CHEP seeks to manage more than pallets in the supply chain

Pallet provider CHEP is building beyond its traditional heartland with CHEP Equipment Management beginning to manage new non-CHEP owned items in the supply chain, such as roll cages and kegs.

Mike Pooley, the VP and country general manager for CHEP UK & Ireland is determined to continue to provide value for money and high quality service in its existing business but recognises the need to grow.

Pooley explains: "We realise to grow in the longer term we do have to look to new areas.We are developing value added services, including CHEP Equipment Management where our customers get the opportunity to outsource some of the asset management and administration to us." CHEP is talking to customers in the dairy and brewing industry at the moment about this service, which would involve CHEP managing the assets and keeping track of where they are in the supply chain. The company can also provide auditing services.

Pooley explains the benefits: "Our expertise can reduce the number of assets being lost, saving money. This is particularly significant with high value items such as kegs.

"We can also help customers to know exactly where kit is, and keep it moving. This means they can run efficiently with a minimum of equipment, improving cash flow.

"The third benefit is that many customers want to concentrate efforts on core business, and not have a large number of people tied up with administrative activities." One example of this is CHEP working with a leading dairy provider to manage its roll cages from the DC down to the store level.With the wide range of customers already working with CHEP on pallets, the potential for expansion is clear.

Consultancy service

Extending CHEP Equipment Management is only one example of value added services offered by CHEP. The company also has field-based staff offering consultancy services to customers.

CHEP also offers a range of Plus services, such as Plus AS, which ensures compatibility with automated storage and retrieval systems, and Plus ID, which uses RFID to allow customers to track and trace product movements throughout the supply chain.

To come, perhaps a few years done the line, is Lean Logistics.

The transportation management software provider was acquired by CHEP parent company Brambles in 2008 and operates as a unit within the organisation.

Pooley says: "We have not launched Lean Logistics in Europe yet.When we do, it will help us build on the logistical collaborations we have developed with retailers and manufacturers.

"We have a pretty unique view of the supply chain and believe there is significant value in being able to work with customers to help them optimise their purchase of transport.We can naturally see synergies they may not be able to see. For example, customer A is moving goods in one direction and customer B moving goods in the opposite direction, we can put these companies together and save empty running."

Building trade

CHEP has also been keen to expand outside its traditional base in the FMCG world and more into the industrial sphere.

"We are looking at the building sector to develop a service offering with them.We are getting close to launching that with a number of customers," says Pooley.

"The challenge was developing a collection engine to collect pallets throughout the supply chain, because its not quite the same as with supermarkets. In the building sector pallets often end up on building sites, so developing a collection agent with construction firms is key." CHEP has found the building industry keen to collaborate and focused on looking for efficiency gains and improving the sustainability of its supply chains. A pooling system can bring carbon savings and reduce packaging waste.

The environmental angle is important for CHEP from two key perspectives. CHEP estimates that a third of its energy savings will come from plant and two thirds from logistics.

"We are trying to take miles off the road," says Pooley. "Using other forms of transport, are interesting.We have taken 25 per cent off the road in last year, and moved it to rail and boats.We work closely with Stobarts and Danone Eaux France, for example, and use empty running they have available on trains from Europe to the UK." Due to the partnerships, CHEP has taken 3000 vehicles a year off the road, with Pooley adding the greater flexibility recently apparent in rail provision has been very beneficial.