MANAGING THE RETURNABLE PACKAGING IN THE SUPPLY CHAIN

1. MANAGING THE RETURNABLE PACKAGING IN THE SUPPLY CHAIN JEFFREY WONG, DIRECTOR CHEP SEA OCTOBER 15TH 2008

2. THE WINNING RECEIPES FOR THE 2ND DECADE OF ECR Market Context • Increasing global sourcing of raw materials • An increasing focus on the environment • Greater health and hygiene regulatory pressures • Increasing competition • Changing consumer demand • Loyalty increasingly influenced by the whole shopping experience The Ingredients for a Winning Recipe…. Leaner, Greener and Safer Supply Chains “…aimed at better satisfying consumer needs, through businesses and trading partners working together.” ECR Australasia

3. RETAIL READY PACKAGING (RRP) • Retail Ready Packaging not new in the market • Referred to different names…Shelf Ready Packaging, One Touch Packaging, etc • Display Ready Cartons is available in the market • A high percentage of on the shelf products, non-produce shipped in DRC • *26% of the Retail Produce Volume shipped in DRC in US • Returnable Plastic Crates, sometimes called trays, crates, RPC, • *has 8% volume of the Retail Produce Volumes in US • Large returnable containers also called Bins are retail ready *Corrugated Packaging Alliance news realease17 May 2005 “…increased speed of replenishment leading to better on shelf availability & increased sales” ECR Australasia, Retail Ready Packaging, pg 6

4. RETAIL READY PACKAGING STRUCTURE *Consumer Unit Tertiary Packaging Merchandise Unit Display Ready Packaging Dollies Display Inner (In a shipper) Returnable Plastic Crates Display Shipper (Trade Unit) Dairy Dollies • Easy to Identify • Easy to Open • Easy to Shelf • Easy to Shop • Easy to Dispose Bins “How to manage returnable packaging?” “How to manage returnable packaging?” *ECR Australasia, Retail Ready Packaging, pg 6

5. HOW TO MANAGE RETURNABLE PACKAGING • Considerations in choosing between DRC and RPC • Scoping the project across the supply chain • Prioritizing Products for Returnable Packaging • Understand the total process and consider pooling of returnable equipment • Ensure Supply Chain Costs Reduction Targets are Met

6. CONSIDERATIONS IN CHOOSING DRC AND RPC

7. SCOPING THE PROJECT ACROSS THE SUPPLY CHAIN Finalisation

8. PRIORITISING PRODUCTS FOR RPC OR RETURNABLE BINS Successful projects will need the participation of the Retailers, the Suppliers and the service providers that store and mover the products

9. PRIORITISING PRODUCTS FOR RPC (Examples)

10. 3.6 0.8 0.4 Transport Storage Handling Procurement RPC Maintenance &Cleaning Other* Total ENSURE THAT TOTAL SC COST REDUCTION TARGETS ARE MET (…often total supply chain costs are not captured) Scope: From factory to organized retail store • Product: FMCG basket of goods

11. DEMONSTRATING CHEP’S VALUE PROPOSITION

12. REUSABLE PACKAGING INNOVATION – CHEP’S CREDENTIALS • PCA (Packaging Council of Australia) Award Winner • 2002: Beverage trays • 2003: RPCs (1st Generation) • 2005: Folding Bin • 2005: Holden Automotive Custom Designed Packs & Inserts • Regional implementation experience (ANZ) • Beverage tray national pool • RPC national pool • Foldable Bin national pool • International pool of auto parts containers • Supply Chain benefits …realised! • Retail Ready • Resource savings • Capital benefits • Product quality benefits • Environmental benefits • Warehouse efficiencies • Transportation efficiencies

13. EXAMPLE OF AN INNOVATIVE DESIGN

14. RPC AND BIN PROCESS MANAGEMENT CRATE R&D CAPEX SOURCE RELOCATION SUPPLY FORECAST DEMAND CRATE USE WASH TRACK REPAIR INSPECT RETRIEVE

15. CHEP’S CORE VALUE PROPOSITION Recognised as the global leader in pooling solutions, CHEP offers pooled platforms, pooling systems and services which collectively represent a single supply chain logistics service. Core benefits delivered include: 1.Reduced costs • Reduced platform manufacturing and maintenance expense • Reduced transportation costs • Reduced process management costs • Reduced losses • Trans Tasman produce movements coordinated in Australia and New Zealand 2.Reduced risk • Customers’ products are protected in transit meaning reduced damage, loss & ullage • A single pooling solution that operates throughout the customer’s supply chain meaning integration and simpler, risk-free systems compatibility 3. Revenue protection • Customers’ products are shipped and arrive in ready-to-use or ready-to-sell condition • Speedy turnaround ensuring faster cash-flow • Continual monitoring of supply chain to ensure Vendor costs minimised 4. Reduced CAPEX • Customers do not need to invest in their own pooling infrastructure, pooling processes and pooled platforms

16. CHEP’S CASE STUDY: PRODUCE SUPPLY CHAIN IN ANZ Challenge To help a major regional retailer move, store, merchandise and protect a range of fresh produce lines from a base of >1,000 suppliers into 800+ retail stores Replacing 60 million Styrofoam and cardboard containers per annum Solution Collapsible, returnable, vented, column & cross stackable RPC – and a sophisticated tracking system Benefits Improved product quality, reduced handling, transport efficiencies (outbound), 40% reduction in reverse logistics, reduced packaging waste, improved supply chain visibility eg. cycle times, stocks & flows

17. IN SUMMARY Supply chains are constantly changing, needing to be LEANER, GREENER and SAFER CHEP can help you achieve operational excellence through: • Efficient, safe & environmentally friendly packaging design • Synchronisation of reusable & returnable packaging with forecasts • Network leverage (physical & knowledge) • RFID enabled visibility & control • Standardisation & customisation

18. WHO IS CHEP TODAY? • Brambles owned and part of a global CHEP business in 45 countries around the world • Provider of managed reusable & returnable supply chain packaging solutions • Working to make logistics in Asia-Pacific leaner, greener & safer • Serving customers in: • FMCG • Fresh Food • Auto • Industrial • Transport & Logistics