Feature Packaging & Pallets
Last-mile simplicity
A campaign by a leading pallet pooling business to I
n late 2011, CHEP – the provider of pallet and container pooling solutions – facilitated a high-level customer forum which included senior executives from companies such as Britvic, Coca-Cola, Mor- rison’s, Sainsbury’s, Heinz and Nestle. The main purpose of the conference was to tackle the mushrooming complexities in this last mile which – although only a short distance - accounts for some 65% of the total supply chain cost. Some retailers, in their constant drive to reduce costs and increase efficiencies, have introduced bespoke and non-industry standard packaging and handling solutions. This, in turn, has led to
DIFFERENT STAGE OF DEVELOPMENT
According to CHEP, a key issue is that last mile logistics is at different stages of develop- ment across Europe. In some countries – such as Greece and Italy – full-sized 1208 pallets are still used which are then unloaded by hand at the retailer and the products are manually put on the shelves. Whereas in Ger- many and Spain, smaller, fractional pallets – of which the 600 x 800 is the most popular choice – are being increasingly utilised to take goods in retail ready packaging directly on to the shop floor where they can act as gondola ends and merchandising units.
“We now need to work together to help make CHEP’s objective of reducing the current 55 packaging platforms down to a much more manageable level a reality”
their suppliers having to increase the different ways products are packed and delivered. “CHEP is at the heart of the supply chain and so ideally placed to see both the changes that are taking place and to share ideas as to how these final stages can be simplified,” said John Kenna, director market & cus- tomer insight at CHEP EMEA. “This part of the supply chain is changing fast. We feel that through collaboration and offering in- novative solutions which can be integrated into our equipment pooling model it will help our customers adopt simpler procedures.”
56 June 2012 Storage Handling Distribution
“This complexity obviously puts added pressure on a manufacturer as several retail customers may be taking the same product but require them on different pallet formats, resulting in multiple SKUs for what is es- sentially the same product,” added John. “Frequently, full-sized pallets have to be broken down into smaller units which entail further handling, so adding delay and cost to the process. The current com- plexities also reduce flexibility and slow up the time it takes to get a product onto the shelves. CHEP can influence this drive
www.shdlogistics.com reduce the number
of different formats currently found in the challenging “last mile” of the supply chain is being warmly welcomed by blue-chip FMCG manufacturers and retailers.
towards increased standardisation due to its existing pan-European networks.” A key aspect of this move towards greater simplification is to try and convince supermarkets to accept “equivalent units” which would be packed and trans- ported in formats other than their own. Andy Wooffindin, UK and Ireland pallets & project manager for HJ Heinz & Co, said: “We are very supportive of this CHEP initiative, as the number of formats used in the last mile has gradually proliferated as retailer requirements have evolved over the years. For example, Heinz operates with up to five variants in the 800 x 600 size format and we are aware of two, possibly three, new variants under development. There are also numerous quarter pallet for- mats, all very similar in form and function. “Standardisation of units in the 800 x 600 and quarter pallet formats would be very helpful as it could reduce the number of units, suppliers and poten- tially SKUs to manage. Recognition of the equivalence of units would also be helpful as it may help suppliers re- strict the number of formats used. “A successful standardised unit is likely to be multi-purpose, creating additional value through the supply chain. For exam- ple, it needs to work like a traditional pallet on the factory and warehouse floor but also be fitted with retractable wheels for easy manoeuvring round the supermarket aisles. Creating value beyond this basic require- ment may be the key. Perhaps by using a
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