Most people in the UK warehousing and logistics industry are familiar with CHEP as the leading provider of pallet, container and crate pooling services, but globally it’s also the pallet provider for many of the world’s largest supply chains, and an integral part of a major industrial group. Howard Wigham, Managing Director, CHEP UK, spoke to Warehouse & Logistics News.

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Warehouse & Logistics News – First of all, Howard, how would you sum up what CHEP does?

CHEP is a service company that provides managed unit load solutions, of various standard shapes and sizes, across business supply chains in multiple industries and in more than 50 countries.  Our solutions are based on returnable and reusable pooled equipment.  We help businesses to move, store and protect their products through the supply chain in a cost effective, safe and environmentally sound way.

WLN – What kind of cost benefits can people expect with your services?

We believe we can help every business to systematically reduce their total packaging-driven supply chain costs. We achieve this through our quality equipment, information systems, network scale, insights and people, plus – and we think this is key – the concept of end to end supply chain thinking, which I’ll come back to later, if I may.

We offer concrete ways to help our customers make their supply chain operations leaner, greener and safer. This means they can extract a greater return from their supply chain investments, increase their performance to an ever more competitive level and focus scarce resources on their core business.

WLN – What kinds of companies do you help, in which business sectors?

We provide our services to a huge range of customers – from the very smallest producers whose business may revolve around a single harvest period, right through to some of the very largest global FMCG companies who are shipping goods around the world in vast quantities, every day. And in addition to the consumer products/fresh sectors we service customers in the automotive, aerospace, chemical and manufacturing industries.

WLN – What different pallets and other equipment do you provide?

We provide a range of modular reusable equipment designed to make the best use of shipping container and truck space while providing the maximum protection to contents. CHEP pallets can be used for distribution worldwide, and we offer a wide range of pallet types and sizes specifically designed to meet the needs of our customers. The quality and availability of our pallet reduces product damage, increases load stability, improves the efficiency of loading and unloading, and ensures the smooth running of production, shipping and receiving operations.

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WLN – Who owns CHEP?

CHEP is part of the Brambles group, which is a pooling solutions company specialising in the provision of reusable pallets, crates and containers and associated logistics services through the CHEP and IFCO brands – more details are available at the Brambles web site (www.brambles.com).

WLN – What are the key issues facing today’s supply chain and logistics operations?

In many situations the current approach gives rise to a series of costly complications. And supply chain efficiency is now under scrutiny more than ever as businesses strive to improve processes and reduce costs in the search for that all-important competitive advantage and to maintain or expand margins in an operating environment that is becoming increasingly tough and where like-for-like sales are stagnating.

Costs occur throughout the supply chain, with some being directly visible, such as the direct purchasing costs of the materials, and many being invisible, such as:

• the administration needed to order and store the equipment,

• costs associated with handling multiple platforms if different receivers specify different approaches,

• poor platform selection causing damage to goods in transit, meaning they need to be returned and replaced

• trucks that cannot be used to capacity or routed properly

• platform collapses in transit meaning that spillages occur which need to be cleaned up

• lack of standard approaches reducing picking speeds or meaning that extra stages need to be included in the supply chain, such as co-packers repacking promotional items

• items needing to be decanted or repalletised before they can be used or displayed. In the case of retailing for example, this can ultimately affect on-shelf availability and in- store dynamics.

These visible and invisible costs can also reside at all stages in the supply chain, not just within the four walls of a single business. And the selection of the platform in one part of the supply chain can cause all these issues in another part of the supply chain, sometimes without the implications and pain being known or considered – this so-called end-to-end supply chain thinking I referred to earlier.

We believe that these issues are increasingly relevant as, for example in consumer goods, the trends towards more online and convenience retailing and the increased use of promotions are increasing the complexity of supply chain fulfilment operations, and this extra complexity drives cost for both manufacturers and retailers.

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WLN – Some companies own or operate their own ‘closed’ pools of pallets and containers or buy one-way packaging platforms.

Yes, they do, but this approach can be expensive and inefficient. On top of removing cash and capital that can be used for core business investment, it drives extra complications around administration to procure and manage the equipment, the equipment takes up space and can often get lost or damaged and drive the need for still further capital and/or operating expense. Fundamentally, this means that packaging-driven total supply chain costs are much higher than they need to be.

WLN – How are the costs much higher than needs be?

What I mean by that is that the selection of the platform or packaging used to store, protect and move goods through the supply chain, and the ownership model employed, can have a significant impact on the cost, in the case of automotive on the cost per part for example, and in consumer goods on the cost per case or cost per pallet. Ultimately, this cost is being passed on to the consumer.

WLN – Can you help customers identify and reduce costs?

Yes, we can. To help understand this ‘end to end’ total supply chain cost, we have developed a network value mapping tool that looks to quantify costs in a variety of scenarios. This helps us work with customers to build ‘as is’ pictures and develop ‘to be’ scenarios that lower total packaging-driven supply chain costs.

WLN – How can equipment pooling help resolve these issues and complications?

We would argue that things can be improved through the use of a standard pooled platform, provided by a specialist service provider – whether CHEP or someone else – who has the depth of resources to invest in the required equipment and service infrastructure, makes ordering and equipment supply easy and efficient, and who also assists with timely and useful supply chain advice and query resolution. And so pooling is a strategic business option for companies that wish to reduce capital expenditure, improve day-to-day supply chain operations, and reduce total packaging- driven supply chain costs.

WLN – For the uninitiated, how does pallet and container pooling work, and what are the benefits?

In its simplest form, pallet and container pooling is the shared use of high quality standard pallets and containers by multiple customers or users, spreading the cost across the pool. Goods are efficiently stored and moved through the supply chain to end customers, and they are protected in transit helping to ensure product quality is maintained. Availability, accessibility and scalability of equipment supply helps to support business growth, and also brings environmental benefits.

WLN – What are the environmental benefits?

By its very nature, equipment pooling is more environmentally sustainable than the alternatives, be they cardboard or one-way or exchange white pallets, significantly reducing the use of resources and waste. This reduced environmental impact is due to the reuse of assets, and the reduced need for this one-way packaging, be it cardboard, styrofoam or single use plastic and wood packaging materials.

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WLN – How are you set up to cover the UK?

CHEP has a sophisticated network of Service Centres strategically located to meet the needs of our customers across the UK and Ireland as well as across Europe and around the world, ensuring availability of the right quantity of fit for purpose equipment.

WLN – How many pallets do you move per day?

With over 500,000 collection and delivery points globally, more than 3 million loads are shipped on CHEP pallets every day. In the UK and Ireland we track in excess of 24 million pallets.

WLN – How do your pallets and containers compare with other providers?

As the market leader with the largest pool of pallets and containers worldwide, we pride ourselves on delivering high quality, fit for purpose shipping platforms that meet the ever-changing demands of the supply chain. We’re committed to continuous improvement and we work closely with our customers as well as trade and industry associations to refine, develop and implement new products and solutions. For instance, at our Last Mile Solutions Customer Forum in November 2011, we discussed with manufacturers and retailers ways to cut costs from the last 50 yards of the supply chain, utilising equipment and approaches that go well beyond our origins of pooling the standard blue pallet platform.

Reducing the number of product display formats required by supermarkets would clearly help – our recent examination of the supply chains of 41 retailers in seven European countries identified 24 different packaging formats and more than 50 different packaging platforms. And this is precisely the kind of complexity that drives waste and extra cost. We engage actively with industry bodies such as ECR to help further thought on improving supply chain efficiency.

WLN – Pallet pooling clearly works. But why choose CHEP?

There are several reasons, the first being our global scale, size and reach. As mentioned before, CHEP is part of the Brambles Group of companies, listed on the Australian Stock Exchange, and currently with an enterprise value of more than US$ 14 billion, a strong credit rating and having been in this type of business for more than 50 years, Brambles is the world’s leading provider of pallet and container pooling solutions.

After that come the general reasons for choosing us. Quite simply, CHEP has made the capital investment in equipment so you don’t have to.

Outsourcing your equipment pooling to us means that your business can benefit from our substantial supply chain logistics expertise to reduce total packaging-driven supply chain costs and improve customer satisfaction.

We also help our customers to be environmentally responsible. In Europe, CHEP’s pallet pool reduces timber usage by more than 2 million trees each year. Our UK operation has been awarded the Carbon Trust Standard by measuring, managing and reducing its carbon emissions. CHEP is the first pooling company in the world to achieve both FSC and PEFC multisite certification, which means all the wood used in CHEP pallets is sustainably sourced. This includes wood used to build new pallets to replenish the pool as well as the wood used in our continuous repair activities.

But ultimately we make sure you have the right equipment, in the right quantity at the right place and at the right time for all your supply chain requirements, everyday. And we do this for a huge range of customers – from the very smallest producers whose business may revolve around a single harvest period, right through to some of the very largest global companies who are shipping goods around the world in vast quantities, every day.

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WLN – What online account management tools do you offer?

Portfolio+PLUS is our online account management tool offering all customers real time, multi-user access to their CHEP account in a secure environment 24/7, supported with bespoke one-to-one training and easy log-in facility.  Portfolio+PLUS has been designed to streamline and simplify administrative activities, improve productivity and most importantly save customers time and money.

With constant development and regular enhancements, it continues to deliver real tangible benefits to CHEP customers of all sizes, keeping them in full control of their CHEP account. Not surprisingly, more and more customers are enjoying the benefits of Portfolio+PLUS with over 80% of orders in the UK & Ireland now carried out online.

WLN – What customer service can people expect?

Customers have unlimited access to our customer service teams, with a dedicated team of customer Service professionals who are trained to answer any queries relating to a customer’s account or specific shipment. In addition to our office based Customer Service Teams, we also have a network of regionally based Account Managers who proactively engage with manufacturers, logistics service providers and retailers, and focus on preventing any problems. Collectively, these teams are dedicated to delivering proactive service improvements on transactions, and processes and who will work directly with you to support improvements to your account, if required.

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WLN – Finally, how flexible are your solutions?

As a service business, we increasingly understand the importance of keeping things simple and being easy to do business with. Therefore, all CHEP customers have complete control in the way they deal with us and how they manage their account, via a number of different interfaces, each one designed to give maximum flexibility and constant access to our services.

CHEP UK

Tel: 0161 786 0500

www.chep.com

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