Maintaining visibility of reusable containers as they move – or fail to move – within your supply chain is critical in ensuring your analytics are as accurate as possible for the most informed decision-making. But if you do not control every stop in the supply chain, this can prove to be much more challenging. The reality is many suppliers or third-party logistics providers could care less about your push for “best practices” if it increases their workload or changes their routine.
This challenge can be overcome by a twofold solution: using serialized tracking techniques in locations you control, and bulk tracking where you do not.
If suppliers cannot – or choose not to – capture serialized data, they can simply send the type and quantity of reusables used per shipment. This non-serialized data, or “bulk” data, still has value, as it can be used to show you how many containers that supplier has on hand, and how many they are still responsible for. Loss of serial-level accountability is overcome by creating two inventory levels: “virtual” inventory, and “responsible” inventory.
- Virtual – The best estimation of the inventory levels at the supplier. We consider this “bulk” data.
- Responsible – The inventory that the supplier is still responsible for until it shows up at another location in your logistics chain. This data is serialized.
Three inputs are related to this inventory transaction:
- Inventory Sent – The serialized inventory sent to your supplier, including the type, quantity, and date each reusable was sent.
- Returned – The number of reusables the supplier claims they returned to you.
- Actual Returned – The serialized containers that were sent from the supplier that have subsequently shown up at another location in your logistics chain.
Using the following two simple equations, the Virtual and Responsible inventory levels of the suppliers you interact with can be determined:
Virtual = Sent (Quantity) – Returned (Quantity)
Responsible = Sent – Actual Returned
Defining the variables in these equations gives you access to data that would otherwise be beyond your reach. Including the inventory levels of uncontrolled locations in your equations, instead of writing them off as “unknowns,” can produce significant savings, particularly if your goal is to reduce the dwell time of reusables and overall container usage in your logistics chain.