xTrack PMS – Returnable Packaging Management

Have you ever lost returnable packaging, such as wooden pallets, during logistics activities? In a large company, thousands of lost pallets in a year – which is not exactly a rare occurrence – means tens of thousands of euros added to costs. And we’re only talking about the product itself, the pallets themselves. What happens when we also take into account the human effort of managing the packaging? The costs increase even more! Managing returnable packaging with the right software solutions ensures tight control of costs and promotes a sustainable business model based on digitalization in logistics and environmental protection.

What is xTrack PMS (Packaging Management System)?

xTrack PMS is the application that automatically manages returnable packaging (Euro pallets, non-standard pallets, crates, containers, etc.) accompanying the product or products to be sold.

To support logistics companies (and not only!), Axes Software has developed the xTrack PMS (Packaging Management System) application within the framework of the project co-financed by the European Social Fund through the Competitiveness Operational Programme 2014-2020: “Innovative platform for the management of work processes in factories and warehouses through artificial intelligence“.

The application has maximum flexibility, so that it can be adapted to the needs of each individual company. It has been designed for companies that use a large number of returnable packaging items (manufacturers, distribution companies, 3PL service providers) and need to keep a close eye on them to reduce the costs caused by their loss.

In a warehouse network, things get much more complicated. While it may seem simple to take care of some returnable packaging items, in companies with complex logistics flows, managing them proves very difficult without an automated system.

Returnable packaging can be found in many different states, no matter what type of business you run. They can be in stock (unused), they can be with the carrier/courier/haulier or with the beneficiary (at the warehouse). Packages can be declared as damaged or they can be replaced by vouchers, which are documents proving that the driver handed them over with the goods to the beneficiary who holds them for a while and has to return them by a certain date.

xTrack PMS records all these situations for each individual packaging item and changes its status when a change occurs. This means you know at any second how many packaging items you have, where they are and what their condition is.

Advantages of xTrack PMS

Here, in brief, are the advantages that xTrack PMS brings you:

• You can define a variable number of states or stages in which the returnable packaging items you manage can be found, depending on the specifics of your operations;
• You manage the number of returnable packaging items allocated to each customer (goods supplier and package owner) and beneficiary quickly and easily;
• You track the several types of packaging items you manage at the same time;
• The application ensures full packaging traceability;
• You may accurately manage unavoidable losses due to packaging wear and tear;
• You always have access to accurate data because the application has a flexible reporting system built in.

In addition, all parties using returnable packaging pay more  attention to managing their stocks at different stages.

xTrack PMS integration with other applications

The benefits of returnable packaging management through xTrack PMS are maximized when the application is integrated with other logistics software solutions.

xTrack PMS processes can be automated through EDI (Electronic Data Interchange) messages that the system automatically receives from various other applications. From TMS (xTrack TMS) applications, for example, xTrack PMS receives information about loading and unloading of goods from the customer and unloading at the final recipient.

xTrack PMS can also interface with a WMS application, which provides data on changing statuses within a warehouse. If you use the xTrack WMS application, collecting data from the warehouse is made very easy through task technology.

The flexibility of xTrack PMS allows you to set as many stages or states as the packaging you manage may be in. From our customers’ experience, we know that it is useful to generate a status change in PMS for every event recorded in external WMS, TMS or POD applications.

Information about returnable packaging stocks can be used when making return decisions to customers.

Stocks of returnable packaging

Returnable packaging stocks are tracked by xTrack PMS from the moment they leave the customer’s (packaging owner’s) premises until they are returned. The application has built-in methods for changing the characteristics of the packaging and the final destination of each item.

Packaging circuit

Once they leave the customer’s premises, the packaging may be:

• with the carrier (transport company),
• in one of the logistics company’s warehouses,
• in the custody of a beneficiary (left at the place where they were delivered, together with the customer’s products), as evidenced by a document called a voucher,
• damaged (destroyed).

The rule is that after taking a number of returnable packages from a customer (which is marked in the transport management system – xTrack TMS), the carrier returns the same number and types of packages to one of the warehouses of the logistics company that organized the transport. Subsequently, returnable packaging items can be transferred between warehouses, with or without cargo, the two states being treated differently and highlighted separately in the xTrack PMS application.

To compensate for returnable packaging destruction and loss, the logistics company can purchase packaging from various suppliers. These are highlighted separately and have no return-to-customer feature.

Packaging stocks are kept in minute detail, so restrictions may be placed on not returning more packaging to a customer if the customer’s packaging items have not been recovered from the final recipient of the goods. A beneficiary can say: ‘The goods on the pallets have not been sold, so I can’t return those returnable packaging items yet!’ This information will also be in xTrack PMS and the customer can be notified.

This way you’ll always know, down to the smallest detail, what packaging you have in stock, who it came from, who it needs to be delivered or returned to and where it is.

Return of packaging

Packaging items are returned to the customer from the nearest warehouse to the customer’s location. In this way, xTrack PMS organizes the collection flows to the selected warehouse of all packaging recovered from different network warehouses. You save a lot of work just for this operation if you don’t do it manually!

What happens actually? The carrier is sometimes left “loaded” with a number of reusable packaging items that they have not physically returned. With xTrack PMS, you can keep track of returns for each individual carrier. This way, when carriers return packaging items used in multiple shipments in one batch, it is simple, fast and error-free to record it in the system.

You enter the number of packaging items for all applicable options (physical return, vouchers, lost or damaged) into the system, the application automatically processes each piece of information and updates the database. You will thus have an up-to-date record of all returnable packaging items, including the damaged ones.

Document flows

Returnable packaging items are accompanied by documents, most often pallet notices or CMR (Convention relative au contrat de transport international de merchandises par route) entries to prove delivery. The challenge comes from the fact that there are certain changes to these documents that need to be taken into account in the application, i.e. those mentions that change the status of the packaging stocks.

Voucher circuit

Packages that are not physically returned immediately are temporarily replaced by a type of document called a voucher, which certifies the fact that they have been taken by the beneficiary. These documents are received by the carrier (driver) and submitted to the warehouse from which the packaging was originally taken to justify why it has not been returned.

The flow of vouchers is very complex. The driver, a third party, hands them in to prove they are no longer in their possession. There may be several internal validations within the logistics company until the vouchers are passed on to another carrier who will physically retrieve the packaging specified in these documents.

The documents can be scanned and saved in the application database so that they can be checked later for traceability. This xTrack PMS functionality is important to ensure that no packaging is lost “en route”.

Although the packaging stock specified in vouchers is not physical but virtual, we can always know which beneficiaries have the packaging and when we will recover it. With this system, the logistics company is able to respond to customer requests for packaging items because it can tell exactly, for each customer, how many there are physically in stock, how many are covered by vouchers, who issued them and when they are to be retrieved, how many there are in the hands of carriers and what is to happen to them (delivery to beneficiaries, transfer between warehouses or being returned).

Vouchers have a validity period within which the returnable packaging must be recovered from the beneficiary. If this is not possible, the voucher term must be extended, otherwise the packaging may no longer be recovered.

Management of returnable packaging losses

No matter how well you manage everything, there are situations where returnable packaging items are lost:

• natural losses, through degradation of the packaging; in these situations, a limit not to be exceeded can be negotiated with the parties involved.
• theft;
• discrepancies between the statements of the parties involved.

All packaging losses are managed separately for each customer, each beneficiary and each carrier. Monitoring these losses and the processes related to loss compensation leads to increased attention paid to packaging handling at each stage of the flow implemented in xTrack PMS.

Packaging losses are saved as special states in the application so we know exactly who those packaging items came from or went to, and we can identify the source that generated that loss. The loss can be caused by the customer, the driver or the beneficiary.

With the agreement of the parties involved, cutoff times when losses above the accepted limit are charged by invoicing the entity that generated them may be set up.

Even if an entity loses packaging above the allowable limit, there is a possibility to receive, instead of cash, packaging in bulk that will automatically compensate for the recorded losses from that entity. This exchange is also an automatic flow that can be generated by xTrack WMS through special packaging receipts made with a mobile computer in the field.

Compensation for losses

Some packaging may be damaged and become unusable or lost due to the fault of the logistics company. Some vouchers may also be lost, not recovered before the expiry date or damaged due to the fault of the logistics company. In such cases, the logistics company must give packaging away from its own stock or buy a sufficient number of such items to be able to physically return them to customers in place of the missing ones.

Change of ownership

To avoid wasting time and resources transporting packaging between warehouses, the logistics company can operate changes of ownership for such items. This means that customers “assigned to a warehouse” will become the owners of the packaging of other customers who currently have packaging items in that warehouse and vice versa.

For example, if a customer assigned to the warehouse in Bucharest has packaging items in the warehouse in Cluj and, at the same time, a customer assigned to the warehouse in Cluj has packaging items in the warehouse in Bucharest, the logistics company will change the owner in the database to avoid cross-transportation of physical packaging. Obviously, the change of ownership will be done observing the quantities and types of packaging originally owned by each customer.

Ownership exchange is a form of compensation. The logistics company thus achieves savings on return transport of packaging and quickly meets the returnable packaging needs of its customers.

Benefits of xTrack PMS

Flexibility

The xTrack PMS application can be easily adapted to all the requirements of companies that own or manage their customers’ returnable packaging. The complexity of the application can vary depending on the operations of these companies.

User-friendliness

The application is easy to use. Its page titles indicate the operations the user can perform, the data presentation format is simple, the field names are clear and the operations are placed in a logical sequence.

Effortless efficiency

Users no longer have to track the various packaging items or vouchers and determine  compensation independently, handling piles of paperwork. xTrack PMS manages them all seamlessly and automatically. All users have to do is enter data and select preset commands.

Clear record of returnable packaging item status

Automation means error-free, continuous processing and updating of the data entered and makes a decisive contribution to reducing the time spent on managing returnable packaging. You always know where each customer’s packaging items are, how and when you can get them back.

Increased profit

Efficiently organizing returnable packaging recovery shipments and managing vouchers on a daily basis so that you avoid document expiry means fewer losses, lower costs and greater satisfaction for your customers.

Business importance of returnable packaging management

The management of returnable packaging (transport packaging or tertiary packaging) is an important activity for companies in various economic sectors. This is also reflected in EU policies set out in Directive 94/62/EC on packaging and packaging waste.

The current priorities of the business environment in Romania and other EU countries are moving towards the transition to a circular economy through an efficient management of packaging and packaging waste, facilitating reuse, recycling and recovery.

The introduction of appropriate legislation aims to reduce the amount of packaging waste (including returnable packaging waste) and reduce its environmental impact. Packaging management is an economic imperative, an environmental objective and a requirement set by the European Commission. By 31 December 2025, at least 65% of the weight of all packaging must be recycled. The recycling targets for each material are:

• 50% for plastic;
• 25% for wood;
• 70% for ferrous metals;
• 50% for aluminium;
• 70% for glass;
• 75% for paper and cardboard.

It is time for companies that manage or own returnable packaging to invest in software applications that help them to better manage both undamaged and damaged items (waste). Strict record-keeping of returnable packaging by category is one of the first steps on the road to implementing environmental protection measures. From a sustainability perspective, the reuse of packaging and the recovery and recycling of damaged packaging are aspects that should no longer be ignored: in addition to economic benefits, a reduction in pollution can also be achieved.

Would you like to enjoy the benefits of xTrack PMS? Fill in the form below and our consultants will get back to you in 48 hours.