Asset Management in the Supply Chain

Over the last decade more and more companies have implemented returnable and reusable transit packaging (RTP) fleets and pools, whether it is pallets, crate / tote bins, steel stillage, cages or even wooden crates. What is guaranteed is that these fleets require a capital investment, (whether directly or through a fleet / pool provider), and should be protected as you would any other company asset https://assetmanagementwealthadvisory.com/.

The specifications of the RTP fleets vary enormously depending on the industry, the application and budget. However one thing common to many of the established RTP fleets or pools is that when they were originally specified, cost and implemented, a number of elements were not considered, and often still aren’t. These include repair and maintenance costs due to normal wear and tear as well as misuse, equipment loss, stockpiling and extended dwell and cycle times, lifespan of the equipment and the flexibility of the chosen design to adapt with developing and changing supply chain demands. These elements all have a cost impact, which can be substantial, and surprisingly many companies are either unaware of the real cost of their packaging pools, or just accept that it is a high cost and then budget accordingly.

The key to managing costs of an RTP fleet is the in the initial equipment design and specification, the processes specific to the fleet within the supply chain and having an effective management and control system which can be easily integrated into the existing supply chain operation.

The starting point is therefore establishing the objectives of the RTP fleet and the requirements within the supply chain that you are looking to satisfy. Analysis of the operation and supply chain requirements, now and for the next five years, needs to be carried out and once the objectives and requirements are confirmed then the methods of handling and the type of packaging required can be established and specified. Success will be facilitated by a simple cost effective process design, which adds value to the existing operation by generating -self funding- fleets, to include cost control mechanisms which reduce cost of damage, loss and misuse.

Process designs are unique to the individual customers supply chain needs, whether it is a simple hub and spoke operation or a complex multi tiered supply chain. Identifying the subtle differences between the needs of an inbound or outbound RTP pool is crucial to a successful solution.

The actual equipment design must take into account the physical requirements of the RTP unit, as well as the lifespan under actual working conditions, the ease of maintenance and repair, the ease of handling and of course the initial capital investment. It must be remembered that when costing an RTP fleet it will probably be an initial high capital cost, compared to disposable one trip packaging, but it is also an asset that can be depreciated over a number of years. The annual cost of running the fleet can be budgeted and this will vary depending on the individual supply chain needs. However these costs can also be monitored and controlled with a suitable management system.

There are a number of asset management systems being used to manage fleets or pools, and experience shows that a simple system, using established technology can provide the perfect tool for controlling your fleet effectively.

The objectives of a fully integrated pro-active fleet management system are as follows:
– To reduce overall packaging fleet costs
– To increase fleet visibility and cost control
– To optimise packaging fleet utilisation and minimise cycle times
– To provide proof of accountability for damage and loss
– To manage a repair and maintenance program

– To manage and minimise packaging waste in line with environmental legislation
A suitable system should be modular, enabling it to cope for example, initially with a simple hub and spoke operation developing into a more complicated multi-tiered supply chain over a 3 to 5 year period.

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