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. 

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.

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. 

Take a Closer Look at Returnable Packaging

So how robust do you believe your supply chain is and how are you looking to manage and increase your capacity in the growing global market?

I will be taking part in a panel discussion on the capacity and robustness of supply chains at the Automotive Supply Chain Congress in Liverpool.

Over the next two days the executives from the leading automotive manufacturers will be attending the annual conference to discuss where their supply chain is heading and how they can keep up the growing market, returnablepackaging being one key area of interest.

On the panel there will be Jonathan DiMambo from Bentley Motors, Richard Horswill from Stena Freight, Cengiz Kabatepe of Ford Otosan, Timothy Nickel of Surgere, Mike Silvio from Cooper Standard Automotive and Stewart Robertson from DHL.

With today’s demand and capacity restraints due to fast and accelerated movements through the supply chain no one has time to waste with waste.

The procurement of one trip packaging and disposal is completely unnecessary when the offer of hiring/ renting quality returnable solutions on a one trip basis is available regionally and globally.

The automotive industry is surprisingly unaware of the opportunities that returnable packaging presents to their supply chain. The amount of options that are now available to OEM’s and tier suppliers are endless.

Development of the returnable packaging market and the emergence of new companies now provide OEM’s and tier suppliers with solutions that they could only dream of previously.

Returnable packaging solutions can help solve your issues around capacity and robustness in order to improve the performance of your supply chain. This one simple change can transform your whole supply chain.

Intercontinental supply chains have grown significantly and will grow even further in the future, the need for more components required in more locations and more often is rocketing. Bringing costs down and improving capacity utilisation is integral, returnable packaging using plastic improves cubed utilisation allowing you to ship larger quantities for lower costs.

With the speed of supply chains growing and quality standards going in the same direction there is little room for error, plastic returnable solutions are built to ensure quality and reduce damages.

Reducing damages and ensuring the quality of components is high on the agenda, using returnable packaging solutions can reduce these risks associated with the expendable packaging such as cardboard. By reducing the risk of damaged goods this in turn reduces the costs and aids the speed of the supply chain.

With the progress that has been made by the returnable packaging industry it is now easier than ever to justify the shift to using these new methods as opposed to using old and inefficient packaging solutions.

Now, the automotive industry has all of their needs catered for in terms of packaging. All they need to do is try returnable packaging for themselves to experience the benefits first hand.