Global Logistics Company UPS Partners with Recycling and Waste Solutions to Develop and Execute a Centralized Palette Program.
The Program will Allow UPS to Track, Salvage and Generate Revenue from Palettes within the System while Optimizing Cost Benefits.
Global logistics company and leader in package delivery, UPS recognized an issue within their palette system, and sought partnership with Recycling and Waste Solutions (RWS) to not only remedy but optimize the program at a local, regional and national level. Understanding that its palettes are a commodity driven by the market throughout regions of the country, UPS needed to be able to monitor, track, value and drive its palettes throughout the system as well as the market in order to cut costs on waste and theft, and drive profit.
UPS understood the value of its palettes by mass and quality, but had no process for capturing that information, tracking it or applying it to operational equations that would cut costs and generate revenue. Through its partnership with RWS, UPS sought a diverse team to with an analytical approach to apply tactful programs across service lines in a way that UPS had not been able to accomplish before.
At the time, UPS did not have the right system – or any system – to track their palettes. The logistics giant did not have any account for what was in the system and what the value of the system was. As a leader in the industry, its palette system was already a very large commodity that was not only undervalued, but essentially devalued.
In order to capture the system data, put a program in place to track, divert, and optimize the value of UPS’ palettes, UPS needed a partner to invest the time and resources with a thoughtful and analytical approach, advanced real-time monitoring and a dedicated and diverse team.
Partnering with RWS, the UPS team offered a sampling of the challenge through its Atlanta headquarters, where RWS conducted its initial analysis to assess the local and regional system. Here the team developed a scalable program that could be customized and rolled out by region, throughout the country, and ultimately, globally.
Using its Audit app, RWS was able to provide real-time data to UPS while onsite during the analysis. This gave UPS an opportunity to take a live look at a numeric evaluation of the incoming, outgoing, diversion and loss of its palettes by volume as well as cost vs. profit. Once the data from the first ten sites in Atlanta were evaluated, the RWS team began applying the same approach with customized tactics throughout the rest of the country, territory by territory, region by region.
It was critical to monitor how many palettes were coming into each hub, what their condition was, how they were being reused to be sent out to other hubs, or how many were being exhausted, either broken down or excessive, that needed to be released from the system through one form or another. And if the palettes were being exhausted, how was that diversion process evaluated and determined for the highest ROI on the material?
Critical to rolling out the program and details of the evaluations was being able to tailor the program to diverse sites and teams, and training the employees in a way that streamlined the process so that their valuable time was not focused on palette evaluation and allocation. In order to ensure this balance of automation and manual review, RWS implemented a chain of custody throughout the supply chain so that there was clear and constant directive on the palettes as they made their way through the system.
From January to August, 2016, RWS helped UPS to divert 165 million lbs. of palettes from landfill. This was a 75% increase from the previous year, a 300% increase on collection and 400% increase on revenue. RWS extracted 1.6 million palettes, and is projected more than 3 million through the end of the year. Now, UPS’ palette program has become a multimillion dollar business. Further, UPS has gained the following advantages:
- A system-wide and centralized tracking and diversion program customized by region and hub necessity, with analytic and realtime technology, bolstered by trained employees and a hands-on RWS team.
- A new stream of revenue that was otherwise devalued as a sunk cost, wasted commodity.
- An auditing system that prevents theft internally and externally.
- A dedicated and diverse team of RWS professionals to implement customized palette programs system wide alongside trained UPS team members.
- Waste collection has been reduced from five times per week, to two times.
- A newly piloted program, reflective of the palette program, to capture corrugated containers. This program is on track to divert 120 tons of OCC, and set to rollout system wide, as well.
- Centralized vendor contacts from a network of nearly 500 down to 1. About RWS Recycling and Waste Solutions provides the nation’s largest supply chains with innovative managed solutions for Commodity Recycling and Waste Services that reduce cost, drive commodity revenue and improve overall services through flawless execution. Managing thousands of locations with hundreds of thousands of work order requests takes proven tools and dedicated resources. RWS knows the full corporate value of sustainable environmental and economic waste solutions.