Linking the supply chain

Wood Focus magazine
27 Aug 2010

Software that may help manufacturers and product designers reduce the costs and CO2 emissions associated with transporting and storing goods across all sectors is said to have been used for the first time by a major UK retailer on beverage packaging.

The software, created by Incept, based in Redhill, UK, is said to be ‘novel’ in the way it ‘draws a picture of the supply chain’, from when an item leaves the production line, explains Nick Gazzard, Principal of Incept and Leader of the UK Chartered Institute of Logistics and Transport’s Sustainable Transport Strategy Group.

‘We draw out factories, distribution depots, warehouses, retailers, etc. We connect them all up and that provides a generic map in which you can input any numbers and describe any supply chain for a particular company or group of products (see image right).

‘In the [earlier] stages of the supply chain, you tend to deal with bulk stock levels and configurations. But as you move downstream, the configurations begin changing and you move from pallets to roll cages. The activities that happen at each stage are reflected in the model [and] each product has its cases of pallet, stock levels and characteristics reflected accurately.’

Gazzard says the technique initially responds to a packaging industry need to cut costs but can be applied across all product ranges, including construction.

‘People are understanding that although average transport emissions might be five to six per cent, if you look at a specific product, the emissions might be 20-40%. If industry does not start measuring this, then the Government will start making them.’

The recent Incept study for a major retailer (whose name remains confidential) tracked the cost and CO2 emissions associated with the take-home beer supply chain. The model has found that savings can be made when transporting beer can multipacks through the supply chain compared to equivalent packs of glass bottles. For example, £0.049 and 10g of CO2 can be saved when comparing four-pack 440ml cans versus glass 6x330ml bottles.

The potential savings from switching 50% of take-home beer packs from glass bottles to cans are estimated at £17,600 and over 3,000t of CO2.

The key aspect is pallet efficiency, explains Gazzard. Cube efficiency in packing the case converts to a higher pallet loading. ‘The more you fit [onto the pallet] relative to the amount of litres, it is a lower cost per litre to transport,’ says Gazzard. ‘The cube can be massively different depending on the thickness of the glass, the neck, etc. That can make up to 50% difference in terms of the amount of product loaded.’ Glass products, due to their geometry, are said to have lower pallet utilisation, resulting in higher costs per unit.

However, Gazzard notes that the model is not about pitting one product type against another. ‘Just because this study found one pack better than another on one dimension, it does not mean that it is going to be the case on all dimensions.’

He outlines the importance, moreover, for designers and marketers of any product to consider pallet optimisation and to work with the logistics industry and retailers on this. ‘The ideal product to fit a pallet is a perfectly proportional cube. That is not [always] going to happen, but if you can morph your product around the pallet on software, you can get a 15-25% improvement in pallet loading by modifying the diameter or the height of a product to get an extra one in the case.’

He adds, ‘We are trying to give people more levers to pull to reduce CO2, [and] my view would be that we expand the models to look from raw material to downstream’.

There are also issues related to vehicle efficiency (ensuring trucks are largely 90% full), vehicle maintenance, driver behaviour, and so on.

Vince Major, Chairman at Can Makers, UK, notes, ‘We have been looking at the front end [manufacturing] and the back end [recycling]. This is a meeting in the middle’.