How Guardian Container Consulting delivers 1000% ROI for OEM customers
For decades, OEMs have wondered where their missing reusable containers and racks end up – whether in dorm rooms, people’s garages, or makeshift housing. There are certainly plenty of myths. Guardian has found that extreme losses are actual, but where they end up is not where you might initially expect.
Dallas, Texas and Detroit, MI – When it comes to preventing reusable packaging loss, tracking technology is just part of the solution, according to Guardian Container Consulting. Company executives stress that actionable data isn’t of significant value if you don’t act on it.
To this point, their approach is to have expert human monitoring of their tracking platform. They deploy experienced boots on the ground to audit supplier facilities and carrier yards, deal with theft rings, and tackle any other interruptions large supply chains face.
“There is an art to supply chain tracking in this manner,” stated Ben Hesskamp, CEO at Guardian Container Consulting. “Existing inventory and logistics systems are meant to track supply chain movements that are moving correctly. Our system focuses solely on finding where they are not moving correctly.”
Guardian’s technology utilizes cellular networks, WiFi, and GPS to give absolute location data on OEM fleets by tracking reusable packaging (plastic knockdown containers, metal racks, plastic pallets, etc.). Guardian’s GPS does not require additional system hardware or inventory reporting by third parties, which it states is probably the most notable difference between its technology and other tracking technologies like RFID.
Once the trackers and platform are installed into OEM container and rack fleets, no further infrastructure or maintenance is required. All tracker communication from that point on is through cellular networks to Guardian’s platform. By removing the responsibility of other parties to report shipment and inventory data, they can see what is happening instead of what is reported to be happening.
The Cost of Lost and Stolen Reusable Packaging
Hesskamp notes that original equipment manufacturers, known as OEMs, commonly spend 10’s of millions of dollars annually to replace lost reusable packaging – much of which is avoidable. Likewise, he noted, it’s extremely common for those same OEMs to spend 10s of millions on corrugated cardboard packaging to take the place of those lost containers.
None of these numbers are shocking, considering that back in 2010, AIAG reported that the U.S. automotive industry was spending $750 million annually for reusable packaging loss replacement. Hesskamp estimates that this figure has only grown since 2010. The need for reusable racks and containers in the auto industry has grown significantly, and the demand for these containers has grown dramatically in agriculture, beverage, and many other industries.
Standardized containers like 48”x45”x34” knockdowns are in extremely high demand across many industries and are inherently interchangeable. They are highly valuable to any company that can get their hands on them. When there is a vulnerability in an OEM supply chain where records can be altered or simply not reported correctly, it is easy for other non-OEM parties to take advantage of OEM container fleets. With the value of their assets on the gray or black market, the motivation to steal or misappropriate reusables is as high as ever.
Guardian says it recovers several millions of dollars of assets each year for its clients. It achieves this success by helping to seal vulnerabilities in the system that caused the losses in the first place, whether caused by a supplier, carrier, or something entirely outside the supply chain. The company works with customers to generate a tracking plan, install GPS tracking for the fleet and then actively monitor the results. Guardian can travel onsite to problem areas anywhere in the U.S., usually within a few days.
Typically, Hesskamp told Reusable Packaging News, they already begin finding and addressing anomalies and recovering reusables before the total tracker installation has even been completed. Significant results are seen within a few months of GPS tracking and auditing.
The Art and Science of Reusable Packaging Management
The company’s approach is to install GPS trackers in a very small percentage of reusable containers and racks to provide a statistical sampling of entire container fleets (in many cases, as little as 1%-2%). When a truckload of containers is diverted from the supply chain, or smaller amounts are repeatedly taken, the probability of at least one tracked container is almost inevitable.
“It gets to a point where there is only a very small chance that we would miss something significant,” he said. In Guardian’s experience, it only takes one GPS tracker’s data to start an investigation to discover vulnerabilities, uncover who is responsible, and recover the OEM’s assets.
While Guardian offers geofence and automation tools to customers, its preferred approach is to monitor the platform for anomalies rather than rely on such automated tools.
“GPS can have some amount of location error, so people tend to fence an area larger than they need to,” observed Lucas Hesskamp, Supply Chain Security Consultant at Guardian Container Consulting. “We’ve seen multiple times where things are getting stolen across the street or next door.” He suggests that relying on programs to indicate problems results in many problems going unidentified.
In such cases, he notes, monitoring and looking at patterns are more effective. “There’s a lot of temptation because of the technological system to completely automate it,” he said. “But that’s not really the way to go.” Someone with a good understanding of the customer supply chain can monitor movements and have a good intuition about whether a movement is authorized or not- and avoid considerable loss of time and money in chasing non-problematic shipments.
For example, he recently tracked a truck going 500 miles off-route on a Friday, but then on Monday, the truck returned to its designated location. The driver just went home for the weekend. With knowledge of the supply chain and behaviors of the freight industry, staff quickly make assumptions about whether an event is suspicious or merely unintended. They deal with perhaps ten red flags daily, whereas if they relied on a fully automated solution, there might be hundreds of questionable movements.
“We do use automation in certain aspects of our monitoring, but after doing this for 5 years, we have found that no amount of data automation can beat the human eye, experience, and an in-depth knowledge of the customer’s entire supply chain,” Luke Hesskamp said.
Dealing with Container and Rack Theft
Ben Hesskamp says that stolen plastic for both resale as containers and sale as regrind plastic is very lucrative. The black/gray market behind the container and rack industry makes it challenging for honest recyclers and container reseller businesses to compete.
When Guardian takes on a new OEM, theft problems typically appear early in the process. The company then takes steps to stop those leaks. After many disputes where parties have initially refused to return OEM containers, Guardian now consistently succeeds with the OEM in getting all assets back.
In the last few years, the emphasis has switched to communicating with theft rings. Guardian encourages them to stop pinching OEM assets. It is a course of action that has proven effective. As a general matter, Guardian has seen that when thieves know their activities are being watched and weaknesses in the supply chain are fixed, long-term losses begin to disappear.
One interesting fact discovered by Guardian is that stolen knockdown containers from OEM clients are more likely to be sold in that form rather than ground up. It makes sense. Reusables are much more valuable than regrind material. Guardian has identified thousands of intact containers for return for its clients, many states away from where they were initially taken out of the supply chain.
And when retrieving freshly stolen containers, they sometimes stumble across inventory that has been missing for years. “We’ve gotten back containers that were presumed lost for some time,” Lucas Hesskamp said. “So we’re actually not just preventing further losses, we’re actually buffering the existing fleet with containers that previously went missing.”
Misplaced and Misappropriated Reusables
GPS tracking enables Guardian to identify where the container and rack system is failing. It could be a case of containers being mixed and shipped incorrectly, forgotten in storage, or misappropriated by a Tier 1 to use for shipments with a Tier 2.
Container and rack shipping and inventory errors can be frequent with the dramatic influx of new, inexperienced employees in supply chains. For example, an OEM outbound shipment reports a full load of 48x45x34″ knockdown containers going to a Tier 1, but in reality, half of the load is 48x45x25″ high units. After unloading, the Tier 1 doesn’t know what to do with the mistakenly shipped containers, so they just store them in the yard or an onsite storage trailer without reporting it on their OEM inventory.
“These internal problems happen all the time,” Ben Hesskamp said. “They go unreported, but our system catches it almost every time.” Armed with the data, Guardian will report to the OEM and request to perform an onsite inspection of the flagged location.
Lucas Hesskamp recently performed a site inventory and found that the excess container count was more than three times what was stated by the supplier. He noted that suppliers often fail to make complete inspections of their entire facilities or that they will make inventory estimates based upon shipping documentation rather than getting into the tight spots to get a complete count.
For example, Guardian has done hundreds of OEM supplier inventories where several full trailer loads of reusables had been sitting outside – sometimes for years. It can be hard to point a finger at anyone, Lucas Hesskamp noted. Sometimes all the people in charge at the time in question are long gone.
Another problem Guardian sees frequently is unauthorized use of OEM containers by suppliers. A Tier 1 might decide to use OEM packaging for unreported Tier 2 shipments or to store work-in-progress parts. The result is a shortage of reusables and the need to use expendable packaging, not to mention expediting charges that can also result.
Guardian also discovers a significant amount of lost containers in truck yards. Loads sometimes reported as delivered have not been, whether due to being forgotten or being moved or consolidated between trailers. Guardian sees this happen regularly with empty container and rack return routes.
Guardian Container Consulting says its winning approach is to combine technology, monitoring, and recovery. It interprets data through a lens of understanding how OEM supply chains work and then interacts with supply chain stakeholders and outsiders as needed to reposition inventory and seal the leaks.
It is a result, it says that ticks all of the boxes for both financial and sustainability outcomes. Reusable packaging remains fully utilized over its lifetime to deliver its intended value while avoiding the need for corrugated cardboard substitute packaging.