EFFICIENT LOAD PLANS PROMISE BIG SAVINGS: EUROPE STUDY

JAMES FALLON

LONDON (FNS) -- The development of efficient unit loads as part of supply-chain management could result in savings equal to 1.2% of a product's final sale price, according to a study released by ECR Europe.

The study, which examined storage and transportation practices and containers, was conducted by consultants A.T. Kearney, Munich, Germany, as part of the Efficient Unit Load project team of the ECR Europe program. The research results predicted that the use of more standardized unit loads could produce savings of $6.82 billion (U.S.), based on total 1994 sales in Europe of fast-moving consumer goods, according to ECR Europe.

These savings are in addition to the potential savings of 5.7% projected if companies introduce changes based on the first step of ECR, analysis of the supply chain. The study polled 25 companies throughout Europe -- 14 manufacturers and 11 trade organizations -- with total annual sales of $67.5 billion (U.S.).

The study, released late last month, represents phase one of the Efficient Unit Load project team's initiative, which began in November 1995. The second phase, expected to be completed this month, focuses on the development of general principles in the field of secondary and reuseable transport items and estimates the potential savings from EUL.

The final phase will test the principles and confirm the savings. A working group is addressing transportation and storage, and A.T. Kearney is looking into the savings question.

Among the study's findings:

Existing international and European efficient unit load standards are only moderately used;

The use of many local standards has resulted in the proliferation of pallets, roll cages, boxes and plastic trays of different sizes;

Local ECR initiatives that do not conform to the European standards could potentially contribute to further proliferation of various pallets and other containers;

The product focus of manufacturers contradicts the shelf focus of retailers, and

Proven savings will be the biggest driver in broader acceptance of international and European standards.

The project team includes manufacturers from the European offices of Danone; Gillette; Heineken; Kellogg; Mars; Nestle of Switzerland; Sara Lee; Unilever; Procter & Gamble; L'Oreal, Paris; and Dr. Oetker. Retailers include Atlantic of Greece; France's Auchan; Edah, Netherlands; FDB of Denmark; Sweden's ICA; Germany's Karstadt; France-based Promodes; Italy's La Rinascente; Austria's Spar; and Tesco of the United Kingdom.