Dieter Held manages the “Packaging logistics at its best” project
Packaging for more than 30,000 different products is delivered directly to production units at EMD in Darmstadt, Germany, every day. The company was recently honored with the 2012 German Award for Supply Chain Management for the sophisticated concept that makes this effective packaging delivery system possible.
“This award is like the Oscar for logistics,” says Rüdiger Grigoleit. The Head of Central Services at EMD is proud that the German Logistics Association (BVL) chose EMD and its innovative packaging concept for the honor.
Among other things, the company was selected for the award because of “the sustainable manner in which EMD evaluated and changed its own processes and those of its suppliers,” says Bernd Gottschalk, who headed up the panel that selected the award winner.
The main objective of the new packaging concept was to achieve higher efficiency at the same level of quality as before. To this end, the concept focuses on just-in-time delivery to all production units at the Darmstadt site of EMD. Since the new system’s introduction, trucks have been delivering all the required packaging from external suppliers directly to wherever EMD needs it. The system has proved very reliable for everything from small glass vials to special cardboard boxes and plastic containers.
Manufacturing units always get the packaging they need in the required amounts for their daily production of more than 30,000 different articles, and without having to store any of the packaging onsite. This is what enabled EMD to close its large packaging warehouse in Darmstadt, which had 4,500 separate pallet stations. The space previously occupied by the facility can now be put to good use for the further development of the production location. Thanks to the flexible delivery of packaging within the site, EMD now saves several million euros each year.
Implementing the new packaging concept was no easy task, however, as EMD utilizes a huge variety of packaging. Darmstadt alone requires around 3,500 different types of packages — everything from bottles and vials to barrels, canisters, and corrugated cardboard boxes. The volumes they hold range from one milliliter to 1,000 liters.
To begin with, units with different target corridors had to be convinced of the need to achieve a common objective. After all, smooth collaboration between the dispatchers, suppliers, service providers, procurement departments, quality assurance departments, manufacturers and the company’s plant transportation units is absolutely vital.
The resulting transport flows must be organized and managed as quickly as possible from the time the packaging is ordered to the point at which it’s delivered to the site. This was no longer possible with conventional logistics processes, which is why the packaging management organization converted the entire order and delivery processing system into an electronic data interchange (EDI) setup to coincide with the introduction of the new concept.
This digitization now ensures a fluid process chain from the initial online order to the well organized deliveries at the site. Among other things, orders are processed in a manner that ensures trucks are loaded with packaging in the exact sequence it needs to be unloaded when they reach EMD. A EMD forklift operator meets each truck that arrives at the entrance gate and accompanies the vehicle on its planned route to each station where packaging needs to be delivered. Barcodes on the pallets are then used to identify and check off the individual packaging deliveries as they are unloaded from the truck.
Dieter Held (left) and Rüdiger Grigoleit (fifth from left) received the German Logistics Award 2012 for developing innovative packaging processes. They are shown here with colleagues from EMD and representatives of the German Logistics Association
© BLV/Kai Bublitz
It’s not just the large number of different products manufactured by EMD that makes packaging logistics such a big challenge. A more important issue involves the fact that packaging for pharmaceuticals, food, and special chemicals need to meet much higher safety and purity standards than is the case in many other sectors. EMD achieved a type of balancing act here by complying with all legal stipulations, while at the same time creating a completely new packaging delivery system characterized by flexible processes.
The key instruments it utilizes are quality assurance checks at supply chain partners and pre-delivery spot tests at EMD, as Dieter Held, who manages the “Packaging logistics at its best” project, explains: “As a result of this setup, our suppliers always have an approved packaging inventory that they can use for deliveries to EMD as needed.” This approach also saves time by eliminating the need to check the quality of new deliveries as they arrive. This ensures the packaging logistics system can be integrated seamlessly into the production process chain.
Consistent quality assurance, flexible logistics chains, electronic data interchange, and the drive to innovate — these are the cornerstones of the successful just-in-time packaging delivery system at EMD. However, it was the well planned and well thought out packaging concept that truly laid the foundation for the project’s great success.
For this reason, the BVL panel expressly praised the exemplary implementation of the analyses, strategies, and communication and investment measures that made this supply chain management solution possible. The panel also pointed out that EMD’s concept could serve as a model for other industries outside the chemical and pharmaceutical sectors. The award was presented during the 29th International Supply Chain Conference.
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