For the supply chain, which consists of pallets, crates, and containers, to function smoothly, optimal supply and efficient pallet management systems are essential. For large volumes of returnable transport packaging (RTP), a comprehensive system is crucial for tracking and monitoring the entire supply chain from a single platform. Pallet management systems, such as those for Loscam or CHEP pallets, can result in faster transit times, better resource utilisation, improved life-cycle management, and overall cost savings. This blog discusses the importance of a pallet management system, highlighting potential causes of overstocking in returnable pallets, the cost of stocking reusable containers and pallets, and its potential to enhance supply chain efficiency.
Table of Contents:
- What Exactly Is a Pallet Management System?
- What Are the Possible Causes of Overstocking in Returnable Pallets?
- What Costs Are Involved in Stockpiling Reusable Containers and Pallets?
- How Can a Pallet Management System Maximise Supply Chain Efficiency?
- Conclusion
What Exactly Is a Pallet Management System?
Pallet management systems, or pallet software applications, help optimise supply chain efficiency. These systems digitise various aspects of the supply chain, such as tracking and monitoring RTP transportation, automating pallet counting, and monitoring the speed at which RTP moves throughout the supply chain. This optimisation not only reduces costs but also creates a more efficient and continuous supply chain.
What Are the Possible Causes of Overstocking in Returnable Pallets?
Several factors contribute to overstocking in returnable pallets, including:
Offsetting Warehouse Inventory: Inventory in use is effectively removed from circulation and must be offset, requiring regular rotation to avoid high holding fees.
Dealing with Split Loads: Dividing a single shipment into smaller loads for different destinations increases the need for more supply chain assets.
Buffer Stocks: Maintaining a buffer of RTP containers is critical to compensate for any shortcomings and ensure smooth operations.
Absence of Automation: Manual handling of supply chains leads to inefficiencies and inaccuracies, creating pressure to hold inventory.
Urgent Need to Match Production Schedules: Lack of pallets or crates can disrupt production lines, especially in industries like automotive manufacturing.
Changes on the Demand Side: Inconsistent throughputs in industries like automotive spares and textiles can lead to RTP being held up or taken out of circulation.
Reverse Logistics Delays: Poorly managed supply chains can result in time-consuming pallet recovery processes.
Misplaced or Lost Inventory: RTP is often lost, misplaced, or damaged, encouraging suppliers to overstock due to lack of visibility.
What Costs Are Involved in Stockpiling Reusable Containers and Pallets?
Stockpiling reusable containers and pallets incurs several costs, including:
Paying for Standby: Added stock as a buffer requires accounting for incoming and outgoing shipment charges.
Increased Warehousing and Storage Costs: Additional funds are needed for extra pallets and containers introduced into the supply chain.
Increased Rental Fees: Extra stock requires additional space, leading to higher rental fees.
Increased Working Capital: Building buffer stock necessitates more working capital.
How Can a Pallet Management System Maximise Supply Chain Efficiency?
Manual recording of supply chain management procedures can lead to inefficiencies and increased costs. A pallet management system helps by:
Streamlining Inventory and Reducing Losses: Improved visibility and control over supply chain assets.
Providing a Single Digital Platform: Enhances efficiency by consolidating supply chain visibility.
Offering Precise Inventory Visibility: Including Loscam and CHEP pallet sizes and dimensions for accurate tracking.
Reducing Asset Shrinkage and Safety Stock: Minimizes losses and optimizes resource utilization.
Improving Management Efficiency and Traceability: Prevents overstocking and overuse of buffers.
Conclusion
Overstocking returnable pallets and containers can lead to inefficiencies, increased costs, and logistical challenges in the supply chain. Pallet management systems improve visibility, automation, and control of supply chain assets, reducing shrinkage and optimising resource utilisation. Considering every aspect of the pallet, including Loscam and CHEP pallet dimensions, modern systems are crucial for supply chain optimization.