Returnable Transport Items (RTIs) play a critical role in supply chain operations by enabling the safe, secure, and efficient transport of high-value, delicate, or costly goods. These items not only help protect the bottom line but also contribute to environmental sustainability. While most companies rely on supply chain management and execution systems for the timely delivery of high-value products, these systems often lack the functionality necessary to optimize and manage their fleet of RTIs.
In today’s streamlined supply chain, managers often overlook the management of RTIs, relegating it as an afterthought. However, the failure to manage the inventory of RTIs, which includes reusable containers, pallets, trays, wheeled trolleys, cages, and other receptacles, can result in significant financial losses.
The lack of comprehensive RTI tracking and maintenance results in lost, damaged, and misplaced assets, leading to an industry-average shrinkage rate of 15% to 30% annually. Many companies that track their RTI fleet rely on a manual approach, which is time-consuming and error prone.
The financial impact of not managing RTIs is significant. It involves considering the number of containers in the RTI pool and multiplying that by the cost per unit, typically ranging between $5 and $5,000 each. It is also important to determine what percentage of the RTI fleet is considered ‘safety stock’ to account for RTIs that are never returned, lost, in need of repair or servicing, or unaccounted for in facilities. The upfront purchasing or manufacturing cost of these additional containers is just the beginning. The cost of storing, cleaning, maintaining, delivering/returning, and manually tracking the safety stock of RTIs also needs to be factored in.
Failing to track and manage your RTI fleet proactively results in unnecessary hassles and big costs, including:
• Additional labor required to track assets: Manual tracking of RTIs consumes significant labor resources that could be better utilized elsewhere.
• Shrinkage from lost, broken, unaccounted, or unreturned assets: Unmanaged RTIs can lead to a higher rate of asset shrinkage, directly affecting the bottom line.
• Extra inventory to compensate for missing RTIs or late returns: Companies often need to purchase extra inventory to make up for the lost or delayed return of RTIs, adding to costs.
• Expedited fees for rush shipments: Inadequate RTI tracking can result in last-minute shipments, which often incur higher fees.
• Safety and quality issues from lack of proactive and preventive maintenance: Without regular maintenance, RTIs can deteriorate, posing safety risks and quality control issues.
• Charges for improperly maintained and non-compliant assets: Non-compliance with industry standards due to poor maintenance of RTIs can lead to fines and additional costs.
Common Challenges in RTI Tracking and Management
Several challenges hinder effective RTI tracking and management, including:
• Lack of Visibility: Without a centralized tracking system, it is difficult to monitor the status and location of RTIs in real-time.
• Manual Processes: Relying on manual processes for tracking RTIs is not only labor-intensive but also prone to errors.
• Data Silos: Information about RTIs often resides in different systems, making it hard to get a complete picture of the fleet.
• Inefficient Maintenance: Without proactive maintenance schedules, RTIs can quickly become a liability rather than an asset.
Real-Life Examples of Effective RTI Management
To overcome these challenges, some companies have adopted advanced returnable asset management solutions:
Chemical Manufacturer with Manual Tracking:
A very large chemical manufacturer with a large fleet of returnable relied on its customer service reps to manually track the containers, calling individual customers to return the empty containers. This manual approach placed an ongoing strain on the customer relationship and wasted the customer reps’ time, which could have been better spent selling additional products. With an asset tracking solution in place, the tracking and managing of their containers are now completely automated, and the company has real-time visibility into the asset pool, saving significant time for the customer service reps. More specifically, the RTI tracking system automatically sends notifications and emails to customers with an accurate status of their RTI inventory.
Multi-National Baking Company with Lost RTIs:
The largest multi-national baking company in the US was struggling to track – and ultimately hold onto – its returnable transport items (RTIs). The reusable trays and dollies used to transport the firm’s baked products were being lost, stolen, or damaged – many of these without the company’s knowledge. With over 8 million trays in use at any one time, each at a cost of around $7, the organization was facing losses of more than $5 million annually. The impact of asset shrinkage on the company’s carbon footprint was also a significant concern. By adopting a returnable asset management solution, the company ensured the efficient management of its RTI fleet, leading to substantial cost savings and improved supply chain operations.
In conclusion, the management of RTIs is a critical aspect of supply chain operations that should not be overlooked. By implementing robust tracking and management systems, companies can reduce unnecessary costs, improve operational efficiency, and protect their bottom line.
