Retail distribution
From eight to three crate sizes: simpler handling, lower costs
For a chain handling 125 million EPS crates annually, we streamlined operations and implemented a single working method across five distribution centers. The result: 40% lower handling costs and a 15% increase in truck volume capacity.
1. The client and the challenge
Kuehne+Nagel, Albert Heijn, Bakker Barendrecht, and Euro Pool System collaborate in a supply chain that processes around 125 million EPS crates annually. These crates are used daily by more than 1,300 Albert Heijn stores. The assignment for our project manager: simplify handling between the supply chain partners and reduce the number of base sizes from eight to three. This required not only a new crate standard, but also a working method that was practically feasible across five major distribution centers.
Core pain
How do you keep the handling of 125 million crates manageable when eight footprint sizes introduce extra variation in storage, stacking, and transport? With volumes like these, every unnecessary touch or underutilized cargo space directly impacts costs throughout the entire supply chain.
2. Our approach
We combined end-to-end supply chain project management with a Lean approach on the shop floor. Together with the parties involved, we examined how reducing size variations, smarter stacking, and improving process flow could simplify handling. Reducing the number of base sizes from eight to three formed the foundation; we also improved pallet selection, layout, and packaging material usage. We made the new working method visual and easy to transfer, allowing it to be implemented consistently across multiple distribution centers.
3. The diagnosis
The potential for improvement did not lie in a single, isolated action, but in the coherence between crate sizes, pallet stacking patterns, transport, and shop-floor processing. Eight different base sizes made standardization more difficult, while the existing pallet selection and stacking methods left room for a higher load factor. The layout and the use of foil also presented opportunities to reduce handling and material consumption. Therefore, the improvement challenge went beyond merely reducing crate sizes: simplify the entire handling process, improve operational flow, and make better use of the available space.
4. From insight to execution
We translated the chosen standard into concrete adjustments in daily operations. A different pallet type allowed for more volume per pallet, and better utilization of trailer capacity increased the volume per truck. Layout adjustments on the floor supported a smooth handling of the crates; tape replaced stretch wrap to save on dunnage material. We documented the working method in simple visual instructions, ensuring that new employees could also quickly understand how to perform the work. Next, the new standard was rolled out to five major distribution centers, together employing more than 1,800 staff.
5. The result
According to the project data, the simplified handling resulted in 40% lower handling costs. The number of base sizes was reduced from eight to three, and better utilization of trailer capacity allowed 15% more volume to be transported per truck. The new standard has been implemented at five distribution centers. Additionally, dunnage costs were reduced by using tape instead of stretch wrap. A rate of €0.12 per crate is a separate projection: negotiations on this are still ongoing, meaning this rate is not yet final.
8 → 3
Base formats · less variation in the chain
+15%
More volume per truck through better loading
−40%
Achieved reduction in handling costs
5
Distribution centres · over 1,800 employees in total
The stated 40% refers to the savings on handling costs reported as achieved; the expected rate of €0.12 per crate is still under negotiation. Checkpoint for this draft: the source also mentions 125 million crates per year, a current cost price of €0.20 per crate, and €18 million in total handling costs for 2024. Mathematically, these figures do not align without further specification of volume, period, or cost categories. For this reason, no annual savings in euros have been calculated. The average crate value of €4 refers to the value of the material itself, not the handling costs.
6. Next step
The next step is to secure the new way of working and specifically investigate where technology can add further value. Predictive volume planning based on historical data, seasons, promotions, and weather forecasts can help to better align staffing, transportation, and equipment with demand. Dynamic route planning and a 3D load planner can reveal additional opportunities for trips and loading. With a digital twin of the warehouse, layouts and walking routes can be tested before any physical changes are made. Predictive maintenance can help prevent unplanned downtime, while IoT tracking can provide greater insight into the location and movement of pallets or crates. Visual work instructions can also be expanded with AR support for pallet stacking. These are potential next steps, not results that have already been achieved: for each application, the required data, investment, and expected return must first be substantiated.