YOUR SUPPLY CHAIN TAKES ON A NEW DIMENSION

NO. 8 – SPRING 2019

INNOVATIONRoad transport fills up on new forms of fuel

DECODING The human factor: the big challenge for tomorrow’s supply chain

A DIFFERENT VIEW

3

EDITORIAL – CONTENTS

LOGIS

TIC CÉCILE CLOAREC Group Director of HR, Communication and Sustainable Development

Human resources,at the heart of customer satisfaction

4 PANORAMA All the sector’s news in brief

6 DECODING The human factor: the big challenge for tomorrow’s supply chain

12 INNOVATION Road transport fills up on new forms of fuel

4 #EUROPEANTRANSPORT

15 YOU HAVE THE SOLUTION New distribution centre for Hasbro in Central Europe Testimonial by Ilja Aust, Hasbro Europe

16 REPORTING Lean Design and Co-Pack Save time, save money!

18 THE ESSENTIALS FM Logistic around the world

15#PROXIMITY

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' There is no wealth but human beings'. This aphorism, attributed to Jean Bodin, has never been more fitting than when applied to the supply chain.

Our sector faces two major challenges in respect of human resources. The first relates to the considerable labour shortage and the resultant difficulties in recruitment. The second affects the nature of our activity, which has to absorb the growth and acceleration of flows (both physical and digital) whilst implementing technological changes. We need to reinforce our skills and rethink our procedures, our working methods and our structures.These quantitative and qualitative demands have led FM Logistic to make human resources a strategic focus of development and long-term investment for ensuring that we deliver the quality of service expected for each of our operations. This constant drive for excellence in our work has resulted in FM Logistic’s teams creating the Lean Design and Co-Pack service (see page 16). And lastly, the group’s unshakable determination to play an active part in the evolution of logistics models explains the reinforcement of the urban logistics solution Citylogin and the strong determination to improve the environmental impact of the company’s activities (see page 12). With these steps forward, FM Logistic confirms its ambition to be one of the leaders in the sector.

Delivering your lunch for 126 years! For more than a century, workers in Mumbai have relied on dabbawalas to deliver their lunches. Late morning, the deliverers pick up meals cooked in the family home and then take them to the respective workplaces, on the dot of lunchtime. The organisation is smooth running and almost perfect: the error rate is estimated at just one in six million. Therefore, their customers can count on punctuality and accuracy! Their long existence and quality of service are an inspiration to start-ups of the 21st century, such as Deliveroo, Foodora and Uber Eats. In fact, the CEO of Runnr, a new India-based app for home deliveries of meals, decided to draw on the knowledge and experience of a number of dabbawalas to ensure that the company’s supply chain would benefit from optimal organisation.

INDIA

#AGILITY16

PANORAMA PANORAMA

54 FM LOGISTIC > NO. 8 – SPRING 2019

Europe’s new logistics corridors #EUROPE A study published by Cushman and Wakefield1 presents the eight key logistics corridors of the future in Europe, which are expected to redraw the map of the European logistics sector between now and 2030. The Blue Banana, the original corridor that covers the Rhineland and extends to northern Italy, is thus being transformed and replicated into multiple corridors in response to the expansion of the continent and the creation of new motorways. These new corridors take in Great Britain, the sea route between Ireland and Belgium, the Iberian Peninsula, Central Europe, the North Sea, the Black Sea and the Baltic countries, which are linked up to Finland, Poland, the Czech Republic and Germany. According to one of the study’s authors, 'major change is also being driven by e-commerce, new technology (…), multi-modal connectivity and transport networks'. With the increase in freight volumes, transport costs, labour shortages and congestion of the road network, these corridors are likely to keep developing. Demand for the transportation of goods within continental Europe is set to triple (+182%) by 20502.

Bringing shop and warehouse closerNew sector for the next SITL

Japan: hack to improve cybersecurity

#INNOVATION The French start-up OneStock is stretching its wings and winning over increasing numbers of businesses around the world with its innovative solution. Having been developed by working with some of the big names in retail and luxury in France, Italy and soon the US, the solution gives the client a complete view of its stock, so it can prevent shortages and delays to delivery times, and manage surpluses. This tool, which can be used for managing supplies in physical and online shops alike, supports retailers in their digital transformation and in becoming integrated omnichannel operations.

#SITL The next edition of the SITL, which will take place from 17 to 20 March 2020 near Paris, will include an additional sector devoted to Security, Safety & Cyber. Similar to the other six sectors, this theme will be explored through talks, an exhibition and a dedicated route. According to experts at the 2019 edition, losses connected with cyberattacks in the transport and logistics sector have amounted to EUR 6 billion in Europe. This is a crucial topic of which the sector’s professionals need to be made more aware, as the threat concerns every link in the supply chain, no matter the size, country or area of activity.

#IOT The Japanese government has authorised the country’s national institute for research on information and communication to hack more than 200 million connected objects used in the country’s offices and homes. The goal of this study is to test how robust the security systems are, ahead of preparations for the 2020 Tokyo Olympic Games. The institute will try to compromise objects, such as webcams and routers, by using random passwords. If it succeeds in hacking an object, the owner will be contacted and encouraged to review the security measures he/she has in place.

3% Percentage of large-scale

blockchain projects deployed across companies

TRANSPORT

DIGITAL RETAIL EVENT

CYBERSECURITY

PGC ads attract Amazon’s interest #STRATEGY To boost the sales Amazon makes through its smart assistant Alexa in the US, the retail giant is asking companies in the consumer goods industry to include the Alexa badge in their ads. The aim of this strategy is to communicate that voice-operated trade, particularly via Alexa, has become a well-established habit in US households. According to Recode (Vox Media), the website behind this revelation, which was gleaned through access to email exchanges, the placement would be free of charge. In other words, Amazon would not pay to be mentioned. In exchange, however, the Silicon Valley giant would provide data on the products’ performances on its platforms, as well as ad spots. This sounds like an effective way for brands accepting the agreement to build their skills, specifically their voice apps developed for Alexa. According to a study published by The Information in August 2018, only 2% of owners of an Amazon speaker have used it to do their shopping. So, the room for improvement remains immense, even for one member of the all-powerful GAFA.

VOICE COMMERCE

1,000 KM/H Speed of the Hyperloop system, the

first test track of which will be installed in February 2019

USD 5M Growth announced for the

exoskeleton market over the next 10 years

¹ The changing face of distribution – The shape of things to come, January 2019.2 Eurostat.

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DECODING

With supply chains facing labour shortages, demands for new skills, upheavals to structures, etc., human resources are, now more than ever, a central factor in supply chain transformation.

The human factor:

the big challenge for tomorrow’s supply chain

FM LOGISTIC > NO. 8 – SPRING 2019

65% of children entering primary

education will go on to work in jobs that do not yet exist

+ 16% Annual growth

of the supply chain sector

Source: The Future of Jobs, Jan 2016, World Economic Forum.

More manager than technician

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T he issue is now unavoidable: 'The human factor is the major challenge for our sector', says Cécile Cloarec, director of human resources at the FM Logistic group. Indeed, the whole profession seems to agree on the matter: Aslog (the French association for logistics) includes

the topic as one of the five main challenges in its Benchmark Supply Chain Horizon 2020. In fact, the challenge awaiting logistics professionals over the coming months and years is a double challenge—one that is both quantitative and qualitative.

KEEPING OUR WORKFORCEThe first obstacle to be removed is the labour shortage. 'For us, there's a real problem in terms of staffing', Cloarec re-iterates. The supply chain is experiencing a period of very strong growth, driven by the upswell in global trade and the acceleration of e-commerce. And yet, the consequent demand for labour has caused the sector to run aground, the problem being that European markets are currently enjoying almost full employment. In parallel, 'the sector is developing more quickly than skills', explains Valentina Carbone, associate professor at ESCP Europe, who specialises in the supply chain.Alongside these structural difficulties, the sector also has some-thing of an image problem. Certain parts of the profession seem to lack attractiveness for young people seeking employment. Take for example the role of a lorry driver, where workers are currently retiring in large numbers. For millennials, the idea of driving a heavy goods vehicle may seem too restrictive in terms of working hours, work–life balance and other factors. The re-sult is an urgent need to compensate for the outflow of drivers: 'The profession is facing a chronic lack of drivers, which is only going to keep increasing', Cloarec says. 'Projections suggest we could see a 20% increase in transport flows between now and 2030'.

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LOOKING FOR NEW TALENT

So, how can the sector attract the best profiles and keep them? How can it support operations and achieve excellence in terms of customer satisfaction? Carbone has some advice: 'We need to increase visibility, increase people’s awareness of our jobs, which are engaging, multi-faceted, manifold and which open new windows onto the world, and we need to do it by making the public aware from an early age. It’s essential to raise awareness of service providers, all those jobs that make flows and trade in products possible'. Initiatives aimed at this direction are gradually emerging. For instance, the Dutch company Inchainge has an online simulation game called The Fresh Connection. Aimed at students and young people, it describes how the supply chain works. Carbone has another recommendation, too: 'There should be more synergies between logistics companies and the education sector. We already know that there's a lack of training programmes'.

As well as that, each company in the sector needs to take responsibility for refining its corporate image. The entire aim of employers’ brand strategies is to make a company more attractive through advertising campaigns, social media presence, relationships with educational institutions, etc. 'We want to become a benchmark employer. If a candidate wants to work in the logistics sector, we would like him/her to think of FM Logistic first because of our business, our reputation and the opportunities we offer', emphasises Blanka Borkowska, director of HR at FM Logistic Central Europe.Being highly active in its approach to these issues, the group entered the Universum listing of the most attractive employers in 2017 and, over the last three years, has received a number of Top Employer and Happy Starters awards for its excellence in the management and onboarding of young employees. 'These awards and certifications enable us to polish our reputation and our e-reputation', explains Laurent Leleu, director of HR at FM Logistic France. 'It’s good to start and develop your career with us because the human factor–the women and men of FM Logistic–are at the heart of our strategy'. So, despite its international scale, FM Logistic positions itself as a family-style company, where the working atmosphere is characterised by positivity. And it’s a place with opportunities for career development, too: 'In a buoyant

DECODING

Valentina Carbone, associateprofessor

at ESCP Europe, who specialises

in the supply chain

THE EXPERT

We need to increase visibility, increase people’s awareness of supply chain jobs, which are engaging, multi-faceted, manifold and which open new windows onto the world, and we need to do it by making the public aware from an early age Valentina Carbone

FM LOGISTIC > NO. 8 – SPRING 2019

The increase in global trade and the acceleration of e-commerce are leading to a very rapid acceleration in the supply chain sector

800 The number of new recruits in

2018 at FML France and also the estimated number for 2019

#STUDY What are the skills of a supply chain manager? In a large-scale study run in 2016 by ESCP professor Carbone and her students, which gathered feedback from 190 companies, the results reveal that to be a good manager in the sector, one needs managerial and leadership skills more than technical skills. Despite the technological revolution, we expect supply chain managers to be leaders or project managers more than technicians. What counts most of all is their overall strategic perspective on the business. Once again, the human factor is at the heart of it!

1110

DECODING

job market, offering a competitive salary isn’t enough. We also need to give our employees opportunities for development, cultivate the company’s values and promote a pleasant working environment', adds Borkowska.Training is another powerful tool. 'We need to be able to look for candidates who are new to logistics and be in a position to train them in our warehouse schools or in our internal university,' says Leleu. In order to tackle the shortage of lorry drivers, FM Logistic France has created career paths to enable order pickers and forklift drivers working at distribution centres to develop towards jobs based around driving. And in terms of training, FM Logistic uses the full range of possibilities: in-person courses, the e-learning platform, etc. The company is even trialling virtual reality to train staff to obtain their forklift driving licences.

NEW ROLES, NEW PROCESSESAt the same time, HR departments need to work on the qualitative aspect because the supply chain is changing, it is becoming more complex and it is going digital. The development of technologies, such as artificial intelligence, big data, blockchain and robotisation are leading to the creation of new roles. 'We are witnessing a transformation of the very nature of the business,' says Cloarec. 'The sector as a whole is increasing in added value'. This disruption means changes to structures and processes, as well as an increase in the skills of employees, and that includes operators as well as managers. 'We are now looking for new skills in automation, data management, artificial intelligence, robotisation, etc.', she explains.And that’s not all! 'To succeed, we need to have solid HR teams and be able to depend on properly identified and structured internal processes, with career paths marked

Making sure that each employee benefits from good working conditions

out to develop the knowledge of each of our employees', says Leleu. In addition, FM Logistic has implemented a strategic shift with the digitalisation of its HR procedures. 'This digitalisation of HR processes is a precondition for improving them', emphasises Cloarec. 'It strengthens our human resources policy as a whole'. The level of change goes deeper than this. Flexibility, ability and adaptability are the watchwords of the company of the future, and data processing must take speed and relevance on board. 'Our structures need to become more cross-functional in terms of sharing information and facilitating and collective decision making', she continues. 'Our working methods need to evolve; they must become less hierarchical, less vertical, more collaborative, more geared towards projects and interaction'. The benefits of all this are more varied tasks for employees and improved responsiveness and quality of service for clients.

POWER TO THE PEOPLEIn order to achieve this, FM Logistic has chosen to deploy numerous digital solutions, including Google Suite, which enables multiple people to work on sales proposals, and facilitates video conferences across the whole world at a click, as well as the Workday application to manage HR processes in the cloud. Under this major project, which is called People EmPowerment Solutions (PEPS) and is currently being deployed in 14 of the group’s countries, FM Logistic is granting more autonomy to its operators and its managers. 'As a portal for sharing HR information, PEPS enables an employees to access HR data through their smartphone, tablet, PC, etc.', explains Leleu. Each employee will be able to access online training, request annual leaves from his/her line manager and receive a fast response, etc. 'We're strengthening and enriching the employee experience, and we'll eventually operate all HR processes in real time, 24 hours a day', says Cloarec. Faster processing of HR data also enables the use of Cockpit Manager, a digital dashboard that supplies live information for managing the teams and for allocating the necessary human resources to the warehouses, hour by hour.It is clear that despite the technological change afoot within the sector, the human factor remains as much as ever at the heart of the supply chain. In the warehouses, AGVs, robots and other drones work with the inventory to save humans the strenuous

Three jobs of the future #FUTURE In a growing job market, new roles emerge. Here are three which are likely to appear soon:• Data alchemists: They will exploit information

flows to extract key data for them to assist with decision making.

• Client solutions providers: Their role will be to detect new requirements among clients and to coordinate the new services and solutions to respond to them.

• Prospective research strategists: They will anticipate the future and the strategy to be implemented over the long term.

CASE STUDY

What are the goals of Ikea’s People and Planet Positive strategy? GOPIKA PAWAR Faced with climate change and increasing inequality, Ikea has responded with its People and Planet Positive strategy, which defines three key areas associated with three main challenges that affect Ikea’s business: enabling as many people as possible to adopt a healthy and sustainable way of life; integrating the circular economy and having a positive impact on the climate through our operations; and promoting fairness and equality. If we want to achieve these positive changes, we cannot act alone–we need our partners to engage with the same level of enthusiasm.

How does Ikea’s code of conduct, called IWAY, influence operations on a day-to-day basis? G. P. The IWAY code ensures that each employee benefits from good working conditions. To provide a service to Ikea, it must be followed 100% and without compromise. The idea is to guarantee a better quality of life at work for everyone through compliance with human rights, with the labour code and with respect for the environment, business ethics and anticorruption laws. The effect of this is an impact on employee wellbeing, management, safety and working conditions, as well as the promotion of idea sharing and the general development of the business.

In what way are Ikea India’s sustainability ambitions in agreement with FM India’s? G. P. The FM India team has shown a lot of interest ever since the IWAY code was launched, and a number of improvements have been seen after the initial awareness-raising and training sessions. An atmosphere of trust and a productive dynamic have become established. As well as that, the application of these practices is not limited to the workplace–they have spread into employees’ social lives.

GOPIKA PAWAR Head of eco-development and customer satisfaction, Ikea India

FM LOGISTIC > NO. 8 – SPRING 2019

and repetitive nature of such tasks. 'Technology needs to remain a tool used to assist humans, in whom the core expertise lies', says Carbone. And we must remember that there will be no artificial intelligence without human intelligence… Precision and flexibility will always be needed to process packages. Human resources are the cornerstone of a successful logistics operation. And people are at the heart of customer satisfaction.However, we have to support employees in these new ways of working, in which the changes are both structural and technological. 'There's a challenge in terms of assimilation. It’s never easy to change habits, to adapt to new methods that shake us up. That’s why we spend time thinking about the human/machine interface so that the machine remains a support, a facilitator, and not the opposite of that', Cloarec concludes.

HR staff have a key role to play in supporting employees in the transformation of the supply chain

12

INNOVATION

13

'N atural gas, electricity and hydrogen will shape the future energy mix of the logistics

chain', says Alan Mac Kinnon, professor of logistics at the University of Hamburg, in his book Decarbonizing Logistics. 'There won’t be a miracle solution, but rather a mix of solutions', agrees Charlotte Migne, director of sustainable development at FM Logistic. The necessary energy transition is particularly relevant for the road transport sector, which accounts for almost 10% of the world’s pollution. The primary alternative to petrol for carrier fleets is natural gas. Mainly composed of methane, it is available in two forms: compressed natural gas (CNG) and liquefied natural gas (LNG). Compared with diesel, CNG and LNG can reduce NOx emissions by as much as 70% and fine particles by 85%. Natural gas vehicles (NGV) are a solution better suited to heavy goods transportation than to light one.

The low price of this gas is one of its most appealing aspects. Furthermore, it benefits from tax relief in a number of European countries, with the average tax rate in the EU being 76% lower than that for diesel. As well as that, natural gas engines are 50% quieter than their diesel counterparts. Finally, the infrastructure for refuelling is now quite well developed.

IS THERE AN ECOLOGICAL COST FOR GOING ELECTRIC?Electric vehicles EVs are also starting to appear in the logistics sector. Originally, they were limited to utility vans for short distances.

Now, though, manufacturers are starting to bring electric lorries onto the market. In reality, the term 'VE' covers four different kinds of engine power: HEV, PHEV, BEV and range-extended EVs, known by the acronym REEV (see glossary). For the first two of these, the combustion engine still plays an essential role in propulsion. Although they are more ecological than standard vehicles (40% lower emissions), they are not the optimal solution. But BEV and REEV should replace them over the course of time. And batteries are constantly gaining in capacity. EVs are particularly well suited to metropolitan areas and the restrictions often in place there. Their zero emissions status not

Road transport fills up on new forms of fuelTo contribute to the fight against climate change and air pollution, the supply chain

sector can now diversify its methods of propulsion with technologies that are gradually reaching maturity.

An overview of these new solutions, particularly those suitable for road logistics.

To remove the final obstacles to the switch to new energy, we need a context of legal restrictions and tax incentives, as well as a car industry that is proactive about producing such lorries Charlotte Migne

only contributes to the fight against air pollution but also enables them to move freely through the low emission* zones in place in many major cities (264 in 2017). However, there is still a high ecological cost for the production of EVs, which require the considerable use of rare metals, for example. Another drawback is not least the fact that how ecological the electricity is depends on the source used to generate it. For instance, in some countries, including Poland, electricity is produced from coal-fired power stations, which emit large quantities of CO2.

7% of global CO

2 emissions

come from international freight transport

FM LOGISTIC > NO. 8 – SPRING 2019

THE EXPERT Charlotte

Migne, director of sustainable

management at FM Logistic

Source: International Transport Forum.

Other solutions?#CITY LOGIN To fight against climate change, logistics and transport companies can take action about their fleets of traditional vehicles by improving their performance and maintenance. 'Forty percent of polluting emissions come from tyres and worn-out brakes', emphasises

Charlotte Migne, director of sustainable development at FML. Supply chain operators also need to pay close attention to the behaviour of their drivers by giving them training in eco-driving. This results in average fuel savings of 15%. But the solution also depends on taking a comprehensive approach to the supply chain: 'It is important to rethink the entire logistics process, from warehouse construction to vehicle maintenance to the new paradigms of transport, which include the multi-modal approach', she explains. That is the path FML has chosen to take with its City Login urban service.

14

INNOVATION

HYDROGEN, THE OPTION OF THE FUTUREWhat about hydrogen, then? Vehicles that use hydrogen as a fuel are fitted with a fuel cell rather than a battery. This fuel cell supplies the engine. Similar to EVs, they do not produce any exhaust emissions (other than steam) and are more energy efficient than diesel and natural gas engines. Fuel cells offer a number of other advantages, too. They are smaller and lighter. And they require less maintenance, as batteries wear out over time, whereas fuel cells keep working as long as they receive hydrogen. Finally, filling up a hydrogen fuel cell is much quicker than recharging a battery (less than 5 minutes for a charge that will take you 500 to 600 km). So, why are not all commercial fleets already using hydrogen vehicles? Answer: They are still very expensive to manufacture. Not only that, but hydrogen production still currently relies 95%

15

YOU HAVE THE SOLUTION

CLOSER TO THE CUSTOMERAt first, Hasbro made deliveries to its customers in Central and Eastern Europe from its distribution centre in Soest, Germany. 'Due to the strong growth in this region of Europe and a strategy of wanting to get closer to the market, we decided to set up a new distribution centre in the Czech Republic', says Ilja Aust, head of operations at Hasbro Eu-rope. After a selection process consisting of several stages, FM Logistic was chosen to provide the warehousing and transport services for this new logistics platform. 'The de-cision to go with FM Logistic was primarily motivated by the company’s operational excellence and its foothold in this geographical area', Aust explains.

A WIDE RANGE OF SERVICES 'FM Logistic completely covers our logistics needs in Cen-tral and Eastern Europe. A side from the core elements of warehousing and distribution, the group provides us with high added value services: customs services and coordination with other carriers', Aust continues. It is important to bear in mind that sales in Europe’s toy sector are concentrated over a few weeks before Christmas, which makes for a huge challenge from a logistics perspective, as an enormous volume of products needs to be delivered within a short timeframe to hundreds of different points of sale. 'FM Logistic succeeded in adapting to our needs under pressure and provided us with an excellent service during the crucial festive period'.

OPERATIONAL EXCELLENCE 'The start-up and ramp-up phases of the new distribution centre were a success because they were based on a well-de-signed development plan and highly coordinated project man-agement', Aust says. 'As for the platform itself, besides the operational excellence that I already mentioned, I would say that one of the main factors behind the success of the distri-bution centre’s launch was the quality of the staff recruited locally. In my opinion, FM Logistic trains its employees very well and takes great care of them. Furthermore, the FM staff responsible for Hasbro have shown themselves to be highly committed and motivated. They're creative, responsive and always ready to find solutions for our company'.

NEW DISTRIBUTION CENTRE FOR HASBRO IN CENTRAL EUROPE

Testimonial by Ilja Aust, Head of Operations at Hasbro Europe

on fossil fuels, where as carbon-free hydrogen production has not yet gone beyond the prototype phase.

Finally, unlike electricity and natural gas, hydrogen requires a recharging network to be set up from scratch. And each station will be very expensive, costing somewhere between USD 330,000 and 5 million. The result? The hydrogen infrastructure is still lacking, with just a few hundred stations currently in use worldwide. France, for example, has about 20! Most of them are to be found in Japan, Germany and the US. The use of this form of energy is not likely to surge until after 2025, the year when the cost of fuel cells is expected to become sufficiently low and the infrastructure of hydrogen stations sufficiently well developed. 'To remove the final obstacles to the switch to new energy, I would say we need a context of legal restrictions and tax incentives, as well as a car industry that is proactive about producing such lorries', says Migne. 'I think the legal restrictions will need to come not only from cities, as is happening today, but also ideally at an international level by setting a price for carbon. And lastly, we need to inform consumers that when they think about choosing responsibly, they need to remember that delivery is an important aspect of that choice, as a way to apply pressure and encourage the most ethical logistics businesses'.

FM LOGISTIC > NO. 8 – SPRING 2019

1,500 The number of brands operated by the toy and

game company Hasbro. Some of the best known are Monopoly and licences for Marvel, Star Wars and Disney toys

*Low emission zones: the European Commission has defined seven types of urban areas with specific traffic restrictions to fight against pollution better.

Glossary of Terms #HEV The internal combustion engine is still the main engine. It is supplemented by a battery, which takes over at low speeds.

#PHEV Similar to HEV, but the bigger battery can be charged externally and does all the work until it runs out. When that happens, the internal combustion engine takes over.

#BEV No internal combustion engine, 100% electric.

#REEV A fully electric vehicle with an internal combustion engine that can recharge the battery when it has run down. The internal combustion engine is not directly connected to the wheels.

REPORTING

16

Save time, save money!

Lean Design and Co-Pack

Promotions are still the most effective way to offer consumers a great deal, and they give brands a powerful mechanism for increasing their market share. The trend for them has prompted logistics companies to offer

special solutions for reducing costs and prioritising getting attractive promotional batches of products onto the market quickly.

I n 2017, promotions grew by 3.5%* in France. They therefore continue to contribute strongly

to the market shares of mass-market retail brands. And in spite of the Egalim law (see opposite), they are set to continue this growth in 2018–2019. In this context, the business of packing in batches of products or co-packing should follow an upward curve.Usually, the process of launching to market is fairly long, not very agile and requires an array of different services: once the idea has been launched for marketing, it is then passed on to a packaging designer, purchasing, then sent to logistics managers, who issue a call for tenders to outsource it to logistics professionals.Being aware of all this, FM Logistic has

come up with a new, fully integrated offer, capable of helping its clients to rise to the challenge of getting the product on the shelves quickly and attractively in order to boost their sales: Lean Design and Co-Pack. 'It’s a comprehensive, turnkey development process for co-packing and promotional batches', explains Alban de Laveaucoupet, head of product packaging at FM Logistic.

'It combines the design of secondary packaging (box, case, display, sleeves, etc.) with the execution of co-packing operations for food, non-food and luxury products'. ALL-INCLUSIVE With Lean Design and Co-Pack, FM Logistic can now be involved further upstream in the process, from the moment the brief is created by the marketing teams. 'By using 3D volumetric design software, we're able to offer a variety of proposals for the design and handling of the boxes, POS displays and cases for promotional batches', de Laveaucoupet continues. 'Above all, we can develop packaging solutions that are industrially viable. The creatives and volumes of the new designs are tested at a real-life scale on our packaging lines'.

EGALIM LAW AND PROMOTIONS

#WHAT IS THE EGALIM LAW? The Egalim law, which aims to ensure a balance between commercial relationships in the agricultural sector and healthy sustainable food, applies to promotions in France. It only affects food products. Discounts on these products are limited to 34% of their value and can only be applied to 25% of the annual volume sold by the brand. This means that an offer for 'buy 1 get 1 free' is now prohibited, whereas an offer for 'buy 2 get 1 free' is not.

#HOW HAS FM LOGISTIC ADAPTED TO IT? Having been enacted in November 2018, the Egalim law came into force in France in January 2019. To inform its clients of the potential consequences and possible solutions in response to it, FM Logistic organised workshops on the topic at the start of the year.

2

#WHAT ARE THE CONSEQUENCES FOR PROMOTIONS? It seems likely that there would not be fewer promotions but that their nature will change. According to predictions by Nielsen*, consumers may even see bigger discounts on non-food products, such as health and beauty or cleaning products, whereas with food, there are likely to be more operations based on large volumes and family-size offers.

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Lean Design and Co-Pack therefore offers numerous advantages to brands that become FM Logistic clients. One of the most important of these is speed to market. 'It means that the same point of contact manages the analysis of the functional specifications, the design of the 3D packaging and the execution of an in-context simulation (box, shelf display, etc.). They then produce the prototype, make the required changes and apply any improvements as many times as necessary', says de Laveaucoupet. The result–development time is halved, and the promotions are on the shelves more quickly to boost sales.

LOW TIME AND COST TO MARKETThe principle of the single point of contact throughout the project not only has positive repercussions for the process of listening and consultation and, therefore, the relevance of the offers but also makes it possible to reduce costs at all points in the chain. 'We help our clients save time and money by simplifying the decision-making process and speeding up the implementation of the operational phase', says Florence Bourgeais, director of marketing at FM Logistic.

'It's particularly because we work on a "wall to wall" basis', adds de Laveaucoupet. 'In other words, the warehousing of products takes place right next to the co-packing lines, which avoids additional time and cost for transportation'. And finally, another advantage is that Lean Design and Co-Pack is a green solution because FM Logistic offers its clients solutions based on new, environmentally friendly materials.These many benefits have already won over numerous manufacturers. 'In just a year, we have already designed around 20 projects', de Laveaucoupet explains. Examples include box harmonisation of Nana, Tena, Lotus Baby and Demak’up products for the purpose of rationalising the industrialisation and communication of these four brands produced by the Essity group, and a box set of American Crew beauty products for Revlon. Bourgeais concludes, 'Lean Design and Co-Pack is not only aimed at promotional operations; this new, comprehensive service enables a brand to really add value to its products. Ultimately, the idea is that our clients can boost their sales'.

1

A comprehensive solution

FM LOGISTIC > NO. 8 – SPRING 2019

8 WEEKS The record time for moving from the idea

for the container to the approved concept being ready for production to launch

*Source: Kandar Worldpanel.

*Trends and perspectives on the impact of EGA 2018.

8 weeks on average

8

Client’s requirement

Approval of project

launch

ADJUSTMENT(IF NECESSARY)QA TEST

STUDY

COMPLETE SOLUTION

DESIGNPROTOTYPE

CLIENTAPPROVAL

1918

Opening of a pharmaceutical platform #DEVELOPMENT A temperature-controlled warehouse dedicated to the pharmaceutical sector was opened near Bucharest last February 2019. The new logistics platform, the result of a EUR 20 million investment, is designed to meet growing demand from companies in the health sector in Romania. Located in Dragomiresti, the warehouse offers 10,000 m2 of space for the storage and distribution of heat-sensitive products, such as vaccines, pharmaceutical products and medical devices. Its operation has been certified as compliant with Good Distribution Practices (GDP) and Good Storage Practices (GSP) for pharmaceutical products. The investment will help companies in the sector meet the strong growth in the country’s consumption of medicines (+11.8% over 12 months up to 31 March 2018), the market for which is now worth EUR 3.15 billion, according to a report by the research company Cegedim.

Top employer! #DISTINCTION FM Logistic has been awarded the Top Employer certification for the fourth consecutive year. The company, which employs almost 6,000 people in France, including 700 new jobs directly created in 2018 and 27,200 full-time equivalents (including temps) at the group level, received the distinction in February 2019 from the Top Employers Institute in Paris. Established in 1991, the Institute is an international certification body which examines the working conditions offered by companies and their efforts to improve employee well-being.

Commitments to the Indian market #INVESTMENT In March 2019, FM Logistic announced plans to invest USD 150 million over five years in its own warehouses and distribution centres in India. This will result in the creation of 500 new jobs in India over the next 12 months. As a part of this initiative a multi-client logistics platform was launched in the Delhi region, and the Mumbai multi-client warehouse will be expanded. We have also invested in over 12 hectares of land in Jhajjar, near Gurugram, for the construction of a new warehouse. Once built, the logistics platform designed by NG Concept (FM Logistic’s sister company which specialises in logistics buildings) will provide 70,000 m² of warehouse space, accommodating up to 100,000 pallets. FM Logistic is also investing in a new warehouse management system (WMS) and a transport management system (TMS) to provide its clients enhanced visibility into their deliveries.

THE ESSENTIALS THE ESSENTIALS

ROMANIA

New warehouse new Hanoi #NEW SITE The group continues its international development with the construction of a new storage and distribution site in Bac Ninh, 20 km from Hanoi. The USD 30 million investment is aimed at strengthening the group’s presence in the Vietnamese market, which is currently very dynamic. Having set up operations in Vietnam in 2017, FM Logistic has not run any large site of its own until now. Once complete, the multi-client warehouse in Bac Ninh will employ some 300 people and will offer 52,000 m² of warehouse space, holding up to 70,000 pallets. The first section, measuring 21,000 m², will be ready in spring 2020.

INDIA

Honours for the group’s environmental policy #DISTINCTION In 2018, FM Logistic was graded B- by the CDP for its environmental policy, well above the sector’s average grade (D). This result means that FM Logistic takes coordinated measures to limit global warming. The policy means that FM Logistic is among the top 13% of companies, on the basis of the scores calculated by the agency, with all sectors and countries combined. Not only that, but FM Logistic also received an A- (well above the average of C) for actions to encourage its supplier-partners to take measures for fighting against global warming.

INTERNATIONAL

2.5M ROUBLES The amount invested in Russia by

FM Logistic, alongside 270 jobs created in the Rostov region

1ST FM Logistic is the first French logistics

company to be ISO 45001 certified in occupational health and safety

VIETNAM FRANCE

FM LOGISTIC > NO. 8 – SPRING 2019

EUROPE

New test on carbonemissions measurement

#SUSTAINABLE DEVELOPMENT A new tool for measuring greenhouse gas emissions is going to be tested at FM Logistic’s cross-docking platforms and sites in 12 countries, primarily in Europe. Named REff (resource efficiency at logistics sites), it has been developed by the German applied research institute Fraunhofer IML. The group, which has set itself the goal of reducing the carbon dioxide emissions from its logistics platforms by 20% by the year 2022, intends to publish a report at the end of the test phase.

Create a chain of solidarity to fight against social exclusion

The FM Group strengthens its social responsibility commitment by creating its Corporate Foundation. Based on the Group’s values: trust, openness and performance, its mission is to fight social exclusion by supporting local initiatives in the fields of insertion and childhood.

Because everyone has a right to have a better life, already this first year, the foundation has helped more than 100 young people between 18 and 26 years old who were at risk of exclu-sion. FM Foundation is proud to support employees in their solidarity projects.You would like to share your talents, your skills, and get involved with us?Join the solidarity chain!

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