Returnable container management solution from IBM

The goal

Optimize logistics throughout your supply chain

Is your automotive manufacturing company looking to improve turnaround time and reduce loss of returnable containers? The IBM solution for returnable container management enables more effective container tracking to improve the availability of your assets. Our solution can help original equipment manufacturers (OEMs) and suppliers reduce order-to-delivery cycle times and facilitate just-in-time supply chain operations.

The advantage

An end-to-end container management process

Automotive manufacturers realize typical loss rates of between two and five percent per year on standardized metal containers. This considerable loss of investment by OEMs can be reversed with IBM's comprehensive model for tracking and managing the flow of containers.

• We can help you create a dedicated department that is responsible for container management, including booking and planning. This department:
• Resolves shortage issues, handles complaints due to incorrect tracking and wrongly applied fees, and follows up on damage issue resolution by identifying and charging the responsible party.
• Is the keeper of tracking and inventory data, and is responsible for maintaining accuracy and consistency.
• We can help you establish a payment model that allocates costs to individual suppliers on a pay-per-use basis to control costs more closely and allocate charges more accurately. Depending on OEM policy, suppliers may be charged for container use or alternatively for excess container use above allocated stock levels.
• We can help you institute logistical controls to optimize container usage, such as planning and allocation of container supplies and penalties if the inventory exceeds the allocation. This provides an incentive to keep the containers in circulation.

The benefits

Drive out waste, accelerating competitive advantage

By driving waste and cost out of your automotive distribution system, product prices can be kept low and competitive advantage can be increased. The returnable container management solution can help:

• Increase visibility into the supply chain to provide timely and accurate knowledge of container location and status.
• Reduce order-to-delivery cycle times and facilitate just-in-time supply chain operations with consistent parts delivery.
• Enable third-party logistics providers and suppliers to plan better with visibility into container distribution needs.
• Reduce the long-term investment that often results from purchasing more containers than needed due to efficient circulation.
• Decrease shortage issues and track responsible parties for missing or damaged containers so fees can be charged accurately.

Asset tracking features can improve utilization and availability of manufacturing equipment by tracking movable tools and other assets according to their physical location.

The goal

Steer efficiency into container management

Is your automotive organization looking for visibility into and control of container management? Original equipment manufacturers (OEMs), suppliers and third-party logistics providers can benefit from the returnable container management solution from IBM. Gain container management visibility and transparency throughout the supply chain with AutoID technology, such as radio frequency identification (RFID) tracking and process improvements.

The advantage

Innovation and standards of excellence

IBM's commitment to the automotive industry has resulted in a client base of major automotive suppliers, OEMs, distributors and dealers. We have more than 10 years experience with RFID technology, and we are at the forefront in helping to establish RFID standards.

• We support our clients with an extensive network of 15 RFID Solution, Research and Test Centers around the world. Major centers are located in Yamato, Japan; LaGaude, France; Dallas, TX and Austin, TX; Dublin, Ireland; Boeblingen, Germany; and Seoul, Korea.
• IBM was recently named by AMR Research as a market leader in RFID—ahead of the pack in the areas of technology expertise and delivery.
• AMR Research cited IBM for our ability to link RFID projects to Demand Driven Supply Network (DDSN) initiatives.
• IBM Business Partners are industry-leading companies that help us deliver end-to-end, integrated solutions that solve problems unique to the automotive industry.
• We have more than 25 years of automotive industry experience and a worldwide network of over 2,500 automotive experts.

The benefits

Rev into gear with efficient OEM and supplier processes

Decrease tracking errors with a consistent reading of where your containers are at any given moment in time. The returnable container management solution enables OEMs to collaborate with suppliers to drive efficiency into the automotive manufacturing and distribution process. Our solution can help you:

• Gain a faster, more accurate account of containers, even without line-of-sight access.
• Accrue information with rewriteable RFID tags that have the potential to hold extra data.
• Track container movements centrally for tight management and consistency of information.
• Automate container check-in, check-out and accounting processes to avoid human error.
• Eliminate the need for expensive, one-way, disposable packaging with better planning processes.
• Synchronize operations with suppliers to satisfy just-in-time manufacturing.
• Increase collaboration by enabling suppliers to book containers in advance, using a Web-based booking system.
• Leverage historical data to estimate the requirements for each supplier with manufacturing resource planning systems.

The approach

A container management implementation

A European automotive industry manufacturer facing a major investment in new containers implemented the returnable container management solution from IBM. Our client reduced the overall number of containers needed, representing an investment savings of approximately 40%. They:

• Optimized utilization by instituting flow management of the container pool.
• Increased inventory turns by a factor of three, meaning that the manufacturer could use fewer containers to meet the same requirements.
• Reduced the variety of containers in use.
• Moved to a pay-per-use cost allocation scheme.
• Instituted penalties to suppliers for extended use.

The financial advantage

Get cars off the line faster while reducing costs

Based on the results of IBM engagements in 2006, a container management system can produce a positive return on investment in less than one year. A comprehensive approach to returnable container management in the automotive industry can help you:

• Reduce turnaround time.
• Decrease container loss rates.
• Realize a decline in the use of expendable packaging.
• Achieve more accurate cost allocation.

Next steps

Questions about this solution? Contact an IBM sensors and actuators specialist.

The issues

Steer container management in the right direction

Optimize your automotive company's investment in returnable containers through a combination of process and organization changes, supported by a corresponding IT solution. AutoID technology, such as radio frequency identification (RFID) can enable accurate tracking. And a centrally located data repository provides visibility to container availability throughout the supply chain.

The benchmark

A team to support your company’s innovation

IBM's experience in RFID dates back more than a dozen years, spreading across a wide range of technology disciplines including the integration of asset tracking and inventory management.

• We are an early adopter of RFID with ongoing research at Watson Labs and the experience of implementing the technology in our own semiconductor manufacturing plant.
• Our investment in sensors and actuators exceeds US$250 million.
• We support our clients with an extensive network of 15 RFID Solution, research and test centers around the world. Major centers are located in Yamato, Japan, LaGaude, France, and Dallas & Austin, USA, Dublin & Boeblingen, Europe, Seoul, Korea.
• We are a member of the Auto-ID Center Technology Board and EPCglobal, as well as the author of leading industry white papers and studies on RFID.

The components

The role of IT in container management

An integrated, end-to-end container management process depends on supporting IT applications. A representative IT architecture for container management consists of:

• Legacy systems
• Container management applications and data repository
• Original equipment manufacturer (OEM) enterprise systems

The existing legacy systems for recording container movement are integrated with a central repository (the OEM's enterprise application suite) that handles the container accounts and the master data.

Depending on your unique configuration your solution could include:

• IBM WebSphere® family of middleware products integration and application infrastructure software.
• IBM RFID Information Center which offers enhanced reporting tools and alerting capabilities that allow you to access and analyze data using browser-based reports for faster decision making.
• IBM WebSphere Premises Server which provides a service-oriented architecture (SOA) platform to streamline processes and enable transformation.
• Manufacturing Industry Framework specific to the automotive industry.

The implementation

A comprehensive solution for automotive OEM’s

The returnable container management solution offers a flexible interface enabling automotive suppliers and OEM's to track container movements and access booking, planning, fees and complaints. A key part of the overall system is tight integration across the enterprise, enabling automation and accurate accounting across departments.

IBM can deliver a comprehensive, end-to-end container management solution, including:

• Assessment
• Business case development
• Planning
• Business process transformation
• Design
• Pilot system development
• Solution deployment
• Systems integration
• Ongoing maintenance

The cost of ownership

Drive efficiency across the supply chain

IBM can help you develop a feasible solution for returnable container management, taking advantage of unique AutoID capabilities in automotive manufacturing.

• Detect containers without line of sight to streamline inventory handling and process efficiency.
• Improve operational efficiency by integrating disparate systems.
• Maintain existing legacy systems while integrating supply chains using Web services.
• Leverage existing standards so you can reap benefits from solution implementations today, while gaining the ability to adapt to future evolving technologies.

Next steps

Questions about this solution? Contact an IBM sensors and actuators specialist.