As we regularly report in The Grocery Trader’s Back of Store section in, returnable transit packaging is essential to modern multiple grocers’ back of store operations. But is its potential benefit fully appreciated?
Joe Kelly, General Manager, USA & Western Overseas at RTP specialists K.Hartwall presented a report earlier this year to the Reusable Packaging Association, taking in the European view of retail Returnable Transit Packaging. You can see the full report at the web address below.
To go back to the start, Returnable Transit Packaging’s growth in grocery retail in the 1980’s and 1990’s was linked to a move away from suppliers delivering direct to individual stores, and a corresponding growth in grocery retailers’ central distribution operations.
And it has gone on growing relentlessly since then. The supermarkets’ expansion has led to an increased range and volume of RTP’s in such areas as dairy, beverage and bread, produce, meat and fish and high value goods. Central distribution operations need a focus on handling and stacking, uniformity of loading for ease of picking and store handling, damage reduction, speed of handling, reduced cost of packaging and semi-automation.
Joe Kelly’s presentation quotes a logistics cost breakdown from Tesco in which assembling orders accounts for 19% of logistics costs and replenishing shelves 46%. He goes on to say that the average number of products carried by a typical supermarket has more than tripled since 1980. The current trend to SKU reduction is a result of the success of Aldi and Lidl, who stock around 1,500-2,000 SKU’s. Keeping it simple keeps costs down.
Today’s returnable transit packaging comes on wheels, and has a small footprint. It is retail ready and enables ‘One-Touch’ Replenishment. RTP also allows greater flexibility of delivery frequency and promotional activity, and ultimately the chance to re-engineer the supply chain. But it comes at a price, and asset control and management, combined with transparency and responsibility are crucial. That said, tagged assets can be tracked with RTP Auto ID and Data Capture, keeping costs down.
In the future RTP will be a critical component of an increasingly complex supply process, which will be IT-enabled, requiring more size formats and alternative conveyance. RTP will also have to be more store, consumer and colleague friendly.
The full report can be found at http://reusables.org/wp-content/ uploads/2015/05/Joe-Kelly-slides.pdf