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Optimizing logistics

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European Business: IFCO Systems developed a relatively simple product that has essentially revolutionized logistics for retailers worldwide. Is this the result of pure luck or savvy business?

Wolfgang Orgeldinger: In business, success is all about timing and responding to a pressing need. Our company developed a simple solution to a very widespread need for practical and reusable containers that are optimized for the shipment and retailing of foodstuffs. Before IFCO Systems introduced its collapsible containers, retailers across the globe were producing an immense amount of waste generated by one-time-use boxes. In 1992, the international food container (IFCO) tray was developed in Pullach, Germany, as an alternative to disposable containers. Users at all levels of the supply chain now appreciate the simplicity of our packaging for guaranteeing the freshness of their products, as well as the ergonomic design, which greatly decreases workloads and logistics costs.

European Business: How does integrating IFCO packaging reduce workloads and contribute to environmental sustainability?

Wolfgang Orgeldinger: In terms of environmental sustainability, our reusable containers minimize waste in two ways: by maintaining the integrity of perishable items during shipment and also by mitigating the number of disposable boxes that would otherwise end up in a landfill. IFCO Systems is a global leader in this field because retailers see the potential to reduce both labour costs and resources consumed in the process. Furthermore, our partners are satisfied with the IFCO boxes because they offer sufficient ventilation for fresh food products and are easy to collapse and stack.

European Business: In just 25 years, your company has established a strong presence in over 30 countries and serves customers in more than 50. Has IFCO Systems cornered the market on green packaging?

Wolfgang Orgeldinger: Although our company does have a leading position, with over 290 million reusable plastic containers (RPCs) currently in circulation in 330 retailers globally, it is not entirely accurate to claim that IFCO Systems has cornered the market per se. There is lively competition at regional and national levels that we have to face every day. What does set us apart from the competition is that, with more than 90 service centers worldwide, we are present wherever our customers are. IFCO Systems is by far the most experienced provider of RPCs, with the most impressive infrastructure to take on a variety of consumable products, from fruits and vegetables to meats, fish and even beverages. We have also developed a modular system for the containers so that they can be mixed and matched to accommodate any shipment.

European Business: In an intensely logistical organization like IFCO Systems, does digital technology play an important role in the management of these intricate supply networks?

Wolfgang Orgeldinger: For the last 15 years, we have been employing sophisticated IT systems to optimize container flows, developed by a very experienced team of IT experts and mathematicians. This is a highly complex process that requires the expertise to forecast how long the containers will be on the road, when and where they will be returned, as well as where they will be shipped to next. The whole operation has to be controlled efficiently and cost-effectively.

European Business: Do you provide your customers with direct access to their RPC orders through IT interfaces?

Wolfgang Orgeldinger: Internally, our operations are based on an SAP ERP merchandise management system. For our customers, we offer internet-based systems, which enable them to order the RPCs as well as to track their RPC flows. These systems have been in use for many years and are constantly improved. Our customers have the opportunity to do business with us over the internet as well as through other tools such as EDI.

European Business: You mentioned that IFCO Systems continuously improves its IT systems. Are there any new developments on the horizon?

Wolfgang Orgeldinger: The latest thing to happen in this context is the close cooperation with our sister company, BXB Digital, in Silicon Valley. The goal of BXB and Brambles is to turn dumb assets into smart assets by equipping the existing assets of the group with sensors and RFID chips for the real-time analysis of data. We are currently working together with BXB on a project for a large-scale US trading company to follow the supply chain of fresh products without gaps, which will ultimately improve the quality of the delivered goods. Shortening the supply chain will ensure that consumers are offered only the freshest products at the lowest price point.

European Business: So, your background in IT is still applicable in your current position?

Wolfgang Orgeldinger: I’ve been fortunate enough to experience the corporate world from several angles. I began my career in marketing, but after ten years I transitioned into the distribution side of things. Consulting, operations and IT followed, and although I am no longer directly involved with IT, the advantage of an IT background is that you understand how a company works and can continuously identify opportunities to streamline operations.

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