WAL-MART SMOOTHS THE FLOW OF PERISHABLES WITH PLASTIC

PATRICK SCIACCA

BENTONVILLE, Ark. -- Wal-Mart Stores here is improving the flow of perishables through its supply chain with the aid of reusable plastic containers supplied by third parties.

"It's a returnable-container initiative," said Bruce Peterson, vice president of perishables for the large retailer. The returnable-container program is similar to pallet pooling in that the third-party owns the asset and the retailer rents it, according to Peterson.

The stackable plastic containers move from the grower or shipper to the retailer's distribution center and then to the stores, where the store-ready containers are displayed, reducing the handling of the perishable product.

Once the perishables are loaded into the reusable container they aren't touched again until the customer touches them, Peterson told SN.

When the containers are emptied, they are returned to the DC where they are picked up by the third party. However, Peterson noted, in the future there may be some backhaul opportunities for Wal-Mart, if the third-party's depot is within a reasonable distance of the DC.

Peterson said that plastic containers offer some advantages over traditional corrugated boxes when shipping through the supply chain.

They include durability, which directly relates to a reduction in damaged/lost products, as well as speed, because the containers are display-ready and stack easily.

The reduced damage and increased ease and speed of product flow through the supply chain have provided enough savings to expand the two-year-old pilot program.

The program is still ramping up, according to the retailer, which moves about 25,000 returnable containers a month through two of its DCs.

The reaction at store level has been so positive that store-level personnel want the program to expand faster, according to Peterson.

"I think it's still in the pilot stage. I don't have enough stores set up with containers to definitively say it's doing well," Peterson said.

Although there is no plastic container rollout planned for the immediate future, the retailer said plastic could be a dominating force in the future.

With plastic containers, unlike corrugated boxes, 'it's not a one-way trip," Peterson noted, eliminating the need for the retailer to deal with waste.

Plastic containers also open the door to the possibility of using radio frequency technology for tracking the plastic containers.

"It [RF technology] is being looked at," Peterson said.

The transition to third-party plastic containers did require modifying some pick sizes as the retailer moved from about 600 sizes down to six.

"We spent some time educating the warehouse staff on how to work the new containers, which lock together," Peterson said, noting there was also some initial hesitation from some vendors to use the new containers.

"I think there are legitimate concerns and there is some resistance to change, [but] we're fortunate in our vendor alliances that we can test new things," Peterson said.

Before the retailer even considers the returnable containers for a product, Peterson said, there are several logistical factors that are weighed into the decision.

Some of these factors include the effect of packing the product into one of the standard plastic containers, how the container will be handled at the DC, and how the store will get the containers back to the DC.

He noted that this process takes place each time a new commodity is considered for the container program.

Peterson said the latest challenge has been using the containers for bananas, which have unique shipping requirements, he noted.

The retailer is currently working with two container-pooling companies -- International Food Container Organization, Tampa, Fla., and Chep, Orlando, Fla., which is most noted for its pallet-pooling program.