CHEP Supply Chain Solutions Generate Over $30 Million in Value, Reduce 13 Million Pounds of CO2
This just in from Fresh Summit 2016, CHEP’s Solutions Portfolio is bearing fruit for customers.
Data released at the Produce Marketing Association’s annual event reveals that consumer products companies partnering with CHEP to optimize their supply chains reaped greater than $30 million in savings and revenue growth over a 12 month period. Optimization efforts have also helped customers to operate more sustainably through the elimination of empty miles and associated CO2 emissions from their transportation networks. The new information follows initial results reported at the Modex 2016 Show in April. At that time, CHEP announced customer value creation of $13 million.
Partnering customers saved $20 million through the elimination of inefficiencies while generating incremental revenues of $13 million. These efficiency gains helped eliminate 3.5 million empty miles, translating into a reduction of 13 million pounds of CO2, equivalent to the energy needed to operate 631 US homes for one year
While CHEP’s core business is obviously still the pooling of reusable pallets and containers, the Solutions Portfolio initiative signals an emerging transition for the company, according to Jason Adlam, a 20-year company veteran, currently Vice President, New Business Development for CHEP USA. “We have started on the path of becoming more than a pallet company,” he explained, speaking at Fresh Summit 2016.
“CHEP’s breadth and depth of customer relationships allow us to look at the supply chain more strategically with a lens on value,” Adlam offered. The CHEP Solutions Portfolio taps the company’s extensive supply chain knowledge to provide several powerful analytic tools, including value stream mapping, transportation solutions, sustainability, sustainability, packaging performance and unit load optimization.
Value stream mapping, one of the CHEP solutions, involves the mapping of material and information flows through the supply chain, including transportation and touchpoints. According to Adlam, 95% of customers which participate in this process have found at least 12 ways to reduce costs. CHEP helped one customer save $280,000 by eliminating unnecessary outside storage.
The largest wins to date have been in transportation optimization, helping customers to remove empty miles as well as identify revenue generation opportunities created by overlaying the partner transport lanes with those of CHEP.
CHEP’s Innovation Center, which is ISTA and USDA certified, plays a key role in its packaging performance and unit load optimization solutions.
Half Pallet ‘Picking Up Steam’
Adlam also reported on the progress of CHEP’s half pallet, which he said is “really picking up a lot of steam.” The product is finding traction for retail floor-ready displays, which can boost sales by as much as 30%.
According to CHEP, the half pallet, which is used in both floor display and in-aisle applications, can reduce warehouse labor and handling by up to 25%, in-store labor by as much as 75%, reduce shelf replenishment time by 60%
CHEP also provided a case study outlining its engagement with Wholesum Harvest, one of North America’s fastest growing providers of organic fruits and vegetables. The results of the collaboration helped Wholesum Harvest to become more efficient and sustainable.
Wholesum converted to CHEP pallets, generating efficiency and environmental benefits across their supply chain. To further reduce Wholesum’s environmental footprint, CHEP helped them utilize carbon offset credits to fund the “Improved Cookstoves” project in Mexico. Wholesum’s credits helped provide 30,000 families with more efficient, safer and sustainable wood burning stoves for cooking, allowing this company to deliver on its social responsibility commitment.