ABC MODEL

Version 3.4a

April 2003

x zD

FE

D

C

B

A

sCE

rDA

rEA

sCD

zE

yFD

STANDARD MODEL

uCC

uBB

vBA

vAA

vBB

uAA

uBA

vCC

zC

w zBzA

yFE

yFC

b

cadDE eDE

eEDtED

yFA

E

D

C

B

A

5 BASIC STOCKS

5 BASIC STOCKS

Conditioned

Before

Conditioning

Awaiting

Inspection

Emitter

Distributor

PlantField (Q)

Equipment

Factory

GENERIC CONVENTIONS

f

zS

e c

d

bS

R = a – b – zR

S = b + c – d + e + f – zS

b = bR = bRS

Uppercase = Stock

Lowercase = flow

S = change in stock S

b = flow b

zR = flow z from R

bRS = flow b from R to S

$$ = revenue

$ = cost of the stock or flow

$b = cost of flow b

* = the cost of transport

blue = flow measurable by CHEP

green = flow reported by customers

orange = flow not reported to CHEP

red = balancing flow (loss/gain)

R

a

zR

When a flow has only one source and destination, the stock letters can be left off.

TOTAL POOL

scrapped lost

new

Total Pool

Equipment

Factory

found

SYMBOLS

STOCKS:

• Total pool = T

• Equipment factory = F

FLOWS:

• New equipment = y

• Scrapped equipment = x

• Lost equipment = z

• Found equipment = w

T MODEL

T

yF

T = w – x + y – z

zx w

TOTAL POOL = PLANT + FIELD

zQ

yFQ

Plant Field

FSent (s)

Returned (r)

x wzPy = yFP + yFQ

z = zP + zQ

P Q

yFP

PQ MODEL

Fs

ry = yFP + yFQ

z = zP + zQ

T = w – x + y – z

P = r – s – x

+ yFP + w – zP

Q = yFQ + s – r – zQ

T = P + Q

x wzP zQ

QP

yFQ

yFP

FIELD = EMITTER + DISTRIBUTOR

FEmitter

Distributor

s

r

x wzP zQ

P Q

yFQ

yFP

FIELD = EMITTER + DISTRIBUTOR

FE

D

s

r

Q = D + E

T = P + Q

T = P + D + E

T = P + D + E

x wzP zQ

QP

yFQ

yFP

PLANT STOCKS

FE

D

Conditioned

Before

Conditioning

Awaiting

Inspection

s

r

x wzP zQ

QP

yFQ

yFP

ABC MODEL

FE

D

C

B

A

s

r

T = P + Q

P = A + B + C

Q = D + E

T = A + B + C + D + E

x wzP zQ

P Q

yFQ

yFP

ISSUES, RETURNS AND TRANSFERS

FE

D

C

B

A

sCE

rDA

rEA

sCD

zE

yFD

i = s + yFE + yFD + dDEx wzA

P

zD

zC

zB

yFE

dDE eDE

eEDtED

yFP

INTERPLANT FLOWS

FE

D

C

B

A

sCE

rDA

rEA

sCD

yFD

u

v

x wzA

zC

zB zD

zE

yFE

dDE eDE

eEDtED

a c

b

yFP

FE

D

C

B

A

sCE

rDA

rEA

sCD

yFD

STANDARD MODEL

uCC

uBB

vBA

vAA

vBB

uAA

uBA

vCC

x wzA

zC

zB zD

yFCzE

yFE

dDE eDE

eEDtED

yFA

a c

b

FE

D

C

B

A

sCE

rDA

rEA

sCD

zE

yFD

STANDARD MODEL

uCC

uBB

vBA

vAA

vBB

uAA

uBA

vCC

x wzA

zC

zB zD

yFE

dDE eDE

eEDtED

yFA

b

a c

yFC

1 CHEP

• ABC model used as the foundation for all pooling systems; applies to all types of equipment (pallets, RPC, IBC, CCC, Auto)

• Standard terminology based on ABC model adopted globally

• Revenue and cost overlays linked to ABC model

• Operational KPIs derived from ABC model, revenue overlay and cost overlay

• “CHEP 101” global training for all employees starts with ABC model

• TRIPS configured to match ABC model 100%

• All reports generated automatically

• Productivity and Quality projects developed around operational KPIs

PLANT NETWORK

Plants numbered P1, P2, P3, …, Pn

P = P1 + P2 + P3 + … + Pn

All plants have stock A: A1, A2, A3, …, An

Not all plants have stocks B and C.

Pk = Ak + Bk + Ck

Subcontracted plants and temporary storage sites count as plants.

Each TPM location is registered as two locations: one with a D code and one with a P code (A code always, B and C depending on location).

In TRIPS when a goods receipt is processed, the y is recorded. When y equipment remains at F at month end, it is assumed to be a yFP without transport and reversed out when the yFE or yFD actually occurs.

C

B

A

sCE

rDArEA

sCD

SINGLE PLANT STOCK MODEL

uCC

uBB

vBA

vAA

vBB

uAA

uBA

vCCC = yFC + a + c – sCE – sCD

+ vCC – uCC – zC

B = b – c + vBB – uBA – uBB – zB

A = rEA + rDA + yFA + vAA + vBA

– uAA – a – b – x + w – zA

x

zC

wzA

zB

yFC

yFA

a c

b

FIELD NETWORK

Emitters numbered E1, E2, E3, …, En

E = E1 + E2 + E3 + … + En Transporters modeled as emitters; same as chained emitter

Distributors numbered D1, D2, D3, …, Dn

D = D1 + D2 + D3 + … + Dn

(The actual numbering will match the TRIPS codes used for plants and customers.)

EyFE

zE

EMITTER STOCK MODEL

sCE

rEA

E = sCE + yFE + dDE – tED – eED + eDE – rEA – zE

dDE eDE

eEDtED

DISTRIBUTOR STOCK MODEL

DyFD

rDA

sCD

D = tED + eED – eDE + yFD + sCD – rDA – tDE – dDE – zD

zD

dDE eDE

eEDtED

E1

D

yFE1zE1

tE2E1tE1E2

yFD

CHAINED SUPPLY MODEL

sCE1rE1A

E2 yFE2zE2

zD

sCE2rE2A

sCDrDA

OK to have chain of emitters

dDE2 eDE2

eE2DtE2D

TRANSPORTERS

Transporters modeled as emitters in transfer hire system (same as chained emitter); hold stock E.

For one-way trip and exchange models, transporters do not hold stock.

NON PARTICIPATING DISTRIBUTORS

Distributor records in TRIPS contains a field for type of distributor, Participating or Non Participating.

A Non Participating Distributor (NPD) is one who has not signed an agreement to be liable for loss or misuse. These are further defined as Cooperative, Semi-Cooperative, and Non-Cooperative.

Report on NPD stock generated automatically by query on flows to/from distributors classified as NPD.

INTERNATIONAL FLOWS

Records for Plants, Emitters and Distributors in TRIPS contain a field for country in which they are located.

Report on international flows are generated automatically by query on flows to stocks in countries other than country of origin.

Vital metrics are based on global tracking. Options exist to comprehend country to country and region to region flows so that the stocks balance properly.

RECYCLERS

Assets recovered from recyclers and locations not currently in TRIPS are measured on flow w into A.

TPM

Assets move from D to A as they are checked in. Activity is recorded as rDA with zero transportation cost.

Each TPM location is registered as 2 locations: one with a D code and one with a P code (A code always, B and C depending on location).

UNUSUAL FLOWS

• dDE is an issue from a Distributor to an Emitter going out directly from a Distributor location (not TPM). We are investigating whether to discontinue this practice.

• sAE is practiced in a couple of markets but should be discontinued as it is not consistent with our quality standards – therefore not shown in model.

• In TPM, rDA is a virtual flow with zero transportation cost; assets move from D to A as they are checked in.

• yFA is discouraged, but is practiced in Automotive, IBC, RPC and the Canadian businesses for specific situations. New equipment should be delivered directly to a customer from F to avoid double transport.

• For pallet business, uCA and uCB are sinful, therefore not in the model.

• u flows are discouraged.

• Currently in TRIPS, the same transaction is used for yF flows as sC flows. Hence to prevent double counting of flows, y flows must be subtracted from s.

GLOSSARY

GLOSSARY

• ABC Model

• Plant (never depot)

• Transporter (not haulier or carrier)

• Emitter (not shipper) = manufacturers + growers + …

• Distributor (not receiver) = retailers + distributors + …

• Customer = all in Field = Emitters + Distributors ( + Hauliers )

• Transfer (not dispatch): tED

• Issues = i = s + yFE + yFD + dDE

• q issues (exclude issues internal to Q such as dDE) q = s + yFE + yFD

GLOBAL VITAL METRICS

x

C

B

A

sCE

rDA

rEA

sCD

PLANT STOCK

zC

w

zB

zA

yFCuCC

uBB

vBA

vAA

vBB

uAA

uBA

vCC

yFA

c/(a+b)

(c+ΔB)/((a+b)

u/i

$c/c

w

P/(q/22) or 28

C/(q/22) or 28

ca

b

i = s + yFE + yFD + dDE

ISSUES, RETURNS AND COLLECTIONS

FE

D

C

A

sCE

rDA

rEA

sCD

yFD

w

yFE

dDE

tED

yFA

i = s + yFE + yFD + dDE

q = s + yFE + yFD

i

y

y/i

(r+w)/q

(rDA+dDE)/(tED+sCD+yFD)

$r/r*

$i/i*

$$/i

yFC

TOTAL STOCK KPI’S

FE

D

C

A

sCE

sCD

yFD

yFE

dDE

T = A + B + C + D + E

Q = D + E

i = s + yFE + yFD + dDE

T

$$/T

%Δ$$/%ΔT

Q/T

T/i/28 or 35 days

B

ABC MODELCHANGE LOG

V3.4a

– Dropped the last two letters in the plant flows. The letters are not necessary since there in only one source and destination for these flows.

– Lowered the yFE lettering on the chart, so it would not be confused with the yFC flow.

– Clarification around handling y flows.

– Added definitions for Distributors.

– Modified metric pages to refer to the Vital Set.