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upon the asset’s return.
While you may have less pull with
customers that are receiving your
pallets and containers, Welcome
says suppliers need to work with
their retailer customers to remind
them that reusable pallets and containers belong to them and that if
these assets are lost, it raises costs
throughout the entire supply chain.
A NEED FOR MORE SOLUTIONS
Although the problem of pallet and
reusable container loss has been
around for a while, there seems to
be increasing recognition that the
industry needs better solutions for
stopping the leakage.
Last year, CHEP formed a team
to look for opportunities across
the supply chain to maintain better
control of its pallets. The team is
starting to look at such things as
how often pallets are being shipped
to or from points other than the
distribution center or retail store,
and what role those points play in
their customers’ supply chains, says
Gormley.
While company-specific programs are good, Welcome emphasizes the necessity of developing industrywide best practices.
“There’s a growing need for industry to coalesce around a solution, to
identify good practices, and to share
them with people,” he says.
There are signs that’s beginning
to happen. The Food Marketing
Institute, for one, is starting a joint
industry effort with food manufacturers, reusable asset manufacturers, and service providers to
establish best practices for tracking
and retaining assets, evaluate possible technology solutions, and stem
theft through both regulatory and
legislative efforts as well as educating law enforcement agencies about
the problem. ;
chain is a good first step, says Kukuk. “You
need to step back and look at all the different ship-to points and touch points,” he
says. “Just have a simple discussion around
all the different alternatives for where a
product could have gone next, whether it’s
a 3PL warehouse, your own warehouse, or
back to your primary shipping point. From
there, you can narrow down those spots
where your product could be leaking out
of your system.”
The best way to track shipping assets is
to maintain a simple pallet-out, pallet-back
accounting system. Kukuk says that some
of Orbis’s customers have been successful
using a credit and debit process. “They
debit pallets out when they ship them to
a supplier and don’t credit them back in
until they receive them back,” he says.
While it is possible to manage this cred-it-debit process with paper and pencil,
technology can certainly boost accuracy
and efficiency. Some larger companies,
such as plastic pallet pooler iGPS, have
taken the step of tagging their pallets with
RFID chips, while others have found success using bar codes. “We have many customers that do a good job controlling visibility just with simple bar coding, scanning
ins and outs,” says Kukuk.
Hand in hand with a tracking program
comes the necessity of getting suppliers
and other stakeholders, such as carriers
and 3PLs, involved in reporting where the
asset went and who they shipped it to, says
Kukuk. Companies need to talk to their
partners about how and when pallets and
shipping containers will be returned to
them. “For example, do you want them
back in a full truckload like you sent them
out, or do you want them back in smaller
quantities? And if so, are you able to monitor and control that?” he says.
To get that buy-in, Kukuk says, it’s
important to remind outside partners
“what’s in it for them.” For example, if
there are cost savings associated with using
reusable pallets or containers, Kukuk recommends finding a way to share those
savings with your partners.
If the carrot doesn’t work, there’s always
the stick, Kukuk points out. He reports that
some shippers go so far as to charge their
suppliers a deposit for the pallet or container, which is refunded to the supplier
