Article Euro Pool System, experience the benefits

Rijswijk, 2009
Gerben Paauwe, Benelux commercial manager:
“Growing demand for integrated depots”
Article
More and more retailers are choosing for a Euro Pool System integrated depot.
Margin pressure, traffic congestion plus cost reduction and logistic complexity
are the most important drivers, says Gerben Paauwe, Benelux commercial
manager. But also sustainability plays an unrelenting role. It is expected that in
2010 half of all returns in the Benelux will take place via a Euro Pool System
integrated depot.
The Belgian supermarket chain Delhaize started working this way in 2000, and was
followed by the German Doego in 2002, and the Belgian Colruyt in 2004 not to forget
the Spanish retailers Caprabo and Eroski in 2005 and 2006 respectively. There are
ongoing talks with several other European chain stores about the eventual integration
of their return centres with a Euro Pool System depot. In 2008, almost 30 percent of
all crates in the Benelux were handed back via a Euro Pool System integrated depot.
That percentage is expected to grow and reach more than 50% in 2010, says Gerben
Paauwe, Benelux commercial manager. “Margin pressure and traffic congestion are
forcing retailers in that direction. Besides, sustainability also plays an important role
for many retailers. An integrated depot is by far the most economical and most
sustainable solution for the logistics of all fresh products in the supply chain.”
Savings on transport and handling
We talk about an integrated depot if a Euro Pool System depot is combined with the
retailer‟s return centre. “There are several possibilities for shortening the supply
chain. The retailer can, for example, transport the return flow of the store network
directly to a Euro Pool System depot, without stopping at a retailer‟s distribution
centre. If a Euro Pool System depot is part of a return centre, we talk about a
dedicated depot”. And this is economically advantageous for both parties, says
Gerben Paauwe: “By combining our depot with the retailer‟s return centre, we can
namely save considerable transport and handling costs.”
The exact amount of the savings will depend on all sorts of factors, like the distance
between the existing Euro Pool System depot and the retailer‟s return centre, and the
form of the organisation. With an integrated depot, all transport costs between the
depot and the return centre are in any case eliminated. This means annual savings
for Belgian retailer Colruyt, for example, of more than 450,000 transport kilometres
and, consequently, of a significant amount of CO2-emissions. Moreover, a number of
handling costs just disappear for the retailer, like the costs related to internal
transport, classification, storage and distribution. These savings can amount to 30
percent of the total handling costs in the return supply chain.
Bundling return flows
The third important advantage is the possibility of bundling all return flows, creating a
„one-stop-shop‟ for all return flows from stores, like cardboard, drinks bottles and
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other types of packaging. “We can also handle the multi-way packaging systems of
other parties, for example, empty fish boxes, bottles, cardboard waste and products
that need to be removed due to their validity date. Euro Pool System can take over a
great deal of the store‟s „back door‟ activities. Easily and efficiently.”
The cooperation form can be very flexible, adds Paauwe hastily. “Of course there are
other parties that can handle waste flows well, but the advantage is that we can also
sort out all empty crates, wash them and directly make them readily available for the
retailer‟s suppliers. We have much experience in doing this by now, and we are the
only ones doing it!”
An integrated depot then offers many possibilities to operate more efficiently and to
accelerate the flow in the supply chain. Euro Pool System can record and report
accurate data on the return flows, allowing for better insight into the demand for
particular products. This information can in turn be linked to an automatic order
system, and „out-of-stock‟ situations at stores can be avoided. The automation
possibilities are then many. “In most depots, we can also sort out, count and wash
crates automatically”, says Paauwe.
Break-even point
The advantages of an integrated depot are then considerable, but the necessary
investments also need to be recovered. Paauwe: “For the retailer, the subcontracting
critical limit is considerably lower than for Euro Pool System. To justify the
investments, we need a minimum volume of ten million return units. However, it is
also possible for many supply chains to share a Euro Pool System depot, if they are
small. So you can jointly profit from the efficiency and the other advantages.”
Euro Pool System asks for a degree of commitment from the retailer. Paauwe: “In
line with the investments, we look for three to five year contracts at least. We also
agree on minimum return volumes. But, on the other hand, this allows retailers to
save property space that can be used for other purposes. Think, for example, of the
extension of one‟s own DC. If you cannot or don‟t want to expand a particular site, an
integrated depot can then be a solution. Because you‟ll need less time to manage
return flows, you will have more time for your core business. Consider you‟ll need
some time to switch over, though. The construction of a dedicated integrated return
centre from scratch can take – between studies and realisation – two to three years.”
Who would benefit the most from an integrated depot? “In principle, all retailers,
regardless of the store type, but depending on the vision and the current organisation
of their logistic supply chain. Any retailer looking for efficiency, integral cost reduction
and sustainable operation has come to the right place.”
Savings tips for retailers
1. Switch from one-way systems to Euro Pool System‟s multi-way packaging
solution.
2. Switch from rigid crates to foldable crates; you‟ll need considerably less
space for storage and transport purposes.
3. Standardise the packaging of all fresh flows, like fruit and vegetables, dairy,
bread, meat, fish and ready-to-eat meals, and save more costs.
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4. Integrate your return centre with a Euro Pool System depot, that is: choose
for an integrated depot.
5. Automate as many activities as possible in the integrated depot, such us the
sorting out, counting and washing of crates and internal transport operations.
Euro Pool System International B.V. is Europe’s biggest provider of logistic services
in the area of multi-way packaging for fresh products. In cooperation with the
European retailer sector, Euro Pool System focuses more and more on providing
optimal logistic solutions.
Euro Pool System employs 152 people in seven countries. The pool organisation’s
123 million blue and green returnable crates rotate 600 million times a year. Euro
Pool System has 45 service centres throughout Europe.
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Note for the editorial staff
For more information, please contact Dymph Neeteson, PR & Communication.
Euro Pool System International B.V.
P.O. Box 1887
NL-2280 DW Rijswijk (ZH)
T: +31 (0)70 3014 1 30
F: +31 (0)70 3014 1 99
E: dymph.neeteson@europoolsystem.com
I: www.europoolsystem.com
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