Attendees:
Bob Sanders (IBM)
John Clark (#2 Va. Tech Hokies)
Paul Russell (HP)
Ron Johnson (Intel)
Joe Brown (Liebert)
Richard Black (AMP)
Beth Feldkamp (Compaq)
Minutes: If I have mis-stated anything, please let me know.
A. Pinewood Nematode Issue on Exports from US and Japan to China:
-- Heat Treatment (core temp. 56C for 30 minutes) is the only known approved treatment at this time. Kiln Drying expected to also be approved but isn't yet. Important: China strongly opposes chemical or fumigation treatments according to initial reports.
-- We don't know whether the stated 1/1/2000 enforcement date means arrivals on that date or shipped by that date. Most likely arrivals in China on or after that date. Thus, the pipeline to China is already affected.
-- USDA is currently in China negotiating on this. A hearing is scheduled for week of 11/29 in Washington DC to review results of that.
-- Exporters will have to declare that the shipments include only hardwoods, non-woods, or heat treated softwoods or risk problems.
-- Wetness acquired after treatment should not be a problem.
-- Kiln drying is generally done at the board level (vs. pallet level) and then the boards are stamped "KD".
-- Heat treated woods are also done that way and carry a "HT" stamp. Of course, this stamp would not carry to all pieces after processing.
-- We can expect continued stiffening of regulations on pest control in the future. APHIS aspires to universal, global control of this by end of 2000 or early 2001.
-- It is curious that this affects only US and Japan at this time. No word yet on how trans-shipments through these countries would be affected.
-- Summary article will be sent separately.
B. Pallet Logistics Discussion:
-- In response to the 9/22/99 draft spec, John Clark provided a detailed response which was greatly appreciated. Key Points: 1) If we end up raising pallet prices to achieve higher quality, this will be most burdensome to those at the beginning of the pipeline unless they are allowed to recover these costs from their customers and so on down the supply chain. 2) Retailers won't be much interested in this and cannot be counted on to be a part of the reverse logistics process. There were a number of other good suggestions which I'll add to the draft report.
-- The reuse loop may take on several "shapes" depending on which portion of the pipeline you and your customer are in. For instance, a figure 8 loop may apply wherein a supplier and a manufacturer agree on a closed loop system and likewise with the manufacturer and their customer. The first might be a loop using the 1200x1000mm pallet and second (if the customer is in Europe) may involve only the 1200x800mm size. We expect that the "standard" size will most likely apply to inbound shipments from suppliers and get increasingly difficult the further downstream you go since the products are likely getting larger in size and therefore less likely to cube out the standard pallet efficiently.
-- Buy Back Programs: As I understand it, this is simply where the customer pays full value for the pallet from its supplier. This has merit since the seller (the parts supplier) recovers his full cost, or nearly full cost and the buyer (in this case the Computer Manufacturer) is then incented to take good care of this pallet so that he too can charge nearly full value for it from his customer and so on. The end of the process occurs when the pallet is sold by say a retailer to a pallet buyer who then earns a profit getting it back to someone in an earlier position in the pipeline at a cost lower than what a brand new pallet would cost. This is reverse logistics controlled by market conditions as opposed to a system controlled solely for our industry by our industry or third party provider
-- Part suppliers are already heavily burdened with having to stock multiple spec pallets. It is possible that a single $10-15 pallet that we all agree to may actually be preferable to dozens of cheaper pallets that they must deal with. Also, by leveraging the volume of so many users agreeing on this pallet, the economies of scale should provide better value.
-- CHEP is the only know worldwide capable supplier of pallets and the associated logistics control. This is effectively a rental program wherein you must use one of their pallets which are very good quality but also very heavy. Using CHEP would preclude us designing our own industry unique pallet. It may be difficult to get people to accept the much heavier albeit good quality pallets. See http://www.chep.com. We briefly discussed perhaps including them in our next call simply for educational purposes at this time. Pal-Ex is another company that is large but not yet in Asia. This is a problem for our industry since we view Asia as the beginning point for much of the Electronics Industry supply chain.
-- Ideally we would achieve standardization throughout all electronics industry but this will likely have to start with a very successful computer industry program which would then be much easier to get others to join in on. This represents a challenge and an opportunity.
-- John Clark reports that prescriptive specs have been more successful in exchange programs (like the Euro Pallet). A performance spec is nice because it doesn't restrict us to a particular design or material but may result in too many differences and be difficult to control. Authors Comment: This may mean we need a prescriptive pool pallet spec and a performance spec for the non-pool pallets.
-- ISTA labs could be used regarding testing per the protocol we agree on.
C. Meetings
-- Next meeting is Dec. 16, 1999 using same dial-in number as today. I will have to set up another series starting in January.
-- We discussed having another face-to-face meeting in similar fashion as we did at TransPack 99. After discussion with Ed Church, Exec. Director of ISTA, we agreed that ISTA would provide a free room and projector for us on the afternoon of Thursday, April 27, 2000. We would have the room available to us from 3-6pm but of course we wouldn't have to meet for that entire time unless we chose to. Depending on how we're progressing we may end up using most of that available time, especially if we're into detailed discussions about reuse pool logistics with third party organizations. This day was selected because it was in the middle of the ISTACON conference and would not require additional days for any attendees and would not conflict with any other already planned workshops, seminars, and so on. Please advise if you plan to attend that meeting in person so that we can be sure to get an adequate sized room. By copy to Ed Church, we'll also need a speaker phone with outside access to an 800 number so that non-attendees can still dial in.
Thanks again for your participation. Paul, please post to the website.
Regards,
Bob Sanders WDOS, Dept. VQZ, Bldg. 002-3, Office MM302 RTP, North Carolina, USA, 27709-2195 Phone: 919-543-1260, Fax: -4253 (IBM T/L: 441) email: btsander@us.ibm.com IBM Intranet: w3.wwd.ibm.com/documentation/packaging