From Waste to Win: Rethinking Returnable Assets

Discover how supply chain leaders integrate sustainability into their operations. Host Bill Wohl and guest John DiPalo explore the impact of returnable assets on efficiency, cost savings, and environmental responsibility. Learn how managing transport items can enhance visibility, reduce waste, and strengthen partnerships across the supply chain. Brought to you by ACSIS, the supply chain visibility cloud solution provider.

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Narrator:

Welcome to the supply chain visibility stories, the podcast for supply chain managers, brought to you by ACSIS, the 100% supply chain visibility cloud solution provider. Supply chain visibility stories is hosted by Bill Wohl, a technology industry veteran and enterprise software professional.

Bill Wohl:

Thanks everyone for joining us for this next in series of discussions exploring the intersection of technology and business. On this podcast, we're talking supply chain. Our podcasts are designed to be brief and focused, and we're hoping this format inspires the audience, all of you, to think about how technology impacts your business and how to engage with us. I'll have information about how to touch base with ACSIS and our special guest and the series at the end of today's discussion. Hi, I'm Bill Wohl and I'm honored to be the host of this series brought to you by ACSIS. I'm always fascinated by the business challenges faced by companies and then how they meet those challenges by applying technology with a focus on the supply chain. Our podcast series topics have ranged from talking broad macro trends to global systems integrations to so-called edge devices all around the renewed focus on global supply chains. During the course of our podcast, one of the recurring themes is sustainability. And that's a topic that's increasingly on the minds of supply chain leaders and company executives. Sustainability can cover a broad range of subjects. So, let's dig in a bit with one of our regular guests here on the podcast series, John DiPalo, chief strategy officer at Access. John, welcome back as always to the podcast.

John DiPalo:

Bill, thanks for having me on.

Bill Wohl:

So, you spend a lot of time talking to customers that are thinking about their supply chain. How often now is sustainability coming up?

John DiPalo:

You know, it's interesting, Bill, because more and more sustainability is a very hot topic as it relates to supply chain. So, people are actually looking to bake sustainability and sustainability initiatives into a lot of the different things that they're doing. You know, even all the way down to the fact that when you're responding to RFPs or engaging with new customers, they want to know about what your sustainability plans are for your own company and how that fits in with a with a larger strategy. So, it certainly is a topic that a lot of people are talking about and rightly so because it is the right thing to do.

Bill Wohl:

So, John, the topic of sustainability is an interesting one because you can pick up almost any newspaper or watch any television program. There's a lot of discussion about global warming and sustainability and companies trying to reduce carbon footprints. Sustainability covers a lot of topics. So from where you sit advising customers on their supply chain strategies, what does sustainability really mean to you?

John DiPalo:

Yeah, you know, I think that there's a lot of different areas that people are looking at for sustainability. And you know, the challenge that I see is that there's a very broad focus around different things that can be done. But when I look at sustainability and when I look at the areas that we work with customers on, you know, there are a lot of things that companies could start with and look at doing now and they will all add up to, you know, significant steps towards sustainability, but it's really starting to look at how can I refine processes that I'm doing today. How can I look at existing systems that I have in place or existing processes that I have in place and build sustainability out of those. So, you know, it's an interesting way of looking at it and I think it fits in nicely to an overall sustainability program and a sustainability message, but what can I do now that maybe could just start to move the needle on how my company can become more sustainable and and focus on that sustainability message.

Bill Wohl:

At the strategic level, there is no quick band-aid fix to sustainability. What you're suggesting is that sustainability touches lots of places on the supply chain and companies really should focus on trying to find that first opportunity to sort of build a beachhead and extend out and eventually that will all add up to an overall sustainability positive approach.

John DiPalo:

Yeah, I mean there's no question you know I think that certainly companies need to look at it from a macro level and say okay we're going to embark on a sustainability initiative as a pillar of how a company thinks, but there are things that companies can look at today that fit under that umbrella and will, you know, be additive into that sustainability pillar that they're going to build for the company.

Bill Wohl:

So, on this podcast series, we've talked about sustainability on one episode prior and one of the topics that came up was returnable assets. So, why don't we sort of triple-click down on that a little bit because I think knowing you as a regular guest on the series, you're likely to say, "Okay, here's an area where a company can find a quick win. Why is that?

John DiPalo:

Yeah, there's no question that's the case. And you know, I look at companies as it relates to transportation and shipping and moving of product in two areas. So, there's companies that move products in returnable assets. So, totes and canisters and cylinders and racks and all of the different types of returnable items that are in the space today. And then there's a whole new group of customers that are currently using one-way disposable assets that are now looking can I improve that process by making and joining the circular economy by leveraging returnable assets for some or all of my products

Bill Wohl:

As opposed to creating waste.

John DiPalo:

Correct. So, you know, taking a look at, you know, how much cardboard am I shipping out on an annual basis or you know, how many items am I shipping that I could get the transport item back and recycle and reuse for the next shipment. And what that really is, when we start to think about it is a great opportunity to refine that process and fold that into your sustainability initiative because even companies today that are using returnable transport items typically are not managing them to the level that they should in order to get the most benefit from both a cost and economic perspective for the company, but also to ensure that they're getting the most  value from a sustainability perspective for those items.

Bill Wohl:

So it sounds like you're suggesting that this exercise which is sort of wrapped in sustainability is a bit of a proxy for efficiency.

John DiPalo:

Absolutely. There's there's no question of that. But you need to start by managing those transport items, right? Because in many many cases, you know, they're they're an unmanaged asset within the company. So they wind up not being leveraged to the best that they can be. So companies typically have either too many of or they don't have the right items in the right place and you know you wind up either purchasing more because you don't have the right returnable asset count at a location or you're moving them around in order to fulfill orders and things of that nature and it's because of that unmanaged process that it lends itself to not being as efficient as possible.

Bill Wohl:

So interestingly, companies could be spending a lot of time thinking about efficiency purposes but they can collect data that then docents positive gains against a sustainability goal.

John DiPalo:

Absolutely.

Bill Wohl:

They're not mutually exclusive. It all comes together.

John DiPalo:

Correct. And you know if you look at you know carbon footprint, if you look at you know items that are winding up in landfills or oceans or other things that are you know these returnable transport items cuz you see them all over the place. And the reality is if you started to take a look at managing orders and the returnable transport items that are used to transport those orders as an entire process, your ability to keep those returnable transport items in the right place, doing the right things, and using them to get better visibility of what's going on with your supply chain will provide you benefits in two significant areas, right? So, you have the cost of the items, the replacement of the items, the carbon footprint caused by using those items, but you also have potential excess transportation for because I'm not managing things. as closely as possible. , you know, you have excess cost and nonvalue added labor that goes into that. So, there's a lot of different benefits that can be achieved by combining all of that and bringing that under one umbrella.

Bill Wohl:

It sounds though, John, it strikes me listening to you that the benefits may not only be on the side of the company focusing on supply chain sustainability. There may be benefits on the  customer side or on other players in the supply chain. So, if you have excess containers that are waiting around to be returned. That's taking up warehouse space and it's a hassle for your end customer. So is this exercise then deepen the working relationship with with everyone along the supply chain?

John DiPalo:

Yeah, you bring up another significant benefit with how can I become more aligned with what's happening at my customer locations. Right. So again, utilizing the returnable transport item as a proxy for items that are going out. Well, if you're tracking that out to their location, you also can start to think about, well, how can I utilize that to, you know, leverage almost, you know, a smart conbon or a replenishment process with customers because as they conse items from the returnable items that you ship them and they come back, it turns into a cycle where you can understand product velocity, you can understand demand better, and you can work on a much tighter relationship with your customers. And by the way, it gives them an opportunity to click that box for their own sustainability programs because of the circular economy and now they're participating in that.

Bill Wohl:

You know, over the 20 years I've been involved in touching supply chain as a business, it strikes me that there are a lot of learnings along the way that companies pick up from others. We share those experiences. So let's think about it in this context. Can you give our audience an example of a company in a particular industry where this exercise has a benefit? 

John DiPalo:

Absolutely. You know, there's actually it's interesting because, you know, we have two particular, you know, customers in similar industries, you know, both in the chemical in the chemical space, both utilizing, you know, large fleets or large quantities of returnable assets in canisters and totes. They both had the same exact problem. So, they had these canisters and totes that were unmanaged assets. You know, certainly they knew what they paid for them and they knew how many they bought, but they weren't directly tied into the production process or the distribution process. And in fact, in both cases, their ERP systems thought of them as an unlimited number of assets. So they never directly correlated what things were moving through their supply chain to the transport item that they were using. So what happened was they wound up with many more than they needed.  you know, and they had to pay for the storage of those and the cleaning of those and the maintenance of those items. They wound up losing a lot of them. So then you had this replace cost. And the other thing was, you know, in one specific instance, it's a fairly complex asset. And they weren't managing the, you know, the inspection, the maintenance activities, the same way that they were managing, you know, other maintenance and inspection activities for, you know, let's say equipment or other pieces within theirvenvironment. And what happened is you now have an entire class of assets that become unusable because they've fallen out of inspection, as an example. So the overarching cost for all this becomes fairly significant. But then you start to think about the carbon footprint for you know, purchasing additional assets and managing these and storing them and all of those types of activities. And once we started to manage that process and tie it to their production and distribution process, the reality was that they quickly realized that they have far too many that they're managing in the wrong places and were able to start to work with those assets in a much more predictable way and it gave them immediate return and it will give them ongoing return because they're not going to manage these assets in the way they were before. It now becomes a part of the overall process.

Bill Wohl:

So it seems looking at this as a multi-layered problem could be really daunting for supply chain managers to think about getting started. What's the advice that you can give as we wrap up today's program? on on how customers can take that first step.

John DiPalo:

It's actually easier than than I think a lot of people would think.  especially if you have an existing  fleet or group of returnable transport items. You know what we typically do and have had great success with customers is looking at you know a single distribution channel or a group of sites or a group of locations bring that down distill that into let's understand the flow of those items and the flow of that product through that limited supply chain process and put in a solution to track that but configure the solution in such a way that you can expand it rapidly as you start to roll that out. So we get a very quick win. We get to able to show the stakeholders not only a cost savings but an efficiency savings and then as we roll it out to other areas we already have that model template that can be rolled out to other divisions or other sites. So you know it is start small but realistic and look at a true supply chain in a smaller view and then move forward from there.

Bill Wohl:

Start small and be realistic. That's great advice. As always, John DIPalo, chief strategy officer of ACSIS. Thanks for being on our podcast today.

John DiPalo:

Thanks, Bill. Pretty great to see you again.

Bill Wohl:

That wraps up today's episode. My thanks to ACSIS for making this podcast series possible. We welcome your comments and questions about the discussions on these podcasts, so you can engage with us at the official ACSIS Twitter and LinkedIn accounts. Be a part of the discussions. I'm your host, Bill Wohl. And for everyone at ACSIS, thanks for joining. We look forward to our next episode. Talk soon. 

Narrator:

Thank you for listening to Supply Chain Visibility Stories brought to you by ACSIS, the 100% supply chain visibility cloud solution provider. Visit us on the web at ACSISinc.com. That's acsisinc.com or join the dialogue on social media. Look for ACSIS Inc. on LinkedIn and Twitter. Join us next time for supply chain visibility stories brought to you by ACSIS.