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Improve Supply Chain Efficiency

May 1, 2008
By Terry Glass Improving supply chain efficiency is often measured by hitting certain targets. The targets, however, that supply chain managers are aiming

By Terry Glass

Improving supply chain efficiency is often measured by hitting certain targets. The targets, however, that supply chain managers are aiming at today are entirely different than what they used to be.

Hewlett-Packard recently announced a goal to reduce energy use in its supply chain by 20%. Wal- Mart continues to challenge its supply chain to meet aggressive targets, most recently by measuring the energy used to create the products that it sells in its stores.

In 2008, supply chain management is an exercise in increasing efficiency. Most current industry trends are focused on delivering excellent performance with low impacts on energy use, the environment and a number of other areas.

Add downgauging rigid plastic containers to the list of trends.

Downgauging? Yes. Let me explain. Plastic rigid intermediate bulk containers (RIBCs) are valued in the supply chain for their durability and resistance to corrosion or other damage from harsh chemicals. Compared with steel containers, plastic RIBCs can offer similar performance at a lighter weight.

Downgauging takes the lightweight benefit one step further. When plastic blow molders talk about downgauging, they are talking about a process in which a molder uses a high-performance resin to manufacture a RIBC that potentially weighs less than existing RIBCs, while providing similar or better performance. The walls of the container are thinner, meaning that less plastic material is used to manufacture the container.

Terry Glass

One of the keys to downgauging a plastic RIBC is maintaining the level of performance that thickerwalled containers provide. Few supply chain managers will sacrifice a container’s durability to shave some pounds off the weight. The RIBC must continue to perform as well as—or better than—existing containers.

Successfully downgauging a container requires the use of the right resin. High-performance resins, such as Continuum bimodal polyethylene resins, have been used to manufacture containers with thinner walls, while providing the performance that supply chain managers expect from traditional RIBCs.

It may be unusual for a supply chain manager to pay attention to the type of material used to make a plastic container. However, in 21st century logistics, every detail is critical.

By downgauging rigid plastic containers, supply chain managers may increase the fuel efficiency of their operations. The downgauged containers weigh less than some existing plastic containers and may reduce the overall weight of a truckload. According to the Green Transportation & Logi s t ics Repor t conducted by Eyefortransport, transportation and logistics can account for up to 75% of a company’s carbon footprint. With several retailers paying attention to energy usage, improved fuel efficiency can be a significant benefit. Along with lighter weights, downgauged rigid containers may have thinner walls that may improve storage space. Collapsible containers with thinner walls may take up less space when in storage, offering supply chain managers an opportunity to maximize storage space.

A study from consulting firm A.T. Kearney showed that, today, 50% of companies will deselect suppliers for not meeting sustainability criteria. More than half the companies in the survey use some form of sustainability metrics—ranging from eco-efficiency of materials and packaging to carbon footprint to full lifecycle costing—when evaluating suppliers.

The A.T. Kearney figure comes as no surprise to supply chain managers who are trying to keep up with the latest sustainability initiatives from Wal-Mart, Home Depot or any other number of retailers. In fact, according to the Green Transportation & Logistics Report, 94% of supply chain executives are working on “greening their practices.”

Many sustainability initiatives have elements that focus on reducing material usage. For example, Wal- Mart has said it wants to cut packaging waste at its store by 25% within three years. Using downgauged rigid containers can help contribute to this goal.

Terry Glass is the application technology leader for rigid plastics at the Dow Chemical Co.

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