I recently interviewed Michael Rada who discussed the realization of supply chain optimization through innovative packaging.
Michael Rada works for the third largest corporation of Japan. He lives in Czech Republic and works Sumisho Global Logistics Europe, which is a bit unusual. He considers himself to be more Asian than European. He studied Japanese for almost 30 years. He works as a manager with a wide range of responsibilities. Sumisho Global Logistics Europe is part of Sumitomo Corporation. Sumisho Chemical is a department of Sumito Corp. Michael finds it amazing that every day he receives 5 to 10 different pieces of news from Google regarding his company.
One of Sumisho Global Logistics’ achievements is in their packaging. Michael is developing different packaging styles. Through modification of the packaging he can save 8 trucks of 10, which of course the clients are very happy with.
They are currently concentrating on electronics manufacturers, which is one of their major clients. Sumisho slightly differentiates themselves from other logistics companies. They provide the full service in terms of optimization, but also include optimized processes and services. They step in provide a deep analysis of the supply chain itself. They then begin step by step to improve all parts of the supply chain to achieve the most efficient solution.
Packaging is one of the big issues they address. Considering that Sumisho Global Logistics can develop a package which saves 8 trucks out of 10, some assume this service goes against their main shipping business. However, this is not true because even the 2 trucks that remain can be better paid trucks and the client is much more satisfied.
Some people in Czechoslovakia are concerned about seeking consultation from Japanese companies. However, the interesting fact is that no investment is needed. Sumisho Global Logistics simply arrives with a calculator, pen, paper, camera and of course Excel. Excel in Japanese companies is a very important tool. With these tools and a lot of experience their team can implement optimization services.
Future of Packaging
Michael sees the future in returnable packaging and the extension of the life of current packaging units. For example, there is a lot of flow of one way wooden packaging units such as pallets. Almost all of the goods from Asia come on these pallets which are being thrown away in a dump after the first consumption, even being very high quality pallets. This is why Michael started a project to re-use these one-way packaging units for other clients. He creates a multiple usage tool and at the end of the life cycle of the pallet they are shredded and used for generating electricity.
The same process can be applied to cardboard and other materials, which at least in Eastern Europe very quickly end up in a dump. For Michael to develop the returnable packaging units, the current significant advantage in industrial use has a metal and textile combination. Non-woven textiles in combination with metal frames make very efficient units which are flexible, durable, and which have a cycle of roughly 5 years where they can be used easily and efficiently.
Michael recently replied to a LinkedIn question regarding whether textiles are good and someone replied saying yes they are good because it has been used in automobiles for over 10 years. As far as Michael knows the automotive sector is about the only business which uses textile packaging. All of the sectors, even audio/video, air-conditioning, white goods, etc., use card board, foam, or polystyrene, which from Michael’s point of view are not good.
Obstacles to making changes to supply chain packaging
Michael believes there is basically one obstacle; the proper calculation provided to the client which will make a different and provide a return on investment. Before launching a new project Sumisho spends at least a few months to provide full data which are analyzed based on the data from the client regarding sales etc. Sumisho always provides a guaranteed return on investment.
Last year’s return on investment was one year. This year they can even for overseas shipments realize six months or below. If you can guarantee a return on investment within a month there would not be a client who would have an objection.
Another advantage of Sumisho Corporation that the corporation itself also owns banks, insurance companies, etc, so that they can even finance if the client is not able to finance the project themselves.
With such a short time frame for a return on investment, no client says no in the end.
About Michael Rada
SUMISHO GLOBAL LOGISTICS EUROPE