by koos bouwer independent industrial engineering consultant l.
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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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by koos bouwer independent industrial engineering consultant

An initiative of the Citrus Growers Association

By

Koos Bouwer

Independent Industrial Engineering Consultant

19 August 2010

Hicube pallet analysis

contents
Contents

Purpose and task

Symptoms

Cause

Effect

Supply chain analysis

Cost analysis vs risk

Proposed Action

purpose
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

the task
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
problem symptoms
Problem Symptoms

PHOTOGRAPIC TOUR

symptoms
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
possible causes
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)
technical
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)

carton failure
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
quality control
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)
risk survey
Risk Survey

Note: Not a representative sample of total supply chain

the effect
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
fruit supply chain
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

supply chain characteristics
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
gaps in supply chain
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.

cost analysis
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
hidden costs
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

proposed solutions
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)

characteristics of a good solution
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

technical solutions
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
implementation solutions
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?
proposed action plan 1
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
proposed action plan 2
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

slide27

THE END

Koos Bouwer

082 8878425

Email: bouweb@orangenet.co.za