PG WEB EXTRA: CHEP Exec Discusses New Designs, Better Platforms

Editor’s Note: The following PG online exclusive contains companion insights for the "Pallet Progress" feature story, which appears in our March 2013 print edition, from Chris Timmer, VP of Retail Sales for Atlanta-based CHEP USA.

PG: What are the most recent significant developments in pallet construction and/or technology?

Chris Timmer, VP of Retail Sales, CHEP USA: We are constantly seeking and testing new ways to improve our pallet design, as well as identify new platforms and services. In addition to our Innovation Center, Pallet Test Track, and continuous enhancements we make with technology and how we interface with our customers, we recently launched some construction design improvements to our 48x40 block pallet to ensure we continue to build a better shipping platform for our customers.

CHEP also works continuously to ensure we stay abreast of trends, developments and advances in technology through strategic collaboration with our customers. In March 2012, CHEP USA launched the Strategic Leadership Forum (SLF), a series of regularly held meetings in which both retail and manufacturing industry leaders come together to collaborate. The sessions are hosted by CHEP, which has engaged Capgemini Consulting to facilitate the discussions. The goal of the SLF is to aid participants in understanding these challenges and to develop collaborative, value-added solutions.

The June 2012 forum, held in Chicago, focused on the end-to-end cost of promotional floor-ready displays (FRDs), as well as the increasing demand for smaller orders of more sizes.

The 2012 SLF was the catalyst for the creation of an industry cross-functional project team designed to answer the question of what is the real business case for retail-ready packaging (RRP), with a specific focus on promotional floor-ready displays (FRD). Included in the study was a deeper look at the various shapes and sizes of FRDs, including display shippers, full pallets, half pallets and quarter pallets.

The FRD issue is complex, since FRDs come in a variety of formats to accommodate a myriad of merchandising strategies. The driver for this study was the view that the value proposition for the use of preconfigured RRP/FRDs for promotional items is unclear, and leading practices should be better defined and shared.

All of the R&D efforts at CHEP are focused on addressing specific customer challenges. As manufacturers reduced primary and secondary packaging to address both economic and environmental issues, for example, we worked with them and their retail customers to maintain viable unit loads by upping our quality standards.

Moving forward, we are focused on developing solutions that extend the use of pallets and other platforms to the store in the form of retail-ready displays. We are also integrating our enterprise supply chain solutions to create even greater synergies for our customers.

PG: Please discuss CHEP’s pallet materials.

Timmer: CHEP pallets are mainly constructed with commercially available softwoods. Most lumber used for CHEP pallet production and repair is kiln-dried at very high temperatures. In addition, when specifically required, CHEP can provide heat-treated pallets that meet ISPM-15 specifications. Our pallets are painted with CHEP blue paint color to assist in identification.

It’s because of rigid engineering and specifications – designed to allow for a uniform stable unit-load platform – that CHEP is able to significantly reduce product damage for its customers.

PG: What advantages do your pallets offer?

Timmer: We consider the leading advantages of our pallet pooling solutions to include:

• Pooling Versus. One-way: Unlike typical “one-way” pallet use, CHEP operates a “pooled pallet system” in which we maintain ownership of pallets moving through the supply chain as leased assets. CHEP controls the sourcing, construction, movement and repair of pallets according to strict protocols. The pooled pallets circulate in a closed system with maintained ownership, continuous inspection and repair, and controlled end-of-life management. CHEP works closely with its customers to analyze their supply chains and data to identify specific improvements that drive operational efficiency. We do that in a collaborative environment using a range of industry-accepted tools and methodologies such as Lean and Six Sigma.
• Durability: CHEP pallets are highly engineered to be strong and durable, and to meet and exceed the demands of a modern grocery supply chain.
• Platform and Cost: CHEP enables customers to focus on their core business competencies by providing the right pallet at the right place and time, for the right price. Businesses wanting to reduce capital expenditures and improve supply chain operations can often achieve the following using the CHEP pallet-pooling solutions: decreased operational downtime, reduced product damage, minimized pallet load rejections and improved pallet quality. Again, CHEP works closely with customers to analyze their supply chains and data to identify specific improvements that drive operational efficiency, through such as tools as Lean and Six Sigma.
• Quality: Most recently, CHEP USA announced its commitment to quality by becoming ISO 9001:2008-certified. Achieving ISO 9001:2008 certification means that CHEP USA was benchmarked against other mature businesses and found to have a best-in-class quality system. This certification is another way CHEP is demonstrating its commitment to quality, as well as the continuous improvement of our processes across our entire organization.

PG: What are the “green” aspects of CHEP’s pallets and the company’s related eco-minded philosophies?

Timmer: Environmental sustainability at CHEP has three parts: A corporate culture of sustainability that includes public and long-term sustainability targets, a sustainable service that is based on continuous reuse of products that are made from renewable resources, and the ability to help our customers achieve their own sustainability goals and reduce costs, by using CHEP pallets and collaborating on innovative projects that only CHEP can deliver.

In addition to this cultural commitment:

• CHEP controls the purchase of all lumber used in pallet manufacturing and repair. This reduces chain-of-custody risk and facilitates better quality management.
• CHEP’s maintained ownership and controlled end-of-life management helps ensure recycling efforts are maximized, keeping waste out of landfills.
• We offer our customers the ability to achieve their own sustainability goals by reducing environmental impacts across the supply chain, while saving money simply by using CHEP pallets, but also by collaborating with CHEP on innovative projects with a magnitude of positive impact that only CHEP can deliver.
• CHEP’s extensive service center network in the USA also allows short transportation distances virtually anywhere pallets are needed, reducing the transportation carbon footprint of the entire supply chain.

Finally, CHEP has been using life-cycle analysis methodology to calculate environmental impacts since 1999. That methodology uses scientific data to measure a product’s environmental impact from “cradle to grave” and reports on total energy consumed, total waste generated and total C02 emissions generated. Results of a 2009 life?cycle inventory (LCI) analysis performed by Franklin Associates reveal that the CHEP Pooling System produces less solid waste, consumes less total energy and generates fewer greenhouse gas emissions than other common shipping platforms.

PG: Thank you for sharing your insights with us.