Changing the Automotive industries perception of Recycled Returnable Packaging

There has been a longstanding question from automotive manufacturers about what happens to returnable packaging at the model end-of-life stage? There is also the perception that all returnable packaging is bought new.

As a result of this perception, the automotive industry assume that the value of the returnable solutions at the end of their life is zero which becomes a barrier to them moving from expendables to returnable.

Unbeknown to them that there is a bustling refurbished and recycled packaging market with specialists looking to continuously purchase packaging.

Packaging refurbishment specialist purchase totes and general purpose applications from OEM’s and tier suppliers who clean, repair and de-brand them before selling them back to the market. This is a great alternative to replacing broken or stolen returnable with new packaging.

Bespoke packaging solutions may not be fit for general re-use but in this instance they can be ground down and recycled to be re-used elsewhere. Therefore, there is no reason for the automotive industry to believe that returnable packaging has zero value at the end of its life. 

I think that some of the issue is that automotive manufacturers don’t want to talk about recycled packaging in fear of them buying their own returnable packaging back.

It is important to know that this is a legitimate market and that resellers accept packaging only with the correct legal documentation to ensure transparency.

If you would like to understand the potential of recycled packaging or find out how much your returnable packaging is worth please contact me. 

Do you understand the potential of one-way returnable packaging?

As intercontinental logistics flows increase in the automotive manufacturing industry, could we see manufacturers forced to take a fresh look at global pooling packaging solutions.

For a number of years, there has been underutilisation of pooling companies and one-way returnable packaging methods in the global automotive industry. There could be a number of factors responsible for this – perceived high-cost, lack of understanding of plastic returnable solutions or smaller logistic flows.

With the increase in intercontinental manufacturing footprints, the supply chain and logistics operations could be forced to reconsider returnable packaging and pooling solutions provided by the likes of DHL, Chep and Goodpack.

I was recently quoted in an Automotive Logistics article stating that the biggest trend the industry is seeing at the moment is the increased use of pooled returnable packaging over long-distance, one-way flows.

I believe that OEM’s and tier suppliers are not fully aware that they can receive all of the benefits of returnable packaging with the pooling provider handling and managing the return journey.

Put simply, the OEM or tier supplier pays one price for the use of the tote or plastic container to be transported to its destination. The packaging solution increases cube utilisation, reduces risk of damages or contamination and handling in comparison to disposable packaging – therefore experiencing all of the benefits.

Once the items have been removed from the packaging, it is then the responsibility of the pooling company to arrange the freight for the reverse-leg.

Implementing a pooling provision into intercontinental flows significantly reduces transportation and handling costs, reduces waste costs and removes the need to identify reverse-leg freight to make returnable packaging viable.  

Next week we will be exhibiting at the Automotive Leader’s Summit in Liverpool where you will be able to see the Macro EuroBin which is the new 900kg folding plastic container.

If you are attending the conference, please come and see how I can help you make savings on your current packaging solutions. 

Why is Europe behind in design and manufacturing of strong plastic returnable packaging solutions?

European pooling companies, OEM’s and tier suppliers in the automotive manufacturing industry have to go the US for plastic folding containers - isn't it time that 900kg folder plastic containers are made in Europe?

I have always wondered why the European and UK industry are still going to the US; why haven’t they looked at improving injection moulding capabilities on the continent.

The demand is there and the use of steel packaging is costly and in some cases logistically unviable.

It is clear in Europe that manufacturers do not have the design and technical capabilities compared to their US counterparts. But this is no longer an excuse, if packaging suppliers had taken a sensible view on this gap in the market and invested in acquiring individuals with the required expertise, the European market could be on a par with the US.

Could it also be the fact that existing injection moulding specialists did not want to see the opportunity before them? If they ignored developments in other markets around the globe, their clients would be satisfied with their current offering.

If a 900kg folding plastic container is manufactured in Europe, it significantly reduces the cost of importing and transporting products rather going across the pond to source their supply chain solutions. Why hasn’t this opportunity been seized upon pooling companies who use US products?

Maybe it is now time for US expertise to arrive in the European market, it is now time for someone to realise the opportunity within the automotive supply chain.

Whilst on the topic of how far behind the European automotive market is with injection moulded containers, Macro Plastics will be launching the EuroBIN 1210 in Q3 of 2016 which can be stacked 10 high folded and has 900kg capacity.

This is an example of how the US and, more specifically, Macro Plastics have grabbed the bull by the horns and developed an innovative 900kg returnable plastic container which fits seamlessly into the global automotive supply chain.

The design of the EuroBIN has focused on -

More Product + Less Packaging = Less Cost. 

Automotive Logistics, Europe Conference - is the automotive industry actually going to look at cube utilisation?

With the Automotive Logistics Europe Conference in Bonn taking place in March, cube utilisation in the automotive supply chain is bound to be a topic discussed again - why is the industry doing so little about this?

Over a number of years cube utilisation is something that has been covered by conference after conference across the globe yet it appears that nobody within the automotive industry has bothered to look further into cube utilisation or act upon the information that is discussed at these conferences.

In the overview of the conference taking place from 15th - 17th March there needs to be a number of goals outlined -

●     reduced handling

●     less labour

●     fewer delivery delays

●     no damage

Firstly, why isn’t cube utilisation on this list of goals? Secondly, if those who work in the sector take a closer look at the returnable packaging options that are currently available on the market they could have already made significant improvements towards achieving some of these goals - cube utilisation being one of them.

I am looking forward to the discussion in Session 3 on Wednesday afternoon called Feeding the Line as ‘What is the role of packaging in part protection and cube utilisation?’ will be up for discussion. I am keen to hear about people’s thoughts on this but, more importantly, why there appears to be little activity to address cube utilisation. I would like to stress that this is an issue throughout the global supply chain, not solely in Europe.

By paying more attention to cube utilisation throughout the whole supply chain and acting upon this information, the industry would be able to drive down costs and significantly improve efficiencies. By the whole supply chain I mean inbound journeys to manufacturing plants, return journeys, continental and global trips as well as transporting spare parts.

The IsoBin from Macro Plastics cubes out at ISO Container to 97.2% of floor space and can be stacked three high when carrying components. Without looking at the how the IsoBin can help you to achieve the goals set out above, you can significantly reduce the space you require in transportation. The simple fact that reduced space means reduced cost, which goes straight to the bottom line, this should be enough for the automotive supply chain to do something about cube utilisation.

One OEM has saved $1 million by integrating the IsoBin throughout their global supply chain by improving the cube utilisation of the ISO Containers. These savings have been made on 3 parts on Northern to Southern hemisphere trips and the opposite way as well travelling from East to West and back across the Atlantic. This proves the potential impact of one solution on a global supply chain.

It is so important for top Automotive Supply Chain decision makers to understand what services are about and how Returnable Packaging now works on a Global scale.

Top 10 Tips to improve your Supply Chain for 2016

Having worked in the returnable packaging industry for over 30 years , I have come across a number of challenges that face the global supply chain across a number of industries. In recent years these challenges have both increased and intensified.

Here are 10 key areas that I believe need to be addressed in order to ensure that a supply chain is performing for your business.

Space Utilisation - in a global supply chain space = money. Making the best use of space in containers is essential to increase value for money whilst reducing costs at the same time. Packing as many units into a container increases value for money and reduces the amount of containers required. Increased space utilisation has always been an area that the supply chain has strived to improve, this has increased in importance as supply chains are now on a global scale and more items are required in more locations at a higher frequency than ever before.

Reducing damages & higher quality standards - the need to reduce the cost of damages to parts during transit in the automotive industry is paramount. The margin for error is now virtually nil. Achieving this target is down to the quality of your packaging. Expendable packaging is commonly used through the supply chain which is not the sturdiest of materials especially when transporting heavy parts in a Global Supply chain. This type of packaging is susceptible to collapse when exposed to moisture. Container rain is a common issue with cardboard collapsing when being transported across a number of continents with varying climates resulting in damaged goods. Damages are both a monetary and time cost. Solid returnable packaging delivers on all of the quality requirements, therefore helping to reduce costs.

Reducing operating costs - as supply chains become ever more complex and increase in size, keeping a lid on the costs of a global footprint is key. Increasing overall efficiency and sustainability are top of agenda. Reducing the reliance on expendable packaging can help to make a huge step towards reducing costs, expendable packaging has been used for decades but now it is increasing becoming less viable. Looking towards other alternatives is now a necessity - returnable packaging is a cheaper more viable option that provides sustainability over a number years on a global scale. Reducing the costs in a supply chain can have a direct effect on your bottom line, so with returnables available on a Global “one trip” rental basis, through poolers, then target costs can be met.

Safety standards - health and safety is now a huge part of the working life and improving safety standards in the supply chain is constant. Containers and packaging now play a role in helping to improving health and safety. Earlier in this post I mentioned the risks of using expendable packaging; if stacks are collapsing or weakening during transit this presents a significant risk when they are being moved and unloaded. Returnable containers are designed with interlocking feet and rounded edges, ensuring they can be stacked safely when in use and reduce the risk of catching on clothing or people.

Increasing awareness of pooling companies - investing time into looking at the benefits of using a pooling company is something I would advise all businesses to do. I have seen how partnering with a pooling company can help to reduce costs, improve efficiency and transform the performance of a supply chain but I find that a lot people in the industry have ignored poolers so far and simply don’t realise how they can help you. With the pressures of a global supply chain, renting containers from a pooling company and employing their services to transport your goods across the world solves a lot of headaches especially when it comes to costs and responsibilities.

Need for standardisation -There is a huge need for standardisation in the global supply chain as I have mentioned several times already and I am going to bring it up again. Moving to a global standard footprint especially in the automotive supply chain would make everyone’s life more easier. Agreeing on a global standard for returnable packaging will remove all of the problems that OEM’s and tier suppliers currently face when moving components across several continents and countries. One packing size and shape may be ideal for being transported around Europe but may not be the most viable option once it reaches other continents. If there is a standardisation, value for money increases, larger quantities of goods can be transported quicker and it improves the overall supply chain.

Space Utilisation (Storage) - As we see more parts/ components being required in multiple locations at a higher frequency means that storage and space is now more important than previous years. Tailoring your supply chain to improve performance at every stage even includes warehouse storage - saving space means saving money whilst at the same time improving safety. Using containers that can be safely stacked at height can save a considerable amount of floor space, allowing your to store more components at any one time. Also storage when not in use is a consideration that needs to be factored in - solutions that nest neatly and safely helps to reduce risks and costs again.

Reduce handling - within the automotive industry reducing the amount of times that the people come into contact with parts is an ever present target. This helps to again reduce operating costs which have a direct impact on the bottom line, reduces the risk of damages and makes the process a lot smoother. In an ideal world, OEM’s would like a part to be placed into a container and not touched again until it reaches the assembly line. In order to achieve this target, a standardised container is essential due to the global footprint which complies with the requirements in order to be allowed to go line side. Expendable materials cannot do this; the attention then turns to plastic returnable packaging.

Part protection - using fabric dunnage within your returnable packaging solutions helps to maximise the pack out of the container, but more importantly protect the contents. As I have mentioned above, parts and components are being shipped in larger quantities across larger geographies therefore there is risk of damage. Using fabric dunnage specifically made to order, ensures that the contents of the returnable packaging solutions arrive at the line side in the desired quality. This helps to reduce replacement costs and reduce hold up time spent in the assembly process.

Keeping up-to-date with returnable options - returnable packaging is an area which is constantly changing with the rapid developments in design and manufacturing innovation. In the automotive manufacturing and supply chain industry it is surprising the amount of people are unaware of the different types of returnable packaging and the benefits. Therefore, my final tip for people in the automotive industry is to keep up-to-date with developments to the returnable packaging options on the market as you may be missing a big opportunity to make savings to your bottom line and drive up the performance of your global supply chain. It is important to seek the correct advice from the right people and when consulting from a Packaging Supplier this can be biased towards their products - ALWAYS seek an independent consultant

Explore the potential of returnable packaging & pooling companies at the Auto Logistics Global Conference

At the Auto Logistics Global Conference later on this month, I am inviting the automotive industry to explore the potential benefits one trip returnable packaging can bring to their supply chain.

One of the biggest issues I have with the industry is the reluctance to take an in-depth look at the possibilities of plastic returnable packaging and pooling companies. This is a point I have made numerous times in previous blog posts and one that I would like to highlight again in the run up to the conference in Detroit.

In a globally competitive industry which is constantly looking to drive up profit and reduce costs, investment can be a contentious issue as the focus is on ROI, ROI, ROI. This is why sometimes it is easier for manufacturers to stick to what they know and attempt to cope with the issues they encounter with the tools they have at their disposal.

In order to experience the benefits of returnable packaging coupled with a pooling company there is no investment needed. Using the Macro Plastics’ ISO Bin to transport components and parts on a global scale on a one trip basis, the OEM or tier supplier is only charged for the rental of the bin and the outbound journey. There is no charge for the inbound journey as the pooling company is able to use the bin for another client. Therefore, there is no need to worry about the ROI as no upfront investment is required, you simply pay for the service that is provided.

The cost savings compared to the expendable packaging currently used or owning returnable packaging solutions is significant. In addition to the cost savings mentioned above, the ISO Bin provides the best pack density on the market which further reduces costs as you are able to move higher quantities using fewer bins.

Ask yourself what challenges you are currently encountering in the supply chain; how do you plan to address these? Can your current packaging solution help you?

Then look at the challenges you see on the horizon and are your current packaging solutions able to cater for the challenges ahead?

Using a pooling company in conjunction with ISO Bin is a global first that delivers results both today and tomorrow.

If you are attending the Auto Logistics Global Conference in Detroit and would like to know more about the benefits the ISO Bin and a one trip returnable solution please come over for a chat. We will be exhibiting the ISO Bin so you can see it for yourself.

Broaden your knowledge of returnable packaging at Auto Logistics Global Conference, Detroit.

In September the Auto Logistics Global Conference is taking place in Detroit and we will be there showcasing the opportunities that Macro Plastics’ ISO Bin can provide you in your global supply chain.

The key areas of the conference will be Big Data and the internet of things and both of these can be utilised by the industry to improve sustainability and create opportunities for the coming years.

If the industry understood the potential of returnable packaging in a global supply chain, they would realise how they can make their operations more sustainable and help them realise opportunities they have on the horizon.

I believe that there is a lack of awareness within the automotive industry about the opportunity for Global returnable transit packaging. Due to the lack of knowledge there is a fear to try something new in the supply chain which is the only way that the individuals responsible for logistics will be able to get a better picture of how these type of solutions can benefit them in the long run.

I recently came across an infographic by Control Hub highlighting that supply chain and logistics mangers believe that costs could be better controlled. There were two statistics that drew my attention. Firstly, 43% were concerned about identifying the most efficient shipping routes and reducing miles. Identifying the shortest or most cost effective route to transport components from tier suppliers and OEM’s is always going to be on the agenda. The interesting element of this statistic was the reducing miles part. Fully understanding the opportunities of using returnable packaging, 

such as the ISO Bin, helps to increase pack density. Therefore, shipping more parts per load which in turn reduces the number of loads and therefore reducing the miles.

Secondly, only 28% of the managers were concerned about the optimisation of the transportation network with pooling points. This again raises my main angst about supply chain and logistics managers not fully understanding the potential pooling companies can provide when using returnable packaging in a global manufacturing footprint. The Control Hub article concludes that on the whole companies agree that logistics costs can be better controlled yet less than a third of those questioned are interested in looking at the efficiency improvements and cost savings pooling providers can deliver.

This is an industry growing on a global scale looking to reduce costs, increase quantities and improve the bottom line. Utilising a pooling company in the global supply chain using a market leading returnable packaging solution can answer two of those objectives and contribute the third which is also the ultimate one – improving the bottom line.

During the Auto Logistics Global Conference, one of my aims is to open the eyes and ears of supply chain and logistics providers to the benefits that a product like the ISO Bin can bring them. The industry is consistently innovating the vehicles they produce, they should be thinking innovatively about their internal processes too.