The effect of asset visibility on managing returnable transport items

Returnable transport items (RTI) have increasingly been introduced for environmental reasons and to achieve logistics benefits such as better protection of products, improving working environments, and enabling more efficient handling and cube utilisation. Even though RTI are often of high value, vulnerable to theft, and critical for production and distribution, they are often managed with limited visibility. As a consequence, RTI systems are typically managed with large asset fleets and high operating costs. In this paper, we propose a framework which identifies cost aspects of implementing and operating RTI systems which may be influenced by asset visibility. The framework is utilised in a combined case study and simulation where the introduction of new roll container and tracking system is studied. The study examines the potential effect of visibility from an asset owner point of view by quantifying and comparing investments and operating costs for systems with varying degrees of asset visibility. Prior RTI literature has to a great extent neglected the issue of shrinkage and its impact on the operating cost of a RTI system, while the results from this study highlight its importance. The practical results from the study imply that significant cost savings can be achieved. However, it must be emphasised that asset visibility alone is not enough; proper management actions are needed in order to attain the full benefits.