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SUPPLY CHAIN & LOGISTICS FROM PAGE 47 at source of supply are the trigger. Consider the supply chain producing and distributing wheat, corn and rice – the primary products supplying humankind’s required calories. The 2019 UN Cereal Supply and Demand Brief reported the world consumed more grains than it produced the previous year1 and, in consequence, reserves known as carry-over stock intended to carry us through to next year’s harvest declined, which was a worrying development. Fortunately, in recent years there have been some excellent harvests, and carry-over stocks were able to weather the storm, but, while the report said stocks will be sufficient, we can’t ignore the warning signs. It’s clear that for any in-demand product, supply chain managers should consider building in buffer supplies and sources of alternatives, and, for fresh and perishable products, more localised supply chains make sense in future. What are the options? The conundrum of adding buffer stock while keeping costs low may well be solved, with the answer coming from the steady growth in online shopping. According to a UBS Evidence Lab report, online retail sales in Australia have grown at 14 per cent for the past three years2, and now make up around nine per cent of total retail sales. Online shopping helps, as warehouses used for online supply and delivery can double up as buffer stores without adding significant additional cost – other than that of the space used. The online stock never needs to reach the retail supermarket, effectively shortening the supply chain and reducing transport cost and, with the online warehouse available in the supply chain, there’s no significant additional cost if utilising some of the warehouse space to hold buffer stock of products deemed essential or considered at risk of interrupted supply. It’s an effective way to build a buffer zone into the supply chain, but not without challenges, some relating to how product is stored and accessed. To manage, an effective warehouse management system is critical for food companies needing to remain compliant with rigorous, regularly updated and increasingly stringent regulations. Basic functionality including expiration and batch date tracking, FIFO (first-in/ first-out) and FEFO (first-expiration/ first-out) identification is certainly needed, and supply chain managers seeking to implement changes in warehousing approaches would be wise to explore some of the newer options available in the latest warehouse management systems. Retailers dealing with fresh or perishable produce also need to be able to track, identify and isolate certain products, as was seen recently when strawberries were contaminated with needles. Standards and services company GS1 Australia is one of the most trusted partners in the value chain. Retail World spoke with GS1 Account Director Andrew Steele to explore some of the latest innovations retailers are introducing to enable better tracking and measurement across the whole supply chain. “What we’re currently seeing is retailers telling us they want to be able take a microscope to their supply chain, not only to effectively move stock through, but to identify and isolate any particular stock to get it off the shelf, recall it or withdraw it from sale,” he said. “Their other goal is to install and maintain consumer confidence, so the consumer knows the product on the shelf is safe to consume.” One of the ways this is being approached is through two-dimensional barcodes, something Woolworths trialled effectively in 2019, and is now rolling out. “If I’m a supplier into Coles, Woolworths or Metcash, for example, and I’m supplying the same product, I don’t want to be doing something different for each retailer, because that just adds cost,” Mr Steele said. “More than a year ago and to their benefit, retailers collaborated and said ‘this is the barcode standard we want to implement’, and it’s intended to be consistent across all retailers and across other areas of the supply chain as well.” The standard Mr Steele is referring to is a 2-D barcode that enables far more data to be held and aligns well with not only consumer convenience and confidence but also the requirements created by the use of buffer warehousing. Woolworths Senior Project Manager Roberto Olivares, the Program Lead for data embedded barcodes, says that after 40 years of EA and UPC barcodes, the retailer is moving forward using the GS1 data bar and GS1 data metrics. “We started with loose produce, working with industries and retailers,” he said. “There are a number of key benefits at all levels for our customers. It means more accurate and faster identification for fresh produce, with less errors between varieties and decreased transaction times at the register. This means you scan and weigh the product, instead of looking in the lookup screens. “For our produce teams it means improved PI management and generates better orders, especially on lines like plums, nectarines, mangoes and avocados, which are quite similar between the different varieties.” Mr Olivares says there are benefits for commercial teams and buyers through improved traceability and for suppliers through the ability to have targeted recalls or withdrawals. Customers also see improvements in waste reduction, product provenance, food safety and all product attributes, such as organic and allergens. “Our commercial team will continue to work with our suppliers at the industry level to implement GS1 data bar in produce and to gradually continue the implementation of GS1 data metrics in our pre-packaged products,” he said. Online driving innovation Other exciting developments in the supply chain could bring real innovation if consumers adopt what’s being suggested. Managing partner at Last Mile Experts and former vice president of Amazon Logistics, Marek Rozycki, says the cost of the last mile in a supply chain accounts for about 41 per cent of supply chain costs. With many online consumers already feeling that home delivery methods are outdated, various alternatives are being trialled around the world, including in Australia, as a way to reduce those last-mile costs. Mr Rozycki outlined some international trends in last-mile delivery that may soon be seen in Australia: In-store click-and-collect ‘drive-thru’. Continued growth is forecast for click and collect parcels, especially at major supermarkets or grocery stores. In some cases, employees will bring the 48 RETAIL WORLD JUN, 2020