Packaging Corner: Find value beyond the pallet

The pallet truly is the tie that binds the supply chain together. Which is why CHEP—which uses more than 300 million of them handling products from production to point of sale—expanded its service offerings to help customers realize savings and sustainability opportunities throughout their supply chains.

“We’re in a unique position to bring all parties together and find ways to add more value to the operation, end-to-end,” explains Ben Eugrin, director of supply chain solutions at CHEP North America.

CHEP offers an ideation session, where personnel throughout the supply chain gather to discuss their pain points in operations, planning, forecasting, transportation, distribution, finance and sustainability. “They seem like areas far removed from the pallet, however, a lot of the work we do is simply bringing parties together—both within an organization and from their partners—because the data needed to analyze these pain points is often scattered throughout a supply chain,” he says. “We pull all that together to identify the root causes and take action together.”

Among the solutions offered is value stream mapping, through which the majority of customers have found 12 or more areas of greater efficiency. “For one customer, we saved $280,000 by cutting third-party warehouse costs, but we also see trends where activity-based costing is required to look at true cost to serve their customer base,” Eugrin says.

Further, CHEP looks at transportation costs and opportunities to combine a customer’s fleet with CHEP’s own network to synergize overlapping lanes. In 2016 that cut 3.5 million miles from the supply chain, eliminating 13 million pounds of carbon dioxide from the North American transportation network. And, by mapping less-than-truckload (LTL) shipments from inbound suppliers, CHEP can identify consolidation points for further transportation savings.

To reduce product damage and unsalable goods rates, CHEP’s packaging performance testing center evaluates primary, secondary and tertiary packaging and unit load building, as well as handling within a facility. “For a paper company, we generated a 75% reduction in product damage in their operations, yielding $500,000 in savings,” adds Eugrin. “For a tissue manufacturer, we evaluated recycled corrugate secondary packaging to confirm its viability, saving them $320,000 in costs.”