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The Ti x Hi pallet configuration has been widely used in the supermarket food and grocery industry in Australia. Industry leaders like Woolworths Supermarkets in Australia, Safeway and CostCo in United States stipulate Ti x Hi pallet requirements for their suppliers to conform to if the products are to be received at their respective distribution canters. Non-conformance will result in pallets and products being rejected at the supermarket's distribution centers.

TiHi pallet configuration has been used by many industries to specify how pallets are being configured. Ti specifies how many cartons as a logistic packaging unit on a layer of a pallet and Hi specified how many cartons high of the pallet that is being stacked to build a pallet. Suppliers to supermarkets will bill based on carton at the supply chain level from suppliers Distribution Centres (DC) through the supermarket's DC to the supermarket.

In its simplest form, TiHi is usually displayed as Ti x Hi. When Ti = 16 cartons (i.e. 4 shippers x 4 shipper square) and when Hi = 4 then the pallet TiHi will be displayed as 16 x 4. But more importantly; 16 x 4 in mathematical terms is indeed a multiplication function which yields 64.

Pallet Ti Hi = Ti x Hi

If Ti = 16 And Hi = 4

Then Ti x Hi = 16 x 4 = 64 cartons on a pallet

However working on Ti x Hi level only satisfies logistics requirement from the distribution centers to the supermarkets where the unit of sale is in cartons. In the supermarkets, the cartons are put on the shelves with its front facing the customers. The retail customer will pick up the number of boxes, tins, pack, packets or each (EA) of product that he/she needs and pay per that individual sales unit. It is this sales unit which is of interest to supermarket management; how many each (EA) are sold.

This is when the idea of an Ti x Hi extension or some times called a pack key, can provide another level of granularity. What if the pallet Ti x Hi configuration is extended to Ti x Hi x EA? In this scenario, say there are 12 boxes in one carton, then the Ti x Hi extension will become 6 x 4 x 12 and by way of multiplication yields 768. There will be 768 boxes of in the pallet that will be sold at the supermarket level. 768 boxes in a pallet will provide more information to the supermarket management than 64 cartons in the pallet.

The idea of TiHi extension can be further extended to another level. This will be especially useful to handle small products like pens where there may be an intermediate packaging unit called the shipper or master pack which holds together the individual boxes of pens. As the sales unit in the supermarket or retail level is a box, the Ti Hi extension has now provided a link between the pallet (logistical unit) and box (retail sales unit).

The full pallet configuration using the TiHi extension for pens can take the form of Ti x Hi x Sh x Bo where Sh = Shipper/Master pack and Bo = Box.

If Bo = 10, Sh = 4, Ti = 16 and Hi = 4, then there will be 16 x 4 x 4 x 10= 2560 pens in a pallet. Each carton will hold 4 shippers and each shipper will hold 10 boxes.

The adding of the third and fourth dimension to the Ti x Hi two dimensions presents the following levels of information for the products being configured in this manner:

1. There are 10 pens in one box
2. There are 4 x 10= 40 pens in a shipper
3. There are 16 x 4 x 10 = 640 pens in a layer
4. There are 16 x 4 x 4= 256 shippers in a pallet
5. There are 16 x 4 cartons in a pallet

Why is Ti x Hi extension important?

1. It provides an relationship between the standardized shipping unit of the pallet to the standardized sales unit of an each (EA). This link is not only mathematical but also physical with the Ti x Hi x Sh x Bo being printed on the product packaging side by side with other palletisation graphical information;
2. With this link, retailers and distributors are not bounded by the logistical unit of pallet and sales unit of each (EA). Distributors can sell by shippers and layers while logistics service providers can similarly transact by boxes and shippers;
3. The mathematical relationships can be easily programmed into ERP systems of most companies as Units of Measure (UOM); CRM or Trade Promotion Management (TPM) systems can similarly use the TiHi extension for volume discounts via multiple shipping units of box, shipper or layer; and WMS systems for warehouse mixed pallet picking and shipping;
4. Inventory management, SKU rationalisation and cycle counting activities will have the capability to conduct more detailed analysis through the different Ti x Hi extensions levels that can now provide the granularity never possible before with full/mixed pallet locations and bulk/loose locations;
5. Warehouse management has more pick locations than just bulk/loose with intermediate shipper/box/part locations; and
6. Industry 4.0 will now have an mass personalisation and customisation enabler for Lot Size of One will have the scaling capability to handle everything from individual pill, nut, bolt or screw in a blister pack to shipping containers.

In the present supply chain environment, TiHi has been implemented in an uncoordinated manner within companies and within industry groups. With standardization across industry groups to achieve Industry 4.0, TiHi extensions can be more widely accepted and adopted for the supply chain of the future.

By including TiHi extensions into the SSCC (GS1 Serial Shipping Container Code) pallet label; the production operators on the production floor, the pickers on the warehouse floor through to the planners, analyst, merchandisers, category buyers and sales directors can benefit from the additional visibility and granularity which is easily scalable.

Ti Hi and Ti Hi extensions have long been miss understood and under utilized as a tool for inventory optimization. This master data has to go though the following stages development to of any use within the organisation:

1. TiHi extensions is formalized as a company standard, as the semantic notation for each SKU;
2. TiHi extension master data set up is applied across each SKU in the ERP system in the Units of Measure (UOM) configuration at the company level;
3. TiHi extension relationship published on cheat sheet together with other supply chain master data (e.g. Sales Org. Plant, etc.) distributed across to all supply chain personnel;
4. TiHi extension printed on the label outside the packaging of every logistic unit; each, shipper, layer (on slip sheet?) and pallet as a four digit variable code eg 16_4_4_10 to represent 16 x 4 x 4 x 10. Each SKU will have its own four variable code which every supply chain staff will understand;
5. Ti Hi extension in a SKU will have a mapping to EAN 13 digit number and is corresponding bar code which can be read by scanners;
6. Ti Hi extension adopted as a industry standard like SSCC labels developed under GS1 convention together with other shipping and SKU master data for the company.

If you are already using Ti x Hi or the various forms of Ti x Hi extension (pack key or pallet configuration) I would want to hear from you. In my study, I am building a body of knowledge on how TiHi extensions have been used and how else it can be used to facilitate the many ideas on the supply chain of the future.

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Share 26 10 Comments Jayson deForrest-Haddleton

Operations Director Asia Pacific Pure Fishing at Pure Fishing

8y

• Report this comment

We have been using 'next level TI HI' for some time to ensure we can report inventory at all levels, i.e. eaches per pallet. The one caveat though, as with any data, is accuracy, the wrong information can create havoc with your systems.

Like Reply 1 Reaction 2 Reactions Jawad Akhtar

Solution Architect - SAP Digital Supply Chain; Author of Eight SAP Press books on Supply Chain, PLM & Logistics

8y

• Report this comment

Good and informative read! Thanks for sharing your 'from the trenches' experience, and looking forward to many more posts from your side!

Like Reply 1 Reaction 2 Reactions Andres Ballon

Head of Network Design - Supply Chain at Woolworths Limited

8y

• Report this comment

Hi Phillip, I agree with this as a broader retail industry exercise, however in my experience the use of advance ERP and corresponding level of integration with suppliers and QA, ensure that integrity in units to inner to outer remain constant.

Like Reply 1 Reaction Chris Mousley

I talk with businesses and Governments about Smarter Planning & Supply Challenges

8y

• Report this comment

Hi Phillip, Interesting thoughts here Wider adoption of a standardised Sub Ti Hi across the industry will lead to more transparency and greater compliance. Agree with Adam Peanna's feedback that certain suppliers will have incremental changes as they bleed through stock in varying sub Ti Hi configurations, leading to inventory descrepancies across counting the mix of stock. Regards,

Like Reply 2 Reactions 3 Reactions Habib Francis

Management Consultant

8y

• Report this comment

Hi Phillip, Interesting article- many organisations use Ti Hi as a standard form of communication to the retailers and then use sub-Ti Hi within their own businesses to define the SKU's. Thanks for sharing this article.

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