5th International Conference on Production Engineering and Management

ISBN 978-3-941645-11-0

5th International Conference on Production Engineering and Management

AN INNOVATIVE MODULAR AGRIBUSINESS HUB FOR THE VOLGA REGION

FRANCO C. GROSSI

Department of Architecture and Design Kazan State University of Architecture and Engineering

Kazan’, Republic of Tatarstan, Russian Federation

Abstract The “Volga Region” is an historical land inside the Russian Federation that includes territories adjacent to the flow of the Volga River. The Autonomous Republic of Tatarstan is the ancient, original region, possessing a unique culture in what place, east, western traditions and idioms are shared, and it is placed in the middle of the Volga Region. Kazan is the capital of Tatarstan, a modern and visionary town, where it will be possible to design and develop an advanced and innovative agribusiness infrastructure and where to introduce the concept of "Hub" in the housing and in the distribution of food. The main concepts exploited in this project are modularity, standardization and use of ICT facilities. The module will be the pallet, the standard the Euro Pallet and the warehouse class A and, as regards ICT devices, the RFID equipment and the satellite control.

Keywords: Agribusiness, Hub, RFID, Kazan, Tatarstan, Volga Region

1 INTRODUCTION

It is now the correct moment in the present conditions of Tatarstan's vision, to develop an advanced agribusiness infrastructure and to introduce the concept of "Hub" in the housing and in the distribution of food. The main problem, in this region, is the seasonality of agricultural products with consequent price fluctuations. So the creation of an innovative "Hub" would definitely grant to keep steady the prices of agricultural products and to be able to have them available through the year. The model used as a reference for the design is the "Marché International de Rungis", near Paris, France. Moreover, one of the aspects of traditional culture of the Tatar people is adherence of production "Ḥalāl”, which means breeding of animals, which have been grown up and then slaughtered according to Islamic canons. Thus, there is a serious problem of industrial slaughter of animals in the agro-industrial complex of the Region. At the present time, the share of household slaughter is the 90% of the general manufacture of

5th International Conference on Production Engineering and Management

meat, and such slaughter, as a rule, is made without carrying out of veterinary and sanitary control and so includes many infringements of technological and sanitary rules.

Figure 1: Sketch of the Ḥalāl Complex

Taking into account all above mentioned, the whole project would also include the realization of a modern technological complex for cattle slaughtering in accordance with religious requirements "Ḥalāl", and onsite, other facilities. This project will treat only the Hub facilities. In the following sections, the discussion will be based on these subjects:

The utilization of the ISO standard "Euro Pallet" as the main module.

The construction of the warehouse Class A

The ICT equipment and devices

2 THE MODULE

In architecture, the concept of module is stated as a “repetitive dimensional or functional unit used in planning, recording, or construction buildings or other structures”. [1] Using module, leads to a more precise and accurate design and avoids, for example, as has already happened, the design of a hospital in which the beds, for their dimensions, do not cross through the

5th International Conference on Production Engineering and Management

doors. Many architects utilize the module, in other words a selected unit, which is used repeatedly in the aggregate constructions. For example, Le Corbusier developed the “Modulor” [2] in the long tradition of Vitruvius and Leonardo da Vinci’s “Vitruvian Man”, introducing a scale of visual measures. Modular warehouses are typical today but no one using its modular unit as a "visual measure", like the Pallet.

2.1 The Pallet as the Module All we know that a pallet is a flat transport and handling structure that supports goods in a stable fashion. Wooden pallets are preferred in our project. They typically consist of three or four stringers that support several deckboards, on top of which goods are placed. In a pallet measurement, the first number is the stringer length and the second is the deckboard length. Pallet users want pallets to easily pass through buildings, to stack and fit in racks, to be accessible to forklifts and pallet jacks and to function in automated warehouses as the one of our project. The real novelty, in this work, is to use the pallet as a module unit, through which the whole construction will be designed.

2.2 The ISO Euro Pallet The International Organization for Standardization (ISO) sanctions six pallet dimensions, detailed in ISO Standard 6780: Flat pallets for intercontinental materials handling—Principal dimensions and tolerances.[3] The pallet chosen in the present project is the EUR 3, 1.000 W x 1.200 L millimeters, most used in Europe and in Asia. This will be the standard module.

Figure 2: An EUR 3 Pallet

5th International Conference on Production Engineering and Management

Figure 3: The EUR 3 Pallet dimensions

3 THE CONSTRUCTION OF THE HUB

Utilizing the module for the designing of the Hub, in this case the dimensions of the EUR 3 Pallet, will guarantee a precise procedure of work and the ability to maintain a constant control on the project. It is a bit like to proceed with Lego bricks. You always may have the option to have an overall view. So, the Modular design approach is here adopted. It subdivides the building into smaller parts called modules with the dimensions of the chosen pallets. This modular system is characterized by functional partitioning into discrete scalable, reusable modules, rigorous use of well-defined modular interfaces, and making use of industry standards for interfaces. 3.1 The Warehouse Commercial and industrial real estate can be broken down into several different categories, as shopping centers, office buildings, or warehouses. Particularly, Warehouse/Distribution buildings are commonly the largest and are used for warehousing and distributing products. NAIOP [4], in these terms defines Warehouse: A facility primarily used for the storage and/or

5th International Conference on Production Engineering and Management

distribution of materials, goods, and merchandise. Typical characteristics are shown in the following matrix.

Figure 4: Industrial Building Types (Source: NAIOP).

3.2 The Warehouse Regarding the present project, a Warehouse in Class “A” was chosen. In this respect, a subjective classification system [5] divides buildings into three categories: Class A, Class B and Class C. Building classifications differentiate among buildings within a relevant market area and are primarily based on quoted rents, building systems and services, tenant and building finish and location. Buildings must exhibit more than one of the characteristics but need not exhibit all of the characteristics to be considered under a specific classification. The following matrix illustrates the primary considerations for determining classification of office buildings as either Class A, B or C.

5th International Conference on Production Engineering and Management

Figure 5: Industrial Building Classification, according to NAIOP

3.3 The Hub The Merriam-Webster Dictionary defines as Hub: “A center of activity - An airport of City trough which an airline routes most of its flights”. It is so thinkable to borrow that concept for giving a definition to the Agribusiness Hub as “A central location that connects multiple producers and dealers on a single network”. The distinction between Warehouse and Hub is great. Today’s Agribusiness Warehouses have evolved into crucial Hubs in supply chain networks. They are moving goods to market more effectively than ever before and taking on value-added functions that they can perform more efficiently than any other link in the supply chain. Here are some bullet points, taken from an article written by Clifford F. Lynch of C.F. Lynch & Associates [6], concerning Hub (Distribution Center):

A Hub offers value-added services. Rather than simply offering static storage, Hub provide a myriad of services for clients, whether those customers are external or internal company departments and functions. In fact, a well-organized and -managed distribution center will provide whatever services are necessary to complete the order cycle, including order processing, order preparation, shipping, receiving, transportation, returned goods processing and performance measurement.

5th International Conference on Production Engineering and Management

A Hub is customer focused. While a warehouse is focused on the most efficient and cost-effective methods of storing products within its walls, and Hub’s sole mission is to provide outstanding service to its customers.

A Hub is technology-driven. The distribution center of today must have in place state-of-the-art order processing, transportation management and warehouse management systems if it is to scan bar codes, plan loads, process orders and locate product efficiently.

A Hub is relationship-conscious. Whether its clients are outside companies or other company departments, a distribution center must remain focused on its customers’ requirements. A distribution center is the principal link between suppliers and customers, and its management must be conversant not only with the customers’ needs but with the most efficient and cost-effective methods of meeting those needs. By contrast, a storage warehouse is so inwardly focused, in most cases, that there is very little understanding of what customer service really means.

4 THE ICT EQUIPMENT AND DEVICES

ICT (Information and Communications Technology) is a term that includes any communication device or application, e.g. old and new media and so on, as well as the various services and applications associated with them. ICT embraces the IT, TLC and A/V digital worlds. The ICT equipment provides IT service management. The use of ICT technologies enables to implement significant savings in the management of Lean and let to be always: anytime and anywhere. Pallet-level tagging provides a quick, automated, cost efficient and accurate way to track all the items through the supply chain and in the retail environment. This includes better visibility and control of inventory and an expansion of producer experience capabilities.

4.1 RFID Radio-frequency identification (RFID) is the wireless use of electromagnetic fields to transfer data, for the purposes of automatically identifying and tracking tags attached to objects. The tags contain electronically stored information. RFID tags are used in many industries. In the present case, RFID-tagged products can be tracked from the site of production, through warehouses, until the users. Many organizations have set standards for RFID, including the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), ASTM International, the DASH7 Alliance and EPCglobal. This project refers to ISO/IEC 18000 [7], an international standard that describes a series of diverse RFID technologies, each using a unique frequency range. RFID has been used, e.g., to tag the components of the concept car "Punto Student", so that,

5th International Conference on Production Engineering and Management

when it entered into the car-repair garage for service, the defective parts did "outing" by themselves.

Figure 6. The project “Punto Student”, the Ideal Car for Italian Students, a concept car, equipped with RFID tech, presented at the Motorshow 2002, Bologna, Italy.

RFID technology is a simple method of exchanging data between two entities namely a reader/writer and a tag. This communication allows information about the tag or the element carrying the tag to be determined and in this way; it enables processes to be managed more easily. Key uses currently include production control, identification, authenticity features/authenticity protection, logistics and container management, animal identification, payment functions, contactless chip cards, management of goods and inventories, position identification, time clocking, admission control. In the present case, the tag will be attached to each pallet. The main concept, here, is to use the RFID ILT item-level tagging, in which our items are the pallets, so to track them to better control their location and inventory through the supply chain.

4.2 Satellite Tracking vehicles and monitoring single items by satellite is today a common practice anywhere in the world. Therefore, wherever short and long haul transportation carriers go, by means of satellite and satellite-cellular terminals, it will be possible, in a near real-time, truck tracking and pallets monitoring. Pallet fleet managers will be informed of the operational status and location of the pallets and of the trucks, also utilizing invaluable, low-cost data communications links for location checking and virtually any other requirement. Important actions to increase productivity are, e.g., to transmit electronic documents, such as forms, work orders, instructions, personnel identification, completion acknowledgements and billing signatures, and text messages, for exchanging them in-cab with truck drivers. The aim, in this project is to track every single pallet from the producer until the warehouse and, moreover, inside it.

5th International Conference on Production Engineering and Management

5 THE PROJECT Agribusiness involves the production, distribution, and consumption of food, clothing, and shelter. It includes all economic activity in the food and fiber system, which encompasses the input supply industries, agricultural production, and post-harvest value-added activities, such as commodity processing, food manufacturing, and food distribution [8]. The agribusiness supply chain includes a number of processes such as supply management, production management, and demand management to customers through a competitive distribution channel [9]. Each step of the way can be plagued with issues such as diversity of production and demand, bulkiness of produce, perishability, and seasonality. Highlighting the complexity and importance of supply chain management within businesses handling agricultural products, Agribusiness Supply Chain Management addresses issues that help readers systematically approach decision making in the agribusiness sector. Managers in all areas of the agri-food system must be competent, flexible, and informed [10]. 5.1 Main Principles The Hub's main prerogative is its positioning near to a highway, because in Russia it is common using trucks instead of the train, even for the reduced cost of automotive fuel. Inside the value chain, all actors should be involved, from manufacturers, to drivers of trucks, to Hub's personnel, to dealers and so on. To avoid risk of stock all merchandise will be on consignment. Thus, the modes of operation of the Hub will be two: or request by dealers (FIFO) or attempted sale by manufacturers (LIFO). 5.2 Description Below the description of the chain: 1. The producers shall affix bar codes (approx. 1kB, each one) on

individual packaging (boxes, cartons, cans, etc.) and RFID on pallets and all on trust and collaboration. Of course, random checks will take place throughout the supply chain. Yes, absolutely. The two technologies exchange information in different ways. Therefore, the systems complement each other, perform valuable services in different fields of application and can be efficiently used in combination as well.

2. Data on pallet prepared by the producers will be sent via the web to the Hub.

3. The trucks will start from the manufacturers and will be monitored by satellite in their path, in order to predict the date and time of delivery to the Hub.

4. Once reached its destination in the Hub, the truck will pass through special antennas that will control input and output via the RFID put on

5th International Conference on Production Engineering and Management

pallets, by implementing the warehouse incoming and downloading outgoing.

5. Other efficient antennas deliver high-throughput, high capacity communication, enabling organizations to capture, move and manage critical information to and from every point of agribusiness activity.

6. The pallets will be placed on the shelves and you can, at any time, check the availability and amount of stored goods. Other values entered in the RFID may be the exact dimensions of the content placed on the pallet and the storage temperature for perishable foods.

7. The discharge from the warehouse and the consequent variation of the goods in account sale, into sold and then with the respective bank payment may take place in an automatic way.

5.3 Economic Factors An economic analysis of the Volga Region was already made and the result is that it will be possible to create strong economic growth in agribusiness in that area. “Warehouse is nothing more than the management of space and time”, says Thomas W. Speh [11]. The world is depending on the agricultural economy to stay strong and vibrant and provide needed food [12]. The most important cost factors, e.g. handling, storage, operation administration and general expenses were discussed. Swat analysis was positive and business plan forecasted a great Gross Margin. 5 CONCLUSIONS The request for a new hi-tech warehouse construction is very relevant in Tatarstan, because their production is still not enough for the internal market and so they are forced to import from abroad and to store and distribute products. It must now to choose whether to build a new one or expand an existing one, such as a large warehouse already built in an industrial area near Kazan, along the most important highway, which have loading docks to load and unload goods from trucks. The main objection is naturally to allow, either transport optimization along the supply chain, or to have an optimal inventory also regarding service quality. The aim is to go towards a completely automated system, in which pallets and goods will move on a totally plant of totally plant of automated conveyors, cranes, for an automated storage and retrieval system, controlled by computer running logistics automation software. However, all of this will be done step by step. At first the construction of the building, designed using the "pallet module unit". Then the tagging project of the goods, to track exactly their position using RFID and satellite tech facilities. No less important will be the education of the workers, so to provide personnel development and continuation training. The goal is to require operators to work and handle only the tasks, to achieve the result of a fully automated warehouse Hub.

5th International Conference on Production Engineering and Management

Figure 7: Rendering of the Agribusiness Hub.

REFERENCES [1] Harris C.M. (2006) Dictionary of Architecture and Construction, McGraw

Hill, New York. [2] Le Corbusier (1949) Le Modulor, essai sur une mesure harmonique à

l'échelle humaine applicable universellement à l'Architecture et à la mécanique, Éditions de l'Architecture d'Aujourd'hui, coll. Ascoral, Paris.

[3] ISO 6780:2003 Flat pallets for intercontinental materials handling -- Principal dimensions and tolerances http://www.iso.org/iso/catalogue_detail?csnumber=30524/.

[4] NAIOP Terms and Definitions - North American Office and Industrial Market (2012) Naiop Research Foundation, Herndon, Virginia, http://www.naiop.org/.

[5] Lynch C.F., (2003) “Moving or Storage?” http://www.cflynch.com/layouts/ layout_3_1_publications/layout_3_1_1_articles/layout_movingstorage.html , C.F. Lynch & Associates, Memphis, TN.

[6] Ricci, Carolyn (2010-10-12). "Retailers Buy into Item-Level Tagging". Apparel Magazine. Retrieved 2012-12-19.

[7] ISO/IEC 18000-63:2013 - Information technology -- Radio frequency identification for item management -- Part 63: Parameters for air interface communications at 860 MHz to 960 MHz Type C.

[8] Van Flet D.D., Van Fleet E.W., Seperich G.J. (2013) Agribusiness: Principles of Management, Delmar Pub, Clifton Park, NY.

5th International Conference on Production Engineering and Management

[9] Chandrasekaran N., Raghuram G. (2014) Agribusiness Supply Chain Management, CRC Press, Boca Raton, FL.

[10] Beierlein J.G., Schneeberger K.C., Donald D. Osburn (2013) Principles of Agribusiness Management, Waveland Press, Long Grove, ILL.

[11] Speh T.W. (2009) Understanding Warehouse Costs and Risks, Warehousing Forum, Volume 24, Number 7, June 2009, Columbus, OH.

[12] Allen A. (2014) Agricultural Economics: What You Must Know About Future Agricultural Finance Now, Kindle Edition, Amazon Digital Services, Inc., Seattle, WA.