MANAGING THE
RETURNABLE
PACKAGING IN THE
SUPPLY CHAIN
JEFFREY WONG, DIRECTOR CHEP SEA
OCTOBER 15TH 2008
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
The Ingredients for a Winning
Recipe….
Leaner, Greener and Safer Supply
Chains
 Increasing competition
 Changing consumer
demand
 Loyalty increasingly
influenced by the whole
shopping experience
“…aimed at better satisfying
consumer needs, through businesses
and trading partners working together.
”
ECR Australasia
CHEP RPC – LEANER GREEN SAFER
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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
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RETAIL READY PACKAGING STRUCTURE
*Consumer Unit
Tertiary Packaging
Merchandise Unit
Display Ready
Packaging
Display Inner (In a shipper)
Dollies
Display Shipper (Trade Unit)
Returnable Plastic Crates
Dairy Dollies

Easy to Identify

Easy to Open

Easy to Shelf

Easy to Shop

Easy to Dispose
*ECR Australasia, Retail Ready Packaging, pg 6
Bins
“How to
“How
to
manage
manage
returnable
returnable
packaging?”
packaging?”
CHEP RPC – LEANER GREEN SAFER
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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
CHEP RPC – LEANER GREEN SAFER
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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
CHEP RPC – LEANER GREEN SAFER
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SCOPING THE PROJECT ACROSS THE SUPPLY CHAIN
Finalisation
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PRIORITISING PRODUCTS FOR RPC OR RETURNABLE BINS
High
X Lettuce
X Oranges
X Apples
X Bananas
X Watermelons
Volume of
Replenishment
X Cabbage
X Parsley
Low
Difficulty of
Replenishment
High
Successful projects will need the participation of the Retailers, the
Suppliers and the service providers that store and mover the products
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PRIORITISING PRODUCTS FOR RPC (Examples)
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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
100.0
0.4
0.8
3.6
13.7
21.9
59.7
Transport
Storage
Handling
Procurement
RPC
Maintenance
&Cleaning
Other*
Total
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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
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EXAMPLE OF AN INNOVATIVE DESIGN
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RPC AND BIN PROCESS MANAGEMENT
CRATE R&D
CAPEX
SOURCE
RELOCATION
FORECAST
DEMAND
SUPPLY
CRATE USE
WASH
TRACK
REPAIR
INSPECT
RETRIEVE
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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
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CHEP’S CASE STUDY: PRODUCE SUPPLY CHAIN IN ANZ
Challenge
To 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
Replacing
60 million Styrofoam and cardboard containers per annum
Solution
Collapsible, returnable, vented, column & cross stackable
RPC – and a sophisticated tracking system
Benefits
Improved product quality, reduced handling, transport
efficiencies (outbound), 40% reduction in reverse logistics,
reduced packaging waste, improved supply chain visibility
eg. cycle times, stocks & flows
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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
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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
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