Ecr presentation jw

MANAGING THE RETURNABLE PACKAGING IN THE SUPPLY CHAIN JEFFREY WONG, DIRECTOR CHEP SEA OCTOBER 15 TH 2008

THE WINNING RECEIPES FOR THE 2 ND DECADE OF ECR Market Context
Increasing global sourcing of raw materials
An increasing focus on the environment
Greater health and hygiene regulatory pressures
Increasing competition
Changing consumer demand
Loyalty increasingly influenced by the whole shopping experience
The Ingredients for a Winning Recipe…. Leaner, Greener and Safer Supply Chains “… aimed at better satisfying consumer needs, through businesses and trading partners working together. ” ECR Australasia

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

RETAIL READY PACKAGING STRUCTURE *Consumer Unit Tertiary Packaging Merchandise Unit Dollies Returnable Plastic Crates Dairy Dollies Bins “ How to manage returnable packaging?”
Easy to Identify
Easy to Open
Easy to Shelf
Easy to Shop
Easy to Dispose
*ECR Australasia, Retail Ready Packaging, pg 6 Display Ready Packaging Display Inner (In a shipper) Display Shipper (Trade Unit) “ How to manage returnable packaging?”

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

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

SCOPING THE PROJECT ACROSS THE SUPPLY CHAIN Finalisation

PRIORITISING PRODUCTS FOR RPC OR RETURNABLE BINS Successful projects will need the participation of the Retailers, the Suppliers and the service providers that store and mover the products

PRIORITISING PRODUCTS FOR RPC (Examples)

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
Transport Storage Handling 0.4 Procurement 0.8 RPC Maintenance &Cleaning 3.6 Other * Total

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

EXAMPLE OF AN INNOVATIVE DESIGN

RPC AND BIN PROCESS MANAGEMENT INSPECT FORECAST DEMAND WASH REPAIR RETRIEVE TRACK CRATE USE SUPPLY RELOCATION SOURCE CAPEX CRATE R&D

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

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

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

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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Ecr presentation jw

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