The best reusable container management initiatives ensure that available containers are used efficiently, and replenishment is regular and reliable. When containers aren’t available for use, the delays that are caused can be costly – and simply purchasing more to cover those shortfalls negates the costs-savings gained through continued reuse (which might be the reason you switched to reusables in the first place!).
Making the right decision up front on the best replenishment model for your initiative can both minimize the need for end-user involvement and maximize efficiency, while still taking the challenges of your unique business environment into account. We’ll touch on a few of the more common models of replenishment, and their benefits.
NOTE: In these examples, we’ll presume that a fulfillment center delivers containers to end users, and concentrate on the generation of orders for the fulfillment center.
When a company first gets their reusable container program rolling, a manual replenishment method is usually the default approach. Simply put, when a location’s reusable container inventory runs low, an order for more must be manually placed – typically via phone call, email, or filling out a web form.
While this is a simple low-tech method of getting more containers, it means no order validation is performed, and they can be subject to mistakes, such as ordering the wrong type or quantity of container. This issue can be compounded if a user forgets to get more containers in a timely manner, and has to make a rush order – forcing the company to absorb the expedited freight, alternate packaging, and repack costs.
MAX INVENTORY/ HISTORICAL MIN-MAX
These two ordering models are very similar to the previous example, in that they still require a user to manually place an order for more reusable containers. With the “max inventory” approach, a layer of validation – setting a maximum quantity to limit the number of containers a location can have at a given time – is added. Requested order quantities are checked against the ordering location’s on-hand inventory, and orders that would exceed the location’s maximum allowable quantity generate an error.
The “min-max” approach first determines a location’s historical demand for a reusable container, then limits the order quantity to match. Users can generate orders for quantities up to their historical demand limits, but cannot exceed it without generating an error.
We’ll touch on additional replenishment models in upcoming blog entries. In using the proper replenishment model, companies can reduce the number of reusable assets needed, minimize end user involvement, increase velocity of container movements, and ultimately reduce the barrier to entry of participating in a reusable program.