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Markets in Transition: Technology to Prevent Pallet Loss in the Field
While the business case for automatically capturing reusable pallet data is still unfolding, there is a middle ground of sorts for some applications.
By Rick LeBlanc
Date Posted: 8/1/2007
In a recent consulting assignment, I was charged with reducing the loss of pallets and kegs at hundreds of small retail customers served by ‘Bubba Sudz,’ a large beer distributor. Those pesky empty pallets and kegs have a tendency to sprout legs and gallop away from businesses where they are left unsecured. Pallet losses were significant, and beer kegs, generally speaking, are becoming a larger concern than in the past.
Kegs are attractive to thieves looking to steal them and sell them for scrap metal. In addition, there is growing concern to track kegs in order to control underage drinking. South Carolina approved legislation this summer to require tracking of kegs, and a town in New Jersey has taken similar action. Michigan increased its deposit for kegs from $10 to $30 in order to promote better asset protection. (A new keg reportedly costs about $150.)
While recommendations for my client involved several aspects of better pallet control, another key area was tracking store returns. Returned goods were being tracked by the trucking company used for various regions rather than a specific store, and the information was not detailed enough to address local hot spots of lost pallets. Data on returns at specific stores could be captured by clerical staff with an extra 20 hours per week of data entry work — still a good investment considering the asset losses the company was suffering.
Increasingly, however, people are turning to technology to better manage this process of gathering information. Hand-held devices in the field are helping businesses more effectively manage mobile assets, said Jerry McNerney, Motorola’s senior director for transportation, distribution & logistics solutions. Motorola calls it ‘enterprise mobility.’
“Enterprises are looking to help their workers, who are mobile, to have the appropriate tools and the appropriate information to help them do their jobs,” said Jerry. “Where we see the vision of enterprise mobility going is more towards a seamless delivery where all of the technologies come together to allow a person to do their job more effectively.”
People get excited about enterprise mobility for a couple of reasons, according to Jerry. One is that they want better information so they can meet customer expectations in an improved way. The second is that businesses are always looking for ways to improve their operations, such as increasing production and better inventory management.
But are people actually using the technology in the field to track beer kegs and pallets?
“Absolutely,” said Jerry, especially kegs.
Jerry cited the TrenStar model. TrenStar bought keg pools from large breweries and now rents RFID-enabled kegs back to them. “You think about the inefficiencies in the past, and now you have a company that actually puts RFID tags on the kegs, and they are managing those assets much more effectively and in a much more trustworthy type of environment,” said Jerry. “It reduces the cost structure for everyone. And for the breweries it was a large capital expenditure that they were able to shift to the outsourcing partner.”
Breweries and distributors that have not outsourced their kegs also use tracking technology, noted Jerry, typically barcodes. “They are scanning the kegs and tracking where they are in a facility as they pick them up and ship them, and collecting and distilling appropriate information,” he said. “When they are making deliveries, they may be stopping at 15 different sites, and they are collecting very specific information so they can say exactly who took custody of those assets. That would be a very common application.”
CHEP, iGPS and some other companies have utilized technology to track reusable pallets, but the practice of automatically scanning pallets is not common, Jerry said. “You would see the barcode to track the goods on the pallet, and so that is more of the trend. The cost of a wood pallet is still fairly nominal, but the cost of the goods on the pallet is a whole different ball game.”
While the business case for automatically capturing reusable pallet data is still unfolding, there is a middle ground of sorts for some applications. While drivers may not be scanning pallets yet, they do use hand-held devices to manually key in information about pallets they pick up, which improves the granularity of data and helps pinpoint any hot spots of pallet loss.