sector; that has revolutionised the ing and education programmes and this dichotomy has been symptomatic of the dynamic in the Irish economy for at least the last five to six years. But whereas the supply chain can landscape.’’ Sweeney is well placed to comment, given the institute’s ongoing research into the cur- rent state of practice in Ireland increasing, despite the volati- lity in the Irish economy. ‘‘I feel that this is a reflection of the fact that the profession has become more knowledge- Movers to shake up retail reality do little enough to stimulate ^ what it calls the ‘‘supply chain intensive,’’ said Swe eney. the domestic economy, Ed- barometer’’.The most recent of ‘‘Markets have become more ward Sweeney, director of learning at the National Insti- these was completed at the end of 2012 and, said Sweeney, the sophisticated and complex, globalisation continues to hap- Cold Move’s tute for Transport and Logis- tics (NITL) at DIT, believes story emerging is giving the in- stitute empirical evidence that pen and this is especially im- portant for Irish firms tapping direct retail everyone involved in the ex- backs up what it is seeing anec- into new territories where they porting side of the Irish supply dotally ^ that there has been have previously not had a foot- model could chain could be doing more to steady improvement in Irish print. We are seeing more vir- bolster Irish exports. ‘‘We often talk about how SCM in the application of leading edge thinking. tu al supply cha i ns, more outsourcing and a greater use change the good our exports are,’’ Swee- ney said. ‘‘But what I have ‘‘Undoubtedly there are pockets of exc ellenc e out of technology, and what this means is that managers require landscape for found to be a little disappoint- there,’’ he said. ‘‘But bench- a higher level of skill and com- ing is the fact that we have tended to focus on the old reli- marking Irish practice against best practice, the bad news is petency ^ all of which will have implications for education.’’ plenty of Irish ables when it comes to our ex- port markets ^ the UK, the that there is a lot of room for improvement, largely in what Also, many modern supply chain managers need to grap- firms, writes Dave Boland I reland’s largest retailers have long benefited from centralised distribution, where one delivery can carry multiple products from multiple suppliers. But there is still a swathe of symbol groups, and indeed manufacturers, who would benefit from such streamlined and efficient dis- tribution models, but which Jason Mallon, managing director, and Stephen Gillen, commercial manager, Cold Move have to date been excluded from the party due to their in- dependence. retailers, though he is aware drivers of the initiative is cost in bringing Irish foodstuffs to vious in frozen and chilled That could all change now, there are not many left, and savings. We are trying to add overseas markets). foods,’’ said Mallon. however, with the introduction those that do remain are likely value and extract costs from But overall, the company is ‘‘I do believe to a certain ex- of Cold Move’s direct retail already to be part of a purchas- the supply chain on behalf of poised to take advantage of tent that the Irish ambient busi- model, which operates out of ing group (which will already our customers.’’ the changing way in which n e s s h a s a b it to go, b ut its new chilled distribution cen- understand the power of cen- Indeed, the case for manu- food is distributed in Ireland certainly the frozen and chilled tre in Swords. tralised commercial activity). facturers is as open and shut and overseas, and is currently sector has been going through Opened in 2012, the north ‘‘In the past, you might have as is the case for retailers ^ in in the vanguard of ensuring a period of change; and we will Dublin facility allows Cold seen maybe up to 40 deliveries the past, a manufacturer might the businesses of Ireland bene- see more big changes in how Move to manage deliveries on per day,’’ said Mallon. ‘‘Now have had to drive 30 or 40 kilo- fit from these changes. frozen and chilled food is dis- behalf of its customers and de- that same store gets just one. metres to deliver one or two ‘‘The evolution of the supply tributed in Ireland in the years liver them directly to retail, And from a productivity, cost cases. Now they can deliver all chain in Ireland has been ob- to come.’’ taking in products for its cli- and quality control perspec- of their goods to Cold Move’s ents, consolidating them, pick- tive, it makes far more sense to centralised hub and allow the ing them to order and sending have one vehicle going in than distribution specialists to bring them on in one integrated de- to have 40.’’ their product around the coun- livery. While relatively new to Ire- try in a consignment that in- ‘‘This is a new model for Ire- land, the model has been pio- cludes deliveries from other land in terms of chilled and neered successfully manufacturers ^ with everyone frozen foods,’’ said Jason Mal- throughout Europe, and has al- benefiting from the added va- lon, managing director of Cold ready been adopted by the lar- lue of extra volume. Move Ireland. ‘‘Before 2012, ger retailers who have their To date, Cold Move operates manufacturers had to deliver own centralised distribution a subcontracted fleet of about to Irish symbol groups directly. models and who have been 45 dedicated vehicles a day; But now these same symbol benefiting from the traceability and while not all of these bear groups are setting up their and cost savings that come the Cold Move colours, Mallon own central distribution mod- with the model for some time. said the intent was to have all els, which cut down on many But just as the smaller sym- vehicles liveried soon. of the deliveries required to bol groups can benefit from ‘‘We have invested heavily in get the goods to retailers.’’ centralised purchasing, so, too, our infrastructure,’’ he said. Thus, the familiar sight of a can they benefit from centra- ‘‘We have invested in new facil- motorcade of trucks, both li- lised logistics ^ and Mallon be- ities and in new IT, but, be- veried and unliveried, making lieves this is a side of Cold caus e ou r veh i cles are constant drops to small symbol Move’s business that will grow subcontracted, we are using retailers could become a thing considerably into 2013 and be- the available capacity in indus- of the past, certainly in the yond. try.’’ area of chilled or frozen goods ‘‘Some are already working This new service from Cold (assuming these retailers opt with us,’’ he s aid. ‘‘But I Move has triggered an increase en masse for the direct retail strongly feel that this part of in the company’s overall busi- model). our business will experience ness of about 20 per cent on As well as providing its ser- significant growth over the 2011, growth that has been vices to symbol groups, Mallon coming year. It has to be done helped by a positive 2012 for Ir- said Cold Move would be inter- if retailers are to move forward, ish food exports (and Cold ested in talking to individual and obviously one of the big Move plays a significant role