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CHEP and IFCO Systems Make Mark with Sustainability Focus
Sustainability Targets: CHEPís parent, Brambles, makes sustainability and environmental friendliness a major focus by eliminating empty miles, reducing landfill waste and improving the overall supply chain.
By Chaille Brindley
Date Posted: 11/1/2016
CHEPís parent, Brambles, makes sustainability and environmental friendliness a major focus by eliminating empty miles, reducing landfill waste and improving the overall supply chain.
Sustainability is more than a slogan for CHEP USA and its parent company Brambles Ltd. Known for its blue pooled pallets, CHEP with its vast logistics network is in a rare position to help grocery manufacturers, shippers and retailers to remove wasted miles from the supply chain and overall reduce environmental impacts.
Making a Difference with Customers – Kroger Focus
Brambles has made sustainability a focus since 2010, and its companies have been successful at reaching many of its goals to reduce its CO2 emissions and overall environmental footprint. Kroger Co., the nation’s second largest grocery retailer, recently singled out CHEP and IFCO Systems for its partnership in reducing supply chain waste. Information provided by the companies was used in Kroger’s 2016 Sustainability Report. A key aspect of the program is using more pooled pallets and containers and eliminating single-use packaging and thereby reducing material going into landfills.
“Kroger is committed to being a positive force for change when it comes to sustainable business practices, and CHEP and IFCO play an important role in our effort to meet our zero waste goals and continuously improve the sustainability of our supply chain,” said Suzanne Walker-Lindsay, director of sustainability for Kroger.
For example, Kroger notes its use of IFCO RPCs for fresh produce improved product quality and reduced waste by eliminating the use of more than 73,000 tons of waxed and corrugated boxes.
A key part of the program offered by CHEP and IFCO is to take its models based on real world data and overlap it with data from the client and make accurate analysis of sustainability benefits and savings compared to other alternatives. By doing this, Brambles hopes to distinguish itself in the marketplace and create strategic advantages based on improved environmental performance. This is a trend that wooden pallet companies shouldn’t ignore and should work to develop their own answer to sustainability questions.
“We are committed to providing our customers with sustainable solutions that help them make their supply chains more efficient and environmentally friendly,” said Juan Jose Freijo, global head of sustainability for Brambles. “Kroger is a valuable partner and we are pleased to contribute to their zero waste vision. Those companies working together on common goals will be the ones with the greatest impact on environmental sustainability.”
When people talk about sustainability they can mean many different things. But it all comes down to recycling and reusing products as much as possible, reducing life cycle impacts, decreasing CO2 emissions, cutting empty transportation miles, reducing waste and improving processes to be more efficient. For example, Kroger’s commitment to CHEP pallets avoided more than one million pounds of solid waste and eliminated 430 tons of carbon dioxide (CO2), the equivalent of growing more than 41,000 trees for 10 years.
Many large companies in the supply chain are collaborating to reduce total system waste. For example, Kroger, CHEP and IFCO are members of the Consumer Goods Forum, whose members have committed to reducing food waste by half within retail and manufacturing operations by 2025. They are also contributing to the United Nation’s 2030 food waste reduction goals.
Brambles Long-term Program
Since Brambles first started its sustainability efforts in 2010, the company has made major strides, including a 20% reduction in carbon emissions and 75% of sites completely eliminating wood waste being sent to landfills, which represents 92% of its production volume. In fiscal year 2015, customers’ use of Brambles’ pallets and reusable plastic crates eliminated 460,000 tons of waste from landfill and saved 1.38 million trees.
The Brambles companies have put a major focus on sourcing new wood from certified suppliers. Today, 97% of the wood it buys comes from certified sources. Sustainability also includes working on community outreach and tackling major problems, such as hunger. Brambles and its business units, especially CHEP, have collaborated with more than 100 food banks, contributing in-kind donations of US$1.45 million in 2015. The team recently announced a three-year partnership with The Global Foodbanking Network, where Brambles will provide supply chain knowledge, in-kind contributions, volunteers and donations to help finance GFN operations, in an effort to reduce hunger, poverty, malnutrition and food waste globally.
In addition, the team donates the free use of pallets and containers, and employees volunteer thousands of hours to help sort and pack food at local food banks. A key part of Brambles’ efforts to encourage community involvement is providing employees three days per year to do community service projects.
All of Brambles’ efforts are designed to work in alignment with key social and environmental issues identified as major global concerns by the United Nations. Brambles has divided these focuses into three areas – Better Planet, Better Business and Better Communities.
Better Planet deals with efforts to improve the environmental impacts of its businesses, such as reducing landfill waste, reducing empty transportation miles, buying certified lumber, reducing CO2 emission, etc. Better Business involves more employee engagement, encouraging greater female and minority leadership and involvement in company management, and developing partnerships to achieve better supply chains. Finally, Better Communities includes corporate donations and volunteerism. You can read more at www.brambles.com/sustainability or watch a video at https://vimeo.com/159883415
Freijo said, “We have achieved many of the targets and we have improved in all of them. For Brambles this is a continuous journey.”
A major focus of Brambles is to eliminate empty miles and optimize logistics networks. CHEP compares its supply chain with those of its customers and partners and works to eliminate empty miles by improving backhauls. And this savings is then documented and verified by a third party audit service.
Todd Hoff, vice president of marketing for CHEP North America, explained, “We have found examples where customers have empty trailers at the end of their supply chain, and we have used those to move pallets back into our supply chain.”
This provides cost savings and reduces CO2 emissions. Hoff added, “We are the largest backhaul shipper in the United States. We have about 45,000 transportation lanes, and what we are doing is maximizing those with our customers to reduce empty miles.”
CHEP also connects customers with each other to identify even more empty-mile opportunities. These companies might not otherwise work with each other.
What makes all of this possible is Big Data. Large amounts of information shared across partner networks and then can be analyzed. Transportation routes are matched and compared, and all of the savings data from each customer is analyzed to produce truly accurate reports.
Also, Brambles has started to deploy the use of more fuel efficient trucks in its fleets. And the company is a leader in Europe in developing an alliance with supply chain partners to evaluate and develop alternative energy infrastructure, such as liquid natural gas.
Beyond Automation: Changing the Culture
Some of the biggest savings come with little changes. Freijo commented, “Technology change is important, but as important is to change the culture and processes in the facilities as well.”
Brambles companies are looking to reduce waste steps and eliminate items that introduce waste into the process. One example is fixing and changing setting on air compressors to reduce leaks. Also, in some locations new lighting has been installed to save energy. While advanced automation can be helpful and is something that Brambles is always evaluating including robotics, many small changes can make a big difference.
One advantage that CHEP has is its ability to document and provide detailed reports for customers that show real cost savings and environmental success.
Brambles has only six people on its global team managing its sustainability efforts. But most of the critical work is done by sustainability champions in individual business units at the regional level. And these goals and targets are spread across the company by these champions and through training efforts. For example, in the Supply Chain Academy, a specific training program provides recurring education that enables workers to know how they can help achieve these corporate goals
Sustainability has become a business focus for Brambles, and when you connect that with real cost savings, it is a win-win situation for everyone involved.