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. 

Global standardisation of packaging agreed upon for the first time

At the Auto Supply Chain Congress in Liverpool I chaired the packaging discussion on the final day. Alongside me on the panel was Bill Povey, Packaging Manager, Unipart Logistics; David Mayo, VP Automotive Europe, CHEP; and Wendell Smith, VP Sales, Macro Plastics.

 For the first time ever at an automotive conference, the panel agreed that there could and should be a standardised returnable packaging footprint that can be used across the globe in the supply chain.

Up until now there had been serious resistance to having a standardised product that can fit seamlessly into the supply chain across numerous continents. There have been various reasons and queries put forward by individuals within the industry as to why they don’t see a need for a packaging solution that can be transported by road, rail and sea across the globe.

OEM’s, tier suppliers and logistics providers are now coming to the consensus that some sort of standardised packaging is going to have to be the way forward. This is pleasing news for an element of the supply chain that is not given enough attention but underpins the whole process from OEM’s and tier suppliers through to the automotive manufacturers.

As a result of this lack of attention, the OEM’s are not fully aware of what returnable packaging can bring to their supply chain.

During the discussion Bill Povey pointed out that returnable packaging offers cost benefits to the client and health and safety benefits to the logistics providers. This indicates that there are benefits to all of the parties involved in the supply chain. These benefits can be felt on a larger scale if there was some sort of standardisation across the globe.

The standardisation is not some far flung dream, it is constantly increasing in importance for the automotive industry and is becoming harder for people to ignore.

The prime example of the need for a standard returnable packaging solution is the Ford Focus. By 2018 Ford will be manufacturing the Focus in five location

s around the globe, requiring the same parts and components in all of those locations on a large scale.

In the current environment, when tier suppliers and OEM’s are preparing to bid/ tender for work they have to consider the viability of transportation and logistics solutions.

They have to look at manufacturing locally which in the context of the Ford Focus would mean locating in five locations requiring large scale investment. A second option is having to package parts and components to be sent to up to five locations with various parameters and requirements. Again extra costs would be incurred by having to package and handle components for different locations.

With the option of a packaging solution that is standardised the OEM’s and tier suppliers can manufacture in their current locations and ship to five different corners of the globe using one product. This significantly reduces the costs compared to the options I mentioned above and, also, drive down their costs compared to the options above and drive down their current packaging and handling costs. This is without looking into the benefits of using logistic pooling companies.

What do you want Returnable Packaging to do for you? – Packaging Discussion, Auto Supply Chain Congress, Liverpool.

During the Auto Supply Chain congress in Liverpool, I will be chairing a discussion on packaging and what the automotive industry wants it to do in the global supply chain. I am keen to know what the industry is currently using to package their components, the issues they have with the materials they are using and most importantly, their plans for the future.

I want to understand the industries thoughts on those areas because packaging’s role is growing in importance within the global supply chain and overall manufacturing process in the automotive industry.

Logical planning and implementation of packaging solutions can help deal with the pressures of the overall manufacturing process from tier suppliers, OEMs and the 4PL’s through to the manufacturer.

So think about this – are your materials delivering value for money and, secondly, are they sustainable enough to cope with the increasing demands related to time frames and quality?

With increasing demand on a global scale, packaging is required to be robust, agile and cost effective. Are your packaging solutions meeting these expectations?

Plastic returnable packaging is one solution that caters for all of the demands of the automotive industry, driving down costs and improving efficiencies in the global supply chain. Plastic is increasingly becoming the material of choice for the automotive industry when looking to improve their packaging, the main reason behind this is the fact it can produce the results manufacturers require time and again.

Moving to returnable packaging offers a variety of options and benefits compared to expendables such as wood and cardboard. Plastic returnable packaging helps to streamline the handling process from tier supplier to plant reducing both costs and timescales.

You can mould the returnable packaging solution to suit your requirements by using pooling companies which also helps to reduce the costs of packaging. Using pooling companies in a global supply chain improves efficiencies without the need for capital investment as you only pay for the outbound trip. When using a pooler there is no charge for the return journey as the company uses it for another customer in the same area. There is no ROI as there is no investment in the first place when using pooling companies.

I have been surprised at the lack of knowledge of pooling companies offering returnable solutions in the automotive industry. Even more surprised to hear that some in the industry aren’t even aware of the viable options now available.

The packaging discussion at the Auto Supply Chain Congress is all about hearing your ideas and thoughts on what you want your supply chain to do for you. 

The ISO Bin should be the industries returnable of choice, see why at Auto Supply Chain, Liverpool

How much does it cost you to dispose of your packaging? Or if you do happen to use returnable, do you think there could be competitive alternatives?

With the ISO Bin from Macro Plastics, sponsor of the AutoSupply Chain Congress, there are no costs to disposing of packaging as there is nothing to dispose of. Installing dunnage inside the ISO Bin removes the need for cardboard and plastic packaging, therefore no rubbish means no cost.

Then you have concerns about the cost of shipping back to the OEM or tier supplier? Have you encountered extortionate costs for return journeys previously?

Pay me a visit whilst in Liverpool at the congress so that you can see why this type of packaging is a viable alternative to your current method solely on the benefits of returning the bins.

Purchasing cardboard and assembling the packing is a recurring cost that is removed when using plastic returnable. Plastic returnable packaging also removes the costs associated with processing components in cardboard packaging. There are no storage costs, there is no need for picking and repackaging at the plant as the ISO Bin can go lineside. Then there are disposal costs that you incur with cardboard. This sustainable product not only helps your bottom line but also ensures that your supply chain is environmentally friendly, especially as we are now in a time when green standards are high on the agenda.

The ISO containers can be stacked 8 high on their return journey, this significantly reduces the space that is needed in comparison to current returnable options on the market. Therefore you can increase the number of units per container and reducing the cost of returning the bin.

With regard to the dunnage, a dedicated container is used to return the dunnage used in the delivery of the components to the plant. The bulk of the ISO Bins can then be collapsed down and stacked to either be returned to the tier supplier or can be used elsewhere in the supply chain.

The ISO Bin can be safely stacked in a warehouse 6 high when fully loaded, again reducing the space required in comparison to alternatives and reducing the storage costs.

Potential cost downs couple with improved performance of your growing supply chain cannot be ignored. This is a solution that delivers on the two key areas of the logistical process having a direct impact on the bottom line providing a ROI.

But then why do you need to be concerned about ROI when there are options that do not require capital investment?

Come and see the ISO Bin at the Auto Supply Chain Congress, Liverpool

In June Macro Plastics are one of the sponsors of the Auto Supply Chain Congress in Liverpool and we will be exhibiting the ISO Bin.

During the congress the bin will be there so come and see for yourselves what it can do for your automotive supply chain. Saving time and money whilst helping you to improve the efficiencies throughout your logistics process, you can’t afford to ignore what this product has to offer.

What are you currently using in your Global supply chain to transport components from tier suppliers and OEMs?

Are you using returnable packaging at all? If not, why not?

As with anything new, there is always a little hesitancy and apprehension which is understandable but, when it comes down to business and an industry which is as fast paced as the automotive manufacturing, hesitancy can result in being left behind.

Therefore, Liverpool is the ideal opportunity to come and look at the ISO Bin first hand to gain a better understanding of returnable packaging and the ISO Bin in particular.

As the industry increases in complexity on a global scale the need to increase volumes and frequency whilst reducing costs is heightening. You have to ask yourself, are your current packaging solutions going to be up to the tasks you are facing?

Integrating the plastic ISO Bin into your global supply chain optimises pack densities utilising 97.2% of floor space in ISO Sea containers and can be stacked 3 high. The durability of the plastic used by Macro Plastics reduces the risk of damages during transportation. In comparison to using wood in your supply chain, plastic reduces the overall weight and in turn, shipping costs.

The ISO Bin has been designed so that it is able to go direct to line-side further reducing costs by removing the need for handling processes or repack. Having a packaging solution that allows components to arrive at the manufacturing plant and be transported directly to where it will be assembled onto the vehicle significantly reduces the risk of damages, improves speed and preserves quality in transit therefore reducing costs in the supply chain further.

Those are just some of the benefits of the ISO Bin concentrating on the first leg of the journey shipping the parts. We haven’t got into the results it can produce for you on the return journey; I will be covering this in my next blog.

As I have said earlier in this piece, the Auto Supply Chain congress is the perfect opportunity to get your head around the ISO Bin and have all of your questions answered.