Pallet pools: It’s all about logistics
The key to controlling the costs of a pool of reusable pallets and containers is managing the logistics processes.
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The plastic pallet market has traditionally been an owned asset market, not a pooled market. While CHEP and Peco created pools for the 48 x 40 inch wooden pallet favored by the grocery, consumer packaged goods and retail industries, plastic pallets were traditionally owned by the food, pharma and assembly manufacturers that are the largest users of plastic pallets.
The exception to the rule is iGPS. But like CHEP and Peco, iGPS attacked the broad 48 x 40 market. For nearly a decade, ORBIS Reusable Packaging Management (http://www.orbiscorporation.com/Services/RPM-for-Assembly-Manufacturing) has been changing that model for the 44 x 56 inch pallet favored by the bottling and canning industries. In addition to pallets, ORBIS RPM is also managing the plastic slip sheets and top frames that complete the unit load in those industries.
“We operate 14 service centers in North America and Mexico,” says Albert Seecharan, president of the division. “We have a proprietary software system to track reusable assets. And, we can manufacture a pool of product; deliver the pallets to the point of use; and then use our back haul system to bring them back to a service center, clean them and prepare them to be shipped back into service.”
In addition to pallets for the can and bottle industries, ORBIS RPM is using the same software and service centers to manage returnable plastic containers, totes and dunnage for industrial customers in the automotive, heavy equipment and assembly manufacturing industries. “We can create a solution for manufacturing supply chains where multiple suppliers are shipping into one plant or multiple plants,” says Seecharan.
The value, Seecharan says, is realized in several areas.
For one, an end user can manage seasonal spikes in production without a significant outlay of capital. “They share their daily, weekly and monthly projections with us, and we build up an inventory to meet their needs,” Seecharan says. “We own the asset.”
The most important component to the program is logistics – the system to pick up and deliver assets. “The most expensive cost to reusable assets is getting them shipped back for reuse,” he says. “With our back haul system, we are able to cube out a trailer to maximize the efficiency of shipping goods. The customer benefits from shorter routes, more efficiently packed trailers, faster turnaround times and more product per shipment.”
While ORBIS RPM has focused on assembly manufacturing industries to date, in the future, Seecharan is looking for opportunities in other industries. “We’re interested in retail CPG. There are a number of CPG suppliers shipping to the same plant or distribution center in a retail environment,” he says. “We think we can help them.”
About the AuthorBob Trebilcock Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.
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