CHEP: The Net of Things

Abstract

PART A: Forced by operational inefficiencies in its own business model, CHEP, the market leader in the rental pallet business, became an early adopter of Radio Frequency Identification (RFID) technology. Having proven the effectiveness of the technology for internal operations with a pilot test, CHEP now had to find clients who want to adopt the technology-enabled services in order to pay for a large scale roll out. The case traces CHEP’s challenges associated with the development and deployment RFID in its own operation and raises questions of how to proceed with potential IT-enabled change at the enterprise and supply chain level, without spoiling relationships with current clients and maintaining its core business. PART B: In fall 2007, Brian Beattie and Puneet Sawhney looked back at CHEP’s RFID initiative and the progress that has been made since the 2003 decision to further incorporate the technology into its assets. While the original intent of tagging all pallets did not materialize, considerable progress had been made into quantifying the benefits of RFID adoption. Industry-wide developments had changed the scope of the RFID initiative from simply tagging the asset pool to creating value added service for CHEP’s clients. Overall, RFID had yet to revolutionize the supply chain, but the evolution of technology and the innovation of RFID related products and services had aided CHEP in maintaining its market leadership in the pallet business and enabled CHEP to created new lines of business.