Each year, the Automotive Industry loses between 16 and 18 percent of reusable packaging assets, which, according to Surgere’s Chief Executive Officer Bill Wappler, amounts to an enormous “multi-billion-dollar problem.”
Unfortunately, the issue of lost assets isn’t limited just to the Automotive Industry. The issues the Automotive Industry faces are congruent with those faced in the Food Supply Chain, Retail Supply Chain, Pharmaceutical Supply Chain, etc.
Companies have typically found that as their supply chain becomes more complex, they’re burdened with high costs stemming from inefficient handling of returns to suppliers. These complexities and capital losses translate directly to the average consumer resulting in higher costs for goods.
For Honda of America Manufacturing, Inc., having blind spots within their own supply chain was unacceptable. Simply put, Roger McIntyre, Department Manager of Material Service with Honda of America, said, “As our supply chain has gotten more complex, we’ve outgrown it.”
The inevitable growing pains Honda of America’s supply chain faced resulted in lost containers and a general lack of visible assets.
Due to inefficient handling of returns to the supplier, when a returnable pack was unavailable, the supplier would resort to using corrugated boxes. Corrugated boxes cannot be reused, efficiently stored or loaded into trucks.
On some occasions, the supplier would have to expedite the shipment of reusables back to the supplier. These practices resulted in burdening Honda of America with high costs and it became clear the status quo was an unsustainable model.
Several years ago, Honda executives met with Surgere — the developer of the web-based community AutoSphere — to manage their packaging supply chain.
Surgere provides customized solutions for every supply chain utilizing sensor-based science – in conjunction with their proprietary cloud-based solution – that delivers unprecedented visibility, data and ROI.
Original equipment manufacturers (OEMs) working with Surgere typically experience increased productivity, a reduction in operating costs and a visible ROI in as little as six months.
For Surgere, the key to solving Honda’s supply chain issues and universal issues spanning the entire supply chain system was delivering the appropriate technology in the form of a community.
AutoSphere was specifically designed to link automotive OEMs with their Tier 1 suppliers. AutoSphere allows automotive supply-chain partners to engage in the same set of activities while drawing on a common database.
Relevant data provided by Surgere’s solutions can pinpoint — with 99.9% accuracy — when a supplier has loaded a truck, what’s on the vehicle, where it’s going, when it arrives at the distribution center, and when the OEM accepted receipt. Most importantly for Honda of America, Surgere’s system allows for close tracking of empty containers when they’re returned to the supplier.
Ultimately, after three years of research analysis, Honda of America chose Surgere’s Solution for their supply chain. A full rollout is scheduled to go live in June and finish up around July 2019.