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. 

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.