AGCO International GmbH, a leading global manufacturer of tractors and other agricultural equipment, has formed a new partnership with CHEP, signing a two-year contract for a pooled container management program.
This new contract, signed in December 2010, will see CHEP providing packaging and services solutions for the flows of inbound components from AGCO suppliers in 16 European countries that ship to five AGCO manufacturing facilities in Germany, Finland, and France. CHEP will support this business from 12 of its container service centres across Europe.
Under the contract, CHEP will provide a managed pool of standard reusable containers and use its technology to manage AGCO's own pool of specialised containers. Previously AGCO utilised a mix of reusable containers from its own pool, cardboard cartons and other one-way packaging, suffering logistics inefficiencies and unnecessary costs as a result.
AGCO Vice President of Purchasing and Materials, EAME, Torsten Dehner, said: "The delivery of supply chain excellence through cost reduction and continuous improvement is critical to our business strategy. By partnering with a professional and experienced packaging and supply chain solutions provider such as CHEP, we believe our success in these areas is greatly enhanced. This allows AGCO to provide an even better quality of service to our customers."
CHEP and AGCO are partnering to identify opportunities for the standardization of packaging across AGCO's European and worldwide supply chain.
The elimination of non-standardized one-way packaging and outsourcing of pooling container services has considerable potential to improve efficiency. It reduces unnecessary transport and ensures maximum efficiency for the customer, which no longer needs to relocate empty containers within its pool. AGCO's supply chain will have a higher degree of visibility thanks to CHEP's Internet-based PORTFOLIO+PLUS™ system, which displays all container movements and locations on a global scale. The online system offers a user-friendly ordering structure and the ability to perform standardized processes easily.
AGCO, Director of Transportation, EAME, Bϋlent Ileri, said: "Our decision to work with CHEP will not only allow our business to realise cost savings, but also improve our overall efficiencies as we reduce the time and resources we allocate to packaging management, handling and transportation. These efficiencies help us reduce our overall environmental impact and improve our sustainability performance. Combining this with a reduced need for capital investment and greater flexibility during production fluctuations made it an easy decision to partner with CHEP."
CHEP EMEA Vice President of Automotive & Industrial Solutions, Marcelo Di Benedetto, said: "We are delighted to be helping AGCO achieve its goal of supply chain excellence. We are confident AGCO's decision, as a leading manufacturer of agricultural machinery, will prompt others within the industry to review their packaging processes and consider opting for CHEP to gain similar significant cost savings, an improved sustainability footprint and greater supply-chain efficiency."