In today's marketplace, achieving a successful and profitable port operation is becoming evermore difficult. The business is no longer simply about unloading vessels, but increasingly, operators need to provide “added value” services whilst facing pressure on revenues due to competition. Brian Louis, md, Total Control Systems (UK) Ltd, tells the Journal how effective systems can streamline a port's perishable handling operations and unlock the potential to charge for value adding services.

It is important to recognise that while the ability to provide more complex services and comply with increasingly stringent regulatory regimes is driving up costs, there is a real opportunity to use systems and technologies to give your operation a competitive edge.

So often value-adding activities take place unrecorded and with no mechanism to raise a charge. With the latest generation of industry-specific applications, there is a real opportunity to take tighter control of every aspect of your operation, streamline processes, offer more value-adding services and drive up revenues.

TRACEABILITY AND ACCOUNTABILITY

Traceability and accountability are services that both shippers and government now demand. In fresh produce, more product is now bar coded at source; shippers require out-turns with full details of the individual pallets and will provide despatch instructions at an ever-increasing level of detail. This, linked with stricter customs and phytosanitary controls, places far more emphasis on the processes, controls and systems of the port operator.

Many port operators do not have systems that allow the necessary processes and controls, and therefore they face the potential for penalties and, more importantly, loss of business. A good system, that provides rapid, simple, yet comprehensive recording for receiving and despatching, with full warehouse management integrity, is essential to achieve traceability.

THE TECHNOLOGY CHALLENGE

Some operators attempt to develop such systems “in house” with varying degrees of success. As the requirements are routinely becoming more sophisticated and complex however, internal systems need to be continually developed which, in many cases, leads to an expensive and self-perpetuating cycle of bespoke development and maintenance.

Other operators purchase expensive and restrictive Enterprise Resource Planning (ERP) systems, which are not designed for the business and are generally cumbersome. These can restrict the business and have, in some cases, jeopardised the future of organisations.

COMPLEX REQUIREMENTS

Port operators must address the present and future need for added value services. At a basic level, these include the ability to pick to specific instructions (in some extreme cases down to specific pallet). More conventionally, there is also a growing requirement for consolidation and pallet building from a mixture of products.

Some port operators already go further than this and pre-pack or re-pack at port. Electronic Data Interchange (EDI) communication (receiving and despatch instructions) and production of customer specific pallet and box labels are an integral part of future requirements. Without full EDI capability, the port operator is jeopardising its business, and exposing itself to potential non-performance penalties.

The port operator's systems should meet existing customer demands and have the flexibility to encompass future requirements of the shipper and the shipper's customer base.

BILLING

Another requirement of the port operator is to ensure that all aspects of the operation are correctly billed. The basic operational charge is for stevedoring, but it is also essential that storage charges are correctly billed and easily justified.

Further special “event” charges need to be easily captured and billed, as many port operators simply do not bill these services and are therefore losing significant revenue potential.

A comprehensive, easy-to-operate, non-restrictive system is essential. As it is almost impossible to ensure that operatives will correctly record all aspects, the use of Radio Data Terminals (RDT's) is integral to this. The system should allow planning to drive the operation, but should not be so restrictive as to prohibit the recording of what has actually occurred. It should easily facilitate the accurate and timely recording of all actions, the real-time operation of the business and rapid reporting to shippers and other interested parties.

The system should cater for all current requirements, but be “future proof”. It should assist the port operator to “sell” his services at a premium price, particularly as, although shippers are constantly trying to “drive down” prices, they in turn need the correct facilities to ensure that they can meet the exacting standards of both government and customers.

Indeed, the port operator can gain more business by offering additional services to shippers as it is less likely that the shipper will move its business as it will not wish to lose existing facilities. EDI is one such service, but access to the port operator's system with visibility of stock and the ability to directly enter data (whilst still providing total security of all other shipper's data and full audit-ability) is also possible.

EVALUATION

So, how does a port operator evaluate the potential systems:

1. Do not consider “in house” developed system. Inevitably these will be:

• Costly (evaluate the real cost)

• Inflexible

• Inhibitive to rapid growth by restricting change and development

• Behind market leading competitor's systems.

2. Ensure that the system is successfully implemented by other port operators in the same or similar businesses. For example, perishables and fresh produce are rapidly moving, and the identity of the product can change during storage, it is essential that the system can cope with specialist requirements.

3. Ensure that the system has enough flexibility to provide the functions required, and can be enhanced and developed (without costly bills) for new requirements.

4. Ensure that the implementation is not going to result in an 'open cheque book' whereby every system change and addition is at an extra cost.

5. Ensure that the system is 'future proof '. Requirements will only grow, and you do not want to look at changing systems in a few years time. For example Radio Frequency Identification (RFID) chips will potentially replace bar codes in the future. Similarly more information will be required to be stored and communicated by pallet/box.

PRODUCT TRACEABILITY - THE ROLE OF RFID

The move by major supermarkets to embrace Radio Frequency Identification Devices (RFID) as a means of product tracking has significantly raised the profile of this technology in recent months.

Across industry in general, there has been more reports, hype and speculation regarding RFID than on any other topic. Indeed many companies I speak to see this as just another cost they will have to take on.

Whilst there is some truth to that I do believe there are some significant benefits for the fresh produce companies themselves.

So I thought it may be helpful to throw some light on this topic in the context of the fresh produce industry.

The first thing to say is that RFID is not new technology. It has been around in various guises and in many applications for many years. Solutions for tracking items have been implemented on production lines, airport baggage handling, the automobile industry and in security access cards.

These were specialised niche areas with relatively expensive solutions deployed to tackle very specific problems. What is new is that this technology is becoming more widely available and affordable. So what is it, why the interest and where is the payback?

STEROIDS

The easiest way to understand RFID is to view it as bar coding on steroids. Imagine having the ability to identify any item and provide instant detailed information about it without ‘on line’ connectivity to a database or people waving hand held “line of sight” scanners about for every package.

From a fresh produce viewpoint, consider the advantages of knowing what produce each pallet and carton contains and the quality of the shipment throughout the packhouse.

Furthermore, this information can be automated and centralised so that interrogation is possible at any time without recourse to paperwork or phone calls.

Additionally, the information can be shared instantly with your customers enabling them to plan accordingly.

The technology itself relies on RFID tags which are also referred to as smart labels and radio barcodes. These are attached to whatever needs to be identified and monitored.

They comprise of a micro-miniature chip, aerial and substrate and come in all sorts of shapes, sizes and formats to suit specific industries.

The rest of the solution consists of the antenna to sense the tags’ presence, the readers, the middleware and host applications that handle and harness the information and the integration into the back end business management system.

The tags themselves break down into two main types i.e. active (self-powered) and passive (without power). The difference is that active tags continuously broadcast while passive tags have to be pinged by radio waves from the reader to reveal their presence.

PASSIVE

From a commercial viewpoint, the passive tags are obviously very much cheaper and therefore more suitable for bulk tracking of low value consignments. It is these low cost devises that are favoured by the retail industry.

A number of major retailers have already published their RFID requirements and are already testing the concept for tagging in-bound pallets and cases.

BENEFITS

There will be significant all-round benefits in the supply chain when RFID technology becomes more widely used in future. Fresh produce growers and suppliers will have greater access to information relating to the processing and distribution of their products.

This technology can be used to automatically track the produce throughout the pack house, increasing stock visibility and dramatically increasing the potential for better stock management.

This is the Holy Grail for most fresh produce companies.

Distributors will be able to increase order fulfilment while reducing the paperwork involved in managing the distribution process. Retailers will be able to reduce stock-outs and shrinkage while gaining greater control of product expiry dates.

All parties involved in the supply chain will find it easier to comply with current and future traceability regulations.

The key message is that it is early days yet as standards are still evolving.

As RFID matures and becomes widely adopted, the price of the technology will continue to reduce. Its adoption will be required by all suppliers wishing to continue to do business with the major retailers.

Therefore from an IT viewpoint, RFID should be considered as an important part of your overall business solution strategy. This will not only meet future customer requirements, but also improve your bottom line via better stock management throughout the whole supply chain.

TRIGGER

You therefore need to ensure that your ERP system can not only read this data, but more importantly, can automatically trigger actions and alerts on events that affect product quality and delivery.

Companies who plan to take advantage of the opportunities for efficiency gains provided by these developments will have a significant competitive edge in the battle to retain existing customers and win new business.