May 092010

The emphasis today across all industry sectors is ensuring a sustainable Supply Chain, (a continual improvement process), with the key considerations of improving environmental and social impacts. This is achieved through the management of raw materials, products and services at all stages within the chain. Materials Handling Equipment (MHE) and the way in which it is used plays an increasingly important role in the drive towards sustainability and therefore developments in MHE can have a substantial impact on all areas of the supply chain.

The biggest impact within the MHE sphere over the last decade has been the increasing rate of introduction of Returnable Transit Packaging (RTP) fleets across all areas of manufacturing, engineering, food production and retail. Wooden pallets and crates, along with their plastic and metal counterparts are all RTP products, although some more suitable to the sustainable Supply Chain ethos than others.

In Europe, more complex RTP ‘systems’ were first developed on a large scale by the automotive industry nearly 20 years ago with the increased Japanese influence in JIT manufacturing, production and supply chain techniques. Automotive RTP solutions at first were mainly basic engineered load carriers (pallet base boxes and panelled steel stillages or racks), carrying the primary packaging which contained multiple “loose packed” parts and components. Although the load carriers were counted as RTP, the primary packaging was often one trip disposable plastic or cardboard packaging.

With the introduction of JIT production techniques, as well as more components being painted and finished prior to shipping into plant, the requirements for a more disciplined approach to production planning and receiving and handling parts at line-side, dictated the move towards more component dedicated and surface protective MHE. This in turn resulted in primary packaging being replaced by fixed inserts and dividers, (known as dunnage), holding the component and parts in the outer load container, and thus RTP systems were born.

Other engineering and manufacturing industries have followed similar development of RTP systems to that of automotive, but the use of more standard RTP types are widely used across all sectors as previously mentioned.

The original rationale behind RTP use was predominantly cost driven based on the ratio of RTP unit trips in their lifespan against capital investment versus single trip packaging costs. In the food, medical and pharmaceutical sectors, the drive was also towards elimination of wood, cardboard and other fibrous materials in the production areas predominantly for hygiene purposes.

It is not until more recently that sustainability of the Supply Chain and packaging waste legislation has been a key business driver in the development of RTP systems, and the advanced management techniques of the RTP fleets. In addition to the capital investment, other costs include repair and maintenance, equipment loss, stockpiling and extended dwell and cycle times, lifespan of the equipment and the flexibility of the chosen design to adapt with developing and changing supply chain demands. However RTP fleet operational process and therefore costs can be managed by effective control systems using RFID/barcode or batch-counting techniques, integrated into existing distribution and traffic systems. As the life of the RTP equipment is prolonged through effective management it also serves to improve sustainability and further reduce the cost of packaging per trip.

The retail sector developments into reusable ‘shelf ready’ packaging incorporates the use of RTP into the retail store display, negating the need for decanting product and eliminating disposable packaging, whilst reducing handling costs. Common examples of this are the plastic soft drink bottles that are displayed in store and picked by the consumer from plastic moulded trays often mounted on wheeled dollies, and also the reusable vac-formed trays seen on shelves trays that hold yogurt pots and similar products.

The development of RTP in all sectors continues in an effort to increase lifespan, reduce waste in process and cost, and minimise carbon emissions through reduced pallet miles”
Maximising lifespan through design is crucial so not only does it enable the RTP unit to encompass many tasks within the Supply Chain, but also ensure its longevity, maximising return on investment and reducing the impact on the environment by decreasing the need for replacement manufacturing. The development of universal RTP units with interchangeable dunnage to suit different product lines and components is key. At the end of the product or component production life cycle, the RTP can be refurbished and new dunnage fitted to suit the new components. These RTP units then have an extended life potential of maybe two or three product models, (eight to 15 years in automotive terms), whereas in the past many ‘dedicated’ RTP units were scrapped after a single model production life.

In order to minimise the transport and logistics requirements, RTP design objectives are often for maximum product density for product delivery and optimal nesting or folding for the return journey when empty. In many cases RTP fleets are pooled and shared between users in the same supply chain to reduce the overall amount required. For example, Ford Europe use a fleet of pallet based folding plastic containers referred to as FLCs which are non component specific and shared between suppliers throughout Europe. They also use the same design FLC for dedicated components and have increasingly adopted the use of flexible textile dunnage systems, which enables components to be individually protected, but also maximises component nesting and therefore density per FLC, which are usually stacked two high on a vehicle when erect. Once the components are decanted the FLC units are folded down, with the textile dunnage remaining in situ, and stacked six high in a vehicle for the return journey to the component supplier.

One specific MHE design initiative is the Back Haul Trolley (BHT) presented as a method for automotive OEMs to increase and optimise usage of their Rail Vehicle Transporters (RVTs) currently used for the outbound delivery of finished vehicles only. The BHT is a dolly adapted to fit onto RVTs and to carry automotive FLCs and stillages loaded with components into the automotive OEM plants. This introduces cost savings to the inbound parts Logistics and Supply Chain operations, and reduces vehicle emissions, whilst also utilising otherwise empty rail wagons already inbound to the OEM plant.

Benefits of RTP extend even further by reducing the need for fork lift truck activity in production and handling areas as many RTP systems are either fitted with wheels or can be carried on dollies. This enables the RTP units to be linked and pulled in “trains” by tow trucks enabling more units to be handled per trip than if using a fork lift to move individual load carriers around the plant. The RTP can in many cases then be moved manually by operators into position on either the production line-side or into a stowage area. There is an increase in the use of conveyor systems and roller racks to move smaller RTP units such as totes and trays around the production, warehouse and despatch areas. This reduction in fork lift truck requirements also has health and safety benefits, reducing fork lift and pedestrian accidents, as well as environmental benefits in reduced fork lift truck emissions.

This overview of MHE trends and developments specifically in RTP use demonstrates that RTP systems are geared to total Supply Chain sustainability initiatives and cost savings ensuring environmental benefits through reduced vehicle and trip requirements. It is a complex, multi-faceted and fast moving sector with new initiatives constantly entering the market.

Either adopting RTP for the first time or indeed looking to improve current RTP use and initiatives can be a daunting task. Investing at the outset in specialist materials handling consultants to review, plan, develop and implement your MHE strategy, will maximise the opportunities and the benefits of your MHE systems and process to support your Supply Chain sustainability requirements.

Gideon Hillman FCILT MIBC – has over 17 years European Supply Chain, Logistics and Materials Handling industry experience, having been employed at a Senior Management Level throughout Europe within the Materials Handling, Logistics and specialist Supply Chain Services industry for over 12 years, prior to establishing Gideon Hillman Consulting in 2004, now recognized as one of the fastest growing specialist Supply Chain Consultants and Logistics Consultants in the UK. Gideon is a Chartered Fellow of the Institute of Logistics and Transport & The Institute of Business Consulting. Further details are available at: or make inquires via email to

Author: Gideon Hillman
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Gideon Hillman

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