In a search for full supply chain efficiency, the motivation of standardisation along different parts of its supply chain, and the formation of technological intelligence with high synergy throughout the chain, Danone has been talking to Loscam since 2009 on the use of standardised pallets and our palletisation model in order to achieve these goals.
Listed on Euronext Paris and on the OTCQX stock market, Danone is a leading multinational food and beverage conglo-merate. Danone’s vision is “One Planet. One Health.” and they foster a strong belief that the health of people and the health of the planet are interconnected. Danone governs itself to the highest standards, generating sales of €24.7 billion in 2017 withproducts sold across 120 markets.
The Loscam China team outlined a unique returnable pallet pooling solution, in accordance with the operation and wide business scope of the Danone brand. As a result a collaboration commenced between Danone, its distributor and Loscam China, in order to construct a comprehensive infrastructure enabling palletisation in the upstream and downstream supply chain.
In 2015, Danone officially incorporated palletisation into its strategy, taking gradual steps to develop inter-factory palletisation and factory-distributor palletisation. The palletisation infrastructure established has revealed the economy of scale and the internal palletisation ratio is climbing. Loscam China has become the national partner for Danone’s pallet standardisation and palletisation.
Choosing palletisation for transformation
Palletisation allows Danone to create a highly efficient supply chain ecosystem, which includes raw materials, production units and distribution, achieving optimised operational performance in spite of tight time constraints and strong seasonal fluctuation. Resource redistribution and restructured processes have enriched Danone’s ability to offer quality customer service, reduce human resource cost, fine tune transportation turnover and increase product quality.
Danone has also taken into account two key prerequisites prior to practicing palletisation. First being the scale and capability of customers to facilitate the streamlined palletisation model, the second being the ability of the service provider to offer quality palletisation expertise and support.
Preparing for palletisation
From standardisation of packaging boxes, installation of machines and equipment, to changes on trucks, facilities, IT and SOP infrastructure, Danone has performed a series of makeovers to create the ideal environment for palletisation to take place. Now, customer orders are placed by pallet load, while guidelines, training and motivational programs are in place to encourage third party logistics providers and downstream distributors to practice palletisation. A massive, streamlined palletisation model is now in place.
Witnessing the benefits
The economies in scale through palletisation is witnessed in different areas: increasing stock and truck turnover, maximising space utilisation, increasing loading efficiency while minimising manpower costs by decreasing the demand for manual loading. And most importantly, reducing product damage as a result of less requirement for manual handling.
Forecasting a palletised future
Current palletised delivery in Danones’s downstream supply chain is already close to 50% and its taking steps with Loscam to close the gap for upstream suppliers. The successful collaboration between Danone and Loscam China is exemplary in demonstrating logistic efficiency and capability along the FMCG supply chain, showing what the overall logistic system can achieve.