Jon Walkington, Sales Director, Retail & System Integrators at Schoeller Allibert UK
Protecting the bottom line remains a top priority across the full gamut of industry, from manufacturing through to retail. Of course, this shouldn’t come as a surprise in what is a more volatile economy. The uncertainty surrounding business performance puts strong emphasis on the need for agile logistics and a razor-sharp analysis of supply chain competence.
The need for cost control has never been greater as financial resources are pushed to the limit through the supply chain, aiming to meet the market demand for high volume and short lead times in many markets. Being able to manage the fiscal elements of the supply chain is a prized skill, but there are a number of effective ways that today’s supply chain managers are able to reduce the pressure.
As the impact of the global Covid-19 pandemic slowly dissipates, all industries are determined to grow and create brand new commercial opportunities, but clearly this must be tempered with a tight control of expenditure. After all, for many businesses there remains too much unpredictability, with rising inflation and commodity prices which must be absorbed, along with large scale disruption in logistical channels. Simply, the supply chain must work harder to provide value.
Fortunately, there are many different tools available to modern business operations. At Schoeller Allibert, we play our part by reimagining the humble container into becoming something altogether more value-adding. A deceptively simple component when we look at robotics and automation currently being implemented in the supply chain, reusable transit packaging is in many ways, the circulatory system of a business.
As a global leader in the field, we have seen first-hand how competitive businesses are putting durable plastic containers to the forefront, making key business evolutions, such as the integration of e-commerce, slicker and more effective.
Tighter cost control with rental
Sometimes, it’s the simplest of changes that makes the biggest differences, and as businesses seek to fine-tune their operations in all areas in support of a more robust bottom line, there is ample opportunity to change the fundamental relationship with supply chain logistics. One way we offer that is by offering rental solutions, as opposed to the more traditional path of upfront procurement.
The rental model creates significant advantages for operators without the need for outright ownership, as the packaging SKUs, their maintenance and their life cycle remain the responsibility of Schoeller Allibert.
Renting transit packaging provides a number of unique benefits on cost control. One of the most immediately apparent is that initial cost outlay is considerably lower. This has two major advantages; first, it means that a business can invest in the latest supply chain technology and scale alongside it, growing inventory as the business grows. Secondly, it gives more flexibility and agility, meaning companies are not investing in more stock than they need.
Looking into the mid-length cost control benefits of renting, asset costs come from OPEX (operational expenditure) budgets, as part of standard operations. Importantly, this this frees up valuable CAPEX (capital expenditure) allocation for investment in other areas, giving businesses greater flexibility with their investments. This alone would make rental an extremely attractive proposition, but in a more transient and unpredictable commercial landscape, we are expecting to see this become the norm, not the exception.
The UK Plastic Packaging Tax
Adding even more cost-saving benefits to the rental model, as the physical inventory stays the property of Schoeller Allibert, renting enables businesses to circumvent the cost liability of the UK Plastic Packaging Tax. Instead, as the owner, this is paid by Schoeller Allibert.
The UK Plastic Packaging Tax is new legislation designed to encourage optimal use of recycled materials. The tax applies a £200/tonne charge on plastic packaging that does not contain at least 30% plastic recyclate and aims to reduce the reliance on virgin plastics. In the extremely high volumes required in today’s market, this cost can add up very quickly for brands that are not prepared for it, so rental offers an extra layer of bottom-line protection.
It’s a question of making the supply chain more flexible and agile in order to meet current and future operational needs, and rental is a fantastic way to approach this. At Schoeller Allibert, we supply customers renting their equipment with our gold-standard containers, totes and pallets in a more versatile way.
Renting reusable transit packaging also lightens the fiscal load when it comes to maintenance. Although designed for extremely long lifespans, plastic packaging needs to be maintained in order to perform at its best. By renting over outright ownership, the responsibility and cost of repair again stays with Schoeller Allibert, taking another cost out of the equation for customers.
The rental range includes many of the flagship products in the Schoeller Allibert range, including the BigBox Classic. Built for performance, durability and optimal use of footprint, BigBox Classic features generous 1200x1000mm dimensions and is designed for seamless racking and performance.
Like many of the products that comprise our collection, BigBox Classic turns transit packaging from basic fundamentals of achieving effective logistics into a true commercial edge. The container provides an ideal solution for the storage, handling, and transportation of bulky and large goods through the supply chain, ensuring operations are always at their best.
BigBox Classic holds around 10% more interior volume than conventional pallet boxes, meaning fewer packaging journeys are needed, efficiency is optimised and carbon footprint reductions can be achieved. The solution is a prime example of Schoeller Allibert’s unmatched expertise, with thoughtful design and performance built in at every stage.
Fitting seamlessly into digitally automated workflows, the solution can be equipped with SmartLink® technology. SmartLink is a platform that uses LPWAN wireless connectivity to link individual containers and create a network of intelligent assets that can be managed and controlled from the secure SmartLink cloud-based platform, giving every supply chain the opportunity to be an intelligent supply chain. Among its many transparency and security-led features, discrete sensors can monitor temperature, pressure, contents and battery levels, as well as other metrics.
In summary, the pressure is on for businesses to extract every last ounce of value from their supply chains, which means tight cost control is not a ‘nice to have’ – it’s an essential component of success.
Of course, outright ownership has its own range of benefits, but as we move forward into a more cost-conscious and agility-oriented market, we are expecting rental models to become more common as priorities shift. As market evolution progresses, we look forward to helping our customers supercharge their supply chains in entirely new ways.