Working with bottled water brands from Coca-Cola, Unicer and SCC among others, and delivering drinks throughout Europe, LPR is in a unique position to be able to see where the supply chain can be more efficient and sustainable.
Pallets are an essential part of a drink manufacturer’s operations. In fact, for anyone who needs to move large amounts of goods. It’s a common misconception that pallets are a cheap and throwaway commodity. They’re actually an expensive piece of kit that has been precision engineered to withstand the rigours of the supply chain.
Although estimates vary, there are probably more than 350 million pallets operating throughout Europe at any one time. The pack horse of the supply chain, pallets get goods from factory, to distribution hub, to store.
“Logistics can be on the periphery of a manufacturer’s concerns when it comes to running the business, but it actually has a crucial role to play in going that final mile and keeping the shelves stocked with your goods,” says LPR’s Jane Gorick. “There are opportunities to develop practices that help to save costs and improve environmental credentials, perhaps by reducing empty running or operating more collaborative processes. Empty running is one of the biggest wasteful practices in the logistics sector. In the UK, for example, around 25% of movements are of vehicles carrying empty or part loads. By finding solutions that maximise vehicle optimisation, brands will go a long way to reduce their environmental impact.”
Nearly all FMCG products will be delivered on pallets. “Increasingly, retailers are using automated racking systems,” says Gorick. “These systems are built to handle pallets, which is why pallet sizes in continental Europe are consistent, as are those in the UK. And it’s in such systems where the need for high-quality, precision engineered pallets really becomes apparent. They need to be robust enough to store up to 1.5 tonnes of product at heights of up and over 30 metres. If a pallet were to fail in such a system, it would have a catastrophic effect, with significant health, safety and cost implications.”
Other distribution methods are always being introduced to the market, such as pre-packed and merchandising units that move product straight into store and into the shelving. With drinks, some of the faster-moving products in the supply chain, dollies are proving successful in getting drinks quickly through the supply chain. However, they’re expensive pieces of kit and – as is the case for pallets – asset management becomes essential to ensure they are returned back to the manufacturer and don’t become damaged in transit.
“Dollies are fulfilling an important role in getting goods to store and supporting in store merchandising,” says Gorick. “However, when ?it comes to moving bulk quantities of goods, pallets continue to have an important role to play in offering the most efficient and cost-effective solution.”
So, with pallets an essential factor in the drinks sector’s supply chain, how can manufacturers develop more sustainable options? The traditional pallet model known as the ‘one to one’ involves businesses hiring a number of pallets from a pallet pool operator, such as LPR, which the manufacturer must then return. In such a system, there’s a lot of emphasis on the manufacturer to have the number of pallets they deliver returned to them. It’s through this final stage where empty or part loads creep in and they’re not inspected for potentially catastrophic flaws.
Gorick explains that the one-way-trip system operated by LPR offers greater sustainability credentials: “There are different pallet models on the market that offer greater environmental benefits, as well as making internal cost savings. The one-way-trip means that businesses hire a pallet to transport from factory to distribution centre only. We then take on the responsibility for collecting, refurbishing and re-circulating the pallets. The result of this approach means that lorries don’t have to back-haul small numbers of pallets, and return journeys can be freed up to secure new, full load business – benefiting all within the supply chain.
“This also has important benefits internally. The time taken to manage pallets is vastly underestimated. With larger manufacturers taking thousands of pallets at any one time, checking that all have been returned from all drop-off points – this is a massive undertaking, not to mention the time needed to sort and manage the complex invoices. Systems like the ‘one-way-trip’ can help to simplify this, working with existing management systems to reduce the time being spent on the administration of pallets.”
Even as manufacturers consider alternative and green methods of distribution, such as rail, pallets will continue to play a fundamental part in getting goods to market. As Gorick has demonstrated, not only are pallets key to keeping the wheels of the supply chain turning, choosing the most effective solution will help drinks brands not only improve environmental credentials, but also save costs by streamlining internal administration.
Jane Gorick is MD of the UK arm of LPR, one of Europe’s largest pallet pool operators. LPR UK currently handles more than five million pallet movements a year.
© FoodBev Media Ltd 2020
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