By Jim Jennings, ORBIS Project Manager at CAMI

A decade ago, General Motors (GM) and Suzuki began a joint venture in Ingersoll, Ontario, Canada, under the name of CAMI Automotive Inc. The company, which runs two assembly lines and has a capacity of 200,000 vehicles a year, produces the Chevrolet Tracker and Metro for GM and the Vitara and Swift for Suzuki.

CAMI's objective in 1995 was to convert its entire operation to returnable containers as part of the company's lean manufacturing methods. To this end, improving packaging, transportation and lineside presentation of containers were specific goals of the returnables program. Such a program would also benefit the environment by virtually eliminating waste from expendable packaging.

Program Scope

CAMI asked ORBIS to complete a thorough economic analysis of the effects of a large-scale conversion to returnable packaging. The study began by assessing the needs of the people (production associates) on the assembly line, then working back through CAMI's supply chain to evaluate supplier processes. ORBIS completed its study in three months and identified significant cost-saving opportunities for CAMI, specifically:

• Reduce expendable packaging by 92% for all part numbers
• Decrease or eliminate the recurring costs of expendable packaging and related costs for waste disposal
• Improve cube utilization by 5% each quarter for the first year of operation with standardized packaging

ORBIS also showed other areas that reduce costs but were not immediately quantifiable. Those areas will:

• Improve inventory accuracy
• Decrease lifting and repetitive-motion injuries
• Reduce quality control costs
• Reduce manufacturing time by putting parts at lineside
• Improve floor space use and maintain a cleaner work environment

Following the analysis, CAMI asked ORBIS to become their "packaging department" to implement and run CAMI's entire packaging program for the company and its suppliers. To make the program a success, however, some challenges had to be addressed.

Inventory Control and JIT Flexibility

Improvements to CAMI's operations had to align with its JIT (just-in-time) delivery system. So a plant-wide, small-lot returnable containerization program was needed to decrease the carrying cost of large inventories, improve inventory counts, reduce manufacturing time, and increase the flexibility of manufacturing systems.

Overcoming Supplier Resistance

Some suppliers were reluctant or unwilling to change to a new returnable packaging system. Cost was a leading factor with many suppliers suggesting that they would have to charge CAMI more for converting to new packaging. CAMI, ORBIS, and TransFreight, CAMI's logistics provider, worked together to educate suppliers about specific cost savings and production efficiencies for their individual operations. Moreover, CAMI chose to purchase and own the returnable containers that its suppliers use.

A "milk run" system was established to meet the challenge of getting suppliers' parts to CAMI and the empty containers returned.   TransFreight and CAMI's Logistics and Material Handling department designed the milk run where trucks, running the same route each day, pick up products from several vendors in given geographic areas and drop off empty containers for reuse.

Safety, Timing and Purchasing

Issues Other challenges included safety when handling the containers at lineside, interdepartmental disagreements about timing for projects, and complete justification for every packaging purchase.

ORBIS has worked very closely with CAMI's production associates on solving packaging safety issues. ORBIS also worked on teams with production associates,
departments and suppliers on setting up standard pack sizes and estimating packaging approaches for proposed changes in suppliers, processes, or parts. In all cases, ORBIS' on-site, full-time project managers have been important to keeping everything on target.

Program Details

CAMI's on-site ORBIS team consists of two project and material handling engineers who locally manage the program. Both are responsible for solving packaging problems that CAMI faces. In fact, the ORBIS team is considered a part of CAMI's logistics department and   works with virtually every department at CAMI. The scope of work is limitless for creating better packaging solutions for the company, which runs two lines through stamping, welding, painting, and final assembly.

CAMI's returnable packaging program uses "small-lots" of parts in containers along the assembly line. This approach keeps container sizes and lineside racks consistent for each application. It also means that each container holds a small number of parts (i.e. quantities in multiples of 10 to help inventory record keeping). In turn, racks hold the optimum amount of containers required by production associates at lineside.

ORBIS implemented a small-lot containerization system, including containers and racks that nearly eliminated expendable packaging in the weld, paint and assembly shops. ORBIS also created special packaging for two new model launches, and developed a returnable bulk packaging system in the stamping area.

Impressive Results

Results of the conversion to returnables have been impressive, with specific areas in the company showing dramatic improvements. For example, CAMI has seen a large reduction in costs for purchasing and disposing of expendable packaging and dunnage. Now only 5% of packaging is expendable. Cube utilization improved by 15% for one year and continues to climb as ORBIS and TransFreight work together. CAMI's inventory control also improved, especially in storage areas, and carrying costs of parts have been substantially reduced.

CAMI recovered its initial investment in less than 10 months. The cost savings result from:

• Reduced packaging costs
• Reduced waste disposal costs
• 15% increase in cube utilization, reducing total freight costs
• Incremental savings from better inventory management and ergonomics

Benefits are Paying Off

As a total solutions provider, ORBIS is an important partner to the optimization of CAMI's packaging and transportation systems. Through ORBIS' total solutions approach and its use of on-site project managers, CAMI has significantly improved its packaging and returnable container system.

With a useful life of about 10 years, returnable packaging has proven to be much more effective than expendable packaging. Benefits include cost reductions, quick payback, improved worker safety through ergonomic container designs, cleaner plant, and improved floor utilization.