Designing a logistical and material handling system for European distribution - a case study for Tetra Pak's SCAP project

Abstract: As a complementary product to the Tetra Brik Aseptic packaging system, Tetra Pak is about to introduce a new, value added, aseptic packaging system called SCAP. The SCAP packages consists of a lower part made of carton and an upper part made of plastic, similar to a PET-bottle, resulting in a bottle shaped package. The purpose of this thesis is to design a logistical- and material-handling system for the upper part of the package, further on referred to as the SCAP-top. The system is to include all activities along the Supply Chain, starting with ready-made SCAP-tops, manufactured in pairs by extrusion blow moulding at a central plant production site, and finishing with the SCAP-tops entering a filling machine at a customers? site. The methodology of this thesis is principally based on a project development method used regularely at Tetra Pak companies, called idea management. The method consists of a number of steps with the purpose of generating, evaluating and carry out new ideas, and was a very helpful tool in structuring our work. However, the initial steps, that involve brainstorming, proved to be quite difficult. The main difficulty with that procedure is in our opinion to induce people to think in the specific directions that you want, in order to reach useful results. Although the method assumes that the participants are open-minded, our experience is that the best results are obtained when the purpose of each exercise is well specified and does not allow thoughts of too many subjects at the same time. After defining necessary parts of the logistical system, an overall supply chain model was put together that provided a visual overview of activities and thereby lead times. Based on this model and deriving from the idea generation session, a number of alternatives of material handling and packaging equipment for the SCAP-top, including primary packaging, load carriers, factory layouts etc, was put together. A major question concerning the packaging system was wheather the SCAP-tops should be packed stochastically or ordered in a specific pattern in the primary package. To answer this question and in order to evaluate the material handling and packaging alternatives, empirical tests concerning filling-rates and packing patterns of primary packaging was carried out as well as transportation and storage simulations. To get an understanding of the economic situation, a cost model of the total supply chain was created. Hereby the different alterantives could be compared, both concerning running costs and investments. Apart from displaying the total cost, the model also showed that the transportation costs represented 60% of the total running costs, making it the far most important factor in the supply chain. The different alternatives were finally compared and evaluated out of economical, functional and environmental factors, using the Kesselring matrix. The alternative for the SCAP-top material handling system that got the highest rank means in broad outline that a highly automated production layout is used, a corrugated board of model 210BC with an unsealed, plastic inner bag is used as primary package for stochastically placed SCAP-tops. As load carrier a 0,9mm thick, multilaminated, kraft liner board called Slip Sheet is used and the SCAP-top transportation is handled by jumbo trailers with 3m of loading height.