Optimizing Containers and Reusable Packaging Operations
By Justin Newell, Chief Executive Officer, INFORM North America (Atlanta, GA), a leading provider of AI-based optimization software that facilitates improved decision making, processes and resource management.
The heightened focus on sustainability, environmentally-sound practices, and cost and regulatory concerns of various industries has made reusable containers and packaging management a top priority. Regardless of the packaging’s material, reusables have become a growing staple across diverse supply chains.
In a Reusable Packaging Association (RPA) survey, 66% of the respondents said demand for reusable transport packaging increased over the past 12 months, and 85% expected related products and services also to increase. Reusable transport packaging is regarded as a strong facilitator of the world’s transition toward a circular economy, which emphasizes an economic system based on the reuse and regeneration of materials or products in a sustainable, environmentally-sound way, which minimizes waste. Applying robust software with essential functionality for efficient container and reusable packaging management can effectively help mitigate many of these challenges.
Solely focusing on crates, containers, pallets, ULDs, IBCs, or any other reusable packaging, there are considerations related to availability, demand forecasting, tracking, demand-oriented distribution or redistribution, and transport that must be addressed. Today, advanced software can be applied to effectively manage these functions while meeting critical environmental goals such as reducing CO2 emissions. By managing the container flow in a seamless, transparent process, inaccurate planning of replacements after removal from circulation or due to excessively high inventory can become the exception and not the norm. Similarly, with the use of intelligent demand planning, distribution and tracking, high levels of safety stock, which are often created to meet volatile and seasonal demand for load carriers, can be avoided. With recyclable containers, visibility also helps to direct containers to recycling or repair facilities at the end of their lifecycle.
Recovery and rerouting reusable containers can be challenging. Industry estimates are that there are over a billion reusable packaging containers, such as pallets and crates in circulation worldwide. The majority of reusable transport containers can each cost between a few dollars and several thousand dollars based on industry use and customization. As you can imagine, these items might depreciate and negatively impact a business’s cash flow and balance sheet.
In addition to cost factors, there are logistics to consider, such as which participants in the container pool need which containers, in what quantity, condition, or quality type, and where and when. Keeping track of all participants and their container schedules is difficult and can result in some participants not receiving their reusable containers on-time or receiving containers in the wrong locations or the wrong type/size containers. Changes in container locations and container status (i.e., empty, full, in need of repair or maintenance) can also wreak havoc on the planning of these returnable assets. Further, not knowing what future needs lie ahead can be problematic for efficient container transport planning and management.
Demand Forecasting, Tracking, Demand-oriented Distribution and Transport
There is software on the market which can promote the most efficient management of reusable transport packaging. These solutions deliver relevant data, transparency, monitoring, and strategic network planning that is needed to optimally manage these assets. In demand forecasting, advanced software uses historical data, current demand, seasonality, sales staff input, and ad-hoc bookings to accurately determine the container demand of all participants’ locations. It takes into account seasonal fluctuations, as well as statistical exceptions in its demand forecasting. It also provides an online overview of all participating accounts and locations within the network in order to deliver current and planned future demand forecasts.
Tracking of reusable transport packaging (location, status, etc.) does not need to be done manually anymore. It can be automated using bar codes, RFID technology and GPS tracking data and devices. The route of every load carrier can then be monitored and traced at all times with full transparency.
For the demand-oriented distribution of reusable transport packaging, the software uses an overview of the current locations of the containers along with the actual demand for them. By combining this information with agile optimization technology, the software is able to distribute containers according to the actual forecasted demand. Their individual targeted distribution, as well as current and future needs can be viewed in an online overview by all participating partners from a central or regionalized planning perspective. Container account management can also be performed online for each party.
The transport of reusable transport packaging is optimized using today’s advanced software. It addresses questions such as: How do pallets, containers, crates, and other load carriers arrive at the next destination whether for loading, unloading, at production, cleaning, repairing, maintenance, storage or new units coming into the pool? The goal is to make sure containers arrive at their next destination on time and as cost-efficient as possible. A transport request can be autonomously generated by the container management system and forwarded to the software for truck scheduling or third-party route optimization. The load carrier’s movement data flows seamlessly back into the container management system thereby enabling the appropriate response to current transport demand and to support efficient pooling cycle operations.
Other Performance Features and Benefits Derived
In addition to the environmental benefits that optimized reusable transport packaging management provides, there are other valuable performance features. These include among others:
- Automated inventory balancing (e.g., minimizing stock outs and costly emergency shipments);
- Alerts to address incorrect orders, rule violations, stock outs or overstocking, defective auto-ID hardware, etc.;
- What-if scenarios using actual data to assess the impact of various disruptions or seasonal impacts on reusable container pooling;
- Key performance indicators (KPIs) relating to inventories, order delivery and pick-ups, cleaning/repairs/maintenance, and transport performance; and
- Automatic record keeping of all transactions facilitating timely, accurate invoicing and the required audit trail for all containers in the pool.
Collectively, all of the software’s features drive valuable benefits in container and reusable packaging management. Users derive a reduction in lost containers, reduced working capital, lower logistics/warehousing/labor/operating/management costs, avoidance of follow-up costs and less replacement purchases, more reliable asset management, and faster, informed decision making supported by directed KPIs and advanced analytics that are available in real-time.