Planning a digital journey for fruits and vegetables: IFCO optimizes its circular economy with Microsoft Azure

The challenge: A more scalable customer portal and more reliable data collection

IFCO is headquartered in Pullach, a small town near the city of Munich, Germany. This is the company’s birthplace from which a pool of more than 350 million reusable packaging containers (RPCs) is being managed. They are delivered to producers and suppliers around the world to be packed with food before being transported to retailers. As soon as the RPCs are empty, they are given back to IFCO to be processed and reentered into the cycle. Damaged containers will be repaired. Only if they are beyond repair, they are ground up and recycled by up to 100 percent to make new RPCs. “We call this the IFCO SmartCycle^TM,” says Patrick Klinger, Customer Systems Director at IFCO. “By collecting, combining, and evaluating master, movement, and – in the future – location data at every stage, we can optimize the planning of our processes and logistics.” Using the specifically designed platform MyIFCO^TM, each customer can order RPCs, track all their movements, view stock, manage inventories, access reports for analysis, and provide integration with their own systems.

Customers rent containers from a pool of RPCs rather than buying them, which has the following benefits: no capital investment, no depreciation losses, and an easily calculable price per cycle. IFCO’s circular economy model helps customers achieve their sustainability goals and provides for strong growth: “At present, we’re already sending our RPCs around 1.9 billion times to some 300 retailers and over 14,000 producers worldwide every year – and the trend is rising,” Patrick Klinger says. "Such a large number of customers requires a flexible solution that can map processes as efficiently and accurately as possible, while also enabling their permanent monitoring." In 2020, IFCO therefore developed a company-wide cloud and IT strategy. The vision: a scalable, expandable system with the option to integrate new functions and services as needed.

The solution: Microsoft Azure creates transparency for reusable packaging containers

This is why IFCO set out on its journey towards the cloud with Microsoft technologies: today, the hidden champion uses a variety of Microsoft Azure services. All the company’s data is collected in databases in the cloud—such as Azure Database for PostgreSQL, Azure Cosmos DB, and Azure SQL—and consolidated in an Intelligent Data Platform. This data is analyzed using Azure Synapse Analytics, while Microsoft Purview establishes the framework required for all topics related to compliance and data governance. In the front end, Power BI has been rolled out as the standard solution for all users who handle report and data modeling. “We simply didn’t have the capacity or—to some extent—the expertise to implement all this simultaneously,” Klinger says. “We actively searched for partners who were experts in their respective fields and also matched our cultural and organizational style. The project was challenging to manage at times, but it did allow us to be considerably more agile.” Roughly a year on and the data platform is all set up and all key systems—such as the MyIFCO^TM portal, the global SAP system or the salesforce system—are tied in. Even the initial batch of the planned use cases have already been implemented.

"Today, for example, we save a lot of time when compiling our standard KPI reporting that features the most important sales and logistics key figures for daily supply chain management," says Andreas Hübner, Director Data & Analytics at IFCO. "This is due to all data now being consolidated and integrated into a single platform, with Power BI as our main visualization tool.” In addition, with the new setup and processes, IFCO can provide an even more accurate and standardized data management. "This, for instance, has further increased the awareness of data quality or data responsibility. Whether in North America or Europe, we are always referring to the same data now," Andreas Hübner continues. "This opens up room for innovation. Our colleagues are using this newfound time to further improve processes and gain even more insights from our figures. They can see at a glance what we are sending to our customers and where we might have to make some adjustments. This enables us to provide our customers with detailed forecasts on a regular basis. The path toward AI is now open to us."

Always knowing where each box is—automated route reporting for more reliability in planning

IFCO is currently focusing on track and trace to optimize the traceability of its containers and make supply chains even more transparent. The first pilot projects are already underway at a number of retail partners, involving several tracking technologies that allow to locate and track products in real time. "With the help of track and trace, retailers and suppliers can immediately see, for example, whether a delivery of reusable containers was held up at customs, accidentally deposited at the distribution center or sent to the wrong store," explains Patrick Klinger. "By continuously tracking the movement of goods in real time, corrections can be made immediately, eliminating unnecessary delays and costs caused by deliveries and products ending up in the wrong place at the wrong time." This has benefits not only for IFCO's customers, but also to the company itself: By always knowing exactly which container is where, the company can plan ahead and better optimize its own supply chains.