With a highly complex supply chain previously served by non-standardized, in-house containers or disposable packaging, an American manufacturing company determined that this solution was not only very costly and labour-intensive to manage, but was also not acceptable in terms of ergonomics, quality and sustainability. Contemplating whether to address these challenges internally with an improved in-house solution or to conserve resources by outsourcing these processes to a third party vendor, the company decided to evaluate potential solutions and partners and find a flexible, needs-based supplier to effectively manage its packaging.
After weighing various options, the American manufacturer partnered with CHEP to implement a company-wide supply-chain approach to lean material flows and container management, which was specifically tailored to meet the needs of the client. Under the new CHEP program the customer has been able to greatly simplify and streamline its logistics operations.
A large piece of the service that CHEP provides includes complete asset management and visibility. With this tracking system utilizing RFID technology, an abundance of supply chain data is at the customers’ disposal and allows for the analysis of supplier cycle times and identification of areas for improvement in container utilization. CHEP provides complete asset visibility as containers move throughout the supply chain, ultimately reducing loss and damage. Additionally, after containers have been used, CHEP retrieves the empty assets and relocates them to a nearby service center where they are cleaned, inspected and stored for future use. This removes concerns about return freight and logistics from the customer and allows them to focus entirely on their core business.
The manufacturing company has realized several additional benefits since implementing CHEP’s reusable solution. Due to the flat rate pricing model, in which the customer is billed for the equipment upon issue to the suppliers, the pooling concept provides zero costs to their service partners. To this end, both the customer and its suppliers enter into a contract with CHEP, which has helped to greatly speed up the supplier on-boarding process, as they benefit from savings in logistics and packaging costs.
- Customer-tailored container pooling solutions
- Supply chain analysis and right-sizing
- Implementation of CHEP’s pooling and tracking systems
- Optimized and efficient supply chain flows
- Guaranteed delivery
- Flat-rate pricing model
- Improved trailer cube utilization
- Strategically located facilities for short transport routes and reduced environmental impact
- Inspection, cleaning and repair of returned containers
- Economical and sustainable solution
- Elimination of waste and corrugated expenses
- Reduction of material staging time, space and labor
- Shipping in consistent pack size
- Reduction of loading time
- Damage-free parts due to ergonomic packaging
- Easy online ordering
The purpose of this program was to implement a lean packaging process throughout the entire supply chain by switching from owned containers and corrugate to CHEP’s returnable container managed solution. This program offered many benefits for the customer – in particular, cost savings and reduced environmental impact. This pooling solution reduces non-value-added re-packing of material from bulk, offers improved trailer utilization from bulk to standard pack and ensures a lean material flow, which enables greater operational efficiency. Because the American manufacturer opted for a pooling solution through CHEP, the company not only eliminated the purchase costs for its own containers, but also those associated with transportation, handling and loss. Up to 25 percent of the overall logistics costs can be saved along the value chain through the rental of transport packaging from a cross-company pool like the one CHEP operates.