New Systematic Supply Chain Evaluation and the New Supply Chain Simulator
Best Load™ saves Chevron Lubricants 11% in Annual Packaging Spend
Dr. Marshall S White, President of White and Company LLC, worked with packaging
specialists at Chevron to conduct a comprehensive supply chain evaluation with the goal of
reducing pallet and plastic pail packaging costs. Dr. White applied the principles of Systems
Based Design documenting how the packaging, pallet, and unit load handling system interact.
Then modeling these interactions using White and Co.’s new Best Load™ supply chain
simulator software, identified savings opportunities that were implemented and successful.
The well planned evaluation included:
Supply chain audits of the manufacturing locations in California, Texas, South Carolina, and
Kentucky. To reduce project cost, Chevron staff was trained by Dr. White to conduct the supply
chain audits which included documenting all packaging placed on top of the pallets and all unit
load handling, storage, and shipping methods used.
Analysis of Audit Results: Dr. White’s team at White and Co. used the engineering principles
of Load and Resistance Factor Design to identify what mechanical interaction between the pails,
pallets, and unit load handling procedures, dictate or constrain the pail and pallet designs used.
For the pallets the highest stresses occur when unit loads are supported by certain conveyors and
during the warehouse stacking and racking storage procedures. For the pails the design was
limited by the compression stress during stack storage of three unit loads stacked one on top of
the other..
Design Procedure: Using the supply chain simulator Best Load™, White and Co. modeled the
pails, pallet, and handling equipment interaction.
The 1755 pound unit load of Chevron lubricant in proposed 90 mil, 5 gallon pails on the
proposed 48x44, four stringer, double winged, pallet.
Using Best Load™, changes in unit load handling equipment, pallet, and plastic pail design were
quickly tested with the goal of reducing stress on the pails and pallet, permitting the use of
alternative, lower cost pail and pallet designs. The recommendation included modification to
one unit load conveyor system at their California facility, reducing the number of pallet designs
used from 9 different designs to 4, and stiffening the deck of the wood pallet using a four stringer
winged design. The stiffer pallet reduced the compression stress on the 5 gallon plastic pails
when stacked 3 unit loads high in storage and permitted replacing the 100 mil pail with a 90 mil
pail. This was a net savings of $7.50 in packaging per unit load.
Testing:
The proposed pail and pallet designs were tested at the ISTA certified, Virginia Tech, Center for
Packaging and Unit Load Design to validate predictions of the Best Load™ analysis. Following
this, Chevron procured prototype pails and pallets from vendors, and a series of field trials were
conducted.
Specifications:
White and Co. helped Chevron draft new specifications and the program was implemented.
Savings:
Within the first year of implementation, pallet spend was reduced by 4% and plastic pail spend
by 16%. Total annual packaging spend decreased by $380,000. Additional undocumented
savings associated with improved materials handling efficiency, also occurred.
Summary:
The principles of Systems Based Design can be used to evaluate existing supply chains and
reduce materials handling costs while making the supply chain more sustainable. For more
information about systems based design of finished goods supply chains access to the new
supply chain modeling software Best Load™, contact White and Company LLC.
www.whiteandcompany.net
Office: 540-552-1158