Understanding Collaborative Returnable Packaging Management with Suppliers- Scenario Overview

Managing returnable packaging materials involves controlling and supervising the lifecycle of packaging materials that are intended for reuse. This includes tasks such as the following:

• Master Data Management
• Inventory Management
• Tracking
• Rental Fees Calculation and Invoicing
• Planning and Replenishment
• Collaboration with Suppliers and Customers

In this system, packaging materials are continuously returned and exchanged between the production plant, designated as the partner location, and the customer or supplier, designated as the exchange partner.

The management of returnable packaging materials in a closed-loop system with suppliers typically involves the following activities:

• Replenishing empty packaging materials to the supplier.

  This activity involves the collaboration of two personas:

  • Packaging Planner: Responsible for initiating the process and verifying the accurate updating of stock data.
  • Shipping Specialist: Responsible for preparing and executing the shipment.
• Receiving packaged components from suppliers.
  • Warehouse Clerk: Responsible for creating the handling units in the system, verifying the received components, and confirming the goods receipt.

• Initiate the process of replenishing empty packaging to the supplier.
• Verify that the stock balance has been accurately updated.
• Receive packed goods from supplier.
• Check that the inventory of packaging material is updated at both the supplier's location and customer’s plant.
• Compare internal postings with exchange partner.

In more advanced scenarios, returnable packaging materials might be routed to repair or cleaning centers for necessary maintenance before being reintroduced into the loop. Additionally, it is common to engage a service provider responsible for managing the returnable packaging materials. This service provider plays a central role in transporting and dispatching the returnable packaging materials to different suppliers.

• Process Step Description

  This step involves sending the empty packaging to the supplier to ensure an adequate supply of containers for fulfilling the delivery schedule in upcoming periods. Typically, the packaging planner on the customer side initiates this step, as he has visibility into the supplier's delivery schedule and an overview of the packaging stock throughout the supply chain. In case of a potential shortage, the supplier may proactively initiate the replenishment process by ordering additional packaging materials from the customer.

• Process Step Execution
  • The packaging planner reviews the available stock of packaging materials on the supplierside and evaluates the coverage based on the supplier's delivery schedule. Various planning strategies can be applied to perform this evaluation. If a shortage is identified, a sales order for the packaging material will be generated to initiate the replenishment process.
  • The shipping specialist creates an outbound delivery with reference to the sales order and handles it like any standard shipment. This includes printing the bill of loading and providing the shipping documents to the truck driver. The process step concludes with the posting of the goods issue. This generates a material document in the ERP system to reduce the stock of packaging material.
• Result

  The material document generated through the goods issue posting will reduce the stock of packaging material in the plant while simultaneously decreasing the account balance in the supplier's account.

• Challenges

  Failure to trigger replenishment at the right time or entering incorrect quantities of packaging material in the delivery can jeopardize the process. Additionally, exceptions may arise in day-to-day business, such as lost or damaged packaging materials. Module 2 provides a detailed explanation of how efficient collaboration with suppliers can help address the challenges.

• Process Step Description

  The supplier uses the empty packaging received from the customer to pack the produced components and build handling units for shipping. These handling units are then received by the customer and can be transported either to the warehouse or directly to the production lines.

• Process Step Execution

  To execute the reception of packaged components, the warehouse clerk initiates the creation of handling units in the system. This task is typically automated when the supplier sends an advanced shipping notification containing the handling unit information as an EDI message. Once the packaged components are physically received and verified, the warehouse clerk confirms the reception in the system by posting the goods receipt. This action increases the stock of components and packaging materials within the system.

• Result

  The material document generated by the posting of the goods receipt will increase the stock of packaging material in the plant and increase the account balance in the supplier's account.

• Challenges

  Any discrepancies between the notified quantity in the advanced shipping notification and the actual quantity received can result in stock inaccuracies, potentially affecting the planning process. Module 2 offers a comprehensive explanation of the processes implemented to effectively address these challenges.