Ecr presentation jw

MANAGING THE RETURNABLE PACKAGING IN THE SUPPLY CHAINJEFFREY WONG, DIRECTOR CHEP SEA

OCTOBER 15TH 2008

CHEP RPC – LEANER GREEN SAFER2

THE WINNING RECEIPES FOR THE 2ND DECADE OF ECR

Market Context

Increasing global sourcing of raw materials

An increasing focus on the environment

Greater health and hygiene regulatory pressures

Increasing competition

Changing consumer demand

Loyalty increasingly influenced by the whole shopping experience

The Ingredients for a Winning Recipe….

Leaner, Greener and Safer Supply Chains

“…aimed at better satisfying consumer needs, through businesses

and trading partners working together. ”

ECR Australasia


RETAIL READY PACKAGING (RRP)

Retail Ready Packaging not new in the market

Referred to different names…Shelf Ready Packaging, One Touch Packaging, etc

Display Ready Cartons is available in the market

– A high percentage of on the shelf products, non-produce shipped in DRC

– *26% of the Retail Produce Volume shipped in DRC in US

Returnable Plastic Crates, sometimes called trays, crates, RPC,

– *has 8% volume of the Retail Produce Volumes in US

Large returnable containers also called Bins are retail ready*Corrugated Packaging Alliance news realease17 May 2005

“…increased speed of replenishment leading to better on shelf availability & increased sales”

ECR Australasia, Retail Ready Packaging, pg 6


RETAIL READY PACKAGING STRUCTURE

*Consumer Unit

Tertiary Packaging

Merchandise Unit

Dollies

Returnable Plastic Crates

Dairy Dollies

Bins

“How to manage

returnable packaging?”

Easy to Identify

Easy to Open

Easy to Shelf

Easy to Shop

Easy to Dispose

*ECR Australasia, Retail Ready Packaging, pg 6

Display Ready Packaging

Display Inner (In a shipper)

Display Shipper (Trade Unit)

“How to manage

returnable packaging?”


HOW TO MANAGE RETURNABLE PACKAGING

Considerations in choosing between DRC and RPC

Scoping the project across the supply chain

Prioritizing Products for Returnable Packaging

Understand the total process and consider pooling of returnable equipment

Ensure Supply Chain Costs Reduction Targets are Met


CONSIDERATIONS IN CHOOSING DRC AND RPC

Requirements and Considerations

Display Ready Carton (DRC) Returnable Plastic Container (RPC)

Usage cycle One time, one way trip Reusable, Multiple trips

Branding and differentiation through packaging

Can be made to be distinctive and differentiated

Blends into the retail surroundings

High Demand Volatility One time costs expensed Invested RPC for peak not utilise during trough unless it is rented RPC

Backhauling transportation Advantages across wider geographical areas or borders esp where volumes are low

Advantages where there are large volumes need to be backhauled and transportation is available

Robustness Can be designed to be robust at a higher cost but not as robust as RPC

CHEP’s RPC build to sustain multiple usage in varying supply chains

Environment – Life Cycle Inventory Measurements (Franklin Associates, Life Cycle Inventory for RPC and DRC for Fresh Produce Applications)

Dispose after use Reuse after wash; requires 39% less energy, produce 95% less total solid waste, 29% less total greenhouse gas emission


SCOPING THE PROJECT ACROSS THE SUPPLY CHAIN

Finalisation


PRIORITISING PRODUCTS FOR RPC OR RETURNABLE BINS

Volume of Replenishment

High

Low HighDifficulty of Replenishment

X Watermelons

X Oranges

X ApplesX Bananas

X Parsley

X Lettuce

X CabbageVolume of Replenishment

High

Low HighDifficulty of Replenishment

X Watermelons

X Oranges

X ApplesX Bananas

X Parsley

X Lettuce

X Cabbage

Successful projects will need the participation of the Retailers, the Suppliers and the service providers that store and mover the products


PRIORITISING PRODUCTS FOR RPC (Examples)


ENSURE THAT TOTAL SC COST REDUCTION TARGETS ARE MET

(…often total supply chain costs are not captured)

Scope: From factory to organized retail store

Product: FMCG basket of goods

21.9

13.7

100.0

59.7

Transport Storage Handling

0.4

Procurement

0.8

RPC Maintenance &Cleaning

3.6

Other* Total

DEMONSTRATING CHEP’S VALUE PROPOSITION


REUSABLE PACKAGING INNOVATION – CHEP’S CREDENTIALS

PCA (Packaging Council of Australia) Award Winner

– 2002: Beverage trays

– 2003: RPCs (1st Generation)

– 2005: Folding Bin

– 2005: Holden Automotive Custom Designed Packs & Inserts

Regional implementation experience (ANZ)

– Beverage tray national pool

– RPC national pool

– Foldable Bin national pool

– International pool of auto parts containers

Supply Chain benefits …realised!

– Retail Ready

– Resource savings

– Capital benefits

– Product quality benefits

– Environmental benefits

– Warehouse efficiencies

– Transportation efficiencies


EXAMPLE OF AN INNOVATIVE DESIGN


RPC AND BIN PROCESS MANAGEMENT

INSPECT

FORECASTDEMAND

WASH

REPAIR

RETRIEVE

TRACK

CRATE USE

SUPPLY

RELOCATION SOURCE

CAPEXCRATE R&D


CHEP’S CORE VALUE PROPOSITION

Recognised as the global leader in pooling solutions, CHEP offers pooled platforms, pooling systems and services which collectively represent a single supply chain logistics service.

Core benefits delivered include:

1.Reduced costs Reduced platform manufacturing and maintenance expense Reduced transportation costs Reduced process management costs Reduced losses Trans Tasman produce movements coordinated in Australia and New Zealand

2.Reduced risk Customers’ products are protected in transit meaning reduced damage, loss & ullage A single pooling solution that operates throughout the customer’s supply chain meaning integration and

simpler, risk-free systems compatibility

3. Revenue protection Customers’ products are shipped and arrive in ready-to-use or ready-to-sell condition Speedy turnaround ensuring faster cash-flow Continual monitoring of supply chain to ensure Vendor costs minimised

4. Reduced CAPEX Customers do not need to invest in their own pooling infrastructure, pooling processes and pooled

platforms


CHEP’S CASE STUDY: PRODUCE SUPPLY CHAIN IN ANZ

ChallengeTo help a major regional retailer move, store, merchandise and protect a range of fresh produce lines from a base of >1,000 suppliers into 800+ retail stores

Replacing60 million Styrofoam and cardboard containers per annum

SolutionCollapsible, returnable, vented, column & cross stackable RPC – and a sophisticated tracking system

BenefitsImproved product quality, reduced handling, transport efficiencies (outbound), 40% reduction in reverse logistics, reduced packaging waste, improved supply chain visibility eg. cycle times, stocks & flows


IN SUMMARY

Supply chains are constantly changing, needing to be LEANER, GREENER and SAFER

CHEP can help you achieve operational excellence through:

Efficient, safe & environmentally friendly packaging design

Synchronisation of reusable & returnable packaging with forecasts

Network leverage (physical & knowledge)

RFID enabled visibility & control

Standardisation & customisation


WHO IS CHEP TODAY?

Brambles owned and part of a global CHEP business in 45 countries around the world

Provider of managed reusable & returnable supply chain packaging solutions

Working to make logistics in Asia-Pacific leaner, greener & safer

Serving customers in:

– FMCG

– Fresh Food

– Auto

– Industrial

– Transport & Logistics

Ecr presentation jw

Documents

Transcript of Ecr presentation jw