The Trend Is Your Friend
The calendar is little more than a convenient device used to
bring some semblance of order to our daily lives. It has no relation to what is
actually happening. For convenience, most of us start a fresh, new year this
month. Yet the challenges of last month or last year remain.
Toward the end of 2001, I spotted a few trends (for lack of
a better word) that I think bode well for the future. These happenings have no
agenda. They’ll happen when they happen. I suspect the impact of September
11 has or will accelerate these ideas, most of which were apparent before that
day. The most encouraging tendency is that transport packaging — and
maybe this is the year to start calling it logistics packaging — is
getting earlier recognition in the supply chain — and maybe this is the
year we start calling it the supply web.
Here’s what I mean: Manufacturers build things, then
tell the folks in packaging to figure a way to box it up so it arrives in good
shape. And, by the way, do it really cheap and use returnable containers
because we read returnables are a trend and we’re a trendy company
’cause our logo says so.
Then someone breaks the news to the guys in the front office
about the cost of returnable packaging. Some bean counter even refers to pallets
and containers as assets that should be tracked, just like computers, company
cars and corporate jets. In previous columns I’ve mentioned radio
frequency identification as the Holy Grail of asset tracking in the returnable
packaging world. Well, we’re getting a bit closer. The release of Savi
Technology’s asset management software and its adoption by CHEP
International offers a new way to not only count the beans, but track them as
well.
According to managers at Savi, the physical conveyance used
to transport the product (read pallets and containers) will also be the carrier
of information about the products. CHEP plans to extend this software and other
aspects of the asset tracking program throughout its international operations.
This includes tracking a significant proportion of its pallet and container
pool at more than 400 depots worldwide.
Along this same line, and maybe it’s more intense
since September 11, is the need for real-time monitoring of containers. Pacific
International Lines recently added 200 Smart Containers (that’s the name
and function) for servicing customers. The Smart Container provides accurate
and updated information via internal monitoring devices all along the supply
chain from the start of the packaging process to the customer’s door
— without human intervention.
We’re likely to see more tracking and monitoring of
shipments because of a third trend that’s occurring: the development of
contingency plans. Many companies have disaster plans (usually for natural
disasters), but a contingency plan is a bit different. A contingency plan means
the company plans business as usual, only to get its supplies a little
differently. Less than a week after September 11 there were slowdowns, even
shutdowns at automotive and electronic manufacturing plants along the U.S.
border. Limited air cargo hurt retailers of perishable goods.
Although no one is suggesting going back to the days of huge
inventories, there have been statements from companies like Ford Motor
indicating it will stockpile critical parts — albeit temporarily —
in warehouses near some U.S. plants.
What does all this mean to packaging managers? Your
customers won’t want more inventory but will want greater inventory
visibility and control. Visibility in the information sense if not the physical
sense. You’ll have to provide data on everything you ship and when it
will be available. The demand for mixed unit loads will most likely increase as
your customers ask for exact quantities — yet expect you to own and hold the
inventory. This won’t be easy.
Investment managers tell us the trend is our friend, based
on the theory that it’s easier to a ride a horse in the direction
it’s already going. As a logistics manager, you must understand the trend
before deciding how friendly it will be.
Clyde E. Witt, executive editor, cwitt@penton.com
