Logistics and transportation are evolving into a sophisticated market. As an example of this, American Honda over the past 18 months has been actively reinventing the supply chain of its North American operations through the introduction of a “West Coast Hub” in Chino, California.

This new facility serves as the central distribution point for all Japanese made parts. Containers are received daily from Japan, get processed, and parts are either stored in Chino or allocated and shipped to as many as 14 other facilities across the United States and Canada.

To manage this operation, Komyo America, a Honda subsidiary corporation, introduced returnable slim metal cages, which are used for maximizing trailer capacities and have been instrumental in reducing damage during shipping. When crates are shipped back, Honda is able to accommodate as many as 160 collapsed crates in every trailer load.

“This new system of returnable crates has been a fantastic investment for American Honda. Our Komyo crates are stackable and therefore we can utilize the entire trailer when shipping parts, reducing the overall number of trailers we ship between locations. In addition, since the products inside are protected by the walls of the crate, items shift less during transport resulting in a significant savings through the reduction of damaged parts,” notes Desmond Tamaki, manager of planning and logistics for American Honda.

Already over 20,000 crates are circulating within the American Honda system. To maintain total inventory control, all crates in this system are bar-coded and each time a crate is shipped between locations, it is scanned. Data is uploaded to a server and transmitted to a dedicated website accessible by all part centres for total asset visibility. This proprietary crate tracking solution is contracted through Vestigo Corporation of Guelph, Ont. (www.vestigocorp.com), which specializes in inventory management and tracking service for returnable shipping assets. Vestigo has been instrumental in developing and maintaining the hardware and software applications to make this complicated process possible.

“When we first met with the people at Komyo and American Honda, we realized they had a very demanding operation which presented a challenge that required a sophisticated solution,” notes Peter Kastner, Vestigo president. “Honda and Komyo were clear from the outset about their expectations for quality, reliability, and service. Fortunately, we were able to meet the Honda and Komyo expectations. What started out as a supplier relationship with an excellent customer has evolved very positively for Vestigo. We continue to work with Honda and Komyo to search for other opportunities to deliver even more positive results.”

Komyo utilizes the Vestigo system on a daily basis to track the volume of product flowing between the cross-docks, manufacturing facilities and part centres. “We also have set-up a system where we can see how long crates are outside the country in Canada or Mexico, ensuring that crates return in a timely manner,” said Gregg Healy, manager of the returnable crate system within Komyo.

“Self-generating reports based on shipping data which shows how much we are saving by reducing shrink wrap, tape, wooden pallets and corrugated materials provides the evidence that the returnable crate system actually saves American Honda money lots of money!” Healy noted.

With such dramatic results in such a short time, Honda is laying the framework for expanding the returnable system in both Europe and Asia. Future plans include the rollout of the Komyo/Vestigo system in Southeast Asia as well as expansion of crate utilization for the manufacturing facility in Mexico.

“There are still many opportunities within Honda where we can improve our service through the effective use of returnables, similar to what we have done in Chino,” remarked Tamaki. “This is another great example of how the application of the Honda philosophy of improving our business operations while being good stewards of the environment can function in harmony.”

Komyo will showcase their returnable crate program during the ProMat trade show at McCormick Place in Chicago from January 10 to 13, 2005. At this exhibition, sponsored by the Material Handling Industry of America, the Komyo presence includes support from Vestigo. The two firms will demonstrate the significant value added of a comprehensive Komyo returnable crate program which includes the Vestigo tracking solution.