VMT – Packaging to reduce costs

The Dutch VMT, headquartered in Stein, South Netherlands, provides complete packaging solutions for clients such as Audi, Autoliv, Benteler, Faurecia, Fehrer, Ford, Grammer, Hyundai Mobis/Glovis, International Automotive Components, Intier, Johnson Controls, Kia, Land Rover, Lear, Mitsubishi, Porsche, Proseat, Rieter, SAS Automotive, Seeber, Toyota and Volkswagen. The company has its own production facilities in Eastern-Europe: Czech Republic (VMT Ecopack Sro) and Western-Europe: The Netherlands (VMT Ecopackaging BV). A worldwide sales offices structure ensures quick response. A rental company (VMT Packaging Pooling Systems BV) is also situated in the Netherlands and provides packaging rental options around the world.

The company started supplying the auto industry in 1990. According to VMT, its packaging solutions are designed to maximize transport efficiency thus lowering packaging and transport costs. It has found that using durable plastic and steel containers has two advantages – first to lower automotive companies operational expenses by elimination of one-way packaging; and second to reduce transport costs by implementing collapsible and nestable solutions which help to maximize empty packaging for return transport.

One of the factors influencing the choice of packaging is the distance of the supplier from the assembler: non-collapsible solutions are usually better over short distances, while collapsible packaging is better over long distances. Because of the durable, light and recyclable materials used, VMT says that customers get a quick payback period.

It has developed a business model with a formula that calculates the return on investment, and determines potential cost savings. Using the model, clients can compare the full costs of different options, such as one-way cardboard boxes in combination with wooden pallets or steel containers.

All the packaging solutions can be further customized to meet a client’s demands. VMT’s welding technology makes customization of dimensions possible, with low tooling costs, according to the company. Protection of the parts and high truck packaging density are important considerations when developing new solutions. “We meet all of our customer demands by offering you complete development, prototyping, consultancy and testing expertise to determine the most efficient method of handling your product. It is even possible to use our Ecopack-rental program for multi-trip transport,” says the company.

An example of VMT’s durable and collapsible containers is the Ecopack pallet box. Due to the separation of pallet, sleeve and lid it is possible to reach a unique maximum nesting ratio of one to seven. This translates into significant cost savings in the complete logistics chain, apart from the reductions in cost and waste by eliminating one-way packaging. One of the many advantages of the Ecopack system is that it caters for nearly every length, width and height. This makes it an optimal modular system adaptable to storage and transport dimensions.
VMT says that its 10-year-plus experience at the forefront of designing and manufacturing complete packaging solutions helps it to offer their worldwide customers a wide array of solutions. “Starting as a packaging consulting firm back in 1990, we gradually expanded to a full service supplier of returnable packaging systems for the automotive market. Our wide array of products ranges from ordinary divisions and sheets to ingenious returnable packaging systems. Techniques like thermoforming, injection molding, foaming, die cutting, screen-printing are combined in the most optimal way to create the best logistical and economic packaging solution,” says the company.

VMT has ISO-9001:2000 certification that ensures that the entire process from problem definition up to implementation is transparent and complies to the highest quality standards. And with an eye to the automotive industry, VMT Ecopackaging operates according to QS-9000 procedures.

The company works with clients closely during the whole process starting from prototyping to production and eventually, the final packaging. “We strive to develop a long-term relationship with our customers. As your one-stop-shop for all your packaging issues, our commitment to put in extra efforts sets us apart from the competition. The wide range of packaging solutions we offer the ability to cooperate with a full service system supplier for your packaging,” says the company.

Automotive Industries spoke to Richard van Mulken, founder and managing director of VMT.

AI: How does VMT work with the automotive industry ?
Mulken: One to two years before a new car model is in SOP, VMT starts working on defining the most optimal packaging solution for the car components. The packaging is developed and chosen to survive at least the lifetime of a car model, which is on average 5-7 years. Even after the lifetime of the car model, some components can be re-used for new applications. This way of development of containers ensures easy adaptation and standardized modules which can be re-used. This avoids capital loss, and reduces investment in packaging for future model launches.
AI: Can you explain where your packaging is used in the logistic chain in automotive ?
Mulken: Our packaging is used in the whole logistic chain from Tier 3 to OEM. Often the distance gets longer the more you get down in the logistic chain, which creates a focus towards more collapsible solutions the further you go down in the chain. The packaging we develop to ship parts from Tier 1 to OEMs is mainly sequence packaging. Such units are, seen the short distance of Tier 1 to the OEM usually designed for easy handling, such as sequence racks with wheels. Seen the very short loop and cycle time due to sequential production, the packaging is re-used very frequently. The use of one way packaging in such a short loop is not profitable which makes durable solutions a logic choice. Also the handling times on the line make easy to pick solutions preferred over expandable boxes. For inbound shipment to the JIT factories in Tier 1, the distance in combined with handling defines the packaging used. The main focus is to avoid one-way cardboard and pallets and to reduce of transport costs on returnables by using collapsible box units. Low cost countries make good nestable and collapsible solutions a must to maximize the profits from situating plants in a low cost country. High transport costs could balance out the savings in labor and materials. Defining the right packaging is crucial to keep transport and logistic costs low. The same is for the inbound packaging used at Tier 2, where distance even plays a more important factor. This makes the pressure even higher to define transport and packaging cost friendly solutions. This is also the starting point of our investigation: what is the protection degree needed, what is the transport distance, are we developing a sequence, JIT or batch production container and how frequently is the packaging re-used (twice a day or once every 20 days). This strongly defines the container type to be used and if a packaging should be designed mainly focused on quality, handling, packaging cost or transport cost or a combination of those. The average weight of each parameter varies along the chain.
AI: What are the kind of automotive customers that particularly need your packaging solutions ?
Mulken: VMT has grown from a supplier of packaging solutions for seating components for the main seat systems suppliers to a complete packaging provider for all interior and exterior components. Business is now divided in three Business Units: seating, interiors and exteriors. Seating BU consist of returnable plastic and steel containers for headrests, armrests, foams, metal frames, plastics, electronics. The Interior BU is divided in durable packaging for: door panels, cockpit, consoles, dashboard, pillars, headliners, (floor)carpets, sun visors. The exterior part is divided in rubberized window parts, roofing rails, wheel cover, front-end, rear bumper, lighting systems, exhaust systems, engine covering, mirrors and as last subgroup other plastic exterior parts. The Business Units are Tier 1 driven, but it goes further down mainstream back to Tier 3. For example, the group’s door panels component group can be further divided in complete outbound door panel containers (to OEM), inbound packaging for door panel carriers (to Tier 1), crash pads (to Tier 2), boxes for pocket holders (to Tier 2), boxes for armrests (to Tier 2). Table 2 gives some idea of different container types used per business unit.
AI: Can you give an example of a recent developed container solution ?
A good example is the Hybrid-VDA GLT container, developed to replace the non collapsible steel wire mesh boxes called Euro-DB Gitterboxes. The Hybrid VDA FLC is a large folding container of 1235 x 825 x 970 mm. It is fully compatible, and inter stackable with metal non collapsible Gitterbox containers. There are some 22 million non-collapsible Gitterboxes in use, which will need replacement in the coming years. This represents a large potential.
AI: Has VMT made inroads into developing countries where the manufacture of automotive components is increasingly shift to?
Mulken: We started working as one of the first packaging providers in Russia and the Ukraine. Eastern-European countries like Bosnia, Croatia, Bulgaria, Romania are growing rapidly. Slovakia is becoming a new automotive hub due to PSA and Kia setting up plants in the country, and it is one of our larger markets. Further we see the Russian area as a very high growth potential for our solutions. Areas as St. Petersburg, Nizhy Novgorod and Toljatti are gaining more automotive business. Local sourcing will start for multinational OEMs which have Joint-Venture partners in Russia. VMT is also planning to start production of containers in these new development areas.
AI: Please tell us a little bit about VMT’s global presence and how you plan to expand this.
Mulken: VMT started working with a major interior and seating systems supplier in the USA on the elimination of one-way cardboard containers, and on collapsible concepts and plastic packaging to lower transportation costs. In the US there is still a lot of wasteful packaging, and we see a tendency to eliminate this. It is recognized by US automotive companies to reduce costs in the logistic chain by optimizing their packaging in two ways. First to eliminate one-way cardboard, second to eliminate containers which have high return transport costs. The price of fuels and the change to lower fuel consuming cars in the US is contributing and supporting our packaging concepts, which are recognized as offering savings on transport costs. Further we see growing potential in South-Africa. The humid climate makes metal boxes rusty and the dust gives quality issues with many parts. A closed plastic collapsing unit has been shown to be a viable solution. Ecopacks were implemented with the SOP of the BMW 1 and 3 series two years ago in Rosslyn at a seat supplier. Since then, we have received a number of enquiries to change metal boxes to folding large containers like the Ecopack container. Within South-Africa we also focus on the elimination of one way cardboard.
AI: What are some of the markets you have identified for future growth?
Mulken: The growing tendency of rising steel and fuel prices in combination rising wages, make automotive suppliers more focused to find cost reductions in logistics. The LCC policy often reduce wages, but increase packaging and transport costs. This makes packaging concepts (quantity of parts per truck, good collapsibility of empty packaging) more important. Durable packaging nowadays is not seen as a necessary investment or as cost driver, but as a tool to reduce overall piece price of components and of transport costs. We focus on markets where cost pressure is rising and automotive manufacturers are implementing cost reduction programs. Generally this is the automotive markets in Western-Europe and the US where the search for costs reductions leads to finding creative cost saving solutions. Developing countries are not, however lagging behind in this trend to find the most efficient way of shipping goods. In some cases they are on the forefront of implementing new concepts.