Chain of events: a blog of Food Chain Intelligence

This event was attended by about 100 industry, government and trade association representatives from Australia and New Zealand.

There were several topics of interest to the refrigeration industry, which I will discuss in several blog notes in the next few weeks. My first note focuses on the information offered by Roslyn McMaster, from the Enforcement/Compliance NSW Australian Competition & Consumer Commission (ACCC). Roslyn’s intervention in regards to what constitutes a ‘green claim’ and the role of ACCC in false environmental claims was a timely reminder of the industry’s responsibility when developing new or improved energy efficiency standards.
The ACCC does not see ‘green’ marketing as a new phenomenon. Cooperation between ACCC and the Australian Greenhouse Office goes back to a cooperation agreement signed in 2000. Environmental claims that are of particular interest to ACCC are those focusing on environmental sustainability, recycling, energy and water efficiency or impacts on animals and the natural environment. For example, statements such as ‘green’,’ sustainable’, ‘renewable energy’, carbon neutral’, ‘carbon offsets’, ‘eco-friendly’ , ‘environmentally safe’ or products/services that promise improved ‘greenhouse gas emissions’  footprints. Sound information that backs these statements needs to be made available by manufacturers in all kinds of products claiming ‘green’ benefits.
The ACCC can act on the statements above under the Trade Practices Act (TPA). The aim of the Act is to ensure that a business does not make false representations about their products, whether it is in an advertisement, over the phone, on their website or on product packaging. Although it is OK to state real environmental benefits, those benefits should not be overstated.
Roslyn provided examples of ACCC’s enforcement of the TPA, which include measures such as education, voluntary compliance, administrative resolution, court enforceable undertakings and litigation. In the past five years, the ACCC has taken action over misleading ‘green’ claims in a range of products, including washing machines, air conditioners, electricity providers and motor vehicles. Financial penalties include fines of up to $1.1 million for businesses and $220,000 for individuals.
For the refrigeration industry (including domestic, commercial and industrial refrigeration), compliance with energy labelling guidelines such as mandatory Minimum Energy Performance Specifications (MEPS) and Energy Star ratings will be critical. Particularly considering that the change of Federal Government in late 2007 has also precipitated a change in MEPS and labelling policy. As a matter of policy, increases in MEPS stringency will now be implemented in a 3 year cycle.

Brian Walker (The Retail Doctor Group Pty Ltd) presented a topic of high relevance to the retail industry, particularly on these challenging times of slowing sales and high costs. Brian’s talk, The Seven Steps to Retail Business Fitness, described the key fitness indicators that can be used to assess the competitive position of every retail business:

1. Strength, based on a strong brand and a point of difference.
2. Power, or the ability to exert maximum influence within a marketplace.
3. Agility and speed, which are based on reacting quickly to market changes and moving faster than competitors.
4. Flexibility, or the ability to adapt plans or alter the operating strategy to secure a better outcome for the business.
5. Endurance or resilience to continue to operate consistently under varying levels of tension.
6. Skill, based on having the right capabilities to be effective in the retail business.
7. Co-ordination, or the ability to integrate the above components to increase productivity.
Brian has developed a method to assess the fitness of retail businesses, recognising that there are three phases in the life cycle of these: day-to-day business, growth and sale. Although his talk focused on non-food retail, I can see his method applied to any type of retail business.
James Tupper (ECR Learning and Change Manager, IGD, UK) presented a talk entitled Out of Stocks, Lost Sales and Store Switching – Getting to Grips On-Shelf. James focused on food retailing and described the top reasons for out-of-stock (OOS) situations in the UK:
1. Store ordering issues, such as last order generation left too late, incorrect order placement, inaccurate forecast and incorrect order generation.
2. Delisting by store staff, or product listed but taken from shelves by store staff due to poor planning and communication.
3. Shelf replenishment issues such as staff not having time to refill shelves, poor back store operations, lack of shelf edge label and lack of OOS checks.

James went on to describe how collaborative programmes involving different supply chain partners have been shown to improve shopper service levels, while decreasing time spent on crisis management. Practical examples included:
· Promotion management collaboration between ASDA, Unilever, Johnson & Johnson and MARS.
· Collaborative learning program between TESCO and Unilever.
· Collaborative on-shelf availability programme between COOP and Carlsberg.
One more learning that I took home was the following: in multi-store retail the perceptions of head office in regards to which stores are performing better than others, purely based on financial performance, is not a reliable indicator of the actual market potential. Great performing stores inspire and generate commitment from employees to the store’s goals, generate intense customer loyalty establish accountability, get everyone to focus on the key business drivers and basically, overachieve in relation to the market potential.
This was the first event of the year organized by The Australian Centre for Retail Studies (ACRS), a commercial Centre within the Department of Marketing at Monash University’s Faculty of Business and Economics. The ACRS provides research driven education and knowledge leadership to those involved in the retail sector, or wishing to learn more about retail. I thoroughly enjoyed this event and I look forwards attending the next conference in Sydney.

The National Manufacturing Week was held at the Sydney Convention & Exhibition Centre (Darling Harbour) on the 27-30 May 2008. It is somewhat disappointing that the food manufacturing sector was underrepresented (or not represented! I didn’t meet anyone from the industry) in the event. However, I met representatives of companies with very helpful products for the food industry. Examples included FLIR Systems (thermographic cameras), Fluke Australia (thermography and other testing systems) and VMV Pty Ltd (machine vision and manufacturing IT).

I found the exhibition very interesting. Here are some pictures of the week.

I recently attended the Showcase of Container Innovations event hosted by SCF Containers. I was impressed by the huge logistics effort required for this event, which involved moving 21 containers (from 21 ft to 46 ft) into the Melbourne Showgrounds (and out, back to SCF’s premises when the event finished).

My particular interest was on the refrigerated container line. The container in diplay was a 41 ft size, with poyurethane insulation and internal surfaces of stainless steel. The doors have triple seals, which are effective in avoiding heat leakages through the door seals. In this model, the insulation thickness in the side walls is about 5 cm, with thicker insulation on the ceiling and floor (about 149 cm). See the photos below.

I also found the side door dry containers concept quite interesting. Here are some photos that demonstrate the concept:

The sidedoor container design won the 2007 Australian Business Awards on the Innovation category.

I was pleased to meet Ken and Matthew Osborne from Ospack Systems there. Transport innovation showcases are unluckily very rare and Ospack certainly fits the profile of an innovative company. The Ospack radiation liners have been shown to be effective in decreasing the peak temperatures experienced in maritime shipments of dry cargo. Maintaining temperatures as low and as steady as possible without refrigeration is particularly critical for products such as wine, lactose and milk powder.

The SCF Containers team was available to answer questions and I had conversations with Richard Sykes (SCF Director), Jonathan Coad (National Sales Manager) and other staff that answered my questions. Congratulations to SCF Containers, I enjoyed the event and hopefully we will see more innovation events focused on refrigerated and dry cargo transportation in the near future.