Costco Wholesale has brought to Australia a completely new concept in the sale of consumer goods, including everything from top brand name electronics, furniture, automotive accessories and sporting goods, to everyday grocery and items and apparel.
The opening of Costco’s first Australian store, at Docklands in Melbourne, attracted significant media attention, including coverage in major newspapers and on prime time television.
However, to bring such a radically different type of operation to a new country required a whole lot more than just local real estate and staff. It required a set of key suppliers that could replicate its hugely successful overseas operations.
That task fell to Costco’s regional operations manager, Mr Rick Carlson. According to Carlson, one of the main criteria when establishing a presence in a new country is the availability of suppliers that can replicate the equipment, technology and services levels that his company relies on around the world.
“Costco is a unique operation, in that our store is also our warehouse, so the main movement of stock around the facility has to be done in a single shift after regular shopping hours, and that means that a lot of standard industry practices have to be dramatically altered,” Carlson says.
One of the key supplier relations was to be the selection of Costco’s materials handling equipment partner.
“In the United States we have a long-standing relationship with Crown Equipment for vehicles, Crown Commercial Training for operator training, and Crown Power for its Zero Battery Change solution,” Carlson says.
“Over the years Costco has trialled many different brands of lift truck but have always found the Crown products best suited to withstand the heavy duty workload that we put on our equipment through.”
Crown’s General Manager Marketing, Craig Kenchington, says it's fortunate that in Australia Crown has an existing strong partnership with global leader in stored energy solutions (lift truck batteries)for industrial applications, EnerSys.
"EnerSys and Crown have worked together in the US for over twenty years, so it meant that Costco could actually enter Australia with existing key supplier partnerships already in place,” Kenchington says.
Costco’s Docklands facility covers some 14,500m2 with racking capable of holding 2,500 pallet positions.
“Unlike our operations in countries where we have a multiple facility presence, and therefore can supply from a centralised distribution system, in Australia stock is supplied in pallet quantities directly to the Docklands location,” Rick Carlson says.
“However, with the capability of storing 2,500 pallets of overstock, we are still able to maintain sustainable stock levels whilst still gaining the benefits of Costco’s extremely strong buying power.”
To accommodate the vast range of stock that has to be moved, Crown has supplied Costco with lift trucks that can work easily and safely with anything from very large plasma televisions or outdoor settings to smaller items such as perfumes and fragrances.
Restocking operations at Costco are coordinated to have minimal impact on the company’s trading hours. This means that most stock movements occur between 4.00am and 9.30am so that the warehouse is in top presentation form for when the doors open to members each morning.
To accomplish this, Costco has chosen to implement Crown Power’s premium “Opportunity Charge” battery system.
Opportunity charging with dedicated fast chargers allows operators to charge their vehicles’ batteries on their trucks in order to maintain the battery’s state of charge (SOC) between 30% and 90%, eliminating the need to take a truck out of service for traditional battery changes.
According to Craig Kenchington, this brings significant benefits to companies deploying fact charging solutions.
“Fast charging is all about high-availability of trucks," he says.
"Today specialist batteries and dedicated chargers means that trucks can be ‘topped up’ during shift breaks without the need to remove batteries from the units.
"Savings are made in not just time, but also in only needing one battery vehicle rather than the two required for battery change-over.”
Rick Carlson says the savings from such a charging system are real. “Fast charging allows our operators more time undertaking lifts and less time involved in changing batteries.
"I estimate we are saving in excess of one and a half hours a day of downtime with the Crown Power solution, meaning our operators are considerably more productive,” he says.
All Costco operators were familiarised with the charging system as part of the initial operator training supplied by Crown Commercial Training prior to Costco’s Docklands facility opening to the public.
“Initial training was carried out at Crown’s Mulgrave facility with a State Certified Trainer," Carlson says.
"New operators undertook eight hours of training, with experienced operators requiring only a four hour refresher course. Costco-specific training was then undertaken at the Docklands facility."
Now, some months after the public opening of the Docklands facility, operator feed back is positive.
“Drivers have taken to the new vehicles very well," Rick Carlson enthuses. "In particular, having trucks that can be rapidly adjusted to the individual driver through the operator suspension feature which makes their work more enjoyable.
"General feedback is that the Crown vehicles are very consistent in operation and are very user-friendly,” Carlson adds.
“Our main Crown contact people in Sydney and Melbourne have been quite eager in meeting our needs.
"The range of vehicles, the timing of product delivery, driver training and equipment installation all worked smoothly for Costco. It helped make for a successful launch in the Australian market.”
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