New model programmes present the biggest opportunity to improve the performance of inbound packaging, but is the industry making the best use if it? Jonathan Ward reports
Packaging decisions in vehicle manufacture are intimately linked to new model programmes. While carmakers, their suppliers and their service providers may find occasional opportunities to refine the packaging solutions in use during volume production, the biggest chance to make changes arises with the introduction of a new model. At that stage, there is everything to play for; a new vehicle might adopt different technologies, part configurations or manufacturing solutions. It might use a different supply base with different logistics requirements. But could the shear number of variables involved in a new-model packaging programme be a curse as much as a blessing? Faced with so much choice and complexity, is the industry tempted to fall back on tried and trusted solutions, rather than seizing the opportunity to innovate?
For carmakers, work on a new packaging programme takes place in parallel with the development of the new model from the start. “We begin work as soon as the concept has been defined,” explains Rick Walklet, director of containerisation for GM North America. “Detailed data obviously isn’t available at [that] stage, but we pull in assumptions about the overall scope of the programme, the supplier footprint and the likely size and densities of parts.”
This data allows the packaging team to calculate the programme’s baseline costs, says Walklet, and consider the key trade-offs that determine its overall performance. “Containers and logistics go hand in hand, and we do estimates and tracking for both so that we keep them aligned,” he says.
The initial calculations also mark the start of a dialogue with other parts of the business aimed at optimising the programme. “If we see particularly high costs in our early estimates, we work with the programme team to see if there is a way to bring them down,” explains Walklet. “We have the benefit of visibility of the entire value chain at that point, so we can work cross-functionally to explore options like the number of total manufacturing locations for a part. Perhaps we might see that if there is the option to run two sets of tools instead of one, we could reduce the total enterprise cost.”
With the basic logistics concepts established, the design of the packaging proper can begin. “Based on prior experience, we generally know which components will use standard racks and containers and which will require unique designs,” says Sukhvinder Sehota, supervisor in materials handling and packaging engineering at Ford’s technical centre in Dunton, UK. “We then rank the packaging requirements in order of priority: 80% of our effort is spent on the custom racks.”
GM’s Walklet describes a similar approach. “We have a bill of containers that we can adapt and modify depending on the needs of the programme.”
The exact nature of the modifications required will only become clear as the geometry data on parts becomes available. “As the programme evolves, we can start working with math data to improve the container design, by carrying out space evaluation and looking at how parts will be nested,” says Walklet.
This is also a key point at which the packaging team can give feedback to their engineering colleagues if a particular part configuration looks problematic from a packaging point of view. “If we see a big opportunity, for example if you could remove a particular bracket to dramatically improve packing density, then we will go back to the design team and see what can be done,” Walklet notes.
The growing use of offshore and long-distance supply chains also calls for close and careful interaction between the packaging and manufacturing functions. “Right now we are discussing a new approach for a heater and blower assembly,” says Ford’s Sehota. “On previous programmes, those components have been supplied pre-assembled in highinvestment standard packaging but they have moved to a long-distance supplier, and we get much better freight figures if we ship the parts separately in low investment, standard packaging and then assemble them in our plant, as long as we can maintain production quality, so we are exploring that option now.”
Offshore supply chains are also a new frontier for the introduction of returnable packaging. The high cost of return journeys means offshore suppliers typically use expendable packaging today, but a number of players are entering the market with returnable designs, optimised to fill standard shipping containers.
David Hampton, president of Goodpack’s automotive division, for example, says his company is enjoying some success introducing its standard intermediate bulk container on long distance routes where it can integrate them with other supply chains for return journeys. Goodpack containers are currently being used to ship automotive components from South Africa to Central Europe, for example, before being cleaned and delivered to European rubber producers, which fill them and send them on to its customers elsewhere in Europe or worldwide.
Container pooling specialist Chep is also getting into the international returnable market, according the company’s director of business development, Dave Alden, with a new folding, stackable container design optimised to fill a standard container both full and empty.
Another key decision to make at the concept stage is who in the supply chain will be responsible for the design and purchase of packaging. This decision will depend on the carmaker’s overall philosophy on inbound packaging, and on the specific configuration of the supply chain in question. GM, in North America, says Walklet, always owns its packaging. Other manufacturers are increasingly giving packaging responsibility to their tier one suppliers, or outsourcing to third party container pooling operations like Chep or Surgere.
At Ford in Europe, the ownership philosophy is changing, says Sehota. “In the last few years quite a lot of strategic packaging decisions for major commodities were made by our suppliers and Ford purchasing, although even then we were involved to verify their assumptions and the costs. More recently, however, there is an understanding in the business that transparency and control of packaging is very important, especially when things go wrong in the supply chain.
For packaging manufacturers, 3PLs and consultants, the trend toward giving suppliers increasing responsibility for packaging design has led to them offering more value-added services. “Suppliers often don’t have their own internal packaging design capabilities,” explains Dan Roovers, vice president, automotive sales at packaging manufacturer Orbis. “So when we work with suppliers, we generally offer more support and dedicate more resources at the development stage.”
If tier one suppliers are given the responsibility for packaging design, or if they choose to outsource this work to an external service provider, a key challenge can be meeting the widely different packaging requirements of different carmaker customers. As Bridget Grewal, director of engineering at packaging consultancy Surgere points out, different carmakers have traditionally had “packaging philosophies” that vary significantly. “While some carmakers like heavy-duty containers designed to be handled with forklift trucks, others [who] prefer more gentle, manual handling will tend to go for lighter, plastic designs,” she says.
Rodney Salmon of UK-based packaging consultancy Copperbay, suggests the need to understand the multiple packaging requirements is costing the industry a lot, particularly when a single line or production facility feeds multiple end customers. “I was speaking to one tier one suppler recently who was producing trim parts for eight different OEMS. They had to deal with 12 different pallet sizes and multi-packaging types, including wood, metal, cardboard and plastic. In total, they were filling 240 different packaging combinations, they had more than ten people dedicated to packaging engineering full time, and had to pull in more help for new model programmes.”
Eliminating this complexity could deliver dramatic savings, suggests Salmon. “When I asked the plant manager how much standardisation could save him, he thought it might be as much as 50% of total packaging costs.”
Once all the concepts are in place, carmakers move from trying to get things done as early as possible to as late. Detailed container design, says Walklet, is carried out as close as possible to launch date to minimise the number of late container design changes requiring rework. During the detailed design phase, container engineers must integrate the requirements of multiple stakeholders, including optimal packing density and part protection and loading and unloading, which will have particular requirements depending on whether the process is automated or manual.
Converging quickly on the right solution is done with a combination of established best practices and collaboration. GM, says Walklet, uses an internal bill of containers database, which defines standard packaging concepts for particular component types. Stakeholders are then given the opportunity to sign off on the final container concept, and to review and test a sample.
Sometimes, testing requirements are as much about gaining an understanding of the real use case. At Surgere, senior engineer Gary Grewal says his team is increasingly using vibration monitors mounted on containers to gather data on the level of shock and vibration experienced in transit, particularly on unfamiliar routes in emerging markets.
“We can gather that data remotely, and use it to develop accelerated tests on our own vibration tables that can replicate the effects of a multi-day trip in an hour,” he says. This approach is most often used to convince customers that lighter, more space-efficient packaging solutions would provide the strength and part protection they need. “We did this for a tier one customer recently and saved them $750,000 at a stroke,” he notes.
Packaging engineers at tier one suppliers are less likely to have the luxury to interact with the product design teams. Michael Silvio, director of supply chain management at Cooper Standard Automotive says that his team usually gets its first opportunity to consider packaging design after part sign-off. “We use standard containers wherever we can, but some parts require specialist packaging due to their size or protection requirements,” he says. “That is particularly the case with larger items like fuel lines, which are usually the last part to be designed on a car, because they need to be routed around everything else.”
Once the design is complete, carmakers typically order an initial run of containers to support their prototype and testbuild activities, followed by one or more batches to support the programme in time for the start of production. “Six to eight months prior to production we are usually supplying racks to the production line, which helps plant facilities and carriers check that they can manage the racks at volume production,” says Sehota.
“A lot of the decisions about who makes the final rack fleet are driven by supplier capacity issues,” says Sehota. “We use a relatively small number of rack suppliers and, because different model programmes often overlap, you might find that the supplier that built your prototype racks doesn’t have the capacity to build the full fleet. Sometimes we even dualsource the final fleet. Our main priority is that the availability of packaging shouldn’t be a constrain on production.”
One risk with a highly refined, evolutionary process for packaging selection is that it closes the door on the adoption of innovative concepts. Pleasingly, the carmakers we spoke to were able to point to clear examples where the new technologies, or concepts developed in other areas, are making their way into new model programmes.
At GM, Walklet describes the use of lightweight, stackable plastic packaging to replace conventional steel racks. “In the past couple of years we have moved from a steel rack with dunnage to a plastic pod solution for a very large component,” he says. “The technology was one we used on smaller components in the past. Scaled up to the larger parts it saved container cost, weight, and gave the same packing density and part protection as the original steel rack”.
Surgere’s Bridget Grewal thinks that increased input from tier suppliers is also enabling the introduction of novel package designs, which can offer some unexpected but important benefits. “We were involved recently in a project for Chrysler for a part that required the container to be accessed from both sides at the line,” she says. “The original design required the container to be mounted on a turntable, but we were able to work with the supplier to come up with an alternative using a turntable mounted inside the container itself. The result was a container that only requires 54 inches (137cm) of line-side space instead of 96 [inches].”
Once a container fleet goes into production, packaging engineering teams typically move on to other projects, although they may be called back in if there is a problem with the package, or increasingly, if somebody spots an opportunity to improve packaging performance during the life of a programme. “If you can fit more parts into the same footprint, you might be able to significantly reduce transportation costs, and if the parts are travelling a long way, even a relatively small improvement can be worth doing,” says Silvio of Cooper Standard. “We sometimes find that the physical flexibility of a part allows you to put more in a container without compromising accessibility, for example.”
Repair, reuse and recycling of containers between programmes is becoming an increasingly important issue, as rising raw material prices drive up the cost of container fleets and companies look to save money and reduce their environmental footprints. “Much of our current development work is driven by repair and recycling issues,” says Ford’s Sehota. “We ask how easy it will be to fix a rack if it breaks, and how easy it is to separate the various materials used at the end of life. You don’t want to use plastic-coated steel if you can avoid it, for example.”
Standard designs also help the reuse of containers and components between programs. “We try to communise all pallets on a standard footprint so you can remove the top structure off and recycle the base,” he continues.
Copperbay’s Rodney Salmon says that the high price of plastic resin means that recycling should be right at the top of the business case for packaging suppliers. “The first thing you should do if you are talking to a carmaker about a new programme is find out about the container fleet used on the outgoing model, and as a good supplier you should offer to recycle or recondition any existing packaging and reuse material or existing packaging for the new programme.”
Even in standard containers, steady evolution is driving increased recycling. “The tooling costs for plastic containers can run into the millions of dollars, so new designs tend to evolve over time, but our customers are always looking for refined container designs, to fit more parts into a container and more containers into trucks and sea containers,” says Dan Roovers of Orbis. “Recently, we have introduced several new container types, so there is a lot of buyback of old container fleets.”
Used plastic containers are ground up and combined with virgin material in the manufacture of new ones. “The percentage of recycled material we use in our containers varies between 10% and 50%,” says Roovers. “We determine the right amount of recycled material to use by testing prototype containers and comparing them to those produced with virgin materials. We’ll only add recycled material if there is absolutely no performance sacrifice, and the amount you can use varies by container design.”
Rising fuel prices have made the weight of packaging a more important issue than in the past, which is pushing the use of novel materials, particularly for larger, heavier parts. “We want to reduce the size and weight of our steel rack fleets, basically to reduce the net weight of our packaging,” says Sehota. “Today we ask, how can you take 30% or 40% out of the weight of the rack, in order to generate a lighter freight load, so reducing fuel consumption, and possibly lower investment costs for a rack fleet.”
Approaches under investigation include the use of thinner, lighter sections in conventional rack designs, as well as the introduction of plastic and composite rack designs for larger, heavier parts.
Driving this change will require the adoption of new material technologies, however, and this is one area where Sehota sees a significant opportunity in the industry today. “A lot of packaging companies approach us with new commercial concepts, but not many want to talk about the packaging materials,” he says. “We need that input today, but it’s not clear whether the current packaging companies have the materials science capability to develop such concepts.”
Everyone in the packaging supply chain agrees that earlier part sign-off would help, by allowing more time to refine and optimise package designs, but most accept that late design changes are an inevitable fact of life in the design process, although other key trends have helped in recent years.
“The on-going standardisation of vehicle modules and platforms has helped by reducing the variation between models,” says Sehota. “But that is an approach that is driven by the product development and manufacturing benefits it offers, unfortunately not to make the part packaging easier.”
