Present Approaches to Reusable Packaging Management Constrain Expansion in Some Applications
If you come to a fork in the road, Yogi Berra once said, “take it.” In a nutshell, that is where some reusable pallet and container applications find themselves. A few years ago, USPS was in the spotlight for its high attrition rate of plastic pallets. It was forced to take the drastic move of supplementing its pool with less expensive recycled wood and presswood pallets. USPS appreciated the benefits of twin sheet plastic pallets which integrated nicely into its logistical process, but disappearance rates were too high.
“The government,” some people commented. “It wouldn’t happen in the private sector.” But indeed it has. The April 2010 meeting in Chicago pertaining to the theft of reusables underscores the problem faced by bakeries, dairies and soft drink manufacturers with respect to plastic container and pallet theft and loss. Beyond that, I hear “off the record” that some large grocery retailers now apparently are postponing the purchase of more downstream plastic pallets. Some of them are supplementing with wood pallets until they can get a better handle on plastic pallet management.
I recall Dr. Diana Twede commenting at the AIAG reusable packaging workshop in October 2009 that the auto industry, which knows exactly what is inside the container through inventory management systems, has such difficulty with managing the container itself.
Where the container is tied into a specific inventory control system, the process can be relatively straight forward. Coca Cola in Atlanta, Georgia, for example, tracks multiple sized pallets and containers with its SAP system.
“When we make palletized customer deliveries, these pallets are left at the customer site and picked up during the next delivery,” Mike Jacks of Coca Cola explained. “Although we don’t charge for pallets we do track them. We have assigned them a material number in SAP and check them in and out for each delivery. Pallets are include on the invoice at no charge but not displayed on the customer copy, this allows us to track them the same way we track any other material.”
“For locations like Sam’s Club where we know will not get the pallets back we use the Chep system,” Mike added. “We still lose pallets but we can at least identify the offenders.”
There are many tracking solutions available, from those built into inventory management systems, to dedicated returnable asset tracking products. Increasingly, cloud computing solutions are, so to speak, looming on the horizon.
The manual tracking of reusables and data entry can seem difficult, indeed impossible to some users, although I can think of several companies that do a very good job of it, where there is leadership resolve to do so. Auto ID seems more interesting to many reusables management underachievers, but the justification is not likely to swing on pallets alone. As I talk to vendors and consultants over the last few years, they make it clear that the present case for RFID for low cost reusable packaging management is shaky. But the case for complete visibility is huge, and the container tracking is an added benefit. As in the case of Coca Cola above, with advances in field technology and complete asset visibility, better asset management, including RFID, will “tag” along for the ride.
In the short term, reusable packaging users can take solid steps to reduce their losses, starting with leadership resolve to correct inefficiencies. Pay attention. Compel your operative team to pay attention. More on that to come. You can check out the related article, “Reusable Packaging: Is It Really So HARD TO HOLD?”
This article first appeared in May 2010.