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.

The Taxi Journey

Within the Global Automotive supply chain and packaging industry, I have been surprised at the lack of knowledge and awareness of the role returnable packaging can play in these ever increasing and sometimes complex supply chains.

Everyone is concerned about cost savings wherever possible and squeezing all areas in order to reduce the money spent throughout the manufacturing and supply process. Then the second train of thought is how to cope with the growing demand across the globe to ensure they keep up with the demand of sales and deadlines. 

Yet there is a lack of awareness at the one solution that can help the automotive conquer both of these tasks, ‘one trip returnable packaging’ however when I speak to supply chain professionals there is a great number that don't grasp this idea.

I describe the concept of ‘one trip returnable packaging’ as simply a taxi service. One trip returnable packaging is the taxi service for the global supply chain. The Taxi is the packaging.

You call a taxi when you require it. The taxi arrives  you get in, or in this case the Component parts, the taxi proceeds on the journey dropping you, or in this case the component parts at the location. You pay the taxi driver the fare for the journey. Then the taxi moves onto the next job.

The plastic/steel returnable totes play the role of the taxi which are requested by the tier supplier to transport parts to the automotive manufacturer. The owner of the taxi is the pooling company, 4PL or OEM/Tier.

As a taxi takes you to the door of your location, returnable packaging can be taken directly to the assembly line. It does not require the handling processes associated with expendable packaging which could be likened to being dropped at the end of your street as opposed to outside your door. 

The client then pays for the journey that the parts have travelled. Then the returnable totes can then be used by someone else in a similar location. 

Therefore, the costs compared to expendable packaging are significantly reduced as there are no unpacking and repacking processes required as well as disposing of cardboard and wood from the expendable packaging.

Let’s discuss this in Bonn at the Automotive Logistics Conference.

Looking to save time and money in your supply chain? Returnable packaging can help you address that objective.

Global returnable packaging strips out the unnecessary packaging and handling processes. One solution fits all when you are looking to save money and time at the same time as improving the quality of your products.

At the Automotive Logistics Europe conference in March I will be interested to hear the industry’s thoughts on how they are looking to improve efficiencies and reduce costs in their global supply chain.

The automotive industry need to look at the opportunities “one trip” returnable packaging can offer them in a global market, especially when OEM’s and tier suppliers are exporting parts at an accelerating pace. An increasing number of parts are required in a growing number of manufacturing plants across the globe in larger quantities and more frequently.

Then the question arises, can your current handling processes handle these demands? Do you have the capacity to facilitate the demands? And lastly, have you considered the increased costings that are attached?

Using cardboard and wood is currently the norm and has been for many years and because of this the supply chain is ignoring all of the costs of one trip packaging. Currently OEM’s are employing 4 LPs and specialist repack companies to receive in component parts in wood and cardboard.

The classic hidden costs that are ignored by the supply chain are purchasing, procurement and making up of cardboard boxes, wood, dunnage and strapping.

Do you know what your damage costs are from one trip packaging in your global supply chain?

Returnable packaging allows the parts to go straight into the plant and to the line side. This is compared to cardboard packaging which has to be unpacked and then repacked at a handling centre near to the plant before being transported to the assembly line. Then there are the attached costs of disposing of the cardboard and plastic.

OEM’s – how much do you pay your repack company to unpack from one trip and then pack again into returnable packaging? And, by the way, what are your disposal costs?

These processes are unnecessary with the evolution of plastic returnable and will eventually become defunct. At a time when the automotive industry is looking to reduce costs and looking to 5 to 10 years ahead in improving their manufacturing and supply chain methods.

Look out for my next blog when I explain what the taxi service is. 

How can returnable packaging drive the performance of your global supply chain?

In March, I will be attending the annual AutomotiveLogistics Conference in Bonn, Germany, representing Macro Plastics.

To quote the beginning of the overview on the AutomotiveLogistics website of the conference – “Supply chain professionals at OEMs and Tier Suppliers across Europe are coming up with innovative – and contrasting – ways of improving the bottom line.”

This is exactly what returnable packaging provides and the ISO bin from Macro Plastics is both innovative and contrasting. Global returnable systems are currently in operation in the automotive supply chain.

Moving out of the financial difficulty which has shrouded the previous years, the automotive supply chain industry is looking towards refining their processes. Returnable packaging is one process that can be refined to make improvements to the supply chain immediately and making it resilient for years to come.

Reducing operating costs and improving efficiency are the two main aims of a supply chain. With the quantities, speed demands increasing on a continental and global scale returnable packaging is becoming a must.

The ISO bin is innovative in its design to a standardised international footprint, therefore it can fit in seamlessly into your global supply chain. Moving towards sustainable returnable packaging is inevitable as it is required to remain competitive in the automotive market. 

Why can’t you make returnable’s work in a Global market?

There really is no reason why returnable packaging shouldn’t work for your supply chain. Returnable packaging delivers on all areas of the supply chain, most importantly on cost downs and efficiency.

Michael Scholl of Opel states that returnable packaging is a key part of the strategy yet questions the use of them due to cost. The cost of returnable options is reduced through the pooling companies offering one trip solutions. If you explore the market of returnable packaging you will be able to find viable alternatives that match the company’s needs and help to drive down costs.

Earlier this year at the Automotive Logistics Conference Andreas Ginkel highlighted the importance of returnable packaging to the supply chain and aiding automotive manufacturers in growing globally.

Scholl points out in the Automotive Logistics magazine that due to the rise in the number of parts there is “a critical focus on replacing extra handling in plants and warehouses, such as repacking or sequencing with the most advanced delivery concepts”. If Opel are aware of the needs to look at repacking and packaging, why are they unaware of what returnable packaging can do to help them address this issue?

Using returnable packaging removes the need for repacking; returnable options are able to go line side requiring no extra handling and aids in streamlining in-plant logistics. Using plastic returnable packaging reduces the risk of dust contamination during the manufacturing of vehicles as opposed to using cardboard is another benefit.

When asked about standardised packaging Scholl states the returnable packaging is “historically high and a key strategy”.

But then goes on to say - “However, for certain parts and supplier locations, returnable packaging cannot be justified from a cost perspective, as the length of the loop would require too high an investment and freight costs of empty returns.”

Returnable packaging is designed with global manufacturing at the forefront of thinking, so why can’t it be justified in terms of supplier locations? And then when it comes to the cost of empty returns, as mentioned above, explore the one trip solutions offered by pooling companies which removes the cost of returning and the added hassle.

The point that is missed by many when one trip solutions are mentioned is the fact it is not solely used for the automotive industry. They can be used to ship a variety of goods from clothing to pharmaceuticals.  

If Opel are so clued up on returnable packaging and the fact that they are a key strategy why aren't they equipped with knowledge to understand how returnable packaging can benefit them?

They have identified the need for them and also some of the associated problems that they could encounter, this is when a free trial is needed to understand the process and address the problems that they are outlining.   

How far are we away from standardised packaging?

The myth that the automotive industry can’t standardise packaging on a global scale is an issue that is quite irritating.

We as an industry, in terms of automotive manufacturers and in supply chain and logistics, are increasingly talking about the shift towards global manufacturing. So how can some people still not entertain the idea of a returnable packaging solution that is standardised?

A manufacturing process that spans continents taking place in numerous countries which is growing is going to require more parts more often covering thousands of miles in various forms of transportation. So why not have packaging that complies with all guidelines, is suitable for all forms of transport and delivers on cost, efficiency and quality.

But then here is my point – so many of you are unaware of the opportunity in returnable packaging being charged on a one trip only basis across continents. Has the automotive industry turned a blind eye to the ISOBin solution and how this can be the FIRST EVER standardised packaging solution?

ISO Bin is tailored to the ISO Sea Container to optimise capacity for goods to be shipped globally. The ISO Bin cubes out to 97.2% of the containers – so this is a packaging solution for the only globally standardised shipping containers that are the market leaders in terms of optimisation.

With this in mind – are we really that far away from a standardised returnable packaging solution? Are we that far away from the automotive industry realising that with production growing and the shift to global manufacturing models, that not only require returnable packaging and not expendables but also a standard solution that can be used across their supply chain?

At Macro Plastics with the ISO Bin we could have the first ever recognised standard packaging that delivers on all requirements of a modern day returnable packaging solution.

All of this has stemmed through a detailed design process ensuring that all manner of requirements from cost efficiencies to environmental issues and it has led to a quality returnable solution. If you are shipping in cardboard then the content have to unpacked and then transported to the line, these are unnecessary handling processes when the ISO is able to go straight to the assembly line.

The ISO Bin is one quick fix that can be shipped globally, is the best on the market in terms of space utilisation helping you to ship more and reduce costs. This is an environmentally friendly solution that can be leased to help reduce shipping costs and is available as a one-way rental, further reducing costs and driving up efficiency and quality standards.

So with all of these factors, why is the automotive industry yet to have a standardised returnable packaging solution that produces results for them? 

Automotive Logistics Europe Conference, Bonn

Overall, the conference was filled with some very exciting developments for the automotive industry and the supply chain.

With growth both in Europe and globally, the supply chains are increasing in complexity and standards of performance. With an increase in volume and need for new systems and expertise it can only spell good news for logistics and packaging supplies.

It was interesting to hear that VW are looking to reduce their carbon emissions by 25% by 2018. The environmental impact of transportation has been a burning issue for a while and is a bold move in the right direction. In terms of returnable packaging reducing emissions is high on the agenda. With manufacturing globally on the rise ensuring the utilisation of the capacity in packaging is essential, if this is done properly a reduction in the environmental footprint will follow.

Also, just the principle of returnable packaging aids this. Expendables are disposed of and require a recycling process. Just by using a packaging solution more than once will go towards improving the footprint.

Marzell Bandur, Director of Supply Chain Planning at Opel, spoke about looking at packaging design, supply flows and consideration for costs.

“For example, we are transporting more parts, larger part, over larger distances. With carbon dioxide emissions taxes, as well as road toll prices, it means that the costs involved along the supply chain are much higher”. – Marzell Bandur.

All of the points made above look directly towards the potential of returnable packaging. A returnable packaging solution cannot only cover those areas but deliver on them with one simple solution which can provide a clear breakdown of costs and savings.

Lastly, it was refreshing to see that the importance of logistics to the whole business model was brought up. Having a representative from supply chain and logistics on the board of management is something that other industries have embraced; this was pointed out by delegates from Starbucks and Amazon. A lesson to be learnt by the automotive industry in my opinion.

Levent Yuksel, from Jaguar Land Rover, made some great points on the issue.

“Logistics needs to be thought of as cross-functional, it’s as much about trying to keep customers, manufacturers and suppliers all happy. We should be putting a logistics person on each company’s executive board. This would give a competitive advantage. We shouldn’t be thinking ‘logistics is a cost and a waste’”.

Logistics and supply chain have an impact/influence on all areas of the executive board so it makes sense to place someone there. And if done correctly and effectively logistics can be a cost that works and reduces waste to the overall manufacturing process that both aid the bottom line. 

The Importance of Globalisation

Last week I chaired the Returnable Packaging session at the Automotive Logistics Europe Conference in Boon, Germany.

It was an extremely insightful and productive discussion with one of the main topics was the importance of globalisation.

Previously, automotive manufacturers would operate on a regional basis, selling models especially into continental and national markets. There was a requirement for global supply chains but for the standardised parts that were used in all models.

Now more than ever models are being manufactured and sold internationally. Tier suppliers are now required to ship globally as opposed to regionally. With this trend set to continue and grow there is a heightened need for an agile global supply chain.

Returnable packaging plays an integral part of building a global supply chain. It is no longer a matter of packaging components that will be transported within the same country or continent. Components are required in larger quantities in numerous locations around the globe and are travelling longer distances.

To create a sustainable supply chain that is able to keep up with trends and developments in the automotive industry only points in one direction – returnable packaging.

The industry now requires packaging that ticks the large as well as the small boxes. The large boxes are durability and size. If components are passing through numerous countries on their trip across the world using more than one form of transport, a solution needs to ensure quality upon delivery and comply with transporting requirements in terms of size in the various jurisdictions.

These were the areas that I am pleased to say came up during the session. It provides an indication to me that the OEM’s, tier suppliers and manufacturers know that they have to move and modify their supply chains in order to produce results.  

One trip returnables – why don’t you just have a go?

The one thing that strikes me about the automotive supplychain is the reluctance to try something new for the first time.

There is a lot of talk around where logistics and the supply chain will move with technology and how savings are made. This was a topic of discussion at the Automotive Logistics Conference in Bonn last week, looking to what lies ahead and how they can improve.

It is all well and good talking about it but it is actions that will help the industry realise how they need to move forward in an expanding market.

This is where I encourage the automotive tier suppliers and OEMs to look at where they would like to go with returnable packaging and commit to doing a free trial.

A lot of people are put off when looking to make the shift from expendable to returnable solutions. There is the impression that you have to make your decision and stick to it. Stop using expendable one day and begin using returnable’s the next. This is far from the truth as you trial new returnable methods alongside the existing ones to give you a real flavour of the benefits of using returnable packaging.

One trip solutions are a great benefit of using returnable packaging. Irrespective of where you require your products all you have to do is rent the packaging, it is delivered to your desired destination and you don’t have to worry about the return journey. Then pooling companies arrange for the containers to be picked up after you have finished with them helping to reduce packaging costs. How easy it that?

All that is asked of the automotive industry who are looking to make the switch from expendable to returnable is to look into a free trial now so that you can experience the benefits first hand.

I encourage anyone who is looking into this or have any questions in how I can help to improve your supply chain to talk to me.

Communication is key, if I am where of your problems at the outset I can help you resolve them quicker, saving you time and money.

Boxing Clever – Packaging workshop at the Automotive Logistics Conference, Bonn

In what ways can innovation and new packaging techniques add value in the automotive logistics industry?

This will be the topic of the Packaging workshop that I will be chairing later this week at the Automotive Logistics European Conference in Bonn, Germany. How can we all raise to the ever evolving challenges and demands being set by the OEMs?

People want a lot of components and parts supplied on a global scale and at larger quantities than ever before. Everyone wants to receive their goods straight to line side, taking out unnecessary handling processes and saving time, and most importantly a one touch supply chain.

So how do we in the packing industry tackle these rising demands head on?

The session will be concentrating on delivering a viable system for returnable packaging on a global scale that not only meets but exceeds the automotive industry’s objectives for a modern day supply chain.

I invite all who are interested to come along to this informative, proactive workshop that we ensure will be controversial, interesting and will demonstrate methods never seen before  but will shape the supply chain in years to come.

The session will be on Thursday 11:00 – 12:15

So come along if you want to be part of the way we change the world of returnable packaging!

What will come out of the Automotive Logistics Bonn March 2014?

The purpose of the Automotive Logistics conference this year is to gauge where the automotive logistics industry has improved over the last year and to discuss where the industry is going in the next few years and beyond.

This will be the 12^th annual European conference held by Automotive Logistics Magazine and, like I mentioned above, it will be the same thing in terms of discussing the past, present and future. The obvious differentiation will be the content of the discussions.

After a difficult few years through the economic downturn the conference next week should be packed with exciting news and developments as the signs of growth appear to be flourishing.

During the downturn there have many cost down opportunities that have missed by tier suppliers and OEM’s , this appears to be down to being afraid to decisions. When it comes to returnable packaging solutions, a quick decision sanctioning a trial can prove to be effective in addressing issues you may have with your supply chain.

I would like to encourage better communication from tier suppliers and OEMs, if you have a problem then it is better to solve it now rather than later. This coming week at the conference there will be 350 people from the industry that all have problems and issues. It is a confidential event, so I would encourage people to communicate and then we can get on helping you.

“Exploration of Value” – logistics and the creation of a supply chain have always had value as a top priority. But now the issue has increased in importance due to other elements.

During economic difficulties when car sales plummeted the need to reduce costs was paramount to keep everything ticking over. Now there have been signs that an economic recovery could be in the pipeline, the need to keep those logistical costs down remains high. This looks set to continue as the automotive manufacturers will aim to recoup revenue to plug holes from poor economic performances over the last few years.

On the flipside, there has been an upturn in sales and production with manufacturers aiming to increase their margins, to capitalise on increased revenues and to prepare for what the future may bring.

Then there is the expansion of the global market. Investment in more models, investment in increased production and investment in new plants globally.

This all equates to large quantities of components and parts being required more often and in more locations. All of this heightens the competition and need to invest in logistics and supply chain solutions that provide maximum value for money.

All of these areas are then compounded by the increased expectations of quality by the customer.

Automotive Manufacturers – how are you looking to improve the performance of your supply chain and fulfil all expectations?

These are issues that need addressing at the present time but they will continue for the foreseeable future.

With all of these factors taken into consideration – Now there is No Reason to say No to Returnable Packaging.

All of the various elements of the issues facing the automotive industry and the supply chain can be catered for by using ReturnablePackaging.

I look forward to the discussions that the conference will bring up and delving into why all automotive manufacturers should shift to returnable packaging in order to enhance their business.  

Automotive Logistics Conference, Bonn 2014 – How are you Exploring Value?

The theme of this year’s Automotive Logistics conference in Bonn is the Exploration of Value. As the supply chain industry evolves value is becoming the main focal point.

How do we transport automotive components globally as cheap and effectively as possible? This is the burning question on the manufacturers’ minds.

The global automotive market is growing at a pace; this requires more components being required in more locations more often. Quality, time and cost are the three core objectives. With competition growing all three have to be delivered to a high standard. And these standards will only grow as time goes on.

So my question is – if you are not using returnable packaging how are you exploring value in your supply chain and logistics solutions?

Where are you currently making efficiency and financial savings as well as improving quality at the same time?

Macro Plastics’ ISO Bin is the perfect example of how to explore the value of your supply chain in the automotive industry.

Do you know of an expendable packaging solution that optimises the space in an ISO container to 97.2%? Macro’s ISO bin can be stacked 3 high in a container when full and 8 high when empty. Ensuring that you are able to transport as much as possible for your money is a fine example of ensuring value.

This is only 1 example of exploring value.