Reusable Packaging News
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Container pooling eliminated the need for cardboard backup packaging at Tenneco. Phot credit: CHEP
“Most automotive companies struggle to reduce supply chain costs year over year,” said William Wappler, Surgere CEO and the brainchild of the digital ecosystem. “We conservatively predict the participants in our digitized ecosystem can achieve double-digit cost savings through highly accurate visibility into the supply chain and through the collaborative power of shared information and analysis across OEMs and their supply base,” he said.
“Really, what we were trying to get to was getting the right container to the right place in the right quantity, in the right configuration, in good condition that we could protect our parts being delivered from our tier 1 suppliers,” McBrien continued.
“We looked at this as being one of the big problems in the auto industry. I don’t think there would be any of us who have annual meetings with suppliers where this doesn’t come up. There are very few venues where this doesn’t come up as being one of the problems.
“We looked at creating a data ecosystem that we shared having an input into,” he said, acknowledging that current management shortcomings lead to production delays, repacking, and the use of expendables. “If we can eliminate those issues we are going to be way ahead of the game.
A common solution to container management
“One of the things we didn’t want to do was to tear our supply base apart,” McBrien continued. “We didn’t want the tier 1s to have to work through multiple solutions. We wanted to get to that common solution so that there were standards, or at least a best business practice document that everyone could operate from.”
“The tiers were really adamant about using RFID, even more than we were, truthfully,” said Doug Adams, General Manager at Toyota. “And they were really pushing us to make sure we were going to use that data to solve all the problems that are in the supply chain.
“We ended up with a system that will allow us to visualize packaging both with parts and returnables in it. Starting from the supplier, using a common platform, through the Surgere software, that we are able to visualize that inventory going through the supply chain both from the supply base and the OE individually. So now we have the data to problem solve this habitual problem we’ve had forever about how to manage returnables.”
The initiative will come out later as an AIAG best business practice or case, McBrien said. “It is still being developed a little bit, but one thing I want to leave you with is isn’t the end of it. It is just the first foundational piece to what can happen next.”
McBrien said that the collaboration did not signal a loss of competitive advantage. “Absolutely not…How we operate in that environment is really what becomes the competitive advantage. There will likely be some some of the group who will adopt 100% of it, some that will likely adopt a portion of it…”