3M Brazil Sees Cost Savings with Chep Program
Six Sigma processes used to select pallet pooling solution
SAO PAULO, BRAZIL - November 22, 2006 - 3M Brazil, a leading maker of consumer and industrial products, has announced it is outsourcing select pallet management activities to CHEP, the world leader in pallet and container pooling solutions. CHEP pallets are currently used for storage and transportation of finished products and raw material at the company's head office in Sumara, Sao Paulo, and 3M is preparing to outsource the distribution of pallet services at facilities in Ribeira o Preto and Itapetininga, both in Sao Paulo state.
3M previously used exchange pallets. The manufacturer verified there was significant room for improvement in the pallet operation, particularly with potential cost reductions for transportation and storage.
"We have seen a 63% cost reduction with CHEP pallets domestically compared to buying and storing our own transport equipment. We also expect a 50% decrease in transport platform costs for products shipped by 3M Brazil on CHEP pallets to other countries," said Jacintho Carlos Manara, Logistics Manager of 3M Brazil.
"Another important factor helping the partnership between CHEP and 3M is the quality of pallets and the fact they are always kept in a good state of repair. Additionally, they are tracked so losses are avoided and high replacement costs are eliminated."
To determine whether CHEP services were appropriate for the company's operations, 3M used Six Sigma processes, solicited feedback from wholesale and superstore retail customers and conducted a comprehensive reference call at the Brazilian facilities of a leading global consumer products company. During the review process, managers identified a chance to decrease loss of pallets and reduce the quantity of renewed equipment derived by costumer returns.
"We are pleased 3M Brazil is seeing a wide range of benefits by using the CHEP pallet pooling solution, and is working to expand the program throughout its network of production and distribution facilities. CHEP will help 3M every step of the way with planning, training and top quality products and services," said Pedro Moreira, General Manager, CHEP Brazil.
About 3M
Every day, 3M people find new ways to make amazing things happen. Wherever they are, whatever they do, the company's customers know they can rely on 3M to help make their lives better. 3M's brands include Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti. Serving customers in more than 200 countries around the world, the people of 3M use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications; safety, security and protection services; health care; industrial and transportation. For more information, including the latest product and technology news, visit www.3M.com.
