Logistics and supply chains are dependent on a basic element of moving goods that is often, and understandably, overlooked. Everything that gets stored, shipped or delivered spends some time on or in a crate, pallet, bin or some other container. Recent years have seen a shift away from single-use, one-way platforms and containers towards those meant for long-term, repeated use.
Collectively, these are called Reusable Supply Chain Assets (RSA’s). Their growing use is a reflection of the many benefits they bring. RSA’s reduce overall supply chain shipping and packaging costs, minimize waste and provide better product protection, thus limiting damage in transit and extending viable shelf life.
Then of course there’s the matter of cost. Obviously, up-front costs can be significant depending on the scale of the operation but the idea is to achieve savings through the extended use of the RSA’s. Managing them well, then, is the key to achieving ROI and justifying the switch from single-use shipping materials. Given the complexity of supply chain logistics and the need to monitor a large number of assets spread across huge geographic territories, fully automated digital solutions are an essential part of effective RSA management.
RSA’s are not some disposable, one-use item that gets thrown away when a shipment is received and unpacked, like styrofoam packing peanuts. Their importance is right there in the name—reusable. They’re just as much a part of the chain as forklifts, warehouse shelves and loading bays. As a capital asset, optimizing their use is not only common sense but a component of lean operations with a direct impact on financial performance.
Digital transformation, so fundamental to efficiencies in other aspects of manufacturing, has brought new possibilities to supply chains as well. When tracking information is automated and digitized, it keeps the supply chain and the products in it moving forward. Real-time visibility into RSA location not only means better pallet and container management, but informs stakeholders about interruptions in flows.
With RSA tracking, inefficiencies become more easily identified. The digital twins of bottlenecks inform and simplify solutions. Assets are more quickly reassigned to where they’re needed. When things get behind schedule or off track, early alerts allow time to fix the problem before it disrupts the supply chain.
In short, tracking returnable and reusable packaging and shipping materials results in streamlined operations, better efficiency and real cost savings.
Let’s look at how location tracking can help to reduce costs in your supply chain and contribute to overall operational efficiency.
When $100,000 of product is sitting on a $25 pallet, it’s understandable that the focus is on the top, not the bottom, of the shipment. Still, it doesn’t take long to see that a relatively small cost multiplied by the number of pallets even in a medium-sized operation adds up to a significant sum. Look at the total number of RSA’s in your supply chain. How many do you have? How much did they cost?
Now, imagine that anywhere from 10% to 40% of those RSA’s never return your facility in a typical year. That’s the average range for conventional methods of RSA management without tracking capabilities. If having to constantly replace forty percent of your $25 pallets doesn’t get your attention, you will soon be the one getting replaced. There’s enough money at stake to make the importance of tracking and managing returnable shipping assets very much worth the investment.
Failing to properly manage RSA’s can create a slow, steady drain on your supply budget that can add up a serious costs by any measure.
Even under ideal circumstances and despite your best efforts, RSA’s are going to be lost, stolen, destroyed or otherwise disappear. They’re also going to accumulate in places and be in short supply in others. When you have insights—both current and historical—into their location and movements, you’re in a better position to make decisions about when you really need to spend on replenishing them and when you simply need to make better use of those you already have.
Ensuring continuity of operations is fundamental to any supply chain, and the temptation to buy more RSA’s than you need to guarantee constant availability can be a costly one. Instead of overspending and creating massive oversupply, tracking services help to distribute existing resources where they are needed most.
Striking the difficult but important balance between adequate resources and wasteful spending on excess capacity is easier when you have an accurate picture of where your RSA’s are and what they’re doing. If you’re preparing for an exceptionally large order or busy season, this kind of insight can be critical to decisions on the necessity of new spending to match anticipated needs.
Down time is usually associated with machines and other assets with moving parts, not wooden pallets and plastic tubs. But the fact is that, like any other capital asset, RSA down time counts against productivity. It costs money to let them sit idle, waiting to be returned to the supply chain.
With tracking capabilities, you can identify RSA’s that have been idle the longest or those that have been out of circulation for longer than the average time. From there, it can be just a matter of a simple request to another stakeholder in the supply chain to look into the delay and get the RSA’s back into active service.
A side benefit to this is the ability to identify, let’s say, “problematic” stakeholders in the supply chain process that are more frequently responsible for RSA down time than others. This can apply to routes, transit partners or end users. Tracking data can document a history of being the source of excessive downtime and can serve as evidence in conversations about rate or fee changes to reflect these losses.
This means more than just being able to locate stock in transit. The traceability that comes from connecting products or orders with a specific container or other RSA can have any number of uses. They include confirming deliveries, getting alerts about delays, possibly lost or misplaced shipments, delivery time frames and more. Should a recall or something similar become necessary, it can be done in a limited, targeted manner that addresses specific issues, avoiding costly and unnecessary mass returns.
Traceability adds transparency to the entire process. If, for example, you know a particular stakeholder is the source of bottlenecks in handling RSA’s but claims not to be, you’ve got the data to show the historical movements of all tracked materials. When materials are lost, you also have documentation of the last-recorded location of pallets and containers.
Real-time insights into RSA movements and flows create the ability to set performance parameters. This can be applied to several situations where an early warning gives you an opportunity to act before errors become significantly more problematic and costly.
For example, it sometimes happens that a particular pallet can get overlooked or lost among the huge numbers of other shipments in a busy warehouse. When a specific RSA is in the same location for too long and has clearly not been forwarded for onward delivery on schedule, you have time to contact the shipper and end user to notify them of the problem and possible delays. From a customer service and retention perspective, this makes RSA tracking a powerful asset.
Other alert use cases include RSA’s that disappear from your chain of custody and when they accumulate in one location while running dangerously low in another.
Using automated asset tracking means being able to pull up the information you need with a few clicks instead of diverting staff resources to time-consuming inventories. Instead of working on picking, fulfilling and shipping orders, your staff gets tied up with other things.
Contact us to learn more about the physical infrastructure that fits your needs and the other ways that RSA tracking can impact your bottom line. If you want to explore more about asset tracking, download our free white paper.