The Challenge of Managing Returnable Assets
Returnable transport items (RTIs) are key elements for enabling a smooth flow of goods throughout supply chains. Despite their importance, RTIs can be prone to high loss and breakage rates.
Organizations with large and complex supply chains may have anywhere from tens-of-thousands to millions of returnable assets, posing significant operational, financial and audit implications for missing or inadequate supplies of these assets.
At a shrinkage rate of anywhere from 3-20%a year RTI fleets can be a large problem with a large cost. What’s more, many organizations lack the ability to even gain insight into the size of their fleet itself, meaning that the cause and size of their asset management problems go unknown.
Today’s RTI management processes are rather inefficient and are based on estimates about when, where and how RTIs are utilized. This limited visibility inevitably causes the involved parties to feel less responsible for the proper management of RTIs.
As a consequence, inefficiencies created by a single party can result in a significant cost burden for the whole supply chain.
Main wasteful practices that can cost companies millions of dollars a year
- OEMs still employ manual methods in the entire process, and this leads to tracking errors and mishandling.
- Purchasing and carrying additional returnable assets than needed.
- Inaccurate billing for asset usage, storage or detention.
- Typically, OEMs order 10% to 15% more returnables than they actually need in order to account for loss and shrinkage over time.
- There are more containers than manufacturers need to run the production program.
- The cost of managing and handling these assets often exceeds many times over the asset investment value.
- The larger an RTI fleet grows, the more difficult it is to track.
- Many companies even see shrinkage rates between 3-20%.
- The leads to wasteful spending practices—having to buy new RTI’s to replace the lost ones and hire additional laborers to manage them.
The value of RFID for Returnable Transport Item Tracking Management
The use of returnable containers (pallets, roll cages, returnable plastic containers, tote boxes, ingredients bins, dollies, IBCs, intermediate bulk containers, gas cylinders, and kegs etc) is an increasing phenomenon in the modern supply chain, with companies constantly seeking to reduce costs, increase handling efficiencies and improve environmental responsibility through less waste.
Increasingly stringent tractability regulation worldwide requires companies not only to provide a complete audit of product and ingredients movement in the supply chain but also compels them to track secondary packaging and materials handling equipment flows associated with product shipment.
In addition, the supply chain suffers significant costs annually, associated with the loss of equipment/assets and their subsequent replacement.
RFID tags on each individual unit make it possible to accurately and automatically track its movement, using fixed readers at strategic in-and-out portals at the distribution center or mobile devices (handheld, cell phones, tablets) readers for mobile read points at remote /customer facilities.
Benefits of implementing TRAKKIA:
Trakkia Platform for RTI and Reusable Assets to provide real-time visibility and control of RTIs and rental assets (e.g., oil/gas cylinders, beer kegs, IBC totes, horticulture racks, pallets, etc.) in a 3-tier (supplier, distributor, retailer) supply chain. It tracks shipping, returning, and receiving of inventory, validates inventory storage, manages processing of inventory (repair, maintain, clean, fill/load, etc.) for reuse at supplier, maintains viability of RTI content, and ensures accountability of supply chain partners.
- An RFID container tracking solution automates the process by providing real-lime visibility for tracking and managing reusable containers wherever they are located within your facility. Whether your business uses totes, bins or containers, a RFID container tracking system will improve productivity and reduce lost or stolen items – which leads to lower inventory carrying costs.
- Reduce Pool players can improve their sales and their brand image (i.e. authentication of pallet quality) by gaining more visibility on the locations where counterfeited assets arrive in the supply chain.
- Adjust the pool With visibility on asset flow and asset stock at each location, pool players will have the opportunity to adjust their pool size with actual customer demands.
- Optimized exchanges with partners. With accurate visibility, companies can plan efficient collection of empties with their They can also control both the quantity and authentication of assets being collected in order to balance their partner’s account and prevent recovery of lower quality, counterfeited pallets.
The standard RTI process supported by TRAKKIA Software includes the following steps:
- Tracking of returnable container current and historic locations, from supplier to customer and back again
- Commissioning and maintenance of RFID tags or bar codes placed on returnable assets using the standard global returnable asset identifier format
- Tracking of the asset through the various operations within the supplier’s facility, such as packing, loading, unpacking, and unloading
- Tracking of the asset through the various operations within the customer’s facility
- Automatic monitoring of events, such as empty and full status, using event management tools that alert relevant parties of unintended or unexpected events or changes in status
- Manage RTI pool shrinkage due to “stockpiling” in the distribution channel or at customer sites.
- Account for damaged and lost RTI’s in financial budgeting.
- Increase availability of existing container supply by a proper allocation based on need/volume.
- Manage periodic maintenance requirements by cycling inventory back to factory/production plant