Lower operational expenses by optimized packaging of transport costs and component prices

The Dutch VMT, headquartered in Stein, south Netherlands, provides complete packaging solutions for the automotive industry. Some of the companies that have used VMT’s products to package their automotive components include Audi, Autoliv, Benteler, Faurecia, Fehrer, Ford, Grammer, Hyundai Mobis/Glovis, International Automotive Components, Intier, Johnson Controls, Kia, LandRover, Lear, Mitsubishi, Porsche, Proseat, Rieter, SAS Automotive, Seeber, Toyota and Volkswagen. The company has its own production facilities in Eastern-Europe: Czech Republic (VMT Ecopack Sro) and Western-Europe: The Netherlands (VMT Ecopackaging BV). A worldwide sales offices structure ensures quick response. The rental company (VMT Packaging Pooling Systems BV) is also situated in the Netherlands and provides global packaging rental.

The company started offering products to the auto industry since 1990. According to the company, its packaging solutions are designed to maximize transport efficiency thus lowering packaging and transport costs. Aim of the durable plastic and steel containers is twofold. First to lower automotive companies operational expenses by elimination of one-way packaging. Secondly to reduce transportcosts by implementing collapsible and nestable solutions which help to maximize empty packaging for return transport . An other important input is the distance of the supplier: on short distance a non-collapsible solution would be better, on long distance a collapsible one. Because of the durable, light and recyclable materials used, VMT says that customers get a quick payback period as the result of the high return on investment of the packaging. For calculation the return on investment, a business case is used, which gives an idea of potential cost savings. Table 1 shows a shortened version of a business case. It reflects the cost reduction in packaging costs compared to one-way cardboard boxes in combination with wooden pallets and the reduction of transportcosts in comparision with non-collapsible steel containers.

VMT provides standard as well as customized packaging. All the packaging solutions can be further customized to meet a client’s demands. VMT’s welding technology makes customization of dimensions possible, with low tooling costs. Protection of the parts and high truck packaging density is an important parameter in the development of new solutions. “We meet all of our customer demands by offering you complete development, prototyping, consultancy and testing expertise to determine the most efficient method of handling your product. It is even possible to use our Ecopack-rental program for multi-trip transport,” says the company.

A good example of VMT’s durable and collapsible containers is the Ecopack palletbox (picture 1). Due to the separation of pallet, sleeve and lid it is possible to reach a unique maximum nesting ratio of 1 to 7. This translates into enormous cost savings in the complete logistics chain, apart from the reductions in cost and waste by eliminating one-way packaging. One of the many advantages of the Ecopack system is that nearly every length, width and height is attainable. This makes it an optimal modular system adaptable to storage and transport dimensions.

VMT says that its 10-year-plus experience at the forefront of designing and manufacturing complete packaging solutions helps it to offer their worldwide customers a wide array of solutions. “Starting as a packaging consulting firm back in 1990, we gradually expanded to a full service supplier of returnable packaging systems for the automotive market. Our wide array of products ranges from ordinary divisions and sheets to ingenious returnable packaging systems. Techniques like thermoforming, injection molding, foaming, die cutting, screen-printing are combined in the most optimal way to create the best logistic and economic packaging solution,” says the company.

VMT has placed a high priority on quality. The company has the ISO-9001:2000 certification that ensures that the entire process from problem definition up to implementation is transparent and complies to the highest quality standards. And with an eye to the automotive industry, VMT Ecopackaging operates according to QS-9000 procedures.

The company has a top-down approach when dealing with logistical and packaging challenges. The company works with clients closely during the whole process starting from prototyping to production and eventually, the final packaging. VMT also offers an excellent after sales service. “We strive to develop a long-term relationship with our customers. As your one-stop-shop for all your packaging issues, our commitment to put in extra efforts sets us apart from the competition. The wide range of packaging solutions we offer the ability to cooperate with a full service system supplier for your packaging,” says the company.

Automotive Industries spoke to Richard van Mulken, founder and managing director of VMT.

AI: How does VMT approach the automotive industry ?

VMT operates launch driven. One to two years before a new car model is in SOP, VMT starts working on defining the most optimal packaging solution for the car components. The packaging is developed and chosen to survive at least the lifetime of a car model, which is on average 5-7 years. Even after the lifetime of the car model, some components can be re-used for new applications. This way of development of containers ensures easy adaption and standardized modules which can be re-used. This avoids capital loss, and makes invest for next model launches in packaging even less.

AI: Can you explain where your packagings are used in the logistic chain in automotive ?

Our packaging is used in the whole logistic chain from Tier 3 to OEM, as visualized with an example in Table 2. Often the distance gets longer the more you get down in the logistic chain, which creates a focus towards more collapsible solutions the further you go down in the chain. The packaging we develop to ship parts from TIER 1 to OEM’s is mainly sequence packaging. Such units are, seen the short distance of TIER 1 to the OEM often fully aimed on easy handling, such as sequence racks with wheels. Seen the very short loop and cycle time due to sequential production, the packaging is re-used very frequently. The use of one way packaging in such a short loop is not profitable which makes durable solutions a logic choice. Also the handling times on the line make easy to pick solutions preferred above expandable boxes. For inbound shipment to the JIT factories in TIER 1, the distance in combined with handling defines the packaging used. The main focus is to avoid one-way cardboard and pallets and to reduce of transport costs on returnables by using collapsible box units. Low cost countries make good nestable and collapsible solutions a must to profit maximum of the LCC. High transportcost could outbalance the cost reduction in labour and materials. Defining the right packaging is crucial to keep transport and logistic costs low. The same is for the inbound packaging used at TIER 2, where distance even plays a more important factor. This makes the pressure even higher to define transport and packaging cost friendly solutions. This is also the starting point of our investigation: what is the protection degree needed, what is the transport distance, are we developing a sequence, JIT or batch production container and how frequently is the packaging re-used (2 times per day or 1 time per 20 days). This strongly defines the container type to be used and if a packaging should be designed mainly focused on quality, handling, packaging cost or transport cost or a combination of those. The average weight of each parameter varies along the chain.

AI: What are the kind of automotive customers that particularly need your packaging solutions ?

VMT has grown from a supplier of packaging solutions for seating components for the main seat systems suppliers to a complete packaging provider for all interior and exterior components. Business is now divided in three Business Units: seating, interiors and exteriors. Seating BU consist of returnable plastic and steel containers for headrests, armrests, foams, metal frames, plastics, electronics. The Interior BU is divided in durable packaging for: doorpanels, cockpit, consoles, dashboard, pillars, headliners, (floor)carpets, sunvisors. The exterior part is divided in rubberized window parts, roofing rails, wheelcover, front-end, rear bumper, lighting systems, exhaust systems, engine covering, mirrors and as last subgroup other plastic exterior parts. The Business Units are TIER 1 driven, but it goes further down mainstream back to TIER 3. For example the groups doorpanels component group can be further divided in complete outbound doorpanel containers (to OEM), inbound packaging for doorpanel carriers (to TIER 1), crash pads (to TIER 2), boxes for pocket holders (to TIER 2), boxes for armrests (to TIER 2). Table 2 gives some idea of different container types used per business unit.

AI: Can you give an example of a recent developed container solution ?

Good example is the Hybrid-VDA GLT container, developed to replace the non collapsible steel wire mesh boxes called Euro-DB Gitterboxes (Picture 2). The Hybrid VDA FLC is a Folding Large Container of 1235 x 825 x 970 mm and fully compatible, inter stackable with metal non collapsible Gitterbox containers, even inside size is the same. Still 22 million of such non-collapsible Gitterboxes are in use, which will need replacement in the coming years. A large potential.

AI: Has VMT made inroads into developing countries where the manufacture of automotive components is increasingly shift to?

We started working as one of the first packaging providers in Russia and the Ukraine. Eastern-European countries like Bosnia, Kroatia, Bulgary, Romania are growing rapidly. Also the Slovak new epic centre of automotive due to PSA and Kia entering this area made this country one of the larger in our sales. Further we see the Russian area as a very high growth potential for our solutions. Areas as St. Petersburg, Nizhy Novgorod and Toljatti are gaining more automotive business. Local sourcing will start for multinational OEM’s which have Joint-Venture partners in Russia. VMT is also planning to start production of containers in such new developing areas.

AI: Please tell us a little bit about VMT’s global presence and how you plan to expand this.

VMT started working with a major interior and seating systems supplier in the USA on elimination of one-way cardboard container and on good collapsing concepts from plastic to lower transportation costs. In the US there is still a lot of expandable packaging, where we see a tendency to eliminate this. It is recognized by US automotive companies to reduce costs in the logistic chain by optimizing their packaging in two ways. First to eliminate one-way cardboard, second to eliminate containers which give high return transport costs. The price of fuels and the change to less fuel consuming cars in the US is contributing and supporting our packaging concepts seen the saving on transport costs. Further we see growing attention of South-Africa. The humid climate makes metal boxes rusty and the dust gives quality issues with many parts. A closed decent plastic collapsing unit has been proven a good solution. Ecopacks were implemented with the SOP of the BMW 1 and 3 serie 2 years ago in Rosslyn at a seat supplier. Since then, we got a lot of response to change metal boxes to folding large containers like the Ecopack container. Also internally in South-Africa we focus on elimination of one way cardboard.

AI: What are some of the markets you have identified for future growth?

The growing tendency of rising steel and fuel prices in combination rising wages, make automotive suppliers more focussed to find cost reductions in logistics. The LCC policy often reduce wages, but increase packaging and transport costs. This makes packaging concepts (quantity of parts per truck, good collapsibility of empty packaging) get more attention. Durable packaging nowadays is not seen as necessary invest or as cost driver, but as a tool to reduce overall piece price of components and of transport costs. We focus on markets where cost pressure gets higher and automotive is looking at implementing cost reduction programs. Generally this is the automotive markets in Western-Europe and the US where the search for costs reductions leads to finding creative cost saving solutions. Developing countries do however not stay ahead in this tendency in finding the most efficient way of shipping out goods, in some cases they are on the forefront of implementing new concepts.