Fonterra. Space: Fonterra's final frontier - Dexion
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Fonterra. Space: Fonterra’s final frontier.
“Sitting at the bottom of the world,
with an incredibly long supply chain,
makes it a big challenge to get our products
to our customers in an efficient way.”
Fonterra is New Zealand’s largest company an efficiency point of view.”
and, despite its distance from key markets,
The supply of more than 210,000 tonnes
the world’s largest exporter of dairy products.
of local butter and cheese each year had
With a proud co-operative heritage outstripped capacity, leading to reliance
stretching back to the 1870s, Fonterra was on third-party overflow stores and resultant
formed in 2001 with the merger of the New inefficiencies in inventory management,
Zealand Dairy Group and Kiwi Cooperative
handling and transportation.
Dairies. The company’s global supply
chain involves 10,700 farmer/shareholders “With Crawford St we saw an opportunity
in New Zealand, with distribution to stores to look at our infrastructure and make it as
and customers in 140 markets. effective as possible and enable us to
Fonterra collects over 14 billion litres of manage the supply chain in a more efficient
milk a year, converting them into 2 million manner,” says Alderson. “It’s a logical
tonnes of milk powder, butter, cheese economy of scale.”
and specialty dairy ingredients. More than “Sitting at the bottom of the world, with an
10 per cent of this product passes through
incredibly long supply chain, makes it a
the doors of Crawford St, Fonterra’s cool
big challenge to get our products to our
store in Hamilton.
customers in an efficient way.”
“Fonterra came from a base of a number
“Fonterra was really looking to consolidate,”
of different organisations which had
different infrastructure,” says Chris Alderson, says Stuart Macnab, general manager
general manager of transformation and Dexion New Zealand. “The cool store was
projects for Fonterra’s group supply seen as instrumental to streamlining
chain, “When it was joined together it Fonterra’s processes, plus delivering cost
was not the most effective system from savings and a more efficient supply chain.”
Dexion Case Study – Fonterra
“The cool store was seen as instrumental
to streamlining Fonterra’s processes,
plus delivering cost savings
and a more efficient supply chain.”
The new plant, designed by Sinclair Knight In fact, the task required co-ordination
Merz and built by Haydn & Rollet, is 230 across the entire Dexion family, involving
metres long, 94m wide, 15m high, and Dexion’s industrial storage division in
encompasses nearly 20,000 square metres Australia and Dexion in New Zealand.
of freezer space. There are five separate
Complementing Dexion’s thinking was
rooms: two for butter and three for cheese. a partnership with Swedish shuttle
Temperatures range between minus 18 to manufacturer, Texo Applications. “We’d
plus 13 degrees Celsius. previously worked with Texo to develop
Allowance was made for easy movement some brilliant next-generation technology
between freezer rooms, cool rooms and which we’d used in other New Zealand
ambient rooms. The maturation of cheese, projects,” says Stuart Macnab.
for example, requires time spent at “The shuttles have no hydraulics, few moving
different temperatures at different stages. parts and easily removable batteries that
Dexion was asked to provide high-density, can easily be recharged without interrupting
cold storage racking and a satellite retrieval operations, perfect for Crawford St.”
system. “Obviously, refrigerated storage is To service the shuttles, Dexion worked
considerably more expensive per square with Eurolift to modify their existing R17X
metre,” explains Macnab. “So we really reach truck. Shuttle controls were integrated
had to be clever about delivering a into the truck itself, putting complete
high-density yet accessible solution. command in the hands of a single operator.
We reached across the Tasman and the “Our high density racking system was
world to tap into our global knowledge, and specifically designed to work with the
were able to bring a lot of extra experience shuttles. The units deposit and retrieve
to bear.” units as required, travelling out along the
Dexion Case Study – Fonterra
“With the sheer amount of materials required,
and the shortness of the deadlines, we had to
be pretty innovative with our implementation.”
rails of the racks, beneath the pallets,” our milestone dates were met, sometimes
Macnab continues. even beaten.”
“This flexibility was important, as the density In fact, three rooms were operational
of the design meant that the racking is before Christmas last year, while the final
seven pallets high, two pallets higher than
two rooms were completed on February 24,
standard, and 29 pallets deep in places.”
a full two days before schedule.
All in all there are more than 51,156 new
pallet positions; 35,600 for cheese and Today, 2,000 tonnes of Fonterra’s Waikato
15,556 for butter. Each pallet of butter manufactured dairy products move
weighs one and a half tonnes. More than through its Crawford St hub every day.
700 tonnes of shuttle rail was used.
The Company’s links between its Waikato
“With the sheer amount of materials manufacturing sites and ports are a
required, and the shortness of the deadlines, significantly more efficient. (For example,
we had to be pretty innovative with our cheese maturation now happens at a single
implementation,” says Macnab.
facility, rather than across locations.) And
“51,156 pallet positions is a lot of steel. So better integration with rail networks has
we manufactured the material in advance, taken a significant number of transport
delivering to a nearby staging site ahead movements off the road, contributing to a
of schedule in order to ensure a timely reduction in the carbon footprint of
delivery to the Crawford St site.”
Fonterra’s logistics operations.
“With Sinclair Knight Merz and Haydn &
After this successful transformation both
Rollet still working all around us, we had to
be extremely flexible with our Dexion and Fonterra look forward to the
implementation schedules. Fortunately the completion of the Mosgiel Cold Storage,
co-operation was fantastic, and any minor located in New Zealand’s South Island, in
issues were dealt with within the team. All July 2010.
Dexion Case Study – Fonterra
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