Worldwide, from the producer to the supermarket, the implementation of technology based on the experience of Eastpack can serve as a model example of applying GS1 standards. Describing this unique case study, we would like to draw your attention to the fact that since 2010, every participant in the GS1 Poland system, as part of the license fee, has the ability to encode a barcode in an EPC/RFID tag at no additional cost.
By describing this, likely the first significant application of EPC/RFID technology in the Asia-Pacific region, we want to encourage you to use modern solutions in your companies that help increase sales, operational efficiency, and significantly reduce costs, regardless of the sector of your business.
Eastpack Limited is a leading kiwi fruit grower that has been operating on the New Zealand market since 1983. Every year, its warehouses/cold stores, located on the vast Bay of Plenty on the North Island, sort, pack, store, and prepare for export a significant share of the national harvest of these fruits. Each year, Eastpack fulfills orders received through the global export organization ZESPRI, which arrive at the main headquarters based in Edgecumbe 10 days before the order fulfillment date. Additionally, ZESPRI reserves the right to change a placed order up to 2 days before the designated date for delivering pallets to the port in Tauranga. With the company’s growth and the increase in the number of pallets of fruit prepared for shipment (in 1983, the EASTPACK enterprise packed 60,000 pallets; in 2007, this number rose to 15.7 million pallets), employees were increasingly unable to meet the demands placed on them when scanning pallets and recording information about each of them. This caused the company to approach GS1 New Zealand in 2007 for an innovative solution that would allow each of the 42 warehouses/cold stores to deliver export shipments with greater efficiency and productivity, while reducing fruit losses resulting from “lost” pallets. An additional reason for seeking a solution from the GS1 organization was the financial burden imposed by the export arm, ZESPRI. For every delay in order fulfillment, Eastpack paid 250,000 NZD in penalties in 2007. That same year, penalties for unfulfilled orders amounted to 280,000 NZD. Additionally, Eastpack lost opportunities to achieve additional cash bonuses for fulfilling “late” orders – 200 NZD for each pallet. It was in the EPC code, known as a simple and compact “license plate,” which allows for the identification of items throughout the supply chain, that Eastpack saw the enormous potential to solve its logistical problems.
Logistical challenge
From late March, for 86 days, fruit flows into each of the warehouses, which is then sorted on the production line by type (green, yellow, and organic). Then, they are divided by size and harvest date, packed into trays, and then, on pallets, they go for up to 140 days to rooms with controlled temperature while waiting for export. Arranged in rows 12 m long and 2 pallets high, they pose a huge record-keeping challenge for the 1,300 employees working in 3 shifts at the peak of the season. In an ideal case, pallets would move according to the FIFO principle – the ripe fruit would be exported first, which would significantly limit or exclude fruit spoilage. Unfortunately, the constant flow of orders and constantly updated data on the type of kiwi and their size continuously disrupted this process. Financial incentives, increasing the operational efficiency of warehouses/cold stores through quick and easy “saving” of fruit, and accurate orders executed according to specifications would mean higher sales and lower losses for the company. Shorter forklift operating times would mean a lower probability that fruit would be “lost” in storage, lower energy demand, and shorter machine and human working times. Less juggling of pallets means greater temperature stability in storage rooms and a smaller amount of spoiled fruit.
The article comes from the “Logistyka” magazine 2/2010.