Monday, August 5, 2013

Freight and Logistics Supply Chain Can Save Money on Basic Warehousing Supplies

Millions of Euros Saved Using New Technology Solutions
Shipping News Feature

FINLAND – WORLDWIDE – Everyone in the supply chain is trying to save both money and reduce their environmental impact and never more so than right now. One of the first places freight and logistics groups look at to cut costs has traditionally been in warehousing and the fact that IKEA has reportedly saved tens of millions of euros since switching to a more environmentally acceptable pallet solution will be enough to make any business manager sit up and take notice.

Two years ago the Scandinavian home supplies group opted to switch from wooden to compressed card pallets. The card was sourced from over 1,000 of the company’s suppliers, after manufacture the pallets and associated packing are pulped and remanufactured, and IKEA estimated it could save €140 million annually in transport costs with the pallets coming in at just 10% of the weight of their wooden counterparts.

Almost forty years ago the Finnish Eltete Group started life producing edging boards to protect and support products, items such as those long right angled strips which run down the corners of a palletised load. Now the company has developed its own factories in fifteen countries, with exports to another forty five, and is manufacturing pallets and boxes from paper board as a substitute for traditional timber and plywood solutions. The package as a whole consists of honeycomb boards, stabilising edge boards with a couple of different profiles, glue and paper cores to stabilise the feet.

These days Eltete don’t just ship finished product however, the specialised machinery which the company uses is now sold on to bigger users to enable them to manufacture their own bespoke products. At the beginning of June Eltete shipped an automatic production line for producing paper pallets to a Japanese paper roll core manufacturer that is broadening its line of business into logistics. Marko Virtanen, Eltete’s sales director of technology, explains:

“We have had a business relation with the company regarding other products for a decade, but the new plant will be a totally new line of business for them. With relatively small additions to the pallet production line it possible for example, for them to manufacture boxes since they will already have many of the production modules ready at hand. Since we can’t keep pace with the growing demand alone, we are also offering [these] turnkey production lines for the open market.

“We can either supplement the products or the production lines and raw material knowledge, the investments’ payback time can be calculated accurately. It may sound easy, but in practice it is impossible to make similar products with the same quality and low price per unit without using our technology. The beauty of our products is that they form a modular system that can be combined into different lightweight transportation solutions. Dimensions and other specifications are easily adaptable according to the customers' demands. When you combine a pallet with a transport box that both are made of carton [board] and can take several tonnes, you can really talk about an environmentally friendly transport packaging solution.”

Photo: A paper pallet or box factory can be set up anywhere in the world and the only raw material needed is carton and glue. © Eltete