Value Analysis and Optimization of Reusable Containers at Canada Post

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This case study analyses the use and sharing of a logistics package, a returnable container, between Canada Post and its large mailing customers. Canada Post and its large mailers frequently experience stock-outs. Standardization of logistical packaging between members of a supply chain should bring them tangible benefits. Thus, sharing standard returnable containers should ensure that the participants benefit from productivity and efficiency gains. This hypothesis is validated for the mailer's use of the container, but in order for Canada Post to benefit, the container return cycle must be rapid. The accounting method chosen (net present value) to calculate the value of the benefit is extremely important. A minimum cost flow model confirms a quantity sufficient to satisfy demand. The disequilibrium between supply and demand can be prevented with better planning and control of the inventory.

, 18 pages

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