Are returnables for your firm?
David Luton President David Luton & Associates
By David Luton -- Modern Materials Handling, 1/1/1998
To solve their waste disposal problems, companies periodically consider adopting a returnable container system. Too often, however, they focus all the attention on container design without considering the logistical and handling environment within which the system must operate.Before moving to returnables, there are a number of business conditions or situations which are required or which favor the success of this approach, they include:
(1) Creating a closed loop so that the returnable packaging or containers ideally return as "empties" to their origin point.
(2) Adopting the use of returnables as far back in the supply chain as possible to maximize the economic advantages of their usage. In this case, one should design returnables so that they meet the needs of all partners in the chain.
(3) Designing the container so that it travels intact as much as possible through the distribution channels. This will yield the most benefit by cutting rehandling labor.
(4) Determining if your returnables will be based on the unit load or a smaller container, such as a plastic tote. It's important to carefully consider delivery logistics. For example, in a retail distribution system with warehouse stores or with supermarkets equipped with truck docks, a returnable unit load pallet can be used in downstream retail operations. Pallets can be picked up by suppliers on the return leg to the DC.
But if distribution involves retail stores-such as flower shops, drug stores, or convenience outlets-only equipped with personnel doors, then use of a pallet isn't viable, because it won't fit through the door. Totes work better in these cases.
(5) Recognizing that returnables are corporate assets, and you'll need to have ways to keep a current tally on what your plant or warehouse has and where it's located (sidebar).
(6) When designing a returnable container system-whether for the unit load or for a smaller container-a goal to strive for is reducing the number of returnable container types as much as possible.
Similarly, a stable demand pattern is particularly preferable because the number of trips or uses increases. Stability in demand is important as well when you calculate the ROI (return on investment) to offset the higher initial investment costs of a returnable container system.
If you apply these concerns to your particular situation and find your application meets some of these criteria, then it may make sense to investigate further the potential for returnables.
Tracking returnables
Just as with any other company asset, a returnable container system requires that you have an effective tracking and control system. Failure to do so will result in excessive losses by theft.
Unless a deposit system is used, most returnable packaging is not designed for delivery to the end consumer. With so many collection points, returns become uneconomic-unless consumers can be induced to return containers to a central collection area.
Your company will also need to have some method to distinguish the returnable containers from substitute or counterfeit items. That's why high quality returnable pallets are often painted.
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