A growing awareness of the environmental harm caused by global supply chains is causing many companies to step up their reliance on reusable packaging for the transport of goods. But managing and keeping tabs on those assets can be a huge challenge. 

Issues of theft and poor utilization plague users in multiple industries, especially food, automotive and chemicals. The U.S. baking sector alone spends more than $10 million annually on replacing stolen plastic trays, and between 10% and 15% of returnable transport items, or RTIs, are lost in transit, not returned or become unusable in other ways, according to a 2007 report in the International Journal of Physical Distribution & Logistics Management. One can only assume that the problem has grown worse since then. 

One leading packaging supplier was especially feeling the pain, with the need to optimize management of more than 350 million reusable packaging containers, or RPCs. It offers customers a complete vendor-managed service, whereby it deploys units at the point of product shipment, retrieves them after use, then sanitizes or repairs them before re-renting to other customers. The company operates in more than 50 countries, with more than 500 service centers. 

Unacceptable Loss Rates 

An operation at that scale can ill-afford to withstand the industry loss rate of around 10% per year. At a cost of approximately $10 per RPC, the impact could add up to more than $300 million in replacement costs per year. 

Asset losses were being caused in part by the time the RPCs were sitting idle and unattended in third-party warehouses, exposing them to theft and necessitating capital investment in new units. But efforts to reduce dwell time were stymied by a lack of visibility into the units once they left the supplier’s service centers and disappeared into customer sites. 

The RPC supplier sought to partially automate its rental operations with knowledge of how many deployed assets had completed the use cycle within its customers’ supply chains, and were therefore ready to be picked up and routed to another location in line with demand. “They also didn’t know how many assets needed to be returned to their regional service centers for repair and sanitization, and how efficient their service centers were at processing hundreds of thousands of assets at any point,” according to Roambee, a manufacturer of sensors for acquiring visibility and intelligence across the supply chain. 

A common solution for the dilemma would be to apply some variety of sensor tag, whether radio frequency identification (RFID), low-energy Bluetooth or direct-to-cloud GPS tracker. But each of those options has its drawbacks, ranging from the need for massive infrastructure at customer locations to a per-unit tagging cost exceeding that of the asset. What’s more, at the scale required by the RPC supplier, there was the prospect of “cognitive overload.” How could teams possibly track, visualize and respond to status data, generated by millions of assets, within a reasonable amount of time? 

Implementing a Solution 

What was needed was an innovative solution that could provide the necessary level of visibility yet be cost-justified. Up stepped Roambee. Its Supply Chain Intelligence Platform melds order information with visibility data about the location, condition and security of millions of assets, including RPCs. 

Instead of tagging every one of those units, Roambee placed GPS sensors on a select few of the assets in groups of hundreds, then studied group patterns of use, cost and loss. It then deployed artificial intelligence and machine learning to predict the presence or absence of an entire group of RPCs against service-level agreements, thereby enabling effective utilization and security at scale. 

The system generates multiple types of aggregate business signals, detecting loss and theft, unauthorized use, aging, full or empty status, cold-chain quality control, chain-of-custody breaches, delivery-window scheduling, assets available for shipping, and revenue recognition of the asset groups. 

The technology addresses excessive dwell time by defining thresholds across customer and retailer locations, then issuing “at-risk” alerts when those benchmarks were in danger of being exceeded. Applied at scale, Roambee said, the method can “negate” annual replacement costs while reducing premiums for insured units. 

AI links customer orders to information about asset location, helping the supplier to execute orders more efficiently and boost per-asset revenue. 

In addition, by analyzing dwell time across all facilities, the RPC supplier was able to identify the top 10% of the service centers that were most in need of technology or upgrades to improve processing times. 

The innovation has helped the RPC supplier to transition from a costly manual operation to a predictive asset-routing model serving more than 500 retail customers and tens of thousands of producer locations, Roambee said. 

“Most importantly,” Roambee said in its submission for the 2023 Supply Chain Innovation Award, the supplier “improved their work culture, boosted team productivity and improved the quality of life for their field asset management professionals with customer and geography-based real-time intelligence, eliminating crisis situations and ad hoc travel to gather on-ground intelligence about aging assets.” 

Resource Link:

Roambee, https://www.roambee.com/