Ford has been transforming its approach to packaging over the last five years under the direction of its chief engineer for material flow and packaging engineering, Kuly Malka. Malka is responsible for all of the OEM’s packaging and container management in Europe and South Africa. He instigated Ford’s first global returnable packaging system and is responsible for the carmaker’s KLT and FXC container pools.
Taking calculated risks to innovate has been a central tenet of Malka’s since his manufacturing engineering days, which began in the early 1990s and it is packaging innovation that is behind the very significant savings he and his team have brought the carmaker through working with container pooling expert Chep and product supplier Macro Plastics, among others.
The gains made have helped to raise the importance of packaging and container management not just at Ford, but in the industry more widely.
It is an obvious point that, without containers, parts cannot get to the assembly line, but it is only relatively recently that the container has been recognised for its wider value as an asset worth investing more in, something that Ford has done. “At Ford we realise that the container is a huge asset,” says Malka.
EuroBins and chocolate trays
Based on a principle of moving more with less, and for less, Malka and his team have worked with Macro Plastics and Chep to transform the European bulk packaging model by introducing the new EuroBin, which was made by Macro Plastics and is being managed by Chep.
Ford is currently moving a significant chunk of its material in an older generation of larger foldable containers. However, in 2018 the carmaker began the launch of a new state-of-the-art box based around a vehicle architecture philosophy proven out on the existing IsoBin (also produced by Macro Plastics) but bigger in size (see statistics box below). The EuroBin is able to handle a 900kg payload and can be stacked six-high, ten-high empty, with obvious gains for empty returns, inventory management and storage. Plans are to right-size the pool by summer 2019.
“What we have done is modernise our container pool and right-size it,” says Malka. He is also keen to highlight, having learned lessons from previous products, how easily the EuroBin can be repaired, thanks to its construction. Unlike the FXC container it currently uses, which has a fixed base, the EuroBin is made up of components that slot together.
“With the EuroBin base, we have actually got three bars and they are connected with a simple locking mechanism,” says Malka. “If a forklift hits the corner, you can remove the affected section and replace it.”
While still in its launch mode, Malka says the damage rate on EuroBins has been very low – “less than 0.2%” – and this will be reduced further by developing with Chep a picture of the constituent parts of the container, highlighting where incidences of damage occur most regularly. That information will be communicated to the plants and supplier base.
“We have to improve the behaviour of the operators who are shunting the boxes around, to minimise the damage through forklifts,” he comments.
Malka says the only constraint he put on the development of the EuroBin was the width of its internal dimension. That was to ensure Ford could reuse all its internal dunnage from suppliers and avoid the huge cost of reinvestment in a new standard.
“EuroBin passed rigorous testing within Ford and Chep with the collaboration through Macro Plastics,” says Malka. “Chep conducted their own key life testing as well, and made a few changes to enhance the robustness. In terms of moving more for less, it is probably the best on the market.”
Under Malka’s leadership, Ford has also introduced ‘chocolate trays’, an innovation by an undisclosed supplier that is being used to deliver powertrain and some other components to the point of assembly in recyclable plastic trays that can hold more parts than the previous method. These trays can be reground into pellets and returned to the manufacturer when necessary. As of the beginning of January, Ford had about 60 applications for this solution and that number is growing.
“It is good for the environment and for our business because we are making freight and material savings,” says Malka. “You can pack more and so there is also a space-saving benefit; the gains from this, financially, are a significant contribution to our business efficiencies.
Global returnable packaging
As noted, Malka’s team also instigated the first global returnable packaging system for Ford based on a ‘taxi-service’ concept, though it required a definitive strategy before it was adopted and Ford trialled it in one of its more challenging markets.
“We did the initial pilot in probably the hardest place to do it – Russia,” says Malka. “We all learned a lot from the project. Here we are, three years later on, and we have got many applications implemented.”
One example is Ford’s movement of catalytic converters from South Africa to all of its plants in Europe. The IsoBin containers are then repurposed and sent to the nearest location of another supplier who will be shipping components back to South Africa. Malka says the Europe-South Africa loop has been very successful and it has begun opening similar loops from Europe to the Americas, with plans to open one between Asia and Europe.
Again, the key to the success of the project is having the right partners who are courageous enough to take risks with innovation and prepared to be part of the transformation, says Malka.
“When you have got partners like Chep, whose strength is pooling, it is really a case of getting partners on board; those with proven capabilities and solutions, which they manage,” says Malka. “My goal is to find the solution, get the business case and get a company like Chep to buy into it; then we implement it.”
Ford’s core business is design and manufacturing but with the right partners in place, it should be a win-win for everyone involved, according to Malka.
“My background was in sports, so it has always been about winning – and in the business world, it really is about everybody making something out of it,” says Malka. “For my company it is generating savings, for our partners it is generating revenue. And it must provide the opportunity to expand. When they expand with an open pool, I am expecting further efficiencies to be generated for all.
Ford balances its use of returnable packaging versus expendable based on individual business cases, taking into account a number of factors that include material sourcing, supplier location in relation to the assembly plants, and flows in Europe.
What is also important for Ford is the environment. Malka recognises the increasing problem of ocean pollution but takes heart from what he has seen since he joined the carmaker’s MP&L function and the pooling of the KLTs. Ford is aiming to do the same with its IsoBins.
“We help the environment because we reuse and recycle, but we need to provide the world with visibility on that,” says Malka. “We also have a zero-landfill strategy, but having durable, returnable containers, coupled with the advent of the so-called chocolate trays, is a good added value for the environment on top of all the other efficiencies.”
Design for logistics
One of the important points about Malka’s background in manufacturing engineering, and before that IT systems analysis (both at Ford), is that as a result he understands the production system and speaks a manufacturing language, something that facilitates the influence materials handling has on parts creation. Manufacturing engineers – or systems integrators by another name, according to Malka – can influence how a car is put together.
“In my old team, we were systems integrators,” says Malka. “We had to explain to our engineering world that there was a methodology to building a car. We then influenced the design upfront in the development. What we have done in my five years in MP&L is the same, it has the same principles; we call it ‘design for logistics’.”
Malka says the materials handling and packaging team has to have an influence on the engineering fraternity when it comes to the design of parts, and drive as many of them as possible into standard containers, leaving only a small amount requiring special containers.
That raises the importance of standardisation, part of Ford’s production system, which dictates that there needs to be real justification for deviating from a standard that has been tested and established.
“The best thing when I joined MP&L was that they actually had a standard tote and a standard durable container called the FXC,” notes Malka. “The mindset is that we try to drive all of our parts, no matter what they are, into those footprints.”
‘Design for logistics’ is also about influencing sourcing and product design, packaging re-use upfront in the development phase, he says.
It is an obvious point that sourcing material closer to the factory means that investment in packaging and container management is lower. However, the world in which suppliers were always centred around the factory has gone, and supply routes are a lot longer because of low-cost country sourcing. Ford needs to invest in more containers the longer its supply chains gets.
“You really have to influence up front the actual sourcing proposals and look at the total landed cost [TLC],” Malka says.
The MP&L function also has involvement with inbound logistics providers because packaging design needs to suit the transport being provided for best use of the available space. Pack density in the box is one concern, but so is how many containers (full or empty) you can move in a truck, which for Malka is effectively just a box on wheels itself.
Language of collaboration
When he says ‘look at sharing’, Malka is returning to a repeated belief: that the only way forward for the industry as a whole is through an open pool strategy and more collaboration between the carmakers and their top tier suppliers in terms of sharing container assets. This can provide solutions for a number of areas, according to Malka, and he is eager to start the discussion about widespread adoption of open pooling.
“My wish is that the whole industry could come together and say: ‘You know what, we recognise that there is going to be low-cost sourcing and that is fine, but why can’t we use and share the same containers to make the world a better place by reducing CO2 and all helping each other to generate efficiencies?” he says.
Malka does not understand why suppliers are not sharing containers, though he admits his thinking is different from that of most supply chain people he interacts with. One thing to get over, he states, is the fear that intellectual property could be compromised.
“To me, there is nothing to be worried about,” he says. “I use the analogy of a taxi service. We all use taxis. But the intellectual individuals are sitting in the taxis, same as our material sits in the box. I don’t really understand why we are not doing a lot more sharing because it is an opportunity in the logistics world and it is how the IsoBin was born.Co-incidentally, we all share the same trucks and ships, do we not?”
Furthermore, this is the approach Ford is taking with Chep on the EuroBin. “The ambition with Chep is that it becomes an open pool as well, like we have done with the totes,” says Malka. “That was born about 25 years ago, which was pioneered by Ford and Chep and now that is an open pool. The open pool is a long-term philosophy.”
However, to understand that shared approach requires company leaders to use the language of manufacturing, rather than “conventional supply chain language” so they can understand that sharing is an advantage for all, he says.