IPP is one of the leading European poolers of sustainable wooden pallets – arguably one of the oldest logistics technologies not only operating but optimising global supply chains.
It provides a diverse selection of mainstream pallets and boxes to meet the varied needs of its clients in the retail, manufacturing and industrial sectors.
It is on these reusable assets that palletised consignments move billions of items through multiple supply chains every day. From sustainably grown saplings through manufacture, repair, repatriation and re-use, IPP’s assets operate in the circular economy.
Part of what the business refers to as ECOnomics – where the environmental sustainability of circular models ultimately costs less than their linear equivalents in cash terms as well as reputational risk – is playing out on a global supply chain stage. Rampant inflation, cost of living crises, war in Europe and general geopolitical instability has placed untold pressures on global supply chains.
IPP has empowered and enabled the humble wooden pallet to endure these challenges through its circular model of build, repair, recycle and repatriation. Its pooling power has created a modern-day value proposition that includes deliverable benefits such as the reduction of unnecessary delivery legs and harmful emissions.
To achieve this unlocking of potential, it has worked hard with suppliers as equals to share their vision, as well as good and best practice. This has helped build sustainable and collaborative partnerships for the future based on trust and open book relationships to leverage value for all. The discussion is no longer about simply reverse logistics – getting the product back – but reverse, bigger-picture thinking around the entire process.
To this end, IPP has been working on its integration of newer Internet of Things (IoT) technology into its circular model. This is about the combination of the oldest supply chain solution, the humble wooden pallet, and the latest iteration of technology that allows for the networking of devices to connect, interact and freely exchange data and information to help optimise the distribution and retrieval process.
The problem:
Pool efficiency depends on the three-way relationship between pool size, dwell time and transportation. IPP had noticed that many customers have more RTIs in stock than they actually need, which means the assets are not being fully optimised.
According to Martin Bachmann, IPP’s Commercial Development Manager, there are various reasons for this.
He said: “This includes customer comfort – they know, in general, where their RTIs are but don’t know where the specific individual pallet is or for what it is used or maybe even misused. They also often keep the surplus as a security stock.
“As a result, we have to keep a larger inventory of pallets on hand than would be necessary if they were actually going to be used. For our customers, this means a slowdown in their average dwell time or rotation speed, which results in a higher price per pallet usage. From a sustainability perspective, increased inventory leads to increased pallet production, which has a negative environmental impact,” he added.
The solution:
Bachmann adds: “In the future our pool of RTIs will be equipped with active IoT trackers. Together with our customers, distribution centre operators and freight forwarders, we will create a digital infrastructure for live tracking and tracing of pallet movements.
“This will improve our optimisation and connectivity and reduce inefficiencies, costs and and the overall environmental impact of having to produce extra pallets simply because we have not had the visibility of stocks – the bigger picture.”
The challenges
Bachmann argues that the journey has to involve senior decision makers understanding the wider strategic benefits of IoT connectivity.
“Transforming into a digital supply chain is a C-Level process and needs C-Level support. Various stakeholders need to be on board and patience in the transition process is critical. Rome was not built in a day, but its long-term influence across the world is still felt today.”
The result:
“This technological approach to an age-old challenge results in better visibility of assets, reduced pool inventory, faster turnaround times and less effort to transmit shipment data and determine inventory levels.
“Overall, the investment needed is minimal compared to the savings provided – it is a win-win because all in all, this reduces costs and allows everyone to make decisions based on much better data.
“Although this technology is relatively new to us, we have recognised the great long-term benefits to our customers and what we have learned so far is already delivering results,” he added.
Image by Kohji Asakawa from Pixabay
