GPS System Slashes Collection Costs

Author: John Forne
Date: 17 February 2010

Tags: Fonterra, GPS, productivity, dairy, milk,

Every minute Fonterra saves when collecting milk reaps the company an extra $2 million a year.

Fonterra, the world's leading exporter of dairy products, uses a GPS-based dispatch system to manage its collections, and the benefits of this are already apparent. In the year to July 2009, the system reportedly helped the cooperative save 3c per kilogram of milksolids in collection costs. Translated into dollar terms, that's a reduction in collection costs of $2 million a year.

Fonterra collects from up to 10,500 farms each day, transporting milk to more than 20 production facilities around the country. Fonterra is facing an uphill battle to improve milk collection costs in the face of independent processors luring large suppliers away. It started seeking savings to its milk collection costs in 2004, by using rail transport in some regions, increasing tanker load capacity, speeding up collection times, and rolling out its new 'Genesis' tanker dispatch system, which includes drawing up a daily milk collection schedule at Fonterra's Hamilton office.

The GPS-based Genesis system allows the milk to be picked up at the right time 99.5 percent of the time. GPS is installed in all tankers and their locations are transmitted every three minutes to the control room. Drivers also have radio telephone contact with controllers.

Read more about Fonterra's use of geospatial information in the Spatial Information in the New Zealand Economy report.

John Forne

Analyst
New Zealand Geospatial Office

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