Outsourcing Packaging Logistics Pays Off For United Glass

According to Jon Graves, General Manager of Demes in the UK, packaging logistics should be much higher on the agenda of top managers than is currently the case. He says: "The opportunity for big financial gains is absolutely clear. Take our recent work with United Glass for example."

Three years ago United Glass was running its own pallet pool which consisted of 560,000 wooden pallets. United Glass invited Demes to work with them to audit the supply chain. Together they identified that, with an average daily demand of around 3500 pallets the major scope for efficiency lay in improving the logistics behind pallet movements to ensure a continuous, systematic recycling of pallets from one destination to another.

Rigorous audits of United Glass suppliers also produced significant savings. United Glass used Demes to identify those suppliers who were losing pallets and began charging them for replacements. As a consequence, the suppliers swiftly tightened up their procedures, removing another source of wastage in the supply chain.

When the management of pallet pools is outsourced in this way every single item is treated as a valuable asset. This involves not only tracking the whereabouts of all pallets, whether empty or loaded, but also continuously inspecting them, repairing if necessary and washing. This detailed maintenance of the pool leads to a number of other important savings. The pallets last a lot longer, lowering capital requirements and they perform much more efficiently in the supply chain, reducing the amount of damage caused through faulty or weak pallet structures.

Total control of packaging logistics also gives United Glass a much more efficient flow of pallets around the manufacturing plants. Demes delivers pallets seven days a week to United Glass plants on a Just-in-Time basis and this has had very positive consequences for United Glass’ production scheduling.

Tracy Simpson, Packaging Logistics Manager of United Glass agrees: "We are delighted at how this has worked out for us. The costs of sub-contracting have been covered many times over since we started working with Demes. Not only have we achieved cost savings but we have also added value into our whole manufacturing and supply operation."

Following the improvements to the pallet pool, United Glass is now in the process of working with Demes to transform its layer pad pool. The companies recently announced the signing of a 5 year deal under which Demes will supply a minimum of 70% of United Glass's layer pad requirements in the UK. There has been a dramatic increase in the use of plastic layer pads, moving away from corrugated, as plastic is both cheaper and of higher quality than corrugated trays. This will add yet another important dimension to the cost efficiency of United Glass’ supply chain.