Value analysis and optimization of reusable containers at Canada Post

We analyzed the use and sharing of a logistics package, a returnable container, often out of stock, between Canada Post and its large mailing customers. Standardizing and sharing logistical packaging should bring members of a supply chain tangible benefits from productivity and efficiency gains. We determined that inventory imbalance between supply locations and demand locations caused the problem. We found that different accounting methods gave very different results in calculating the benefits. We concluded that there is always a benefit for the mailer. For Canada Post to benefit, however, the container must be returned quickly. We used a minimum-cost-flow model to confirm that the company has enough containers to satisfy demand. With better planning and control of the inventory, Canada Post can prevent disequilibrium between supply and demand.