Used bulk containers can cost up to 95% less than new

The per piece packaging costs for used bulk containers and totes can be as low as 5% of the costs for a comparable expendable solution.

By Dave Madden and Thomas R. Cutler

It is not often that returnable shipping containers are considered an aspect of delivering highly efficient and cost effective solutions for maintenance and asset care requirements. In fact, the result of utilizing reusable containers increases plant and warehouse availability, reducing plant downtime. The best implementation of sustainable packaging involves lean and continuous process improvement including plant OEE (overall equipment effectiveness), while reducing maintenance costs.

Asset management evaluation can be defined as an investigation into the whole or part of the asset management processes, structures and systems of a firm. Using a logical approach and organizational principles, a structured methodology must include the utilization of space and packaging. 

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Folding bulk containers, industrial totes and metal storage bins are used over and over again within a facility or between a supplier and a customer. They can be used literally thousands of times. These bulk boxes are much cheaper in the long term when compared to buying cardboard boxes and wood crates every time that product is shipped. Savings can be observed in the per piece packaging cost. While the upfront investment in returnable packaging may cost more, savings can be realized quickly through repeated use (the same bulk containers, metal bins and totes are used over and over), labor (no more box assembly), material handling (fewer moves from stackable containers), quality (fewer rejects due to damaged packaging) and floor space (plastic and metal containers can stack very high).

The per piece packaging costs for used bulk containers and totes can be as low as 5% of the costs for a comparable expendable solution, depending on shipping volumes.

Returnable packaging also reduces waste created by businesses. The EarthWorks Group estimates that 30% of landfill waste is created by plastic and paper packaging. The use of cardboard products and other one-time-use packaging products contribute to this waste.

On-site evaluations, including kaizen events, usually start with a plant tour and include structured interviews with a cross-section of maintenance personnel, as well as multiple departments including operations, quality, safety, environmental, finance and engineering.

The principle areas of a maintenance evaluation

  • Characteristics of plant operation (redundant and one-time use packaging is often ignored in a maintenance evaluation)
  • Existing maintenance objectives (stackable packaging options save space and reusable containers save money)
  • Maintenance schedules (maximized container visibility drives continuous maintenance improvements)
  • Maintenance workload (reduced labor requirements achieve moving away from cardboard packaging assembly which drives significant workload reductions and cost-savings)
  • Work planning and control (reusable packaging solutions allow for strategic planning processes.)
  • Maintenance control (wasteful and unused packaging can be eliminated.)

The packaging maintenance evaluation benefits

  • Reveal the true performance of current maintenance systems in quantifiable metrics by which comparisons to alternative packaging solutions can be offered.
  • Identify the strengths and weaknesses of the maintenance systems. 
  • Benchmarking: Compare the present situation with known best practices in other maintenance organizations and with sound principles of management. 
  • Provide a clear and cost effective road map for continuous maintenance improvement through effective reusable packaging solutions.

Wikipedia defines enterprise asset management (EAM) as the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant, equipment and facilities. "Enterprise" refers to the management of the assets across departments, locations, facilities and, in some cases, business units. By managing assets across the facility, organizations can improve utilization and performance, reduce capital costs, reduce asset-related operating costs, extend asset life and subsequently improve ROA (return on assets).

It would be naïve to believe that use of the best packaging and container solutions for any enterprise is not part of maintaining optimal availability, reliability and operational safety of plant, equipment, facilities and other assets; it is essential for an organization's competitiveness.

Examples of reusable packaging industrial maintenance and asset management

Historical and reactive (run-to-failure) models for packaging solutions are outdated. Companies are embracing whole life planning, life cycle costing, planned and proactive maintenance and other industry best practices. Tim Fidyk a Senior Buyer at TRW Automotive U.S. (Commercial Steering Division) in Lebanon, Tenn., emphasized the use of returnable containers is essential, “Certainly cost saving was an issue. But equally important was availability. We have a new plant manager and he mandated that we move into returnable containers and dunnage. Buy doing so we will experience a significant cost saving going forward.” 

Similarly Special Projects Manager for Tuscon, Ariz.-based FLSmidth/Krebs, Danny Mendoza, suggested, “I was in charge of inventory at the time I first ordered reused containers and I knew I needed a number of these and needed to keep the costs down. The fact that the containers were used, in good condition and less money than buying new, got my attention.”

Troy Cain, General Manager, Whitehead Die Casting Co., Inc., located in Gainesville, Ga., summed up the value of reusable packaging as a key asset management function: “We wanted to find good usable containers from a reputable source without too much risk…now 60% of our total packaging is reused.”

When enterprise asset management includes reusable packaging considerations, environmental benefits are achieved in conjunction with improvement of business operations and performance. Packaging asset management improves overall asset performance, availability and energy consumption. The result is a reduction in total asset lifecycle costs.

David Madden is Founder and President of Container Exchanger (www.containerexchanger.com), an online marketplace for used returnable packaging systems, such as collapsible bulk containers, metal shipping containers, plastic pallets and hand totes. Founded in 2005, Madden led the company through the startup phase and into its current status as the definitive one-stop shop for used containers and crates. Madden may be reached at dmadden@containerexchanger.com

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Fla.-based, TR Cutler, Inc, (www.trcutlerinc.com). Cutler is the founder of the Manufacturing Media Consortium of three thousand journalists and editors writing about trends in manufacturing. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors and Committee of Concerned Journalists, as well as author of more than 300 feature articles annually regarding the manufacturing sector. Cutler can be contacted at trcutler@trcutlerinc.com.

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