Major Odette study on Returnable Packaging Management

Packaging Management has been the cause of many debates over the years in the automotive industry and there has never been a clear simple solution to the many issues that companies, especially suppliers, have been facing.

This subject was one of the major topics identified for attention during the Odette Supply Chain Management Council meeting last autumn. Since then a group of companies ranging from OEMs, Suppliers and Pooling Providers have been meeting in a one day workshop and a number of follow-up web meetings to discuss what might realistically be done.

The complexity of the data communications, often with manual data entry via web portals with very little automisation, creates errors, delays and high costs. The physical sizes of returnable packaging differ among the companies and if we can agree some European, or even global, standards there could be huge savings for all involved. We recognise it may take some time for changes to be made when there is so much capital tied up in the supply chain, but if we don’t start, nothing will ever happen.

The Workshop we held in January identified 23 issues that are of concern. Subsequent discussions among the members have looked at these from the aspects of potential cost savings, ease of deployment, and what should be tackled in the short, medium or longer term. The issues fell generally into 3 main categories:

  1. ERP and IT Systems & Data Communications
  2. Technical characteristics of packaging
  3. Processes and organisation

From these we have identified 3 possible topics for collaborative projects to:

  1. Improve the automatic data exchanges between all partners via standardised EDI or other methods
  2. Define standard sizes for the next generation of returnable packaging of the most popular sizes (i.e. a catalogue), including provision of inbuilt RFID tracking capabilities
  3. Define existing practices in connection with returnable packaging management. This will include container management processes and organisation, the exchange and synchronisation of information relating to supplier production figures/ packaging needs, or when ordering packaging etc. 

The full project team met on 23rd February 2015 and proposed that we start with number three and survey the current practices to define the returnable packaging landscape first. This will include studying both ‘push’ and ‘pull’ systems, who the packaging is owned by, whether it’s standard or special, where the losses can occur, what transport is involved etc. We hope to identifying what works and what doesn’t, but most importantly the potential cost and efficiency savings that might be achievable by better co-operation across the industry and we will focus on potential ‘win-win’solutions’ for both OEMs and Suppliers together.