CHEP reinvents itself in the US

CHEP USA has announced a raft of new products and services covering both the pallets themselves and the way they are delivered, whilst it has also reaffirmed its commitment to wood as the primary source material.
Brambles has launched a comprehensive new service and quality standard for CHEP USA, promising “to deliver immediate benefits to customers while addressing next generation supply chain needs, optimising costs and pricing, and best positioning the business for the medium to long term.”
The company says the new customer service and quality program “Better Everyday” is the culmination of  an in-depth review of the CHEP USA business, which commenced in February 2009, and reflects extensive consultation and successful trials with major customers. The implementation of initiatives flowing from the CHEP USA review, the company hopes, will further strengthen the business to capture a greater share of the USD 10 billion pallet market.
A central feature of the program is the introduction of a new “US Premium” pallet specification, to be fast-tracked over three years, to meet next generation supply chain trends. There will also be an immediate upgrading of the CHEP USA pallet pool to a new minimum standard level (“US Plus”). The two new pallet specifications are the result of an analysis of market dynamics and will allow CHEP USA to segment its customer base according to its evolving quality needs.
Other features of the Better Everyday program include an increase in field-based sales resources; expansion of account management systems, and streamlining of administrative processes to improve the speed and quality with which CHEP USA responds to customer needs.
The program will involve an ongoing net cost of approximately USD 50 million1 per annum. The fast-tracking of this program will result in additional costs totalling approximately USD 110 million over the next three years. Additional pricing and growth opportunities created by the new service and quality offering are not included in the planned net cost of the program.
Brambles chief executive officer Mike Ihlein said the investment reflected the importance and value of CHEP USA as a core part of the global CHEP business. "In the last 10 years the business has more than doubled in size. In the last five years alone, CHEP USA generated cash flow from operation…

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